Property Podcast
Mistakes To Avoid When Buying Your First Property With Luke Moroney
September 19, 2021
Buyers agent and owner of Search Party Property, Luke Moroney joins us on this episode of Property Investory. Moroney takes us on a journey as he explains how he simultaneously traveled the world and worked, and how he had to adjust to a different lifestyle upon his return. Moroney is not only well-versed in vacations, but he’s also a property expert, with 27 properties in his portfolio. Learn from the best as he explains the mistakes he made on his first property, and how you can avoid making those same mistakes.
Join us on this insightful episode of Property Investory.

Timestamps:
00:04:05 | Personal background
00:04:05 | The importance of being first
00:14:16 | Ready for lift-off
00:18:46 | Tested Positive with the travel bug
00:23:00 | A new dawn
00:25:17 | Property Investing Journey

Resources and Links:

Transcript:

Luke Moroney 
[00:29:56] I had holes in the walls. I had tenants that left without letting me know. You know, turning up on the front door knocking on that door, and then not hearing a peep inside

*START INTRO MUSIC*

Tyrone Shum    
This is Property Investory where we talk to successful property investors to find out more about their stories, mindset and strategies.

I’m Tyrone Shum and in this episode, we discover how Luke Moroney built a large portfolio of over 27 properties. He explains what life was like growing up, how we went from being stuck in NSW to travelling all over the world on cruise ships, and also explains the consequences of buying a property without researching first.

*END INTRO MUSIC* 

*START BACKGROUND MUSIC*

Tyrone Shum
Luke Moroney has lived a full and well-travelled life, he’s now the owner of a popular buyers agency. 

Luke Moroney  
[00:00:48] I am a joint owner in a company called search party property we're a property buyer's agent. You know, through my journey, I've bought quite a few properties, currently sitting at 27 properties in the property portfolio. And, you know, probably transacted over 200 properties for family, friends and clients.

Tyrone Shum 
[00:01:13] Wow, that's amazing. And so when you said that you've been doing that, when did you start in a journey?

Luke Moroney  
[00:01:20] I started back in 2002, bought my first investment property in Western Sydney in Blacktown, which is only about 10 minutes from where I lived, which is often a bit of an early investor or first-time investor mistake that often is made.

Tyrone Shum    
Moroney’s day to day consists of liaising and strategising with buyers and investors

Luke Moroney   
[00:01:51] It's constant conversations on property deals, conversations with individual investors, thinking about what their strategy, what their plan is, what kind of property deals that we wanted to buy, firstly, maybe it's a dip their toes in the water with something nice and easy and simple. Maybe it's a progression with them on a second or third, or fourth property. And it's just that constant drive to increase their property portfolio, increase their wealth creation, for that future choice. So deals and combination of that and mindset and action, which is a big one for everyone, because there is so much fear around property investing, and the pros and cons of it and how it actually works, and how it can benefit you and future.

Tyrone Shum   
[00:02:39] Totally understand and this is the thing with property, there's just so many facets of it, and there's just so much that, you know, one can really only absorb in that one. That's why you surround yourself with a team having a good team around you to be able to do that. Because you know, it's a team play a game, it's a team sport, I guess you can say, without the people around you it's very, very difficult to really go property in yourself as well.

Luke Moroney  
[00:03:03]  I have a little acronym I like to share on social media a lot. It’s ‘turn on your tap’,  T.A.P: Team, Action and Patience when it comes to your investing. So just those simple ideas and thoughts and acronyms can really make a difference for some person. And it's like, okay, that kind of makes sense. Where's the team? what kind of action am I taking? And then, with any investing, whether it be property or other investments, it's about having patience to allow that to grow to, to sustain a whole strategy, not only that one property, or that one investment, but a whole portfolio for the future.

Personal background

Tyrone Shum   
Moroney grew up in the 80’s where all things were simple and easy, but he couldn't have been further removed from that world.  

Luke Moroney   
[00:04:05] I grew up in Western Sydney, like you said, early days was in the suburb of Wentworthville. But I don't have too many memories because I moved out, we moved out there when I was two or three years old. Moved into Girraween on a quarter acre block, traditional type of family upbringing in terms of the 1980s going through that period. Girraween is a little known suburb in the midst of Toongabbie, Pendle Hill, in-between sort of Blacktown and Parramatta. And yeah, I've had a pretty you know, I've had a great childhood, many memories of playing cricket in the backyard with my brothers and sister, and, you know, family and friends would come around often. So, you know, I, I feel like I'm very grateful for my upbringing and you know, the experiences I had and the journey that I went on. So it was great.

Tyrone Shum    
While he lived on an acreage, he was still within the realms of Sydney.

Luke Moroney    
[00:05:24] It was suburbia, really, as opposed to you know, there's some of the areas of Girraween that, you know, it was a little bit farm, a little bit industrial. But the pocket that I lived in was, you know, house after house with quarter acre block. So 1000 square metres of land. It's definitely changed now. The house that I used to live in is actually a childcare centre now. And just down the road, you know, on either side of the road that's been converted into townhouses and duplexes. So there's been a lot of development in the area in recent times, as I guess Sydney has expanded in population. So two as the wanting and needing for being close to train stations, and we're only like a 10-minute walk from the Toongabbie train station. So you know, I used that through my high school years, I use that through my working years where I used to catch a train every day to the city from Toongabbie, which is about an hour ride. So you know, it is well versed in a lot of different areas in terms of thinking about property, because obviously holding onto something like that is... it's gold, right? Like having land in Sydney that's within, you know, 40 kilometres.. difference in proximity, then you've got situations where you can, you know, make a lot of money through or wealth creation through property.

The importance of being first 
Tyrone Shum  
Moroney bought his first property early, but maybe he got into it quickly because he’s always known the importance of being first.

Luke Moroney   
[00:07:00] The primary school was just down the road. So I actually walked to school each and every day. I remember, I was always an eager beaver and wanting to get to school first. So I could be the first one in the cricket nets and have the bat ready and the ball ready for the first time, the first person to come up and bold to me. So my mother always said are you always wanted to be first in line, always wanting to be first. And I guess I've lived that through my working life. Whereas, you know, you're always chasing in terms of the squeaky wheel gets the oil, right. So if if you're not chasing for something then no one's going to reply back to your, you know, move things for you to get things happening. So ultimately, everything's up for you. And it was the same way as me getting to school when I was a kid being the first one to show up to play cricket and waiting for the next person to come play with me. So yes, I was a bit of an eager beaver. And that driven motivation is really shone through or shone through in my life.

Tyrone Shum  
He has fond memories of his childhood, a time he says was full of family, friends and activities.

Luke Moroney   
[00:08:14], playing sport in the backyard, a lot with cousins a lot with a, you know, family. I'm one of four kids. Dad was at work working for the government for you know, 25 odd years, he then ended up buying into, bought a business, ran a childcare centre. So you know, that entrepreneurial space is definitely within the, within the family and it's been passed on. And, you know, mom was at home. So we were very fortunate to have a parent at home. You know, these days, it's often you know, parents are both at work, you know, we're lucky enough to have our mum there. You know, when we returned home from school, I'd eat a feast as soon as I got home, and then eat at dinner as well. So we were very active kids, whether it be at school, whether it be straight after school, you know, playing cricket and football, basketball in the backyard. So we were you know, lucky enough, whereas you see, I guess the kids are today if they're going out to do things because of the small parcels of land that they live on these days. They're having to go to the park. So it's not a case of getting in the backyard and playing some of these sports. So I feel very fortunate. I feel very grateful about our upbringing. You know, there's always that those dramas that we do have in our lives, but what are we so grateful for? And that's what I really reflect on and I feel that I'm very lucky and fortunate, especially when you hear other people's stories, right?

Tyrone Shum    
[00:09:45] You mentioned that you had cousins and family and stuff like that and being in a family of four, were all your cousins living close by? Is that why you guys were able to, you know, hang out with each other and go and play sport together.

Luke Moroney   
[00:09:58] Yeah, absolutely. They're within sort of 10 minutes, I guess it was that old avenue of, you know, family or kind of often stuck in those areas very close by where it's, there's more of a, I guess, a division these days. And I know when I've travelled over to the US, and you see the proximity that families leave over there, one's a New York, others in LA, other ones in Texas, so for them, as soon as they go, they leave high school, it's going off to college in another area of the country, we tend to just, you know, stick in the same sort of city at least. And previously, 20 years ago, 40 years ago, it was, you know, stay in the same neighbourhood, be crazy to live in, you know, for someone to live in Western Sydney, and then even someone to live in northwestern Sydney. So, you know, it was kind of frowned upon if one of the family left the area. So, you know, it was all like, so close to family and family was a big one in those days. And I remember, we used to do little athletics on a Friday night, and then everyone would be over my grandmother's house on a Friday night straight after and a little three-bedroom house that she had that before, you know, 30 or 40 people in their cousins and, you know, other family members and you know, extended family would come and visit.

Tyrone Shum  
[00:11:22] I can totally, totally relate. And the reason why I say that is because I am a family of four as well. And my family, my father is a family of five. And because we grew up in the right area as well, everyone lived literally in there, you know, my uncle lived North Ryde, my grandfather's place in East Ryde. It's like, literally everyone was in Ryde. And we'd have our Sunday meets just like you know, any 30, I can tell you that we didn't have that many kids, but I think we'll probably have at least half of that. And I remember we did all our travelling, we hung out as families pretty regularly, you know, around there. And unfortunately, you don't see that anymore as much. And especially with lockdown and COVID, It's even harder now. But I do remember being so close, you'd end up just going over to their place and hang out with my cousins or hanging out with my siblings and stuff. And we'd play. Yeah, I do miss those days. It's great that we're talking about that as well. Good memories. Good memories. Absolutely. So after say primary school, you mentioned you also used the public transport in Toongabbie to travel, you know, for school and stuff. Did you stay in the local area for high school? Or did you do travel further out?

Luke Moroney    
[00:12:22] No, it was actually quite further out. Actually. It was all the way up in Castle Hill that we went to school. So I think my mother was set on us to go to Oakhill College at Castle Hill. So it was walk to the station, a 10-minute train ride to Parramatta, and then a bus for 45 minutes to Castle Hill. So yeah, it was pretty epic. And both my brother's one left in Year 9 one left in year 10. I went all the way to year 12. And, you know, it's kind of like an outreach way, at least on public transport. That will really toughen you up definitely. doing those. I guess there's really hard knocks, I guess, sometimes we don't realise maybe some of the pain that we went through as kids or the hard work we did as kids is really developed us. I guess it can go both ways. Right? He can, he can make us or break us. So, and I think it's really just resonated with me to just like work hard at things and you can achieve.

Tyrone Shum   
[00:13:22] I know Oakhill college because I live only live maybe 10 minutes down the road from there. So I'm very familiar. But back then when public transport system isn't as good as it is now. Like, you know, now we've got the metro, it's very easy to get there and so forth. But I couldn't imagine you travel what an almost an hour and a half every time, at least, you know, just one way it wasn't. That way you'd be on public transport for at least three hours a day.

Luke Moroney  
[00:13:46] Yeah, absolutely. It was, I guess sleeping on the bus was a big thing back then. And I couldn't wait to get my licence in year 12. You know, being able to drive to school at least a couple of days a week what? You know, just like change your life at the time, So you know, it was great. Like, I wouldn't take it back.

Ready for lift-off 
Tyrone Shum   
Moroney yearned for more than being stuck between four tortuous walls after he finished school. 

Luke Moroney    
[00:14:16] I was really committed to, you know, I wasn't the avid, you know, avid school fan, you know, into the books or anything like that. I was pretty, pretty much like last minute.com when it came to doing schoolwork. And I was in a situation where I didn't really want to go to University. I couldn't really stand the thought of actually going in to study for another three or four or five years. So I decided, Well, what do I like? What do I know? I didn't actually have any idea what I wanted to do. I did some work experience in year 10 or in year 11 in the travel industry and decided okay, well travel sounds exciting, and I want to see the world, maybe that's the best way to do it. So I did a short the shortest course possible to get, you know, tick a box and get a certificate, and then went into looking for a job. 

Now, it was really interesting back when I was 18, just left school, and I went into doing that course, straight after that course, the unemployment rate in Australia was something like around about eight or 9%. So, when we have a look at what's happening right now, where we got five or 6%, over the last, I don't know, 10 years or so at least, it's been like that. I, I was actually able to get, you know, two interviews, and I was successful on both interviews and got the choice between one job or another. So, you know, I guess those jobs are always out there. And it was, it was great for me to just get in there and get started. And, you know, sink my teeth into a career and work and, and see what how I progress, I made the choice of taking the job at a larger company, as I thought that that would, you know, be a lot of learning a lot of growing potential promotions, you know, thinking long term. So doing the hard work or the, you know, that those tougher jobs early on, for the chance to, you know, really promote myself and learn as I went along.

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Tyrone Shum
Coming up after the break we continue our journey back in time to follow Moroney’s career in Tourism 

Luke Moroney 
[00:17:31]  was actually at one stage the airline representative for Sri Lankan airlines, back in the early 2000s

Tyrone Shum
We learn how he adapted to an unexpected revelation back at home

Luke Moroney 
[00:23:38] got to a position where I had to, you know, start a new friendship started a new lifestyle, a new way of living

Tyrone Shum
We discuss the worst investment he’s ever made

Luke Moroney 
[00:31:50] I lost money in terms of opportunity costs because that investment did nothing for 10 years,

Tyrone Shum
And that’s next. I’m Tyrone Shum and you’re listening to Property Investory.

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Tyrone Shum   
With a burning desire to travel and a need to work, Moroney pursued a career that could give him both. 

Luke Moroney  
[00:16:39] I was travelling tourism, we were actually a wholesaler of airline tickets. So the airline tickets these days are all online. But back then it was actually printed tickets. You know, people had very creative destinations that they went to, so that involved getting multiple airlines on an airline ticket. So that gets quite confusing. And, you know, we basically then sent those airline tickets to the real estate agents for them to give to their, their clients, their passengers. So, you know, we were in the in-between the airline and the travel agent, just about to say real estate agent, the travel agent. So, you know, and I progressed through in terms of working in the tourism, from the airline ticket side of things to being a sales rep. And, you know, I was actually at one stage the airline representative for Sri Lankan airlines, back in the early 2000s, when they were actually flying into Australia. 

Tyrone Shum    
[00:17:43] Wow, that's exciting. So did you get a chance to travel as well as being part of that?

Luke Moroney    
[00:17:49] I did. Yeah. We got a few trips along the way. Yeah, I guess my fondest memory was going to Sri Lanka and the Maldives. Some, you know, very exotic destinations, beautiful places. You know, it's a little bit I guess, what it was with to two different destinations so close to each other, where you've got, you know, Sri Lanka or in some of the issues that they've had within their country, going over to the Maldives. And you're, you're looking at beautiful island locations away from everything can relaxing on the beach, beautiful weather and yeah, it's quite was quite a special trip.

Tested positive with the Travel bug
Tyrone Shum    
On top of travelling for work, Moroney was fortunate enough to live abroad and travel through the US. 

Luke Moroney   
[00:18:46] I actually spent more than four years overseas. And I actually worked in Whistler in Canada, on the ski fields. So I worked at a hotel. And you know, during the day I was out there on the mountain snowboarding around. So some really fun memories of Whistler and, you know, British Columbia, Vancouver, that sort of area. I really enjoy my travel around the US. So many memories, so many great people along the way. So inviting and so accommodating, you know, to the actual fact that I took a seven-week trip after travelling around meeting so many people a subsequent seven-way trip where I didn't actually pay for a night of accommodation because people in San Francisco and Denver and Nashville and, and Miami and Florida and Fort Lauderdale, all accommodated me along the way. So, you know, people have this bad thing about people from the from America and the USA. And but I've had some really good memories around that which has been really good and I guess after that stint in Whistler, my working visa expired. So I had to make a decision what was the next plan? And, and I actually went for an interview at a cruise ship company, Princess Cruises well known around Australia right now for some unfortunate reasons, but we're in a situation where, where I was working for Princess for 18 months, and, you know, had some really good memories around, travelling around the world. So starting my ventures in Dublin, going around the UK, up to Norway and Iceland, and then all the way through the Mediterranean, the Suez Canal, all the way to Thailand. So some extensive travel in my, in my, in my past.

Tyrone Shum   
Eventually, Moroney satisfied his craving and decided to come back home

Luke Moroney  
[00:21:09] I think that you know, four years, it was a good test. I felt like I needed to progress in areas of my life and think about what the next stage was, you know, it was all about the factor of thinking, you know, am I taking this into a fantasy land type of situation where I'm just travelling the world living from paycheck to paycheck? Or do I want to get serious and progress my learnings, my growing and, you know, areas of my life and my working life that I wanted to, you know, to progress with? So when you are travelling, especially on the cruise ships, where you're doing the same thing each and every day, and it was about trying to, you know, maybe get back to a normality in life. And I just felt like it was just really a Fantasyland type of situation. And I wanted to progress and grow. I grew enough in, you know, when I was there, with promote, you know, trying to get promotions on cruise ships is really, you know, really tough. It's kind of like a time that you spend there rather than your, you know, your expertise and your skills and how good you are. So, you know, I was like, Well, you know, after a week or so, I thought I was really good. And I want to promotion, but they go well, you've got to be here for three or four years. I'm like, okay, that's a bit of a joke. Time for me to you know, to think about this and take it for what it is spend the time and holiday and, and see the world, but then eventually want to go back and, you know, realise a life where I can, you know, create more for myself?

A new dawn
Tyrone Shum    
Moroney returned to a much different life than the one he was expecting. Feeling misplaced and lost, he had to reevaluate what he wanted for his journey. 

Luke Moroney   
[00:23:00] I think it was around 2005 or six that I came back to Australia. And, you know, it's interesting that and you kind of reflect on that day that that timing, I got a little bit lost when I came back, to be honest. You know, a lot of people had moved on from where I was in the past. So I had to like really reboot, restart my life. So really interesting. I found myself getting back into the travel industry, that's probably the only thing I knew back then, of what I've been successful on, you know, what I've had in terms of skills and knowledge and experience, and then got to a position where I had to, you know, start a new friendship started a new lifestyle, a new way of living. So that's it, it was, you know, it was a real, you know, eye-opener, I'm just like, Oh, I thought I could just get back with family and friends and things like that. But it wasn't the case. Everyone had moved so much on and had such a life without me being there. So yeah, really interesting experience.

Tyrone Shum  
[00:24:04] Wow. And what about family, you know, as you mentioned, you know, friends and stuff like that people do move on, and they've got their own lives and so forth. And they kind of live day to day kind of thing. But what about family? You know, I guess Did you come back and stay with your family for that period of time, while you sort of settle back in?

Luke Moroney   
[00:24:20] Yeah, lucky enough that I was able to do that. And, but I guess there's a little bit of a sense that, you know, I haven't been there and like some of those stories and experiences that I haven't been a part of, have been, you know, been missed by me. So initially, it took maybe a year or two to get back in that of having memories and stories to tell each other. Whereas I lived a life overseas, which was very different to what their experiences are. So to get that connection back was very interesting.

Property Investing journey
Tyrone Shum  
Moroney bought his first property in 2000 before he started travelling, but with little education or guidance, his first buy did not warrant the results he was hoping for. 

Luke Moroney     
[00:25:17] I kind of wanted to tick off that box of getting investment property, get that done, sort of get tenants in place, and then go in and do the travel. So, you know, initially, I don't really, you know, heard a little bit about property and how things worked. And, you know, it was an idea from my parents to say, you know, to all us kids through the years to say, you know, maybe you want to get out there and buy a property. And that's the extent of the learnings and teachings that I got from my parents. Now, is that wrong or right? Well, you know, it's a great thing of them to put some ideas and actions in place for me. And, and I guess the maybe the thing that was lacking not to their, their fault, or anything is that you know, to try and educate me along the way of why I'm doing the investing, or where should I be investing, or the knowledge skills and the experience that they've had that that could benefit me? Because I found that in my first investment, back in 2002, that property didn't actually grow for 10 years.

Tyrone Shum   
[00:26:25] Wow, that's interesting. And then I guess that's the thing, that's part of the property cycles, things go up and down. And, you know, normally, on average properties, increase in price or grow at about every seven to 10 years. And that's the maybe a purchase just after the cycle just kind of finished and yeah, interesting.

Luke Moroney    
[00:26:42] Yeah, I bought at the peak of the market back in 2002, and three, in Sydney. So there was, you know, allow for quite an extensive time now, there was, you know, some ups and downs along the way. So if you bought at the low points, yes, you would have made a bit more money than I did. But I bought, you know, at a very high point. And the market just flatlined pretty much apart from those ups and downs along the way. But between 2002 and 2012, there was very little growth. And then, you know, Western Sydney really was the first one to take off. In 2012, before you saw the rest of the Sydney market take off in 2013 and 14 if you go towards the Northern Beaches, where that really started to go aggressively, you know, up in price.

Tyrone Shum   
His first experiences with property will be etched into his memories forever, but maybe not for the best of reasons. 

Luke Moroney    
[00:27:40] It's definitely the most memorable one. You know, it's always your first that you never forget. You know, and I think it is the most memorable one, because all the things that I did wrong, we often have that, you know, memory or mindset about ourselves to focus on the negative, right. So I guess that's the way we as humans that we are built. So you know, all the things that I did wrong, where I, you know, basically pick the first house that I saw, try to get a, you know, a 2K reduction in price to feel like I got a deal and got into a position of just, you know, quickly trying to put the deposit on the property and the agent really tried to, you know, push and hurry us through to get that done. You know, you know, I bought a regular three-bedroom house in the suburb of Blacktown. 

Yeah, it's in the past has proven to go really well. In actual fact, my brother had previously bought in Blacktown, four years before for $150,000. And, you know, he was able to double his money in five years, I took 10 years, and I had no growth. So it was really 15 years before, you can see actually any growth or substantial growth in that property to come through. So, you know, going off past results, and looking at what past results did and thinking that there will just be the same next time as well. It's not, it's not the case. And, you know, people found that in, you know, Sydney property market, maybe over the last four years or so, as opposed to the previous five years that so between 2012 and 2017, you know, property markets in Sydney just went skyrocket. They've remained pretty flat up until over the last four years, up until maybe the last six months or so. So, that experience that I had between 2002 and 2012 has really played out. But, you know, going back to your question, in regards to that, you know, the memory of that first property, trying to you know, picking that property at the peak of the market was one trying to manage the tenants on my own that was definitely another one. 

You know, I had holes in the walls. I had tenants that left without letting me know. You know, turning up on the front door knocking on that door, and then not hearing a peep inside, eventually just opening the door and having a look at the mess and the holes and the, or the dramas that will, that led me to being, you know, there on a weekend cleaning up and, you know, some terrible experiences, you know, when I first invested in property, and but I always had the mindset of, I'm going to hold this for 50 years, it doesn't matter what happens. Now, I'm just long term, I'm a long term thinker, I guess where I've seen the struggle with a lot of people is, you know, they have that one incident where a bad tenant comes through, and they want to sell immediately, it's just too hard work for them. And I know a lot of people that sold in 2005, and six and seven, that actually, when they sold, they sell it for less than what they bought it for. And, you know, that's where, you know, and, and another factor is they don't get back into investing, they don't learn from their mistakes. The great thing about it is I learned from those old mistakes of not buying at the peak of the market, not managing my tenants. And, you know, having the team of people around me, you know, goes back to the acronym I talked about team action and patience with investing.

**OUTRO**
Tyrone Shum:
In a future episode of Property Investory, we’ll continue the conversation with Luke Moroney and discuss the strategies he uses

Luke Moroney 
[00:01:46] So the strategy that I've used is a buy and hold strategy. So you know, for me, it is the patience around building a property portfolio

Tyrone Shum:
The personal habits that have helped him stay sharp 

Luke Moroney 
[00:22:05] I do a seven-kilometre run. And that started just after Christmas back in 2017.

Tyrone Shum:
We hear a story about him trusting his gut…

Luke Moroney 
[00:13:20] they were just saying drug capital of Australia. It's a terrible demographic, and all these sorts of things were coming in all the comments back to me

Tyrone Shum 
And that’s next time in a future episode of Property Investory.


**END OUTRO**