Banjo Smyth

The old saying that ‘Knowledge equals power’ is simply not true. The correct saying should be

‘Knowledge that is ACTED upon equals power’

The difference in these two statements is massive. No matter how much knowledge you have on a certain subject it doesn’t equate to anything unless you use this knowledge to take the relevant action.

If you have an amazing knowledge of Investment Strategies but you forget to actually implement this knowledge then you aren’t going to receive the true benefits or power that deserve to be associated with this knowledge. Now this may sound very simplistic and basic but you would be amazed at how many people have great knowledge that they never put into action.

Human beings have a terrible habit of underestimating their ability and knowledge. We also have a bad habit of wanting to know everything about a subject before we actually put it to use. I can tell you now that if you keep waiting until you know everything then you will never actually start.

READY FIRE AIM

This is one of my favorite sayings. Too many people spend too much time Aiming and forget to actually Fire. The best way to get things happening is to fire and then start worrying about the aim.

So am I suggesting that you start gambling with your money on the Stock Market with Strategies that you don’t properly understand?  Of course not but I am suggesting that your start trading on the Stock Market with Fake money. Paper trading is one of the best ways to learn as a Stock Market Investor. So once you learn a new Stock Market Investment Strategy you should start to paper trade and see how you go. If your aim is a bit off then readjust some things and try again. My main point is DON’T wait until you know everything before you start implementing your knowledge.

‘Knowledge is too precious to not use it’

Does Ready Fire Aim mean that you shouldn’t do loads of research and preparation? Not at all. You should be very thorough in your preparation but not so thorough that you never get to put this knowledge into action.

It is a common misconception that once in a lifetime opportunities only come around ‘once in a life time’. The reality is that we can create our own once in a life time opportunities every single day. We simply need to implement our knowledge by taking proactive action.

1. People never DEFINE what being RICH actually is

2. People’s definition of being Rich normally focuses on long term goals therefore making it feel impossible to achieve.

3. Most people OVER ESTIMATE what they can achieve in 1YEAR and UNDER ESTIMATE what they can achieve in 10 YEARS

4. People tell themselves that “they don’t really care about money” and then proceed to work 40PLUS HOURS a week in a job they hate.

5. People never decide that they MUST become Rich and take genuine action towards achieving this goal

6. People don’t have a REALISTIC PLAN

7. People FOLLOW the Plan

8. People listen to advice from POOR PEOPLE yet they are very skeptical about advice from rich people

9. People allow other people’s opinions to effect their action and goals

10. People don’t take RESPONSIBILITY for their own results always blaming everyone else if they don’t succeed.

11. People give up when SUCCESS is just around the corner.

12. People think that their Car & House are ASSETS

13. People would prefer to live in IGNORANCE rather than take care of their personal finances

14. People don’t understand the concept of COMPOUND INTEREST

15. People don’t have access INVESTMENT STRATEGIES & High quality Coaching

16. People make the same decisions and perform the same actions as everybody else yet they expect to create a different result.

17. People think that Investing is Risky and fail to realize that NOT INVESTING is the biggest risk of all

18. In order to become rich you must remember to actually ASK for what you want.

19. People want to GET RICH QUICK rather than doing any work

20. People don’t understand the fundamentals of a budget – Spend less than you earn.

EDITORS NOTE: Only one of these reasons (no.15) relates directly to Investing Strategies & Coaching. Becoming Rich is at least 90% in your mind. You need to define exactly what it is that you want and truly believe that you can achieve this. You really can ‘Learn to be Rich’.

I’m sure you are probably thinking – what is the “Law of Opposites” and what does it have to do with Investment Strategies & Wealth Creation? When I first heard one of my mentors (Jamie McIntyre) talk about his Law of Opposites theory I was thinking exactly the same thing.

So what is Jamie McIntyre’s Law of Opposites?

The law of opposites is an incredibly powerful tool that can be used to help develop the mindset of a millionaire and in turn create a successful life. Quite simply Jamie McIntyre suggests that one of the best ways to become financially successful is to

“Find out what most people are doing and then do the exact opposite”.

This means that when you are faced with a decision or a particular situation, you should think about what the average person would choose to do and then do the exact opposite. As funny as this may sound, if you start using the law of opposites I can almost guarantee you that new and amazing experiences will begin to enter your life.

When Jamie McIntyre first told me about his law of opposites theory I thought he was being silly. How can the law of opposites help you develop the mindset of a millionaire, surely its more likely to develop the mindset of a ‘crazy lunatic’ who has a severe blockage in their decision making process? After reassuring me that he wasn’t a ‘crazy lunatic’ he proceeded to explain why the law of opposites is in fact a crucial part of developing the mindset of a millionaire.

When I look at the results that most people’s actions are producing they are way below my expectation. So if you want to produce similar results to these people then your task is very easy - Simply make the same or similar decisions that they are making and you will be just like them in no time at all. What Jamie McIntyre is trying to say with his law of opposites is that to be successful you need to do things differently than the general public. You need to start developing your mindset of a millionaire and stop making the same decisions as everyone else.

The best example that I can give you of Jamie McIntyre’s Law of opposites in effect is how most people approach becoming financially rich or wealthy. Rather than trying to get a financial education and develop the mindset of a millionaire most peoples attempt at becoming wealthy is to buy a whole heap of tattslotto tickets. If these people would take the time to educate themselves in the world of finance they would be astounded at what they could achieve.

Forget any fancy strategies or crazy ideas, if people could learn and master one simple concept like ‘compounding interest’ their lives would start to change forever. I am always hearing from people who are worried about how they will be able to afford to pay for their child’s education but did you know that if you were to invest $3.33 per day into a fund that was earning 15% that by the time your child turns 19 it would be worth $110,424. Then if you stopped contributing and let the money to continue to grow on its own it would be worth

- $9.6 million by the age of 50

- $39.2 million by the age of 60

- $158.2 million by the age of 70

Basically that means that if you were to give up a ‘soft drink a day’ or your weekly tattslotto ticket you would be able to leave your children a multi million dollar inheritance. When you start to create the mindset of a millionaire you will never cease to be amazed by the things you can create.

The ironical thing about tattslotto is that within 3-7 years of winning, most people are in a worse position financially than they were to begin with. Why? Because they haven’t developed the mindset of a millionaire, they have simply been gifted a whole lot of money and they don’t have the correct skills to make their money work for them.

Imagine if someone was to offer you the choice of these two things

They will give you a million dollars in cash

or

They will teach you how to create the mindset of a millionaire

What would you choose? I know what most people would choose and to be honest a few years ago I would have taken the cash too but after developing my own mindset and learning to implement Jamie McIntyre’s Law of Opposites I know that it would be the wrong choice. In order to succeed we need to branch, take some risks and develop the mindset of a millionaire. Funnily enough, sometimes the best way to do this is to see which way most people are going and head the other way.

The Wikipedia definition of the Rat Race

“A rat race is a term used for an endless, self-defeating or pointless pursuit. It conjures up the image of the futile efforts of a lab rat trying to escape whilst running around a maze or in a wheel. The rat race is a term often used to describe work, particularly excessive work; in general terms, if one works too much, one is in the rat race”.

Whilst the above definition seems to make sense, the best description of the ‘Rat Race’ that I have ever seen was in a short Video by Warren Borsje. This is one of my all time favorite youtube clips. It shows Warren Borsje telling the story of a young man who has just got his first job and is about to enter the ‘Rat Race’ or the ‘9-5 treadmill’ as he likes to call it. As always he effortlessly combines entertainment, education and comedy - Absolutely Brilliant!

Thanks Warren. What a great clip!

I believe you are in the Rat Race when. . . .

- You come home after work and only have enough energy to watch the TV.

- You get the feeling that life is slipping you by and there is nothing you can do about it

- That horrible feeling enters your stomach on Sunday afternoon (otherwise know as ‘Sundayitess’)

- You know you should have done something (like get your car serviced) but you say to yourself “I just didn’t have time this week”.

- You see someone achieve something and saying “I could do that” but then don’t because you get distracted by life

- You let your dreams remain dreams.

Congratulations! You have almost completed your first property investment project. You have bought the property, renovated it, rented it out and now your ready to buy your next one (after a well earned rest of course). For this to become a reality you will probably need to get a revaluation on your investment property. The other option is to save for another deposit but in most cases this will take you a few years so it is much easier and quicker to refinance your investment property.

First of all you need to organize the bank to perform an investment property revaluation. The best time to do this is just before your tenants move into the property as it should be looking great after you ‘cheap renovations’ have been completed. It goes without saying that the better your property is presented the more favorable the investment property revaluation will be, so make sure you have the place looking great.

Once the investment property revaluation has been completed it is up to you to decide if you would like to refinance your investment property loan. Let me explain to you the advantages of this procedure.

Let’s pretend that you bought your property for $300,000 and after 2 months work it was revalued at $360,000 (NOTE: whilst these are very general figures they are very realistic if you have bought and renovated well). Let’s assume that you had a 90% loan so you paid a deposit of $30,000 and you have an interest only investment property loan of $270,000.

What you can now do is ask the bank to refinance your investment property at the new price of $360,000 and get access to 90% of the new investment property revaluation. What this means is that rather than having a loan of $270,000 (90% of $300,000) you now have access to a loan of 90% of $360,000 = $324,000.

So what’s the difference between $324,000 and $270,000 the payout figure of your old mortgage? $54,000. You now have access to $54,000 ‘whenever’ and for ‘whatever’ you would like without even selling your property.

The are two common questions that people normally ask when they hear about this investment property refinance strategy.

Q. Do you have to pay interest on the $54,000 if you don’t want to spend it?

A. Absolutely not, you only have to pay interest on it if you decide to spend the money.

Q. Can I use the money to buy anything, for instance a new car or a trip to Disney world?

A. Technically yes, but I definitely wouldn’t advise you not to do that - just yet.

The whole concept of this Investment Property Revaluation and Refinancing Strategy is that you use the equity of your asset to buy more assets NOT liabilities. $54,000 would be the perfect amount to use as a deposit (and legal costs) of your second investment property and that is exactly what successful investors have been doing for years and years.

If you’re a bit disappointed that you don’t get to buy your Porsche straight away then don’t worry, you can still buy your dream car but I would advise you to buy a couple of properties first. Then once you have started to create some serious equity I would insist that you treat yourself to some of life’s great luxuries. Who would have thought that refinancing your investment property could be so much fun? So what are you waiting for, its time to put the ‘5 R’s investment Property Strategy’ into action.

Renovate – Rent out – Revalue – Refinance and Repeat.

When you are leasing out your property you will be faced with two main options. You can either employ a real estate agent and let them do all the work for you - or you can rent it out yourself. There is no right of wrong answer; it simply depends on your situation.

The Positives of using a Real Estate Agent when leasing out your property.

- You will be able to completely forget about your investment property and concentrate on new and more exciting things (like figuring out how you can buy your second investment property

- Real Estate agents know what to look for in tenants and ‘should’ be able to pick a high quality tenant.

- If something goes wrong they will be there to fix it. If you live a very busy life the last thing you want to have to do is fix a leaking tap after work.

- They will handle all the paper work and rental agreements.

The Negatives of using a Real Estate Agent when leasing out your property.

- The most obvious negative is the cost. Most real estate agents will charge you a management fee of 7.7% of all rent, plus a set up fee of 5.5% of the annual rent.

- Therefore if your tenants were to move on every 2^nd year you would pay 10.4% (on average) of your annual rent to your Real Estate agent.

- So if you were renting your house for 300 per week you would pay the real estate agent $1622 per year out of your annual rental income of $15,600.

The Positives of leasing out your property yourself.

- You will save money.

- You will be able to oversee all maintenance and problems which will probably mean that you will be able to save some money on repairs (especially if you are a bit of a handy man/woman).

- You can personally choose the tenant and find someone that you think will suit the property. Don’t underestimate the ‘good’ feeling that you will get when you make somebody very happy by giving them the opportunity to live in a great house.

The Negatives of leasing out your property yourself.

- The main negative is the ‘time’ factor. If you live a very busy lifestyle it can be annoying if you are constantly getting phone calls from your tenants.

- You will need to organize your own rental agreement and lodge a bond. This is much easier than it sounds and all the relevant information is readily available on the internet.

The Answer?

It really comes down to deciding what is more important, your money or your time?

If you do lease out your property yourself I think the best way to look at it is to think that you are employing yourself. If we use the above example you would basically being paid $1622 per year to be your own real estate agent. If that sounds like a pretty good deal then I would have no hesitation in recommending that you lease out your property yourself. Best of luck.

When it comes to investment property renovations the question I always get asked is - “how much work should I do”? The answer to this question will change dramatically depending on each person and their current situation. Are you the kind of person that loves DIY (do it yourself) home renovations? Do you love researching cheap renovation ideas? Or does the thought of a month’s DIY home renovation make you feel sick? Only you can answer these questions but believe me there are huge advantages of doing minor renovations let alone a full month’s work on a property

So let’s assume that you have 2-5 weeks to complete your DIY renovations, what is a realistic goal to try and achieve? To a certain extent this will depend on your budget but you would be surprised at how much you can get done if you find some good cheap renovation ideas. My DIY renovation budget is the same for every project I do - I like to call it the “Spend as little as possible” budget! Below is a list of the most obvious and important things that you should look at when attempting a cheap DIY renovation.

Interior Painting

A fresh coat of paint is the easiest way to make a house feel new again. The great thing about painting is that everyone can do it and it’s such a rewarding job. I love watching the house slowly get transformed as each new wall is painted and best of all if you do it yourself it shouldn’t be too expensive.

RENOVATION TIP: If you’re going to paint the house beige don’t even bother! Property investors always make the mistake or choosing plain and boring colors. Paint the house as if you were going to be living in it. If you’re feeling really adventurous you could even include a feature wall.

Floors

Replacing the existing flooring is another way to make your property feel brand new. You can either replace the carpet or in some houses you can polish the floor boards that are under the carpet.

RENOVATION TIP: This is one part of the DIY renovation process that I would recommend hiring somebody to it for you (floor polishing &carpets). The professionals do such a quick, good and cheap job that it’s hard to make an argument for doing it yourself. To save some money you can rip out the old carpet and left over staples before the professional come.

Bathroom & Kitchen

These two rooms are very important when it comes to renovating your investment property. If you do have some money in your budget then the Bathroom & Kitchen are a pretty good place to spend it. How much work you do here is up to the individual but I would recommend trying to get both of these areas clean, modern and usable.

RENOVATION TIP: Rather than re-tiling you can use Tile Paint to great effect. I have used ‘White Knight’ tile paint over the top of outdated 80’s tiles and the results have been outstanding.

Fittings

Replacing old Light fittings, door handles and cupboard fittings is a great DIY renovation idea. It is a very easy and cheap way to create a more ‘modern feel’ in your Investment property.

RENOVATION TIP: Look at the expensive designer brands and then find good quality imitations that are a quarter of the price.

Garden

One full day in the garden and you can make a big difference to overall appearance of a house. Pull out some weeds, trim some branches, mow the lawns, sweep the driveway and suddenly your property is looking pretty good. You might be saying “Since when is sweeping the driveway considered DIY home renovation”? Well I don’t care what you ‘call it’ – Gardening, DIY, Renovations, Cleaning – the fact is that putting a day or two’s work into your garden will definitely make your house more attractive to potential renters and bank valuers.

RENOVATION TIP: This is a great part of the DIY renovation to get some help from family and friends with. Everyone has done some gardening at some stage and you can even turn it into a bbq event. This will make it more fun and easy as the whole family can come.

Exterior Painting / Render

This might not be your first priority but it will drastically improve the first impressions that people have of your house. If your property is a weather board then a few coats of paint is a great idea or if it’s a Brick house then rendering your property can make a massive difference. Render can turn an old and ugly brick house into a modern a beautiful place in a few days.

RENOVATION TIP: DIY rendering is an incredibly cheap way to improve the value of your house. It can be messy and laborious but the results are fabulous.

Hopefully there is something here for everyone. So my answer to the question “how much work should I do on my investment property”? Do as much as you can whilst spending as little as possible. In the perfect world you would complete all the ideas that I have mentioned in about month and for under a budget of $10,000. Is this a realistic DIY renovation goal? Yes I believe it is very achievable, especially if you (or someone you know) have a few ‘handy man’ skills. Remember that renovating you investment property should be fun and exciting. Best of luck

“Money is better than poverty, if only for financial reasons”

Woody Allen. . . . . who else?

Congratulations! You have bought your first house and now you’re simply waiting for the property settlement period to end. So what should you do? Sit around and be happy with yourself? Definitely not! Now is the perfect time to organize everything that needs to be done to the property before you start paying the mortgage.

The best thing about the Property settlement period is that you will be so excited that it will be a joy to ‘plan out’ what you are going to do. Make a list of all the revamps/renovations that you would like to achieve and see if there is anything that you can arrange before settlement occurs. For instance if you are going to get the floors polished, why don’t you get some quotes and set an actual date for the selected workers to start. Tradesmen are so busy these days that you often need to book them a few months in advance anyway. If you contact the Real Estate agent they will be more than happy to give you access to your property for any number of reasons. Don’t think that you can’t visit the house during the property settlement period. Just call the Real Estate agent and they should always be able to help you out.

Whether you are planning on doing some renovations or renting the property straight away it is vital that you use the property settlement period to your advantage. The last thing you want is to be paying the mortgage whilst you wait for a tradesman to polish your floors or whilst your looking for a tenant. If you use the property settlement period wisely and effectively everything that follows will be ten times easier – and remember

“by failing to prepare, you are preparing to fail”

Benjamin Franklin

Steer clear of emotional bidders and keep your eye open for motivated sellers.

When you are purchasing anything it’s obvious that you want to pay as little as possible for it. When it comes to buying houses there are two main factors that will alter the price – If you can take advantage of these two ideas you will learn how to buy property at a great price.

1. Steer clear of emotional bidders and people who are making their decisions with their heart. When people/families buy residential property there can be emotional factors that cause them to pay more than the value of the house. For instance they might be in a rush to find a property as they have already sold their previous house, or they might be living with their in-laws in between houses and desperate to find their own place. The husband might fall in love with the garden and be prepared to do anything to get buy or vice versa. Believe me you do NOT want to compete with these people, one of the great advantages you have as a property Investor is that you shouldn’t be emotional. Walk away from the property and find another one that will end up being a better deal. If you want to know how to buy property for way more than its worth then simply find an emotional buyer and you will see how its done.

2. If you can find a motivated seller you may be able to buy the property at a great price. What do I mean by a ‘motivated seller’? Simply someone who wants to get rid of their house quickly. For instance a divorced couple or someone who has been transferred to a new location and wants to sell their place before they buy a new one. Always remember that the ‘conditions’ of your offer can be just as important as the price. For instance if you know that the seller is desperate to get rid of the house then it would be a great idea to offer a very short settlement. You would be surprised at how often lower offers get accepted because of the conditions that are attached with the offer. I hope these two ideas can help you to learn how to buy property at a great price. Good luck and happy bidding.