The 3 Stages Of Property Investing

[arve url="https://www.youtube.com/watch?v=FXlxavKJXMM" mode="lazyload" align="center" /] There are 3 distinct phases to property investing which can give you a good framework for what to focus on. Foundation, Acceleration and Freedom. Book A Free Strategy Session With Pumped On Property Resources Related To This Episode 2 Properties To Financial Freedom What It Feels Like To Be Financially Free Transcription: Hey guys, it's Ryan here from on property and welcome back to another property investment episode where we're talking about investing in property and achieving financial freedom. Today I'm joined with me by none other than Ben Everingham, the buyer's agent. How's it going, Ben and Ryan, how? Amen. Yeah, really good. So in this episode, Ben, we're going to talk to the good people out there about the three stages of property investing and this is more specifically for people who are interested in investing using the two properties to financial freedom strategy that we've talked about. But before we get into your background, looks a little bit different there. What's going on? You're in your room. It looks like I'm in a wardrobe right now, I think from the camera angle, but um, we've moved into our new office which is super exciting for our business. So we were in a property that I owned, um, I've decided to sell that property and we built this other property for the Sydney office or which was my own home. Um, and it's now become the office and it's pretty kick ass. Maybe you and I can show some people on the next visit when you come in next week. Yeah, well maybe next week I'll come in and we'll do like a walking tour, get people to have the office and they can see it. For people who don't know. This is actually Ben's dream home, quote unquote Ben and Lisa's dream home. They built this home themselves. It was going to be their dream home and then they lived in it for a bit and turned out not to be and they now live in their new dream home. But yeah, you having a laugh about this yesterday because a couple of epic clients came up and we'll talk about it all and I said like they'd been working towards being on the water for five or six years. We bought that piece of land that took about a year and a half to register about another half a year to build. We moved in for like eight months and then decided it wasn't for us and it's like, you know, we have a bit of a laugh about it now that I'm two sentimentally attached to the house. To sell it, so we thought we'd put the office in it. Okay, so maybe not the soundest financial decision, but hey man, it feels good. Do it. Why not? So anyway, in this video we want to talk about the three stages of property investing for those using the two properties to financial freedom strategy. For those of you who don't know about this strategy and haven't seen the episode on it yet, please go to on-property dot com dot a u four dash five. Oh eight. That's when me and ben spent about an hour talking through the strategy in depth, but the basic rundown is that you purchase two properties, build a granny flat on each of those properties. So you've got four incomes coming in, you pay those properties off, all those properties, pay themselves off over a number of years, 15 to 25 years, and once they're paid off, effectively you become financially free because the money that you're using to pay down the mortgage can now be put into your pocket. So it's just a really simple investment strategy for getting that baseline financial freedom, but something that can really help you as an investor when you are going along your investment journey is you just have a framework of the different stages of investing so you know where you're at, you know, what stage you're and you know what to focus on at that point. So that's why we wanted to create this episode to really talk about those stages and give you that framework to work with because it's been really helpful for us and it's been helpful for a lot of Ben's clients as well. Yeah. So I think I'm sort of jumping into the strategy or this framework. We've been talking about it with a couple of different people obviously through video format, the podcast and then I've started to introduce it to clients probably over the last six to eight weeks and the feedback's been really positive and I like the second phase of this strategy probably more than anything else. And I'll explain that a little bit more once we get to that. But um, I really do like this concept of starting with foundation is Ryan calls it, which means getting your ducks lined up so that in the future you've locked in financial freedom for yourself based on obviously you being disciplined and actually saying this strategy through because you know, that's the way that the strategy can come unstuck as well. Yeah. And so the three stages that we're talking about is stage number one is foundation, and this is where you buy what we're calling your foundational properties. So these are the properties that will go onto when they're completely paid off, provide you with that passive income and financial freedom. So stage number one is that foundation stage where you're building up those foundational properties there, the foundation to your financial freedom. Stage number two, the one that ben saying he's so excited about is the acceleration phase. And this is a really fun phase as well because you can then try and pay off those foundational properties faster. You can do it through so many different methods, which we'll get into. And then the third phase, which is probably my favorite phase, and that's, and that's the freedom to have choices, to do what you want, uh, whether that be to live a crazy life like I do, or to pursue a larger portion of wealth. So let's go deep on the foundation phase because that's really the most important phase if he only gonna get one, right? You've got to get that one right. So Ben, do you want to talk people through the foundation phase and what they need to do in that phase? Yeah. So foundation finished to property strategy. And again, if you only want to do one property, fine, if you want to do five properties, fine, you know, this is just an overall concept for the average person like Ryan and I to achieve pseudo financial freedom in a relatively good period of time to financial freedom, real financial freedom, financial freedom, let's call it real financial freedom then. But obviously there's dependencies as well, man. So I don't want to be like you're going to be 100 percent financially free because if the world goes into war or something or assuming disaster doesn't strike and assuming you invest well in your properties, continue to perform, then you should have baseline financial freedom, financial, whether that be guaranteed forever, no matter what nuclear bomb to go off or whatever. Probably not. But assuming that the world continues, I have the standard rate that it is. You know, you should be fine. Sorry. Let's just like not cut that out because I know you're not going to leave it. I'm embarrassed by that. So step one is really, really simple. We go out and we actually buy a house and if you can afford to buy a second house, she'd go out and buy a second house after you picked up that first one. Now we're not talking about setting world records for the most expensive properties purchased here. What we're really looking for is really, really high quality properties. I like the Sydney and the Brisbane markets personally, but obviously there's other markets in Australia that this can definitely work within. What you do need in terms of the market is a market where you can legally build a house or buy a house and then, you know, build a granny flat on that property and read them out to two different people. Now that's really important because as of the time I'm recording this video, you can't legally do that in Melbourne. Um, but obviously you can in New South Wales parts of was South Australia. You can do it in northern territory and you can do it in Queensland. So I'm a Sydney, Melbourne, Brisbane Investa, but it really works the strategy in parts of Brisbane and parts of Sydney. Maybe Sydney is a bit expensive. So what we're talking about for this to ultimately work like an example would be go out and buy 400 to $450,000 home, um, within sort of 20 odd k's of the cbd on a nice big block of land. Um, and so you go out and buy two houses that look like that, or you go out and build two houses that looked like that depending on what your preferred strategies. And then what we do after we own those two houses is to add granny flats that both of them. So we effectively, if they bought an existing home, build a granny flat on the back. If we've decided to buy a piece of land and we're looking to build, then you obviously build the house and the granny flat at the same time. And you know, let's say the house is 400 to 450 k at the moment, the granny flat might be $110,000 on top of that, you know, for a roundabout that 510 during the sort of $560,000 mark, um, you're getting a really high quality property that's going to get long term capital growth. But he's also getting a great Brent return. So again, let's say that we bought the house for 400 K, we'd hope it would rent for somewhere between 380 and 400 bucks a week. And then you do your $110,000. Granny flat built that in the backyard on an older home. And you'd be getting about 280 to 300 bucks a week that depending on the market, so you know, one house plus one granny flat, now the house and another granny flat, you know, we're looking at about 680 to 700 bucks a week in total rent return per house. And obviously if you add the compound effect of inflation on rent returns over a period of time, you know that revenue is going to probably be today the worst that it's going to be in the holding period. And as time goes on,