What I am focused on: How can property entrepreneurs profit in a down market? Obviously we want to buy the lows in the market and we can either then develop and add value into a rising market or we can manufacture some growth and sell in the same market by renovating but how do we mitigate some of the other problems associated with the current market – what if we find it challenging to fund our purchase or to find the right buyer at the right price when selling? For the last 100 plus years Australians have managed to buy and sell properties even when the market threw us curve-balls (and we faced challenges getting into and out of the market due to funding constraints or low sentiment) by using “owner finance” principles – so my focal point question this week – “How can we mitigate loss of control in an uncertain property market by leveraging seller finance alternatives for success?”
What I am reading: “52 Homes in 52 weeks” by Dolf DeRoos. When I had children and stopped actively practising as a barrister I began the segue to property investing and started reading personal development and business books. After years of reading dusty legal times I was blown away by the fact that there was a whole exciting world of opportunity out there! I started with “Rich Dad, Poor Dad” by Robert Kiyosaki and realised I was now playing in what he referred to as the “investor” quadrant so I doubled down on real estate investment books. Dolf De Roos’ ‘Real Estate Riches” became my bible. Dolf was my absolute hero and years later I met him in person at an event where we shared the stage. I told him that he was the reason I did what I do. He suggested a business collaboration and I was so honoured. But life got in the way. One of my greatest regrets was that I let that opportunity get away. Dolf did collaborate with one of his students, Gene Burns and they bought 52 homes in 52 weeks using seller finance techniques.
What I am studying: Seller finance strategies available in Australian law for property investors. This is a strategy that helps both buyers and sellers in a falling property market with rising inflation and interest rates. It has been used in Australia for nearly 150 years and always loses popularity when it is easy for buyers to get a loan and for sellers to achieve their asking price. But when the market turns it can be really useful in attaining win/win outcomes where banks and lenders are saying “no” to buyers – which is what we are seeing now with rising rates and the cost of living making loan qualification with higher serviceability challenging for buyers. This has a knock-on effect for sellers who may have to lower their asking price. Seller finance can achieve outcomes without a bank.
What’s coming up: We have a complimentary livestream event this Saturday for those that want to learn how to purchase distressed real estate for little to no money down. You can register if you haven’t already here.
In case you missed it: Another episode of the Property Lovers Podcast was released this week, it is a special Q&A episode where we answer all of your burning property questions. Available wherever you find your podcasts or here.
Thoughts, suggestions, feedback? Please let us know on our socials!
PS: We caught up with Property Lover Jenny recently to discuss her inspirational journey, you can check out the full conversation with Jenny and our other incredible clients here.