Property Hub - Investment Insights & Inspiration - Get Invested: Part 1 - Drew Evans on building instant equity

Episode Date: March 1, 2024

Building wealth with property takes time, but is there a faster way? Drew Evans shares his insights. As I always say, building wealth with property is a long-term game, and with a low-stress, sustainable strategy most people are looking at a commitment of at least 15 years.  Of course, there are faster ways but there is no silver bullet - it all depends on your borrowing capacity, equity, knowledge, expertise, risk appetite etc.  To talk about how to accelerate your property investment strategy, we've got a two-part interview with Drew Evans from Caifu Property. Drew is an active property investor who has built up a property portfolio valued at $25 million over the last 10 years. He is passionate about helping his clients benefit from the same strategy that has fast-tracked his personal portfolio. This week we’re going to delve into Drew's personal investment journey to break down what he's done differently and why, and in next week’s part 2 episode he’ll deep dive into the detail of how he is now helping others to do the same. Connect with Drew www.caifuproperty.com.au Join our Facebook community Join the The Property Hub Collective, connect and learn from likeminded investors and experts. Join the Property Hub community on Substack! Sign up to get Australian property news, opinion and episodes in your inbox: https://propertyhubau.substack.com/  Three easy ways to Get Invested right now: Subscribe to this podcast now, if you haven’t already, and get the inspiration delivered to your podcast feed each week Get a copy of my book, Get Invested, for FREE, and find out what it takes for you to invest in living more, working less. Go to: https://knowhowproperty.com.au/get-invested-free-ebook Join the Get Invested community. Each month Bushy sends a free and exclusive monthly email full of practical ‘Self, Health and Wealth’ wisdom that our current Freedom Fighter subscribers can’t wait to get each month. Just visit bushymartin.com.au, scroll to the bottom of the page and sign up. About Get Invested, a Property Hub show Get Invested is the leading weekly podcast for Australians who want to learn how to unlock their full ‘self, health and wealth’ potential. Hosted by Bushy Martin, an award winning property investor, founder, author and media commentator who is recognised as one of Australia’s most trusted experts in property, investment and lifestyle, Get Invested reveals the secrets of the high performers who invest for success in every aspect of their lives and the world around them. Get Invested is part of the Property Hub podcast channel, your home for property investment insights, inspiration and stories from Australia’s top property experts, investors, leaders and analysts. Subscribe now on Apple Podcasts, Spotify and Google Podcasts to get every Get Invested episode each week for free, and also get full access to RealtyTalk, Australia’s top online property show for red hot property investing news and insights direct from property industry leaders and influencers. Property Hub is a collaboration between Bushy Martin from KnowHow Property, Kevin Turner from Realty, show producer Andrew Montesi from Apiro Marketing and Apiro Media, and Australia’s largest independent podcast networkDM Media.  For business enquiries, email [e-mail] omnystudio.com/listener for privacy information.

how does this work or how do some people you know build these massive property portfolios while other people get stuck at one or two so what i've done is i've taken on small developing as a passion of mine it's been very very uh fruitful for me personally and obviously now i'm helping clients do the same but how well it's very simple not necessarily easy but it's very simple in the fact of finding opportunities that are under market value you then add value to the property, whether that's renovating or subdividing or developing. For me, it's by doing small developments. Welcome to Get Invested on the Property Hub podcast channel, the leading weekly show to help you unlock your full self-health and wealth potential. I'm your host, Bushy Martin,

and each week, I go deep with the best investors, experts, leaders, and founders to find out what it takes to break free from the grind, discover freedom, and live by design. Subscribe now and join me and get invested in the life you really want. Let's get started. Hi Freight and Fighters. How can you grow your wealth faster and earlier so you don't have to work? This is a question that I'm constantly asked when I first start working with investors. If you're a time poor, hardworking Aussie who's ambitious and focused on building your career and dedicating long hours to make this happen, while devoting what remains of your limited spare time to your family and friends and the safest easiest and most affordable way to build wealth and

property is to focus on scarcity and play the long game by securing quality properties in tightly held demand areas and then structuring the ownership and financing cleverly to optimize cash flow affordability and then just let time the tenant the tax office and the magic of compounding to do the heavy lifting on building your wealth while you continue to do what you do well and enjoy your life now this is a low stress low mess way to build your wealth by stealth and it has and continues to work well for many hard-working Aussies but on average this is going to take you a minimum of 15 years to make a dent so are there alternative faster ways to make it happen the answer is always yes but there's no surefire one-size-fits-all silver bullet or a set and

forget magic formula because it always depends. It depends on how much. In addition to how much borrowing capacity you have, how much equity you have accessible and how much your resulting purchasing power is, it also depends on how much knowledge and expertise you have, how much time you can dedicate and devote to investing, how much additional perceived risk you're comfortable managing in the context of your personal sleep and night factor, how much you can adapt to the dynamics of constantly changing property conditions and how much action you take and if you're short on any of these how much you can surround yourself with a proven team of expert independent professionals in each and every aspect of the property investment process so that your role

as the owner of your elite investment team is just to manage your managers. Now these are all consideration that today's special guest Drew Evans has successfully embraced. He's going to open your eyes to an alternative way of investing that has the potential to manufacture equity more quickly and effectively, as long as you're able to manage and mitigate the associated creation risk. So this week, we're going to delve into his personal investment journey to break down why and what he's done differently. And in next week's part two episode, he'll deep dive on the nitty gritties of the how, and how he's now helping others like you to do the same. You see, Drew has consistently questioned the status quo and followed the road less travelled by clearly

combining a delicate mix of analytics, research and intelligence as the key to wise and profitable property acquisitions using his pie principle, which I'm sure we'll talk about later. And this has resulted in him being able to create just over 10 million in equity in just 10 years. If you've been listening to the Property Hub for any length of time, you have already heard and seen drew on our realty talk show and now we're going to deep dive on the ins and outs of his personal approach so i'm really looking forward to this conversation so welcome and let's get invested drew hey bushy thanks so much for having me again mate good to see you absolutely mate uh we've had some good chats on the realty talk show in relation to some of the great initiatives that

you're doing but uh for those who either haven't seen them or haven't come across you in recent times. Let's kick it off by asking you, what do you do differently and why do you do what you do, Drew? Thanks, Wushu. Yeah. So I guess, first of all, I'm an active property investor myself and a small developer. I also now help, I think we're up to 850 clients do the same, which is pretty humbling experience given it's been less than a decade running my own business. But I guess where my point of difference is very different is the fact of when I had my own personal aha moment and that's when you know i picked up the the brw rich list and of that you know top 100 people uh some crazy statistic of the amount of rich people in there were actually

formed by investing in property and at the time i was looking for another property investment education company and i thought geez how does this work or how do some people you know build these massive property portfolios while other people get stuck at one or two and for me it all came down to strategic planning and the strategy that you adopt with specific property acquisitions And so for me, I kind of fell into it, I guess, in some respects, because I've done the typical retail buy, hope, and pray approach to investing, which can't work. But unfortunately, my personality doesn't allow me to have the patience or the ego, I guess, to allow that to happen.

So what I've done is I've taken on small developing as a passion of mine. It's been very, very fruitful for me personally. And obviously, now I'm helping clients do the same. But how? Well, it's very simple. not necessarily easy, but it's very simple. And the fact of finding opportunities that are under market value, you then add value to the property, whether that's renovating or subdividing or developing. For me, it's inspired by doing small developments. So at the end of the project,

you have a significant equity advantage. And it's this equity that gives you options. Because as you correctly said in the intro, it's either your borrowing capacity or it's your buying power that will prevent you from moving forward and building up the portfolio of your dreams. and so for me i love the ability to develop big chunks of equity on completion of any project to give you the option do you a use the proceeds that you've made to then pay down any non-deductible debt that in turn frees up your borrowing capacity which allows you to keep moving forward or b do you use the equity that you've generated to then roll into your next project because i can tell you now when you first get started that is the hardest part because you have to slave your

way to build up your deposit. And I can tell you, the perks of living in this beautiful country is it's not easy to save. You have a huge amount of tax, you've got a huge amount of living costs, and then you save what little is left over. So getting into your first one or two acquisitions is the most important. Sorry, let me clarify. It's all important, but the most important to get your money to work harder for you is by finding opportunities that can speed up the results. And again, very humbling when we talk about those numbers. In fact, it's a little bit more now but uh you know i started you know 10 years ago and uh if you were to ask my 10 year younger self uh if i was i was today yeah i would uh i'd have to take my hat off but um again i'm

no different to anyone else uh yeah i'm nothing special it's just i've sort of uh had a concept have an idea and uh to be frank just really giving it all it's bushy a lot of my well there's there's so much to unpack with what you've just shared uh right there and then but well i'm going to come back to that mate because what i want to do now is is wind the clock back uh to as early as you'd like to go and talk us through where you've invested your time energy money over the years and why and how has this led you uh to what you decided to do a few years ago and really focus on small developments and i'm talking uh childhood potentially influence the parents what what has got you to this point uh because i it's a pretty interesting story mate so i want to hear it

It is, yeah. And, you know, I'll just pre-frame. If my accent's a little bit off, it's not because I'm having a bad day. It's because I actually, I grew up in a country called Zimbabwe. And I was on board in school at the time when I turned 15. And unfortunately, my family were victims of the land redispersement regime from Robert Mugabe. You know, not to get into detail, it's a pretty depressing story, but Dad was really badly beaten up. It was at that point he said, kids, you know, you're not going back to boarding school. We're actually off to Australia. So in December of 2001, we packed up our bags and were fortunate enough that we could move to Newcastle, here in Australia. I'll leave that story aside because I then went to school. Listen, I wasn't smart enough to get into university. You know, it's something that my mum's best advice she ever gave me, actually, which is a bit of a digression. She said, Drew, don't worry if you're not the smartest person in the room

because those who are will end up working for you. And I don't know. Thanks, Mum. But I don't know if that was to help see me through it. But anyway, so long story short, up in time. Sorry, mate, jumping in there. I'm going to use that quote because one thing that I've noticed and you've probably noticed as well is that superintelligence

can actually be a hamstring when it comes to investment because very intelligent people tend to over-intellectualise. They're looking for the unicorns as a consequence of that. And as a result, they can be their own worst enemy in terms of actually taking the action required to get the results that you need to in property. So, sorry to digress there, mate, but I haven't heard that quote before

and I'll tell your mum I'm going to flog that because that's going to become very useful moving forward. But sorry, mate, go on. No, no problems. So, I went to business college. At the time, you know, we couldn't afford to get into the international university. So, I went to business college,

travelled, ran out of money, travelled, ran out of money, actually ended up working for National Australia Bank as a financial planner, which in hindsight now for me is a big mind-blowing because at the ripe old age of 19, 20, 21, advising retirees about how to spend their hard-earned cash, for me, it's just, this doesn't make sense. But again, I digress. I then worked for Newcastle's biggest house of land developer, and that taught me exactly what not to do. Yeah, now, I'd attract you there, Matt, because I'm always interested in what gets people involved in property and interested in property. So you're sitting in the NAB, you're a financial planner.

What was the trigger that thought, gee, I might jump over here and have a go at this? Well, see, I've always been really interested in how to generate wealth and how to get money to work harder for you. And that's a direct credit to my parents because my parents in some ways are very, very entrepreneurial. They inadvertently did that through, I guess, their career in farming in Africa and more so what they've done here in Australia now. So I've always been interested in that. And obviously, property has always been a passion of mine, even though I didn't really know it at the time. So again, it showed me what not to do in the land of elephant space. I then moved to Sydney and worked for Australia's biggest property education company. And I put that in

inverted commas, rightfully so. But essentially from there, it was the best job for me at the time because it taught me exactly what to do in business, but also more importantly, what not to do in business. And I'll leave that story there. But essentially, fast track six years of working at this organization. I went very, very hard at investing myself personally. I made some cracking investments, but to be honest, Bushy, I also made some absolute horrors, which no doubt we'll talk about in a sec. What that allowed me to do is it allowed me actually to resign from my job. I was living in Double Bay at the time. My property portfolio paid for me to resign. It paid for all my living expenses, and I didn't have an income for

the better part of two years because of my property portfolio. Again, there is a bit of a silver lining to that story. The aha moment for me was actually because I was still employed by somebody else. I did my first project at the time here in Newcastle, actually, which was purchasing a corner block of dirt. Now, my intention was to develop two four-bedroom homes on the block of dirt with a mutual subdivision.

And again, depending on how much detail you want to dive into, I came up with the roadblock after roadblock, but I actually met an architect that said, drew. Based on the land size, you physically can't subdivide the block and put two dwellings on it. However, if you put the dwellings on it first and then carry out the subdivision, you can do it. The moral of the story there is essentially, inadvertently, I was actually practicing what I preached without even knowing about it, which is finding opportunities that were under market value, adding value through in-house hall development, and at the end,

I had a huge equity advantage to give me options. My previous, I guess, education from previous as mentors was hey buy the best piece of blue chip real estate that you can afford and just wait it's sit and wait and uh i guess for me that's um that's something that i don't believe in anymore at all actually um but again we can talk about it down the track so yeah i mean for those that don't have an option it's better than putting money in the super uh but if you're aggressive and you're wanting to make things happen faster then then being creative is is the essence of exactly exactly that mate so we're we'll we'll circle back to that i'm also interested in again i'm going to sort of jump in here because a lot of a lot of people listening will be going well

why did why did drew decide to build two houses on a corner block and have the confidence that the building exercise assuming that you probably haven't had much exposure to building in that point in time what made you feel comfortable that was a good thing to do uh to be honest for me it was numbers on the up in and you're 100 right like the problem with developing is you don't know what you don't know and probably developing is something that you don't want to get wrong right it could be very very very unforgiving if you get it wrong uh you know we're not it's not like we're talking about insignificant amounts of money uh when we do it so uh i was just very fortunate that that everything kind of went according to plan um and it was a very profitable project for me

uh my second project probably not the case and again i can elaborate on it if you want which was a 2,000 square meter block of land carrying out a mutual subdivision with two four bedroom houses in the wrong market with the wrong time with the wrong causes and I was fortunate I didn't lose money but I can tell you what Bushy

I definitely didn't make any money and that's a learning lesson. Well here's the good news though a lot of people at that point and I would imagine it would be a very stressful exercise as well as financially challenging would hang up the towel throw the baby out with the bath water walk away from property and not do it again

where does resilience come from in you personally that says okay well that's a learning exercise for me i'm just not going to do that again i'm going to do it differently uh yeah this is how i'm going to go from here what talk to me a bit about that um well i think a little bit about my ego probably got a bit to play about it um you know i'll just i'm never ever going to give up i'm never ever going to fail um it comes back to one of my favorite quotes and it's along the lines of whether believe whether you believe you can or you can't you're right and that's always stuck with me so i guess you know at the age that i was like what's the other alternative give up and you know it's never been an option for me so i don't even i don't even consider i don't even know how

to answer that question love it sorry keep keep going the exercise because i i love the way you're breaking down your property journey yeah because i really want you to share the highs lows wins losses and and the learnings that came out of it if you don't mind yeah of course so i guess if i take a step back before i got into my personal story and where my love of property started was actually through my parents so when i was at university um mom and dad had this agreement with me where they purchased a university house it was a four bedroom house and uh i won't use the word I want to use to describe its positioning, but let's just say it was an absolute dump. Now, what we did is, Drew, you can come and help us renovate it. Essentially, what we did is we

turned a four-bedroom house into a seven-bedroom house. We converted the garage into three extra bedrooms. The deal that I had, Bushy, was I got to live there for free for my university days. However, I had to manage the property. I had to rent it out to my buddies. I believe at the time, it was $130 or $160 a week per room. That included all of your water, all of your electricity, all of your bills, all of the internet. And my job was to manage it on behalf of my parents. So we actually did that so well for the first house,

we then got a second house. And again, that sort of sparked the interest because we were adding value. We were generating a huge amount of positive cash flow, even though I was doing all the work, but I got to do it for free. And for me, that's what sort of spurred what I love to do and that's how it all came to be.

So that's what sparked my interest. go um after that uh you know i then started working this education company and uh you know the mistake i made there was purchasing an off-the-plan apartment in brisbane and again i don't want to have a uh you know a mud-throwing competition uh contest it just actually is what it is i purchased this property in hindsight completely overpriced in the wrong market uh i held it for seven years and and then just made the call hey it's time to get rid of it and lucky to get my money back. Was that apartment one of the ones

that the company you're working for were actively promoting? They were, mate, yeah. Yeah, they were. As soon as you mentioned the words off the plan of an apartment, my eyes shut down, mate, because there's so many red flashing lights

in that statement, let alone beyond that. But if you're drinking the Kool-Aid of the company you're working for, I can completely understand why you'd go, right, well, if they guys think it's good, let's have a crack. Clearly, the reality is very different.

So let's go on from there, mate. Well, I think you're right. You're young and naive, and you kind of take on what your mentors or role models do. By contrast, though, in my opinion, not all of the plan departments are wrong. I mean, I've got a business partner now, and he's made a million dollars in all of the plan departments. I kid you not. And it logically doesn't make sense. So I think it comes down to a project-by-project basis.

I think it comes down to an individual client's personality and obviously strategy perspective as well. But for me, that was the big no-no, which goes against the advice that I was sort of taught, is buy the best piece of real estate and then hold it for as long as you can, which isn't wrong, isn't wrong, right? But is it the best strategy for me?

The answer in hindsight is definitely not. There's better and quicker and easier ways to do it. Yeah, and let me circle back there. I totally agree with what you said about the problems. The difference is whether you're the people developing the apartments and then making the profit versus the person who's buying the end result and there's no upside apart from holding a property that's not likely to grow much.

So, yeah, very well said because it's very easy for people if they're working in one area to poo-poo an alternative strategy. As you and I both know, you can make money out of anything in property. you've just got to be smart and clever about how you do it and apply the right opportunity to the right conditions to to maximize that so i know that beautifully said so i keep interrupting mate but keep going that's okay well i mean it's it's a great talking point because for me now the way that i look at property it's no different to any other product you see on supermarket shelves right you know i did a video the other day with a chocolate bar you know mr

beast who's one of the most famous youtubers i picked up his chocolate bar and i said hey Property is no different to this product. There is margin everywhere. And you think about it, like in property, there's margin, right? It's not a dirty word, right? It's if you're going to buy an existing house, a land developer's made money, a builder's made money, a developer who's done it all together has made money, a real estate agent's made money, and then the vendor makes money as well.

And my investment philosophy is go, where do you draw the line between purchasing somebody else's capital growth versus creating your own? And for me, that's the bit of an insight as to how my brain works moving forward with developing real estate. love it love it excellent all that yeah we i'm sure we haven't finished the end of your personal journey matt so so keep us going and again tell us about what you did and and what worked well what didn't and what what the learnings in each case were because that that's the stuff that we really want to unpack of course so i guess the um what worked really well for me is also my

i used that project i did in uh in newcastle what worked really well is the fact that i took profit off the table, use that profit to pay down the debt on my own home. So I now live in my dream house completely debt-free. The challenge with that now in hindsight is never ever sell unless you are in a position where you need to. And what I talk to my clients about is there's only really two reasons. Number one is your current portfolio is preventing you from doing something else and you become stuck. Or number two, the opportunity cost of holding that property, It outweighs the opportunity cost of selling it. Now, in that project at the time, I didn't need to sell.

I wanted to, but I didn't need to. So the silver lining is I sold it. I paid off my dream house. But if I'd held that property, I've done a video on it, it would be worth a million dollars more today. So again, that's a big learning lesson for me. Another one with the off-the-plan apartment is take your ego out of it. Sometimes you're better off to cut learning lesson,

not a mistake, but a learning lesson. And again, it frees up capacity to go again. Now, I guess I've learned so many different things that have happened between then and where I am today. But what my journey was, it's all about investing in as many properties as I could from a personal perspective, because when I was working for somebody else,

I did have a really strong income, which meant I paid a huge amount in tax. Now, let me stress, my investment philosophy is not to invest in property just to minimize your tax. It's a benefit of investing. It's not a reason for investing. So I got to a point where I had six or seven properties in my personal name.

I wasn't paying much tax at all. Whereas now, as my portfolio has grown and my strategy has sort of grown a little bit more, the entities that I use have also changed and adapted. So now I've got a family trust. I've got a development company. I've got a joint venture company. I've got a self-managed super fund company. And all of these different entities serve the purpose for what I'm wanting to do.

And I guess that's another big learning lesson now is saying, hey, every acquisition you should take on, it needs to have a strategy behind it. Am I going to buy, develop, sell? Am I going to buy, develop, keep? Is this going to set me up for my next acquisition or is it going to set me back? And these things are so important that you get the structure set up correctly from the very beginning because one of those projects was a huge learning lesson. And again, I hope this doesn't come across the wrong way.

I want to share my experience with you just to help save you the potential mistake, which I've already done. That mistake was. Yeah, go on. Sorry, mate. That mistake was listening to my old accountant, and let me stress old accountant, around how to structure a development on the Central Coast.

Now, again, I never want to sell if I don't have to, but my old accountant said, Drew, the best entity for you to do this in is at a family trust. Now, in New South Wales, you don't have a land tax exemption within family trust. Now, that's fine. If you've got one project, okay, fine. Well, I have a six grand a year in tax.

I can pay that. Not what I was expecting, but it's manageable. But try doing the whole barrage of developments if your intention is to keep them. Again, no right or wrong. It was just probably wrong advice for me at the time. To fill the lie there, it's actually one of my best performing

personal developments that I've done. I did a duplex on the Central Coast. It was an eight bed, four bath, two car. Is that right? Yeah, eight bed, four bath, two car, which will be carried out in subdivision. So four bed, two bath, one car, four bed, two bath, one car.

Now, I was all in, and this is very crazy to say this now, for $898,000. That was the total acquisition price. That's the land price, that's the construction price, that's your DA contributions, your headworks charges, your subdivision fees, all in, $898,000. Now, the project was finished.

To be fair, I did rent it out for six months or so, and then this land tax bill came through. I went, oh, my God, what's this all about? Fortunately for me, I did take profit off the table. I sold each half for $725,000 per side, which again is a gross realisation of $1,450,000 and that gave me the taste of developing where I essentially got a gross profit of $552,000.

So again, blessing and a curse, use the proceeds, pay down the debt of my house. And were you able to roll over the capital gains from those into future projects because you had a good accountant sitting in your back pocket or how did you manage that component? No, mate. And I'd love to know if you can do that.

But no, I bent over and the ATO was pretty happy with me for that year because I did pay not only the land tax bill for the year, but also the capital gains tax. But still walked away with a net 560-odd grand. Is that what you're saying? My gross numbers were 552 gross. After all of that, I guess if you want to go deep dive personal, it was at the time that my wife was pregnant with our first child.

So she wasn't working. It was in a family trust. Guess where all the properties got distributed to? Again, helping minimize the capital gain and to tax. But for me, paying tax isn't a bad thing. It means you're making money, Drew. But, mate, nobody's strong-armed to sell that development. Nobody put a gun to my head and said, Drew, you have to sell it.

And anybody wanting to sell a property needs to have their head read. If they're going to make money, you know you have to pay tax. It's a known variable, so plan for it. It's not nice, but you've got to plan for it. So that's exactly what we did. Now, moving forward, I guess this is where things have got really supercharged within my portfolio, is understanding how one plus one actually equals three, and I'll explain that.

As soon as you can incorporate different people, different entities, and you understand the lending environment, there's certain loopholes that can fast-track things, and this is where, honestly, it pays to get the right advice. It pays to follow people that have already done what you want to do, and that's something I'm very passionate about now, which obviously is what I help my clients do moving forward. But again, I don't know how much detail you want around what I'm doing now, but just stop me at any point. No, what I love about what you've shared already, Drew, and this is again, I see a lot of people

misreading this, is that you're smart enough to adapt and evolve your strategy over time to make sure you're buying the right type of property in the right entity given the circumstances at that point. And it does change and evolve. It needs to change and evolve to optimise your situation as you go down that track. I see a lot of investors who come in with a very fixed mindset around this is my strategy, I'm only going to do it until I die.

They're really missing the opportunity because it's that mix of the right property combination, the right financing structure that needs to support it alongside being very clever around the entity and tax treatment of those properties to then truly look at what is the bottom line in this exercise rather than look at each of these bits in isolation, which is a big issue I see with both investors and some of the property professionals. They're only looking at their piece without understanding the impact it has on the broader sphere and then the broader strategy that the client is adopting to actually achieve their

long-term goals. So there's some absolute gold in what you've shared there, mate. One thing that I would like to do now is if you look back on, you know, you've had a pretty extensive and a pretty rapid investment involvement over time compared to a lot of the buy and hold and hopers, as you say. what what's been your best investment and your worst investment during that journey and what have you learned from each of those yeah i think i'm briefly skipping on those the best investment was the one that i had to sell on the central coast um so far i've got better ones than that but i haven't sold them yet so i don't want to give you the actual numbers yet because it would be uh non-congruent so i don't have the actual numbers but i can tell you actually it's a lot

more than the 552 upside. The worst investment, I guess, is definitely that off-the-plan apartment in Brisbane. Purchasing it seven years later, sold it, lucky to get my money back. In terms of what I would do differently, you actually hit the nail on the head before. In my opinion, it's all about thinking twice, cutting once. Probably can be very unforgiving if you get it wrong. So run through all the scenarios. It doesn't cost anything. It's almost like paper trading if you're on the share market is run through the scenarios but speak to people who can give you the best advice right and i'll give you an example uh unfortunately i had a client that joined us that i did this before they joined us um they went and set up these fancy fancy

structures right and on paper i think it was probably an ego tickle uh when they went to family barbecue you know i've got this corporate trustee for this family trust who does this for this holding entity that sounds fancy right um they came to me and i said drew i want to do my for this project. I said, cool. Where's your finance coming from? Oh, you know, I earned a good income. Okay. Well, how are you going to fund it? Mate, they spent $10,000 setting up these entities, but they couldn't get the finance to put, well, they're like, Mr. and Mrs. Clotton, you've just spent 10 grand and you can't even use what you've set up. So these are the things that you need to talk about and go, okay, well, listen, what am I doing behind this project? Am I going

to buy it, develop it and sell it? Am I going to buy it, develop it and keep it? Better yet, Bushy, in the interest rate environment that we're in now, am I going to buy this duplex, develop it sell one half use the proceeds i make to pay down the debt on the other half to again free up the yields free up the cash flow to allow them to keep it bought these the questions that you need to ask before you pull the trigger on any acquisition so again learning lesson you need to have your strategy talk to your finance talk to your entity and have it all come together now you also correctly said is we're not trees right property developing is not an exact science right things pop up and you need to move and you need to adapt why on earth

if your strategy at the beginning like me and again i'll be humbled by would you buy develop and sell a property on completion if the market is still booming why would you do it you're leaving profit on the table so again you need to begin with the end in mind figure out what you want to do is it your borrowing capacity that's going to hurt you first or is it your buying power that's going to hurt you first whether it's you whether it's me it happens to all of us how are we going to overcome that better yet are there entities where we can join venture with people are there entities where you can essentially have as it stands today with a handful of different lenders an infinite borrowing capacity right if you invest with a corporate trustee and family trust

and companies as long as you can get an accountant declaration letter that says that that entity is trading profitably some lenders will get this 100 exclude the debt in that entity yeah right if you're the treadmill or if you're by the lawn at home, listen to that again. There are some lenders that will 100% exclude the debt. Yeah. Pretty crazy, right? Yeah, absolutely. William told me that 10 years ago. Yeah, it's spot on. The one qualifier I'm going to add to that though, Drew, and you'd know this as well as I do, is that making that trust positive cash flow or profitable the whole time often means you need to contribute a bigger chunk of equity than what you already would. So it's a very good solution for some investors who have the horsepower to do that.

As a blanket, my view is always that the solution's right for the right person, but there are a lot of people who are going to struggle to make the equity contribution necessary to keep that trust in a positive cash flow position unless there's other income going into it and then it becomes a trading entity that has the the financing issues that we spoke about you just touched on earlier so it's it's a horses for courses exercise a lot of people are going to oh let's go and get these special purpose trusts done and we can we can keep buying property forever uh the other thing i would say to that drew uh and again i'm i'm fairly conservative because i i like to look at the long-term exercise just because you can doesn't mean you should

because there's a you can be creating a house of cards that can fall over very quickly there are reasons why residential lenders do put limitations on borrowing capacity because they they're looking at their own risk so don't disregard the risk totally but by chasing the reward make sure you get a balance between the two and coming back to your point make sure you've built out the whole jigsaw and built it on paper first with every aspect that's involved in this so you know what the worst-case scenario on the bottom line is. So plan for the worst and then expect the best, and then there's not going to be any secrets or surprises in it.

So it's choosing the right vehicle and the right opportunity structured the right way at the right time without diving in and chasing the big gold carrot without seeing the big stick that might be sitting behind it. So I hope you don't mind me sort of jumping on that. No, no. I mean, at the end of the day, you're right, you're right, you're right, you're right, you're right. Everything you're saying is 100% right, right?

But from my perspective is sometimes you don't know what you don't know, right? And again, how do you make decisions or how do you take action on something that you don't know exists, right? So we're probably true. Definitely explore. It's spot on. That's the key is if you didn't know about it, go and explore it. uh have a chat to us or have a chat to drew uh to see whether that's even something you can do and whether it's right for you but if you don't know about it and you're still sticking to the

same old same old and you just you're stuck on a groove on the old record then there's if you ask the right questions and explore the exercise there's always a way so i'd love that i absolutely love that mate i think that's the key though as well right because you're no different to who i when it comes to probably investing and developing and making money there's no one-size-fits-all approach there really isn't right it's almost like the the compare the pair ad right what works for you may not be too good for me and we probably we probably should have started with that or i should disclaimer that right everything that i'm talking about is relevant to my personal circumstances but when it comes to your personal circumstances you need to speak to the right

person get the right advice around what you personally want to do um so yeah sorry mate No, no, no, beautifully said. We're on exactly the same page in that regard. Just jumping out of that for a minute, given the journey you've been on so far, what do you struggle with, Drew? At the moment now, I guess I'm sort of struggling with time. And again, it sounds so cliché.

You can always make more money, but you can't get more time. You know, in the last three years, it's actually my son's birthday today. But, you know, I'm at the office at six o'clock. I get back late at night. So for me, it's obviously just having that work-life balance at the moment for me. I'm very fortunate, same as you, Dushy, where I'm doing this because I love doing it, not because I need to do it, right?

I guess the reason I've worked so hard for this past decade is to really set myself up financially so that I have the choice to do what I want to do. So for me, that's the biggest thing I'm struggling with now is obviously trying to run two businesses, have two kids at home uh you know try and try and sell a house move into state and keep that work life balance but uh you can't stack too much more into that uh that cut mate it'd be well it's really overflowing and most people wouldn't be able to cope with it but let's jump to the future then uh paint it yeah paint out for us as i'm a big believer in living by design not by default by by making it happen not being letting it happen which i a lot of unfortunately aussies

use the excuse of being too busy to happen. So what does your ideal life and your life vision look like, mate? Well, for me, it's all about lifestyle. It's having the ability where your property portfolio pays you to own it. You don't have to pay it. And that's been one of my founding principles, Bushy, is I would never take on another project or another investment until my entire portfolio looked after itself, unreliant on my income or my wife's income or my business income. So fast forward to where the future holds, it's pretty exciting. One of the cool projects that I'm working on with my business partner at the moment is I'm sitting in our office now, which is in a suburb called Bullaroo in Newcastle, Lake Macquarie. We purchased

essentially a shop around three shops. Now we set up a special entity. And again, let me stress, this is the disclaimer. This is what I've done. This is not advice for anybody else, which was about Drew Evans. I set up an entity in my super fund. Damien set up an entity in his super fund. We combined forces. We bought the three shop fronts that I'm sitting in now. We've also just bought the newsagents next door. So essentially, we formed this amazing parcel of land on a main road in an absolute booming suburb. So again, before you walk before you can run, now I'm starting to understand, well, listen, how do I get the highest and best use out of a development site? For us, is it developing a level of

commercial with two levels of apartments the the area that i'm in is very undersupplied in ndis do we do a whole ndis building or more recently i'm running feasibilities on how do we develop a medical suite so the three levels of medical suite so you've got gps x-rays pathology uh that's kind of you know what i'm working on at the moment now but again all of this stuff takes time um i don't have the answers but like i practice what i preach the back of an good what can go wrong what can go wrong what can go wrong what can go right but you know for me uh profit creation is secondary to capital protection right i haven't worked this hard to give it all away because of ignorance and that's something that i'm doing now

yeah i love it mate what i love about uh what i'm hearing is that you you're always questioning you're always exploring that that almost childlike curiosity uh backed up with the ability to actually take action is clearly a big part of you and who you are and obviously a big part of your success because you explore things inside and out. You look at how it applies to you and where you're at and where you're going. And if nothing else, that is a great example of what the people listening in need to start adopting is not just to accept the one way, to keep exploring, to surround yourself with the right people who have already done it and can show you how to do it, rather than those that advertise themselves well, talk a great story but haven't done anything

and then end up putting you in a very difficult situation. So it's follow the proven players. But if we sort of revolve around now and we look back on a pretty rapid career, given the obvious inbred impatience that you have, which is a great driver at the best of times, if you were starting out again, what, if anything, would you invest in differently? what would i do differently mate i would find someone that has a proven track record that's done what i want to do right i'd find that person and i would do anything i could to get mentored or get coached by them to show me how to fast track the results because what i've kind of

learned is why don't make all your own mistakes when you can learn from somebody else somebody else so again you may find mentors that are happy to have a chat to you and fast track your results you may have to pay mentors and uh for me that's another big lesson that i've learned is uh the most expensive sometime the most expensive advice that you can sometimes get bushy is free especially when it comes to property so it's uh you know it's get educated it's understand plan for the worst hope for the best and is this acquisition going to set me up or is it going to set me back um but i can tell you what my portfolio would look very very differently if i didn't have the typical retail properties that you hold for seven years and you

get your money back i love it mate uh there is so much to learn from the the journey you've shared with us uh in the in the next episode we're going to deep dive into small developments so now that you've sort of wet all of our appetites around that in terms of the nitty-grits of how but i what i always do i'm uh get invested drew is i jump into what i call the bushfire lightning round or the ambush round and you'll get a couple days so i'm going to give you a blindfold and a cigarette and uh we're gonna surefire a couple of questions uh just to get to know you a bit better and the first of those mate is what's your favorite song and why oh gosh uh i'm gonna have to go to a childhood favorite which is blink blink 182 what's my age again i don't know what it is

about that song but it just gets me jacked up every time i listen to it well uh i'm a little bit older than you mate but uh i went along to the blink 182 concert in another eight years ago and I ended up in the mosh pit with my son and I was battered and bruised for about a week after, but great song, great band. Second one, mate, what superpower do you wish that you had and why? Oh, I wish it would be two.

It would be get back more time. It would be timeless, which I guess has its pros and its cons, or be invisible. I'd love to be a fly on the wall to listen to some conversation. Love both of those, mate. Slightly different direction.

if you could have coffee with anyone, either alive or dead, who would you choose and why? This is an interesting one because I've racked my head about this. There's so many people I'd love to meet, but what I've come to with my answer is I'd love to meet me when I'm 60 years old and have advice for the future me, have a coffee with the future me. What would you do differently? Love it. Love it. Okay. It's going to be a very wise year, mate. Given what you've packed into a pretty short period of time already, that would be someone worth talking to, mate. So book me in for that coffee when you hit 60, mate.

I'll be a bit old in a bit, but it'd be worth a chat. And next one's a little bit interesting. What would be the title of the book about you if your worst enemy wrote it? Ooh, that's a good one. I'm actually going to steal... Patrick Bet-David, who's an American, you know, Joe Reagan podcaster type guy,

he's actually got a book that says, Choose Your Enemies Wisely. So I'm going to pinch his title, and I'll call it that. And keep your enemies closer than your friends, mate. It's spot on. That's a cracker. Now, what's a question you wish I'd asked you that I haven't, and how would you have answered, mate?

What have you asked me? What would I do differently? I think we cover that off. Mate, no, listen, I think this has been a great chat. I don't really have a question. I'm an open book. I guess for me, I don't pretend to be something I'm not. I don't pretend to overcook the numbers and over over inflate things um you know for me I'm very

very fortunate to the values that my parents have instilled in me where honesty is always the best policy if I don't know something I'll tell you that if I've got a great result I'll tell you that if I've messed up somewhere that I'll tell you that um so for me that's probably the big takeaway is hey I'm I'm no different to anybody else listening to this podcast um you know I've just had a huge drive and a willingness to give it a cry. Absolutely, mate. Been absolutely gold. It's really setting up for another great conversation

when we dive into small developments in the next episode. So I just want to thank you for taking the time to share the ins and outs of your personal journey, mate. And if anyone listening would like to ask any further questions or leave comments about any part of Drew's journey, just join and jump into our newly-badged Property Hub Collective interactive Facebook community by clicking the link in the show notes

that you'll find quite easily where you can keep the conversation going with other like-minded, hardworking Aussies. And I look forward to continuing this conversation in the next week episode where we're going to deep dive into the good, bad and ugly of alternative investment in small developments.

So I look forward to seeing you then, Drew. Thanks, Washi. Talk soon. Thanks for tuning in to Get Invested on the Property Hub podcast channel, your home for property investment insights and inspiration. And don't leave yet until you've taken the next step towards living by design

by getting my award-winning book, Get Invested, absolutely free when you sign up at knowhowproperty.com.au or bushymartin.com.au. And finally, make sure you subscribe to Property Hub to get your weekly dose of Get Invested inspiration along with every episode of Realty Talk, Australia's leading property show for red-hot property investing news and insights direct from industry leaders and influencers. Remember to always get invested in your knowledge and I look forward to seeing you next time.