Debt to Financial Freedom Podcast Episode 2 with Joe Tucker

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Ep 2 - Debt to Financial Freedom Podcast with Joe Tucker

Joe Tucker is one of the best Buyers Agents I know. In fact, I refer many of my clients to him so you are in safe hands with him and his team when purchasing your next property! He runs Property Principles - as well as one of the largest property investment groups on Facebook with over 30,000+ members AUS Property Investors. Enjoy the episode!

Victor Lagos, a seasoned financial expert with years of experience working with clients to build wealth, shares his invaluable insights and strategies to help investors avoid common pitfalls that can kill their borrowing capacity. He draws from his own vast experience in the financial industry to provide practical advice and actionable tips.

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What is Debt to Financial Freedom?

Welcome to the Debt Financial Freedom Podcast. Everyone loves the benefits of money, but so many of us avoid the hard truths about saving and investing. We wrongly assume we don’t have enough time, capital or knowledge to be able to get to the point of having passive income streams, savings, or investments.The things we really need to know about money aren’t taught in schools. Spending less than you earn, maximising your income, budgeting, taxes, mortgages, investments and passive income - if you didn’t learn these things from your family, then you’re probably like most people who rely on credit cards, buy now, pay later and overdrafts. And then when you want to invest or buy property you will be wondering why you can’t get approval.But there is no judgment from me here - I was in exactly the same situation! Huge debt, poor financial habits and no assets to my name. Step by step I turned my situation around and now, as a certified mortgage broker for 16 years with several investment properties in my name, I’m here to help you go from debt to financial freedom. Because if I can do it, you can too.In this podcast, I will share tips, insights and strategies from my own journey and experience, as well as my clients and guest experts, who share my values and mission to help others create financial freedom. My goal in this podcast is to share raw, honest, transparent, and helpful stories that you can relate to, and that will inspire you to take control of your finances. The only ‘good’ debt is debt that brings you closer to financial freedom and I will show you exactly how to achieve this. Everything shared by me and my guests in this podcast is general in nature, and for education purposes only. None of your personal objectives, financial situation, or needs have been taken into consideration. I highly recommend you seek personal, financial, legal, taxation, and credit advice before you take action on what you heard on this podcast.

Victor Lagos: Welcome to the
debt to financial freedom

podcast. I'm your host, Victor
lager, and the founder of

loggers financial. I've been in
the finance and lending industry

for 16 years, and I've
personally made financial

mistakes and learn from them. I
started this podcast to share

stories and lessons on my own
journey, and to share insights

that may help others on their
journey. And I interviewed

people that I've connected with
that share the same values and

mission to help others create
financial freedom. My goal this

podcast is to share raw, honest,
transparent and helpful stories

that you can relate to, and
inspires you to take control of

your finances and only have debt
that brings you closer to

financial freedom. Everything on
this podcast is general in

nature. And for education
purposes only. None of your

personal objectives, financial
situation or needs has been

taken into consideration. I
highly recommend you seek

personal financial, legal
taxation and credit advice

before you take any action on
what has been heard on this

podcast. Welcome to episode two
of the debt to financial freedom

podcast. I'm your host, Victor
loggers. Today, I'm excited.

I've got a pretty good guest,
friend of mine, my buyer's

agent, my personal buyer's
agent, Joe Tucker. So for those

of you who don't know, Joe
Tucker, he has his own buyer's

agents agency called property
principles. And he is a co

founder of the very infamous,
that famous, very famous group

as property investors on
Facebook, which correct me if

I'm wrong, Joe, it's got about
27,000 followers now, about

30,000. Okay, Wow, impressive.

So, John, welcome.

Joe Tucker: Thanks for having me
here. This is this is awesome. I

feel like we've spent so much
time together as well. It's just

literally, it's good to catch
up. And it'll have the guests

listen in. The funny thing is,

Victor Lagos: we really got to
know each other over the phone.

And after a while, it kind of
felt like we've known each other

for ages. You know, we're just
always checking in, give me the

property deals. And yeah, you
know, actually, the main reason

I want to get you on the show
was because it was such a

goodbye. And I wanted to just
share that to my audience,

because so many people don't
understand how does buyer's

agency work? And why would you
like, why would you use one, and

I can share my story, and I want
to share how you actually helped

me like you helped my wife and I
a lot. And but before we get to

that, actually, I wanted to
maybe just hear a bit of your

story. And then I can sort of go
into into mine and how you

helped me?

Joe Tucker: Yeah, awesome. Well,
it's awesome to be here. And I

think that buyer's agents are
not for everyone, like using a

buyer's agent isn't the most be
all and end all of everything.

You can go out there like we've
created, like you said, as

property investors, it's about
investors getting out there and

doing this stuff themselves. But
yeah, my story's a bit of an

interesting one. So my first
deal was through a buyer's

agent. And I was terrible, it
was terrible mistake that I made

to go down the buyer's agent
route, this specific one, but it

took taught me a lot of lessons
about how to actually buy

property. So back in the day,
when I was getting my first

investment property, actually, I
had about $60,000 in savings,

and even in when you know 2018,
it's, it's not that's still not

a lot of money to be able to go
out there and buy. So I actually

used a guarantor loan and a bit
of a different way than normal

to buy a property. So one of the
things is I met a bit of a

mentor of a mentor of mine who
bought investment properties

throughout Sydney, he was
getting renovation projects, and

he was buying a property that
was under market value, adding

value through a renovation and
then withdrawing the equity,

which will allow him to go
again.

Victor Lagos: So instead of
selling it, he was actually

keeping it and extracting the
equity.

Joe Tucker: Yeah, yeah. I mean,
you don't have to sell you don't

have to sell the property to get
the equity out. That's, that's

what I learned. I thought you
had to buy Reno sell, buy rent,

sell, and then accumulate the
money and then buy a better

house. But for me, I only had
$60,000. So for stamp duties and

legals and deposit. That's not
enough to do it. So instead, I

asked the question, how can I
make this happen? Like how can I

continue my my investing journey
because right now with 60,000, I

can only buy buy and hold, and
I'll have $0 left for a

renovation. So instead, I
actually utilize the guarantor

loan, which was from my parents,
so I'm very grateful for that.

Amazing, amazing I like to think
about it is not so much a

handout. They didn't give me
$60,000 on top to help me

through but they gave me the
ability to leverage off of their

property to go in and purchase
my own deal. Yeah, that then

left me with C $60,000 to do
some renovation work on the

property and also pay for stamp
duty and everything like that.

Victor Lagos: Yeah, that's a
good, that's a good play. And

not all brokers know how to do
guarantor loans, either. They're

a little bit confusing. Oh,
yeah, not all banks will do

them. And especially not all
banks will do them for

investment properties as well.

Or did you buy it as an owner
occupy?

Joe Tucker: No, no, it was an
investment. It was absolutely an

investment. Yeah. Yeah. It's
interesting. I can't remember

the bank we use. But we had a
great, you know, great broker at

the time that helped me through
all of that process, for sure.

Victor Lagos: Awesome. And just
so just so our audience can

understand. At what point did
you realize, you know, what, I

want to help other people on
that journey to financial

freedom, because I've figured it
out. And I don't want to keep it

in I want to share with other
people. Well,

Joe Tucker: it was the
experience that I had of using

my first buyer's agency that I
went with, and essentially, it

was the coolest guy he has, he
spent hundreds of $1,000,

hundreds of 1000s of dollars on
media and marketing. He had all

the Facebook ads, he was on all
the podcast, he had a slick

suit, slick hair, the best, best
looking guy and and you just

think, Oh, well, the media
perception is he's the best. And

then I engaged his services. He
ended up finding me this amazing

hotspot location in Queensland,
a place that I'd never heard

about. And deal done happened in
a couple of weeks. And it

started to unravel when I
actually flew down to the

property and checked it out.

Because it's settled, and I flew
there, the day it settled to

pick up the keys, I was
expecting to do a $10,000

renovation, $12,000 renovation
and that would help me release

that guarantor loan. But I
didn't do the due diligence, I

handed my financial future over
to this guy. And that's where I

think people go a little bit
sideways. And this is why we

created the group is because you
got to get educated on property

first, don't just call up a
buyer's agent. I've heard about

buyer's agents, I need to just
someone else here, take my

financial future here, take the
keys, you drive, you need to

still be the one driving so I
didn't do that big mistake and

ended up with a dud property. On
Dave settlement, I was walking

up the stairs to go in and check
the property out. They were the

stairs that I had to pay $12,000
on defects $30,000 later, we got

the property for 280,000 30,000
on the Reno and that got

revalued at 310,000. So $1 in
and $1 out in equity, but that

pretty much just locked my money
away. So what I learned from

that was not every buyer's agent
is the same. If it's a massive

large scale, buyer's agent, it
may not be the best fit for you

like you want to have
communication, you want to make

sure that they've got your
incentives aligned as well. And

make sure that they're not
getting any kickbacks or

referrals from anybody. That's a
big one. Ask the question. Hey,

have you how do you get paid? Is
it just me that paying or do you

get paid by mortgage brokers
conveyances property managers

and those type of things who's
going to be doing the

inspections because the real
estate agent did the inspection.

So they got the camera and we're
going up, down, left, right and

moved all the bad stuff. And
it's only until then I realized

when I was too late that it was
too was too late and I am crappy

deal?

Victor Lagos: Well, actually, I
did not know this part of your

story. So no, thanks for sharing
that. And I feel like there's a

lot of people out there that
have gone through something

similar, where they were sold
the idea someone had really

good, you know, content out
there. And they were, you know,

all over the shop and in terms
of social media. And more

importantly, there was so the
dream or the idea of, of

financial freedom. And after a
while, they realized that they

were sold at that. Yeah. And
many of them, you know, it ends

up their journey. Yeah, and I
say this to a lot of people, the

first property you buy can
either make you or break you.

Yeah,

Joe Tucker: and is the most
important one, the most

important one is the first one,
then the second one, then the

third one. And then once you get
to five, you can you can be a

little bit looser, I'd like to
get to five, with your help.

Well, we will it will be getting
there. And I think that that's

actually a good point as well,
that you need to think and this

is the broking side of things.

This is your broker. So it was
awesome to have these in depth

conversations about strategy and
structuring. Because the way I

like to think about it is what
is this deal got to be to allow

you to get into the next one. So
you don't just look at the first

deal like oh, great, I've got a
$600,000 Borrowing policy or an

$800,000 borrowing capacity.

Should I just buy one property?

No, if you your goal is to get
to 3 million over the next, you

know, however many years, you
need to be strict and structured

about lining up the right
properties at the right time.

Because if you get a cash flow
here and growth here, it might

not give you the leverage to get
into the next one.

Victor Lagos: Yeah, good point
and just understanding where you

are on that journey. Some you
might talk to someone that's

already got a few properties. So
then you kind of assess their

portfolio. Yeah. Or you might
talk to someone that's buying

them First, and it's about
understanding what are the goals

in the short term? And in the
long term? And what's going to

help them achieve that. Yeah.

And balancing that with the
right property, the right

strategy, and obviously the
right finance structures?

Joe Tucker: Absolutely. Well,
that's what I found interesting

about your story, because you
have got a great financial

background. You're brokering of
the amazing Loggos. Financial.

Why did you decide to use a
buyer's agent? Like what was it

that because you already bought
property previously to this?

What made you go, Hey, I need to
use a buyer's agent this time.

Victor Lagos: Look, what it's a
good question. Thanks for asking

that because I a lot of people,
you know, they want to go out

and do it on their own. And I
was one of them. And I did, I

spent probably about two or
three months, maybe a bit less

researching the market. Like you
said, it's about getting

educated, alright, it's not just
jump in here, take my money,

find a property for me. And I
just, you know, do my own thing.

You got to know what you're
looking at. So you can guide the

buyer's agent the right way. So
I'm still glad I bought the

first time because I learned a
lot. And so basically, what the

time was around lock downs. Last
year, September, a little bit

before that. So everyone was
inside, right? couldn't really

get out there. So I spent that
time looking at other markets.

And to be honest, we weren't
well, I found out we weren't

actually fully thinking about
pure investment. We were

thinking, where could we move
to? Because obviously, Sydney

was locked down. And we're like,
Where can we actually have a

better lifestyle? That's more
affordable. And everyone was

buying in Queensland, you know,
in Melbourne, and where can we

buy somewhere different, and
Tasmania came up. So I looked, I

looked into Tasmania, different
suburbs, and I started talking

to property managers. And it
wasn't just a random property

manager actually went online, I
looked up property managers

actually had good reviews. And I
spoke to her. And you know, the

ones that are responsive,
because when you deal with

professionals, you want to make
sure that they're actually going

to be responsive and come back
to you. So the first one that

came back to me I talked to, she
was great. She she told me the

suburbs that I should probably
be considering around that price

point that I was aiming for. And
but it was tough. I gotta say,

like, we missed out on three
properties. And we won the

fourth one. Wow. And it was a
hard market because everyone was

offering much more than, than
the guide to win. So we lost on

price. Yeah. And in Tassie, like
you can't just put an offer in,

like in Sydney, or we just use
an email. This is my offer, like

you have to sign a contract with
all your conditions, and has to

be witnessed. So can imagine
when you're stuck at home, how

do you do that? Like, yeah, you
have to print and sign I had to

get my wife to sign the witness
and send that off to the agent

to see if they'll accept the
offer. But you know, but I'm

glad the third one that all
three didn't go through because

the fourth one was a great one.

So we bought and I thought this
was a great investment until the

next one which you helped me
with. So this was we bought a it

was in Launceston. It was a
three bedroom, two bathroom on

1100 square meter block. We the
starting price is about 500,000.

We ended up winning it at just
over 600,000. Well done. I was

very happy. It's a good it's a
good property. It's a bit

outside of Launceston, but it's
it's got potential. And I made

sure that it was an area that
had some potential for growth.

So there was a bit of new
development around the area. But

this was an established
property. It was brick veneer,

still is brick veneer. And it
rented out for 560 a week. So

decent yield five and a bit
percent. So that was good.

Because firstly, what what
happened was we revalidated

after about a year, it became we
found that they went up close to

$100,000.

Joe Tucker: Crazy. Well, then

Victor Lagos: it was just the
market to be honest, but it was

also buying the right location.

Yeah, we then extracted the
equity. So we borrowed the

money, took that out and use
that as a deposit to buy

another. And that's when you and
I connected. And I thought you

know what I'd like to I'd like
to work with a buyer's agent

this time around. First and
foremost, I didn't have the time

working my business and I really
just, I knew that I wanted to

buy in Adelaide, I just didn't
have time to research where

didn't have time to talk to
agents. But you know, when you

and I spoke, we got a better
understanding of what that

looked like. And that's thing
you got to be clear about what

it is that you want, right? And
I share that with you. You went

out looking for it. And look,
I'll pass it over to you like

because, you know, tell me what
you did to help find a safe

place because it

Joe Tucker: was a cracker. Yeah,
no. Well to give people a bit of

context about the deal. So this
is in a suburb that we are

currently buying in. It is a
good growth location. It is

doing incredibly well. It's done
incredibly well. So we put

adjust this property for
580,000. And it was after some

negotiation. So we'll walk
through a step by step process

of, I guess, under unpacking the
deal. So, the deal was purchased

at 418. But sorry, 518. But we
did some negotiation. So in

South Australia, and this is the
importance of knowing the market

that you're buying in, right,
you need to know what you can

and can't do. So in Tasmania,
it's a little bit different. In

New South Wales, the rules
around negotiation and different

cooling off period, if you pull
out of the cooling off period,

you've got to pay point two 5%.

In Queensland, it's a little bit
different in WA, they don't even

have a buddy cooling off South
Australia, they've got a two day

cooling off period that allows
you to pull out of the deal for

whatever reason, you know, my
cat doesn't like this property

I'm going to pull out. So you
can use those type of things to

your advantage. So what we what
we did on this one is instead of

having a pest and building
clause in the agreement in the

contract, we did it. So we did
the piston building during the

cooling off during the two days.

So you've got to be quick with
that you've got to have the

right people in the right
locations to be able to do those

piston building inspections. So
you've got to organize that

quickly. But it makes your deal
a lot more cleaner, if that

makes sense. So we negotiated
down which we'll chat to in a

little bit, I'm sure 508,250.

And it's renting out at $670,670
a week, which is 6.8% yield. Not

in a flood zone, no easements,
no fire, we do all the due

diligence, obviously, to make
sure that that's happened.

There's no covenants on the
title. So if you want to

subdivide into the future, there
may be that potential for you.

You've just got to get all the
council, everything like that.

But an unreal deal. Absolutely,
absolutely mental. But the

reason why we got that is, and I
guess this is something to be

aware of is I'm doing this every
single day, my full time, like

my full time job is finding,
negotiating securing properties.

And people out there in the
marketplace against buyers, like

they're against me like these
are this is my competition, and

I'm your competition if you're
going out there to buy it. But I

always say if you put a part
time effort into something,

you're going to get a part time
result. So you do have to put a

lot of hours in to get those
deals to build those

relationships with the agents to
get that. And that's exactly

what we did with this, this
agent here.

Victor Lagos: You know, it's
funny, because I do share that

with a lot of people who asked
me like, Why did I use a buyer's

agent? And it's like, well, it's
not just the time because that

was obviously a big benefit for
me. Yeah, it's because I know

that a real estate agent is
going to look at selling their

property for most of the time,
the highest price that they can

get, right. But they're gonna
think about a commercially so

that if they're building a long
term relationship with you, as a

buyer's agent, they're gonna get
future business. Yeah, they do

right by you, right? So and
they're also going to be more

transparent with you because you
speak the language, right? You

understand how, how it works,
how to price it, how to

negotiate with buyers, and
sellers, etc. So if I called up

a real estate agent, who was
interstate, I'm just a one off

buyer, right? Interstate
investor? Yeah. So why would

they want to give me the best
deal and be transparent with me

when they can do that with the
local buyer, or they can try to

get a higher price or local
buyers? So if anything, they'll

probably try to get me to pay
more. Because they can't see me

they gotta meet me. Yeah. And
it's a one off transaction.

They'll never meet me again.

Yeah. So that's where I think
you really leverage that. And

we're able to find out, you
know, rough estimate of what I

needed to come in to win, right,
because the agent can't tell you

directly what the price needs to
be right?

Joe Tucker: They do, sometimes,
not all the time. But it is

illegal for them to tell you
that. They should not, they

should not. But I think what you
were talking about before of, I

just don't know, the agent would
put you know, 500 to 560 on the

guide price or whatever the
number is for whatever the

property is. But you need to be
an area expert know so well what

your walkaway price is. So for
me, I set my own target price of

I'm not going to buy this
property like this one here. I

think it was that I think we
worked it out to be valued at

540,000 or 400. And whether we
go 530 or something, and our

walkaway price was 525, and
might be messing up the numbers

there.

Victor Lagos: Well, this is what
I like about you, as well as

that when we were talking about
this, you wanted to get me a

deal that you were able to Well,
first and foremost, it had to be

in an area that had growth and a
decent rental yield like the 670

a week. That was like icing on
the cake. We didn't plan to get

that much rent that was just,
you know, really, really good

deal. Right. But in terms of
when you were looking for the

deal, you wanted to get it below
market value. You weren't just

gonna go in and say let's get
the best price Buying at market

or above?

Joe Tucker: Yeah, right. That's
easy to do. Like anyone can do

that, right? Anyone can walk in
and do that.

Victor Lagos: And I because I'm
a broker, I've got access to

tools to tell me what properties
are worth based on bank

valuations, right? Rather than
RP Data core logic, you know,

that's a guide, but my one is
like, what will banks lend

against? So I checked that, and
it just so happened that it was

worth 569,000. Right. So yeah,
you know, you got it for at 518.

That's what 3040 grand something
like that below market? Well, on

top of that, during that window,
you talked about two days, there

was some work that needed to get
down, right, so owner occupiers

who, you know, this area was
more owner occupier investors,

so people who did go check the
property out, probably want to

move in. And because there was
work that needed to get done,

they were probably thinking, How
much money do I need to spend

before I can move in? Or if I'm
renting? Yeah, I gotta, I gotta

like pay double rent and the
mortgage while renovate blah,

blah, blah. Yeah. So that then
meant that we were able to get

the price of the property at X
amount. 518. Yeah. But then

when, during that window, you
organize the piston bill, and I

didn't know who to contact but
you knew someone on the ground,

they did a really thorough job.

And then you leverage that went
back to the selling agent. And

then they then said, X amount
needs to be repaired. Yeah. So

you did you said this is the
cost. And we dropped the price

by like, nine grand. Further
this guy?

Joe Tucker: Yeah. Well, I mean,
that's, that's what we're doing.

Like, like communication is the
most important thing and setting

it up so that the agent knows
that you also have to find out

what the value of things are. So
that one of the things was,

there's a bit of rust on the
Goddess. Now I know that the

gutters were fine. The Pest and
building guy said the gutters

were fine, but I think they
might need to be replaced. So

we've got a quote for how much
it cost to replace the gutters,

how much the cost to fix the
garage at the back, because it

had this false wall built in
nefarious activities. So we had

to remove that and fix the
electrical in there. So all of a

sudden, I speak to an
electrician, hey, how much does

this cost, and you start to
build a case of justifying that

$9,000 discount. So the no going
negotiation came in with, Hey,

Mr. vendor, I would love to buy
this property, but we bought it

on the proviso that, you know,
the gutters, were fine. And all

of these things were fixed. So
you know, please give us a

discount for that amount, but
you kind of build it. So it was

$15,000 of works. But we're
going to come to the table and

you know, discount it, and it'll
only be 9700. And then you get

it all fixed. And it's you know,
eight grand, or six grand, or

whatever it was, I

Victor Lagos: actually want to
touch on that. Because, you

know, something that's important
to me is transparency. And also

just, you know, sharing things
for what they are, you know,

being rural. And I want to share
this to the listeners because

you know, some of you might be
thinking, well, I want to get a

deal like this. Sounds awesome.

70 a week? Yeah. 20%. Yeah,

Joe Tucker: promise these type
of amazing results?

Victor Lagos: Well, you can't
because this was a rare case, it

was actually a mortgage in
possession. So the bank had

taken possession of it, and it
wasn't being sold by a by the

original owners. So their
incentive is just to get it sold

quickly. And for a reasonable
price, right. They don't want it

to be, you know, let's get the
best price and keep it on the

market for too long. They just
want to go on. And of course,

you know, the end borrower, or
sorry, the original borrower

obviously wants to be debt free
as well, because they're being

charged default interest and all
these extra fees. So it's

important that it's gone
quickly. So that's why it was a

bit of a rundown state. But it
wasn't just run down. That

nefarious activity talked about
what we found out when we did

the person build is that there
was a shed that had previously

been used to to grow. Weed. And
I find it funny because I when I

when I saw the photos of it, it
was actually done quite

professionally. They had power
in there. They had lining inside

the shed, I had to pay to get
that removed, because I didn't

want to give the new tenants any
ideas. Don't take on any risks.

Keep out

Joe Tucker: the money. I don't
know. But this is this is one of

the things of of the property is
that it was a bit of an ugly

duckling as well. Yeah. That
there was a smashed window. It

was a mortgage in possession.

And it did need a bit of work.

So when owner occupied and this
is why the the agent sold it,

you know, presented it to me
before before he sent it live.

And it was this is a little bit
ugly. I know. owner occupiers

don't want to see a smashed
window when they walk into walk

into a place that it needs to be
painted. It needs. It needs the

gutters fixed it needs these
little things. But as an

investor, we need to see past
that. Yeah. But one of the

important questions that you
have to ask a real estate agent

is what terms do the vendor
want? And this vendor was

obviously a mortgagee in
possession. So he just said

like, we just need to be a
little bit flexible at

settlement because there's going
to be a lot of back and forth

between you, me and the bank.

And it's not necessary. Really
the highest price that they

want, they want an easy deal.

And my goal then is to prove to
the agent, that you're

absolutely sound investor,
you've already bought

properties, you're a mortgage
broker, you've got the you've

got the money you've got finance
is going to not be a problem.

And that we're going to be an
easy person to deal with. And

when you're a problem, like you
need to ask key questions to the

agents. When you're in an
investor, and you just come up,

oh, hey, you know, I want to,
you know, I want to buy this

property, I'll give you a 60 day
settlement. Was that what the

vendor wants? You've got to ask
the question and find out what

the vendor actually actually
wants, and then tailor your

offer to suit them. Yeah, to
help that deal go through.

Victor Lagos: Yeah. And, yeah,
fortunately, I was quite

flexible with that. But it was
also a bit tricky. I must say,

Yeah. And, you know, just for
our listeners, I want to I want

to share that story as well. I
was I'm in a different position

to a lot of other people in
terms of risk, I'm willing to

take bigger risks, whereas other
people probably won't. And, and

the reason for that is, you
know, now I run my own company.

So I have the ability to earn
more, right. So the more work I

put in, I can earn more. So even
if I'm over leveraged or borrow

too much, I know that in time, I
can pay that down. Even as

interest rates rise. There's a
lot of other investors, the ones

that are sort of working PAYG.

Now the income can only grow,
maybe, you know, 5% a year,

whatever. Yeah, they need to be
more aware of this stuff. They

can't jump in at, you know, 95%
like I did, so I went yeah, 95%

LVR. And I also took out a
personal loan to come up with

extra money. We just called gap
finance. I don't I never

recommend this to any of my
customers. The only people that

would really be able to do this
is people that are disciplined

enough to pay that back and and
have the ability to earn more so

don't carry too much debt for a
prolonged period of time.

Joe Tucker: Yeah. And that's why
the the cashflow positive,

that's why we specifically had
to chase after a more cashflow,

positive property, just so
happens to be that it was bought

on the market in a great growth
location. So you're going to

have future growth as well. But
at 6.8%, you can weather the

storm of interest rate rises,
even at a 90% LVR.

Victor Lagos: Yeah. Now it's
true that interest rates have

been rising a lot lately, but
because of that high rental

return, it's pretty much
positive cash flow or at least

neutrally geared right now.

Yeah. So that means it's
covering the costs of interest

for the loan, because I did
interest only, and it's covering

the agent fees, insurance
council rates or all the

outgoings. Yeah, so a lot of
people might ask that Right.

They'll say why what were the
interest only and not p&i

Joe Tucker: QUESTION Right. But
from a strategy point of view,

would p&i have helped you in
this situation? Or would have

made it harder to borrow? Would
you be able to even have done it

on piano

Victor Lagos: p&i would have
made me get that would have

meant I get a better interest
rate? That's the main benefit of

p&i. But what that would have
done was, it would have put it

into a negative gearing
position. It meant that I'd have

to come up with money every
single month, in order to hold

on to this property. And that's
okay, if I've got lots of

income, right? But because I've
got a business that's growing,

it's an early days of growing, I
really want the property to be

self sufficient. Yeah. All
right. And you got to remember

that if you're paying principal
and interest, that's not the

requirement of the bank, that's
your choice. The bank cares

about interest. So they'll let
you go up to five years interest

only. And I've got a bank that
even got 10 years interest only.

All they care about is making
the interest and fees. So if

you've got a tenant that's tying
a good rental return, good

yield, then the tenant is the
one paying the interest, not

you. Right, because every
principal payment is your

equity. So that's not the bank
saying you need to have equity.

That's you deciding you want to
have equity. So just because

you're paying interest only
doesn't mean you can't pay PMI.

Yeah, you can well, you do
because you want to do not

because the magnitude of

Joe Tucker: Yeah, well, then you
can just put, and this is what I

chat with some of my clients
about this, because like, no,

no, I want to pay P and I want
to pay PMI. But do that but have

an offset account attached? Or
is that kind of what you

recommend for the people? So
offset

Victor Lagos: accounts are
really good for that. Because if

the if the money goes in the
offset, then you're not paying

interest on the loan. But if
it's p&i, it's not reducing your

minimum repayments. So a lot of
people think if I've got money

offset, and my payments are
coming down, yeah, well, no, if

you're in a p&i repayment,
that's based on what you

originally borrowed. Yeah,
offset money is your money.

Yeah, right. That reduces the
interest. So if you've got an

interest only loan and you put
the money in the offset, then

your payments will come down.

But your offset will be will be
growing because interest is

going down. You're putting more
money in the opposite. Yeah. So

if you then decide one day, I
don't want to use that money to

invest into another property or
to buy something, you know,

something else with that money,
you want to actually pay back

the principal. It's very easy to
do You just call the bank and

say, look, I've got 20,000
offset, I now want to pay that

straight off the principal of my
loan, transfer 20,000 in, and

then they do what's called
reignite re amortization. Right?

So then the say it's, you know,
500 grand loan, yeah, you put 20

grand in. Now, it's 480. They'll
calculate repayments of 480,000.

Yeah, but you don't have access
to 20 grand, but

Joe Tucker: you don't have
access to 20 grand, and you've

got that liquidity when you need
it. If you do need it, you've

been pulled 20 grand out and do
whatever you want, buy another

property. But I guess I'll just
leave the listeners with this.

When it comes to buying a
property, because we want people

to go out there and buy their
own properties. I'm not just

saying the buyer's agent is
definitely not the only way of

doing it. If you've got the
time, energy and resources and

the availability to jump on the
phone quickly, and talk to

agents talk to brokers and all
of that stuff. So for the way I

like to look at areas and
locations is using a framework

called fab. So it's
fundamentals, analytics and

boots on the ground. Okay. Yeah.

So a little bit like it's just
you come up with that? Yeah. My

London, my wife's British, and
they say fab a lot. So. So

fundamentals are things like
looking at an area from a

holistic point of view of what
is the fundamentals for this

area, like what we did for your
property? Is their employment?

Is their growth? Like, where's
the growth going to come from?

What are the drivers of demand
to the area? What's the

population, what infrastructure
is going in those types of

things, then the analysis is the
hard science, the hard data

stuff, so supply and demand
vacancy rates, where is

everything trending from a data
perspective, and the data leads

you to the location, the
location does 80% of the heavy

lifting, and it gets you there
to that place. So you go down to

that location. And the most
important thing to get that 20%

tip for us to achieve that
result in that location was

because of the boots on the
ground, you have to fly, this is

one of the largest investments
of your entire life, fly down to

the location, meet some of the
agents meet some of the property

managers meet some of the
inspectors, ask people about all

of the areas, what do you think
of here? What do you think of

that? And then all of a sudden,
are they going to want to speak

with that random investor from
Sydney? Or are they going to

want to speak to the person they
met a couple of weeks ago

talking about finding an
investment property. So I think

boots on the ground is so
crucial, and you're spending

hundreds and hundreds of 1000s
of dollars. Just get out there,

jump on a flight and you get a
free holiday almost doesn't mean

you can't write it off as an
expense. But

Victor Lagos: I must say I took
a risk buying Tassie because I

couldn't fly down even if I
wanted to. I was locked down.

Yeah. And when I tell people
that oh, one Tassie Oh, have you

guys been there? No, never.

Never been there. Now they're
like, how do you even even

exist? I'm like, good question.

Well, I didn't you know, I
didn't organize an inspection.

And the good thing about the
property manager I used, she

also did the videos. So she
recorded the inspections. So it

wasn't the selling agent. Yeah,
very important. hiding things,

it was showing everything that
was wrong. And then she gave me

a detailed list of what you
know, what are the going to be

some of the costs that will come
up that I need to be aware of?

You know, you did the same
thing, but it was it was with a

you know,

Joe Tucker: with the rest team,
right? You gotta have you got to

have your team built Yeah, built
you got to build the team and

and then test them and see if
they're good. That's

Victor Lagos: one other thing I
want to share actually about

Adalet. So I like this story,
because it's actually worked out

for for the property manager you
introduced with the property

manager. Great guy. He he had a
contact that was going to do the

paint, right? Yeah. Quoted
quoted to paint the entire place

four bedroom house. He said it's
going to be probably around the

10 Grand Mark, I think maybe a
little bit, just a little bit

under and, and I didn't want to
spend that just on painting I

have work to do to get rid of
that shed, and and fix that

window. So I spoke to one of our
clients who is based in

Adelaide, and he told me and I
told him the story. Well, I

actually told him the
predicament that I was in. And

he said, I recently got my house
renovated. Why don't you talk to

my painter he's, he's great, did
a great job. He's Brazilian and

my clients Brazilian. And he
went out he quoted it up for

gray Property Management Believe
it or whatnot. He was not for

for grades. Well, you did a good
job my client so let's let's

test him out. He went out he did
it. He got it done in two days.

Wow. And the property manager
was like wow, like I'm really

impressed with that he's among
us you're gonna start using him?

Yeah, future Joe we use him for
all Yeah, so now he's got future

work. Yeah, right. recurring
income, you know, a better deal

for for the investor. And
obviously the property manager.

It's a win win win scenario for
you because now he's

Joe Tucker: finally get and this
is the thing you didn't have to

lift a finger for any of this
renovation stuff, nothing. You

didn't have to do anything and
we get it all kind of set up.

And if there's little things to
fix, we just make it a part of

the process. I think just
communication throughout the

entire process. So you know, I
like to think you kind of

handheld throughout the entire
journey. You're We're in

control. You're in the driver's
seat, you make the decisions of

yes, I want to go for this one
or no. And but you're kind of

handhold through the entire
thing.

Victor Lagos: Well, that's what
I like, also the way you

operate, because you said not
all buyer's agents are the same,

right? Some of them are really
large, and they're out there all

over the show, helping,
supposedly helping a lot of

people. But I think when you
when you when you kind of give

more of a tailored approach, and
you and you're there, holding

the hand a lot all along the
way, you can actually answer all

the questions. And just also
give guidance. I got it. I

didn't know exactly what it was
like, we didn't know what to

look for. But you helped us.

Yeah. Thank you. Yeah.

Joe Tucker: Thank you. Thank you
for trusting me with it. I think

we got a stellar job. And it's,
it's been awesome. Yeah. Looking

forward to the next one. We'll
make sure to again, yeah,

Victor Lagos: definitely. Yeah.

And I also want to mention that
I met Joe, through a mutual

contact Steve polisi. Great guy,
you know, you do quite a bit of

dealings with Yeah,

Joe Tucker: I mean, commercial,
this is how portfolios kind of

get built out. They start in the
residential space. And then you

need that cash flow play, which
is where it then lends itself to

commercial property. And this is
where Steve police is an

absolute expert and legend in
the space. So he is, by far the

best if you're going down that
commercial route. Usually you

build your portfolio resi boom
into commercial, and he's a

great, and yeah,

Victor Lagos: I was actually
thinking about getting

commercial. But then I thought
about where I'm at in my, my

life and my journey and my
financial freedom. Timeline. And

it made more sense to get
residential right now. Yep,

higher leverage 95%. If you buy
commercial, you need a larger

deposit massive. And also, it's
harder to extract the equity

from a commercial property. If
you want to keep growing. It's

much easier to take residential.

Okay, yeah. So alrighty. Well, I
think we've covered up a lot.

Now, I really want to say thank
you for coming on the show. I

think you've shared some really
valuable insights. I think the

listeners will be pretty
privileged to hear some of these

I don't think you've gone into
as much detail before.

Joe Tucker: Not not as much now.

But yeah, thanks for having me
here. Hopefully, it adds value

to anybody that's listening. And
if you guys have any questions,

just reach out join those
property investor group. It's

not that not about my business.

It's about people growing as
investors. And yeah, great.

Let's do it.

Victor Lagos: You heard that,
guys. So look up, Joe, on

property principles. And as
property investors on Facebook,

you can join the group, you have
weekly live webinars, you bring

on guests, I've seen quite a lot
of that I've actually connected

to some of your contacts because
of that. So highly recommend,

right? You can actually read a
lot of the comments from other

investors as well that share
some insight. Yeah,

Joe Tucker: everyone's at
different stages. You've got

multimillionaires with 20
million plus portfolios, and

you've got people that just
bought their first and just got

their second and struggling and
have lots of questions. And

there's no question to silly
because everyone started

somewhere at the beginning. And
they just want to everyone just

wants to help them through the
process.

Victor Lagos: Yeah, that's what
I love about it. It's really a

community of helping each other.

Yeah, awesome. Well, if you guys
enjoy that, and you want to hear

future episodes, please follow
my podcast. Follow my channel.

You'll see me on the socials and
looking forward to the next

episode. Thank you