EP03: In-Depth Research and Building Your Team

In this episode of Finance Fundamentals, Property, Business, and Beyond, Finance Expert Todd Franzway dives into the third and fourth pillars of his successful property investment strategy. With host Adam Bell, Todd discusses the importance of thorough research and building a robust investment team. Learn how to choose the right location, understand yield variation, and navigate supply and demand. Discover the key professionals you need on your team—from mortgage brokers to buyer's agents—and how to ensure seamless collaboration. Whether you're a seasoned investor or just starting out, this episode is packed with valuable insights to help you achieve property investment success. 

What is Finance Fundamentals - Property, Business & Beyond?

Welcome to Finance Fundamentals: Property, Business, and Beyond – your ultimate guide to mastering the essentials of finance. Hosted by Todd Franzway, this podcast dives deep into key topics like mortgages, investment basics, cash flow management, asset finance, and business lending. Whether you're a seasoned investor or just embarking on your financial journey, join us to explore the fundamentals that drive success in property, business, and beyond. Let's unlock the secrets to financial empowerment together!

  Welcome to Finance Fundamentals, Property, Business, and Beyond, your go to podcast for mastering the essentials of finance. I'm Todd Franzway and throughout this series, we'll explore crucial topics such as mortgages, investment basics, Cashflow, asset, finance, and business lending. Whether you're a seasoned investor or just starting your financial journey, join us as we explore the fundamentals that drive success in property, business, and beyond.

Let's unlock the secrets to financial empowerment together.

Hello and welcome to the Finance Fundamentals Podcast. Today we're diving into pillars three and four of Todd Franzway four pillars for successful property investment. Welcome to the studio, Todd. Thank you, Adam. Good to be here. Excellent. Now, we started off with pillars one and two, which were understanding your numbers and setting clear goals.

So tell me, what are pillars three and four?

Yeah, Adam, we're going to carry on, research, which is a pretty big piece. There's a fair bit to, know about the research and building your team, number four. So you need a team around you to do this. You can't successfully do it on

your own. Just on your own, because there's so much to know, isn't there, and so many pieces that come in from various professionals.

So, okay, so let's start then, with research. Now, this is a big can of worms to open up and understand where to start. What about, would location be the first bit to, I mean, to invest in a property, you've got to know where you're going to do it.

Yeah, that, that's a, it's a big one, right? It's, and even the real estate people say location, location, location, right?

So, yeah, that, that's a big one. It does tie back to, again, to your why and understanding. what you're looking to achieve, as to what location you might be investing in. But then there's a whole heap of factors that we're about to talk about that help to dictate

the location. Decide the location.

Cause one thing I've heard a bit about is the infrastructure of around the location you're looking at. Can you tell me a bit about that?

Yeah. So if people are say looking for capital growth, with their investment, which a large majority are. then large amounts of infrastructure going into an area is definitely going to impact its future value.

So if there is you know, whether it's arterial roads, schools, shopping centres, you know workplaces, there's so many things. infrastructure, like hospitals, et cetera. There's so many things that could be, slated for an area, not yet there. Well, that area is likely to have some pretty good potential

uplift.

Sure. Okay. And that would be, you know, in, I guess for two factors, one, you know, attracting tenants, into an investment property. And also obviously, as you said, capital growth longer, longer term. So what about yield variation?

Yeah, that, that can be an indicator, if you see, potentially a fluctuation in the yield, in a short space of time, that can generally be an indicator that there's some growth happening and potentially likely to continue.

Okay.

And when you say a fluctuation, so yield is, we're talking about the return, the rental return, isn't it? Yeah, that's right. As

a ratio to the value of the property. So if the property values start to increase, in a short space of time, but the rent hasn't quite caught up, you'll notice a decrease in the yield.

And, and that could be an indication that we're going to get some more growth in that area.

Sure. How would, somebody doing their research. You know, find out about yield variation in, in various locations.

Yeah, so there's various, places that you can go to, to research what, the actual rents are or median rents for areas.

So we subscribe to a number of services that we access it. Through and, you know, they're able to access that same information at a cost or we can help them with that too if they want. Sure.

Okay. So another great reason to come to you or mortgage brokers to be able to get that information.

Cause I think we've talked about this before that, you know, as a finance broker, a lot of people think about coming to you after they've decided on, you The property they're going for, but you've got a wealth of information, don't you, that can help somebody make the right choices beforehand.

Yeah, correct. That's right. And we're more than happy to share, you know, I think there's great value in them, seeking out a good broker.

Sure. Now what about, supply and demand? We hear that's usually one of the biggest, you know, indicators of what's happening in a property market.

How does one go about sort of, finding out where supply and demand is sitting in any particular area?

Yeah, again, that, that stuff that is recorded, if you do enough digging, you, you're gonna find out, how many transactions are happening in a particular suburb, you can find out how many houses are there.

So that, and even now there's data from like the realestate. com, how many searches are being done in certain areas and so on. So, yeah, there's various ways you can get an indication. All of

this stuff is available online. If you know where to look and it's putting it all together, but again, a great reason to come to you because you've done all this, you know, where this.

Information lies and can point people in the right direction.

Yeah, that's correct And lots of people are happy to try and do it, you know, look at it for themselves and that's great It's all publicly available. Yep. Fantastic.

All right. Now what about Sort of rental vacancy rates. Where do you find that information?

And what are the indicators there? on, you know, potential property that you should be looking for. Yeah,

so again, that, that's, pretty well publicised as well, but it's just making sure that people know what to look for, you know, and this is another one of those things. And generally speaking, a lower vacancy rate is going to mean there's more demand for people renting the properties, you're less likely to have a vacant property, and therefore that mitigates your risk.

You're less likely to hold an empty property for a long period of time. Sure.

So it's really Looking back through all of these things, to decide on a location, look at your infrastructure, look at yield variation, supply and demand, other things probably like population, employment within the area, all of those things are factors to research properly before diving in head first.

Yeah, I think so. If you're going to invest, you may as well maximise it, you know, because again, why are you doing it? Generally it's for your future. financial future for yours, your family's, so why not maximise it if you're going to take the risk. Cause there's risk attached, of course, you know, so yeah.

But like you said, I guess, how you analyse that information and data that you get when you re, you know, research each of those areas, it's again mapping that back to your why and what you're trying to achieve because, different, indicators within that data would have different, outcomes associated with what you're trying to achieve.

Yeah, that's exactly right. And that's that whole we talked about the other day, the capital growth versus positive cash flow kind of thing. They're the two general ones that you weigh off against one another. Sure. Yeah. Okay.

So, well, I'm more than happy to give any sort of, Advice around these areas of research for any of anyone who wants to come and you know Wants to know a bit more and you know, what does a low Rental real versus a high one mean, etc

Yeah, for sure.

That's right. That's exactly what we're here to do and You know, it's one of those things. We're happy to share the information and, you know, people can go away and do it, do some themselves as well. Perfect,

perfect. All right, well, let's move on to pillar number four. Now, this is about, building your investment, your investment property team and, having the right professionals around you to give you your right advice.

Can you tell me The members of the team that you should be looking to get, how many are there, who are they?

Yeah, so it'll look, generally there's a few key ones, right? So, of course I'm going to put mortgage broker at the top. Absolutely. Why not? We're here to do that. But then, like an accountant is a really good person to have on your time.

One that understands property transactions. If you want a good conveyancer as well, you'll ultimately, once you've purchased your property, you're going to need a property manager, to help with that. Financial advisors can come into it as well if you're looking at this as part of a bigger project.

picture.

And something I've noticed recently, especially around here on in Southeast Queensland is the rise of buyers agents.

Yeah, they are, they've, been a big one and rightly so for the right clients as well. So they're probably not as prevalent in the first home buyer space as they are in the investor space.

yeah, they've been a big one up here lately.

Fantastic. Okay. So, well, so the mortgage broker, you let's run through each of these and what role they, they play for a property investor. So obviously a mortgage broker, something like you've been doing for a very long time. Yeah. It's more, as we're discussing in this series, it's more than just securing the right finance, isn't it?

Yeah, that's right. I mean, like you say, there's a wealth of advice, but it's also talking about the different structures. There's different ways that you can set the finance up to achieve. the same thing and some are going to be more relevant to some clients as others, you know. So, we'll look to sort of like tailor that to the individual client and where they're looking to go.

So yeah, that's a big piece.

And if we look at then, you know, an accountant, you'd probably work closely with anyone's accountant to work out the right finance for what, again, what they're trying to achieve. Cause there's a bigger picture with They're taxing their entire portfolio of all of their assets, isn't there?

Yeah, there's definitely a big piece there. Accountants, there's obviously tax advantages, or maybe not obviously, but there are tax advantages for people investing in property. We can't advise on that, but that's where the accountant comes in and we can work with them to make sure that the finance is structured to maximise their tax.

And often, even for self employed borrowers, we'll be working with the accountant in terms of, their income and how that's documented by their tax returns. Sure. Sure. Okay.

Now, a lot of people might be thinking, what's the difference with what sort of conveyancing lawyer I have? I get to, you know, to look after the purchase of a property.

Are there any differences? Are there things you should be looking for?

Yeah, look, I mean, this is a personal one. I'll always use, someone that has a, an actual lawyer attached to the transaction in case there's any kind of hiccups. Sure. More so than a high volume, low cost conveyancer. You know, for my money there are a couple hundred dollars extra for a pretty big transaction.

You kind of want someone working for you there so that knows what they're doing if something goes wrong.

Sure. It's a lot of these professionals, it is about if and when something goes wrong, isn't it? I do another series with a property manager. We talk about that a lot of the time that, yeah, you don't know their value until something

goes

wrong.

That's right. And, you know, we've been through about what they charge and, versus the low cost ones, et cetera. So obviously you do, With all of these professionals, I think, you know, as a rule of thumb, get what you pay for. Yeah. Yeah. Yeah. Financial advisors, where do they fit into the picture?

Yeah. So they fit in, if someone's looking at property as a larger part of their strategy, you know, even if they're using, their self managed super fund, which is, has been increasing a fair bit lately, the people, amount of people using that to purchase property, so that, they provide the whole advice piece around that and include, you know, vital insurances and, other diversification in terms of investments and stuff.

So, they can be pretty valuable as well. Very valuable.

Sure. Now, what about then a buyer's agent? What, when would you suggest somebody consider a buyer's agent? Using a buyer's agent. What's your take on on their role?

Yeah, so they're pretty good if you're in a position where you have narrowed down almost like an area that you'd like to invest in They can they go and do all of the legwork and negotiations and they generally tend to know a particular area very well Because that's the area that they operate in and so once you've kind of know your area that's when you find the buyer's agent for that area.

And yeah, so it's, if you've got, a large equity position and you know, their fee is like their fee is value if you've got the equity to spend it, right. Cause they'll often save you more than what their fee is. Yeah.

Yeah. No, I have heard that. So, and I get, Access to off market opportunities, etc.

Yeah, that's correct, and that's probably the big piece, is that they'll have off market opportunities that just, you'll never see it if you're just looking online. Sure.

Okay, finally, you're close to getting your property, or you've got it, How do you go about selecting a good property manager?

Yeah, that one is, either they've got to come recommended or you need to go and do a few interviews.

Yep. And you know, I've had, personal experience with some amazing property managers and then some pretty ordinary ones also, as well as across our clients. So, yeah, it's, I love the word of mouth, piece, but yeah, if you can't find that in the area that you're buying, I would, genuinely sit face to face and ask all the relevant questions.

Sure.

Okay. So I guess with all of this, with your level of experience and having been around for, you know, a long time and dealt with a lot of these professionals in all those areas, you would be able to give word of mouth on those you've worked with before that you've been impressed with.

Yeah, that, that's exactly right. And, you know, we work in a large, scale of areas across the country and we have managed to develop some good relationships across the country. Fantastic. So if you're listening

to this and, you know, wanting to put your team together and don't have your own contacts That's something that obviously Todd can, can help you out with. Well, look, last question before we, we finish up, Todd is, what's the key to getting this team working together? Cause there's four or five professionals there, that all, everything you do interlinks. What are your tips for getting everyone working together as a team?

Yeah. So I think what, We've had, clients almost, you know, it's a project management role almost in terms of they'll, as they've been selected that they'll actually send an introductory email to everybody to say, Hey, this is the team. This is the project, so to speak, which is the purchase.

And, so everyone's got an open line of communication because I know when we can communicate openly, we say the conveyance, even, you know, the buyer's agent, real estate agent, it, if we've got a good working relationship, it's seamless for the clients. Sure. Seamless,

okay. So that, look, that's a great piece of advice in that, you're saying that as the investor, if you can get the right team, behind you to do all their bits and pieces, they'll do it well and do their bit and you just become the project manager of those so that the whole thing fits together.

Yeah.

Really great episode there and some great takeaways for anyone who is, considering, doing some property investment. Very enlightening discussion on, you know, how to do your research, how to go about it and building the right team. Being those third and fourth pillars of your four pillars for property development.

property, investment success. So look, understanding both in depth research and the important of a supportive team are fundamental, I think, to navigating that the property investment landscape effectively, but look for more insights and guidance. Don't miss our next episode where we're going to explore more strategies to enhance your financial and investment acumen.

And if you do want more information or to get in touch with Todd directly, now you. About

to launch

a new website.

Yeah, new, new website. So we're going to be at franzway. com. au. So that's F R A N Z W A Y.

Fantastic. So there you'll get all the information you need, how to contact Todd directly about anything we've talked about in this episode or any others.

And, look, of course, please do like, the podcast on whichever platform you're watching or listening on, please subscribe. And we'd love for you to share it, any comments that you make, on any suggested episodes you'd like us to, do we do look at all of those and, until next time, Todd, thanks so much for, for

coming in.

Thank you, Adam. It's been great. Thank you for joining me today for Finance Fundamentals, Property, Business and Beyond. We hope you've gained valuable insights into the complex world of finance and discovered some valuable nuggets to take with you. Remember the information provided in this podcast is general in nature and may not be suitable for everyone's financial needs, goals, objectives or even situation.

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