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Hosted By Tyrone Shum

The Renovation That I Swore I’d Never Do Again with Sam Gordon

Sam Gordon is a successful property investor and buyer’s agent, and founder of property buyer’s agency, ‘Australian Property Scout’, where he aims to find the best deals on properties for clients whether on or off market. He’s best known for his unbelievable track record of building a portfolio of over 20 properties before he turned 30! Gordon is one of the most successful property investors in Australia and he wants to impart some of the wisdom he’s learned along the way. 

Podcast

Join us as we reconnect with Sam and find out about one of the most memorable renovating experiences he’s had in his investment career. We learn about the renovation from hell which changed his reno strategy for good, he shares valuable insider tips and knowledge on what not to do when renovating, as well as discussing how to turn run-down properties into usable, accessible equity, and so much more!

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"There's certain things you should put your time into and quite honestly do. And there's certain things you should just pay someone else to do that have done it before many, many times."

SAM GORDON

Podcast Transcript

Tyrone Shum: Gordon and I jump straight in, and he explains how he came across the property which would ultimately change his renovation strategy for the better.

Sam Gordon: This one was based on me looking to move into the Brisbane market. This was back in 2016, I think. The market was doing pretty well and there was a lot of good stuff around. And I was trying to find a really good little reno project; I was looking to do that for my next one. And essentially, I came across a fair few properties that I was negotiating on, and this one had really stagnated on the market.

This one we were trying to get up to $300,000 for, ‘cause it was quite a good house. It was double-bricked. It was on a pretty big block. It was low-medium density, a big four-bedder house. The problem was it was very dilapidated. And it would need a bit of work to kind of get it back up to scratch. And I think they were trying to target a homeowner buyer for it. And it just didn't really go to plan; the old sales campaign on it.

At the time when they first listed it, it was offered over $299,000. I think when I offered on it, it was about $265,000. And I offered $200,000 for it just as a starting bid to see how we went. And essentially, after a lot of backwards and forwards, we've got it down at $215,000 and after building and pest inspections I was able to get a little bit more off. So I ended up buying that one at $212,000.

Tyrone Shum: Oh my gosh. That's amazing. How long was it on the market for?

Sam Gordon: It was on the market for just over 80 days. So, it was coming up to a 90-day window for the exclusive agency agreement to kind of run out. So, the agent definitely wanted to try and get a deal done before that ran out. So, I think she helped me out a little bit by putting the pressure on the owner to get the deal done.

Tyrone Shum: Always the agent ends up doing that because they obviously know that if it runs out, then they're going to try and get them to get into another exclusive. And then, on top of that, I guess that 90 days that they've had it in there, it's kind of like, ‘Okay, what am I going to do? I need a condition. It should be a pretty easy one’. And it sounds like there's a motivation behind it. Did you find out what the motivation was behind why the vendor was wanting to sell?

Sam Gordon: Yeah, essentially the owners of that property was an Aboriginal non-for-profit organization that owned a lot of properties in the area. And they leased them out to less fortunate families, disadvantaged families.

And what they were essentially doing was they were liquidating—as far as I know—they were liquidating a third or a quarter of their portfolio or something like that, to go and put the money into quite a big property that they were going to renovate and put a lot of the families into, almost a massive unit block I think. There was a story that was something like that.

I think what it was, it got to the point where they were shifting this bunch of properties and they needed a couple more done just before this deadline to clear for the renovations that were coming up. And I think that was a motivation that really allowed me to work quite hard on it and negotiate quite hard and get a really good price for it.

Tyrone Shum: That's fantastic. So, obviously they would have had a few other properties in their portfolio and you would have seen how much they were. So, in comparison to the one that you actually purchased, did you actually see how much the other ones were worth as well? ‘Cause you know, it was listed at, what, $299,000 on the market?

We always know that some vendors might overprice their property, and that's why it sits on the market for too long. There'll be other places that are well-priced. How much do you think that property was realistically worth if they actually put it on the market and sold it at the market value, which obviously fell for you under market value, but how much do you think it would have been really?

Sam Gordon: Well, there were two things here. So, they had renovated a bunch of their other properties and did quick cosmetic facelifts on any of them that were a bit dilapidated. And they were sold for quite good money. This one was almost halfway through, but they had just started a reno and then never completed it. I'm not really sure why. But all they did in this one was replace the kitchen. It was really weird. They put a brand new Caesarstone kitchen in this thing and then never finished it off.

So, it was an absolute steal for me. Like, you know, they come in and have this brand new kitchen, and it was a bloody big kitchen as well with the Ceaserstone. And I think because they hadn't finished it off, it was like a half-done project that they were still trying to get a top dollar for, essentially.

I think if they'd listed this thing at around like $260,000, I think they probably would have sold it very quickly at $250,000. But I mean, as you know, when people [overlist] and then they go stale, it's very hard to get an interest back and people think there's something wrong with it. So, yeah, I think it was probably worth around about that $250,000 in ‘as is’ condition. And I think post-reno after what I did, it probably would've been worth back up towards that, probably very high $200,000’s, maybe $300,000. But that was after full reno. So yeah, they definitely tried for too much at the start.

Choosing the Next Property Move

Being the 5th property in Gordon’s portfolio, it’s safe to say he was getting the hang of things in Sydney’s market at this point. But expanding his portfolio into Brisbane meant he had to start his ground research from scratch.

Sam Gordon: I think to start with, I kind of found areas that I wanted to invest in. I was following infrastructure, following a lot of different spending, trying to avoid oversupplied markets. And I was really trying to really get myself into a good market that I could still afford. At the time I wasn't on a very big salary. I think I was playing around. I was playing with a $50,000 per annum salary. So, I still had to look in the affordable corridor.

So, I was looking at sub $300,000 for a really good reno project that I could make a little bit of equity on, pull that back out and go put it into another deal. And, yeah, I was just refining my area, searching areas. The suburb that this one was in was a smaller suburb in a larger kind of quite big and popular council in Brisbane. But it was a small suburb within that, which is quite often overlooked. We've actually picked up deals with clients in that suburb through the buyer's agency business as well, because people overlook this place because it's quite small.

There were only about 2,000 people in there, which means there's only a very small housing market. So, it's not one of the big suburbs that everyone puts in their search filters. So, this was a funny thing: The agent, I was looking at one of her other properties and she said to me, ‘Look, I've got this other one over here. It's a bit of a reno project. Would you like to have a look at it?’ And that's when I came across it. So, it's kinda funny when that happens. I mean, this is one of the other lessons I learned when I was in the pretty early years of my portfolio.

I guess one of the things to look for sometimes is those suburbs that are often overlooked by other investors and even home buyers as well.

Tyrone Shum: Has that also impacted on, I guess, the price value? Because being a smaller suburb, is it because it's also sort of a niche type of suburb that means it's in limited supply, which could also have an impact on it?

Just the reason why I'm asking is that I used to live in a very small suburb. I'll give you the name of it. I used to live next to a suburb called Putney in Sydney. Putney is a reasonably well-known suburb, which is next to Gladesville, but it was a tiny, tiny pocket. And then there was even a smaller suburb called Tennyson Point, which is actually where I lived. And I had never, ever heard of it before.

I heard of Gladesville, heard of Ryde and so forth. And I grew up in those areas. But then, when we moved into that particular area, it was so small that whenever I told people that I lived down at Tennyson Point where it's just this little, little pocket very close to the water by Parramatta River, they had no idea where I was talking about.

And eventually, obviously, we moved in there and people got to actually know where we lived and so forth. But what I discovered after a period of time, it was so limited in supply, because there's not very many of those properties, particularly on the waterfront. It was priced very, very much as a premium type of market.

Gladesville, yes, is a very expensive suburb. Putney, the same thing as well. But Tennyson, I mean, it was kind of off the charts. And the guys down the road from us, literally when it was going through that peak boom, not long before we sold our property, I think it was in the, you know, the high, like $2 million…Within about 12 months when the boom was happening, the property just across the road jumped to like $3.5 [or] $3.6 mil. I'm like, how is that possible in such a short period of time? And I guess it just goes to show that—I guess when there's limited supply of properties in the area and such a niche pocket market, I noticed that prices can skyrocket pretty quickly.

And, I guess, the question comes back down to: Did you find that same similar effect happening within that small suburb that you purchased in?

Sam Gordon: Yeah, definitely. I definitely did. And it was funny because that reason, I think, makes it more of an owner-occupier driven market, because the local market actually really likes the area. Because it's not really sought after all that much by investors, which was a really funny kind of turn of events, because an investor probably would have picked that deal off because they'd come across it. But for some reason it was being overlooked.

I mean, obviously, they made it, you know, initially overpriced as well. But yeah, it was being overlooked by the potential from an investment point of view. But in terms of the local owner-occupier demand when those renovated homes pop up and because, obviously, I own property in that suburb, I'm always tracking it now and whenever well-renovated properties pop up in that market, it's hit really hard by the owner-occupiers. So, yeah, I think that point definitely carries weight.

Tyrone Shum: Fascinating. So, it sounds like it is more of the owner-occupier type of market at this point in time. And I guess when you went in there, looking at it from that point of view, it changed, you know, how you saw it.

What I'm also wondering is when you actually came across that particular one. How many types of properties were there, sort of like housing? What type of property was this? Was it actually a house, a townhouse, a villa?

Sam Gordon: Yeah, so this Aboriginal housing trust, the non-for-profit, built them (the houses) pretty strong. It was double-bricked. So, exterior brick, interior brick wall, low set. This one was a four-bed, one-bath, with an external carport as well. So, pretty well an indestructible house. Very close, about 600 meters to the local uni. I think it's only a 720 square metre, R3 sort of medium density site. So, four beds, one-bath, low-set brick.

Tyrone Shum: Was there any development potential at that size? Because it was 700 square metres. It's pretty big.

Sam Gordon: Down the track I think there could be. At the moment, I'm quite happy to hold tight and just leave that one as it is. But yeah, down the track, there's definitely potential for it.

Tyrone Shum: All right. Well, I'm really, really keen now to talk a little bit about this renovation. When you told me, I was like, ‘What? Sam doesn't do his own work. He usually gets trades people to help out’. But this one sounds like you got hands on, you know, got straight into it, did the renovations yourself and so forth, and also got a few extra helping hands.

Tell us a little bit about what you, or why, actually, you needed to do this type of renovation. Could you have done something else to it instead?

Sam Gordon: Yeah, look for me, at that point in the portfolio, it was very hard for me to save deposits. I didn't have a huge surplus income. I think back then interest rates were probably, around that sort of time, they'd probably be around about 4% or 5½%. So the portfolio was positive cash flow, but not to a huge extreme—just enough to supplement a little bit but not enough to easily save more deposits on top.

So, it was back to the case of I needed to make money from every deal that I did. So, this was just another one that I needed, you know, sweat equity in there, really force value, buy a below market for one, and then force value on it so I could pull that equity back out and put it into another deal. So, that's essentially what I was looking for. And back then, I was definitely a hands-on-renovation man. I wasn't quite as busy as I am now running my business. But back then, yeah, I was definitely looking for the hands-on renovation, value-add-style projects, and this one definitely fit the brief.

Strategic Thinking in Renovations

Tyrone Shum: So, tell us a little bit more about the type of renovations. Obviously, the kitchen didn't need to be touched so we can leave that one out, but what did you have to do on the property now?

Sam Gordon: Yeah, look, we had one full exterior wall down the left-hand side, and this is probably another reason why owner-occupiers were turned off. Quite a portion of that wall had been graffitied. Which you couldn't actually see from the street frontage. So, it was on the narrow side that just had a footpath down the side, not the other quite open side that you drove in on. So, that entire wall needed to be cleaned.

One of the beautiful things was, and I'd never actually come across this before, but their roof tiles, they were iron sheets, and I've never seen them before. So, like a collarbone full sheet, but they were tiles and withsways. And I'd never come across them before. And neither had the sales agent. So, when I went back with the building and pest inspection, a few of them were dented, and they were leaking into one roof and I said, ‘Look, you just can't buy these things anymore. We're going to have to re-roof the entire thing’.

So, that's where I negotiated for the discount. They agreed to do a 50%, you know: ‘We'll take care of 50% you take care of 50%.’ So, I was able to get another $3,000 reduction on that. Thankfully, the handyman that I used, he had a few of them lying spare at the back of his house. So, he came and replaced them while he did some other work and it cost me nothing! So, that was a great little value add on that one. So, just a few different things like that.

And there were sagging ceilings because it was double brick. And it had actually brick faces that had never been painted. So, that was open brick, which is very, very porous material. So, the entire house needed an interior, needed a repaint, which was a bigger job than I realised, because I never realized how porous that material actually was.

So, putting in perspective, normally I would give a house two, maybe three coats; this thing needed six coats of paint. Just after the first two coats, I did it. And you couldn't even see it. You couldn't even see that I painted it, because it just sucked it into the material. It was crazy. And then the next few coats formed its base, and the two on top gave it actually a really nice finish. And in the bathroom—

Tyrone Shum: This was the internal, you're saying, the internal walls? Could you have actually considered, instead of getting more paint, to have actually done maybe a plaster over?

Sam Gordon: We could've, but I'd already kind of started. So, when I was two coats in, then I was like, ‘Well, surely that sealed it’. Plus, I was pretty cash-poor, you know, in terms of that one. So, I was trying to do it as much on a budget as I could.

Tyrone Shum: Paint’s cheaper than getting concrete or plaster.

Sam Gordon: Yeah, that's right. That's right. And it did come up looking pretty good when we'd finished. And it was maybe an extra tub of paint, so maybe an extra 150 bucks applying it as well—plus the time it took to apply it.

Tyrone Shum: That's crazy. I mean, yeah, it sounds so much fun to have done it. But like, I remember when I did my first ever paint job: I was overwhelmed because I painted a three-bedroom, two-bath townhouse in one of my investment properties. And I thought, yeah, it's going to take me maybe a few hours to do it. I totally underestimated it. Actually it took me probably almost three days to do the whole thing myself. And I'm never doing that again. ‘Cause it was just back-breaking work. And it was just so exhausting, too.

And I guess, you know, I don't know too much about fumes and stuff like that. But after a while, you just start smelling paint all the time and you're just kinda like, I don't want to do it ever again. Did you get any of those feelings? ‘Cause you obviously put six coats of paint; that would have taken so long.

Sam Gordon: Yeah. And it was the first time I'd ever used a spray gun. So, I was pretty much covered for the whole week in paint. I was like a snowman, like white for the whole week. Full gray hair and stuff! It was a good experience, mate. It was different. But definitely, it was a good kind of transformation of that house as well.

Learning From One’s Own Mistakes

Gordon and I jump right in where we left off. He remembers this as being one of the worst moments in his renovation journey.

Sam Gordon: I can probably actually say hand-on-heart, the lowest point of my life was probably doing that bathroom. So, what it was: It was quite standard to Queensland. There was a separate toilet from the bathroom. The bathroom needed a full makeover as well. And vanity tiles, all the rest of it, shower, shower screens and whatnot as well. But the actual toilet is there.

This is the lowest, probably the lowest point in my life. And this is probably the biggest lesson I've ever learned in renovations. There's certain things you should put your time into and, quite honestly, do. And there's certain things you should just pay someone else to do that have done it before many, many times. And I'd never changed a toilet before. And it was because it was double brick, it was ridiculously hard to loosen this thing and get it off. Loosening the system off. And essentially, that was all I was doing.

I was just trying to change the system. I hadn't even changed the base of this thing. I was trying to change it. It took me four hours to get this thing off. And I was squatting in... all this water had come out of the system and was sitting on the floor of this 40-year-old housing commission house just stinking of urine. And I was just breathing this stuff in. And honestly, I walked out of it at the end. And yeah, I can't remember who I called but I said, ‘This is the lowest point in my life’. Like, I just had to walk out of the house and hose myself off. And I felt so sick. It was disgusting.

Tyrone Shum: I could just imagine you walking out of the house or running out of the house and puking all over, gasping, saying, ‘I can never do this again’.

Sam Gordon: It was filthy. It was filthy. I just got the hose, and hosed myself. ‘Cause I just needed to try to get the smell off. It was like you with that pain smell in your nose, like I had it stuck in my nose for the whole day. And this is the thing though, right: You've got to leverage what you can do or what you're not good at and just pay other people to do it. Because then, when I went and got the system and brought it back, as hard as it was to pull it off, it was that hard again to put the new one on!

It was just a system I'd never seen before. I'd never done it before anyway, but I was trying to watch all the YouTube videos to learn as I was going. And I just couldn't get it off. Couldn't get it on. And the real lesson of this story came about a month after I re-leased it out, and the actual bowl, the toilet bowl, had broken. And so, they had to replace the whole toilet anyway. What a slap in the face, mate.

Tyrone Shum: I would have just said, ‘No, I'm getting rid of this property. I don't want it anymore’.

Sam Gordon: It was one of those things. I just had to say, ‘Yeah, all right, pay the bill’. And I just tried to scrape it from memory. But considering it was probably the lowest, lowest renovation point in my life—yeah, definitely won't be doing that again any time soon.

Tyrone Shum: I guess you've learned your lesson. Never install a toilet.

Sam Gordon: Yeah. I'm going to leave that one. Definitely leave that one.

Despite the horrific experience, Gordon ploughed through and began working on the rest of the house.

Sam Gordon: The big things were the bathroom; that was quite dilapidated. All the painting obviously needed to be done. It was, it was very run down. Like, someone had definitely been smoking it as well, so the house was very dark and dingy. And then, there was also yard work.

So, the main things you always look to do for cosmetic reno is, keep it as low budget as possible—which is your kitchen, your bathroom, your paint, your flooring, and all landscaping. And any fixtures and fittings if they need to be done, like old door handles and window finishing stuff: You can do those pretty cheap most of the time as well.

So, I fully fitted that side of the house out as well for about $500. That was all door handles, and I just got some cheap lineations from Bunnings that overhang the windows. So, it was big enough to do it. I literally did the whole house for, I think it was, about $450. It just really popped against the new fresh paint that went through it as well. So, you know, for the cost of that: It definitely added value on that side of things as well.

Tyrone Shum: So, do you remember how much the whole renovation cost you? And after that, you know, when you rented it out, what kind of rental return did you get?

Sam Gordon: Yeah, so I'm pretty sure the entire thing was just a tad over $6,000. And that was everything, and it included a new air-con unit as well.

Tyrone Shum: Even the air-con unit must have cost you a grand at least!

Sam Gordon: Well, it shows how far that sweat equity does go. So, this was a funny story. This one as well—this is one of the biggest lessons I reckon I could ever teach. If I could ever teach anyone that was going to do their own reno… Don't try and do it on weekends. If it is a proper, full-blown reno, if you try and just do it on weekends, like I've done before with my very first properties... and that took me about six weeks to fully renovate a two-bedroom unit. Just ‘cause I was doing it on weekends and after work and it was just really hard to fit it in. So, what I did with this one was I just took a week's annual leave, and I finished up work on a Friday arvo.

I drove up to Brizzy from Sydney, picked up the keys on Saturday morning, and then did a full-blown reno, till I think that Saturday night. I gave the keys back, slept there and then drove home on Sunday. Started work again on Monday. So just, you know, over a full week. But knocked everything out and had it ready to go. But it's one of those big things that I’d always say, ‘Make sure you set yourself some time and just go out there and smash it. Don't try and just fit it in around other stuff’. It's how renos drag out so long.

Tyrone Shum: Yeah. I've heard those stories many, many times, you know. It's like, ‘Oh, I think I'll just do it in my free time on a weekend whenever I can’. But you get caught up and then you just, on weekends, if you've got family, you’ve just got other commitments and so forth—and it ends up never getting done.

And I totally agree if I blocked it out for the whole week, it's just full focus. It sounds like, you know, you did an amazing job. Obviously, there's some challenges as we discuss this now. But did [you] actually do all this yourself the whole time or did you actually hire anyone else to come in or even get some mates to come and help?

Sam Gordon: Because it was Brizzy, well, I didn't have any mates up in Brizzy at the time or, you know, [I was] kind of born-and-bred and pretty much everyone was in Sydney. So, I didn't have anyone that could come and help me on this one. But what I did do was hire a handyman just for a day to come in and help me finish off a bunch of different things. That's probably one of the biggest things.

Biggest lesson I learned out of renos was to do the labor-intensive stuff that you can. Do all that yourself. And then, when it comes to stuff where you could use someone else like the bathroom on this one, or this is a bunch of little things that I knew were going to take me a lot of time. But if I built different things—like I built the vanity, right—we ripped the old one out, put in a new one. And it was even just things like that, and cutting it in, things that I'd never done before. I didn't even have the tools at the time to do it either—being the first proper, full-blown reno that I did.

So, you just learn a lot of different things from those people, and you can smash things out so much quicker. And a handyman typically costs, I think he cost me about $250 for the day just to come in. And we just smashed out so much stuff. But the stuff that probably would have taken me again, like the toilet, if I paid him to do it, he probably could have done it quite quickly as well, having done that sort of thing before.

But, yeah, it's probably four days worth of work that I smashed out in the day as well. So, it definitely pays dividends, hiring people if you can, doing a list of what you can yourself. But if there's stuff you need to pay to have done, or it's gonna take you a bit of time, you've never done it before, get that expertise to come in and help you. And you're almost a labour for him, and he'll just smash it out.

Important Things to Consider at the End

Tyrone Shum: Yes. In many ways, you’ll reflect back over this and go, ‘Okay, it's a great experience’. ‘Cause then, at least, you know what people are doing, because I myself, I've hired renovators to be able to help me do one of my other properties remotely. ‘Cause I wasn't able to get there, especially with COVID, I can’t get down to where I'm supposed to be. And I trusted this person; he did an amazing job because when he sent the photos across. The property manager said, ‘He's an amazing tradesperson’. I was very, very impressed.

But the good thing is while I was communicating with him, because I had done some renovations on my dad's property and a few other investment properties I've had as well, I knew exactly how to talk to him. Because when tradespeople talk, they've got their own lingo, especially when they're talking about like, you know, electricians—they don't call them ‘electricians’. They'll call them a ‘sparky’, or a ‘chipper’ instead of a ‘carpenter’. It's like that's kind of lingo. And then, they talked specific things about, you know, wiring a snake down the wall. Like, you're going, ‘What?’ But if you've never ever done that before, you won't have a clue what they're talking about. So, it's things like that.

I guess I've had some experience, just like yourself, when you’re actually working with tradespeople, you understand their kind of lingo. And it makes a huge difference. Because when it comes time to actually get things done, at least they explain it to you and you don't feel like you've been ripped off—because tradespeople can, you know, take you for a ride if you've got absolutely no idea. And I've had that experience before.

But then, if they know that you know what they're talking about, they'll actually do things properly and genuinely. And I think the hardest thing that I found with tradespeople is actually finding good tradespeople that will come on time and actually do the work.

So, yeah, it's all a learning experience. And I think doing it once is fine, doing it twice. Yeah. It's okay. But doing it three or four times over and over again, you know, it'd be like a slap on the wrist. Get someone else to do it because your time is probably well worth spent buying other properties instead.

Sam Gordon: Yeah, definitely a hundred per cent. Sorry, I'll just touch on one thing there as well. It kind of came to me as you're saying that. ‘Cause it's so true in terms of that and knowing who to trust and how to work with them and stuff as well. One other little thing that I picked up on, on that side of things was when you're doing jobs like that: If you are going to go out and do it yourself, like you're doing it remotely, fantastic if you have people that you can trust to do it. But if you were going to go and do it yourself, one of the best things I reckon you can do is put them on an hourly rate and just get them to work with you, because then, you know, they're not just going to blow off the rest of it.

If they're on an hourly rate working with you and then you just keep pushing and just keep going and go on and on, you get so much done for such a cost efficient price. You know, at the end of it, it's probably the most cost-effective thing I've ever learned with renovations, running people like that. And they like it, because if you're in the trenches with them as well and doing all this stuff with them and a lot of them like teaching you different stuff as well, you know, like kind of passing on different stuff as well, you'd be surprised how much you could get done in a day. Just working one-on-one with someone like that.

Tyrone Shum: That's such a great point, I think, you've raised there. And I totally agree with you because I think once they actually know that you can actually get hands-on, they know that you're not just going to be just sort of standing back and just managing the whole project. I mean, it's great to do it that way, but if they actually know that you can understand what they're doing, they really, really appreciate it and actually do a better job for you. So, that's a fantastic tip.

So, let's talk a little bit about, now that you've finished the renovation, tell us a little bit about what happened after that. How long did it take you to get a tenant in there? Did you get it revalued? You know, what happened straight after that?

Sam Gordon: Yeah, definitely. So, this one I paid $212 for. And all of the reno, I'm pretty sure, it came in at about [the] $6,000 mark. I also negotiated early access on this one. Obviously, it was vacant, and they didn't care. So, I got in it a week before it settled. So, I've got in for that week before and knocked the full reno out. By the time I left on the Sunday, it actually settled on the Monday. So, it was kind of perfect timing. They listed it for lease, so we actually got $310 a week for that one, which I can't remember what that came in at, but it was almost 8% return I think, on a standalone house. That was pretty awesome.

So, yeah, we've got $310 a week, roughly, probably $218,000 purchase price when you factor in the reno. And so the way I still operate today and the way I was working back then was I would wait 90 days for post settlement, go out and order a bank val. And that one actually came in at $280,000. So, I had a massive chunk of equity, ripped that straight out and then bought one about a kilometre down the road, did almost exactly the same thing probably six months after that one. Settled, bought the other one, settled, bought the next one. Yeah. So, it was pretty good.

Tyrone Shum: So, I guess for listeners out there and, you know, viewers as well, they're probably going, ‘Wow, that's really good, you took your week, you know, dedicated time to do the renovation within that week. And you waited 90 days.’ So, let's say, 120 days after everything was all done, you can actually draw out equity.

So, if you got revalued at $280,000, you would have made the purchase at say $220,000—let's just round the numbers up—, you would have made about a little bit over $60,000 in terms of equity from there. Obviously, the bank's not going to give you the full $60,000 ‘cause they're going on like basically an 80% val. But with that, I guess that explains to people how you can actually leapfrog from one property to another. Because if you draw out that, actually how much were you able to pull out of that to use as another deposit?

Sam Gordon: So, I was able to pull out 90%. So, the way a lot of the banks work as well is if you go with the same lender, then get a bank val with that same lender. I was able to pull back out of the same one because I bought it at 90%. I'm always able to refire back up at 90% again. So, I was essentially able to pull out over $50,000 out of that deal to put into the next one. And you only pay the LMI on that difference off the top up now, and really, it's how I was investing at the time.

I still invest that way today, still invest that way for clients. It's how you can keep pulling out and just keep moving. Because if you make that money, the bulk of that was essentially made in the purchase on the way in. We bought below market, we probably bought $40,000 below market, made that money. Yes, we value-added with the reno, and obviously, the cash flows were a lot stronger from doing the reno well. But it was really all in that purchase and was able to pull it back out, roll it to the next purchase and do it again and again.

Yeah. It's definitely pretty solid, and it's very repeatable. That's what I love about it. I mean, that's how I’ve got the portfolio the size we've got today, is from that exact kind of system, the systemized approach. Buying below market, force value where you can, but then just continually pulling that equity out and moving forward.

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