Trent Giumelli is the Chairman and CEO of the Giumelli Group which is the number one Australian housing and small property project, expert. The company was started back in 2006 by Giumelli and quickly became one of the most successful in its field. He has been working in the industry for over 20 years and has come across some times where things did not always go to plan but were valuable for him to learn from.
Come with us as we explore Giumelli’s journey into small property projects and talk about his upbringing, some of the previous jobs he held as a young adult, the impact that the global financial crisis had on his business, some valuable pieces of advice and much more on this episode of Property Investory!
Trent Giumelli is the chairman and CEO of the Giumelli Group who are renowned as property project experts. Giumelli shares with us how he got started.
We’re Australia's number one small property project experts and we basically coach, mentor and work with clients in small developments. We've done it now since 2006 although I've been in property now for over 20 years, which is interesting.
Giumelli tells us about what he does on a day to day basis.
My days are pretty free these days. Obviously I am busy working on the business versus working in the business, but most days I'm dropping the kids to school, enjoying a coffee at my favourite cafe. I start work generally about 9-9:30 most days and finish around lunchtime. I have the afternoon with my wife and my youngest child and obviously get to pick up my eldest from school as well. So I'm going to say it's been a lot of hard work to get here, but now we get to enjoy the fruits of our labour.
His family lived in different areas at different points in time so he was accustomed to different ways of life.
I was born on the central coast of New South Wales in good old Gosford hospital. I lived in Terrigal and Wamberal for my first 23 years of life. Absolutely had a fantastic upbringing. I surf a lot, so we're on the beach there and had the benefit of doing that. But my grandparents used to live in Bungendore down in Canberra, so I actually got to live a lot of the farm life at the same point in time. Moved down to Sydney at 23. I lived down there for nine and a half years. Loved every minute of it, as you can probably appreciate it. Young 20-year-old down in Sydney. It was glitz and glamour and got out of there and from there moved up and met my wife and we moved up to the Sunshine Coast in Queensland.
Some of the most successful people in the world did not enjoy going to school.
I was never going to university. It just didn't fit my mentality. With the greatest respect to everyone that goes to uni. I should have finished school in year 10. To appease the parents I went to year 12. I had some great schooling and one of my favourite schools was St Edwards College in East Gosford. It was a boy's school. We had such a great time with all the boys and all that and playing a lot of sports and doing all that, did quite well at school there. Year 11 and 12 not so great. Went into a coed environment and a late teen is more focused on other things than school at that point in time.
It took some time for Giumelli to figure out what he wanted to do after high school.
I failed school pretty hard in the HSC. I actually wanted to be an architect when I was growing up. I was always a really good tech drawer and coming out of school dad sort of said to me, cause I'd never worked up until then, he sort of said to me, what are you going to do now? And I was like don't worry about it. And I ended up working at David Jones in Chatswood for a period of time there and actually really enjoyed it, surprisingly enough. I was in the back end and doing a bit of selling at the same point in time and it just really kicked the career off into being independent, learning about business and how it operated and what to do, what not to do. I got to see very actively, the positives and negatives of managers.
Just gave me a good stable base from there to evolve and I did. I had a multitude of jobs on my resume until about 29. I've probably been through about 200 jobs in that period of time. For me it was always looking for something more, looking for more training and certainly mentors. And I got that opportunity working for a group called Corview and a chap called Warwick Kirby. I was in North Sydney, sort of the mid-twenties and really thrived there. He taught me so much stuff that I still employ today and if he's listening, God loves you, you've changed my life. You just went hard through the mornings and got in early and just learn what I learned today. Still, apply a lot of the traits that he was able to teach.
It’s fair to say that Giumelli has had some considerable work experience.
I was selling everything from clothes to IT equipment, worked for a powder coating company and an air conditioning company. I studied to be a mechanical engineer at one point in time, selling advertising for yellow pages. There's a whole raft of jobs that we did over that period of time.
Giumelli tells us about why he was always on the lookout for another job.
It used to be a running joke with my mates that you can't hold a job down more than six months. It wasn't that, I was always looking for something better. I was never settled working for someone else. When I got to that point where I felt I learned what I wanted to learn, I then went and did something else. Reading Robert Kiyosaki's book, he did something very, very similar to growing up.
From a very young age, Giumelli was already starting to think about what his future could look like.
I mean mum was always very pro-property. She was from a banking background. My Dad was an accountant. He was also pro-property, but much more conservative. For me it was always just something as I grew up, I had this, it's hard to explain it, just this gut feeling that I was going that way. There were two things I was purely passionate about and that was cars, anything mechanical, particularly racing, and property. I just had this affiliation with it from such a young age. I remember, I started playing golf at about seven. I was training to be a pro golfer back then and I still remember driving down to my grandparents and looking at property as we're going from such a young age. So, I know it sounds a bit far fetched, but I can still remember a lot of those trips.
We hear about how he found himself going down the path of property investing.
Dad was pushing me at the time. I was wasting way too much money on cars and booze and going out as every young man does. Bought my first house in Wamberal, bought it at the top of a boom and ended up losing money on it for the first eight years that I owned it. So I was always taught about negative gearing and all that. However, we renovated that property and made it nice and had a great tenant for that period of time. What I was able to do is leverage the little bit of growth that we had out of it and go into two and three. And I was able to multiply that very, very quickly. So I bought that property within six months.
I bought a secondary property on the Gold Coast and Coomera. Within an eight-month period from there, I then went and bought another one in WA and both of those properties doubled within 12 months. So I was very fortunate from that perspective to buy right. I had a good team around me, being my finance broker, Leanne, had a first mortgage in North Sydney and she really taught me a lot of stuff to do with finance and all that. I was continuing on, I had another two or three properties under contract at that point in time and dad was saying to me, you know, you've got to do something else with your life. I ended up buying a Wizard Home Loans business in 2006. So we went from a very, very slow start. I didn't get started until it was later. I'm still interested, but a very, very slow start. As soon as I got started I was hooked, mate. Hook, line, and sinker.
What age did you start or did you purchase that first property?
I think it was 25 or 26.
We discover the staggering amount of properties that Giumelli held.
By the time I got into developing I had a hundred under contract, under my ownership, across multiple entities, we had a hundred and four on the books and most of them were negatively geared.
After having so many properties on the books there are bound to be some moments that aren’t great at the time but valuable to learn from.
To learn you've got to make mistakes. The way I was able to leverage myself very, very fast is reading about other people's money, leveraging through family members and stuff like that. So we're able to grow that portfolio very, very fast. However, it got to a point where I had to employ three people to run the portfolio and GFC rolled through and actually liquidated everything. Well most of it just because I couldn't see the point of holding that much asset and debt at that point in time, I wasn't really getting ahead.
He explains the impact that the global financial crisis had on his business.
Constantly chasing your tail, robbing Peter to pay Paul, to get to that neutral base. And that's why when the GFC rolled through, I just basically made a blanket rule that anything that didn't have more than 20% growth, the note was either neutral or positive cash flow, we got rid of it, we just liquidated the whole lot. It was a very uplifting moment. It was tough to do, to make the decision, but it was an extremely uplifting moment because I felt free again. And you know, the properties that we did keep we eventually sold them off anyway. But the properties that we did keep we were able to not have to put a lot of coin into them. I could manage them versus a team managing them. So I ended up saving a bucket load of money.
Giumelli had come to a decision on what needed to be done and he didn’t want to waste any time. He shares with us how long it took.
That's three and a half months. I just said get rid of them. So if we can get anything bank debt or more, go for it. And we're just liquidated. So if you want to do something? You can do it fast if you really want to.
Did you have any surplus cash leftover after that or did they just pay off all the debt?
Just paid off all the debt.
So you're really starting from a blank slate from day dot after you've sold all of them off.
I've done that three times now. So didn’t happen the first time, took me three times.
We hear about a difficult moment in his life, not only on the business side but also on the personal side.
I nearly went bust after that event, an ex-girlfriend of mine spent all the money. So that was a tough one. Then from there in 2013 I had a mate of 25 years stick the knife in over money and went backward pretty hard from there.
Giumelli goes into more detail about that time in his life and why it had such an effect on him.
At the end of the day we got on famously, we were great mates and all that sort of stuff. But what I didn't realise at the time, we had our business, which was going fine. We also had developed together. And what I didn't realise at the time was that I was managing his wife and that for me was really, really difficult. I didn't really give two hoots about the money to be honest. It was more the relationship, but that's how you grow and move forward and my firstborn was two weeks old when that happened. So when your back is to the wall you start to really focus and put focused attention into what you do and that's what we did and where we are today because of that. So I'm actually really grateful for that moment in time, as hard as it was, I am actually grateful for it as well.
After going through such a great learning experience Giumelli decided to use that experience to his advantage.
When I started the Wizard Home Loans business, I've found the extent of the franchise very fast and I wanted to learn about the development and that side of it as well. So I basically worked for free, an apprentice to developers in Sydney for a great period of time, about three and a half years. I ended up losing money again off those two. One of them wasn't the straightest person in the world. I just did everything that I could, project managed five 30 plus unit developments at once. Suffice to say I wasn't married at that time and I certainly didn't have kids. So I just committed myself absolutely into learning as much as I could about developing. When I got through that phase, we're talking 2007, eight, nine, that's when I liquidated the properties that I had on the books and I was able to then get into my own first development, which was what I was always looking to do anyway, although I couldn't and wouldn't have been able to go to university to study architecture because I just didn't have the marks to do that.
I certainly had the ability to go through a different route, it is developed, to do the same job. It’s just someone else who was drawing it for me.
We discover what he learned from some failures in the past and how he uses that to his benefit.
I had a failed business partnership in that one and ended up just letting it die. It wasn't worth the hassle selling it. I've had two partnerships and both have gone down so suffice to say I'm not that pro on partnerships. However that's not to say they can't work, so I actually just let it die. I still did finance through the period of time just to be able to make ends meet and pay for things. I ended up working for Commonwealth Bank for a period of time as well, for the same reason, but deep down knew I had to get out of the environment where I was encased. I mean that again with the greatest respect to everyone. A job just wasn't for me. I had to be my own boss. I have to rule the roost in those types of areas. My staff is amazing. I'm not overbearing or anything like that with them. I like to be in control of my own ship and that has brought us a great fortune and great friendships as well.
At the end of that journey, he describes his venture into property development and provides words of wisdom.
I got into it in 2007. Just through leverage and certainly learning with developers, I was able to put some funds and some capital in a joint venture with them. Then I was learning the processes as we went. I did my first one on my own back in late 2008, that was an 80 unit complex, went through the GFC, got funding on it, had joint venture partners and that didn't go too well because one of the partners decided not to pay his mortgage, so the funding fell over, walked away from that. Like anything, it's the journey that you go on and what you learn from it. We still do joint ventures.
However, we are pretty selective about who we joint venture with now. Just from previous experience that that's what it's been. So I can't say that it was all roses because it wasn't. We've had some tough times and we've had to really dig deep a lot, quite a number of times. I'm not trying to say it’s a sob story or anything like that, it's just my journey today. When times get tough you need to get tougher. I heard a great thing this morning just on the radio was, you might get knocked down seven times, you have to get up eight. That was from Denzel Washington, just watching a motivational video. It doesn't matter how hard you get hit and continue to get a hit. You just got to keep getting up and keep pressing forward, focus on what you want and really have a desire, dream, and goal. I have vision boards. I have them in my car, on my phone, everywhere I go. So that I can always look at what I want and where I want it. And it's not all materialistic, some of it is, but you're able to create this lifestyle with desired focus.
Some advice from a person with experience helped Giumelli simplify his outlook on the business.
In 2013 when all that stuff happened with my ex-mate, my wife and I just basically looked at each other and went, right. I was starting from minus $427,000 position. We had tax debt to pay and all sorts of liabilities to deal with. And I remember saying to my wife and my father in law and my mum at that time, my father in law was an ex higher up in Westpac banking and he goes, ‘Mate, you're bankrupt. It doesn't matter which way you look at it, you're bankrupt.’ I just said, ‘Look, don't worry about it. Let me go and in 18 months we'll change this around.’ So what we did is assume the mentality of the kiss theory, ‘Keep it simple, stupid,’ the smaller fish are sweet. So we started on a splitter, which we actually owned at the time and were living in.
Then we moved on to a triple splitter and then a quad. And we just started progressing, doing the small things. There's an old saying that little fish and small fish are sweet and we're running good money out of it. We moved away from the building, I just looked at everything and there's two risks or two areas that you'll go bust in developing. And from my perspective, it's building and finance. And the reason I say that is builders operate off of wafer-thin margins, typically eight to 10% is pretty normal. If they go bust, it's incredibly hard to get a new builder in, number one. And typically, if that doesn't kill you, the finance will because you're going to have delays and all that sort of stuff. So what we did is just moved into land subdivisions, small lot of land subdivisions, which is what we do now. Since 2013 we've gone from that minus $427,000 position to right now on the balance sheet as of today is about $109 million in property with $14.3 or 14.4 million in debt.
We discover where these developments were located and why he chose that location.
They're in Queensland because of the market conditions, the markets were moving around too much for me in Sydney. So we ended up pulling out of Sydney. We were selling property in Sydney, but we ended up pulling out in 2013. As everyone's aware, the market took off again, which it wasn't supposed to do. What happens from our perspective is that we look at deals on multiple levels. So we might go and buy sites with 20 lots or possibly 20 lots and we'll get all of our terms and things like that, which is subject to do DD settlement, CA's all that sort of stuff. When that goes out of the market and says, no, you have to pay cash now. That's an indicator for us to get out because the market's too hot for us.
In that instance. We've got to move away from it at that point in time and look at another area. So for us to do that, we had to make sure that from there we looked at the next market, the next natural swing was up to Queensland or Brisbane. From there, the natural swing in from now is over into WA. So obviously seeking property down there. Sydney for instance sake, we still think it's probably got another year and a half to two years before actively be looking to purchase down there again.
Confidence is something that Giumelli does not lack in the slightest and he will always back himself.
I'm the eternal optimist. Everyone says to me, ‘You shoot for the stars,’ but if you don't shoot for the stars you're not gonna get anywhere. If I shoot for the stars and get to the moon, I'm still going to be a happy man. So I don't look at developing as a risk. I just look at the numbers. You understand that to get to the end goal, it's gonna take x amount of years. Over that period of time, you're going to needy amount of cash, blah, blah, blah, blah, blah. And again, probably shouldn't have taken it on, to be honest. It was a massive undertaking, but we just learned so much from it. And again, can't complain about the journey. It's just one of those things that I thought I could do at the time. I was invincible being in my late twenties as we all are. If shit hit the fan, I could afford to get up and go again. That’s just the reality of it.
Family is an important aspect for Giumelli and we learn about moments that he found extremely valuable.
When my firstborn was one of those moments that completely just changed life altogether. I realised that I'm just an insignificant soul. You've got to now bring up this human being and teach them what the right day is so that was always a big aha moment for me. There's been many over the times and over years. It's funny, I was telling my dad the other day, one thing he taught me years ago when I was younger, I just did not listen to him whatsoever, as we all do. He used to say this saying to me, which was little and often, and he was talking about savings. I was like, ‘Yeah, Dad, whatever.’ He always used to say, the other thing is, every dollar you spend on a credit card you’re spending a dollar 20.
So those little things that have happened in life, I've reverse-engineered. So every dollar I spend, I expect the dollar 20 and little and often is the same strategy and process I use today. And I was telling him the other day and he teared up pretty heavily about that. There are obviously other aha moments. In 2013, when everything went to shit, it was just like, you know what, this is your time. You need to focus and you've got the opportunity now to build something amazing. And that's what we did. In 2015, we set up our palladium program, which is coaching and mentoring people to become property developers and we split profits 50/50 with our clients that choose to participate. That was a big aha moment because I was looking at the time as to what was on the market and there was nothing like it, just plenty of courses out there about property. But certainly, nothing that gave people the opportunity to participate in projects the way we do them. Thankfully today we still operate in a fairly non-competitive environment because you know, the sequence of products that we've gotten and what we do is not a lot of people want to go down that path. So there's been a number mate, but the biggest one for me was my firstborn when she was born. It really set life apart from me.
Giumelli was ready for the challenge of caring for his newborn and how that changed his perspective on business.
Funnily enough, it didn't impact me a lot. It drove me more, but it didn't really impact me as to how I still operate the business today. I shoot for the stars, always have, shoot big targets and most of the time hit him. So for me, the fundamentals of the business have always been the same. What it did do, from a clarity point of view, every year I assess everything that I do and apply the kiss theory. If it's too hard, I'll just get rid of it. That was the one area that it really gave me clarity on was, how can I spend more time with my kids and in their lives while seeing them growing up whilst operating a multimillion-dollar business, I'm working from home and working not a lot of hours a week.
Everyone says it can't be done. I'm here to tell you it can be. You've just got to be able to get the right team around you to do it. So that was a real aha moment and those functionalities of having a child, it just gave me clarity, I think to that, my wife has been amazing. She took a lot of that backend off me, you won't wake me through the night anyway, a freight train could go through our house and it wouldn't worry me. My wife, thankfully, took a lot of that load on her. It certainly made my life a little bit better and easier to be able to achieve what we've done today.
Trent Giumelli’s Advice On Setting Goals & Achieving Them with Brisbane Development Market
We discover the hard road that he had to go down to get to where he is and advice he received along the way.
To be honest, like the first two years I was working seven days a week, a lot of hours. You can't get there just by clicking your fingers or thinking that it's going to happen. You've got to put in the hard yards, number one. A lot of people look at it now and go, oh well, you know, you're living the easy life. We've gone through some pretty big challenges in life and the only reason it's able to happen is because of our people. So within a business, cash flow has been etched in the back of my head from my father, my father-in-law and other mentors and coaches that I have. So cash flow is the biggest killer of any business and development. So you've got to make sure that you've got sales coming in the door.
Again, coming from a conservative accountant, being my dad, he always said, if you don't have sales you don’t have a business. Systems and processes are absolutely imperative. If you don't have them you can't take your fingers off the controls. You've got to think of driving a car with cruise control. If you don't have cruise control and let go of the wheel, you can't drive the car basically. So you've got to have the functions in the business that enables you to be able to let go of the wheel here and there and lift your foot off the pedal and let the team run certain things. You've got to have the right people. You’ve got to have the right culture and to have the right culture it takes a little bit of time, but when you get it, it's amazing.
But you know, with the culture I always say to anyone is be true to yourself. Don't try and be someone that you're not. Make sure that your culture reflects who you are as a human being. For me, I'm very trusting with people and I expect the same from my team and they're all like that. We also employ a lot of older generation people, so the average age of our staff is over 53. The reason we do that is that they've got the right cultural fit in values that we cover as a business. The next thing I would say is to get a coach, get a mentor. Read books, read as many damn books as you possibly can. One of my favourites is ‘Think and Grow Rich’ by Napoleon Hill. One of my all-time favourites is ‘ The Monk Who Sold His Ferrari.’
If I ever get in a bind, that's the default book I go to because it just resets and pulls you back into line and makes sure that I'm on track. But the last thing I want to say is a balance. You've got to have the right balance, whether it be through family or exercise or just going for a surf, swim or whatever. You've got to have balance in your life to be able to sustain the energy levels that are required to be successful. Your customers expect a lot from you but you've also got to set boundaries with them. So they're the key points I would say to any budding entrepreneur. You get those right. It's pretty easy after that.
Giumelli gives some insight into what his business does and how property development works for him.
The first thing you've got to learn is the art of leverage. You’ve got to leverage money. You do that through banks. You can do that through family and friends. You can do it through other people's money. There are all sorts of ways that you have the ability to do that. Then you've got to be able to leverage time. So, development, there's no magic pills or silver bullet or whatever you want to call it. It takes time. You're dealing with a lot of bureaucracies. That is a pain in the ass most of the time and things blow out. So you've got to deal with that. And be realistic about what can be done. So when we were uncertain about everything when everything happened, we had our property, I couldn't develop it because I had no money.
I was in the hole so hard. So what I was able to do is borrow money from my in-laws and my parents and said, “If we give you a rate of return of 25% on your money over a 12 month period, would you take that?” And they were like, “Yeah, absolutely. We can get more than 3% of our money in the bank.” But then the result of that is, how are you going to be successful? We need a business plan. How are you going to do it? So we did that one. They obviously got their money back. I said, “Can I utilise it again and do the same process?” Yes. And we just consistently did the same thing over and over again. A lot of people think that property development is this really exciting thing and at different stages it is.
But it's also very, very monotonous and boring in the sense that all you're doing is tweaking your abilities and tweaking your numbers all the time so that you can deliver the same thing better at a higher profit. The other big thing that we do internally is we will not touch any project that doesn't have more than 30% project profit in it. And the reason for that is that things happen. A lot of the time we see more than that, occasionally we see less than that. The way I was taught to develop was a third, a third, a third. So you put a third to purchase, a third to develop and a third in profit. That's how you always should look at the property. We get kicked on Facebook quite a bit and they say it can't be done.
Giumelli has been faced with a lot of doubters but that did not stop him from reaching his goals.
I'm proof that it can be done and we still find deals that have those sorts of margins in it. We just bought an industrial warehouse site down in Coolum, on the sunny coast and that project's got a 42% yield conservatively off the bat. So the deals are there. We've just been able to consistently stick to our laurels. Anything from 5-30 lots is traditionally what we stick at. We are moving into the warehousing commercial side. The reason for that is, having conversations with my peers and accountants, at some point in time we are going to have a downturn, that's a cash flow strategy moving forward. So it's got huge net cash flow in it and equity. So we're doing that a few times and basically our portfolio at the moment is about 20% industrial warehousing and 80% small land lot subdivisions and we'll continue doing that.
The lots of divisions that we do, we typically aim to deliver our product at affordable housing levels. For the viewers out there and the listeners, if you're going to get anything in any area, go for the bottom end where 95% of people buy. The one thing I learned through the GFC is the top end got hammered, the middle class got hammered, the low end didn't get that hammered. In fact, that whole segment increased over 2008 and 2009 because everyone's losing their shirts in the top end, guess what they do? They have to go and rent at the bottom end. My accountant deals with heaps of developers and he goes, “I've never met a better strategy than yours. Absolutely love what you do because it's bombproof because of that.” So you've got to just be smart about what you do. For us, it's all about delivery. If we can deliver a product that sells for $300,000 just for the land, by the time you build, you're going to be a sort of $500,000 to mid fives. Any ambulance worker, paramedic, policemen, nurse, a council worker, they can all afford that site. Most people can afford that style of property.
Giumelli does not waste any time developing property and quickly moves on to the next one.
The average project for us generally takes about 18 months, sometimes less, sometimes more. We've had some go out to 30 months just due to delays from councils and neighbours and things like that. We also pick up a lot of sites now that have already got DAs in place. So it might take 6-9 months, so there is a big variability in it. But on average, our projects generally take 18. I think 18.2 months is the calculation.
For a motivated property developer like Giumelli, there are never enough properties on his books.
Generally, we look at 10 per year. Currently, we've got 23 on the books. Seven of those are due to finish in the next quarter. So that will all roll out and in, we're obviously thinking of acquiring another 10 over the course of the next financial year. We did nine this year. I purposely pulled one back just to give us a bit of breathing space because the staff are very busy. They asked me to jump off the gas for a month or two. So we have done that, we've listened to them and next year we'll just do the 10 again that we do. Plus my wife does her own projects as well. So for us, we're still doing 10 projects. It's just 10 new projects but there's only nine on our business books.
His business offers some valuable experience for any aspiring property developer out there.
Palladium program and the way it works is, most courses will give you an encyclopedia of stuff to use and you won't be able to get any further information. There's a lot of them out there. I've seen most of them. Some are good, some are shit. I'm not gonna mention names, but everyone else can make their determination from that perspective. What we do is we have like a quasi apprenticeship. So you come in, you're getting involved with us, you've got to be at the right mindset to do it. We're very, very particular about our clients. We only take on clients that we want to work with and vice versa for them. We teach them, we've got a 12-week training schedule that we run online, which is theoretical stuff, but more so they've got on the job training, so they actually get involved in live transactions and participate in live transactions.
And that's where the real learning is. You can have all the encyclopedias and books in the world, but unless you apply what you're doing, you're not going to get much from it. So we make sure that our clients are engaged at every possible station through development. We have a program called Slack, which is basically a chat program and what we do with them is every client that's on a specific project, we set up a channel and we run through and upload all the information. You've got responses from the council, requests for more information, DAs, due diligence things, engineering, etc. All go up onto that channel so that they have the ability to see and read what's going on. They also liaise with our development manager quite regularly. We have monthly boardroom meetings with all of our clients where we go through a Gantt chart and we go through the financials, they get to see everything first-hand.
So the big one of our core values is transparency with what we do. To have that ability to show clients exactly where we're at from a financial aspect and from a development aspect, why it's delayed and why we're in front. All those types of things come up. They can attend council meetings, they can attend site meetings. It's really up to them. You don't have to be that detailed if you don't want to. We do have clients all over the country and obviously we understand that people have to work at the same time. We generally allow half an hour a week online with our clients and that's enough for them unless they really want to come up and come out to the site.
We find out about his strategy on the property and what to watch out for in the near future.
I don't like to own a lot of property these days. I typically just get rid of it. Pay tax on the money and go to the next one. Cash is the king as they say. There are aspects and certainly the warehousing and commercial, we're probably going to hold. There's no question about that. That's just a cash flow strategy as I mentioned before. When shit does hit the fan, for example, Australia has been 27 years without a recession. That's not going to last forever. We're going to get hit at some point in time. The estimation at the moment is around 2024-25, that's from Phil Anderson's information. So for us it's just a progression of putting things in place. The two projects that we've got, if they operate at 50% LVR, being at least 50% of them, there's still a really good amount of cash coming in. To go through periods like that where you can just sit and hold.
Clients have the luxury of various property opportunities and he lets us know what the popular trend is at the moment.
Generally, it’s been residential because that's what we're focused on. However, the last two projects that we floated for clients to participate in were two commercial projects and they filled faster than what anything has filled faster than before. So there's obviously a need and a want from our clients for that perspective. The end product is returning circa 10%, so they're looking after themselves because of the information we feed through to them. They're looking at a similar strategy for the purposes of what potentially can happen over time. Instead of taking profits, some of them will take units, I mean that by a warehouse themselves. So it was really interesting to watch how it has evolved over the course, particularly the last 12 months. Where people have been really looking at different opportunities.
We're also looking at aged care at the moment as well. So I've got an idea out there with that and I know a lot of our clients are really interested in that. But we're also looking at small shopping centres too. So there's a different variety of things that we can get into now because we have the ability to but we may not have the experience. So we might partner or joint venture with an experienced developer for the sake of the exercise on those just to watch.
With a shift towards the commercial property, he talks with us about why he thinks people are gravitating towards it.
Residential, typically you'd be talking 4.5% yield gross. After you take everything out, it generally nets out at about three on average. That's a typical half a million-dollar property renting it, so $450 a week. Commercial at the moment, and bear in mind this isn't done yet, we've done a lot of back end work and making sure that we're right and on the basic numbers, it's looking at a 10% net before tax. So you know, that's a big difference from 4.5% gross and even if it was 8% net, it's still a massive difference to where the residential stuff sits as well. The other thing is from a growth perspective with Sydney. I don't believe it's in a downturn. I just believe it's scaling back to where it should be because it went over a bit. But the commercial markets are doing quite well down there. So you know, generally speaking when residential is off, commercials off and vice versa. So you know, you start looking at different areas and different things that are going on through different regions. Just dependent on and contingent on what's going on in the market overall.
After all these years Giumelli is still hard at work looking for that next investment and we find out what it is that keeps him going.
The thing that drives me and has always driven me is our mission to help 500 people go through and learn about small property projects. So for me, I'm very charitable in nature. Every project that we have, we allocate 10% to charity. For me, that's a big driving force. And the reason it's such a big driving force is I want to be able to teach my kids to do the same thing. We should always be giving back to society and I know Australia has a bit of a tall poppy syndrome issue, but at the end of the day, that all aside and whatever it might be, it's about what we can contribute to the community. I don't want to be remembered just for small property projects.
We went to an event on Saturday night where we donated $10,000 to a local hospital for a machine. It's the poor families that are out there that have children that have any sort of illness. Doesn't matter what it is, it's all the same, just breaks your heart and to give them a leg up over the turmoil that they go through like kids with leukemia. It's such an awful thing to look at and such a confronting thing to look at. But you know, Christy and I, when my kids are a little bit older we're going to take them down to Brisbane’s, Lady Cilento Children's Ward and give them Christmas presents and stuff like that. Just little things you can do and teach and give back and be a better human is my way.
You can find comfort and guidance in many different ways that can help you reach where you want to be.
Three people I always looked up to was my grandfather who's no longer with us, my father and my father-in-law. So they've always been mentors to me over my life, although I didn't always listen. The other thing was books. In 2013 when everything went to hell in a handbasket very, very fast, I committed myself to learning and although the author may not be with us, like Napoleon Hill, for instance, is not with us anymore, you immerse yourself in that book. It can become a mentor for you. Listening to audiobooks, all that. I sought out a couple of groups. I did the Kerwin Rae K2 Elite thing. It was really good. Got some good contacts out of that. Learned a lot more about myself.
We then got out of that, I went into the Fortune Institute, which was Simon Reynolds and Matt Maloof and Matt is still my business coach to this day. You've just got to find someone that gels with you and knows more than you or had the experience. Matt, for me, he's got an accounting degree, he's very systems and processes orientated, but he also understands the complexities of staff sales as well. Then he just pulls the right people around him. My wife's a mentor to me, she's unbelievable. In most instances, if I've ever got an issue, I can go to her and run through it and she'll always have the right answer. I don't want to ever tell her that, but she always does.
She has always taken an objective view. There’s my best mate, the same thing is he's in his own business and we're able to do that with him and their family. And I think it's good to have proper, you know, we pay for our mentors as well. A couple of the guys who are friends and family and all that, they've got the experience, my grandparents and all that. They had many, many years of experience in business and stuff like that. So you can always go back and say, nan or pop or grandma or grandpa or whatever, I've got this situation, I know you've been in business, what would you have done or what did you do that was similar? You can always get experience from that.
So you can't stop learning. That's probably the biggest thing. We're on some of the forums on Facebook, Property Development Australia, a lot of good guys and girls on there and we're always learning from them as well. They have their own things that they have experience in and you can always post a question if you don't know what's going on and get an answer. So I think everyone's a mentor and a coach. It's just how you perceive it, number one. Number two is if you're willing and open to listening,
As an avid reader, Giumelli recommends to us some of his favourite books of recent times.
‘Think and Grow Rich’ is probably the best book on the market today. As I said, I love ‘The Monk Who Sold His Ferrari.’ I'm currently reading ‘Becoming Supernatural’ by Doctor Joe Dispenza. It's a tough one to listen to, but it is very good. ‘The 4-Hour Workweek’ is a great book. One of the best books I've read of late was a book called ‘The Big Leap’ by Gay Hendricks and it was about leaping through your mental stages. That was a cracking book. ‘You Can Heal Your Life’ by Louise Hay. ‘Ask And It Is Given’ by Jerry and Esther Hicks and I could go on for hours here. I commit to reading at least 10 to 15 books a year.
He delves into what you can get from your past experiences and the perpetuity of learning.
Give yourself an uppercut and get focused. I don't think you can and the reason I say that is because at every stage in life like I turned 43 this year and in the last three years I've learned so much. It's not funny. I have still got a lot to learn. So I think life is just an experience. My wife just turned 40 as well. Everyone looks back when they're 40. Oh, I'm too old and all that sort of crap comes into it, wait till we turn 50. I said to my wife, I've sort of broken-down life to date and it's the first 20 years when you're a kid, you don't give a shit, time does not matter to you, you’re just out to have a good time.
The second 10 which is 20 to 30, you're just out having fun trying to make a name for yourself. It's really 30 to 40, where you really start to sort of turn the screws and make a name for yourself and start earning big bucks and doing what you do. But the fundamentals of all of that is if you don't know what you want or where you want to be, you're just going to flounder. You need to have a clear goal in place of where you want to be. And that can be monetary, it can be charitable, it can be anything that you set your mind to. There's nothing that anyone can't do. We're all good at things and not good at other things. I get that, but there's nothing that you can't do.
If you want to be an opera singer, you can do it. It's not my first port of call. Certainly, if I had a go at it, I'd have a good crack at it as well. That's the only thing I would say to listeners is life's a journey. Learn from your experiences and get focused, it doesn't matter if you're 60 years old and worked your whole life. Colonel Sanders started KFC at 65, so there's still life to be had. I'll go to a hundred. I've said that to my wife many times. She laughs at me when I say it but I, personally, love living and I don't want to go anywhere in a great hurry. I'm just trying to, and I don't do it always, but certainly just trying to live in the here and now.
For a businessman, the clients are always going to be at the top of the priority list.
It's always about the clients and I know that sounds cliche but if I can lift my clients up to a stage that they've got on their goals and we're pretty confident we will, but if I can get them to hit their goals in the next five years, that'd be everything to me.
There will be points in life where everything doesn’t seem to go your way but Giumelli assures you that things will get better.
I've got a statement, I was born lucky. So luck has something to do with it. However you will go through, as you know, as you've heard from my stories, you'll get smashed at times. Where all luck seems like it's against you. It's not, you’ve just got to learn from what's going on. Knowledge is a massive thing. If you don't have it, go get it and if you can't get it, find another way. Just never give up on what you want to achieve. There's one of my mentors that always said to me, you may not have done it, but there are thousands of people that have done it before you. So go and speak to peers, go and speak to people that have been there. If it's business go to that level if it’s something else go to that level.
Make sure that you never lose sight. Even as shitty as it may seem or as tough as it may seem. I've been broke almost three times now and as hard as that was, I never lost sight of where I wanted to be. Recently I had a 27-year goal to own a Porsche. I bought one just recently because I never lost sight of what I wanted. I always did the things that I wanted to do, I stuck with the regimes that I have every morning which is a positivity thing in my meditation. I always made sure that I stick to that because that has been the one thing that has always kicked me along.
If anyone wants to reach out and talk to Trent Giumelli he lets us know where we can connect with him.
The best way is to pick up the phone at 1800699325. Alternatively, you can jump on our Facebook page which is Giumelli Group, or go to the website and just submit your details there. We always say the best thing to do is speak to clients. We allow interested people to be able to do that so they can see what's going on. There's been quite a number of interviews with me now on TV and podcasts and stuff. If you want to see those, they're up on the website and on the Facebook page as well.
This episode was produced by Andrew Faleafaga with narrations and interviews conducted by Tyrone Shum.