As an active property investor, strategist, and developer, Glossop is no stranger to the property world. With much of his own personal experience in property and as the director of Pure Property Investment much of Glossop’s day involves working with clients by analysing the market and data and to assist them on how to invest in their property purchasing decisions.
Join us in this episode of Property Investory as we delve into Glossops early childhood and the valuable life lessons he learnt from living a modest lifestyle and how travelling helped him discover his passion for property. We’ll also be looking at how Glossop was able to build a successful property portfolio and how building a business stemmed from his intent to help others with their property investing dreams.
As a property strategist, investor, developer and company director, much of Paul Glossop’s life revolves around the world of property…
I’m the director of Pure Property Investment. I’m now the property strategist's. I'm also an active property investor and I'm a property strategist and developer in the background as far as what I do in general.
With so many qualifications up his sleeve, Glossop shares that much of his daily schedule consists of numerous interactions that involve him assisting clients with their property decisions…
We work or well me personally, we probably work with anywhere between probably three and five investors on any given day on different strategies both everywhere from initial consultations to understanding where the client sit and what their strategy is. And then on top of that, we're doing research all day every day into different markets into different data, and to different properties that we may or may not be looking at securing for certain clients. And as part of that, they're probably yelling at a fair few agents trying to secure properties for our clients.
On top of trying to negotiate things such as building and pest inspections and getting property management over the line for our clients through settlements, and even all the way through down to looking at education content that we're going to be producing for our clients for our database and for our social media campaigns out there. Or going to some people who are bit more aware of what we feel and how it works.
Probably, in a nutshell, every day consists of some elements or more of that.
Growing up in Western Sydney’s Liverpool, Glossop lived a modest life that allowed him to realise the value of finance, education and happiness…
I'm a product of Sydney. Western Sydney in particular side. I was born and bred in Liverpool being separate suburbs of Sydney for those who are outside of Sydney it's what I would deem to be back in the early 80s and I was born and given away my age it was probably a market which was dominated by the accommodation of housing commission and first home buyers who were basically looking for affordable homes in Sydney. These days probably Liverpool and those areas is completely and utterly built out and are completely new places that from when I grew up. And you’ve got places such as Badgerys Creek now.
Only minutes away you've got dozens of universities, hospitals all within 20, 30, 40 minutes and the most densely populated market within Australia now sits where I grew up. Which wasn’t the case 30 years ago, 35 years ago, 40 years ago when my mum and dad bought the home for thirty-three hundred thousand dollars that they first paid for in 1981. Yeah but it’s an area that I think taught me a lot. It was very multicultural and I learnt a lot about just I guess making sure that I wasn't someone who was brought up with a whole lot. My parents split when I was 11 years old and my Mum was a single working mother for the best part of my whole upbringing which meant that you learnt a lot about the value of the dollar and also the fact that I think most importantly that I lived a pretty good life without anything growing up and attesting to my mum, there was a lot of emphases put on make sure you're happy that you've gotten an education and sport were always the cornerstones of what I did growing up and I think that spread through my life and how I look at it with my kids these days. As well as, if I'm not in the property market it to make millions to be able to show everyone or anyone where the wealth and money is basically held, but more so to make sure that I have choices and probably more opportunities and time in my life towards the back end and just make the choice of what I do for a monetary perspective.
With an unclear career path way ahead of him, Glossop shares that much of his education was not only a formal process, but a personal one which involved travel and deep reflection…
I grew up in and went to Casula high school. Casula public school and Casula high school so I was the product of the genuine public school fraternity out there. I spent a couple of years at Westfield sports high which is closer towards Fairfield where I was a bit more involved in sports then migrated over to Casula which was close to where home was.
I graduated from high school back in the late 90s I spent, after that I spent a year over in the U.S. travelling, a bit of studies, and playing a bit of sport and basically just trying to figure out what I wanted to do in life.
[For] a good part of a year there. And I came back to Sydney after that after living abroad for a year. Wanting to try and figure out what I did, I studied architecture for a couple of years. For the part of two and a half years actually and got my diploma in architectural technology and had a passion for property for a good part of that time. And at that stage I wasn't really thinking too much about how that would filter through to more or less profiting through investing as opposed to looking at as a career to looking at working in that building and architecture industry.
However, reminiscing on the unfortunate event that helped him discontinue his studies in architecture, Glossop shares how he ended up in the teaching industry…
There was actually a quite funny story for me. The reason why I didn’t actually become an architect I think in truth was probably [for] two reasons; one of which is that I don’t think I had the mental capacity to dedicate six years of my life.
After I did three years. It was probably a point in time which I realised there was a lot more into it that I wasn't that interested in as opposed to the creative side - which was my big interest but I had a big major work which I designed as part of our program there was a five-story office block which we had to design spend a year going through the ins and outs of the full design which would be otherwise a normal way to submit to council as a practical experience. And back in a day it was done on a very archaic CAD program but there was no cloud storage or USB devices back then which face it works on it. I had a laptop which I produced it all and that laptop was within the laptop bag and the day that we had submissions to our professors on the local Broadway pub in just off George Street, in the city of Sydney, just as I was about to submit at UTS, and my bag was underneath me at a pub that got flogged straight out from under my feet unbeknownst before I submitted. So the day I literally went to submit a year's worth of work was the day that was the point where it no longer existed and therefore I couldn't submit my projects. And that was the day I chose to not not pursue architecture again, because at that point in time I had a good long chat with my professor and he said look that’s extremely unfortunate.
I get it but we literally cannot mark something that doesn't exist or give you a pass or a credit or a partial credit for something that hasn't been presented. There's a lot that was on the table there to say, well at this stage I’d already gotten my diploma which was sort of the path of what to do and then the next step was then again go to a separate part of that course, which I chose to say it’s just not going to happen. And then I took another year off and defensively worked part-time, surfed a lot of the east coast of Australia and tried to find myself a bit more and then realised that at that stage it wasn't what I wanted to pursue. And when I finished that year of additional soul searching, I spent another three and a half years becoming a teacher.
It was after obtaining his teaching degree, that Glossop decided to continue with his travels before finally realising it was time to settle…
I went and restudied and trained and got a Bachelor of Health Education and became a science and physical education teacher and that's what I ended up getting my degree in.
And then I travelled again. I spent another two years in the UK working travelling and teaching. At that time before I realised that it was time to lay down some roots and come back to Sydney and start my professional career as well as start my investing career.
It was during his travels however, that Glossop learnt important life lessons on happiness and how to attain it and why we should be grateful for the lives we have...
Unequivocally I think one thing I've learnt - and I knew it before I left. But one thing that was always important to me, as I think, which one thing is pretty obvious all the time, is that happiness isn't necessarily having a ton of money and being able to do what you want, when you want.
I mean partly it is but the other part is making sure you understand what makes people truly happy in life.
Part of that is is that being able to travel and be exposed to different cultures and realising that there is a lot of people out there who are in far worse positions that have far bigger smiles on their faces permanently, makes you realise and try to make you understand truly what it's all for and what is all very much aligned to. And I think my travel and my past of travelling and being involved in different cultures and doing different stages in my life both from a professional and also from a non-professional career has allowed me to probably just centre myself a little bit better at the harder times. But the truth be told, I mean one thing I think we try to remind ourselves in our office all the time is that we're in quite literally the best and most probably productive and proficient time of the human beings life cycle and it's never been a better time to be a human alive especially in Sydney or in Australia. So I think being appreciative of what we’ve got is something I pretty much got a good grounding on and the travels definitely helped.
Thinking back to his home life prior to travelling, Glossop states that his property career stemmed from his own general interest for property rather than from the influence of his parents..
The architecture and property space was never actually something that flowed throughout my family full stop, whether it be my Mum or my Dad. My mum was a nurse and then retrained in her 50s to be a postnatal depression psychologist, and my dad was a small business owner from a pretty young age and worked in a lot of different things and ran, probably unsuccessfully at the time, ran small little businesses. Yeah, that part of property was probably more of an interest of my own, personally for whatever reason I just enjoyed residential houses and how they were constructed and the design of them and even when I was in my mid-teens I was very guilty of actually probably going to a lot of the older school big show home areas where they'd built 15-20 houses up and then trying to sell to people as far as project homes. And I’ve always had an interest just to walk through these properties dreaming of what could've been to a degree and then just being interested in how properties were built and how to design and make them etc. And that was really where my interest was, in some way shape or form. Which I didn't really realize, what it was or where it was going to go, and I was always probably far more interested in surfing and sport than anything else.
Truth be told.
He adds that it is due to all of his experiences that he has ultimately learnt how to build a career and business from his knowledge.
You connect the dots. I understand property but then I also understand how to make money in property and sometimes they're not mutually exclusive or exclusively and you’ve got to try and figure out how to connect the dots to try to properly align all of your interests as well as what can actually be profitable.
It is with this knowledge that Glossop shares why he does not restrict himself or his business to buying and selling property in specific locations….
We definitely don't specify a location that we only focus in and probably during the last four or five years we've probably bought no short of I think five states. And within those five states probably five to six dozen different suburbs in those states depending on the property type, the price point, the strategy etc.
So it would definitely, using or coining the phrase borderless as far as what we look at. And Australia is definitely our market, but where in particular in any given point of time, what we're focusing on might be a certain suburb or certain state, or certain city.
With so many property options to choose from, Glossop explains that much of the process around determining which agents to work with involves making sure they have certain values.
When we first started out and I was a one-man-band organization that shared, most of these things start out with one person running a business, so it was me on the phones and in-person flying around the country all day, every day which effectively led to trying to figure out who were the markets or who were the clients and agents in those markets to work with the clients that we knew and that we trusted. Which is always going to be A) the first and foremost that basically be truthful and factual about information but then B) because we're trying to find the best amount or the best property in the highest volumes we typically want to know which agencies have the most amount of stock or are getting the most amount of listings. As part of the listing component draft, it’s usually a needle in the haystack scenario where someone is getting 100 listings, you may get two or three out of those listings along the way which actually stack up. But if you're getting an agent who you do know and trust and all those things, and it’s all the same but they're only getting 20 listings let's say a year, then you're getting a much smaller portion of the total amount of choice. So we want to work with people A) we trust B) are good at what they do and C) are also the ones who get the large share of property because that allows us to get a better opportunity to look at a bigger and wider range of property types.
It's a key part from our side, it’s one of the first questions we ask our clients when we’re sitting down with them is, “Why are we here?” For us it's really asking, “What is the motivation behind why you want to invest in property in general?”
And sometimes that doesn't align to what we're aligned to and there is definitely times where we sit down with clients very early on and we realise we’re probably not gonna be the right buyer’s agent or the right strategist for those clients because they’re probably wanting things that A) we don’t feel like we can deliver, and B) Aren’t really in line with our values.
It was after finding himself about to board a plane back to Sydney with under $1,000 in his pocket, that Glossop decided to get serious about building a career from property…
When I did come back from my last round to travel over the UK and Fiji, I came back literally at the time I was flat broke when I got on to a Qantas 747 at the time from Heathrow down to Sydney. And at that stage I was lining up literally, and I remember it vividly where I was lining up to come home for good and I had a Canadian girlfriend at the time who was going to come back with me and she had already been packed. And she'd left for Canada she was going to fly over from Canada in a few weeks after that but during my time waiting in that line there was literally, I had 400 Australian dollars or equivalent of 400 Australian Dollars which was about the equivalent of 250 quid in my pocket at the time. And that was what I was going home with. So I knew I had some pretty serious savings to grow and I had to go back to live with my Mum and try to figure out what I was going to do it at a mid 20’s age and figure out how I was going to actually start my career and all the rest of things, which I wasn't actually too nervous on because I always treat those things as an opportunity. But I remember that the book, sorry, that the flight was fully booked, which meant that they had their stewardesses go up and down the people lining up for their check-in and say we've got four spaces here that are overbooked and there'll be a free ticket for tomorrow plus a night at the Hilton and $1000 redeemable traveller’s check that'll come with anyone who's prepared to get on tomorrow's flight and I thought to myself well I've got nowhere to go, I’ve got no money and I've never stayed at the Hilton. So all those three things made sense to me. So I ended up staying an extra night at the Hilton and I got on the plane the next day and I came in and went straight from Sydney International Airport straight to the Qantas main office in the city of Sydney to go and redeem a thousand dollars and I had the equivalent of fourteen hundred bucks or so in my pocket at the time from memory, and that was sort of where I started. I thought from that point I was mentally thinking I've got to get serious here now it's time to actually go and figure out what I’m gonna do for my career and also how I'm going to turn a career into making money long term.
He explains that it was due to the exposure to the international property market that Glossop realised the potential property investing had to provide him with a fulfilling and comfortable lifestyle…
I wasn't thinking property as a full-time career at the time, but I was thinking property was something that I had an interest in and I knew that was after experiencing what went through England at the time - and I was living in London - I saw and I was exposed to a fair bit of what went through the property cycle there and saw a lot of different exposure to different people making money and it just made me think differently about property in general. So literally from that around about mid-2000s onwards, my mindset was how do I make money through the property? In addition to starting a career. So I spent a couple of months pursuing different roles and eventually looked into different corporate roles to use my degree in different ways other than teaching because I truly wasn't a great teacher and probably wasn't the best or most enjoyable profession. If anyone is out there as a teacher and probably wasn’t the best or enjoyable profession. Anyone out there who is a teacher will know that it’s probably by far and above the hardest money you'll ever earn and exhausting both mentally and physically for anyone out there so I commend all teachers because I know firsthand that it's a very, very tough job but unfortunately it’s not very financially rewarding and mentally. And I thought, “Well I can't go into a career which I'm not fully committed to, nor do I think is going to give me the financial return I want.” So that led me to look at different pathways and I very quickly got into a corporate career in pharmaceuticals which was using a bit more of my science background and education in the pharmaceutical sector. So I spent from there, I started a career in pharmaceuticals in a whole bunch of different formats. It was also within about six months of starting my career in pharmaceuticals which led me to buying and investing in our first property which was essentially a property which needed a full renovation in the suburb of Cronulla in Sydney at the time. Which we knew based on our understanding of the market was a ground floor simple to Badgery had already been opened up was very, very dated but it was very well located and very good yield at the time - which was yielding about five and a half six per cent in Sydney which these days is about half that. And intentionally I was going to take advantage to a small portion take advantage of stamp duty exemption on that which is being offered at the time, so my girlfriend at the time, now wife, we both mustered together about $18 000 dollars and bought our first property for about $375 000 which was partly a deposit.
The other part was, it was very much down the path of 5 per cent deposits back then with stamp duty exemption so it was a pretty cheap barrier to entry.
Thinking back to the specifics of the property, Glossop details the renovation changes he and his wife made to that first property and what that process taught him about investing…
It was late, I believe it was 2009 or 2010 at the time. So we were sort of talking about a decade ago that that first property came into the portfolio. So that was intentionally we were having it a bit as a stepping stone and we really wanted to focus on getting the property bought as well as getting renovated. So we did our own renovation on the property. We spent about six weeks fully gutting it and fully renovating the property. Everything was turned into a two-bedroom unit which was kitchens, the bathrooms, moving an internal laundry into a separate section that was in its own separate area which was existing in a bathroom but then ended up putting it from a bathroom to were a separate toilet was. So a bit of drilling through slabs and a few additional aspects which I had actually some skills and undressing of how to do it, which ended up being an asset. Now after renovation and after costs of about 35 odd hours and above what we put into it as well as pay for it, so that was our probable release of equity to allow us to go off and look at building a portfolio beyond that. And that was probably the first cab off the rank of how to buy accurately, how to invest correctly, how to recycle money properly and then pull it out in a pretty short time while still keeping your cash flows in check.
But how did Glossop’s portfolio continue to grow after that first sale?
Out of my entire portfolio, it’s the only property I’ve actually sold. And at the time the only reason we did sell it was - we didn’t sell at that time, we actually sold it a long time after, which had an epic amount of profit in it, but it also meant that it was a tax-free profit and allowed us to upgrade our home at that time. So it was probably a regretful sale. If it was still in our portfolio today, I’d probably actually end up selling it myself privately so we would’ve saved money on it from a sales perspective. It was in a very, very hot market when I did sell which is pretty close to the top of the market. We probably doubled our money on what we ended up taking out of it, off the table which was purely tax-free at the time since it was the principal place of residence. But the intention was that we wanted to make sure that that money was re-appropriated in a different way rather than recycle equity because we kind of got to the top of our borrowing capacity and the solution was either
We did an upgrade and we were starting a small family or a young family at the time and so the choice was so well let's make this move now whilst the market is still red hot and whilst we can take this money out tax-free because the alternative was to go and rent. So eventually we probably would have run out of the tax-free threshold of what we would have achieved out of that property. So it might have been a, a long term loss if we ended up having to pay capital gains tax on the profits.
On another note, Glossop delves into the most mentally and physically draining property development experience he’s had and the lesson he’s learnt along the way…
I've literally personally bought dozens of properties in portfolios so it’s happened a lot and it consistently happens, I’m still an active investor, I’m doing a large development at the moment which is not necessarily a low point but it's definitely a time-consuming point and quite a stressful point. But if I look throughout the journey probably a moment in time where I probably would have said look there's definitely something I would have done differently. It was buying, I bought property in the Hunter Valley about four, five years ago when that market was probably halfway through its growth cycle. And we made money out of the investment but I took on a very very big renovation project and I was living in Sydney at the time and it was a four-hour drive away and I took it on personally rather than implementing and getting the locals to do all the work for me.
And at that time you basically couldn't get a property to rent or be a property to buy into the market that I bought in, but also on top of that because of the mining boom that was happening at the time, skilled labour or anyone in the trades was a) ridiculously expensive and b) not available. So what I ended up having to do was take a four-hour commute back and forth on a weekend basis and trying to get in a few other different subcontractors and drag them up from places like the central coast of New South Wales and in from Newcastle etc. But then you're not there all day, every day and you're undertaking a full-scale renovation for a four-bedroom house and you’re trying to do it in a record period of time - it does drag out and drain your physical and mental capabilities. So there was probably two months worth of non-stop work and that was in between holding down quite a stressful full-time job in the meantime. So I spent literally Monday to Friday working corporate big hours then literally leaving from North Ryde, up the coast, dealing with traffic and staying there sleeping on the floor for a full weekend and doing that every weekend for the best part of a dozen weekends to get an outcome. And I was dragging a lot of favours from a lot of mates to come up, and selling them beer and the line of “come up and we'll do a winery tour etc” which never happened cause we never had the time to do it. So yeah that’s probably the moment where I realised you’ve got to be realistic in what you can do and what you can't do. And sometimes paying locals to get jobs done that you just don't have the capacity to do that, that drew me out mentally and physically. But financially it was still an okay return.
Looking at the positive results that still occurred, Glossop shares that it is much of these experiences and the experiences of his buyer’s agents, that allows him to help others in their own property journey…
It turned out okay and that's probably the worst of the worse.
I mean the beauty about that I guess when I look at the war stories of what I've got. Look I've got a lot of things I'd do differently and I share a lot of that with our clients and we take a lot of that into our setting strategies and as well as when we're actually looking at securing assets, is that we've got a lot of experience - not just myself - but with our team of buyers agents. They’re all active investors, they’ve all got their own background stories and experiences and I've got two of my buyers agents who have been investors for over 20 years each. So they're very well versed on all of the pitfalls, all the do's and don'ts. And it's not just my stories because it’s those experiences which lead you to make better decisions and there's a set of strategies and we keep everything that we do in check as far as the reality of what every bit of work or any property might entail.
Ending on a positive note, Glossop shares the plethora of moments where everything clicked for him and the one smart developing example that set the rest of his property dreams into motion…
It kind of comes down to different points in time which allowed us to do different things at different points in time as well. You know I've bought property in the western suburbs of Sydney numerous times over. Back in the 2010 to 2013 timeframe, there were different aspects there where there was a property that I still own, in Campbelltown as an example which is a suburb of New South Wales or Sydney rather. And that’s these days right in the thick of where all the population growth, infrastructure etc. is heading. At the time it was a dirt-cheap property, probably I think from memory it was about $252 000 odd dollars purchase price which would be probably more like $600 000 for the equivalent property. But that particular property at that time, I decided it was on a corner block and I had ample space on the side where there was an opportunity to buy it well, which we did and I bought it most certainly at a very sharp price but on top of that it also allowed me based on the price point that we got it at and also the growth that came in from about a six month period, to drag out equity from that particular purchase to then reinvest it into a granny flat for a side property on that particular purchase. Which ended up more or less being a separate property because of the orientation of the corner block. So taking it out in a market which at the time I build the granny flat for about eighty-five thousand dollars, which is a hell of a lot more expensive in today's money. Within less than a year of buying a property I'd refinanced, I dragged out equity, I'd built a granny flat and I had it probably tenanted for somewhere in the vicinity of about 11 per cent yield. And from my side of things, it was all based on a starting point of a five-cent deposit back in the day.
And that allowed me to sort of look at it and say this property is probably fixed at six to eight grand a year cash flow positive. I started with about 20 000 thousand dollars and it's turned into a property which is worth in excess, at that time of about 400000 dollars and I had a six to eight thousand dollar a year pay pack coming to me based on just being quite clever in basically out of that whole development I just shuffled paper, I did very little on that one myself as far as physically. I got people to come and construct, fixed price building contracts, I got renovations done by licensed trades and made sure it was done correctly so they were using my time more effectively and I just continued to do my job that I was doing at the time. And understanding that there were certain properties and understanding local environmental plans and zoning to be able to maximise what could happen. That was very early in the piece for me but that that led to more things and releasing more equity and having a much better serviceability calculation to allow the banks to look at me as quite an attractive person. And all these things started to come into place which allow me to springboard to other options and potentially other sites which were things such as duplexes which I’ve bought, subdivided and held rather than sell, but that led to other things like buying in other states and other property types in other markets which still had the same hallmarks and same drivers which we were looking for.
How to Turn Property Investing into a Full-Time Business and Stay Grounded on the Road to Success with Paul Glossop
Delving into how he’s developed his own property portfolio and clients property portfolio, Glossop shares why he likes to use a strategic personalised approach when it comes to investing or developing…
Our strategy in general is not necessarily to say that it's sort of like it's a graduation ceremony of buying and holding, then to maybe doing a small scale renovation, then a granny flat, then subdivision, then full-scale developments, because truth be told I've got properties that I’ve bought in the last year or so personally that are still set to get - and I have no intention of doing anything with them for a long time. But it's kind of a much more of a what fits the strategy, what fits the budget, what fits the potentially the risk appetite as well? And if I speak about developments and how they fit for me, they are always going to be something that fits in someone's portfolio. Most certainly after I think they've got three, four, five in excess potentially of properties which they bought [or] they've held - they’ve held through good times, they’ve held through bad times, they have a very clear understanding of their personal cash flow because that's something that developments can very quickly do, [which is] bleed you dry of your own personal cash flow until you've completed them. And then also have a very good ability to tolerate stress, tolerate risk and to make sure that they've got buffers in place to make sure they can warrant all those. And if we’ve ticked all those boxes and they're in a position to say yes we can still go and direct our money to something that's going to be proactive, than for us that says well where’s our budget and what are we trying to achieve and is it a buy and hold? Is it a buy and sell?
Is it a potential buy and rent out? Or buy and live in? And all those things come into play and from my own personal experience that's gone from as small as - I've personally done I guess the smallest development would be a corner block purchase. A keep a house on the block, subdivide, cut in half, build a second house on a separate street frontage which as an example there is one that I've done which was as low as a $220 000 purchase price and about a $270 000 construction, as well as subdivision costs etc. to then turn one property into two properties with probably about an 18 to 20 per cent ROI on that whilst having cash flow the whole time. The existing houses is rented and that’s a very entry-level price point with it, it’s simple enough and an understandable end goal as well as decent cash flow all the way through there's something I'd say I've done numerous in between but something I'm doing personally right now back in Sydney. Which is close to a three million purchase of a large piece of land with a foot flat thing subdivision of one property into two separate titles, building four luxury duplexes which is probably going be upwards of five and a half million dollar total in costs, but again still looking at making sure that the cash flows can be managed. Making sure that the purchase is funded by very good consecutive investments elsewhere and making sure I have very good finance strategy to release equity when I could, to make sure that that equity is available to go in for deposits for construction loan deposits etc. which we've done in the past and set us up very well to do such a larger scale lot which we’re undertaking at the moment and actually buffers are in place. Cash flows are in place. And you know what your end goal is and part of this development is actually going to be partly at home as well as partly an investment and that's something I personally have been a big proponent on is I've actually personally been renting for the best part of last decade. When we’ve upgraded family homes we've basically moved out of them very quickly to then maximize our borrowing capacity and minimise what our overheads look like. So we still live where we want to live and we’re renting there but being able to invest elsewhere until we've found the perfect opportunity which has allowed both a development which is a profit-making development which also turns itself into a home which will be our home forever.
He adds that aside from temporarily renting, as a means to eventually build his forever home, Glossop has found that it is actually more sensible in his case, to rent in the current market…
Comparatively, to mortgage repayments even at historically low-interest rates, you still look at comparative mortgage repayments for a million-dollar loan in any given suburb in Sydney or Melbourne and you're closer to what the equivalent rents are for the exact same properties in those suburbs. And you can do your calculations very quickly and note that if a market is not moving upwards, which neither of those two markets are currently, then if your assets are not going up the value and your rents call it 20 to 40 per cent cheaper on equivalent repayment… then where is the sense or sensibility in owning that property? Unless you truly and fully are committed to saying this is the only property that you were born to live in.
Glossop shares that his motivation to work stems from not only a desire to be time savvy but from the perfect Nirvana he’s found working in his business and his co-workers…
Our why has always been time.
I've just been trying to figure out how to buy time quicker and by buying time it comes down to what do I need to earn per year based on what I spend and what my wife and I spend and what we spend on the family. And to say well if we spend this, when are we going to be able to get to the point of our properties producing this? And that then in turn means work and anything else that I do that's related to work or running my business is a choice rather than a necessity and that's always been the why. And we're pretty close to finishing off what the why is at this stage but the beauty about what I do for a living is what I love doing outside of what I do for a living as well. So sometimes the why is just making sure that when I wake up in the morning and I go to work is that my mind and truth be told since I've started running my business for a long time now, I haven't felt like working at all for some time. And I probably quite fortuitous that I've made money in property, but also run a business that's designed to make money and property and I'm working with people who are very very like-minded. So I've kind of found a bit of a perfect nirvana for myself and truth be told all my team members are in very similar positions where we're all very much aligned that we're active investors, we love what we do. So most of us find that coming to work for us is far from a chore as you could possibly imagine. So it's actually quite a unique scenario which we've ended up creating. Unexpectedly to be honest, the reason I thought well there's something I'm passionate about I'm enjoying but I didn't expect to be able to find like-minded team members who would be able to do the same thing as what we do and it just delivers such a better outcome for our clients as well.
However, while Glossop asserts that an interest in property is key to being a buyer’s agent, he adds that a passion for property does not necessarily mean one can run a successful property investing business…
I think the biggest caveat I'd say to motives - I mean buyers agents in general you know have probably gotten a big wrap over the last four or five years. And there seems to be a lot of them coming out of the woodwork. Just because someone's invested in property all of a sudden they're a genius in investing in property. But the biggest aspect of running a business, in general, is being a passion. Property investing is the furthest thing that equates to being a good buyer's agent or being able to run an efficient business. And there are two very very different things. And I think anybody who thinks, ‘Oh well I love property and I’ve invested in it and made a bit of money, therefore I should do this for a living.’ The difference with that vs. what the reality of that is is astronomical. So as much as I love what I do, and we've got an extremely good process and systems set up for how we operate as a business and how we actually work with clients there was something that was opening up a you know a quick textbook to say this is how you start-up businesses, this is how you run it. Because there's no shortage of things that you need to understand, that they’re going to belong, they're going to be expensive they're going to be quite time-consuming. So be prepared for that, that mission. And that was a big part for me, that when I did decide to quit my job - [and that] was quite a lucrative corporate career that I was in at the time - I knew that I was going to be completely unattractive to the banks to borrow more money for some time to come when I turned this into a business. So making sure that there were a very, very clear strategy and an exit as far as releasing equity and having cash flow, was a big part of - I spent the best part of two years building that position up so I knew at the end of the day I didn't want to walk away from a guaranteed paycheck in a corporate career, that I knew that I could still actively invest and that I wasn't going to be head shop - which has meant that I've been actively investing non-stop for well over a decade now.
So exactly what strategies did he implement in order to position himself to be well off when leaving his job and starting his investment business?
If I look at that strategically one thing I think I'm very good at is being strategic and sort of understanding what's the move after the move, and being a bit more chess minded in that sense. And part of that was I reflect back on that small development that I was speaking about - that was a property I purchased back in 2013, maybe it was from memory - but intentionally I knew that I wanted to develop that site. If I didn't have to develop I probably would only be developing it now because of your ROI increases as the value of land increases. But I knew that I had equity in a host of other properties elsewhere. So what I chose to do was go to a one big fell swoop of equity release, as well as get to the point of thinking well if I’m going to start this business - and this is five years ago now - and I want to be in a position where I can develop this site, I can get finance to do it, and I can make sure that I have the cash flow to do it as well.
So I saved up a very good buffer and I made sure that there's always a good natural cash buffer rather than equity buffer in place. So that was always there as saying that's real money, that's not paper money as far as it sits in a bank and it is dependent on the property values that I own. But then on top of that is equity releases to leverage that amount and to let it sit there in a line of credit account. And as well as working with my broker who is exceptional at sort of thinking about how do we strategically - and he knew what my plan was. The plan was to say well how do we get approvals in place before you go and walk away from your job, to A) get your finance approved based on your income as it is now and B) also get your equity release so you can actually go and fund the deposits for these and they're all the things that I got in place for that particular development which meant that at the time when I did walk away from my job that that devolvement was always already on its way halfway through. So I didn't have to worry about finding funding, the funding was already arranged. But I knew that after it developed there's going to be a good wedge of equity available in addition to what was already bought and already settled.
He adds that this careful planning process in conjunction with a reliable team is what essentially allowed him to further his property portfolio after that first development...
What happened after that development which was probably six to twelve months after that was completed as I was able to then go and do another equity release from that and that probably made, let’s call it 100-150 grand in equity out of the development. Which then, therefore, was released, which kept us liquid again to go off and keep moving forward. So it was very good liquidity in the assets across the board but it was also extremely good cash flow. So one of the big things that I've always focused on is looking at paring up assets with good cash flow assets and they're not always the same property. And if you can find both in one then fantastic but being quite pragmatic to say well I know this property is going to deliver me potentially a good equity upside, I can't necessarily say that that's what the bank's going to look at when they say well how are you going to actually service the loan? Sure you’ve got equity but you don’t have cash flow.
So that’s the key - is having properties that are or serving the purpose and at the time that I was looking to walk away from a role, I had no cash flow positive portfolio that had a ton of equity in it as well. And that's why I've tried to keep it even though there's been more equity and more money that's been injected over time, but through income and through properties and through development it's made sure fundamentally the portfolio has always been cash-flow positive. There have been a few equity releases, there have been developments which allow for equity to be released and mitigating risk to is nothing I've done personally has been extremely high risk and I like to make sure that my sleep easy test is making sure that any asset that I particularly have in any given point in time can be sold. And it's never going to be just sold to a developer because in Sydney or Melbourne at the moment if you've got a development site that's great, but to find a developer who's prepared to take on a site you've got a lot less of them now than he did two years ago. So for me, it's holding properties which at a pinch for whatever reason, you can get rid of it and you can sell to an owner-occupier. So there are quite a few levers that have to be considered. And I think it's having very much a helicopter view of the world to understand all those different aspects and having a terrific team and I'm not going to proclaim to be a genius at what I do because I've got a lot of very good people who advised me much so that I look at the same thing with our clients. We’re the buyer's agents and strategists but we don't provide finance nor do we provide accounting advice or legal advice. We want to make sure that you have those team members to get the best outcome because they're all the people that you need in your team to - and the best investors I know have the best people in place on all those different checks and they’re usually the same person.
Discussing what influenced him to jump into the property investing world, Glossop explains how it was the everyday investing discussions that led him to a journey of seeking out and networking with individuals who were successful in the property industry…
Initially, for me it was and as most people are it's usually you know you're a product of the five closest people around you and initially, that was what it was. It was friends it was other people who would probably tell delve just a little bit into buying a home, but nothing much more complicated than that. But as I really realised quickly if I want to surround myself with like-minded - not necessarily as far as my direct friends but - people who I probably look at to say well I want to be able to emulate where you've done that, then I try to find those people to say well let's look at the successful people who are near me, who are happy to share information with me, and then from there try to align myself with them. So I'm very good friends with fortunately a lot of people who probably have done a lot more than what most could do with the property space. And that's people who work in the development space, people who work in the data space on the property specific data space - and it can give us a lot more in it's into what's happening in different markets all the way through to you know the real necessity of my mortgage brokers. Examples have been a property investor in multiples in multiple cities across multiple countries for a couple of decades and he's seen a lot of different markets and a lot of different times and understands finance better than most. And as well as my accountant is someone who's got more property than most people put together and has been investing for three decades and understands those aspects very, very detailed and also can share a lot of insights into what makes and doesn't make a successful property or a property portfolio. So it wasn't necessary to follow exactly what they said, but it was probably taper a bit of comment from all those different aspects ongoing and then filtering it into my own comfort level and what I knew I wanted to do and where I wanted to go, which allowed me to probably if I ever saw an opportunity where I was thinking about, ‘What's next?’ I would sort of rebound that information off a couple of those people and I actually used the buyer's agent. For my first three properties I used a buyer’s agent. So the other strong component is that I'm not really a big proponent - I am running a business and have multiple buyer agents in this space that I see escheat and I did earlier in the piece see very very good value in what a buyers agency provides and the outcome that they can provide if they're the right alliance buyers agent.
It was alongside this sourcing of information from successful property investors and developers that Glossop also educated himself on property by reading books on investing...
I think there's quite a number out there. I’ve always like Jan Somers’ original book that that's kind of the cornerstones of what everyone should probably be looking at. But beyond that, I like to probably align myself a little bit to buyer’s like Ben Kingsley [who] just released a new book, but they've got a couple of others out there. The Armchair Guide to Property Investing is always a nice cornerstone entry-level book. I'm personally actually about to release a book, funny that you brought up books because I’m releasing a book more so on my personal journey and a little bit more about how people can align mindset to as well as how they can align mindset to a very, very clear and obvious way to make money and property investing and basically understanding the fundamentals of all of that how to put it together. I mean Robert Kiyosaki stuff I find resonates quite well. I don’t necessarily align myself with a lot of probably the teachings and the potentially Americanisms of it, but that's a book in a property market that has a lot of very interesting understandings of just cash flow in general and I think The Barefoot Investors Scott Pates - as much as I don't think it’s necessarily aligned to property I think there are some very good takeaways about fundamentally how to manage money. And the more and more I guess we see things like the royal commission coming into play, and tightening the scrutiny on lending standards, and people being able to understand how to create buffers in potentially a rising interest rate market is the management of money and people being much more aligned to that is going to be some that are more and more important as well.
Glossop also shares his advice and thoughts on the importance of understanding long term compounding and cash flow and how these can benefit you in the long run.
I think that there's things that you see and it's a very, very poignant time in I think property investing for Sydneysiders and Melbournites right now where the market starts to turn a corner. And you’re going to get a lot of people hearing a few different bits and pieces about what's happening and what's going to happen. [But] be prepared to understand what long term companding does to property. And not necessarily what long term companding of 7 per cent per annum does to property, but what long term compounding does to 3 or 4 per cent average annual returns on property. And looking at it as if you're paying down debt over 25 years and that debt increases by three or four per cent over 25 years, a very hot tip I have for anyone is to jump on the ASIC website and google compound interest calculator and just go put in something like a million dollars and how that would look compounded over 25 years. Anyone who is 30 years of age or 35 years of age thinking well how do I get to a better retirement, go put in a million dollars into a compound interest calculation. And even holding it without adding any extra, cash to it and if you think you can factor in a principal interest rate payment at that time which means it's going to be debt-free by that time - figure out what 3 per cent capital growth per annum compounded 30 years will provide it, and it opens everyone's eyes up. Eisenstein's adage of it being the eighth wonder of the world is truly what I personally believe, is that property is an illiquid asset that needs to be held for the long term and there’s money to be made short term but ultimately the most successful investors I know have been in the game for over 20 years. If you’re prepared to stay in and stay the journey, and part of doing that is to make sure you understand your cashflow to be able to stay the journey, that is what's going to create more successful investors and less people who sell too soon or don't manage their cash and buy the wrong property time.
Mentioning the importance of staying grounded and true to the goals that drive you in everyday life, Glossop delves into the personal habits that have helped him in his property journey…
I personally think the biggest thing that has stayed true to myself personally over the long term and I see it hasn't changed and I've made a lot more money in property in the last three or four years then I made in the first seven years and part of that just being in the game longer… is that I haven't necessarily changed my personal mindset on what's important in life. And even though there's been more money and more equity come into my life, it hasn't changed anything as far as I drive a very simple car, I live a very simple life, I don't have anything different that I aspire to. And that's partly because I'm very, very happy in the sense that for me, happiness comes into being able to spend time with people who you love and enjoy their company. And I think to make sure that irrespective of whether your happiness is going to come from a Lamborghini or whether it's going to come from just having more hours at home with your kid, making sure that you understand what that why is. Because if you get deviated or if you get sidetracked on saying well, ‘We can do this and this is going to mean that we can do a lot more, spend a lot more or have more time overseas,’ or whatever it is, but it wasn't initially why you got into what you were trying to achieve, then you'll consistently be chasing. So for me that's that's the biggest important part is being comfortable with and being confident with sticking to what your why is and try not to deviate it. Because that is the challenge that I think is that we live in a westernized society, that there is a lot of immediate gratification that can come from buying things and from keeping up with the Joneses and I think sometimes being comfortable with saying what is important to you and staying true to what's important to you will always mean that I think you stay the course in property a lot more as well.
And why he believes that the journey you take to achieve your goal is just as important as the endgame...
The more you look at it I mean I think Gerry Harvey famously quoted the difference between having 10 million which is still an awful lot of money has had a billion dollars in the bank is basically the friends who you share your time with, but it doesn't make him any happier now. Obviously we all want to be able to sit there with 10 million dollars in the bank and make that decision.
But I think we can basically dial it down a bit further and say well irrespective of where you're going to get to, if you try to set the barometer to say you're trying to achieve X amount then 20 years if you're not enjoying that 20-year journey you've got to ask the question, ‘What's the point in creating wealth?’ If in that 20 years that it's taken to create that wealth, you didn’t enjoy yourself, you really want to think about is this really worth it? So making sure that regardless of what journey you choose to go on the path of, that you're happy with what you're doing in the meantime. If it's stressing you out and it's not worth it, then I personally don't see the value in it because everyone's best use is now and irrespective of how old you are, your years don't get better. They typically get harder and you become more tired and get older and everything that comes with it. So I think trying to make sure that you have you know your mindset on enjoying the day that you’re in and saying, ‘Look I’m going to create something better long term, but I'm still gonna make sure that everything in between is taken as a lesson,’ and keeping a smile on your face as long as you’re doing it.
With so much knowledge and success now, Glossop looks back in hindsight to tell us the important piece of advice he would have given himself years ago, and why others should consider this piece of advice too...
When I was a younger buck and probably got a little bit carried away with what was, as you do when you're probably a little bit more fresh out of school and fresh out of Uni and you think you're going to take over the world, probably understanding what true happiness is. And don’t be disillusioned with the fact that really those big and shiny faster cars and the objects that come with it, are really what is going to make you happy. And most of the time when anyone reflects when they were in their teenagehood or during their happiest times as a kid was, is usually when you're footloose and fancy-free and that usually meant that you were driving a terrible old used car, or catching a bus or a train and you're hanging out with your friends and that you had a bit of time yourself. And that doesn't change and the older you get the more of that you want. And I think rather than aspiring or thinking that that's what you need or want as much as it's good motivation, try to find the motivation of how to create time. And I think that's probably one thing I would have been a lot more attuned to is. And I think my travel allowed me to probably be a bit more grounded than most at that age because I did actually value it a fair bit but I think even when especially when you’re in a corporate gig you saw a lot of people with probably a lot more fancier things than I ever had and thinking that that was important and that's what I wanted to aspire to. And I think being true to what importance certain things have in life and don't get deviated and choose your friends wisely because that's the key to I think when you're at that young impressionable age, who you choose to associate with is typically what track and what field you're going to end up taking on in life. So being aware that who you associate with is going to determine a fair bit of the outcomes that happen in life.
He also delves into what the future holds for him and what he’s most excited for in his personal upcoming property journey and how he aims to help people through his business…
I'm completing this development over the next 12 months and I'm going to do some really fancy detailed documentation, and I think one thing I'm excited about is probably showing people out there both not necessarily how to just invest in fundamental cornerstone properties but also how to take a journey right through to things such as full-scale development sites and everything in-between as well.
But if I continue on that's the part that I'm excited about as a business. Sharing more of the holistic component of investing, in showing people sort of start to finish how they can actually work just to make sure that people I think are a lot more aware of it doesn't just mean that you buy boring set and forget properties, it doesn't just mean that you look at development properties, but it's also what your whole portfolio would consist of if you're going to do this long term. And being able to share a bit more of a holistic approach to investing.
Finally, rather than attesting his property success to purely skill or luck, Glossop shares his belief that it is a combination of strategy, teamwork, calculated risk and hard work...
I’d probably say the skill component, I’m not gonna say I’ll be modest but I don't think I’m that skilful in what I do at all. But what I do think I am is I'm quite strategic but I definitely have had no shortage of hard work in everything that I personally have achieved and I think it's not just me that I say that for - my wife’s not on the phone but she's been part of our finance and property journey the whole way and I think a big part of it is making sure that the hard work and there is no substitute for it as the adage goes is a component that is always going to be super important and nothing will come for free. But I think the luck component, look I could say that I was lucky, I could say that I’m lucky in property but for me, it comes down to look I could have sold very quickly and I would have picked myself to be unlucky in property, whereas I haven't sold now I think people will potentially label me as Lucky in property because I've been in the game longer, but that's part of the strategy is to buy and hold, is to have good cash flow and as I think it's Lee Trevino says it's the more it practice the luckier I get. So it's a bit of the way I see properties that the more I do this, the more I know where people will perceive luck, but what I do know is what is always going to be perceived as luck is essentially good calculated risk with a good dash of hard work.
Having had a successful property journey this far and with much to look forward to in the future, Glossop adds how you can get into contact with him.
They can jump on our website pure property investment dot.com. They can also jump onto our Facebook site our Instagram site. We've got a ton of free education on our Facebook site. Sorry, our Facebook and Web page sites, and they can jump on to contact us - there’s a few links to be able to contact us directly from our web page which they can actually use to schedule a free consultation with me just by clicking a button. And it's something that we always are very much pro in doing, is being able to sit down with as many people as we can. We have an obligation-free strategy that we just sit down and go through people's ins and outs and figure out what they're wanting to do and if we fit into that equation then great if not then we still try to make sure that we give our two cents on where and what we see as opportunities for them. So there's a bunch of different ways but if they just google us, pure property investment they'll be able to find plenty of information on us.