Step To Buying A House With Super fund
As a financial planner and a mortgage broker, Matthew Sukkarieh is always kept busy by helping his clients with their financial situations and helping them buy a house whether it is their super fund or other financial ventures like property. Matthew Sukkarieh started off in the IT industry but eventually moved his way into the finance world as well as the property world which he had been learning about from his parents from a very young age.
Come and join us as we explore Matthew Sukkarieh’s journey from being in the IT world to how he stumbled across his first property which led to him becoming a motivated property investor. He tells us a sad story from his past that made him who he is, some adversity he had to face and much more, all in this episode of Property Investory!
Matthew Sukkarieh is a successful mortgage broker and financial strategist. Working both jobs, Sukkarieh has a very busy schedule.
In regards to what I do day-to-day, I provide financial strategies to assist clients to move from their current situation and look at potentially where they may be going moving forward as a proposed situation and obviously adding value from where they are currently situated in terms of ventures rights for their financial position and moving forward in regards to what we could do for them. From a mortgage brokering side as well as the financial planning with the help of Jolene as well.
He gives us a breakdown of his day to day life and how work doesn’t stop in his household.
It’s always just reviewing clients, the financial situation. So, you know, usually what may happen is Jolene’s had a meeting with a client and had a closer look at their financial planning strategy and then I would have another meeting just to give them some credit advice in regards to what they can borrow, what it would look like. Also, the fact that I’m a financial planner, I actually can review the advice as well. So there might be times where I say to Jolene, ‘Hey, did y’all all say, think about this part?’ You know, so it’s like both people working on one client situation, which I think is quite powerful.
The whole Sukkarieh family is interested in and passionate about property investment.
Our dinner conversations are quite boring. They’re usually financial, but, you know, we can’t help that. And I think at the same time the kids also listen to everything financial as well. So what we’ve noticed from their point of view is, just the other day my son was saying, ‘How much debt do you have? Do you want to do some debt consolidation?’ Things like that. I’m going, ‘Oh, that’s a good point.’ But you know, you need to be able to acquire the property. So that’s what happens from that point of view. And so you know, they’re always thinking financially as well which is pretty cool.
Sukkarieh was learning about the property business at a very young age and the apple hasn’t fallen far from the tree.
I was exposed to that too when I was young, so my parents were Middle Eastern so they love property and I’ll explain a little bit more about that journey as well.
His parents taught him about property investment and the possibilities it holds at a very early age.
I grew up at Mansfield, which is a suburb next to Mount Gravatt in Brisbane Southside. I came from a family of six. My parents were Middle Eastern and migrated from Jordan and we lived around about if people know it well, Mount Gravatt Capalaba Road, which was the main street that leads all the way from Rochedale up to Mount Gravatt Garden City and all the way up to Sunnybank. My parents moved from a normal brick house, a property on that street, four bedder, you know, it would have been about 50 grand back in those days and they ended up buying a three-acre block down the road, which they thought for the long-term would be a great investment.
So that really got our head around buying and the importance of long-term investing and things like that because they ended up selling that three-acre block for a good amount of money to a property developer who got approval to build, I think it was 35 townhouses.
Looking back on his schooling life, Sukkarieh talks about how fortunate he was to attend the high school that he did.
I went to Mansfield state high school which is actually one of the top 10 public schools, all schools in Queensland. So it’s renowned. Almost at the top six as well. So what we’ve noticed in that area, in the suburb, is that people, you need to be in that catchment. So that area is kind of gone up in value from that point of view, which I like to say to Jolene in that, you know, hopefully, we left a legacy in that last year of grade twelve. I was looking around, we had some really bright kids and my classmates in there as well. So it was quite cool. It was a good school and good people around there. So it was very fortunate. It was a great suburb and the city shopping centre was around the corner. But once we make that transaction, when my parents made that transaction, we actually moved to another suburb called Belmont. So it required us to travel back and forth to school. But my mom was happy with that school and the outcomes of the results which I was getting as well. So she thought we should keep going to that same school.
He tells us about a devastating time in his life but how it helped him become who he is today.
I was probably only 12 at the time. It got my head around this and what was happening, you know, in that way the passion of property investing has really taken off for myself as well as seeing those outcomes and how it changed and how it changed their lives. So many other factors around it all because my father died actually during that transaction, so he had cancer. But it’s all these journeys in life just add different values to how you live your life and things like that. I saw all his hard work and you finally got the goal, but he wasn’t there to enjoy it all, but you know, it was something which he wanted to achieve and he finally got that from that point of view.
Losing his father helped Sukkarieh put things into perspective and understand what he wanted to get out of life.
It made me realize that you’ve also got to have a level of enjoyment through your life as well because you never know what may happen to you. He was quite young. He was only 50 at the time. So it just puts things into reality and having a priority and also enjoying life as well and making the most out of it.
Sukkarieh moved around quite a bit as a child and through this, he learned the value of property.
It was just more, once that transaction was made, my mum, she’s always gone for acreage properties. So we ended up going another three-acre site over at Belmont. She bought that quite well and has now proven to be also another influential suburb. Belmont’s near Gumdale which is, you know, high end two and a half-acre blocks now. So, she’s just always, you know, even from that property when she saw that she bought another acreage properties, it’s just a thing in investment vehicles she likes to use. Buy acreage property to live in and have the space privacy and also long-term value.
He went straight into university after high school to head towards his goals at the time.
I went to QUT, a university in Gardens Point over at in the city and studied, I got into software engineering so I was in IT straight after high school.
Sukkarieh was faced with adversity straight after leaving university due to some unique circumstances.
That was a three-year degree. It was an interesting time because I finished high school in 1998 so I started my first year in 1999 and everyone would probably be familiar with the millennial bug, a lot of contracts being sent out. So it was really exciting thinking, ‘All right, this is fantastic.’ This industry that I chose and this was while I was studying, you know, you’re just seeing all these six figures numbers going for it, trying to fix this millennial bug. Then I graduated in 2001 which I don’t know if people are familiar, but that was the whole Nasdaq crash with the IT bubble burst. You know, there wasn’t a lot of jobs in that wasn’t really, you know, it was just a crash from that point of view. So that happened at the same time as when I graduated.
So it made it a little bit more difficult to get a job, especially locally in Brisbane. There wasn’t a great deal happening here, but I ended up getting a job after that. But it made me realize how things can go your way in one industry and then also fall apart. So it got my head around that side of it all as well. That things go through sometimes the cycle and we’re obviously going through another IT bubble. But no, I think this is probably more of a different type of IT. That was back in 2001, this is definitely here to stay a little bit more with technology advancing to where it was.
Technology advancements over the past two decades have caused a serious change within the IT industry.
I think it’s more the hardware, like back then in IT software, it’s just the hardware capacity was never there to match the software. Now it is like you can do everything on the iPhone when back then you couldn’t. So I think potentially it’s definitely going through a massive boom before these types of companies forming. But it’s quite consistent now with the catch up of hardware and software together.
A turn of events sees Sukkarieh secure his first property in an unusual way.
“Being a bit too ambitious and just always trying to do something and look for opportunities. And to this day it’s always the case. That’s just how I am. I can’t really sit still.”
I graduated and ended up not getting the job straight away because everyone did work experience. So I ended up working on my street for the first six months and then just building up my work experience. And then I ended up getting a job. And then once I got a job, straight after three months, I ended up buying a property. The way it played out was my brother, actually bought the property, but he couldn’t get the finance for it. So he said, do you want it? And I said, ‘Yeah I’ll buy it.’ And I bought that property. It was actually a funny thing. It was actually on the same road, on Mount Gravatt Capalaba Road, where my parents sold originally. So I knew the area pretty well and I said, ‘Yeah, I’ll buy that.’ And so I did. So that locked me in my career.
So once you get a mortgage, it’s pretty a little bit more difficult to change careers. I kind of knew that IT wasn’t completely where I wanted to be after I did my degree. I knew that about halfway through my degree, but I looked at it and found, well, I only got another year and a half and then I finish, so I’ll stick with it and see if things change for me in the industry. And so I ended up working for a company that did rolled out SPAR supermarkets. So I headed up their point of sale system and I started to really enjoy that. So I did that for a little while until it got to a point where I got another job rolling out software for salons. It was probably one of the largest ones in Australia as well as almost international links. So, and then I met Jolene and we got married and had kids. And that’s when the ambition of me being content as an employee wasn’t really for me or I was just too ambitious and wanted to strive for bigger things from that point of view. Also knowing where it could go in IT. So that’s when I started to explore other options.
Experience in his former industry was very useful in his future business ventures.
It gave me a good insight in regards to how business is run, like a small convenience store to a salon in the spa. So looking at all of that from a view, not just looking at software and figures, you understand and go, ‘Wow, look what this business is making.’ Because you got to see everything from that point of view.
What led Sukkarieh down the path of property investment?
So that property, my brother found it. He couldn’t find the finance so I took over that from him. We bought it for one ninety-five back then and, you know, that was probably in 2003. It was at Mount Gravatt Capalaba Road. It’s probably the start of the whole property boom. I think in regards to it all, people might recall from 2003 to almost 2009 property was going in one direction and that was up. So it was great timing from that point of view. I ended up renting it out initially. Then what happened was during that transition, my mum sold Belmont and went to buy another one, she ended up living there. So I helped her out and she was living there for a couple of years as well until she found another property, another acreage property. So it was good at that time.
When I had that property I met Jolene as well and we got married and had a kid. But we didn’t actually live there. Jolene had property also at East Brisbane, so we both had a property each. After I think it was only for two years, I held that property from 2003 to 2005, and I got a note in the letterbox and someone saying, I’m interested in your property I’d like to talk to you about it. So I ended up pursuing that after trying to work out what I was wanting to do long term with our property. It was interesting because I’ve got a real estate agent value on it because I was actually thinking,
you know, sell it. And the agent said, Oh, you probably won’t get much for it. Probably about two 50 and I only paid one 95. So it didn’t go up a great deal. But I knew the value of that property because it was zoned on a busy road you could do like a, a small office or townhouses. So it was just zoned low to medium density. And so I pursued that letter in the letterbox and it was from a solicitor and I told him how much I wanted for that property. We had months and I said, look, if you really want this property, this is how much I would sell it to you because this is what I plan to do with that property. And back then it was to open up an IT shop on a busy road.
Sukkarieh shares a story that exemplifies how being able to negotiate is very important in the property industry.
I said, look, you could do, you know the computer store here and this is what I plan to do. So if you want to buy this property I would sell it to you at 450 which was obviously above the market. Well, that’s the end of that conversation. Next thing I know, at work I get a letter, an envelope at work, he tracked where I worked and he posted a document to me at work and it was as an REIQ contract with 350 on it. And I’m like, oh well that was better than what the real estate agent said. They offered me 350 unconditional. So it was a really strong contract and I crossed it out and I signed it back.
I said 450. And I just sent it back. That’s all I did. I did 450, crossed it out, initialled it and sent it back to him. He came back at 400 with another contract. Once again, I crossed it out and put 450 and then next you know it he came back and goes, okay. Unconditional, 450. So that was after two years. That’s where it basically took off after that from there for us really. It allowed me to potentially change careers a lot easier. It allowed us to, you know, with the money which we had from that sale, it basically paid off Jolene’s east Brisbane property.
He tells us what happened with that property and his perspective on the outcome of it.
I checked the journey of it, and they just recently sold, but I checked the journey of it. He was after it from a political point of view, they just wanted to put political signs on there. They thought it was a great way. Then there was a chiropractor beside me and I noticed that he joined forces with them and had a DA for like 38 apartments. It was like five stories high and they wanted 1.9 million, which they never ended up getting, at all. And it recently sold to someone else for five 40. So, so you look at it, four 50, he held for more than 10 years and was only able to get five 40, but I don’t know what happened with that development because it’s either they had a DA or it was like draft drawings for 34 targets or something like that. But obviously no one wanted to pay 1.9 million for both sites. It was an interesting journey, and that’s what I always like to say is, especially as you get older, looking back and reflecting and going, wow, that was a good outcome, or this is what you could’ve done, was it best to hold this property or so, it’s always good reflecting back on things like that.
Due to some of the decisions he had made, Sukkarieh had set himself up in a very advantageous position at a young age.
It’s just as well as having a young family and growing up too, at that initial stage because I think I was 25 or 24, actually, I bought the house when I was 19, so I had that completed actually a lot less. I was only about 22 or 23 and we’re basically debt-free at that time.
During a lengthy career, there will be moments that can be looked back on as valuable learning experiences.
I got a little bit beside myself. I guess that’s what happened. I thought, Oh look at me, I’m a property guru type of person, but I knew what I was after. I was after a subdivision site. So that just kind of came naturally. I’ve said, you know what, I’m really into subdivisions after seeing what happened to my parents. I really want to go and I still to this day am always looking for subdivision type of sites as well. I ended up buying a block at Evident Hills, which I was able to subdivide or build townhouses. So it was an 800 square metre site. But the problem I did, it was listed at 450 and I thought I’d offer an unconditional contract at 400 which got accepted and I was like, fantastic, let’s just get it done and I didn’t even look at the property.
So I ended up buying it at 400 and realise that the person who built the house originally actually just did an ad hoc type of job. It was a very funny kind of build and had all sorts of problems, which I ended up discovering. And that was a lesson learned from that point of view is just not to get too carried away on the fact that there’s an 800 square metre site, so it can be developed as townhouses, it can be subdivided but to also look at the quality of the house, which is on there as well. Because that can come back based on your strategy, which it did in this case. Because I was just looking in and got caught up in the land more than the house.
Sukkarieh learns some shocking news and explains how the experience helped him in the long run.
When I looked at the strategy of putting townhouses and looking and seeing if that was possible or just getting a block because you could actually just put a fence right beside the property without moving it and you have a spare block of land. So I went down with that option. But it ended up happening all around when interest rates were about 9%, mind you, it was with Suncorp and it was at 9%. This was around about 2008 during the GFC. So it was a little while when I made that next move in the next purchase. I think I bought it in 2007. Because I didn’t really make a purchase after that because we ended up getting married and had to deal with all of life and had two kids. And it was actually a funny story is Jolene and I were both working in the city and we used to meet up for lunch and go to the gym. We were both on the treadmill, and this was on the finance due date. And so 400, 14 days finance. And it was on that end of that finance day. We’re on the treadmill together. And then Jolene, we had two kids and then Jolene turned around to me. She goes, on the gym at Fitness First as well, I’m pregnant.
And I fell off the treadmill. I’m like, hang on. The finance is due today, what should we say? Should we say we’re going ahead or not? And she goes, oh, well if you think it’s a good property, a good opportunity, I think go ahead with it. All of this, third child, doing the subdivision, all of this. And we ended up proceeding with it. That was definitely a learning curve.
Even with another child on the way for the Sukkariehs, that still couldn’t slow them down.
With three kids, that time off for Jolene. Also because she was working, you know, going on maternity leave and having a mortgage, because obviously we used 100% of borrowing for that property, which was at 400 and just relying on my income. And it was at a time when I also was making a transition from IT into finance where I got offered a job with NAB. So all this was happening at the same time, so we don’t move slowly, but the thing is Jolene and I are always fast-paced and it’s always been the case since day dot. And hence obviously we had four kids before the age, I was 30 as well. So, you know, we did a lot in that 10 year period.
After thinking long and hard about what to do with the block of land he wanted to subdivide, he comes to a decision.
Ended up doing a renovation on it. So we ended up subdividing it all. I went through a property subdivision project manager. I was doing my due diligence in regards to should I do it or not? And I got a good understanding because when I went in and approached this company, they said it would only cost 60 grand to do the subdivision. I was like, oh, only 60 grand. I worked on the figures. I’m like that’s doable. Ended up costing more like 120. So the estimation was completely wrong. It made me realise that the only thing was from that point of view why they wanted to pitch it down to 60 was that they get the job, obviously. So it made me understand a little bit more about things like that. I sold the block of land for really cheap so whoever bought it off me probably did all right. I sold it for 180, the block of land.
Because I would say that, we’re in a situation where I had my third child, I was the only one working, financial pressure. I just wanted to get rid of it and kind of put it behind us. So sold the block of land for one-eighty and then it was a matter of trying to get our money back from the property itself. So we ended up spending about 20, 25, actually probably more like 40 grand on renovations because there were all these things wrong with it. I had to do restumping, new kitchens, do a paint job, et cetera. We ended up selling that house for 404, so all up it was still a profit, but it wasn’t a great deal and there was a lot, it was really stressful during that period of time. And we had our third child. So good learning curve from at all. Obviously that block of land would probably be worth maybe 300 now and the house was probably still worth maybe five-fifty. So long-term, looking back at it all there’s some positives out of it all. But during that time when you’re having a young family, it is a pretty stressful period.
Sukkarieh can still find the time out of his busy days to keep up with all his ventures.
I think it was just more just I think it was just being a bit too ambitious and just always trying to do something and look for opportunities. And to this day it’s always the case. That’s just how I am. I can’t really sit still.
He provides us with a surprising tip on how he thinks more people should deal with property at certain times.
Every project we’ve done and the experience we always kind of reflect back on and it got me to realise that sometimes going through and doing something is not always the best outcome and result. Sometimes just leaving a property and passing it on to someone else to complete it can be also a good result. So there’s many times like even that problem Jolene had at East Brisbane was actually a subdividable site as well. So after Evident Hills, and the reason why I went through the project manager, it was that I wanted to learn from them how to do a subdivision. So I gathered all that paperwork which we did for Evident Hills and all applied it to East Brisbane. And did the subdivision in the build myself, I project managed that one myself and it made me realise what the end results of it all and everything like that.
Sometimes like before we actually did that project at East Brisbane, we put it on the market and we got offered good money for it and we thought this is fantastic and didn’t accept it. So we just looked at it as a way of saying, you know what, we’re best to complete this project and do it because if someone’s willing to pay us this amount for this block, this house with the opportunity, then at the end of it all, it can be really good value and now looking back at it or you look at the initial value and it’s like, well, it would have been better off to sell that without actually doing the project.
So there are certain things where you wanted to buy and have the possibility of adding value, but not technically doing it because you think that sometimes doing it, you think that you’re going to actually be in a better off position, but looking back sometimes you’re not, if you can take that profit now and move onto something else bigger and better, that’s sometimes a better outcome. And I’m not saying that’s always the case. I’m just saying from my experience, the things which you can add value quickly on and move on with the better.
Matthew Sukkarieh’s Property Financial Advice Can Change Your Life
A lot of things can happen when buying property and Sukkarieh has certain strategies in place to face these problems.
It’s something we try to kind of develop I think naturally and it’s probably also things which I learned from my mom and my parents and a lot of people contemplate umming and ahhing about a financial decision. Should we do this? Shouldn’t we do this? And I’ve kind of naturally built the solution of saying, ‘Give me the problem and I’ll find a solution,’ and it’s probably more of a mathematical kind of outcome and not saying that this is going to be the case for everyone. But sometimes as long as you’ve worked out the outcomes, the exit strategy, the entry strategy, done the calculations. Get yourself into the problem and then from there, you can work out a solution. Now, that was the case when we bought a block of units and this was in 09.
So you could imagine we had Evident Hills, East Brisbane, three kids, 09. We’re moving from Brisbane to Sunshine Coast and there was a block of units. And we initially didn’t get the price, it fell through and someone else got it and it was during the GFC. They ended up falling that contract over and we ended up getting it in 09 and that real estate agent gave me a call and said, ‘Mate, do you want it for this price?’ It was there and then, and Jolene’s at home with three kids. So I actually signed the contract unconditioned, seven-day finance, 750,000, because I always saw it as a way of what is the problem here? I can always get out of our finance. If we can’t get finance it’s not meant to be and so we ended up getting that block of units. Once again it was the whole thing, which I said to Jolene, ‘I’ve got us into a problem, don’t worry I’ll find a solution.’ We ended up finding a solution from that point of view. So I think that the method of always calculating them and working at entry and exit strategies is always something which is key.
Being in a positive position has helped Sukkarieh and his wife build their portfolio.
That’s been one of our best investments because it’s been cash flow positive, which Helen has mentioned in regards to her commercial properties, cash flow positive. It does help in regards to it all. It’s definitely helped us grow and build upon our portfolio because from that cash flow positive, it’s helped us pay off our house quicker. It’s helped us grow up into other investments and things like that.
You need to be able to implement the strategies that you want to use and Sukkarieh tells us about the type of mindset you need to have.
I think it’s a matter of getting to know your numbers, your situation, like obviously you can rely on experts like us and Jolene and we’re able to relate all this back to you and getting to know what that would look like in the outcome. Also, I guess the key thing around it all is looking at an area and where you’re investing and making sure that you like it. Like these blocks of units in Mooloolaba and this was an area in which we saw great potential as well. So we were a big believer in this suburb. So getting to know your area and getting to know what was a good price for it, the good opportunities where you can add value, what your strategy is around it all and also when I bought the block of units, block of units back then wasn’t a big thing, but I did all the numbers on it and I said, ‘I don’t know why people are not looking at blocks of units because they’re yielding a really good yield.’ So just, just looking at all opportunities and breaking it down to percentage returns. That’s always been a thing for me, was that mathematical concept. What is the outcome? What can we do? Why and where are people going? Also how to do things a little bit differently.
Trying to find true value. I think what it comes down to in regards really all sorts of investments is trying to really gauge what is true value because even though it’s marketed out and if they’re a real estate agent or et cetera, they may market something out at 650 but you may say, you know what, this property’s worth 750 and they are marketing it all wrong. And this is the reason why.
It is valuable for you to know what is happening in your local area to gain an understanding of the market.
I’m probably surprised that I didn’t become a real estate agent, to be honest, because at a young age I would just go to house inspections, auctions even though I wasn’t interested, I would just be interested in terms of knowing how much that property is going to sell for. I think it was just all grown up and Jolene knows that too. Like on a weekend I like going to a house inspection, I like going to an auction even though I’m not interested in buying it. It’s probably, I don’t know if it’s a sad thing or a bad night, but I just like to know what things are going for in the local area and get to know my area really well.
It is always positive to be inquisitive and continue to learn about your field.
It’s just more of a passion which I have and I do this, not just only with property but shares companies, everything. I’d just like to know what’s going on and it’s really helped us and that’s where I realised when I went into IT, I knew that this wasn’t where I wanted to be because I always had that passion for property and investing and I actually did civil engineering after I did IT because I thought I’ll go down the path of doing further engineering. Then I realized if I’m passionate about property, et cetera, I need to be in finance. And financial planning ended up coming through. I did some day trading. Got really heavily involved in day trading and then we ended up buying the block of units over at Mooloolaba which ended up taking our liquidity away. So we were stuck for some time. It’s all a learning curve. The last 10 years to 15 years has always been a learning curve and it continues to be, with different dynamics happening, low-interest rates, economy changes and things like that.
Sukkarieh helps people take back control over their own financial situation and talks about the results you might see if you do.
I think it’s about taking control. People sometimes don’t like the fact that they receive a paper statement and don’t know what’s actually invested in asset classes. Especially during the GFC when there were major losses. This was probably one of the striving things which happened during that time when the markets were crashing, property was still going up. So the realisation that property’s more tangible, I’ve got more control, the tenant’s not going to leave. That really grew that whole SMSF side of it all for us as that point of difference at the time and allowing people to have more control of their investment instead of not knowing where it was. So during that, we ended up educating people about what opportunities are there with their Super Fund and what you could potentially do. Instead of just having it in an industry or retail fund where you can actually invest it and borrow as well. So changing your $200,000, super fund to now a $500,000. So even though there’s 300,000 in lending, it’s still a $500,000 super fund.
Everyone wants to be able to turn a low amount of money into a large amount and Sukkarieh gives some tips on how to do that.
What I say to clients, it’s about applying that percentage side, so when you’ve got 200,000 and you do 10%, that 10% is only working on that 200,000. That’s all it’s working on, but when you can then leverage and obviously leveraging has the benefits of increasing wealth as well as decreasing depending on where that investment is in terms of that purchase. But if it all works in the right direction, when you buy and change your super fund from my $200,000 investment to a half a million-dollar investment in that market goes up by 10% you get 10% on half a million versus 200. So what you technically did is multiplied your returns by two and a half to three times, each and every time because it’s working on a percentage of what is capitally invested. So that is why that is so powerful. And it’s a matter of not just utilising it for one vehicle, it’s a matter of still applying that diversity because it’s not saying that that is going to be someone’s solution for everyone and nor should you just have one investment working for you. Over the years what I’ve learned was that you need multiple investments working for you to be able to be cash flow and financially free. It’s very unlikely that one investment is going to give you financial freedom.
Super funds can be tricky to understand so Sukkarieh goes into some detail about what you need to look out for.
You need a certain amount or some lenders don’t look at that at the moment as well. So it has changed in the last 12 months. There’s news obviously with a lot of major banks pulling out of the self-managed super fund’s space. There is still lending and stuff in self-managed super fund space. Interest rates vary from 5.99 up to 7%. And there are some establishment phase ranging from 0.95 to 1.25% of the loan amount or even a thousand dollar fee for residential property. So there are things to be mindful of and that is cheaper contributions. So that’s why the end of financial year is really important because you want to maximise how much super. If you’re looking at the self-managed Super Fund for super borrowing, that super contributions is going to make a key part of how much you can borrow. So maximising potentially how much you put into super before the end of the financial year is really key if you’re looking at this avenue. So definitely super contributions. You need at least a 20% deposit for residential. That’s going to be area code specific. Some area codes may require a 30% deposit or even more. And that’s for residential insurance or commercial, you definitely going to need anywhere between 30 up to 50% depending on location and the opportunity as well.
Sukkarieh continues on what to be aware of when setting up a self-managed super fund.
There’s all sorts of self-managed super funds. There are individual trustees and corporate trustees. Individual means just putting it in your own personal name. Now a lot of lenders don’t tend to favour that. It was a cheaper option where you can set up an individual trustee self-managed super fund for $500. But the only problem with that is that you need more than one person to run that Super Fund as an individual trustee and usually with self-managed super funds, it was always was the case for mums and dads. So that made it difficult. If anything was to happen to one person, then all of a sudden you had to wind up that self-managed Super Fund or get an additional member. So that’s where the lenders were looking at favouring more the corporate trustee set up. So the corporate trustee is a little bit more expensive.
Under my financial brief, It’s 1495 excluding GST and that will give you a corporate trustee setup. That’s having a company name running your self managed Super Fund where you can have one person as a director to run that. But we obviously the way it’s usually set up is mum and dad both being directors by being members and then from there if you’re going to borrow, you need to set up what is not as a bare trust to hold that property because you have what is known as an installment warrant and that bare trust is like a custodian to hold that property and have a loan agreement with the bank to pay it off over a period of time. And then the beneficiary of that will be this self-managed super funds.
Through his financial planning business, Sukkarieh helps his clients every day. We get an insight into what he helps them with.
We usually give clients the full education spiel around it all and the comfort of knowing that we’ve got everything covered where you’re not setting up the self-managed Super Fund if you can’t get any money or it’s not right for you. So we’ll analyse the situation, is this exactly what you want, do you understand what you’re getting yourself involved in and all of this information. And it’s not trying to scare them off. It’s just giving them the information so that they can make a rational decision and saying, ‘Yes, I want to do this. I love tangible assets. I can see it, I can drive past it. This is a property that I want.’
He explains the amount of money you might hear being thrown around when talking about self-managed super funds.
There’s a lot of general information, say 200 is minimum, but sometimes we might set something up at 150 because that financial year both parties are going to put 25 grand in, which would then I’d take them up to 200 so it really depends on a case by case scenario. Like I always say that as long as you’ve got an objective of what you wanted to achieve, that’s the main thing because I can’t tell you or no one can really tell someone what is the minimum amount that you want to have to set up in a self-managed super fund as long as the trustees are comfortable but they make it as a decision and understand the cost involved of annual administration and ATO levies and all of that. Someone could set up a self-managed Super Fund and away they go and they can just make 20-30% every single year themselves. So it really depends on what they believe they can do and achieve. But usually, in regards to our clients, it’s between 150 to 200 to 250, depending on what the outcome is. And depending on the client situation, if they’re a high-income earner contributing a great deal into super every single year, then it’s going to be maybe at the one 50 stage then because they’ve got 25 or 50 grand coming in through that year.
Sukkarieh explains how this can also help with tax minimisation.
It’s 15% inside super versus 32 37, 42, 49. So anything that drops your taxable income down to a different rate is always going to be better in terms of the super environment, especially when you get to an age where it’s not far off. So you have that cycle. I think one of the biggest mistakes which we tend to see is a lot of young people going, ‘Don’t worry about super, don’t worry about super.’ If you can worry about it at a younger age and just put that add 2 or 3% in every single year. Not a great deal because you don’t notice it almost go. You’ll be very surprised how much you have by the age of your mid-thirties. I have a close to 200 or 250 by the time if you start at a young age by the time your mid-thirties and that’s a good amount to start off and kick things off.
Time never slows down so it is important to take opportunities when they are presented to you and understand what you want to accomplish.
I think there’s a combination of being able to do things and being able to provide for four kids under the age of 30. I think it was a matter of it got to a stage of just surviving and be able to enjoy time with them. Knowing the fact that when my dad died, I was only 12 at the time and actually it was younger, I think I was only 11, so noticing that I can spend these type of moments with my family now is a key part. It also applies the ability and in teaching other people and educating them through what we’ve learned and provided that is also another little satisfaction. I always say to people, end of financial year and end of the calendar year are two times I always like to reflect and look at things where I wanted to do and didn’t do because of time and then start to realize that time’s getting away. I need to start changing what I’m doing to allow for this to happen. It’s getting like that for even for business. There are so many things that we wanted to implement.
These are two times the factors where Sukkarieh looks back and shares what he wanted to do.
End of financial year and end of the calendar year at times where I reflect back in and there are things which we wanted to do two, three years ago in business and things like that, which we never had a chance to do it because there’s only so much time in the day. But every year I try to change the way I’m living day today to try to incorporate something or do something which I planned to do. So I think everyone can relate to that from that point of view. Sometimes each year you need to either, it may be the fact that instead of waking up at six o’clock, then I wake up at five o’clock, so I’ve got another hour to do something. Instead of going to bed at nine o’clock, I might stay up till 11 o’clock to be able to do something.
So it’s getting to that point now where there was a lot of technical stuff which I wanted to do and I kept pushing it out. Videos and things like that in terms of business. It’s getting to a point where I need to start incorporating some other time in my day to be allowing for that and being conscious of that. So that was meant to happen two or three years ago and it still hasn’t happened. So it’s a matter of really outsourcing it and sooner or later, we need to just start reflecting and adjusting and everyone has it. This could be buying your first property or setting up SMSF or whatever it may be, but you need to allocate time in whatever you’re doing and focus on that to accomplish it.
It is important to understand where you are in your career and where you want to go.
And do it with everything, like I tend to do it for the time like it might be getting property valuations. Just to know how much the property’s gone up. Looking at the history of what’s going on. Should I keep that property? I kind of apply every year, twice a year on what I’m doing personally as well as for the business.
There will always be another person who is going to know more than you in any given field and it is important to utilise that knowledge.
That’s been one thing that kind of has been missing I think because we’ve been so tied up with running the business and the focus has been on the business. I haven’t really been able to find a mentor around the property investor. I think I’ve just been trying to look at what successful people have done and you can all do this it’s all public information anyway through counsel, through RP data. But I tend to work backward from there. So if I see a really good buy or see a property development doing really well, I’ll hone in on what did they buy the property for, what is the percentage per square meter or what is the outcome of it all? I’ll just tend to reflect personally doing that myself. And this is all public information which is out there for everyone to have access to it.
He talks about ensuring that you take on what you can handle and live in the moment.
There’s sometimes a little bit too much information. I think it’s a matter of reality at the next stage. I guess for me it’s really finding a good network of property investors and mentors to do something bigger and better, but at the same time it’s a matter of really working with for now means as well because at the same time, the other thing which can also work against you is over committing or doing something which is a bit too big.
You always need to be learning about your industry and there are many different ways to do that.
I’m a bit of a geek, I guess when it comes down to reading, I don’t tend to read. I know a lot of people have read ‘Rich Dad, Poor Dad’ and all these other kinds of inspirational books. But I tend to focus on my time on research of property or research on companies. So when I tend to read something, it’s more doing research and exploring these types of things or opportunities in our own industry as well. So there’s no real book as such, I just always kind of do an r&d I guess if you look at it from that perspective. So something which just it might be a new IPO float, what does this company do and I put my time and effort in trying to find what that company is doing or it might be a new town plan changed so much time and effort in terms of understanding the new changes to that town planning and things like that. By the time, with family and everything, it really takes up the majority of my time.
Sukkarieh shares some words of wisdom that he has received that has helped him throughout his career.
Stay focused. That’s probably the best advice is to stay focused. Don’t have too many distractions and focus and get things done. Action is everything.
Multitasking is important and Sukkarieh explains how many projects he can juggle at once.
I think the range of the project, from personal to business to property investing to share investing. So that those are like every year that they, there’s a project in every one of those categories. In terms of the size of it, all would be depending on how much I’ve got in terms of liquidity or leveraging or capacity or resources, et cetera. So all the time as well. So I break them up in those type of categories. So you’ve got personal business, residential and shares and investing. So those are my four categories and then each project has its own little set goals and time’s and tasks to get done.
No one’s career path runs smoothly and there are always bumps along the way. Sukkarieh shares some advice he would give to his past self.
What I would say is to be patient. Don’t overthink things or put too much pressure on yourself and time will do its thing. Don’t expect results straight away. I think that’s where a lot of people get frustrated from a mindset point of view. We’ve seen mental health is a big thing as well. And I think a lot of people, especially with this day in age with the cost of living and everything, put a great deal of pressure on themselves. I would say just be patient and things will come. Just have that plan and execute that plan and things will roll out accordingly and let time do its thing.
Sukkarieh does not want to get ahead of himself and is patiently waiting for that next project to pop up.
I’m really excited that we’re at a stage where we’ve reached that financial freedom, having that passive income. So I’m having a mixed view on this. Some part of me wants to enjoy it. And then the ambitious part comes out and goes, ‘Let’s invest again?’ So I’m just doing a lot of research and development and working out, where and what I should put my money into moving forward.
After being cash flow positive at such an early age, he explains the feeling of having that kind of freedom.
I feel like a weight off my shoulders has been achieved. So looking back in and being able to do it like I’m 38 this year and it does feel good from that point of view. It feels like everything which I set myself to achieve when I was in my early twenties. I’ve done that. But at the same time, you can’t just be content with what I’ve got. You still need to grow each and every year and try to beat inflation and the cost of goods and all of that. So as well as, we’ve got four kids and it’s probably moved onto the fact you’ve got to help them set up their lives and then everything like that as well. So it just feels like a little bit of weight has been moved from the shoulders there.
Sukkarieh explains the role that luck has had in his career but also how pivotal the skills and knowledge he has learned along the way are.
I’ve seen so many things that play out and I think sometimes people relate it to luck but it’s actually more than just luck. It’s related back to the skills and everything they’ve naturally developed as well. So obviously luck is amazing to have on your side as well when it all works out. But I think it’s a foundation that you need to have is entrenching yourself with the right people. I think this day in age with all this technology, it’s a lot easier. Like obviously the podcast here and networking, you can learn so much information and take short cuts where people have taken five, 10 years or even a lifetime to learn and know all this stuff. So leveraging all these types of resources is amazing.
As I mentioned, as long as you take action and implement and focus, that’s where a lot of this knowledge, which people gain is going apply. There can be a little bit of luck. Look, obviously luck is many factors. The economy going really well. There’s no world war three breakout, all these other factors which are out of our control. We have no control of that whatsoever. But a lot of that noise is just noise and you just got to focus on what you’re doing every six months or every 12 months and I relate it to your mindset in if it’s training for a goal, like either one, whatever that might be. Like from a fitness point of view, you’re going to have all of these types of noise, waking up to cold weather, rainy days but you’ve got to block all that out and focus on your goals.
You need to take your time and slowly dip your toes in the water, no matter what you are doing.
Health and wealth are definitely in line, to be able to run a marathon and having that little voice to say, ‘Stop running, you’re tired, your knees are hurting, your joints.’ The same thing happens with weight training as well. You don’t want to jump in and do a $2 million project, start off, doing the 200 grand projects. Same thing with weight training. You don’t want to go in and start lifting 200 kilos. You want to start very small and build your way up. So it’s all relative from that point of view but at least you’re doing it and taking action instead of not doing it.
If you want to stay connected with Sukkarieh he provides the details you need to stay in touch.
Core Wealth Advisors has a Facebook page or website and contact us at that 1300634000 number. We’ve got a Linkedin as well as email contact details. So happy to guide anyone that needs assistance from that point of view and share a little bit more about my journey as well.
This episode was produced by Andrew Faleafaga with narrations and interviews conducted by Tyrone Shum.