Peter Toma is a motivated elite real estate professional and the founder and director of the buyer’s agency, Elite One Property. His company is trying to create a better life for their clients through the property. They help you build your property portfolio so you are effectively funded for your future retirement.
Join us as we delve into Peter Toma’s incredible journey and we discuss his background and find out about his childhood and where he went to school, how his parents shaped him and their influence on his career, how his property investing journey began, where he sees his property journey going in the near future, his worst investing moment and his incredible aha moment, and much much more!
- Peter Toma
We find out about what a normal day in the life of Toma looks like.
Our main aim is to build wealth for people through property. So any given day we're talking to agents, we're doing market research, we're inspecting properties, we are trying to find new clients, looking for the best deals that we can, strategising with potential clients, with clients themselves on how they can best build their wealth through property and the best way they can move forward to effectively fund their retirement.
Toma shares some stories from his past and we find out what life was like when he was growing up.
I grew up in the Eastern Suburbs and Western Sydney. I sort of split my younger years between the two areas. I Loved playing basketball when I was younger. I really, really enjoy the sport in general. But I really got started in property because my parents were buying property when I was younger and I probably didn't understand the full, you know, I didn't understand what it all meant back then. But as I've got older and I've realized what they were doing, I found it to be a really good way to build wealth and effectively fund your retirement so you don’t have to worry about how much money you've got left in super.
He tells us about the schools he went to and how he was subjected to the different types of demographics within each area.
I went to school at St Gregory's College in Campbelltown as my main high school. Primary school went to St Agnes in Matraville. So it was a good split I think.
Definitely different demographic in the areas and I think just because of the age difference as well. You know, interacting differently with different people at those specific ages. So you know, when you're a lot younger in primary school you just want to probably be accepted and get along and play and all that sort of stuff. But when you're getting a bit older and into that high school age, you're trying to find who you are and you’re probably hanging out with people that you see yourself wanting to be friends with for a lifetime. So I think different demographics but also from an age perspective different characters and different personalities as well.
We learn more about his journey straight after high school and what he was doing at that time.
After school I went to uni, I studied civil engineering for four fantastic years. And that was good. That was interesting. And it really, I think it really helped to hone my analytical skills. Probably not so much my interpersonal skills. But I think it was good from an analytical perspective. And then when I finished uni, I started working in civil construction and was doing that for a long time until a couple of years ago where I just decided that, you know, working full time is great, but you need to find something else that's going to make you happy. And that was probably when I started it.
He decided to make such a massive change in his life after working in the same job for so long and we find out about what triggered that change.
The main thing was I remember one day I was just sitting at home after a long day at work and I think I did about 14 or 16 hours that day and I just sat there and I thought there's got to be a better way to make a living or to be happy in life. And at that time I had just bought my first investment property. Hadn't really seen much growth at that point until a few weeks later. I just realised and saw the potential in property because all those hours are always working and however many dollars I was making during that time, I made more in that short amount of time through investing in property than I'd had in actually working full time for somebody in a job.
And that's kind of what triggered me, this is a way, there's definitely a better way than working full time for the rest of your life.
It's a fascinating thing and that's what I’ve heard so many times from investors is that once you get to a certain point, when you build up a certain amount of properties in your portfolio, that exceeds what you grow and earn than just working full time or even a job. And I think that's ultimately what we all want to try and achieve. It's just we get stuck and a lot of people just can't get out of that, unfortunately, to do what they want to achieve their dreams.
I think it's so powerful, honestly. It's so, so powerful and until you sort of take that leap and start investing in property the right way, it is really hard to sort of imagine or fathom that there's a vehicle out there that can effectively fund your life until you pass or if you decide to pass that on to your children, that's great as well.
Toma talks about his parents and whether they had any influence on his property journey or any of his interests.
It's always been around in my family. Like I said earlier, they had been investing in property, you know, when I was really young and didn't really understand what was happening. Back then I probably didn't even know they had a little portfolio to start off with. But as I got older, my parents started to do more in the development space. And that's where I started to get more involved in the onsite, you know, development and actual physical building just helping out here and there weekends after work. And that's sort of what triggered, you know, what's happening here? What's going on? And that education through them, I started to understand why they were doing it and then further to that is I started reading more books and trying to understand different strategies because there's a million books out there and everybody's got a different strategy. But just really trying to absorb as much information as possible to understand like why are people doing it. And then obviously compound growth and rental return was a big factor in that. So they played a big part and big influence in my investing in property. And I've really tried to just try to continue that.
Through his parents he had been around the property industry for quite some time and we hear some examples of the properties that his parents were investing in.
Initial investments were around just the unit style investments. Once the development started they were just like a duplex townhouse maybe a triplex style. And it was really cool to be able to go back and just see what was going on and what was happening and getting an idea on how to effectively build a development. Not only from a, I guess, physical construction perspective, but the numbers that go behind it. Like why are we building 2? Why not 3 or 4? What are the council requirements? You know, all those different things were the sort of things I was exposed to when I was going to visit after work or on the weekends to help out.
We learn about the locations of his parents' properties and whether they have expanded out of NSW.
No, just New South Wales and they don't do that many. It's just one every now and then. But you know, it's always nice to be exposed to that kind of thing and I'm very, very lucky in that sense that I am exposed to that. And that I can bounce off ideas with my parents with investing in property in general. Not a lot of people can do that. And I guess that's the reason why people listen to podcasts like this so they can get some more information and have a little community on property investing and have someone to talk to if they need to.
Toma provides us with a status update of his parents’ property portfolio.
They’ve still got their portfolio. They're getting closer to 70 which is getting up there in age I guess. But they're just looking to, I guess, enjoy their life now. So they've worked hard and they deserve it obviously.
A lot of people get into property to set themselves up in the latter stages of their life, he shares how his parents’ journey has impacted their life at their older age.
It's definitely been a positive impact. I've seen people that are the same age and don't have property or investments in general. So from a financial perspective it's definitely helped them and it's definitely a positive and it's probably been more stressful than, you know, not having a portfolio. But I think that sort of immediate, short term stress or financial burden, if you want to call it that at that time, it's all worth it in the end because it's a long term game property. So you're not going to get those amazing returns in the first 2 years. I mean, if you time the market, yeah, you might. But generally speaking property is not a short term investment. You know, unless you're flipping. But I think in general looking at them now closer to the age of 65 to 70, we should look at ourselves and say, “We don't have that much time right now, so we need to make the most of it when we're younger.”
We jump into Toma’s property investing journey and find out about how he got started and what property he invested in.
It was a property in Western Sydney. I knew I was ready to invest, had a bit of a chat to dad about, you know, what we can do? Where can we invest? And we had a big conversation about it and him obviously being successful in what he's done, I took a lot of advice from him. And he suggested a property out in Western Sydney and bought that property for $288,000 back in 2011, I think. Now it’s worth a lot more than that. And so it's been great. But I remember investing going, “That's a lot of money to put down for a deposit,” because you work so hard for the money, you work so hard for your savings, for your money and your deposit and you get a bit scared when you’ve got to write or send that money across for the deposit.
After getting over the hump and purchasing that first property, we find out if he has added any more properties to his portfolio.
Since then I've added another two investment properties and currently in the middle of doing a joint venture development. And so I could have bought more investment properties along the way, a more sort of passive income, but I really wanted to get into that development space. So for me in particular, my strategy was more around saving a bit more and allowing not too much debt to build up in my portfolio so that I could fund my next venture, which is basically a joint venture with a couple of people to do a duplex site in the Sutherland Shire, which we're doing right now. So I've added a few since then and now I'm getting into that sort of development space and really enjoying it. More risk definitely, but with more risk comes more reward.
The first property in the portfolio can sometimes be the most important and we learn about whether his first property was the springboard he needed to jump into his second and third properties.
The strategy there was the buy and hold and refinance, obtain that equity, use that equity to buy the next property and then basically repeat the process. Buy, hold it, refinance and use that deposit and use that equity to buy the next property. So it was definitely the same strategy for property 1, 2, and 3. By now, obviously we're getting into a bit of a different strategy.
We hear about one of the worst moments he has had since purchasing properties as an investor.
I bought a property in Queensland. Obviously me being in Sydney I bought it sight unseen, which is fine. That was all good, there were no dramas with that. The mistake I made at the time was the property that I bought and the property manager, the managing agent that I engaged to manage the property, was in two different cities. So I bought it out near the Ipswich area and the managing agent that I had was in Brisbane. And I guess the rookie error, the rookie mistake I made back then was, they're not close by, they can't go to the property often and check up on it. And it caused me a lot of heartache because they weren't managing the tenants properly.
The tenants were paying rent. And in fact that managing agent, I think in the first sort of 24 months, they went through about 5 or 6 different property managers that was managing my property. And that really caused big issues because information was getting lost between everyone and it was really hard to communicate with them. So that was about a $5,000 mistake that cost me. Because people weren't paying rent on time and they couldn't evict the tenants and all this kind of stuff happened in the background. But something I'll definitely remember and a mistake I'll never make again.
On the flip side, we hear about his amazing aha moment and how everything clicked for him.
I think it's what I was saying earlier, just about my first investment when I was, I still remember I was sitting in an apartment. I was just reading a book. I think it was Michael Yardney’s book actually. And I just realised that this is the way to go to build long term wealth for not only you but your family and hopefully future generations so you can pass it on to them. And I still remember it vividly. I was sitting on the couch, it was a beautiful summer's day. Had the sliding doors open, the breeze was coming through and I was just sitting there going, this has to be the way. And that was my aha moment.
Then what happened after that? What did you do and how long?
I just wanted to soak up as much information as I could and contact the broker to refinance to get that equity out so I can do it again. Because I was pumped. I was excited. I wanted to keep going.
We delve into his second and third property investments and how both of them came about.
The second investment I bought in the same area that I had purchased the first investment, I guess the theory back then I was still learning as it's done well. It's got good fundamentals. It wasn't long after I purchased the first one that I purchased the second one. And then after that, it was a little while in between drinks. Because I was looking at the idea of purchasing interstate and have this borderless investing mentality. Which is quite scary for someone doing it the first time because you don't know what's going to happen. There are different rules in different states. This whole notion of buying a property without seeing it, that's a bit weird for some people. But I really wanted to grow a portfolio where I wasn't restricted and if the market was down in Sydney, well then there would be another market that would be growing. And that's when I started looking interstate and you know, I was looking at things like population growth incomes in the area and the demand for property. What's the supply pipeline like? Are there going to be too many properties coming into the market relatively soon? Scarcity is a big thing. So I looked at all of these different things and I ended up deciding to purchase interstate. It was a great experience for me and something I can pass onto my clients.
How To Take Control of Your Own Future With Peter Toma
Toma shares why he moved into property development so early in his investing journey and we learn about the strategy behind this.
For many sort of serious investors, professional investors you know, the buy and hold strategy is going to take you so far. But I think if you want to take it to the next level, then you need to start looking at manufacturing equity. Manufacturing equity can be just through a simple renovation, could be through a subdivision or it could be through physically developing property. It could also be you're buying a block of land and you're building on top of that. But for me, I feel as though if you're serious about investing, serious about building wealth through property, development is something you're going to get to eventually hopefully sooner rather than later. For many of us there is more risk to it, like I suggested. But the financial rewards from an investment perspective can be a lot greater. And when you've got your manufacturing equity from a build and you've got the market moving in a positive direction for you, then the growth just compounds even more.
I totally agree with you in an uprising market, but in a sort of a flat or downturn market, how does that strategy work?
I think as long as you're buying well, and if you're buying in a slow market and you're selling in a slow market, that's great. If you're buying in a hot market and selling in a hot market or refinancing, whichever one, that's okay too. But if you're buying in a hot market and selling in a slow market, which, you know, nobody has a crystal ball. So the biggest thing is you need to be able to do your feasibility studies properly. Do your realistic one, do your conservative feasibility study and do the best case scenario. So you really need to make sure that, you know, if the market drops by 20%, what's your return going to be? Do the numbers still stack up? If they are, well then it's a pretty good sign to go, even if the market does drop, we're still going to make money and move on to the next development. So your feasibility seems to be on point and you just need to be able to risk assess that as best as you can.
We delve into his current property development project and find out how long he has been working on it.
We bought a couple of years ago. The option there was an older house on quite a sizeable block, a 15 metre frontage, 45 metres long. So pretty big in terms of depth. And the opportunity for that was just simply to buy it, to build it and to build a duplex on it. They're the kinds of properties that you can sort of build in those areas for that size block, for that particular zoning. So that's the opportunity that we found and we took it.
Toma told us that he purchased this property in the Sutherland Shire and he explains why he chose that area over many others in Sydney.
That particular one just worked well within our budget. And the return that we were looking at we could probably get better returns in different areas. But the price points are probably a little bit higher. So for us at that time, it was mainly around the price point to purchase the land to do that specific development.
So at the time the land costs us about $1.2 million. And then obviously you get your closing costs on top of that. We're funding the build ourselves and through an owner builder. So the build cost isn't as high as, I guess some of the other commercial builders. But all in all, we're probably looking after we build and refinance, we're probably looking at about a 15% return.
Which, you know, I think in the scheme of things isn't too bad. Ideally you want 20% plus, but I think in the current market that's a good result.
Basically you're able to sell those duplexes individually for roughly how much in the area?
If we were to sell, we're looking at ranges from anywhere between sort of 1.2 to $1.4 million for each duplex. It really depends on how many bedrooms and level of finish, but that's probably the range 1.1 to $1.4 million is probably the range in that area.
We delve into what he plans to do once the property development is complete.
I think with the current climate, I think we'll just see what happens. Expected to finish soon so it just depends on if the market is going to take a dip or not. For us it’s just a bit of a wait and see game right now.
When is it due to complete?
Probably looking to have it finished in the next sort of 3 to 4 months.
We jump into the process side of things and Toma talks us through the steps he had to take to get a project like this done.
DA approval was a nightmare. Just with the council. Took forever to approve our plans. I think it took us 8 months to get approval.
When you're paying interest for 8 months for nothing. It's very painful. It's a very frustrating process. And I'm sure a lot of people who've done it before can sort of agree with that. But look, from the process, I think you'd need to be clear of the council requirements, what you can and can't build on specific size blocks. Because no matter what the real estate agent tells you in terms of you can build this, you can build that. They'll always tell you subject to council approval. So you really need to be sure. From there we engage somebody to do the plans for us, submit the plans to approval. And that in itself is a bit tricky because you need to sort of, I guess, have an idea of what you want to build, level of finish, the style of property.
You have got to make sure you've got all your ratios right in terms of landscape and hardstand and you need to be sure what you can and can't build in that space. And then once the approvals go in or once the design goes in for approval, from that point it's just a waiting game. Honestly, it's just a waiting game. During that time, you can talk to builders, get pricing from them as well. Council will want to know your estimate of the budget for your build costs as well. So you need to be across that and then once you do get approval it’s all hands on deck. You just got to get started as quickly as you possibly can. There's obviously specific gates in between or during construction where you got to get private certifiers out or council out to come and, you know, get the tick to keep going. The build is actually probably the quickest part if you know what you're doing. It's the research, it's the upfront research. It's the council requirements, the application, which takes a long time.
We discuss the process of figuring out what the land could be used for and who he could seek help from to get it developed.
We just spoke to an architect and I looked up the council regulations myself. And I was comfortable enough, but then when the architect looked at it, they said it was okay as well. I just knew it would be fine and there were other developments in the area going up as well. So having a look at those and seeing what they got approved, public information allows you to be comfortable with that decision.
Toma was able to bring his parents in to help build the property but there are a lot of smaller building companies that can do a good job for you.
I wouldn't discount people going to smaller builders in general. I think that they can provide a lot of value and can show a lot more care for your product. Going to some of these larger commercial builders they've got like the specific trades they are going to use. But they're all about cash and money and they want to get in and get out as quickly as possible and may not take the same level of care for the quality. Because if it's your home, you want it to be nice, you want it to feel nice, you want the things that you're after. So, you know, I wouldn't discount smaller builders out there. If you are looking to put a home or even an investment property because they will look after you.
Next, we delve into the mindset behind his success and we find out about what his main motivating factor is.
The biggest one is I don't want to work for someone for the rest of my life. And so that's number one. And the second thing is, when I leave this world, I want to be able to leave something behind for my family to basically live off. I don't want them to have nothing. I don't want to just have enough for my super and that's it, I want to be able to give more when I'm not here. So that's one of the biggest drivers for me. The other part of it is coming from a background where my parents didn't grow up in Australia. They came here with nothing. And for me to just basically, I wouldn't say waste my life, but not build upon what they've already given me in terms of a good life, for me, it'd be disappointing.
Taking that first step can sometimes be the hardest and we hear about what held him back initially before jumping into his property journey.
I think initially it was do I have enough money for it? I thought I needed to have like 20%. I thought I needed to buy in Sydney. And so back then, you know, it's still relatively big money. But knowing what I know now is you don't have to buy in Sydney, you don't have to have a 20% deposit. There's other ways around that to get into the market and if you need to borrow a little bit more to do that and as long as you can support the cash flow, then that's the main thing. As long as you're in the market. But I think that was the biggest thing that was stopping me back then.
We get some amazing book recommendations and learn about some of the people that have been a big influence for Toma.
Margaret Lomas, I've read a few of her books. Like I said, Michael Yardney, they're probably the main two that I guess look up to and read about. Other than that, everyone has a bit of a different strategy. So like people like Chris Gray who's very into buying, renovating and using equity to do more and using equity to live your lifestyle. Some people don't necessarily agree with that theory. But you know, they’re the sort of three that I look to and say, you know, these are some really, really great strategies that these guys are implementing. I absorbed a lot of knowledge from those guys. They probably don't know it, but it's just the material that they've been producing over the years.
We delve into the best piece of advice that he has ever received.
The best advice, the best advice I've ever received has got to be that you are in control of your future. Don't let anybody else control your future. You are in complete control. Things will happen, but it's up to you to decide what's going to happen from there. It's up to you to find a way, whether that be through your own passion, skill drive or going out there and finding advice from other people as badly as you want it, you'll find a way to get it.
A lot of people are creatures of habit and we discuss what are some of the habits that might have contributed to his success.
One of the things as I mentioned before, had that issue with the property management. Since then, I've always been diligent in checking my rental statements as they come in because it's so easy to just assume that they're going to come in and the rent is coming in. There's no issues. Sometimes managing agents do things without your permission because they think it's okay, even if it's a small amount of money. So just a habit of checking your rental statements that everything's coming in.
And checking your portfolio where everything's at in terms of equity, debt and your finance every 6 to 12 months.
If he could go into the past and give himself some advice, what would it be?
Why didn't you buy more properties? I think I would've said, whatever you've got, just start investing, start investing now. And hindsight is great but I think you just got to go for it. No one is going to determine your future. Only you can determine your future.
We find out some of the goals that Toma is looking forward to achieving in the very near future.
I'm going to continue to do what I'm doing. From the development side of things, I'm keen to continue doing that. But I'm also really, really excited to be able to share my knowledge and help other investors do what I've done. And if people are out there looking to build a wealth base through property. I'd love to be able to share my knowledge, show them different strategies that might be applicable to them and really that's my way of giving back is passing on what I've learned to others now.
There are many agencies and strategies out there for us to choose from but we hear why Toma’s strategies stand out from the rest.
I think the biggest thing is that we recognize that not everybody's strategy is going to be exactly the same. You can read all the books that you want, but at the end of the day, everybody has a different financial situation, a different appetite for risk.
Everybody's at a different stage in their lives. Some are single, some are young couples and people with kids, older people above 60, they still want to invest. So they're going to have different strategies in different models that need to be implemented to them. And then that's one thing that we do is we really look at people's specific scenarios and situations and tailor that advice, that solution for them. So their strategy isn't going to be the same as the next person.
Last and final question for you, paydays. How much of your success is due to skill intelligence and hard work? And how much of it is because of luck?
Luck definitely plays a part. You know, I was lucky that I was born when I was born and I was at a specific age where I had saved enough money because I'd been working and I got into the market in late 2011 when things started to ramp up. So you know, that part of it is luck. But after that comes the skill, the knowledge, the tenacity, the desire to keep learning, to keep going. Because so many people can just buy one property and just stop and think that’s enough, that's okay, I've got my investment property, I'm good. But if you want to keep going, if you want to build a future, a wealth base, you need to educate yourself. You need to put in the hard work and learn. You need to be able to have those conversations with different investors, different managing agents, real estate agents, and when you're doing research. So I think luck definitely plays a part in it. In terms of percentage, I reckon, I’m going to say 20%. Well, I was thinking 30 but 30% is probably a bit too much, but 20% luck. Everything else comes from your own hard work and mindset.