Follow former Australia's buyer’s agent in, entrepreneur and mother Jo Vadillo’s journey on how she stopped working for someone else and took control of her own businesses, creating a 1 million income of her real estate portfolio along the way. Also discover how a Property Women seminar threw fresh light on her path and changed the way she viewed property investing forever!
Find out how she found her passion, what she does in a usual day between her two businesses - Advocate Property Services and Property Women - and uncover how she turned her worst investing moment about the one that got away, into a profitable win-win agreement with the local council in one of her Queensland properties.
Vadillo, director of Property Women and Advocate Property Services, uses her extensive property investing experience to help her clients enter the property market. Starting with breakfast with her three kids, her day-to-day is never the same.
So it's a busy day that starts quite early and I've got other people to worry about as well. But in all seriousness, though in a business day for me, no two days are the same which is exciting. And because I work for myself and I work in a space that I absolutely love and is my passion, I never have that sense of the burden of, ‘I've got to go to work, I've got to get on a bus,’ or anything like that because I predict my week. I structure it around my life as well.
But with that said, I am speaking to agents daily, we’re negotiating deals for clients, arranging events. We do quite a few workshops and look at doing events. I do a lot of content writing as well, I contribute to quite a number of different online sources for property investment advice and client consultations, I’m liaising with clients, giving them updates, going out to sites, looking at properties and I do a lot of interstate travel as well. Partially to do some of the speaking gigs that we do, but also to look at new areas - and I will never, ever refer an area or make a recommendation for something that I haven't physically inspected myself to really get the nuts and bolts of how a location would work.
Wow, how do you fit all that in over a year?
That's not every day, but I'll be honest, everything gets pushed aside if we're buying a property for somebody. Everything gets pushed aside because if a deal’s on the table that becomes our number one priority. So I guess there's got to be a little bit of flexibility when you're working in the property market. And as you know, a deal takes an absolute priority. But yeah it's busy, but it's good and it's always around the space that I really am passionate about.
The bread and butter of her businesses are to work with clients who are sourcing infill land in and around capital cities, as well as doing new builds.
I've got two companies that I run. So whilst I've got a pretty solid investment portfolio myself I've got the company Advocate Property Services and I also run an online education business called Property Women, which is skewed towards educating female investors and how they can do this for themselves as well. So they'll either do it for themselves, or they’ll come to me and get it done for your service as well.
Of her two companies, Advocate Property Services takes priority the most.
I mean I’m the director of the business but my husband is one of the primaries, I mean he basically manages in south-east Queensland we've got a buyer's agent on the ground in Brisbane. We're physically based in Sydney, we're expanding to Melbourne and we've got a team of admin staff as well and we have some contractors who are long term investors themselves and they come in every now and then to support us when the workload gets to a certain point where we just need a few more hands on deck. So it's working with people who probably are equally crazy about the property is what we are, which is great, it's flexible. But I think the beauty of working in the property market is to get kind of quiet around Christmas and early January - which is the best time of year to be sitting on a beach!
Establishing her roots in NSW, Vadillo has also based her portfolio within that area.
I grew up in the inner west of Sydney. So I'm still in Sydney but I actually moved to the other side of the Harbour Bridge, so for anyone who’s not familiar with Sydney there's the great divide of the Harbour Bridge; I'm now north side but I was an inner westie as a kid. And I mean I have properties on both sides now so I've got a foot in both sides of the city.
Going to school at MLC in Burwood, she worked in multiple industries before settling into the property.
I have to confess that I was actually quite naughty at school. I was always somebody who was never going to be a cliched student or academic. I mean, literally every single school report I ever had since kindergarten imply that I probably should speak less and focus more. But I always had that entrepreneurial streak going on and that kind of wasn't nurtured when I was at school. Whereas nowadays, I'm seeing that more and more emerging in primary school than even some of the degrees that they offer now.
So I didn't go to university. I did study, but I went into hospitality because I love people and I'm a very social creature, so I enjoyed that. I did travel quite extensively over a number of years. When I came back to Sydney, I started working in advertising which suited me perfectly. I loved marketing, so those skills are completely transferable of course over to almost any industry really on the marketing side of things. But then I actually did go to university. I reached the point of my late 20s where I thought it’s something I just wanted to do.
So I actually went on to do a masters degree in Communication at UTS and again, a communications degree lends itself to a number of different fields and serves me on a daily basis. Because I really am an extrovert, I'm very focused on people and I'm also a big communicator like I hate not getting the full story from somebody and I ask a lot of questions when I'm dealing with agents on behalf of my clients, or even if I'm just dealing with the solicitor or the broker or anything like that. I'm somebody who wants to be across everything, so I understand what the story is for our client. That was my university education, so I guess I was a little bit closer up to my late 20s and around the same time as when I bought my first property.
With a degree under her belt, Vadillo continues to educate herself to stay on the cutting edge of her career.
It's a great foundation to have but it's certainly, most of my friends I know who studied something at university went on to completely different careers. But I think it's a great educational foundation and I'm forever a student and I'm always going to be. I attend multiple courses, I'm always learning. I’m very much now trying to stay ahead of just the greater emergence of digital, how things are changing and how we learn, how we just take on numbers and sourcing property and how so much can be done from the desktop as well. So that is something that I'm constantly learning because I am Gen-X you know, it’s not like it's all-natural to me. I do push myself to make sure that I'm staying current as well.
Did you actually go back into the workforce to work in the company and gain more experience in the communications degree, or did you run out and start your own business as an entrepreneur?
You know, I never at that point in my life considered working for myself. It just wasn't really on, I mean this is pre-Facebook you know, I wasn't around that space. I’d come from my family who are, ‘Have that job, pay off the mortgage,’ very much PAYG working in professions in banking and it just was never something that I would ever think I could work for myself and do it successfully. So I did go on to work in a number of different media establishments - I worked for Fairfax for a number of years. I actually loved working for Fairfax around the time where the Sydney Morning Herald was first getting online and stuff, so that was a really fantastic time to be working for that business.
And honestly, the change for me came about when I had my first child and I went back to work full time because I had to. Also, my job wasn't going to lend itself to being part-time and that. My heart broke and it was hard and then within two years I had a second child and that was it for me. I just made that decision that I can't work for anyone else full time, I needed to do something for myself. So with the birth of my second son, an entrepreneur was born and I've never worked for anyone else ever since. And he's eight, so he really was that catalyst for me.
As Vadillo’s business grew, her family grew as well.
In the time of the rise and rise of my business, I had another baby. And you know I mean I worked. I mean I was putting an offer for my family, a family member, my mum I was putting an offer on a property in between contractions so I don't have a tendency of stopping, as you can tell. And that's the only life he’s known is sometimes you say, ‘Look we’re busy,’ and it’s a balancing act and I try to make sure I'm not constantly with my face in a phone all the time. But children understand to a certain extent that we're working hard now; but we play hard. We travel quite a bit with our kids now because our lifestyle has lent itself to and the way our property portfolio is working for us, we now have really extensive family holidays so the children know they kind of get 100% of us for much more, many more weeks in a year than I guess the average PAYG parents would be able to afford.
Although the influence to invest in property partially stemmed from her parents, her interest came from a renovation show on TV.
My parents built a couple of houses when I was a kid but I've got to confess my memory is just being super bored and looking at tiles and carpet. I liked walking through the when the framework was up and the brickwork, I enjoyed that aspect of it. But I didn't have an iPhone, I couldn’t just sit in a car and wait for them, those were the days when you really had to entertain yourself. So my memory was always been around the property in some extent; they always had investment properties and doing the builds, going out to these green pastures which are now established suburbs and they did a knockdown rebuild in Strathfield, I was a part of all that.
So it’s always sort of been around me in that respect but I when started, look I don't know what the turning point was, but I don't know if you remember the TV show Property Ladder, the UK TV show from Sarah Beeny? This is pre-GFC and she used to come in and people would say, ‘I bought this house and I'm going to spend 15,000 pounds on it and I'm going to renovate it.’ And she’d say, ‘Oh, don't spend that much, you never going to make your money back.’ And I just fell in love with the property from watching this show and seeing the amount of money that you could turn around in a short period of time. At the same time, seeing people ignore her advice was driving me nuts!
These combined perspectives motivated Vadillo to jump into her property career.
I think the combination of seeing my parents successes, as well as then realising how tangible it is to renovate, to add value and then to move on to add value without using emotion as well. People were like putting in these fantastic speaker systems in their houses and she's saying, this is a flip. I mean you're going to be selling this to someone of a low socio-economic standard, they're not going to care that you just spent 10,000 pounds on doing this to the house. So I learnt a lot. I must admit I learn a lot from those sorts of TV shows. And again it was pre-GFC, so the dollars were great - or pounds were great - in earnings there. But that was a real foundation for me and a real stepping stone into starting to do that for myself.
The beginning of Vadillo’s property business journey catapulted when she attended a seminar that altered the way she looked at property investing.
I'd bought one, maybe two properties when I actually started to attend events and the very first event I went to was a Property Women event, which is the company that I now own. And I just happened to Google, looking for some sort of group of females because my friends just didn’t share the same love or passion, they weren't interested. And I just wanted to be around like-minded people who are walking a similar path to myself. I just happened to be within 48 hours of this full-day event and it was transformational.
But I remember them announcing that the next speaker is going to be an accountant and I thought, ‘Oh, this is going to be really, seriously boring,’ and it was. I didn't understand equity, I didn't understand depreciation. I remember coming home that day and just being so excited saying, ‘Oh my God, we've got like nearly $1 million dollars worth of equity. We can use that.’ Look I just hadn't realised at that point what I had already grown organically and that was a stepping stone and absolute game changer for me and my husband's future in investing.
Taking a step back, the first property she purchased was during a Sydney boom when she was eager for an extra source of income.
Well it was another Sydney boom and I literally bought my property at the, I think August 2002 might have been the peak of that particular cycle of growth in Sydney and it was just all over the media. And literally, if you don't buy something, you're never going to get anything and I think for me, getting drawn into that hype and I thought, ‘I've got to get something, I've got to get something’ - so I did, I saved. I mean that's what you do you know, the first property you save like crazy. I had a full-time job, I was actually doing my university Masters at that point so I had some pretty big uni costs to deal with as well. Even though I was working full time, I knew I needed extra income so this was probably another part of the small business start off for me. I actually put an ad in the yellow pages and started walking dogs on the side, so before work, I would go and grab a dog and take it for a walk. Now, these things are quite... they’re around, but in those days it really was like the yellow pages and I was a dog walker in and around my working full time. So that was the money I lived off and I literally saved all of my income, less the cost of rent and my unique expenses.
So my friends had better clothes than me and better social life than me, but I really had a big vision for what I wanted to do and I really wanted to do it before I turned 30. That was a benchmark age for me. I really wanted my degree and I wanted to have my property, so I bought my first property in the inner west at that point and it was a unit. I think I was on $45,000 at the time plus commissions, but it was hard and I did it on my own. And my husband and I were together but we weren't married and one of our biggest standouts for that period of time was that I would walk in and I was the one pre-approved - and they’d always look at him and ask for his name when we used to go into open homes. It used to drive me nuts. So please make that note if you're a real estate agent, always look at the woman as well, not just the guy. But I think I looked at a lot of properties and I looked at the renovators and I was fearful of renovating at that point, I was like, ‘It looks too hard.’ So I did get a property that had been refurbished and I still own it to this day. It's maybe... oh look, it would have gone up by I don't know how much, but definitely more than one and a half times its value, what I paid at the time.
After purchasing this property - a block of six units in Hurlstone Park in the inner west - for $315,000, she undertook a joint venture partnership and used the funds to purchase their family home.
So we had another unit in Parramatta, that was the joint venture partnership. So we purchased that for $165,000 and my husband at the time went into another joint venture scenario, then we used the money from one of those joint ventures and I pulled out some of the equity that I had in the unit. And that's when we bought our principal place of residence, which is in the lower northern beaches.
It's funny, at the time it was $610,000 which still sounds to my ears, 10 years later, it sounds really cheap. I had to borrow $10,000 off my mum because I was only able to borrow up to $600,000. But I mean for nothing more than just sleeping for the last 10 years, we've made well over $1-$1.2 million or something on top of that, the value of that has gone up and up and up, so that's great. And we're going to use that land to do a knockdown rebuild, so I'm always on the go with those sort of personal projects behind the scenes as well.
On considering her worst investing moment, Vadillo mourns the one that got away - the property she didn’t buy.
It was around the second child had arrived, we were pre-approved, ready to buy again and had an opportunity to buy - and it actually still hurt my feelings when I tell this story. Look, it needed work but it was not falling apart, it was in Surry Hills, so you know this terrace in Surry Hills. They said we've got an offer for $570,000, so I offered $575,000. I just wanted it and said, ‘Let's just be strong,’ going, ‘Let's just get this done,’ and he said the vendors will take whoever can come in and sign the contract first. I wanted to get a pest and building report done, just because I could see there were some issues like there's a bit of damp here and there, something of its vintage but really like I said it wasn't falling apart; I’ve bought worse since. But at the time I've got that sort of, ‘Ooh, maybe this and maybe that and what about this and what about that?’ and didn't buy it. And I literally can't even look up the address on RP data. Like I would've made a lot of money in the ensuing years from buying it.
It was 2009, so I guess that was sort of early GFC phase, where the market had kind of plateaued and gone backwards in a number of different areas. I was in a good position to buy a property that would have probably made me I don’t know, $100-$150,000 a year since then, every year. So we shouldn't talk about that one. But look you know what, now I guess I know what I know now and my appetite for fear is greater. Like I'm not as sceptical, I’m not as nervous. I figured that worst-case scenario I could get, I've done some renovations now I feel like I'd be able to make a judgment call over and above a pest and building report. Not the same advice I'd give a client, but that is my own personal journey and I realise now that yeah, I would be a different person if I was buying that property today. For starters, I would have jumped in the car and driven to Surry Hills and found that contract very quickly. But it is what it is.
However, she still put her money to good use, buying several pieces of land in south-east Queensland. This would become an a-ha moment for her as she coordinated with the council to make the best of the situation.
With part of the money that I had assigned for Surry Hills, we wound up buying two properties in Logan, around south-east Queensland 20 minutes from Brisbane CBD. And I purposely bought land, the house with a large patch of land, like ones 1,500 square metres and the other’s 1,000. I knew that house would just sit there and it’ll just chug along, chug along with fine. Yield’s absolutely fantastic doesn't cost us a cent, never really has cost us any money.
But the a-ha moment with that is that one of the houses, the 1,500, it’s on a very nice street - really nice, leafy street in a relatively good area of Logan, the street behind the council it's just grassed in. Like the people who live in those houses use it, but it's not a thoroughfare street. But it could definitely lend itself to being a road and my a-ha moment would have been when I decided to speak to a couple of the other owners and then spoke to the council. And the council said, ‘If we are to tar that, if we are to build a road there as an amalgamation of owners, the council will allow us greater leniency when we go to subdivide that land.’ So whereas anyone else holding a parcel of land that's 1,500 square metres will be capped at doing say three lots, we’ll be allowed to have four lots which is another $200,000 to $250,000 per lot.
So that and the road at this point, we've got 20 people who are wanting to - sorry not 20, I wish it was 20 - 10 at this point that we've communicated to at this point our estimated costs and it's going to diminish as we reach out to more owners, will be $50,000 each. So my a-ha moment is that by going to council, by seeing that not only would they support us doing this but they'll actually give us something in return, we're looking at another couple $100,000s that we'll be able to get out of that when we go through that subdivision process. So that's not a bad a-ha moment, you kind of go, ‘Oh wow, it was worth talking to the council about that.’ So that's a 2018 project for us, to build a road.
How much time do you think you would have spent, just to talk to the council to do that?
Ah, I don't know. Look I’ll be honest, probably about 10 to 20 hours all up. Talking to other owners, talking to some town planners, getting some road quotes as well. And there’s still a bit of work to be done because I've got to just reach out to other owners and I've got access to their addresses, but a lot of those addresses are investment properties. So I've got to make sure that we get obviously everybody on board and I would hate to find out that I missed out if I was one of those owners, so I want to make sure everyone's communicated to and that's a project that we do next year.
So why would the council agree to do this? It’s a win-win situation.
I guess it’s a council expense to them and some people in those lots, they're doing battle axe subdivisions and those battle axe subdivisions cost a lot of money because you're bringing all of the services through from the main street. So if we build that road and then they've got all the benefit, all those owners are going to subdivide these 1,500 lots. They get all the subdivision costs for that, they get more tenants, they get more council rates. I kind of see it's been a bit of a win-win and it's certainly not going to put a squeeze on the area because 1,500 square meters is a large parcel of land.
Yeah, that's true. I mean when we compare it with Sydney, to get 1,500 parcels of land in Sydney is in excess of probably $1.52 million.
Yeah, you get to have flat blocks too, which is Utopia.
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So when Vadillo initially began investing in property, what held her back?
I'm trying to think of fear, I guess fear stopped me from buying in Surry Hills. And I do feel for people when I see them doing that investing, it's fear, but I really wanted to do this like I really wanted to stop building a property portfolio. Because I knew I was never going to be a multimillionaire working full time, nor do I want to work 80 hours a week to earn this crazy dollar and then never see my family. Just that was never where I saw myself going. So the only thing holding me back possibly was just my borrowing capacity as a single female at that time; that would have been the only thing that was holding me back because even today, lending is not easy at this point in time and the more children you've got, the more properties you've got, being self-employed - I think that's always going to come down to being the thing that holds people back.
To overcome her fears, she has educated herself so as to determine the worst-case scenario and be prepared before taking action.
I think to see the successes as well, I think that has made me realise that the worst-case outcome is the property doesn't double value. I'm buying in areas that relatively the value sustains quite nicely. I've seen the GFC, I think it may have almost gone down 9% - I could be wrong in that number, but it wasn't significant. So the worst-case scenario I'll lose my job and I sell the property and I've got a debt, but not crippling debt. You know it wouldn't kill me, it wouldn't break my spirit. So the worst-case scenario is especially nowadays, rental yields really severely dropped, I mean you can do short term rentals, you can do subletting, there's just so many different ways you can change things. For me to overcome a lot of that fear I got educated and as I said before, I still really am very focused on seeing other property experts speak and how they do things, I read a lot, I explore different opportunities for my clients and for myself as well.
So even though I do this all the time and I've been doing it for years, I still get something out of almost every session I ever have because it inspires me and it keeps those fires burning in my belly that I still want to continue to invest as well. So to overcome fear is to get educated and to really look at what is the worst-case outcome here? Do you have to like move into the property, is that it? Is it an area you don't want to live in, or do you sell it and therefore what would your outcome and what would the cost or loss look like? I think it's really understanding a bit of an exit strategy and then just go for it, because I think the fear of missing out on all that beautiful equity in Surry Hills is what hurt me more than anything else!
This education has been enhanced by property groups and specific mentors who have shown her how to make succeeding in property possible.
I guess Property Women being the group that I aligned myself with early in the piece and Rachel Barnes, have you ever spoken with Rachel before? But she, in her early 40s, acquired 75 properties in 64 months, which to me it was just crazy numbers. She authored a few books, she also wrote Property Is A Girl's Best Friend and she became my mentor - she was my poster child for a female who didn't come from much, she lived in a caravan until she was I think just 17 with her parents. And she's now a friend of mine but I remember my first conversation with her as I kind of walked up to her I said, ‘How do you handle it if work needs to be done? Like how do you handle 75 properties?’ And her answer was she has a $300 minimum and if anything needs more work over that then the property managers then need to ring her. But that was my one question to her and I went, ‘Oh my god, I just spoke to her!’ She's wonderful, she's a property mentor now to others and she was my first property mindset mentor and continues to be, as I said, a good friend to this day.
But I also look at a lot of successful business people and I like reading things like the BRW Rich List and things like that because everybody has got that level of wealth they’ve acquired, a lot of that does fall into property and a lot of those people are like builders who went somewhere or they're big developers and things. But I just find it very interesting how people have acquired their wealth and also how they diversified - I’m more interested these days in a bit more diversification as well, as to where I'm headed in terms of growing my own network.
Vadillo gets access to these mentors through attending conferences where they speak.
I'm a member of a business blueprint, which I think you know about them. I look at things - I read books like Tim Ferriss has got the book The Tools of Titans, the BRW Rich List. When I go to a lot of the conferences that I attend with business blueprint, they'll put speakers on, I know your podcast, I saw Chris Gray speak last week… So I'm around a space where we are talking to, well seeing speakers who have got they've got that property success as well.
I'm just interested in seeing if they've achieved a certain level as a small business owner, what are they doing with that money? Like how they grow in that, how they invest in it. So that's sort of how I’m exposed to other successful Australians as well. Obviously, there's a lot of successful Americans out there who invested as well, but I'm talking about the Australian market predominantly and that's what gets me interested the most.
Books that she would recommend for listeners to sink their teeth into including those by Scott Pate, as an example, as well as subscribing to industry newsletters to keep up to date on trends.
I don't know who started off first before me finding Rachel, I think Del Beaumont's books, The Property Millionaire series of successful female entrepreneur series, which is doing another version of next year. I like those sorts of books because I like 12 to 16 chapters with 12 to 16 people’s different stories. It's short, it’s sharp and it keeps your appetite up for hearing what someone has done as well. So they tend to be the books that I gravitate towards. I haven't read a fiction book this year because I do have a tendency of skewing myself towards - and I never would have thought this 20 years ago - that I'm finally reading Scott Pate's book, The Barefoot Investor which has been on the bestseller list for months or weeks and years and everything and I'm actually just reading that now.
So how does Vadillo filter such a high volume of information, to absorb the most important and relevant news?
Well with Property Women, because we focus so much on online education - so we get Jane Slack-Smith, Bernadette Jansen, Dominique Grubisa, a lot of those women who were quite successful in that space. I'm also looking at not just (and I'm sorry I'm skewing the female gender, but that is the target market there) I’m interested in a lot of the females who are professionals and experts in the industry as well. So I am looking to look at people who you gravitate towards, someone who is like-minded; if you see another female who has three kids or she's just divorced or she's done this, you do gravitate towards someone who lives your life or has come through what you've come through. And that means you know a difficult childhood, or raising kids on your own, or the death of a spouse or something. I find women really eat up those stories, that they really want to hear from people who have the same walk.
The best advice she has ever received is to weather the storm and do your best to avoid selling your properties.
Don't sell! Look and I have and I have had to, when I have had to it's been a joint venture scenario whereby if we didn't sell, it was family, it could have been messy and I thought it was just easier if we all jump in at the same time, we all jump out at the same time. So that was probably a year too early for the Sydney market’s craziness. And adding value and holding. So really for me, some of the best advice has been weathering the storm - during the GFC, a lot of people really struggled and people were selling properties and freaking out. You’ve just got to weather the storm.
I think for me hanging in there because it did feel what when you're in the middle of it, ‘My gosh, this is costing me money now and it's not easy and interest rates are higher and all the rest,’ but now I'm on the other side of it and I'm so glad that I did hang in there and I didn't sell our portfolio. I'm glad I didn't get scared. If you look at the patterns of economy and how properties have changed and grown over the years if you're able to hang onto those properties, hang onto them - do what you need to do to avoid - we're not talking you know, I don't invest in mining towns - but if you're in a town where all the jobs are about to dry up and you know you've got nothing going for the next 20 years, that's a different story. But I buy-in capital cities so it's a different piece of advice I would offer people there.
Vadillo’s strategy has evolved over throughout her journey, beginning as a simple buy and hold and turning into further diversification and building her family home.
Initially, it was always bought and hold, add value, use the equity and buy again. So we did that for nine properties - now we’re in a position where - I sort of touched on the fact that we might be doing this - when we do this subdivision, what we're going to actually be doing with it in terms of do we build on it and then sell it? Do we build on it and hang on to it? Because we're going to have this beautiful tax depreciation, new build and we're going to get great returns. The yields work out really strong in this particular pocket in southeast Queensland. So my strategy when I first started off, the first one was work really hard, save up the money, buy it and I got equity out of that. I actually then went and bought two other properties, again renovated those, got equity out of that and then did it again and did it again. We've also brought in our super fund as well. So that has always been our sort of traditional way of doing things.
Now we need to be a little bit savvier and mix it up a little bit and I guess come down to what we're holding on to, what we need to sell, do we sell, do we keep it? It’s all going to come down to making a massive feasibility chart to make that decision. Building our family home is going to be a very expensive, time-consuming project. So what our strategy is after that, I don't think we're going to stop. I've got property in Queensland and NSW, if I could now I'd be buying in Newcastle, I'd be buying in one of the outer suburbs in Melbourne and getting a decent sized land outside of Melbourne. I'm certainly always open to where we continue to build our portfolio, in the meantime minimise our land tax obligations as well by going interstate.
With six properties and four blocks of land within her portfolio, her interest in development has come with the change of her circumstances.
With that said I was looking at renovations last night because every now and then I look at a renovation that's been done and think, ‘Oh, that’s crazy! I could do a quick little flip like that.’ But the tax law, then the changes in the market and where we are on the property clock doesn't work and it certainly is time-consuming. So I would suggest that we are going to go down to small developments - I love dual key income and duplexes, especially a duplex where you can sell one side off if you need to and maintain the other side. I like the fact that with the changes in regulations for depreciation, then I can go through and the philosophy of clear tax benefits of doing new.
And the bigger my portfolio gets, I guess the less ongoing maintenance costs and time that drains on myself. I never thought I'd ever go down a new portfolio like buying new properties, but it’s just that merging makes a hell of a lot more sense and we found that working with a lot of clients who are interstate, they don't want the ongoing costs and maintenance of the existing property. Some people do, it depends on their personality type. Some people love it, they love that hands-on and depending on what people are after I support that. But for what I'm doing and the level of spare time that I have, I'm looking for more of a set and forget - a little bit set and forget at this point. If I'm buying, building something new and getting that tenanted and I've still got builder's warranty and I’ve still got depreciation coming through and the yield’s neutral at best, or worse I should say, that would suit me. That's what's going to set us in our time.
Discussing her involvement in the Property Women group, Vadillo says the ultimate goal of the community is to educate women on how to create wealth through property, from a woman’s perspective.
Property Women started in 2006, around the time where the seminars often had men at the helm and women learn differently; and we're also talking about a space where women were at this point of getting curious about renovating, but not going to put their hand up and talk about power tools and money in the same space. We're like 11 years on now and it was developed through a need and a call for just having that environment where you can ask the questions and not feel intimidated. Some of the women in our group have been members of the community for those 11 years and built massive portfolios from it. They’ve gained a lot of confidence from being around like-minded women, they're very supportive of each other, we also have affiliate partners so if you're looking for someone who can be trusted to look after you, we've got brokers and accountants, solicitors, buyers agents in different capital cities. So you can come to us and then look at those referral partners because you know they've been tried and tested by our members.
We've got the online education portfolio online education which is split into two different realms - one is the springboard program, which is for people who need to really get their mindset sorted, understand how to start, where to start and I guess how to just basically launch into the first couple of properties. And then for the women who are further down the path in terms of their experience, it's a portfolio accelerator program where we discuss doing joint venture partnerships no money down; doing options on properties as well and just getting into things that are moving away from just cliche, residential stuff and into that sort of small level developments. Just that next level, slightly more sophisticated investor as well. And we do workshops as well, the workshops are relatively ad hoc throughout the year and we try to get around to every capital city.
There is no obligation to become a member in order to attend workshops, receive their newsletters and check out their Facebook groups to find the support you need.
At this point you can jump onto the website and sign up to our newsletter and you'll get all that information and you can attend the workshops without being a paying member. If you want access to online education, there is a cost point for that as well. Again if you want to contact their office and say, ‘Look, I’m about to buy in Adelaide, I live in Brisbane, I really need an accountant. Can you help me out?’ We've got a really great Facebook group - one’s a closed Facebook group, another one is where people just throw questions out there, you know, ‘Do I use this or that in order to do the floors?’
What's really lovely is that it's a very supportive environment. I want women to say, ‘Hey look, I did this and I achieved that and this is the outcome,’ and we all say, ‘Yay, that's excellent!’ As opposed to how Australians downplay and I know women are quite guilty of downplaying their successes as well, so I quite like the fact that I encourage everyone also to sing their praises. I mean if you sold something you renovated and you made a 22% profit on that, come and get congratulated! It is a really nice community in that sense, but it's also some of these women are doing, like one of the members Audra I think she's doing three developments at this point. She hasn’t left her full-time job - others have actually left their full-time job and gone on to become buyers agents or brokers and they're working in that space. They are property stages now, the stage property now for sale. Renovators - renovating is a full-time job. Obviously you need to understand if you're going to do something like that, you still need to be able to service the loan in order to do the buying. So it's broad, but it really does cover all aspects of the education in that property space.
For those who aren’t aware, what are the concepts of greenfield and infill and what role does Vadillo play in this?
When you see house and land packages and new builds and they're always on big green pastures, you know 40km from the city and there's going to be you and 10,000 other people finishing at the same time, that's green fill. That's when you go and buy something and you might be waiting a long time before the demand or the growth is in that particular patch. Infill is what we will go and find a property closer to the city, where someone might have subdivided land, or there’s a really old house that can be just demolished very easily and very quickly.
You're in an area that's established, with great schools and transport and all the great infrastructure that an investor chases and then we work with a very small handful of builders that are really well trusted and being in the industry for a number of years and they will come in - and especially around South Queensland - do dual income properties for our clients, that yield 6% plus and duplexes as well. So we're very particular, we need to physically go out and inspect what that land looks like and we help right through to lock up, property management, the works. But the best thing is that's actually a service that the builder will cover our costs, as opposed to being a typical buyer agents where there is a fee for service. So our clients are loving that because they're getting a brand new property or properties and they've got all those depreciation benefits and a supported service that helps them right through to getting it managed by a great local property manager.
Wow, that's a huge point of difference. So just to clarify, that if they went and did this type of service with you, that the actual purchaser doesn't actually need to pay a fee to you but the builder covers that cost?
There’s our USP, our unique selling proposition is, ‘Hey, we're free.’ Technically we are looking after you in the same way that we would a paying buyers agent, where someone's come to look for an existing property but we find the land, we support you in terms of buying that, we deal with your broker, we deal with the solicitor, get that land purchased. Then we help you look at the contract, also work with the builder, make sure first of all that all the numbers stack up, that it's going to not have any unforeseen building cost, that's all going to be in a way that will get you a really strong yielding property.
And build times are often only half a year, so if you were to sign up this week you'd probably be looking at June 30 to have a lock-up. So the turnaround time is good and it's fast and we actually physically go and inspect those properties along the way, just to make sure everything's tracking well and you've got a regular feed of photos coming through as well so you know what's going on. Doesn't matter if you're interstate, you're going to have a great outcome in the end.
For personal habits which have contributed to her success, perseverance is the name of the game.
Look I review our portfolio a lot like I look at what's happening - you know I'm not just talking where it is, or what I rent I’m getting, I know what rent I'm getting - but if the rents haven't been reviewed, what interest rates am I paying on that particular one? So I do that quite regularly, but I think one of the habits is I'm quite tenacious and I'm a real persevere. So if someone says, ‘You can't do that,’ I will never take no for an answer. I think as a personality trait, I exercise that on a daily basis because I'm doing it for my clients as well, so it's not just about me it's also about if I’m looking for properties for people I will find other ways to negotiate and I can be quite ruthless. But my personality type really does lend itself to being I'm just naturally someone who just keeps going and going and going.
Vadillo’s big goals for retirement include a number of complex projects, such as subdivisions and knockdown rebuilds.
So my immediate goal, not for the business but for me personally, is a big subdivision project that I'm doing on two properties that will give us four parcels of land, of course, build the road that I've already referenced. So that’ll be four parcels of land and what I really need to do is discuss this in greater depth with the town planner, because the decision might be to hold it, to sell it, to do we just sell the land with the dream of the property on that and therefore, are the numbers better if we build it ourselves? So there's a whole bunch of number-crunching that is going to be taking up a lot of my headspace in the next couple of years.
My big thing for my immediate family group is that we're going to do a knockdown rebuild and I want to build a pretty decent-sized property here in Sydney. We go into homes all the time and now I get to a point where I look at existing housing stock and it's like, ‘Nah.’ So one of my big decisions now is to build it to use what it's going to look like, how we're going to utilise the land, the trees, you know all that stuff. I know I've got a battle on my hands with the council because that's potentially a flame zone of about 40, which means the costs are going to go up. All of these things are not simple little projects, they're quite significant when you're running businesses and households as well.
Personally, her goals are to spend time with her young family while she has the opportunity, with plans to travel to Europe in the near future.
One thing my husband Greg and I have a huge passion for is travel with the children as well and we've travelled quite a lot with them in the last few years. So in 2018, we're actually travelling for nine weeks in two different segments. As crazy as that might sound, it's just that point where my oldest child now is in Year Five and it's a good time to take an extended leave. And my husband was born in Spain, so we want to do Europe as well. So it holds back other things just in terms of not being present on the ground as well; I need to live and exist and breathe while my children are young and they still want to hang out with me. I don't want all this to be done and dusted and I've got this 15-year-old, who's like, ‘You've got to be kidding me, I'm not spending seven weeks with you in Europe, mum.’ I just feel as I've gotten older and I've lost friends and family, you just kind of realise that while this is all wonderful it's great to have all these projects, you still need to live and breathe and have a life - and just enjoy that journey and the journey is always going to be going for me.
So there are some pretty decent size projects and plans that I do have and we're very much like that, Greg and I, like we do look at these goals and we plan out the year in advance so we do spend some time in January several days. And it's not just about, well business planning is one thing and looking after our clients, but it's also about us as well. So what is going on? What are our plans? And give us some deadlines, because otherwise one new year becomes another new year and you're just moving over what your goals are every year and time gets away really fast.
If Vadillo were to meet herself from ten years ago, what advice would she give to her younger self?
From a property perspective, I'd say buy more in Sydney. But easier said than done - I was on maternity leave this time ten years ago and I just got married and what would I say to her? She would not have believed you, or myself whoever’s talking to who, she would not believe that she'd be working in an industry that she absolutely loved. So when my husband said to me, ‘Maybe you should look at becoming a buyer's agent and you know getting trained up in this,’ we'd actually used the services of a buyer's agent but it wasn't called that at the time - it was a very new, emerging profession in Australia. And I had my boss when I was working in marketing say, ‘You really should work in property,’ and I remember thinking, ‘I don’t want to be a selling agent, I don’t want to work Saturdays in a suit. I've got a young family now, it's not going to work.’
And to think that I was already doing pro bono as a buyer's agent work, my friends were taking me out to open homes, asking me to help with the research. I was already negotiating for the family - I was already doing the work. Now I just made it the monetary gain and the benefit to the family unit. Within 12 months my husband had finished work, he‘d quit his job to work with me full time and the business just grew and grew and grew as Sydney went crazy as well, people were missing out at auctions. So whilst we offer our full done for you service, people were saying, ‘I just need you to attend an auction because I'm going to be in Melbourne that weekend.’ There's a little bit more bespoke in terms of the service that we have offered people. They found the property but they need us to negotiate because they can't handle talking to agents about money, it freaks them out. So some people just don't like that level of confrontation as well; I find agents are fantastic mostly to work with because it's about building rapport and treating them with respect. And they want to see you get the property as well.
So I find I work with some really fantastic agents and I've built this network now that we get off-market tip-offs on a regular basis, even in the heart of Sydney going through this massive growth. And people would say, ‘Why would you ever sell an off-market property?’ Because people are private, they don't want their neighbours to come and have a sticky beak, they don't want them to know they've lost their job, that they're getting divorced. They just don’t want to have to clean the house when they’ve got six kids - for so many reasons these properties exist. They are there and it's depending on your network, if you get your foot in the door you can really get ahead of the market and get a good property.
If you’d like to find out more about Vadillo’s services and discover the right strategy for your investing journey, you can visit the company website or the Property Women website for more information.
We’ve got the two sites - so it’s www.advocateservices.com.au which is our buyer's agent service and we also buy property and land and also help people, support them during the small development builds as well. And www.propertywomen.com.au if you're looking for online education, or you just want to be a part of the greater community and sign up to receive our newsletters, then please, by all means, jump on board because the water's warm and it's all good.
This episode was produced by Andrew Faleafaga with narrations and interviews conducted by Tyrone Shum.