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Hosted By Tyrone Shum

How to Leverage Equity to buy more Property

Updated 10/08/2020

Brendan Shine is a buyer’s agent and investment consultant. His love for property has allowed him to help others acquire wealth and leverage equity through investing with his consultancy and buyers’ agency, Strategic Property Acquisitions. After realising he would never earn a sufficient income for himself working as a baker, Shine jumped into the world of property investment and where he has now purchased six houses, four duplexes, two blocks of units and one boarding house.

Join us in this episode of Property Investory to hear how Shine was inspired to get into property by his boss at the bakery, how he and his wife managed to purchase 15 properties and his worst investing moments and what he learnt from it that could ultimately inspire you along your journey!

'At the end of the day I was only ever making someone else rich. I was never going to be able to make the big piece of the pie just being a worker.'

Brendan Shine

We find out what Brendan Shine does and what his job description is.

I currently own a lawn and garden maintenance business, which I've been running till the last four years, which I have built up to 130 regular clients. But property is my passion. I've been investing in property for the last 16 years. And last year, I decided to put my experience to work full-time. And I'm in the midst of starting up the buyer's agency business—that's where strategic property acquisitions was born.

He delves into what a typical day looks like for him. 

During the week I generally try to get up around 5 in the morning. First thing I do is get my coffee machine on; I [have] got to start the day with a coffee. In my house, the first hour of my day is generally the quietest. So I try to work on my mindset. So, I listen to a podcast. Or I try to read a book—and I've always got a book or two on the go at the moment. 

And then generally around 6 o'clock, my two little girls generally wake up. And that's the end of my mindset-work for the day. And I generally help organise them with my wife, get the breakfast, get the lunches, and get them out the door by about 7:30 a.m.. And as I mentioned, I run a garden and lawn maintenance business. So, at the moment I'm working two to three days a week there.

I've got a guy working with me as well. So, I organise with him if I don't need to be there. Or I work with him and the other days I’m building up my buyer's agency business. And so I spend my other days on that. And Saturdays, I'm getting out to open homes, getting to know the local real estate agents and what not. And as opposed to the BA business, my time is spent over developing relationships with brokers and agents. 

I’ve spoken to a couple of clients so I've already gotten potential clients that I've been introduced to. So, I'm doing that. And I'm researching and doing properties on behalf of those clients and coming up with strategies and consulting on investment strategies that they may want to be doing, and looking at the trends, and I've been creating a few feasibilities. One of my clients is looking at doing a duplex, so we're just going through that process at the moment to see what it will cost—if it's worth doing or not worth doing. So, that's generally my day.

Before he was interested in property, Shine discusses how long he has been in the lawn and maintenance business for.

I've been in that business for the last four years. So, I moved back to the Gold Coast four years ago. And we had decided we'd build our family home. Then we built on the North Coast, up from the Tweed. So, I was with the builder and I had spoken to him. And I said to him I would like to work from the beginning to the end on a build just to learn all the procedures along the way. Like, I've done a lot of renovations over the year, but this one was a complete build. So, I wanted to spend the time; we had the money there, so I wanted to spend the time. And there was a delay in our starting of the build. So, I thought, ‘Well, what am I going to do while I'm waiting?’

I've done a bit of landscaping; my dad's a real keen gardener. So, I thought I'll just start my own lawns—that will keep me occupied until we start the build. Well, next thing I knew, I had 10 customers, 20 customers—and yeah, over the last four years, I've built it up to 130 customers, a full-time business. I did have two guys working with me. But as I said before, my passion really is property. So, last year I decided I'm going to change that. 

And you know, I came across and listened to a few podcasts, heard about buyer's agents and that struck a chord with me. That was something that resonated with me. So, I made a decision last June to start transitioning out. So, I'm at that stage now. I've got all my licenses. I've got my business ready to go. And I've just secured a buyer for my business three weeks ago—and hopefully that will settle next week for us—and then, we'll hit the ground running.

From Becoming A Chef And Baker To Diving Into Property

Before discussing how he found himself in property, Shine shares a bit about his upbringing.  

I grew up in a town called Laidley, an hour west of Brisbane in Queensland. It's just a farming town they have towards Gutten. So, that's where they grow a lot of your fruit and your veggies and everything. So, yeah, it was just a country town. I think it was about 15,000 people in the town.

Did you go to school around there or did you have to travel out?

There was a school there in town—about 600 people in the high school. So, I went to high school there and got my first job out there when I was at the end of Year 9; I started working at KFC. My mum decided it was time for me to get a job. So, she came home one day and she said, ‘Here is an application for KFC. It's opening up the next town across, and I want you to apply’. So, I started working there.

Mum would drop you off over there as well too and pick you up?

Yes, my mum dropped me off over there. I wasn't the brightest student. You know, I just trodded along. But, yeah, mum thought it was time for me to get a job—so I went.

Shine delves into how he got into the workforce once he finished high school. 

I started off in KFC when I was just coming up to 15. And I worked there for nearly two years. And then in Year 11 at high school, there was a traineeship offered as a chef at a campsite about 20 minutes out of town. So, I applied to that because I enjoy cooking and hospitality was something that I did well at school. So, I applied for that, and I got the traineeship out there. 

So, I did that for two years while I was still in Year 11 and 12, and I worked out there. And then after school finished, the first year afterwards, they took me on as a cook and I worked out there for another year as a cook. And then I decided I'd had enough and I wanted to move to the Gold Coast. So, I moved down to the Gold Coast and I got an apprenticeship as a baker pastry chef. I've got a bit of a sweet tooth, so I thought that would definitely suit me.

What inspired you to become a chef?

Well, my mum used to bake every Saturday. And I would be there at home, and, always, I used to enjoy doing that. And as I mentioned, I have a bit of a sweet tooth, so it was something I did well at school, and I wasn't the most academic student. But, you know, I was good with my hands. Like I said, I enjoyed cooking, so I thought, ‘Well, why not?’. At that stage, I was like, you know, ‘This is something I like’. It was never about the money or anything. It was just something that I enjoyed. So, I was like, ‘I'll pursue that’.

He goes on to explain how long he was a pastry chef after he moved to the Gold Coast, where he actually began his property journey.  

I moved down to the Gold Coast, and I worked for one place for about six months and then they shut down. So, I went to another bakery down at Kirra and, actually, that's where my whole property journey really started. I started working there with the owner, Todd, and he also was into network marketing and passive income. So, that's where he started to talk to me, you know, at one o'clock in the morning—you know, not much really to talk about, no one else was around. 

And he started talking to me about, you know, that he was also involved in network marketing and passive income and started introducing to me all these different concepts about passive income. And he was training me to be a baker, pastry chef. And there was nothing to stop me from in four years going up and opening the shop down the road and being his competition.

But, you know, if you have a passive income, or as he was in with network marketing, he could train me up, and I would be able to earn a passive and he would own a part of it. And that really just opened my mind up to a new world. So, yeah, it was working for him. He started talking about that. And that started getting my mind thinking more about, you know, there's more than just working for the money. I could see how he was living—you know what I mean? He had a very nice ute, and it wasn't due to the bakery. It was due to his passive income from the networking that he was involved with.

Shine delves into more about his previous boss, as to how he was involved in network marketing and managed to run a bakery business. 

Him and his partner own the bakery, and it was called Ocean Breeze Bakery at Kirra. So they had been running their bakery, I believe when I came along, maybe about six, seven years, and they had been introduced through someone they knew about network marketing. So, when I came along and started working in the bakery, as I mentioned, in the middle of the night, he would spend his time with a young 21-year-old, and we would talk about saving. And he started talking to me about money and putting ideas in my head. 

And after a few months, he had introduced me to reading Robert Kiyosaki, which was, you know—that was mind blowing when I started reading Rich Dad, Poor Dad and all those other books by Robert Kiyosaki. It just opened my mind to the possibilities and the different quadrants and learning that I was just an employee and, at the end of the day, I was only ever making someone else rich. I was never going to be able to make the big piece of the pie, I suppose, just being a worker.

Discovering his passion for property in such a peculiar way, Shine discusses how long he was in the pastry chef business before he eventually moved on. 

While I was in my first year as an apprentice with Todd and Tracy, the owners, there was a girl who worked out the front of the bakery. She was doing it while she was at school. And when I came along, she was just finishing school. And her name was Rhiannon, who is now my wife. So, Tracy was talking to Rhiannon at the same time, and Rhiannon was, you know, she'd been saving up money for the previous three years when I first started there, and she was ready to buy a property. 

She had read everything. She was as keen as could be to buy. So, when we started to date, I was already reading and because, obviously doing night shifts, I'd be finishing around seven, eight o'clock in the morning. I would then have the day to read. And she started uni, so I would catch up with her when she was at uni. Or sometimes, I was reading and she was really keen—so that's what really formed the propulsion. 

Within two years, we'd saved up enough money, and we knew we wanted to buy a cash flow property. That was our aim. We weren't worried about growth. You know, at that stage, I was on a limited income period. As an apprentice, you don't earn a huge amount of money. Rhiannan worked casually. So, between us, we had saved up $30,000. And one day she was at uni and she was skipping a class, you know, as uni students, and we came across Mount Isa—and I'd heard of Mount Isa, and it was a mining camp, but didn't really know much about it. And she sent me an email saying, ‘I found this house for $130,000. Four bedrooms, one bathroom, single garage and only one $127,000 for it. And the rental on it is 260’. And I was like, ‘What?’.

We had been looking for probably a good 12 months by this stage, going around Brisbane, Gold Coast, gone out sort of West back towards Ipswich—and we couldn't find something that met our criteria, our strategy. So, when we came across that, all of a sudden, we both did a bit of a deep dive into Mount Isa. And we had learned that xstrata had just come into town previous to this and was putting a lot of money into the town and that they were expanding the mines. So, we jumped in. And that was our first house. We bought that—I was only in my third year of my apprenticeship—and, yeah, we made our first house.

The former pastry chef shares with us the kinds of baked goods he would create in the bakery before he fell in love with property. 

We did the normal bread run—so, your wholemeal, your white, your multi-grain, your sweet buns. And then we also made everything from scratch in our shop, so we didn't buy anything. We made all our pies, our pastries, all the different flavoured pies. And then, just your standard sponge cakes, eclairs, jam and cream donuts. 

You know, it was a standardised sort of bakery. It wasn't a high-end bakery being right across from the beach there, Kirra. So, we got a lot of surf guys coming in, people down on the weekends, and then people in the local hotels and resorts would pop in for a croissant or a muffin. And they also made basic sandwiches and cappuccinos and everything.

leverage equity

Brendan Shine looks back at his time at the bakery and delves into where he learnt his money skills.

Working with them, to tell you the honest truth. I wouldn't work out the front much, but my wife Rhiannon, she definitely did work out there. And she definitely learnt the cost [of] things that would come in and out. But, I suppose for me, where my money skills really came from was from my parents. My parents were, you know, average people. My dad's on a disability pension as I grew up. He had an accident in the late 80s, and he was put onto the pension because he couldn't stand up for too long, couldn't sit down for too long. 

You know, we're a comfortable family. But my parents had very good money management skills and they put away their money. They knew what bills were coming up, and they would put away a bit of money every week towards those bills. That definitely was an impression on me. So, when I started working, my mum and dad gave me a little folder and they said, ‘Right, okay, you've got rego, you've got fuel, you've got maintenance of your car—if you're working now, you're going to need equipment’. So that was a very good installment in me. 

So, I started putting away my money every week. And that's how I ended up saving my money. I mean I wasn't a big party-person—and, obviously, working, I worked six nights a week in the bakery so I didn't go out a lot. So, I was able to save my money, and that's where we started off. I think we sort of got into property. And we read the fundamentals from Robert Kiyosaki and other books, and we put them into practice. And, I think, we were both very eager, and we sort of just jumped into the deep end and learnt on the go. It was really a baptism of fire. 

From The Kitchen To The Mines While Property Investing

Shine shares with us the next path he took after working in the pastry chef business. 

I did that for three and a half years. So, I was in the bank for about two years. We bought our first property, and we bought our second property within a couple of months. Our mortgage broker at the time said...well, we only put down $15,000 on the first property. At that stage, the banks were lending out money, hand over fist. So, you know, we borrowed 97%—and we rolled everything in, and it only cost us just under $15,000. So, the lender said, ‘You could buy another property’. We were like, ‘Can we?’. So, we literally went back out and looked for another property again in Mount Isa because things were starting to move. 

And that's where we bought our second property. It was a three-bedroom, one-bathroom, double-garage, a fully-renovated house. [There] was a divorce that was going through. So, it was a stunning house. That was $127,000—and at that stage, it was rented for $260 a week. So, again, it was cash flow positive. And it wasn’t a huge cash flow, but it was paying the bills and putting some money into our bank account every week.

It sounds like you were able to pick up bargains at that point in time as well.

It was. We were at the entry level of the market and, you know—my parents seeing what we were doing—and my mum was a bit cautious about it, but my dad, he was quite pleased. And he said to me, ‘Well I've got a little bit of money saved up. I'm not getting a huge interest’—and because I was always talking, ‘Oh, I want to buy another one. Property is so cheap’—so, my dad turned around and said, ‘Okay, I'll lend you $50,000, but you have to pay me up 2% higher than what I'm getting at the bank’. And I was like, ‘Okay, I can do that’. You know what I mean? Why not? It's just sitting in the bank. I was very fortunate that my dad had faith in me.

He could see what we were doing and what Rhiannon was doing. And yeah, so he helped with his own money. So, we very quickly, or about another two or three months later, we had built a very good relationship with the agents up there. And one of the agents came to us and said ‘We've got a sale’. Again, it was another divorce settlement. They just want to sell it for what they owe as the mortgage, which was $97,000. And so, we bought that. 

And about two weeks after it had gone unconditional, the agent said, ‘Would you be interested in selling it?’. And we're like ‘not really’. She goes, ‘I've got someone who's really keen. They were looking at it, but they couldn't act quick enough’. And I said, ‘Okay, well what can we get for it?’. And she said, ‘Well, I'll go talk and see what we can do’. She came back, and they offered us $129,000 and we went, ‘Sold’. 

So, in a very short period—once it settled and went through registry and everything and we were able to sell it—we were  introduced to the whole flip concept. We'd been reading Steve McKnight and other ones, you know. So, we thought we'll put that into practice. And so we sold that one. And it wasn't a huge profit on it, but, you know, it was more than a year's wage for me in the bakery. So, I couldn't complain.

Since then, how many properties would you say you've bought, sold, or even have in your portfolio at this point in time?

Over the last 16 years, I've probably had about 14 to 15 properties go through our portfolio. I currently still hold a couple of properties in Mount Isa, and we currently hold seven properties at the moment. But we started off like I said in Mount Isa when we bought the two houses, then we flipped one. And then, with that bit of money we got from that and the bit of money that my dad had lent me, I started doing more research.

And one day, while I was researching, I must have just put in houses, because that's all I thought I could afford—I didn't want a unit or a townhouse, and I must have open-searched—and it came up with blocks of units. And all of a sudden, I’d seen a house and it said, ‘One bedroom, $115,000’. I thought, ‘Oh, that can't be right’. And I went into it, and it was an old house that had been split into full one-bedroom units and it was for sale for $115,000. And I went, ‘Hmm’. I rang the agent and they said ‘Yep, that's right’. And I said, ‘How much are they renting for?’. She said, ‘$80 a unit’—like $360 a week. Yeah, so that was our next purchase. 

And that was a really big aha moment for me. It had been my reality that we could only buy houses. I didn't even dare dream that I could buy a block of units; it just wasn't in my reality. So, you know, once that happened, all of a sudden I'm like, ‘Well, if I can buy this, what else can we buy?’. So, we're fortunate we still had the money. So, a few months later we came across a bedroom boarding house.

That was $150,000. And at that stage, they were renting for about $60 and $70 a week. So again, I think it was about 25% return on our investment on that one. It was a rundown place, and we knew we were going to have to do some work to it. But, at that stage, we were like, ‘Okay, we can do this’. So, that was where we went. And about a year or so after owning those properties, I went up to Mount Isa to have a look at one of our rentals because the tenant had moved out. And then, the agent had said to us, ‘You know, it probably needs a bit of work’. And as I said, we like to jump into things. So, I decided I would go up there and put my handy skills to work, which I had never done before, but I thought, you know, why can't I do it?

I went up, and it needed new carpets and painting. And I thought, ‘Yep, I can do that’. And then, while I was up there, one of the neighbours, who was an electrician who worked up at the mines, he sort of said, ‘Would you be interested in a job up here? What are you doing?’. I thought to myself, they're not going to hire a baker. You know, I've got no skills in the mine. And he said, ‘Just write up what you've done, what you're doing’. So, I did that. And 24 hours later I got a call from a superintendent at the mines, asking me to come in for an interview. And two weeks later, I was working at the mines and I gave notice to my boss. And, yeah, I decided I would work at the mines.

At that stage, I was still dating. And Rhiannon was still at uni down there. So, obviously, before I accepted the job, we had a bit of a conversation about all that. We weren't living together at that stage. She was still living at home. I was living back with my parents. My parents had in this time bought a house down on the Gold Coast, and I moved back home to help save up my money. And, obviously, because I was working night shift, I didn't really interrupt with anyone else. 

I was sleeping during the day and then I got up at night. So, it worked quite well for us. So, I decided I would move into this one-bedroom unit of ours and I would, like I said, I would renovate while I was there. I started working in the zinc lead processing plant there. They  mined zinc and lead; it’s one of the mines up there. And, yeah, I had no clue what I was doing. But I turned up on my first day and they said, ‘Okay, you're staying underneath this machine, and you just hose the concrete’. And I did that for 12 hours.

It sounds very much like using your hands, and you've got a very strong skill set in that. It wasn't really too much of a difference except that, instead, you'd be standing there for 12 hours.

It was amazing at that stage. I think it was about 2006—they were really looking for people. So, I went onto what they called the ‘pool gang’, which is just maintenance—so, hosing up underneath the big grinding mills where they grind down the zinc from the lead so it can be processed. Doing basic repairs with things—but, yeah, I was doing that for about two weeks. And then my supervisor asked me if I'd be interested in going on shift and I'm like, ‘Well, what does that entail?’. He said, ‘Well, instead of doing Monday to Friday, you'd start working four days on, four days off, four nights on or off, and basically, you'd be working up here where they learn how to process—like grinding, floatation and all of that’. And I was like, ‘Okay’. And I got a $7,000 pay raise. I was like, ‘This is great’. 

So, I went up to just over $70,000 coming from a bakery job where I was earning about $30,000. I was wiping my hands, thinking this was the best. 

With all the properties he has invested in, he shares one of his worst property moments.

leverage equity

I would say my biggest thing I have learnt was when the GFC hit. We bought a boarding house, a share house combination. And we bought that in 2006. And while I was working at the mines, we started renovating that property. And, you know, we spent nearly $100,000 on completely gutting the place and redoing it. And at that stage, there were a lot of companies coming into town because things were going quite well with the mining industry. 

And we ended up landing a tenant who would take over the whole property. And they were an earthmoving company who had contracts with smaller mining companies. So, we had a lease with them for three years. It was set up at $104,000. It was fantastic. And next thing, the GFC hit and the company who we had, they were fine. But the smaller mining company that we were doing a lot of the work for went belly up. So, they didn't pay their invoices, which then meant he had to let go of his guys, and then, he couldn't pay the rent on the property.

That was a very big wake-up for us. We were fortunate that we had the buffer there to cover the drop in rent. Overnight, we basically lost $2,000 a week in rent. And there was no one there that we could take on. You know, a lot of the companies were scaling back down. So, it was like, ‘Okay, we really need to be aware or not take it for granted’. I think, at that stage, it was all roses. Everything was fantastic, and we were acting like this was going to be forever. And that was something that caught us out. 

So, we were fortunate that when the GFC hit, we had a buffer. We had been doing the work on the other properties. We had renovated some of those properties and we had drawn down equity. And we had sold off two of the houses and one of the blocks of units we had bought. We had cashed up. So, we were fortunate. But that was definitely a big learning curve for us, which we still hold today.

What happened to that particular property? Did you just completely ride out the wave and then all the other properties sort of helped that one out?

That's exactly right. Actually, it was nearly vacant for a year before we could. So, it sat there. It wasn't boarded up, but we had a big electric gate on the front of the property. So, that was shut off. And we used to have chairs and tables outside—because the way the property was set up, it was a big long veranda that led into eight different bedrooms. And there was a kitchen and a bathroom and a laundry in the middle of the building. 

So, we used to have tables and chairs out for the guys. We had a couple of barbecues there. So, basically, we packed everything up, shut the gate on it, and put a lock on it until we could find a tenant. We didn't want to just put individual tenants back in there because we had had a lot of trouble with that. So, we just basically decided to ride that out until it came to the other side.

That would have been quite a tough challenge. Especially when you say it was like $2,000 a week. That's almost $100,000 of income per year. 

It was a massive loss. And, like I said, we were just fortunate. Our mortgage on the property at that stage was only about $220,000. So, it was more the passive side of it that we had lost and—and we weren't living off the passive income. All the money we were generating up until then, we were just putting back into it. We didn't have kids, and we were very bullish about our property. So, basically, as the money came back out, we were growing and learning new skills; we were reinvesting. 

So, it actually turned out, when that happened, we were in the midst of building our first set of duplexes back on the Gold Coast. And we were lucky by that stage. We had moved into using a business banker. And when this happened, he said, ‘Well, you're already all pre-approved. You've got the cash buffer there. It's not going to affect you’. So, you know, there were a few nights of ‘Is this going to affect our build?’. We've got a construction loan, but we were lucky it didn't affect it. So, the rent would keep moving on. And we would ride it out until we could get another tenant in.

How to Get Rich Quick with Brendan Shine

Brendan Shine in PropertyInvestory

Brendan Shine talks about the aha moments where everything just clicked for him. 

To tell you the honest truth, my aha moment is something that is always evolving. It really is. We have been growing. Like I said at the beginning, we started off with looking for cash flow. That's what we were looking for. And then as we bought properties and we came across a multi tendency idea, our mindset grew. And that's something I've always tried to keep going—always to try to keep learning. 

The day you stop learning is the day you die. There's always new strategies out there, you know what I mean? But in saying that, once I get to know a good strategy, stick to that strategy, try to make it. Once you get to know it, it becomes simple. Don't need to complicate it, just stick to it, you know? And I've always been evolving. So, I wouldn't say I've had one particular aha moment.

I'd probably had many small moments as we've gone through. We've jumped in—and doing our first development, we just sort of jumped in and went ‘Okay’. And we learnt as we went, which then when we went to the next one, we took a lot of those of what we've learnt and applied it to the next one. And it's just continued to fold. And it's given us experience over the years to be able to come into new properties and to be able to see pitfalls straight away, which we wouldn't have picked up five years ago or 10 years ago. We agreed to it then. 

So, we've always been hands-on and learning. I love to read books, but reading books is nothing compared to actually doing it.

Adopting The Right Strategy On The Path To Success

Shine shares the kind of strategy he has adopted to help him succeed along his journey. 

Currently, we've got a good passive income sitting there. So, in the last, probably, eight years, we have started to move more towards development, trying to build chunks of cash. Again, as I said, when we first started out, it was about cash flow, and that's what we wanted. But we learnt over the years—and as our equity grew in the properties we had and when we started renovating—we could see the amount of equity we were building into the properties all of a sudden. 

And the mindset started to change too. We don't just want cash flow. Cashflow is great, but these bigger chunks will enable us to buy a better lifestyle, which, you know, having that basic income wouldn't allow us to do. In 2009, we decided we would try our hands at developing. And after much research, we found a block of land on the Gold Coast on the northern end of it.

A builder—I think there was some sort of health issue—and he had pre-approval to build a sedentary plexus three bedrooms, two bathrooms, double lockup garage on a corner. And he basically just wanted to sell it for what it had cost him. So, he offloaded that to us. We were fortunate that the agent at that stage knew a small builder and put us in contact with him. So, we ended up buying the block of land. 

That was just $300,000. And when the builder came in, he said he could build it for $345,000. And the agent had given us appraisals that we would be able to look at selling it for around $400,000 a duplex. So, at that stage, we were like, ‘Oh, those sums that up’. So, we jumped in, never doing it before. But we thought you got to learn on the go. And we learnt many things through the build—what included, what's not included. 

When we started doing it, we were on a bit of a hill, and they started building this big cutout. And I said to them ‘What are you going to do here?’. He goes, ‘Oh, that's not a part of the build. That's outside of it’. So, all of a sudden, we had to do retaining walls, which weren't included in it. So, it was a lesson, you know what I mean? Next time we knew. Just because the builder says it's going to be X… You know, they always say you got to have those contingencies, but we didn't have the full side. 

We couldn't see what would happen. You know, we knew they were going to cut the block but we didn't think, ‘Okay if they cut on the block that means you're going to have more retaining, you're going to have to do something with that’. That was oblivious to us at that stage. So, again, it was a big learning curve.

He goes on to explain how he has learnt from his mistakes by recognising them as life lessons. 

It's the little things that are hidden. We did a renovation on one of our units late 2009. And we replaced everything in the unit, cleaned it all up. But the only thing—it was a partially furnished unit—the only thing we didn't replace was the washing machine because it's only a couple of years old. It's all good. And two months later [we] got a call, the connection had busted and we had water everywhere through the place. And the washing machine had also broken down. The one thing we didn't do failed, you know. We had tiled floors. Like, it wasn't a lot of damage, but it was just funny that we've replaced everything else. Ee replaced the fridge and the oven. But the one thing we didn't replace, because it was only a few years old, was the thing that failed on us.

It's one of those lessons. And now, when we go in, if they're partially finished or renovating, we'll just sell it and we'll just replace it. So, it's all new. It's under warranty. So then, at least if something goes wrong, you've got warranties on it. Take out the extra warranty when you're buying it. When they offer it to you because, you know, as your own stuff, you know you've gotta look after it. But tenants, you know—some are fantastic and they look after everything like it’s their own. But others, they're not so concerned, they're rough. 

Things break and you can't say, well, you know you can't just point your finger and say, ‘Well, you broke the washing machine’, because it could have been faulty. But it's safer to just take that warranty out, that extra bit of warranty. And you can just ring up and say, ‘Okay, this has gone wrong. I've got the warranty’. And they'll come out and repair it or replace it, whatever it is.

Since jumping into development, he shares more of the details and whether he ever sought out consultants to help. 

In the first one, we [didn’t], because we thought we were being smart. We bought it all pre-approved; it had been through DA, the town planners, everything had been done. We were handed a set of building plans. All we needed to do was take it to a private certifier to get him to certify the building plans. We had all the working drawings. So, in a sense, we jumped a massive step of it, which, you know, we had done a whole development and built these duplexes. But we had never sourced the land and taken it through. So, in that case we didn't. 

But the next one, which we bought, we had to do a material change of use. So, we then had to hire town planners. And we went from scratch, taking it as a rural piece of land. And we liked buying corner blocks because we can always split the houses so that the houses face onto each separate street—so they look like individual houses. So, when people come down they go, ‘Oh, that's a house around the corner, that's a house’. And people get a bit more privacy, which we found was always a comment we got when people came through the house. They'd always say, ‘Oh, we thought this was a house being built. It’s so great that they're completely separate, you're not on top of each other’.

How many of these types of developments have you done so far?

We have done four sets of duplexes, and we've also done three houses now. So, we've basically done nearly one a year. So, like I said, we did our first one in [the] end of 2008 into 2009. And then, [at the] end of 2009, we bought another block for Stocklands. And then, as the GFC was hit...because Stocklands wasn't moving the blocks, they actually contacted us. And they said, ‘We have another block, which is only three lots up from yours. And the builders pulled out. We'll give it to you for what we had offered it to the builder who was 30,000 less than the previous block’. So, it was great. So, we had paid $282,000 for the first one from Stocklands and next thing, they offered the next one at $250,000 to us. 

We really wanted to do it, went to the bank, and they're like, ‘Well, you're starting to get stretched here’. And that's when I went back to Todd from the bakery. By this stage he had sold the bakery. And I said to him...because we'd stayed friends after I left the bakery and I told him what we were doing—and he said, ‘You know what, I'd love to be a silent partner in this. You guys are doing so well’. So, he came on board as a silent partner and put up 50% of the funds. So, that was our first experience into joint venture. So, we literally had two blocks. We were building on one while the other was starting to go through again. We had to do another material change of use again.

By this stage, we had a good town planner and, on board with us, my partner's father—he was a draftee, so that was fortunate for us. He designed our house or duplexes for us. So, my wife sat down with him and sort of said this is what we want. And [he] made them unique. And that was another key point we had sort of learnt after doing our first one. Because we'd bought from this other builder—we had learnt after that he'd probably done about another 15 sets of these duplexes that were identical. And, at that stage, we didn't know—we knew he was a small builder, but we didn't realise how much he had done in the estate. So, we were fortunate that we had Rhiannon’s father who was a draftee and very creative. So, she sat down with him, and they came up with designs that would suit the block.

We made it—we looked over the state forest—so we made it so each bedroom had a bit of a view. And, as I said, we split the block so that each one had their own driveways on a separate street. So, they look like individual houses. It didn't cost a lot more to make them unique, but we decided we wouldn't go with the cookie-cutter sort of design. We would make them unique. And we would aim towards the owner-occupier. And, at the end of the day, we sold each of them to an owner-occupier. 

And, actually, at that stage in 2010–2011, we actually got the highest prices for the duplexes in the estate. Most duplexes were going for around the $400,000 to $415,000, and we had achieved $425,000–447,000 over those four. So, you know, everyone was willing to pay; they valued up. I mean, you could buy a house and the estate of that stage for that same price. But they were unique, and they were a bit different. And that was their selling point.

A lot of investors just want to do the cookie-cutter process—get it over and done with. But when you actually put a little bit of detailed time, you can actually achieve a much better result than just to go with the standard stock-and-bill.

It doesn't have to cost that. And that is one thing over the years. And speaking to other people, you mean, a lot of them just go, ‘I'm just going to buy this house and land package’. But they don't consider that there's probably another 50 of those identical houses down the road. They're like buying a townhouse. What makes yours unique to the next house down the road? Why are you going to get a better price than the guy down the road? You know what I mean? You've got the same layout, the same everything. You've got a lot more competition. Whereas if they're unique, when people came in, they fell in love with it. It was different. They couldn't go out and purchase that anywhere else. 

So, for us, that strategy was that we would aim towards our own occupier. We would play on their emotions, that they would fall in love with the property. And we knew that they couldn't find that somewhere else. So, it was unique and that was our strategy with those duplexes, to aim towards that market. And it worked out at the end. We got a good price. We were very happy with it.

Shine shares more about his portfolio, and how many properties he is currently holding. 

I currently hold seven. At the moment, just on our investment side, the value would be about $2.7 million in value. And our debt ratio is about just under $2 million for everything. But then, as I said, we've always held a high ratio, so, whenever we could, we would redraw out the equity. So, we also have another $176,000 in offset accounts, which we've drawn back out of the property so that we're ready to go. So, if we find something, we're not having to go to the bank and trying to show our savings. 

We've generally got a good deposit, plus from our other developments, we've built up a good cash base to be able to fund to get things started. So, yeah, we currently sit around 80%, which is high. I suppose, for us now, we've got two little girls, we will start to bring that back. But when we were younger and we were hungry, we were happy to ride on the edge of it all.

It's really interesting. Just the reason why I ask that—because you've got passive income coming from those properties, is that right? 

That's right. So, at the moment we derive just over $4,000 a week in rental income. So, we definitely have cash flow. So, again, we've had most of these property sales. We did a few more houses back in Mount Isa in 2012 to 2014. I went back working in the mines, and we ended up doing prefab houses up there this time around. There were some blocks of land that were quite cheap, and rates were starting to go back up again. So, to build up there was taking about six months. And it was about $2,000 a square metre, which meant your house is going to cost $450,000 plus to build a basic house.

We ended up doing prefab. We found a company called Westbuilt out at Warwick. We got houses built for about $270,000 a piece. They were three- and four-bedroom prefab. They took them eight weeks to build. They brought them up on the back of their trucks. They sent their guy out two days before. And he just drilled the pier holes where the house was going to be reversed in. And they literally reversed these two pieces of the house in, dropped it down, and put it back together. And all they had to do was patch up the plaster work inside, pull out the tiles, and then our electrician would come in and install the air conditioners. And the plumber would come in and connect everything up underneath. 

But everything else was already in the house—all the kitchens, vanities, cabinetry, carpets, fans are all there. And then I would come in on my days off from work, and I had some friends that helped me. I did all the landscaping, everything. So, pretty much from the day we said, ‘Let's build this’, it took us about four months to have it complete. They would have all their side done. And then that was just me working four days on, four days off. I could have done it quicker if I just hired someone in, but I liked using my hands. 

So, I did all the landscaping, installed irrigation—because, you know, it's Northwest is quite hot up there. Again, it's going to be tenants. So, I installed irrigation systems just to make it as low maintenance for them as possible, and so that was the last fall. And we re-rent them out now to Queensland ambulance, Queensland police, school teachers; they bring them in. So, when we decided to do that, that was that strategy in Mount Isa. 

They want to bring people in. They want to give them a nicer home. A lot of the houses are quite old, and so they struggled to get people into the town. So, when they were looking for a property, they always went to new properties. So, at that stage, that was our strategy to aim towards them. And that has worked out quite well. We’ve had a Woolworths manager in one of our properties for five years. And, like I said, we've had the other services. They just basically change out their people. If someone gets transferred, they just generally put the next person in, which has been fantastic.

Despite prefab saving time and money, Shine discusses why many aren’t choosing to use it. 

Do you know, I think there was a stereotype. I know I had it myself. And when my wife first brought it up with me, you know, ‘Oh, maybe we should look at this’, I was thinking that they were going to be very simple, very basic laminate sort of style that was going to be not appealing. I was thinking old cabins—you know, you go to a caravan park and you get those little cabins, and that's what I was expecting. And when we went to our first one, and I went into the display house, I looked at it and I honestly thought there is no difference between this house here and our house at home. You know, they're both brand new. 

You have all the mod cons. You can have whatever you put into a normal house you can put into these houses here. So, in our case, once they went on site, 99% of people couldn't tell that they were prefab. They just thought it was a house that was sitting 800 up from ground. You could not tell at all.

Even though we see videos and marketing material behind it, people just don't accept prefab or take it on board as they should. But it's just fascinating. It might be a huge market here potentially to do this because it would spice things up.

I think it is. Honestly, it is fantastic. And the other side of it, where they were building our houses, I had two teams that would work basically from six in the morning till 10 o'clock at night that would come in and you could keep working. There's no wet days; there's no downtime. You know what I mean? You have them on a production line, and they just literally move them along. 

Honestly, I think until someone can see it, they then realise the quality of them. They just don't. It's just that perception that they're of lower quality—they're not going to be as high quality as a standard brick and tall house—which is not true at all.

Once you've actually profited from these developments, did you reinvest that or put that money back into the portfolio to pay it down? What did you do with those funds?

With the duplexes we did down on the Gold Coast, at that stage with the first set, we kept one. Well, actually my parents came to visit the building site we were on, and we looked over the Nerang State Forest. We were halfway down a bit of a hill, and my parents loved one of them. So, they said, ‘If you're happy, we will buy one off you’. So, we sold one to my parents. And at that stage, I had moved back to the Gold Coast due to family issues, and we were renting near Robina. And as we were progressing, we thought it would be cheaper to live in this other duplex. So, we decided to do that. 

And due to us always having investment properties, and, at that stage, the $21,000 was available as the first-time owner’s grant. My wife decided she would...because we had built it underneath a company structure. So, we sold it from the company structure to my wife in her personal name and she was able to apply for the $21,000. So, that was a great bonus to have. It was very handy. And she then took those funds and set up her own. 

She has an online travel business, which obviously today at the moment is not the best, but she set up a travel business doing travel accessories, travel products, which was a passion of hers. So, she took those funds to set up her business. But the next two lots that we did at that stage, we decided to sell them. Looking back on that now, that probably wasn't the smartest idea. With the growth in them, we should've kept them.

But at that stage, our mindset was, ‘We will build; we'll take the chunks out of it’. And so we did that. So, we took the money out, and we reinvested it. When, like I said, I had the opportunity to go back up to Mount Isa, this time I went working underground—and because I don't like sitting around on my bum. We were offered the blocks of land. We found three blocks of land in Mount Isa over an 18-month period. And we did the prefab property. So, on my days off I would be working on those properties, maintaining the other properties. We were very hands on. 

And so, we did that up until 2015. By that stage, we had our first daughter Isabella. And my wife, you know, we were struggling living out in the middle of nowhere without any family, which is completely understandable. So, we decided we would relocate back down to the coast. And it must've been the right time because I went into work to handle my notice to say that I wanted to resign. And there was a big work meeting and they said, ‘We want 200 people to take redundancies’.

I've always been a big believer that things happen for a reason. When you put it out there into the universe for whatever reason, it always comes back in some form. You know, you may not recognise it. But when I look back on it later, I’m always like, you know, we were looking for something or I was confused about something, and next thing the answer just seems to appear. 

So, we had decided to move back. My wife took some time off work. And we relocated everyone back down. And I thought at first I might do fifo, we'll see how that goes. And that lasted like two months. And that's when we decided ‘No, this wasn't working out’. So, like I said, I went in to give the notice and they put up the redundancies. And so, I had to work another two months.

That was the catch. They weren't ready for everyone to go straight away. But I took the redundancy, and I came back to the coast. And we had our block of land already down at Lambeau Heights in Northern rivers, standing on the Tweed. And so, before I left, we had whatever equity we had in our properties. I had a good income, and we got our house plans drawn up for our family home—our forever home—and got everything approved before the end of the eight weeks. And I took that. And that's when I took my redundancy as I said. 

And we had the finances behind me now. I didn’t have to go to work. But when there was a delay on starting up the build, I thought, ‘Well, I don't want to sit around again’. And that's where my lawn and garden maintenance began; it just happened. And it obviously was meant to be, and it grew.

A Mindset That Moved Brendan Shine Forward

Shine goes on to share with us his biggest driving factor for getting into property. 

As I said there at the beginning, my parents, my dad was on a disability pension, so there was never a lot of money. We were comfortable. But, as I started working, I started learning about passive income and what it could offer. It became a really big draw for me to be able to be financially able, to be able to do things that I wasn't able to do as a child. My parents weren’t able to offer that to me. 

And I wanted to be able to have that freedom—to be able to go, ‘I want to learn French’. So, I can stop, and I can go and do that. I'm not just locked into work. After all my readings and learning, it really came apparent to me that if you're going to just go to work and put your money into super, you're going to work until you're 65 or plus these days. And then your best years are gone. And then you get to retire and then you get to travel.

To me, it didn't make sense. So, my driver behind it was: I wanted the ability to have that freedom if I wanted to stop and I wanted to travel. At the very beginning, the driver was the passive income to replace my income. That was my original goal. I wanted to earn $600 a week. That was my goal, because that's what I was earning. And I was like, if I can do that, I'm set. Obviously I was young, I didn't have a lot of expenses. But that was the goal, and that was my driver. 

And then as life has progressed, we've kept growing and we've had a family now. So, now it's more about being able to provide for my family—to be able to provide for my girls. If I want to be able to send them to a better school or if I want to be able to put them into certain educational programs, I've got that ability to do it. Whereas if I was just working for ‘the man’, I have a set income. And it doesn't matter how hard and how good I work for the man. I'm still going to have that set income. 

It doesn't matter what I do. But when I work for myself or I build my property portfolio, I can earn extra money. I can create money. And every Monday morning, I know that money's going to come into my bank account, and I've only just got out of bed. And if I decide to travel—like, we were fortunate enough, we worked our tail ends off until 2009, I didn't go out at nighttime. I would be doing renovation; whatever work I could do, we did do. And we sacrificed. So, in 2009, when we sold off one of our blocks or units and two of our houses, we went traveling for three months.

Me and my wife—we went to Europe, and we had a fantastic experience. And that even pushed me further. Now that I had experienced that and I was able to enjoy that, it gave me more reason to pursue that—to be able to have the choice, which I think most people don't have. You don't have a choice. You've got to go to work. If you don't go to work, you can't pay your bill; you can't survive. That's where my mindset comes from. It's about being able to provide, to be able to give back to my parents. 

When we got married, we were fortunate enough again. We had the finances; we got married in Greece. A lot of people couldn't do that. But we enjoyed Greece so much. We went to Santorini on our first trip, and we had the money. We were able to pay for my parents to just come. My parents were like, ‘I don't know if we can afford it. But [we said] ‘It's okay, we will pay’. We were able to do that. I never would've been able to do that if I had stayed working in a bakery. It just never would have been possible. It opens so many doors.

The hard working investor talks about the kinds of mentors and resources he came across that have contributed to his success.

Do you know what we didn't, which again, looking back on it now, that would be something where I would have been able to progress a lot faster. 

We learnt on the job. We did a lot of research, but at that stage, we didn't. Like today, I'm involved with a lot of different networking groups. Matt Jones, for example. His resources are fantastic. Even though I've done developments, I go on and I listen to his different experiences and the different people that come along. I'm involved in different Facebook groups and you can ask questions. 

So, I think if I had that 10 years ago, I'd be in a different spot to where I am today. But back then, you know, me and my wife, we bounced off each other.

We worked really well together so that we were fortunate. What I lacked, she had good strengths in, and vice versa. And we learnt in the trenches. We have the mindset, and we got in hard work. And as those things arose, we would then seek the answers, or we would then ask the town planner, ‘How do you do this?’. 

One of the first ones [we] had done—our builder, he had never built a set of duplexes. And it came to the end when we were strata titling and there was an infrastructure charge of $15,000 and we were like, ‘What are infrastructure charges?’, and the builders like, ‘Oh, I didn't allow for that’. And we had to go to the surveyor and he's like, ‘Oh no, that was our cost. It's your cost of strata titling, you need to have this.’ And we're like, ‘Oh’. Again, if we had a mentor or we had someone, we would have known that. 

So, looking back on it now: Having those team players, having someone to help you, someone who's already done it, who's down further down the path, would have been fantastic. But we took our journey. We took our path. And we learnt from our mistakes. And then, we would take what we learn, and we would then put it into the next property, the next deal. And it's been a process of 16 years of learning stuff continuously. I'm always evolving and learning new things.

It's amazing what you've achieved in that period of time. I'm inspired just to hear your journey. And I think as part of that, I guess it would have been great to have the mentors there. But nothing beats having that experience as well. And you learn those things so much faster and quickly, too, to be able to apply them. 

They stick in your mind a lot stronger. And that's what I was saying earlier. You can read and read, but until it happens, it really sticks in your mind. It's a big lesson, you know what I mean? I suppose this is the impact they can have. You can read it and go, ‘Oh  that's not good’. But when it actually happens and you're in the trenches, you know what you’re going to remember for that next time. Or, that's something to really observe when I go look at the next development or next property that I’m going to rent, you know—the infrastructure that's around it. You know what I mean? 

You become a lot more aware of your surroundings. It's not just the house you're buying or building. It's the surrounding connections.

A Great Advice For Property Investors And Developers

Throughout his property investing journey, Shine reflects on the best advice he has received. 

Always try to be the small fish in the big tank. Always try to be around those elephants—even though we didn't always emulate that—and get out there. But as I evolved, in the last four or five years, I've definitely taken that advice. I've joined up with a lot of different property group and everything. And that has been the best thing I could've done because there are so many people out there that you wouldn't even realise who have done so much. 

I go to Matt Jones meetups once a month. And you meet the average person, you know, you wouldn't think of it and you start talking to them, and they're like, ‘Oh, I'm doing a 10 lot subdivision’ or ‘I'm building five townhouses’. And they're lessons, that when you start talking to them, you think ‘Oh, I didn't realise this’. And you go, ‘Oh, I hadn't thought of that before’ and ‘How did that affect you?’ or vice versa. When I'm talking to them, I give my experiences. And you get that back and forth happening.

'I started learning about passive income and what it could offer. It became a really big draw for me to be able to be financially able, to be able to do things that I wasn't able to do as a child.'

Brendan Shine

If he had some time to reflect on his past self 10 years ago, we find out what he would have said to himself. 

I probably would have said, ’Stick to the strategies that you're on at the moment’. You know, for us, we started doing some of the developments, and it became a lot simpler. You know, once we knew the rules, how to do it, and then we sort of divulged out of it like ‘No, this is too simple. Are we missing something?’. And we started looking at other things. And I think, looking back on it, if we had stuck to what we were doing, finding the blocks of lands and the duplexes, I probably would have done more. 

We started looking at other opportunities. We didn't pursue them. But there were a lot of opportunities we probably missed because we sort of went off our paths a little bit. But you know, thankfully, it didn't hurt, I suppose, our financial position when we did go off our paths a little bit.

The Combination Of Skill, Hard Work, Intelligence And Luck

So Brendan, how much of your success is due to skill, intelligence and hard work, and how much of it is because of luck?

I would really say, you know, 25%...when we went into the market in Mount Isa, even though we had learnt about strata coming in and they'd put money in it, we never anticipated that properties would grow so quickly. Houses were being sold before they even got onto real estate.com by mid to late 2005. We were lucky that we had made a lot of good connections with real estate agents up then. So, we were getting access to it. And because they knew we were ready to go when they came to the market, we got access to them. But yeah,  25% of that, you know—we couldn't forecast that. The other 75%—it really took us years on the front line, learning the process, taking actions, taking the risks, working through these things, learning how to pinpoint the properties and their potentials.

Dealing with the tenants, financial education mindset, the accounting side of things—like, we managed our properties for the first 10 years, so we dealt with all the tenants. So, you know, doing the rental tenancies and making sure that they're up to date with their rent, renewing their leases when someone moved out, and making sure that we had all that covered. And then, as we sort of moved into the development side of things: dealing with the local councils, compiling the development applications, even though we ended with the town planner, but it was still learning that process, you know, getting through that, dealing with covenants when we went in, what you can, what you can't do. So. it really has been a lot of work being in the trenches. 

Seventy-five percent really comes back down to hard work, you know what I mean? If you are willing to put yourself out there and learn, you really can succeed.

I was just going to say I haven't really heard that many people actually manage their own property. So, hats off to you because it's not easy managing your own.

Again, it was that mindset of ‘We can do it’, right or wrong.  Like now, we have property managers who look after our properties. And I deal with them, and they deal with the tenants. But at the time, we were like, ‘Why can't we do it?’ We probably lost some rent, you know what I mean? We weren't the best property managers; we weren't. But that being said, the process of it all and going through it again, it was another massive learning curve—dealing with tenants coming in, how to manage tenants' concerns or complaints. 

I mean, we had some tenants that were absolutely fantastic. And you wouldn't know that there was a problem at the house and they repaired it. You have other tenants who would ring up and complain and tell you they need an electrician to come out because the light wasn't working, and it turned out they just didn’t know where the light plug was. The electrician says, ‘Yeah, they didn't realise the light point was on the other side of the wall in the laundry’. And I'm like, ‘Really?’. But you know, again, I've been there. So, now, I suppose I have an appreciation for my property managers who will look after my properties when they're going through things. 

Again, I've been there. So, I understand what they're going through. So, you know, it's not an easy job. I think a lot of people just expect miracles from their property managers and they're just going to be able to solve everything. Sometimes, it's not that easy. 

You're dealing with people. Sometimes, better for worse, they can make your life quite difficult or they might have good jobs, but sometimes they can do the silliest things. Like the light switch [situation]: He was an engineer who worked at the mine, and he rang me and he said, ‘The light doesn't come on out the back’. And I'm like, ‘Really?’. It was a brand new house, and he just couldn't find the light switch. He was flicking a switch. He was looking for the light to come on outside. And I didn’t know what switch he was flicking, but it wasn't the light out the back. And we ended up with an electrician there.

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