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Property Buyer Rich Harvey Gets 14 Properties Stolen

Updated 12/07/2017

Rich Harvey grew up on Sydney’s Northshore and got a start to his portfolio fairly early. After building up to 14 properties, a bad deal with a dodgy developer left Harvey with next to nothing, forcing him to start again.

Now, having started PropertyBuyer.com, Harvey works as a buyers agent to help other investors achieve the same level success as he has. Tune in to this episode of Property Investory to hear his heart-wrenching story, how he got his foot on the property ladder, and the high’s and low’s of his journey so far.

"One of my best investments was buying a house that they were he had a granny flat attached and that was a brilliant strategy from my perspective of cash flow and growth"

-Rich Harvey

Rich Harvey grew up on Sydney’s Northshore and got a start to his portfolio fairly early. After building up to 14 properties, a bad deal with a dodgy developer left Harvey with next to nothing, forcing him to start again.

Now, having started PropertyBuyer.com, Harvey works as a buyers agent to help other investors achieve the same level success as he has. Tune in to this episode of Property Investory to hear his heart-wrenching story, how he got his foot on the property ladder, and the high’s and low’s of his journey so far.

Having started his buyer's agency business in 2001, what does Harvey actually do in any given day?

Well, it's not a day it’s science. Alright, every day is different. I mean when I started. I was on the tools a lot more I was out there researching properties. I was marketing my services just to find new prospective buyers. I was looking at properties evaluating properties. Just to see properties developing. I am doing databases I doing everything related to property and running a business. So the days, there are never enough hours in the day typically as a business owner and the other business owner like that.

The goal of Harvey’s day job as a buyer’s agent is to provide the best help for his property investing clients.

And you soon learn to get very smart not take shortcuts but just get very efficient at what you do within that to deliver a service so. And my goal is to deliver really top professional services to any high buyer or investor or sparring developer that wants to get into that property market and help them to do that in every data way.

Harvey also contributes heavily to eradicating the kind of fraudulent behaviour from the property industry that cost him so much in his own property investment journey.

That’s right I'm the president of the Real Estate Buyer’s Agent Association REBAA for short. I’ve been the president for the last two years. I also serve as the chairman of the buys at the chapter of the real estate institute Wiles audio. So both of those roles are a voluntary thing I don’t get paid for that. And then it’s just my way of giving back to the industry to help improve standards, ethics and professional practice in the industry because we are a fledgling of a growing industry and their buyer's agencies ten years ago it was not nearly as popular as it is today. And so it is the regulations and standards that still growing as we speak. So I am serving that role to help improve the practices that got businesses as well.

This passion for justice reaches all of Harvey’s clients; who quickly learn the dangers of pressure tactics and outright lies that are employed by these dodgy dealers.

It's also about transparency in the market got stung by one of those jittering marketing groups many, many years ago what I used to fly. What’s the go Kirsten you show do you want to take your run around the place and then tell you there are only two properties left and it's just signed the contract by something why you going to lose that.

You know and it's really sad to get see people gets in building to buying a major asset on the basis of just a couple of hours and pressure tactics. So that was something that really motivated me to help improve the practice in the industry.

Harvey isn’t shy when it comes to getting what he wants; which is how he managed to rebuild his portfolio after his disastrous misstep.

How do I describe myself as a property investor? A go-getter, I'm someone that's become very savvy with the property. I started at very aggressively try buying as many properties as I could once I sort of got educated. I was a very cautious investor when I started out my, my background is actually in economics and I started out that wide and used to analyse things to the end degree you know.

Make sure everything stacked out so that kind of prevented me from investing properly but once the penny dropped I got there and I went out and tried to get as safely as many properties as I could so I described myself as a there's always a learning investor I still don't pretend to know it all still a lot of simony angles to being a property investor and you know. I'm a cautious but proactive property investor today.

Growing up in an affluent part of Sydney, Harvey was blessed with a great education.

I grew up in Sydney on the Northshore and I went to a high school at the Northshore alright yeah that's, that's pretty much I just went to a public school for both primary and high school audio to a public Claire High and yeah.

Harvey fell into investing himself; striving for his own education in the industry without any outside influences.

No my parents weren't really, my parents were not investors at all. My dad was a solicitor and then became a marriage counsellor and the second half of his lost. So my parents really didn't give me much of grounding audio be fragile with the money and look to invest. I started a garden business. When I was about fourteen fifteen years old and that was my first of business and I built it up to around ten clients and it was the first business I ever sell.
It got me through university but I always had an interest in the property from an early age just looking to see that you know the property was a great where you can liberate it's a really safe investment. You know used to deliver pamphlets around and look at the houses and you know see new houses going up. They were doing renovations. I think wow would it be great to own a house one day you know I was running on my ten state bicycles and so. I think I used to read a lot of books. I used to go to a lot of seminars and, and that's the way that I got myself educated in the property.

Stemming from his own love of gardening, Harvey used his entrepreneurial skills to run his first successful business at only 14-years-old.

Oh, my dad, my dad was an avid gardener. He used to win prizes for having a wonderful garden but I just love going outdoors you know as much as I sort of use my intellect I love to use my hands as well. So I used to enjoy mowing lawns and getting gardening stuff sort for people and doing the right jobs. That's, that’s how I do that.

Beginning from a background in economics, Harvey never knew what he wanted to be as a young adult, but he was certain that he wanted to be the best in his field.

No I, I see a, I studied economics at university I did bachelor economics and then I went back and did a master's degree in economics. I was kind of funny when I was growing up I didn't really know what I wanted to be, everyone at school press pressure on you and say hey Rich what you want to be when you grow up, and it’s like I don’t know and I want to be a professional golfer or a great bookie border or great surfer or you know you got these great dreams as a kid of being a professional. You know sports star. But my golfing handy capped me and really gets down below twenty that was not going to work.

So I did economics and I quite enjoyed you know studying finance and money and how it flows and in studying investing. But I finished uni and then I went to work for the Minister for Transport for a period of time I worked there for about eighteen months as the parliamentary liaison officer. So during question time in State Parliament, whenever the minister gets asked a question; there's always somebody in the background. He's done all the research and that person was me. So I'd always be quickly handing the minister all sorts of briefings all those that sort of thing so I was a pretty amazing job to get not far out of university. It was the lowest rung in the Minister's office but it was still a great start.

From that lucky start, Harvey went on to discover the thrills and spills of property investing.

Then and then I went back to uni full time did a master’s degree finished that. And then I look for a job for a while and I got one with the Forestry Commission as The Economist. So I you know that was an interest in trees and wood forestry so I used to be there for a number of years then I switched over and I became interested in environmental economics and one of the things I used to do was to crunch numbers on valuing the environmental costs and benefits and I got a job with the E.P.A. the Environmental Protection Authority as the senior economist. And I did that for about five years so I worked on things like water pollution controls air pollution issues. The Clean Water Act and a whole bunch of other regulatory things; My job is to analyse the government, the costs and benefits of implementing new environmental regulations, but they're really good at evaluating the cost but no one is very good evaluating the benefits of environmental improvements. And so we helped to develop a whole range of techniques to do that.

So I did that for a number of years but while I was doing that. I kind of get bored for kind of just crunching numbers on a spreadsheet and I started to that's when I really started to rent my property investing journey and I'd catch the trying to work every day I'd read a book a week and get at least one seminar every couple of weeks and I'd talk to people and really want to wrap up my education. Because I figure I'll only be stuck in the rat race for the rest of my life I want to do something I really enjoy doing every day and that's really how I got on the property investment track so I started teaching people how to buy properties and when I was in government was one of the few people to pay zero tax because I was manage to buy enough properties to actually reduce my tax of income to personally zero.

And so people would you know in the age hey you pay no tax and I know it is easy you just do it this way so and I thought there’s a need to start helping people along a property investment journey.

So exactly how does Harvey do the impossible? How can you replicate his amazing feat to reduce your tax down to zero?

At the time my income wasn't that high so that was not so bad. It depends on how much tax you pay. It's all relative. You know but at the time it really evolved by about three properties three to four properties a time and you know they're fairly new properties not all brand new but some of them are fairly new. And so once you crunch the numbers on that it actually you know you feel it used to be called the two to one date. Now go that it's now called the Texas holding variation section fifteen-fifteen the tax act. So you can if you know what your tax deductions are going to be for the year. You submit a form and instead of your employer taking the tax out every week actually goes into your wages because you know it will decline back at the end of the year. So actually it gets to claim the tax one of four, not the bases which is a much better system for investors.

For Harvey, since his first property in 1993, the best strategy is to always create more equity, whether through a Granny flat, renovation or subdivision, the more properties you can buy, the better.

The first time investing was the first time after we my wife and I got married we bought a property in Canon Hills and there was a first time when I consider that still an investment even though it's on. Because that's where a lot of people start making their equity use that leverage from to invested in other things.

So we bought a very large block of land which had an old classic you know post-war auto fifty's and only forty-four top I'm on it and we were able to subdivide off the back and that was brilliant because we were able to then by subdividing building on the back of the house that really released and created a lot of equity for us to invest into other properties so that was a great way that we were able to really add value to the existing block and leverage that to go forward.

From selling his first property, Harvey was then free to build his empire incredibly quickly.

No, no we did sell out there was a principal place of residence so we absolutely do try that sold it moved into the back house. And we've since moved it into and into another house elsewhere.
So we, we didn't sell it on straight away. We just moved into the back and then we basically still time at that timeline dance for a number of years and that's when I was working in government for a period of time and realising that I had to start getting on the property investment track so we then started to buy some investment properties and yeah that's, that's how we got onto it.

A popular strategy for some investors is no strategy. Rather than a blanket goal for each property, Harvey individually analyses each purchase for the optimal way to gain wealth, and equity from it.

Yeah look I didn't really, to be honest, I didn't have a strategy when I first started I wish I did and that's what I teach a lot of people today. It's very important to come up with a very clear mandate as to what you're going to do with your property and there's no one size fits all you know your strategy is going to depend on your right status profile and your financial capacity sale. At that time I just knew that I needed to get an investment property and, and Philip the manager of the day I was you know at the time was awesome thing you know in a good area close to amenities very, very new because you can maximize depreciation. And now that's not always the case you know buying brand new means you actually buying a developer’s margin.

It made mainly you're paying a slightly inflated price and my message to investors these days is probably ninety-eight per cent of the folks in the properties are better off to buy established properties than brand new particularly when you're heading into the typically market getting off track of it.

I jump in to give you a blast alright

The first thing is I didn't really have a strategy but my strategy is definitely involved at that time from buying a simple investment property to do it right as to do in small developments.

With his eyes on the prize at all times, Harvey isn’t fazed when it comes to risky strategies to build his portfolio.

Yes, we did so we started to buy a couple of property, bought a couple of the plan and unfortunately we bought them at the right time as the market was rising it was really you know you look at the property clock and if you can ever do off the plane which is not a highly recommended strategy it is a much riskier strategy. Any time you can really possibly do it safely is when you know you're at sort of that I don't want to clock on the property clock as the markets rise because if you bought at the peak of the market you're going to have settlement risk or valuation risk which could be quite an issue. And so yeah you know so we bought a couple of those and that service does this really well and then we started buying established properties after that.

From those riskier ideas came the knowledge and experience to implement safer choices, such as renovation.

The renovations came to a lot later and once we said it. You got more experienced in doing that and the developments were well told you a story in a moment but we do we sort of look to we're doing developments a bit further down the track.

You can never be free of risk in property investing. There are always dangers in the condition of the property, in the sale-ability of the suburb, and in investing in the wrong development. Unfortunately, next, we will hear how Harvey was unwittingly taken in by a dodgy developer that almost ruined his entire life.

Okay I mean yeah a lot, not everybody gets it right. Not even the experts you know I guess through us the worst moment was when we, we bought a bunch of a couple of properties and we had a bit of equity and we were introduced through a financial plan mind you to a developer and the developer was offering my using return so we thought at the time. Naively around twenty per cent so we have that's amazing. It's all secured against property and basically we were a passive going to become a passive developer with this particular developer. So he was offering these great returns.

I guess the biggest mistake to make, that we made, was not securing and not getting enough legal advice on the top of security we had over the loan. We made into the developer. So the documentation we had was very weak and we basically invested large amounts of money with this developer and you had projects in very good areas you know there in Northbridge and rose by a and all those other areas that are really strong markets. But this developer grew way too quickly. He was incompetent in managing money and we thought you know we had the money invested there for a couple of years and we look at this money is multiplying on paper really, really well but in actual fact, we ended up losing all of that money and that was the worst possible things we take years and years to develop that.

And then you know and they kept promising us the money's coming in. Money's coming and it was always going to be coming and it never came back.

The strain of this mistake was felt by Harvey, not just in his portfolio and his wealth, but over all aspects of his life.

And so that was a very, very heart wrenching you know time and I was really difficult for marriage and other reasons. So it was a really difficult time we basically lost about seventy-eight nett is worth why investing with this developer. We at the time believed him but ended up taking most of their money. So in this appropriated funds and you know charged with fraud and what it all bunch of stuff wasn't someone we should never have been associated with so that was a very silent lesson to learn in the pains was very strong in those days.

The positive side of this horrible story is the lesson that Harvey, and you can learn from it.

So I think that the lesson was to make sure your security is secure and say we didn't have enough strings to pull money back. We weren't a joint venture, we were a passive investor in that development so we didn't have the ability to take control of the projects or do anything with it. We just handed over the money on the basis of a loan document. But we were unable to you know to get the equity back from, from the projects and they all collapsed when the developer went bankrupt. So it was a very, very difficult lesson to learn.

It is never all doom-and-gloom in property investing, each depressing low is always accompanied by an elated high that makes everything else seem unimportant.

Yeah I guess the aha moment was when I was doing a number of courses like Watson software called periodic property investment analysis and I used to play with spreadsheets all the time it was really great, great program and, and I suddenly realised that you don't need a lot of money to invest in property lot of people think you know millions of dollars to invest in property but once they. Worked out how the banks lend money in L.A. bridge works and all the tax depreciation benefits you get to actually hold the property. You know property at the time was like five or fifteen or twenty dollars a week which was I think the after tax holding cost for a good quality gross property and I went I said to my wife this is incredible look at this huge this is you can control quite a large sum of property without a huge amount of cash and as long as you can have a long term horizon you not trading the property.

Then there's a why so it was really when I went through that program and actually looked at all of the numbers how the cash flow works that was my aha moment when I realise wow, anyone can do this on a moderate income you don't have to be earning so thousand dollars a year you know to source a property. Well some people earning sixty or seventy thousand dollars a year. You know continually with financial diligence Boston really good properties and they just managed their cash flow properties that was my aha moment.

But how can you achieve that with the current market?

Everyone I get asked this question every day. You know they say well Sydney's median house Rossi's one point one million year process seven hundred fifty-two thousand acolyte possibly afford to buy and what about my kids. 

Look at the end of the day. I'm amazed at the process but you've got to look at the real right of return on money. You know you've got to factor in inflation right, inflation in generally predict two or three percent years so that you wrote the real purchasing power of money and when you look at three per cent right compounded on a million dollars It's quite easy to see how median prices do double in ten years or so. And so you know we can we could be having a conversation in ten years’ time in twenty-twenty seven you know might sound like a foreign year but you're going to come around pretty fast.

You know so we could be having a conversation and I wonder what the medium house prices in Sydney will be in twenty-twenty seven in the median you know cross.

I believe it will be significantly higher than it is today. So you've got to look at the drivers when I get you know people get scared about all can I afford to buy I can you afford not to buy is the question I come back with. So you get into the market doesn't mean you going to have to go and buy a multi-million dollar property straight off, just bought something to get you on the property ladder in a growth area in a suburb that has the right fundamentals the growth and cash flow and you do well you know I just don't buy any property to get good advice but something that's close to amenities close to transport links potentially areas that have been gentrified and you do well so you know and you don't have to buy in Sydney you know if you can if you literally can't afford to buy something then you can buy something in you know a large regional area. There are plenty of great regional areas that will provide you know good cash flow so they don't just have to be in Sydney and Centric you can consider other areas and consider the rent vesting strategy. The rent need to work and invest where you can afford to invest.

Everyone’s property investment journey goes through phases, there are times or renewal, of patience, and of quick action. Today, Harvey is ready to go through his consolidation phase.

Yeah look I mean we're also going through go through phases where you're an author of growth phase consolidation phase. Or fix up phase. At the moment I'm going through looking at my portfolio and going you know there are some properties that haven't performed nearly as well as they should have so I'm actually looking at removing those from my portfolio because if I leave them there. There's going to be what's called an opportunity cost and if I've got you know a five hundred thousand dollar property that I expect to grow it. You know six to seven percent a year but it's growing at one or two percent then I'd rather get my money out of that property the equity I have and put it into a property that's going to grow and accumulate my wealth. So I'm going through a consolidation phase and also looking at you knows keep continuing to invest good quality properties that develop some properties. Equity growth.

Although unable to share his exact portfolio numbers, it is clear that Harvey’s go-getter attitude has allowed him to quickly and easily rebuild his impressive portfolio of previous years.

I won’t share exactly the exact amounts don't have to share a couple of couple of factors of the first affected state and I don't think a lot of it. But obviously from my confidence and point of view I mean I get before, before I lost all the money that I had to develop I had actually forty properties and I'd built those up very, very quickly. Some of them had bought off plan had to get settled but we accumulated quite quickly which was great but we ended up going back to one property. And had to rebuild from there so I really had two guys that building a portfolio not, not a holly recommended method but that one that builds character and positions on real estate like when I started out with that we were just going well like I did apartments and then we progressed from there to buying houses.

One of my best investments was buying a house that they were he had a granny flat attached and that was a brilliant strategy from my perspective of cash flow and growth a lot of people say oh well if you had a granny flat and she devalued the property. I totally reject that idea. Absolutely you increase the value of the property if you look at anywhere in a metro area it's got a granny flat the highly sought after. Everybody wants the supplementary income. Even if you don't want the income you just want to audio what it literally called a granny flat then you've got that opportunity too so. Granny flats has been a really good investment for us and I always smile when I see the property statement coming in every month and showing a positive cash flow at its generating.

The phases of property investment are always presenting new opportunities for those that are prepared to grab them; and Harvey is ready and willing.

7 Steps To Generate $100,000 from Equity With Rich Harvey

So what held Harvey back from investing in property initially?

I was an economist in my past life. That is good and bad. It is good that it helps you crunch numbers very well but it is bad that you get this disease paralysis of analysis. Sometimes you look perfect getting in the way of a good team. I think a lot of investors fall into this trap, we also say with some of our clients, particularly very analytical clients like accountants or financial people that love to bottle everything. The real world is not perfect. I was really fearful, debt was the other thing. When we had our property subdivided as I have mentioned before. We then managed to pay-off the loan on the house, almost down, we had like 50 grand left to pay off. 

I was thinking, wow, isn't it great, we can almost be debt free. You have to understand the difference between good debt and bad debt or deductible debt and non-deductible debt. I think for a lot of people, they don't understand that distinction. Obviously investing in property, as long as it is a good quality property, it is good debt. You can leverage that debt into more property and greater wealth. I think a lot of people get scared of interest rates, jacking out, they hear about stories back in the early 90's when the interest rate hit seven/eight per cent. They think, oh what if that happens again. It won't happen. Interest rates, yes they will go up, but they won't go up to the same magnitude or the same degree as they did. For me it was getting over a fear of debt and it was getting through too much analysis from making a decision on something.

He says for him to overcome his analysis paralysis earlier, he ensured he educated himself thoroughly.

I read a lot of books. I went to a lot of seminars. I used to meet with a couple of other guys once a month and we'd talk about invest, like a book club, if you like. It was our investment club. We would sort of compare notes, compare ideas and share resources. That really helped me to kind of get a different perspective. 

Often in life, if we don't have anyone to bounce up against, you making decisions in a vacuum. That's why I always recommend getting good advice, not just from friends but from serious licensed professionals, is really important. Having that group really help me to expand my mindset and step out of my comfort zone and to start really investing property very well.

Even though Harvey didn’t have any specific mentors in particular, he acknowledges that he was able to learn a lot through other business leaders.

I can't remember all of their names, it was probably 20 years ago. I had a specific set of questions. It could be just a one or two line thing. That is a really good philosophy, I will adopt that. 

Some of the best advice that I have received is just manage your money well. If you look after your money well when you invest in property, properties are bit like a baby, you have to nurture it in the early years particularly. Sometimes you might buy a property that doesn't provide a positive cash flow. You want to get it to that positive cash flow position as quickly as you can so that it doesn't become a burden to hold that property. It becomes self-sufficient, self sustaining. I think the best advice that I've received is, manage your money well, be prepared and keep moving forward.

Knowing how to manage money and transform properties to create positive cash flow, Harvey says that the best kind of properties are those that provide consistent, passive income.

The first strategy for me was to deal with capital growth. There is no one size fits all. For me when I first started investing, I still pay a fair amount of tax, I was able to use the negative gearing strategy for a period of time that worked really well. I was able to buy a number of properties in high growth areas. Unfortunately the rent didn't quite cover the mortgage repayments and all the costs upholding the property. I went down a negative gearing route for a while. Once you get three or five properties doing that method then you have to realise, a lot of investors come to a screaming halt and they realise, I can't. The banks don't have any serviceability. Everything just stops. 

It often stops in business if it is just one or two properties. One of the strategies I've got is to surround myself with a really good team. I had a really savvy mortgage broker who didn't take no for an answer from a bank. I think a lot of people give up when they go to a lender and the bank says, no I am not going to lend you any more. They throw up hands and walk away. That's not me, I say to my broker, go and find another lender who is willing to lend me money. I am earning a good income, I am a safe risk. I would go and find, if the banks would lend me, I would find a second year or a non bank lender. That is the way I was able to grow my portfolio. The other thing is, you've got to have a really good accountant. They also help you with the strategy, particularly working out the way you structure your portfolio. 

He also says it’s important to get good advice from authorised professionals before going ahead.

A lot of people discuss whether they should put the property in their personal name or a company name or a trust name. Again that is a very individual thing you have to get advice on. Again, not a one size fits all. Make sure you get good advice around that. I had the broker, the accountant and the tax advisor. In terms of the specific properties. I went for, originally, capital cities. I wanted to buy in areas where there were jobs. Then I expanded my horizons to look at regional areas. There is plenty of regional areas around Australia that you can buy in. They don't all perform to the same degree and you've got to be very, very careful in the next ten years to exactly looking at where you'd put your money.

Obviously, avoid mining towns that are just depending on one or two industries. You've got to go into areas that have a number of employees in the town, a number of industries that support the local economy. My strategy was to build up some equity and then I'd do what's called some recycling equity. Once I got to $100,000 of extra equity, I'd refinance my property, pull that money into a line of credit and that would form that 20% deposit to go into another property.

Sometimes I would even do a 90% loan. I would use what's called lender's mortgage insurance and by that, it means you only need ten per cent for your next deposit and that would allow me to get two properties instead of one. Again, it depends on your agent's stage as to when you would that. Just be careful and make sure you are borrowing at a safe rate. That is a smart strategy to pay the lenders mortgage insurance, establish you to get more properties on your portfolio.

It is all about being able to leverage. Especially, as you said, once you build up to equity between 80-100, draw that out and put that into a line of credit and put that down as a deposit that helps you to leapfrog to the next property. You don't have to save that 80 to 100 thousand. It will take a very, very long time to try and save that. As soon as you pull that equity out and you buy another property. Essentially wouldn't you be buying it 100%?

Correct, you absolutely buy a 100% property. You hit the nail on the head but as long as, that is why the cash flow or the rent return you are going to get from the property is critical in your next step. You must buy in an area that has very consistent high rental demand. A lot of people that borrow 100%, then if they run into a vacancy issue, that's when they could become unstuck and have to dip into their savings or worst possible, have to sell the property under stress.

Just be careful that you can manage your cash flow. One of the things you got to do is you got to put a buffer in place. If you do have a vacancy for a month or more, you can cover it. If the hot water system blows up or an air conditioner goes, you'd be able to replace it without any stress, that's really important.

Harvey not only invested in buying property and held onto them, but he also partook in some joint ventures in small development projects. He recommends this as a good way of starting out in developing if that is your goal.

I think you've got to learn to walk before you run, that is a really important thing. Once I've developed quite an expertise in buying properties, then that's the point at which you can consider doing small developments. Don't try and do it all on your own. I look at doing joint ventures with other partners who have even more experience than me in the development field.

I just like to do small discreet things like duplexes and dual living properties. If you try and get ahead of yourself and do a 15 townhouse subdivision and you have never done one before, you can easily become unstuck. When I had enough equity safely to risk some equity into a property that even if I lost it, it wasn't going to devastate me, that's when I am happy to do that sort of development thing.

Just take small steps, like I said, don't try and do it on your own, do it with someone, do a joint venture, with someone that's got land and look for those opportunities because that is the way that you can manufacture equity at a much faster rate. I think the next ten years, as going forward, I think that's going to be one of the best ways to make money out of property. I think you'll see a lot of the investor success stories in the magazines talk about people that have created value through buying a block of land, carving it up and doing small developments, rather than just straight out buy and hold.

On the subject of diversification, Harvey believes in taking advantage of different property cycles from across Australia.

I have invested in Melbourne and Brisbane and other parts of Southeast Queensland. I think it is great to invest in those areas. For a couple of reasons, first reason is that you are taking advantage of different property cycles. Every capital city is at a different stage of the property cycle. It might be on the growth stage, it might be in the down facing stage. You can take advantage of those cycles. Not have all your properties at the same stage at the cycles.

When it comes time and eventually you are going to need to realise the equity and sell those properties. If you can sell a property that is at a peak in the market, that's a great time to sell. Another reason why I buy in capital cities is diversification for tax purposes. Your land tax threshold is dipping at every stage. In Queensland is 600,000, in New South Wales it is 472,000 and in Melbourne it is around the same number. As you accumulate more properties you are going to end up with a land tax issue. If you can minimise that by buying in other states, that's another good reason to keep on buying in other areas.

With a large volume of properties in his portfolio, he has ensured to spread his risk so as to plan for retirement.

I've set up my own self-managed super fund. Obviously there is very strict rules around what you can and can't do with that. I use a Financial Advisor to help me create a strategy for that. I am looking to add another property to that superfund very soon actually. Probably in the next few months or add another to my self-managed super fund. I have other assets in my self-managed super fund too. I think it is important to have different asset classes. 

Again, you don't want to put all your eggs in one basket. Another plan for financial planners, get a good one. That'll help you on your journey and realise that it is not the number of properties you have, it is the overall value on the equity and the quality of those properties that would determine your comfortable retirement.

So what sets Harvey apart from the rest of the crowd? He says that focus, among other daily habits, has allowed him to achieve his goals.

A classic one is eat well and exercise. I go to the gym three times a week. I play tennis. I go water skiing. I try to do things to keep my mind active. Your health is everything. You have to value your health above wealth. If your mindset is right then everything else can fly. I make sure I watch my diet, watch what I eat and make sure I keep on exercising. That certainly helps me. 

I place a lot of value on my family. They're everything to me. I think it is really important to create a legacy in your life. I think I wrote in an article the other day something about, people won't remember how much money you had or how much properties you had but they'll remember how you made them feel. They will remember your legacy more than your bank account. That is an important goal. To realise what it is all for. Is it just to get three million bucks in my account or is it because I really want to leave a legacy in your people.

I think it is really important to make sure, for you listeners, when they set goals, to set some really strong personal goals around that. Other things I'll do for success, I read a lot of books. I am a big reader, big fan, like what you are doing, is to talk to people that have been successful and get their tips. Manage your money well. Keep learning, always have an attitude of learning, attitude and gratitude. I think what I learned in university was how to learn. If there were something I didn't know or didn't understand I would get resources and learn it. That really empowers you because it is such great ability with the internet and networking these days to give the answers to the questions you have. That's what I continue to do today.

As to resources, he recommends books by Jan Somers, Margaret Lomas and John McGrath.

Just for the basic ones, Jan Somers series. I think it is called Building Wealth through Property, that's a great one.

Yes, love that.

She has written about four or five books. I really like Margaret Lomas' books, she's really straightforward communicator. John McGrath, he has written a lot of really good motivational books about real estate. Allen Pease, he talks a lot about body language and that sort of thing. What else is there? If you are looking for sales techniques, Brian Tracy is really good. Michael Gerber, the E-myth and that sort of thing is really good for growing your business. Robert Kiyosaki, Rich Dad Poor Dad for mindset. 

If you are looking for someone to do the legwork for you when buying investment properties, Harvey explains how his services can help.I started my business back in 2001 with really a goal to help people achieve their property dreams, whether that's a high or non-investment property. I saw that there was a real need to represent the buyer, sort of the forgotten party in the transaction. You got real estate agents representing the vendor but there was no one representing the buyer. What we do is, we help out buyers create what's called the ‘buyers brief’. There's really just seven steps.

The first step is to create the client’s buyer’s brief and then research the areas suitable for the client.

We create a buyer's brief and develop their strategy, that's the first thing we do. We then get research on the areas that we recommend to the buyer and that really fast tracks a lot of our investor's knowledge and we give references and examples of properties they can buy for their budget. Then the third step we do, at our end, is to shortlist properties. Over 16 years, we've built up a very extensive agent database. We can send out buyer requests to all of our network and uncover properties that are listed on the market, as well as off-market opportunities for our clients.

Next thing we do, once we've scanned a bunch of properties that fit the brief or fit the criteria. By the way, we reject a lot of those properties, like that John West Ad. We take the client's out and we look at the properties. We get some feedback from them. If there is a property there that we think fits the criteria and the client is happy to proceed on, then the fourth thing we do is a details appraisal report. We give them an estimate of what the property is currently worth in today's market. We look at comparable sales and we look at the market stats to come up with a number for the client on the property. Next step, we then start the due diligence and the negotiations phase.

They're really steps five and six go hand in hand. Due diligence means that we move on with a pest and building inspection. The Solicitor do title searches and we find out more about the history of the property. Then we work out an official strategy. We negotiate with the agent if it is a private treaty or if it is an auction, we will try and buy prior or if they can't buy prior we will attend the auction on the client's behalf and buy the property at auction up to an agreed limit. Then once we've exchanged the contracts on the property, the last thing we do is to find a local property manager and appoint that manager to look after that client's property. Collect their rent and conduct the regular inspections on the property.

Collaboration is key when devising the best strategies for his clients, to make sure that each individual’s needs are catered to.

It is really an end to end service that we offer for our client's. The average time it takes is around about 30 to 60 days. Some of them are quicker than that, some of them is a bit longer. It just depends on the volume of stock that is on the market. We certainly don't have any pressure tactics. We are all about collaborating and working in partnership with our clients to be able to achieve their property desires.
If you want to connect with Harvey, you can do so through the Property Buyer website, or give him a call.

The best way is through our website which is propertybuyer.com or they can give us a call anytime on our 1300 number, it is just 1300 655 615. On the website we have all the email addresses and the team there. We're very happy to chat with anyone any time and love to help them.

This episode was produced by Alex Cooper with narrations and interviews conducted by Tyrone Shum.

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Be the most trusted and innovative brand among the community of property developers and investors in Australia.
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