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Darren Wallis Transcript

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Darren Wallis:
You know you’ve really got to take on board what the people at the coalface are saying. I think that’s what really helps make a business successful.

Tyrone Shum:
This is Property Investory where we talk to successful property investors, find out more about their stories, mindset and strategy.

I’m Tyrone Shum and in this episode, we talk with CEO of one of the world’s top residential building companies, Darren Wallis. Already on the road to success in both business and property, Wallis shares with us his take on franchising in property, how his work ethic has gotten him to where he is today and the story of his personal property journey.

Darren Wallis is the mastermind behind the incredibly successful, international residential building company, GJ Gardner Homes.

Darren Wallis:
I’m the CEO or joint partner of GJ Gardner Homes worldwide and we specialize in building new homes across Australia, New Zealand and America. We do over a billion dollars worth of sales a year, recently listed as the number five builder in Australia for detached residential construction, number one residential builder in New Zealand and in the top 95 franchises now worldwide.

Tyrone Shum:
As expected of a CEO of one of the world’s top franchises, Wallis’ schedule is busy yet different everyday.

Darren Wallis:
There is quite a bit I mean usually I’m up early at the gym, then helping the kids get off to school often and then I’m at my place to work or at the Sunny Coast here I’m at the office. Otherwise I travel quite a bit so often on a plane somewhere. Having offices throughout the world sort of thing means I have to spend a fair bit of time travelling but I’m across various different – even at GJ Gardner Holmes I am a director and founder of quite a few other companies which I oversee strategically as well.

So it depends any one day could be sitting in a board meeting with one of my other companies such as Smith & Sons Renovations and Extensions or having a strategy meeting with total fitouts or meeting with my team at corporate offices for GJ Gardner Homes. So and then certainly with our new projects underway I spend quite a bit of time, you know we’ve got our own finance division now GJ Finance so it may mean that I’m looking at some reports and helping work the strategy out for the next quarter for GJ Finance. Or more recently spending a lot of time actually setting up our new company GJ Energy which is bringing solar and battery to new homes which a lot of people are doing but we’re trying to do it in a little bit different way. We’re going to release something pretty exciting soon to the market.

Tyrone Shum:
While operating his business, Wallis works effectively in two different industries – franchising and construction.

Darren Wallis:
I mean there’s two sort of industries, I guess at a macro level I’ll look at. One is construction so you know, the ones I’ve mentioned so far in terms of you know fitouts, renovations, new homes is obviously all construction but they’re all done within the framework of franchising and I’m quite involved in franchising in a big way and you know heading down next week to talk at the Franchising Conference, the National Franchising Conference. So I’ve actually help other businesses and I’ve got equity in a few different business franchises as well. So I sort of talk across or have sort of I hope some sort of expertise across both industries.

Tyrone Shum:
Wallis grew up in Queensland and completed most of his education, including university there.

Darren Wallis:
I grew up in western Queensland. I was born in South Australia so I’m a Southerner and moved to Queensland with my family when I was around 10 years old and western Queensland so I grew up and was taught mid high school or early high school in western Queensland and then my family moved to the Sunshine Coast where I studied school on the Sunshine Coast and then did a university degree in Commerce in Brisbane at the Queensland University.

Tyrone Shum:
While university did not teach Wallis much about the operations of the real world, he does value his university education highly as it taught him the fundamentals of running a business.

Darren Wallis:
In terms of do they make you success well no, what they do do is give you a solid background to help you evaluate things. So when I partnered up with Greg would go and I had an accounting degree which was the basics of understanding accounting but then you need to apply that within the business but it helps you to quickly ascertain situations within a business and you know you can read a profit loss, you can read a balance sheet, you can understand from a financial aspect where businesses are going.

So it definitely helps. Which is why I then recently went on to finish, I just went last year completed a Bachelor of Laws at QUT which is probably slightly less helpful because there’s a lot of other law subjects involved but it also gives you a background in legal so you’re able to you know hold intelligent conversations with lawyers around what you’re doing so in both franchising and construction you’re often dealing with lawyers and different aspects and understanding different aspects of the business and how the law relates it so it’s been valuable to have that sort of background.

Tyrone Shum:
Like every other university student, Wallis worked many hours at a part-time job to support himself through university.

Darren Wallis:
I took a bit of time off I worked on a banana farm for a year prior to going to university. During university, I put myself through university by working nights at a pizza place from 10:00 at night or six o’clock in the morning back in those days, Fridays Saturdays sometimes Sunday nights. So I was like any other poor uni student out there that had to work to scrape together the fees and the living expenses just to get through university and after finishing university I was contemplating doing what I was going to do and I was offered a job as an assistant accountant with GJ Gardner Homes so I took on that role. I’ve always liked earning money so I was also doing teaching jobs, teaching piano and bits and pieces in the background. But then I became an assistant account.

Tyrone Shum:
Shortly after working as an assistant accountant for the company, Wallis was promoted and eventually ended up as co-CEO.

Darren Wallis:
It was about a year later the senior account left. I took on the senior role and then started obviously then putting the practice a lot of what I learnt at uni but then finding out the real world is slightly different and working my way through that. And then we franchised the business a couple of years after that and it was around that time we franchised that my business partner Greg offered me a partnership in the business in which I bought in.

Tyrone Shum:
After landing the role of co-CEO, Wallis and his business partner immediately started to look into franchising the business.

Darren Wallis:
It was the early 90s when I joined with Greg and you know what we did is we took – when we decided to franchise we had six regional offices and those offices, all the managers, all but one , when we talked about franchising decided that they would want the franchise for their particular area. So we went from six corporate offices to six franchise offices but we did that in the space about three months which is sort of unheard of today in franchising. And so yeah we took that from you know from basically corporate to a franchise in a few months and franchised all six offices that we had in South Queensland here and then between then and about 2000, it grew to about 20 stores and I’d sold New Zealand master franchise to a friend of mine or some friends of mine and I started helping setting up a franchise in Queensland.

And then in 2000 so we’re talking probably 18 years ago now, I was very young at the time. Greg wanted to take, my business partner wanted a bit of time off and said it is time for you to take the reins on as managing partner or CEO or whatever you want to call it. And I did that. We had about 20 stores at that point and so from then till now you know it’s sort of grown to you know fluctuates 125, 130 stores at the moment. So between Australia New Zealand and America and obviously we’re building several thousand houses a year.

Tyrone Shum:
To elaborate more on his business strategy, Wallis shares with us what it means to franchise and why it was so beneficial to GJ Gardner Homes.

Darren Wallis:
Well franchising in itself is basically the systemization of systems.

What it is all about is taking what you do and systemizing it and combining that with the brand and then building a business around that. So you know what we do is we give the skills, resources and systems to a small builder and help him become, from building anywhere between you know 5 10 20 houses a year to doing 20 30 50 100, one of our guys last year did over 180 homes. And with the franchising within the construction scene, I mean you know like you said it is a bit the same as the food industry it’s the same in that like you’re developing a brand. So there’s the market behind the brand, there’s professionalism behind the brand, the professionalism behind the marketing. You’ve got websites, you’ve got in our system you’ve got you know plan ranges of new homes, you’ve got buying power with various suppliers, you’ve got getting together as a group and then then on top of that you’ve got your system. You know we’ve got our own proprietary software system that we’ve developed over time and we’re just spending a few million dollars redoing it right now.

Tyrone Shum:
Wallis believes that the success of a business is determined by its individual smaller elements, rather than a big overarching system.

Darren Wallis:
It’s all those things combined together and what a lot of people think is they think if I just get more buying power I’m going to be successful or if I can get some more marketing I’m going to be successful. Well what is really successful in all areas and that’s whether you’re in building construction or with food or whatever or housing whatever is all the little one percenters add up. It’s not one big thing there’s no one pill that’s going to fix everything. It’s all about being better in a hundred different areas not one. So that’s why I’m quite passionate about franchising because I know what it takes in terms of developing. You got to have a marketing strategy, you’ve got to have your operations strategy you’ve got to have your IT strategy, your different strategies and systems and how it all flows together and it’s all got to dovetail in together and then with franchising you can get that with economies of scale like a small builder out can’t spend three million dollars on a software package to develop it but across 130 stores I can spend three or four million dollars on a software package to get it state of the art then that a small bullet can have the benefit of.

Tyrone Shum:
Definitely and you tap into all the amazing resources training people and you put all the best minds about it get the best result for everyone as well because it’s the system isn’t it.

Darren Wallis:
I mean that’s what we do a lot is you know a lot of focus groups within our own franchise. You know it’s stupid to try and do something from the top and push it down. I mean I know some people do but my thing is collaboration with the group so it will pull together our franchisees, will pull together the estimators or whoever is required of the system or some sort of consultation about what’s happening on the ground will pull those guys together and say okay how do we be better, how do we better support you, how do we make a better product or better service or better system to support you guys, to support the the customers or consumers, whatever it might be but it’s harnessing that the power of the people and listening and a lot of people give lip service to people but actually don’t [do it]. You know you’ve really got to take on board what the people at the coalface are saying. I think that’s what really helps make a business successful.

Tyrone Shum:
Coming up after the break, we delve into Darren Wallis’ property journey where he shares the story of his first investment property…

Darren Wallis:
Well I bought my first house at 21 but within the year too I would’ve bought my first investment property.

Tyrone Shum:
How his good work ethic has rewarded him with success…

Darren Wallis:
And I think part of what my parents certainly for me was that Dad and Mum both had an extremely great work ethic and I think that’s really important.

Tyrone Shum:
His worst investing moment…

Darren Wallis:
But you know like I turned a few hundred thousand dollars in a project down there in that it was just too highly leveraged.

Tyrone Shum:
And that’s next. I’m Tyrone Shum and you’re listening to Property Investory.

On the property side of things, Wallis is a property investor and has been enthusiastic about the industry for a long time.

Darren Wallis:
I mean I’ve always loved property. I mean when you know I basically left home you know I begged borrowed and stealed I mean property. You can’t do that now with all the credit restrictions. I remember using a credit card, borrowing 10 grand off mum and trying to put on an account where I could scrape up enough deposit to buy my first house and then repay everyone within 12 months or you know but the bank but obviously all the extra loans just to get into the property market you know because I knew that once I got in there you know I was happy to do a bit of work around the house, you know make up that house in terms of you know not a lot of money but I guess just tying it up, making it and trying to get a little bit equity in the property and it wasn’t long after that that I used the equity within that property to buy another property investment and another property which funny enough to this day, I remember paying 145 600 for a housland package in Barramundi which I thought was expensive back then. Still got that property so.

Tyrone Shum:
He bought his first investment property at 22 and has continued to build a substantial property portfolio since. He views his property investments as a long-term venture rather than anything short-term.

Darren Wallis:
My first investment property I would have been say 22.
Well I bought my first house at 21 but within the year too I would’ve bought my first investment property.

So you know every dollar was going back into thinking how I could raise enough money to get that first investment property so you know getting the equity in the current house plus saving up a little bit more to be able to afford the mortgage insurance enough to get hold of the investment property you know the nuance sort of things. And you know I built up a reasonable portfolio of investment properties over the next few years but I slowed down a bit and was doing some other things in businesses and within franchising.

But you still got a reasonable portfolio of property. I know this is Property Investory so you are looking at a lot to do with property and you know there’s certainly many ways in which you know people can make money in property and but one of the most effective on the long term and that’s the problem is I think [people want] more short term – if you can continually add on you know investment houses every couple of years. It doesn’t take that long, a few years and you’ve got quite a portfolio and you can do some really solid equity within that I mean at that point you know at some point along that time then I was able to branch out into you know, my business partner and I, we bought a block of land up in Mackay, up on the beach there and I think it was subdivided for seven blocks of land but then I put it back on one title put DA on a set of units up then and someone came along and offered me quite a bit of money for that, I paid about 300000 for I think and it made me a million and something like without actually even building the houses you know just because it was like you know a good return on that.

Tyrone Shum:
However, Wallis believes that it is not enough to just gain equity from investment properties – rather it depends on your ability to find more deals and use previous profits for future opportunities.

Darren Wallis:
I know there’s lots of seminars about how people do that sort of thing and it does happen. But what I think you’ve got to do is be like any business you’ve got to have your core base. You can’t go racing around you know thinking that’s the only deal to be had. What do you do as you got to have your basic business which is okay let’s accumulate property and then be on the lookout for these opportunities that might come along.

And if you build up a decent base and some equity within your property you have that ability to quickly take advantage of some opportunities like that that come along.

Tyrone Shum:
Wallis believes that his parents were also pivotal in setting him up for success, as he learned about property from them, and also adopted their good work ethic.

Darren Wallis:
My parents were originally farmers so like always owning property so Dad always said you know you don’t want to rent that’s waste of money always get into property so I thought I had that sort of built into me. And I think part of what my parents certainly for me was that Dad and Mum both had an extremely great work ethic and I think that’s really important.

The fact that you know you’re prepared to you know, property investing you know you’ve still got to have a job or you need some sort of business to help cashflow what you’re doing and that’s important. Obviously what you do you’re like in all those things but you need that sort of that ability you have a little bit of cash flow to do it but the believe the work ethic is, I think you know I was always up at night researching properties or you know you know when you’re you know when you’re 22 and 23 on a small probably modest salary, you’re out there looking for the deal you know spend nights just searching for property looking for the next deal. A lot of people want to go home and watch TV but I’d sit up you know and back then there wasn’t even realestate.com.au, it would have been in the paper. You know if I wasn’t studying I was looking for property or I was looking at the business.

So certainly you know that’s certainly one thing that influenced me from my parents was you know having that good work ethic.

Tyrone Shum:
The benefits of having a good work ethic is not specific to the property industry, rather important at every job.

Darren Wallis:
It’s not really property focused but you know being you know if you’re employed to work from eight to five you’re not asked to work you’re there at five or ten to eight.

If you know if you finish at five you know you’re the bloke that finishes ten past five you know because then you become known as the person that you know puts in that effort that you know and employers, now being an employer, you quickly recognize those people that will go to that little bit extra.

I mean you’re not talking about you know thousands of dollars or anything, you’re just talking about arriving to work a little bit early and making sure that when you leave, the dot doesn’t hit 5 and you race out that door, you finish what you’re doing and you get the job done and employers know those sort of things and you know that I think has held me in good stead in both what I’ve done personally but also in how I view others.

Tyrone Shum:
Wallis’ worst investment moment was when he invested in a development project that proved unfruitful during the GFC.

Darren Wallis:
I invested in some property through the GFC quite a substantial.
There’s about four or five investors that went in bought and quite a large substantial land holding in south east Queensland. And at the time, it seemed to be all good and rosy.

But in hindsight I should have been watching the signs a little bit more and basically that you know I wasn’t part of the company, I didn’t loaned the company money cause I was a little bit skeptical about the long term viability of the project. But you know like I turned a few hundred thousand dollars in a project down there in that it was just too highly leveraged. It was just a large block of land that we were subdividing terms of like four different 50 blocks like development.

Tyrone Shum:
The poor management of the project was one of the factors which made it one of Wallis’ worst investments.

Darren Wallis:
The problem was that yeah I mean I was always under the impression and that debt is good in terms of you know for construction, for housing. You know I had no problems ever whatever the bank would loan me to buy a house, I’d buy a house. Because my way of doing you know the rent coming in and whatever shortfall it’s fine.

But development a totally different story. And so once you become too highly leveraged in development and then the sales don’t come through.

All of a sudden you’re left with a bit of a hole so you know I’d invested with these guys and possibly the management structure wasn’t probably the best. I mean I didn’t personally have I guess a lot of say over a lot of things, a lot of the implementation of the strategy so definitely burned my fingers there.

Tyrone Shum:
Since walking away from the project, Wallis has learned only to take part when he understands every aspect and is able to voice his ideas and concerns.

Darren Wallis:
It got bought out you know got bought out for cents of the dollar during the GFC, the bank tried to sell it up and bought out by someone. So it wasn’t a great outcome and I just basically walked away from the project. Sometimes you just don’t worry about trying to chase old money as long as you to walk away.

So I walked away from that project, doing my day, but I learned a valuable lesson in that one, developments are totally different to residential housing and two, if you’re not in control be very careful about how much money you’re putting in and you know and sort of you don’t believe the bullshit or you know what everyone is telling you.

Make sure you know, make sure it works. You know it’s easy just listen to a somewhat a salesman I guess in terms of what’s going to happen but you know you should delve into it and make sure you understand what’s going on you know. I guess that’s a principle in investing is don’t invest in something that you don’t understand. I mean I’ve been in the construction industry long time, large developments, I hadn’t actually personally done a lot of large developments because we’re more about you know we’re risk adverse and you know we help builders build residential housing so as soon as you branch into something new, make sure you understand what you’re doing and the risks involved.

Tyrone Shum:
Wallis’ a-ha moment was when he realised his business’ success has been how he builds it up gradually and organically.

Darren Wallis:
It’s not really with property so much as within, I guess your first point about you know building a stable business, like it’s just a slow gradual increase. We’ve had you know I guess setting up in New Zealand the master franchise over there you know within three or four years we become the largest residential builder in New Zealand. So we said that was very lucrative for us.

But been more so that just gradual you know, setting up a new office have a new display home and start developing the business rather than any single one event. You know like that’s the problem with big losses. You spend a lot of time building up even carefully but you can have a loss that wipes out a lot of what you’ve done over the years.

So that’s why you know I mean everyone gets lucky every now and again and know you know I put on the right person that you know I’ve taken a franchise from you know 20 houses to 100 houses a year and you know obviously made us and him a lot of money but it’s over time it’s not one big one strategy. I mean yeah look I bought properties in Mackay for about 300 thousand, sold for a million whatever but you know that’s not something that happens consistently. What happens consistently is building that business over time or building that property portfolio over time and then waking up one day and going oh wow I’ve got 10 properties now you know never dreamt of having 10 properties but you know it’s just a gradual process along the way.

Tyrone Shum:
Goal setting has also been a huge contributing factor to Wallis’ success as a businessman.

Darren Wallis:
Greg and I, my business partner, we always joke about oh when we land and lay our first slab in America. You know we’re going to be so excited we’re going to race over there and have a massive party you know because we’d be looking forward to it. And then you know a couple of years later we’re going oh we’ve built 100 homes over there and we never had that party you know because it’s a gradual process and one thing happens after another you know it’s not really a one off event which is good. Life’s not meant to be a one off event, life is meant to be a journey and if you’re not enjoying yourself along the way well and you know don’t worry about throwing any parties.

Yeah but it’s not there’s not one sort of or in my opinion there is not one sort of end goal. There is not sort of okay when I get to this, life’s done it’s like no I want to continually improve, continually expand continually, you know do things better. At the moment I’ve set a five year goal and in about a year and I’m setting another five year goal. So are you’re constantly expanding what you’re doing and I know that’s not everyone but if you can get in the habit of just looking ahead and what can I do then your actions are focused around achieving that goal.

TyroneShum:
Wallis believes that writing down his goals and setting a time limit for them has forced him to readily take action and has also motivated him to work harder.

Darren Wallis:
So you know I’ve been a massive fan and people talk about it but I do live it in that I’ve got you know always have had spreadsheets of written goals and dates to achieve them by you know like and I look back sometimes absolutely blown away. You know there’s been times I look I haven’t looked at it for eight months or even longer periods of time where sometimes you look back and you go oh wow I wrote that down in 2012 and you know far exceeded that you know and you know I am a big big believer in the goals and putting a date on it but you know that that helps your mental. But then if you don’t put the strategies in place to achieve that then it’s called a dream you know and dream of the day but a goal with a date is like it is the goal. Now what am I going to put in place to do it. But you are but I’m still gobsmacked at the man at times I look through and go Oh shit I’d forgotten about that but I’ve actually achieved it because I wrote it down. I said I was going to do it and I’ve actually done it now you know I can.

It can make a big difference in people’s lives.

And the sad thing is we know that people all around the world have heard it but only 5 percent of people in the world or in Australia have written their own goals and dates on them. So you know we all hear it but it’s the same as like the apple a day keeps the doctor away. It’s not easy to do. That’s one of the big things that I think has had a major impact on where I am in life today anyway.

Darren Wallis:
10 percent luck, 90 percent hard work goal setting and making things happen.

Tyrone Shum:
This is Property Investory where we talk to successful property investors, find out more about their stories, mindset and strategy.

I’m Tyrone Shum and in this episode, we continue our conversation with Darren Wallis, CEO of GJ Gardner Homes, top 5 in Australia’s residential builders. Listen to this episode to discover Wallis’ personal investing strategy, how he found success with the mentorship of only books, and why goal setting has been so important for him along his property journey.

Tyrone Shum:
While Wallis has learned many things from his business partner, he believes most of his mentors have been authors from books he’s read.

Darren Wallis:
Greg and I, we’re sort of great mate as well so I did learn a lot from him in the construction side of things and you know he was big on property as well and one thing I left for him it was like trying not to sell too much property if you don’t have to. Just keep it and the property goes up [in value].

But other mentors, look I read a lot of books in those early days. You know any book I could get my hand on on property I was reading so I was sort of starting to understand I guess, I didn’t have a lot of personal mentors so much I just sort of found a lot myself. You know I went to John Burley’s boot camp in Melbourne or wherever it was. You know we used to go to a lot of properties seminars but you know I was more interested in buying their books or reading their books because I could sort of find out what their strategy was, why their strategy was what it was and then learn I guess a lot sadly from the School of Hard Knocks and in doing it you know.

So to be honest not, I don’t know. Your listeners probably want to hear that. It’s good to find a mentor and it is. In the opposite way, I’ve probably got three or four people that I’m sort of mentoring right now that they asked me to you know can we have a breakfast with you know once a month or whatever and chat about business, chat about property and of course I love giving back. But to be honest I really didn’t really didn’t have a lot of that when I sort of started out. A lot of it, I just had to learn myself part I guess a lot was through books like and I would listen again you know back to that almost like work ethic like at night time I would listen to Jim Rowan on a CD or listen to Zig Ziglar on a CD or Tom Hopkins on a CD or read a book by Robert Kiyosaki and then I read a book by John Burli, I love John Burli stuff you know I have found the application hard in Australia but I would read read books listen to stuff so I guess I was always on the hunt for information. So rather than a mentor I guess I just would seek out the information and then I would sort of sift through it and find out what was appropriate to my circumstances and then act on it in the best way that I could I guess.

Tyrone Shum:
However, in an information age where everyone can learn about everything, Wallis advises investors to consciously evaluate people’s advice before applying it to their own investment journey.

Darren Wallis:
I think it’s important point is that it’s not easy to get access necessarily for everyone to a mentor who can talk you our property because you know my thing is don’t I want to get advice from someone about money that doesn’t have more money than me so don’t go getting advice from someone that says they’re a business coach but they’re not better off than you are you know you’re better off and there’s that much resources out there in learning from people that have done it through books through tapes through the Internet through podcasts. But make sure that you’re sort of evaluating what they are saying and from where they come you know. Sadly there’s a thousand people out there will tell you how to invest in property, they’ve never done it. You know the thing is finding out someone has done it and there is plenty out there and get their resources and sort of start to mimic what they do.

Tyrone Shum:
A piece of advice Wallis has for investors is just to simply stockpile their properties.

Darren Wallis:
You know I had a friend of mine or actually an ex partner that once said that she said you don’t buy and sell properties you just stockpile them you know. My husband just collects houses.

Tyrone Shum:
When considering an investment property, Wallis typically looks for three or four bedroom homes in developing suburbs.

Darren Wallis:
Look I look mostly you know especially in the early days at properties in an area that had good public transport or reasonable public transport at least or close to shops or infrastructure that was going on.

You know schools you know just like a general sort of idea of where I wanted to invest and then I’d look at anything from three to four bedrooms because you know again I guess I read somewhere one day and it is somewhat true but I mean I know there’s other options out there but you know land appreciates, buildings depreciate so you know I’m always looking for the greatest possible piece of land with a house on it in the right area that I know that over time is going to just go up in value so I’m always looking for something. Here in South-east Queensland, there’s a new hospital being done on the Sunshine Coast.

So I’ve got a couple of properties around that area so I’ll find a nice three or four bedroom house that I know a doctor or a nurse is going to end up renting out because there will be thousands of those going to the hospital. It’s a good Iittle area. You know you’re going have consistent rent and you know over time it’s just going to go up in value. So if you’ve got the deposit or you’ve got the equity in other property buy one there is no risk towards that minimal risk investment so you buy that you leave it and away you go. You look for something else. So the majority of my investments, I’ve got a few a couple of two bedders and stuff but I would mostly look at three and four bedders on their own block of land so that… Cause I like to have that, the ability to have the land component of what I’m buying.

Tyrone Shum:
In terms of investment properties, Wallis believes the more, the better and opting to invest into undervalued properties than the vise versa.

Darren Wallis:
A couple of well I guess more waterfront I went into waterfront for a while was thinking waterfront properties are going to go up in value which they do. You know I knocked a couple of houses down, built a couple of houses but my advice around that is if you look at the returns over time in a two 500000 dollar or six hundred thousand dollar houses in a suburb are always going to have a better return rental wise than a one point two million dollar property somewhere in a bit better location.

So in my opinion and you know people look at the jump in property and I just think over time those properties will go up in the same percentages as the other property might be at the same time or whatever but the rental return along the way is better separate investment property is better. You know like okay if you want to you know build your own home to live in that’s fine knock your house down spend a couple of mil that’s fine. But know that that’s where you want to live you know but for investment purposes you know where do you want to be. You want to be access to you know 5 percent of the market or do you want to have access to potential customers which are your renters 80 or 90 percent of the market which is you know three or four bedroom houses in the suburbs. For long term growth and for investment purposes that’s to me superior.

Tyrone Shum:
Despite there being a lot of marketers in the industry, Wallis always tries to build his properties himself for the long-term.

Darren Wallis:
There’s a lot of you know marketeers I guess out there going you know these returns on these houses but honestly it’s like whether you’re a remodeling company or one of the other major building companies or a small builder, if you do it right you can buy the block of land and you can get the right price for the right house. You can build a brand new house so you got all the warranties associated and hassle maintenance hassle free of a new property and even depreciation, all those sort of things but you do it yourself. You know you don’t go through marketeers, you don’t go through you know other people you just to yourself and you know it’s a great way to start building a portfolio whether you’ve bought existing… I’m a builder I’ve bought existing but have also used my franchisees in other words I’m paying the same price as what pretty much the normal investor is paying you know because I want to show that that’s a fair I’m not going to, I’ll do it. I still build houses with them the same as what a normal investor would. And you know they’ve been great investors for me over time.

And I would build a new house every time. I mean I’ve got a couple of existing houses where there was no land and I wanted their house but for investment purposes you know you can get the right price. You know you go and you negotiate with the builder you negotiate with the land but you can easily put together a nice package that you know is a good investment for you for the long term.

Tyrone Shum:
Coming after the break, Wallis shares his go-to book recommendation for new investors…

Darren Wallis:
Richest Man in Babylon is the first book that everyone should read. I remember one year I mean I was so impressed with that book in terms of you know I read it probably a thousand times even though lesson is simple.

Tyrone Shum:
More on his habit of goal-setting…

Darren Wallis:
I mean if you’re not sending out your tasks and ticking them off as you’re doing you’re just not getting anything done.

Tyrone Shum:
And that’s next. I’m Tyrone Shum and you’re listening to Property Investory.

Wallis’ favourite investment book is the classic Richest Man in Babylon, having gotten all his friends hooked on it as well.

Darren Wallis:
Richest Man in Babylon is the first book that everyone should read.

I remember one year I mean I was so impressed with that book in terms of you know I read it probably a thousand times even though lesson is simple. One year I went and bought 20 copies and gave it to all my mates for Christmas.

I like having a fairly large Christmas party and so one year I gave one to everyone. I said here’s big pile of books anyone take a book and you’ve got to read that book.I think they thought I was mad you know. You know I that that that is one of the best books ever written in terms of for investors. And then you go to John Burley. Those books I love to read or Kizaki stuff. Og Mandino stuff, fantastic stuff, a little bit more entertaining I guess I don’t mind those books and then the application is probably a little bit more like a parable. But there was a time, I don’t know what she’s doing now but Jane Summers had some good stuff I’m remember reading her stuff back in the day.

Tyrone Shum:
For Wallis, the habit most contributing to his success is his dedication to long term goal-setting.

Darren Wallis:
Goal setting is really important. Now look I’m the same, I’m the same as everyone else like in terms of you know sometimes it’ll be a couple of months and I’ll go Oh my God haven’t even gone through and looked at my goals and read through my goals you know I guess you know your situation in life you know sometimes that becomes what happens.

But you know if I’m talking to people that are starting out in property or with medium size property investments and you want to get better you know I remember making sure you know I’d read through my goals you know at least once a week and you know like and just read through them to make them a part of what I’m doing every week. I used to set us up a Monday morning report what I call the money report with work. But yeah I’ll read my goals I’ll cross them when they’re done and then I’d set my week in motion as to what I want to achieve that week. And I mean I still do it just in a different format now I guess you know being a little busier now you know I’ve got an executive assistant that does that for me almost where we use the likes of one node or one of those things where you know I set up my tasks and what’s going to happen that week.

I mean if you’re not sending out your tasks and ticking them off as you’re doing you’re just not getting anything done. But for certainly someone relatively new or even midway through their property journey you know having I want to buy one house by this date. I want to have two houses by this date, I want to have three houses by that date and then going in weekly reading that and then putting the date against it and putting a line through it when you’ve done it. That is how you will have an impact on your life and your investments 100 percent.

I just have right now 20 pages of stuff that you know that I’ve said and done and you know like in the process of doing still now you know. I’ve got goals set till I’m 60.

Tyrone Shum:
Wow that’s amazing. Well actually I would love to ask you then. This was going to be our lead up question is What are you most excited about on your property journey over the next five years?

Darren Wallis:
Well that’s fairly easy, we want to be the number one residential in Australia. We’re number 5, I want to be number one and significantly increase into the top 10 in America builders.

So you know we’ve got a long way to go but you know we’ve set those goals but more importantly we’re setting those strategies around how to achieve that. You know that you know that sounds like a fairly lofty goal number one residential builder in Australia not everyone can do that but what you can do is start to look at you know think about what you can achieve over the next few years given where you are now. Peter Daniels is one of the great motivational speakers, an Australian guy I’ve heard him talk and read his books and you know he was a big one on goal setting everyone because there’s no use setting a goal that in one year time I want to be richer than Bill Gates.

What I would do is look at where you see it right now and set a realistic, stretched realistic goal but then be able to put the things in place as to how you can achieve that.

But don’t be afraid obviously to set you know some longer range you know exciting goals because you know if you set the right goals it’s what gets you out of bed in the morning.

Those things are what gets you out of bed in the morning you’re like okay I’m excited about the day because what I do today is going to impact on my life in you know in 10 years time and a famous saying because it’s famous because it’s my brother says you pay now or you pay later, you pick.

Tyrone Shum:
Wallis acknowledges how everyone has different goals and different ways to reach them and believes people should be more open-minded in that regard.

Darren Wallis:
So it’s either you sacrifice now or you pay the consequences later and either way, the thing is, you can’t criticize someone either way.

If you are happy to pay later then you pay later you have to sacrifice now or later that’s fine too. It’s a personal preference and like I’m not one I mean I’m happy to give anyone advice you know as crazy as it might be sometimes but I’m happy to give people advice about whether they take or not. Tell that to them and am I going to get upset because they don’t. No, not at all. That’s their choice. Because they might have different priorities in their life than me and that’s you know and that’s okay too.

Tyrone Shum:
And for those looking to contact or learn more about Wallis’ story, he is available at his company website and his own blog.

Darren Wallis:
If you’re interested in learning more about Gj Gardner Homes, have a look at our website, gjgardnerhomes.com.au or personally I’ve got a blog that doesn’t get updated all that often darrenwallis.com. Have a look at that. Otherwise yeah. Have a look on LinkedIn as well and you can see some of the things we’ve been up to and where we’re going with the business.

Tyrone Shum:
Thank you to Darren Wallis, our guest on this episode of Property Investory.

If you want to hear more about his journey, then visit our website at www.propertyinvestory.com.

Also, if you haven’t subscribed to receive your free property case studies that I only send out exclusively via email. You can text me your email address to 0499 88 10 40 to subscribe. These real case studies are from experienced property investors where they share specific numbers of their portfolio, the strategies and much more. Simply text me your email address to 0499 88 10 40 to get your free case studies. As always, thanks for listening!

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