Get Results Using Property Financial Investment Analyst Tools
Property mentor, financial analyst expert and investor Brendan Kelly had a long way to go before finding his true passion for property, going through careers as a teacher, retail merchant, painter… Now he provides property investment advice and guidance for over 2,000 Australians as a part of his RESULTS Mentoring Program, so you can learn from him how to make the most out of your property investments!
Kelly will share the lessons he has learnt through DIY everything, losing time and $27,000 on a project and how failure can be a catalyst for success in the long term. Discover how you can attain the passive income you’ve been dreaming of, like Kelly, and learn to live your life to the fullest!
First, let’s explain what Kelly does as a mentor to the RESULTS Mentoring Program.
The RESULTS Mentoring Program began around, about 12 years ago now. So, in 2005. We’re 2017. So, yeah. About 12 years ago.
From those early days, Kelly is now the head of the RESULTS Mentoring Program, which aims to teach people to ‘Know WHERE to invest, WHAT to buy, and HOW to profit in any market.’
I started there as an employee through – and it was owned at that time by Steve McKnight and Dave Bradley, with Propertyinvesting.com. Within five years, along with Simon Buckingham and Tony Lambrianos, we’d actually purchased it off Steve and Dave. Through a sense of dedication, wanting to give back, making a contribution, making a change in people’s’ lives, we committed ourselves to a long-term path for doing just that. Transforming people’s’ lives.
And Kelly has certainly been transforming lives, as his past students can testify.
We had an interview or well, maybe we didn’t have an interview per se. We had a phone call. There you go. Let’s put it that way. We had a phone call from one of our earliest mentees. Kevin and Daniella Dillon. Now, they were in our first program which we called RESULTS Program One or RP1. We are now doing RP12. They came back from America and touched base with us. Called us and said hey, how about we get together? I’ll tell you what we’ve been doing.
We sat down with them and it worked out they now have 100 units. They have a $10 million portfolio with 100 units and are living an extraordinarily comfortable existence. Travelling between Australia and America, and they’ve done really, really well for themselves. They retired at the age of 28.
With over 2000 happy participants of the RESULTS program over the last 12 years, it’s undeniable that Kelly’s work really helps.
Extraordinary. It’s wonderful. To get feedback like that and an appreciation, and sense of gratitude from people who have been through the RESULTS Program, about what they’ve learned and about how they’ve changed their lives is incredibly powerful and delightful to hear, given that you kind of dedicate and have dedicated many years to exactly that path. Making a difference. It works and it works great. People love it and we do change lives. More and more people are submitting this resignation to their employers, choosing and able to choose after what they’ve been taught in the training – being able to choose a life in property investing full-time.
Kelly’s first job was nowhere near property. He was a Maths Computer Science teacher. Though, always very focused on finding his true calling in life he realized that teaching wasn’t it, so he moved on to something new.
Not quite. Nope. I lived a lifetime in a very short space. Again, at the age of 15, I started to search,
well what is life all about and what is my place on this planet? I had a very inquisitive and curious mind and wanted something that I would be happy doing for a long time. I thought that would be the path. Be happy and just be good at being happy. I had no idea what that job might be. I went on a search and lived a lot of experience very rapidly. I did the – under the guidance and direction of my parents saying teaching might be an option. I did the math science, computer science teaching. Did that for two years.
Teachers traditionally at that point, if I didn’t want to teach anymore, went out to insurance. So, I sold insurance. I did life insurance and income protection, managed funds. That sort of stuff. Then from there – but that required a lot of calls to coin. Recognized that, you know what? I’m okay face to face, but hunting people down is not my favourite. Where do you go that was that? I went to retail sales. I went and sold clothes. I went into a retail outlet as a casual employee and started my career all over again. Worked my way up the ladder there and said, you know what? People coming to me and me being able to help, that’s nice. I can work with that.
Did I think well, okay, where to now? Then I got into the paint. I worked for Tolman’s Paints and I was a store assistant there and worked my way up to a logistics manager for Tolman’s Paints, for Victoria and surrounding. Anyway, that was great and I specialized in logistics. That’s after I did my post-graduate degree in business administration. Wonderful. Then went into – okay, logistics is good. I get it. Then went into a national role for Cryeveck and became a warehouse distribution manager for Cryeveck and did that for a number of years. It was only on the back of that did I say, you know what? I’m going up the corporate ladder, that no matter where I go, no matter what company I work for, is going to lead to a path and I don’t know what I want that path. It’s deviating away from the expression of life that I want to have for myself.
In his early days, Kelly dabbled in other vehicles of wealth, such as shares and business. But the stability and passive nature of the property were always going to make it a winner in Kelly’s eyes.
I’d tried shares and I had some success, but I found it was fairly time consuming and emotionally consuming. I found that I would watch shares or I would be nervous about this, or I would have to make a decision on it because it was a lot more rapid in giving and take. While that’s exhilarating and exciting, I wasn’t necessarily making a lot of money from it and it was quite volatile. Whereas houses, I’d had a lot of success out of houses. The buy, live in, reno, what we did was great. The one after that we did was great. The renovation we did on our own home was great. I mean, there was a lot of wins in property and they just kept coming. They kept supporting financial outcomes.
I had a choice. I could diversify my attention over and mix up shares, mix up property, mix up business, or I could focus. I thought that you know what? The way that’s worked for me most in the pace that I want to live and the effort I want to put into it, houses are great. Houses are really good. I learned a lot about houses and house construction, which served me later for the more complex approaches to property that we’d taken on. I learned a lot about the timing and the market, and how to time the market, and how to make money from property. In essence, the easiest way to make money out of property is to do an add value project in a wave of growth.
Once Kelly had settled on a property, it was simply a matter of discovering what was the best way to increase its wealth creation? Renovation arrived as the clear winner in this competition.
Now the trick is, what sort of add value project? What works best? That depends on the time and the effort you want to put into it. I was at a point where in my journey, where I recognized that you know what? Making money in a wave of growth with an additional value project that I don’t have a lot of time and don’t necessarily want to put a lot of DIY into this anymore, what do I do? It’s a case of, who do you want to be in this world, what is it you want to do by way of – and if you’re in property investing – by way of property investing? What’s the stall that you want to take and what’s your strategy you individually want to take on? Then you just need to find and create the process for it to fit.
I needed to find people I wanted to play with. I needed to find houses that needed to add value and I needed to find areas that were going up. That’s all I needed to do. I would do a JV with somebody that was going to do more of the timing than I would. I was going to provide some money and the capital to do so and help them find the add value projects. Then do it in an era of growth, in which case, my time requirement for this was limited. My cash requirement was a contribution. My skill would be –
Would be applied – correct – for making the right buying decision, which is the most critical function of any property purchase. Then the money would be made. That’s the system now that I’m continuing to evolve and work with.
The beginning of Kelly’s property investment journey began with one heck of a challenge; a commercial to residential property transition.
We started out with a milk bar. Buy, live in, add value, sell. We purchased a defunct retail shop and when we got in there, the concrete slabbed in the middle of what was to be a land room, was still on the floor. We had to get the jackhammer and clean it out. Pull out all the shops where that held the bread, or do their fish and chips. It was just bizarre. The size of the block was about just under 100 square meters. It was four and a half meters wide by about 22 meters deep. That was our place. It was in Richmond. Richmond, Victoria. At the time, Richmond was going through a transition. We were in a pocket, which was residential but around some of that was industrial. It was really quite grungy but there was a lot of cafes springing up in Swan Street, which was the main strip through Richmond.
The area was in transition. People were starting to spend money to live that close, but have a lifestyle that was better. I’d done some research and I investigated prices in suburbs surrounding Richmond. I kind of figured out, created, thought up a funnel effect. Where I’d noticed that all of the suburbs around Richmond had gone up in price, but Richmond hadn’t. By default, Richmond must. You can’t have that inconsistency in price, particularly an area in transition. We bought this old residential – well, milk bar, rather. That we turned into residential premises.
In 1995, purchasing a property for $120 000 was on the dearer end of the spectrum for Kelly.
There wasn’t a lot of demand for it, but it was the top end of our budget at the time. We bought it on a 95% lend because we pretty much only had $18,000 and we squeezed a couple of grand from the folks. We managed to cover off the five per cent… Which was very exciting, but it was a shell and it was severely ugly. We did a lot of DIY. Actually, it was pretty much all DIY. We learned how to do things through experimentation. I don’t recommend it. It’s a slow and expensive way to go about learning how to do things. For example, it took me probably three weeks to sink 15 kilos of plaster into a fibrous plaster wall in order to make it smooth again, so we could paint it.
Kelly definitely learnt from this DIY experience that sometimes, time is more valuable than money. So after seven years of living in the ‘ugly duckling’ property, Kelly decided to move somewhere else better for a family.
We enjoyed it. It was an awesome place. Richmond. You could walk everywhere. It was wonderful. What we did notice about Richmond was that there’s just this black dust soot type of stuff that settles over a long period of time. It’s not clean, earthy dust. It’s just not pretty dust. Anyway, we thought, that’s probably not good for us and if we’re going to have a family, we need to move out. We were there for seven years and evolved the place, redid the bathroom at the back. Did a lot of DIY stuff. Redid the kitchen and sold it for $420,000 seven years later.
Despite the lukewarm market at the time, Kelly’s profit of four times the purchase price of the property is impressive, but that didn’t mean he knew everything yet.
Yeah. The market was – there was some growth but not a lot of growth. We bought this after the recession that we had to have when things were still pretty quiet. ’98 had some growth. Early 2000’s, not too much. The actual market itself hadn’t risen too much, but we did sell into a warmer type market at the time. That helped us as well. I did make a mistake. The guy next door knocked on my door and offered me his house for $250,000.
The opportunities that the second house presented were endless; a fact that unfortunately, Kelly only recognized in hindsight.
I said no. Again, that’s just naivety. I didn’t want to get involved in another house. If we had – and his house had more land than ours. If we had his house as well, we would have done a lot more and a lot better out of it at the time. You just don’t know these things until you think about them in hindsight.
With the two properties, Kelly could have easily redeveloped the site, but he pushed on with the equity of his first property to continue his property investment journey.
You would redevelop it and we would probably put four flats on it now. Which, you could do in that pocket. You can buy an $800,000 property now in Richmond. Do I regret the sale? No. I valued the equity that I was able to put in the bank and that let us be able to go again.
From there Kelly moved forward without looking back; picking up properties and improving them quickly became his best strategy.
Yeah, it wasn’t that far afterwards. We did a negatively geared buy a whole in Ivanhoe for the purpose of riding a wave of growth. Again, the market had – in 2003/2004, we had some 11% I think, interest rates. So, fairly high. That drove the market down a little. We were able to buy and sell in a two-year time frame. We bought for $228,000 in Ivanhoe. Sold for $328,000 two years later with a $5,000 spend. We were pretty happy with that as an outcome. Then I started on other deals. I went out to Yarraville and Kingsville, out west. Bought a couple of places out there. Yeah, just kept going.
Kelly’s next plan was to build up his portfolio enough to create the passive wealth-income that would allow him to retire and live the life he always wanted.
My goal was always to have a passive income that allowed me to free up my time. Allowed me to spend my time with my kids, spend my time with my wife, and give us certainty in our financial well-being for the rest of our life. That’s always been my objective. I still live to that. There’s also the capacity in sharing the knowledge. I choose the mentoring. I choose to do the mentoring because it is a form of expression. Now again, what do I mean by that? I’m a bit of a believer that everybody’s put on the planet to do something and a lot of people lose that sight of something in just doing the do.
Money allows you the freedom to do something that you believe you were put on the planet for. To choose something that you want to do as an expression of who you are. On your gravestone, what do you want to be written there about who you were and the life that you lived? Another one bites the dust isn’t what I wanted to have on my gravestone. I wanted an expression or something – a presence, a mark. A give back, a give something that was unique from me to the greater good. I still live to that passion and only through having cash, revenue, a comfortable lifestyle, not needing to worry about money. Do you really get to live that? Giving back by a way of the RESULTS Mentoring Program, by way of education, by way of sharing wisdom and knowledge, and helping people not to make the mistakes I made. To get it right, to do it quickly, more efficiently. That’s the expression of life I want to live.
Kelly’s worst investing moment was, as he’ll explain was a result of his own young foolishness, and although it cost him; he certainly gained a lifelong lesson from it.
I bought two properties in quick succession. One on a long settlement. The intent was to do a buy, reno, sell, take the money from that, do a buy, reno, sell. While I was still employed, I had my logistics job, I used the fact that I was employed to secure those loans, which was great. My first one, I had six months, seven months. It was bought, reno, put on the market, and then move into the next one in a six-month time frame. I thought yep, still nine-foot-tall and bulletproof, not yet too scarred. I thought I could DIY the whole process.
So, I started it. I gutted it. I didn’t take away too much, not really. Did I find problems in the property that I didn’t expect? Yes. There was – I took out the bath and I found that the bathroom wall was being suspended by the roof.
Keeping to his trademark DIY style, ended up taking more of Kelly’s time than he could really afford.
Yeah. You could push the studs or the stud at the bottom where the bath was and the wall would swing in the wind. I had to do a bit of repair work on that. Which took a little bit of time, but I did that. Anyway, DIY the whole thing. My three-month reno project took nine months. The dilemma about having a three-month project go nine months when you’ve got a house you need to settle on is that you actually couldn’t settle on. I had to walk away. I lost the deposit and I was just too ambitious so, I stumbled by tripping over my own arrogance so to speak. In my early days and recognized that okay, we need to recover and repair.
Losing the $27,000 on this project was just another hit in Kelly’s worsening situation.
The two problems since succession – again, this was fairly early days. It not only affected the pool of cash that I had available because the reno that I did that took nine months, I put back on the market and the market was in decline. I actually lost money on that as well. Those two hits and I did so while not earning an income. Living for that period of time, taking a hit on one sale didn’t work, and having to walk away from another purchase because I’d not done the work I needed to do by the time I needed to do it, collectively really affected my confidence. It affected the hip pocket, but it affected confidence.
In that, there was – okay, great. Well, I need to recoup and play the game differently. That was a really, really powerful shift for me. Arrogance kind of got whacked out of me.
With the arrogance of youth gone and an uncertain future ahead, Kelly began on the path that would be his mission in life; helping other property investors through the RESULTS Mentoring Program.
It was the point where you get hit in the head and you go okay, well a shift needs to occur here. I need to learn from these lessons and not repeat. I’d established a relationship with Dave Bradley and Steve McKnight during that phase. My teaching qualifications, the fact that I was out there pulling the trigger and making things happen, the fact that I was entrepreneurially my spirit, that I was able to learn, and more than anything I guess, able to teach people what not to do and how not to make that mistake, seemed to inspire them to say, you know what? I think Brendan can make a contribution to the RESULTS Mentoring Program.
I was the lead in the RESULTS Mentoring Program for RP1 when it started in 2005. It was really – there was a certain amount of towel between my legs around that. If I can be so bold as to suggest it. I had to say, you know what? If I can be so bold – I failed. I had intended to do this, I failed and it had caused me and my family some anxiety and I needed to go back to work. It was the time that Steve and Dave had decided to do the RESULTS Mentoring Program and I started with them as the first mentor.
Upon finding his feet as a RESULTS mentor, Kelly eventually gathered the courage to begin his own journey again. But he knew that this time things would be different.
It took a while, I don’t deny that. I then started to get into different deals where I was… with people. The mentoring was a contribution, an expression of who I wanted to be and I was enjoying that. It was then, okay well, what now? As an evolution then into, I needed to do deals that weren’t so time-intensive, deals that weren’t DIY because I was doing what I was doing as a mentor, and was building my expertise through sharing my experience and having others share their experience with me. Took on a buy, reno, subdivide, one into three. Which worked out great and that was in Werribee.
For those unfamiliar, a buy, reno, and subdivide to three is an enormous amount of work to undertake.
Yeah. It was an acre block with a large house on it, which we renovated and then subdivided off the tennis court and a large yard, and sold three separate blocks out with a renovated house on one of them.
It seemed that this taste of developing was only the beginning for Kelly, who would use his new skills to do joint ventures.
Then from there, we started to work into developments and do JV’s. Now as I said, we are doing commercial developments.
Kelly’s property investment journey was, and continues to be, filled with ah-ha moments, and his most treasured ones come from his work as a mentor.
It’s still clicking. Is there one individual event? A moment of reality was when I had to go and go to the vendors of that second house that I purchased from a six-month settlement and say, hi, I can’t settle. That was a fairly harming moment and earthing. The haughty heights of the arrogance that I was living were not so high at that point. The other a-ha moment was working as a mentor. I found that was incredibly exhilarating. I could really have an impact, a powerful and positive impact on people’s’ lives, and it was amazing for me. I over-surprised myself to a certain extent, about what I knew about the property. What I acquired and the knowledge that I’d taken on over the years of doing the renovations. Over the years of doing the purchasing and the selling. Over the years of market analysis. Over the years of sub-analysis and analysis on house and number crunching.
There was a wealth of knowledge there I didn’t know existed. Just had taken for granted and assumed it was there. Assumed pretty much, that everybody had and it wasn’t kind. That was exhilarating to know that through this channel, I could have that impact. Again, for me, philosophically, broadly speaking, not that this is definitive or right but as an idea – there are two kinds of people in the world, as a thought. Those that want the money and need to figure out how they’re going to get it and those that want to make a contribution and have to figure out how to make money from it. I’m a guy that wants to make a contribution and I’ve got to figure out how to make money from it. Having mentoring sit so well and resonate so profoundly was, you know what? This is what I’d like to spend my time doing. So, this is where I spend most of my time.
Despite Kelly’s enormous success in both property investing and mentoring, he doesn’t use his wealth for personal gain or a lavish lifestyle, but rather he is excited to continue his passion of helping others improve their own property investing journey,
Yeah see, that’s interesting. No, there isn’t. I get it. That people’s’ passions lay in different locations and it’s not really fair to say as sad as it is, but as dedicated as it is, my passion really is a contribution. My passion really is – I spend more time supporting people to do what they want to do than probably is fair and reasonable to do. I enjoy that. If that would be a hobby, if that’s a form of what you want to do, that would be what I want to do. I speak at free events to educate and train people. I put on YouTube videos about how to think and how to make money out of the property. I just make contributions around that wherever I can.
Solution To Unconventional Wealth With Brendan Kelly
Despite the time and hard work that this first property caused Kelly, he still remembers it as a fun time in his life.
I had more arrogance than sense at that time. I was living out of a perspective that I was nine foot tall and bulletproof, and just did stuff. We had a ball. Had a blast. I’ve got a photo of my time in that house with my wife. I took a photo of what was to be our land room, which was the shop front. The counter area. In the photo is my wife in a dressing gown in a fold-out striped chair. You know the chairs outside? Outdoor chairs.
Yep. In a dressing gown, bowl of cereal, slippers on, and next to her is ten pieces of 90 by 45 studwork. Circular saws. Chisels, hammers, jackhammer. It was just a mess all around and she’s got a big beaming smile on her face. It’s wonderful.
It was Kelly’s ability to commit himself entirely to his project that lead to success; without the commitment of children, Kelly was able to commit himself entirely to his renovations.
Circular saws and little ole toddlers just don’t play well together.
Despite the small size of Kelly’s first property, his renovations made the place seem vast..
It felt like the TARDIS.
The outside looked really small, but when you went in you go, oh this is very spacious.
His willingness to take on this peculiar project and transform a commercial property into a residential one, gave him a significant edge in a competitive market.
We bought a shell and at the time, nobody wanted a milk bar that wasn’t being serviced or relatively shut-down and a shell of a property. Nobody wanted it. The beauty of being able to get it at that price was the fact that people who walked into it couldn’t see a house. The average owner occupier couldn’t turn around and go, ah, where do I put my couch and what am I going to do with this lump of concrete on the floor? These kitchens are just oily and greasy all over. This just is a horrible place. They just wouldn’t buy it. There was a bit of struggle in selling it, but we had vision and like I said, arrogance, and perspective that we could do anything.
But it Kelly’s willingness to utilize this diversity, to consider the advantages in a situation that would be typically deemed too difficult that led to his success. This mentality is key to his perspective on investing: a mindset that he says, is based on knowledge.
One of actual thinking. One of, you can. There’s always a solution. You’ve just got to figure out what that solution is. A very distinctive can-do, will-do attitude. Anything you take on with respect to making money has got roadblocks all the way through it. It is the desire for the prize. It is the desire for the win, for what you want that will help you drive through those problems. It’s like – it’s the conversation around why are you doing it.
I’ve often spoken about the idea, if your “why” is big enough, mountains become mole hills. Mole hills become pebbles. If your “why” is not big enough, if the reason for you to do this activity, for you to take this on, then your pebbles become molehills and your mole hills become mountains. You just give up. It just gets too hard. As property investors, we are problem solvers and that’s who we need to be. We need to solve problems and there is wealth created in solution. There’s wealth created in solving the problems. You kind of need to welcome problems because having a lot of problems around allows you to solve them. Therefore, allows you to make the money you want. Without a lot of problems – if you want a smooth, easy path, then really, you’re left with more of the same.
My experience of more than the same is that’s just not going to get you where you want. From the perspective of I need to welcome problems, I actually like problems. I like being able to brainstorm solutions and implement solutions, and actually solve a problem because my belief is that nearly all problems are solvable. In fact, all problems are solvable. It’s just, sometimes you won’t like the outcome. But all problems are solvable. You do get to move on. If you adopt that and take on anything that comes your way, from the perspective of “great, it’s a problem, let’s solve it” then nothing is going to get in your way that you can’t solve. Does that makes sense? Therefore, any mountain that appears in front of you is actually not a mountain at all. It’s just a bigger problem to solve and there is a solution. You’ve just got to figure out how.
This breakdown of large challenges is something that can be applied to everyday circumstances. And Kelly attributes this persistence to his success in managing not only his portfolio and investments, but his life as a whole.
Well, you do get to a point of overwhelm if you bury yourself in the vastness of the size of the problem. If you do break it down into bite-size pieces, it’s commonly said, how do you eat an elephant? One bit at a time. You just take on the problem one bit at a time. If you get to a point where the problem seems overwhelming and you just can’t see through it, that’s the moment where you just go, you know what? You are the grab blank and go and curl up into the fetal position and walk backwards and forwards, and hope it goes away. Or you step up and you go, no, no. There’s a solution. I just need to keep pushing. I just need to keep working on it.
If you do step up, then the problems wither away, generally speaking. The ability to break large problems into small bite-size pieces is a form of overpowering in your own mind, the size of the problem.
Most of the time the problems are not as big as they seem. As an example, I don’t feel well, I don’t feel well, I don’t feel well. I have to call the doctor. I don’t want to call the doctor because I don’t want to figure out what I’ve actually got. I’m worried about what I actually might have. I don’t feel well. I won’t call the doctor. Just lifting up the phone and dialing the number to make an appointment for a doctor is really tough because you filled yourself with fear about what’s possible as an outcome. Whereas if you go, I don’t feel well, call the doctor, go and see him. Yep, sure. Couple tablets, I’m fine. It’s not a problem. It’s the process of how you manage something presented to you as a form of resistance. How you manage that determines your success.
As with property investing, if you’re presented with an issue, you just simply step up and keep going at it. Persistent being the key. You step up and keep going at it, you’ll solve it and work it through. The longer you put it off and the more you think about it while putting it off, the more you dramatize the possible outcomes potentially, the harder it is to work through the problem and you walk into a sense of overwhelm.
Kelly is careful to note that an arrogant sense of enthusiasm can be detrimental and it’s a lesson that Kelly learnt after his own losses.
At the time when I had to hand over that deposit and lose that money, that was a source of confidence blow. When your confidence is low, when it’s being shattered or eroded in some way, shape, or form by some event or circumstance, or outcome from some decision, then yes. There is a greater sense of fear in taking on the next move. Getting back on the bike and having another crack at it. Care is required in any property investment decision. Arrogance is not. The ability to pull the trigger is critical and arrogance provides that, but that’s blind. Blind arrogance itself is a recipe for disaster. Care.
The thing that addresses fear is knowledge. The thing that kills fear is knowledge. The more you know, the greater your chance at a confident outcome. The more you know, the more certainty you have in the decision you’re making. If you knew the outcome of every decision you were going to make, then you’d make those decisions with absolute confidence or you’d elect not to follow through on that decision because you knew that something wasn’t going to work right. Well, that said, the more you know, the less an emotional fear gets to play on your mind. Skill up. Learn. Take on what you know. Learn about the deal, learn about the numbers, learn about how to make money from it, learn about how to make money from a buying and hold. Learn about how to make money from a renter. Learn about how to make money from a development. But learn where the money’s coming from.
Ensure that you have all the boxes ticked for your yes or no I won’t. Will I make money? How am I going to make money? If it doesn’t work in plan A, what’s plan B? Create contingencies. There are eight questions that you could ask yourself before going into a deal. One is, how much money down? How much money am I putting into it? How much money am I going to get back? In order to answer that question you need to know a little bit about the numbers of the deal, strategy, and time frame. What’s the risk? Okay. The risks are – if you think about a buying a whole property for example, what is the risk in a buying whole property? Well, if you buy a $400,000 property and it goes down in value – let’s say it goes down by five percent. Or, sorry. It goes down in value. Are you going to lose $400,000? Are you putting $400,000 at risk?
The answer is no, you’re not. You’re only putting at risk, the component by which the price will devalue. Do you have any control over preserving that? Well, yes you do. If you put it back onto the market and read about it beforehand let’s say, you might in fact be able to walk away with what you walked in with even though the price is coming down across the board. There’s plan A and plan B. You’ve got to figure out what exactly is that risk. The next question after that is, am I happy with that risk? What’s my worst case scenario and am I happy with that? Your worst case scenario might be, you know what? I’ve got $20 grand on the table really, out of this. The worst case scenario is I’m going to lose five percent. $20,000. Am I happy to lose $20,000 on the chance that I might make $120,000? No, actually those odds aren’t too bad. I think I’ll give it a crack.
Again, what’s my worst case scenario and am I happy with that? How much time am I going to be in this deal? How much time is it before I get my money back? How much time is it I’m going to be contributing my cash and not have access to it for other opportunities? It’s down, back, time, risk. What’s my worst case scenario and am I happy with it? How does this serve my goals? How does this serve the outcome that I want in my life? Is this deal going to get me closer or is it just a deal to do, or is it actually going to hinder me? If I want $1.25 million let’s say, in cash to invest at eight percent so I get my $100,000 of passive income, is buying a positive cash flow property that’s never going to go up, be the answer? Well, it might not be.
Positive cash flow deals do yield an outcome. If I spend all of my money upfront on a buying whole property with little growth prospects and nominal positive cash flow, great. It gets to serve itself. Great, I’m not out of pocket for holding it and I might wind in my pocket with $50 a week, but if it’s tied up all my money then I’m never going to make $1.25 million in cash to invest at eight percent for my passive income. While it makes money nominally, it’s not going to serve the goal that I want to achieve. We need to pick strategic approaches that work for our outcome.
For Kelly, his key entry strategy is the buy, live in, add value, sell approach. Something that worked for him.
I have always been a fan of the buy, live in, add value, sell approach. If you’re starting out and basically, you have no kids yet. You’ve maybe got a partner. Great way to build equity rapidly. Go into an area where you do some research and you think there’s going to be some growth. It’s an area in transition. An area where there’s change. Jump into that area. Obviously, you’ve got to be able to afford it. Live in there. Do a live-in, add value. A cosmetic reno or a structure reno, but do a live-in, add value. Then put it back on the market after a few years.
That – having ridden a wave of growth on your own home and have done the add value, when you sell it you get to keep all of the price difference. That really helps set you up with a lump sum of equity to go again. It’s often enough for you to then get into a slightly better place and to have change to allow you to then get into property investing independent of the place that you live in. Now, if you can’t do that on the first version, you might want to do that on the second round. You might want to do a buy, live in, reno, sell. Then another buy, live in, reno, sell.
What is inspiring about Kelly’s philosophy, is its moral obligation towards others, something that he holds in high esteem.
Another question that you might want to ask yourself is: is this a project that I have integrity with? Is this a project that I want to take on? It might be that you have the opportunity to buy a derelict boarding house that’s going to produce some great dollars for you. If you’re against that sort of lifestyle for people to live in, that’s not going to be integral to you. So, I encourage you not to do that deal.
You don’t want to walk over little old ladies in order to make a buck. That’s not the way to go about it. There is enough money in the world for you to enjoy it with integrity and as I win-win right across the board. I’d absolutely encourage you to do that.
Like everyone, Kelly has consolidated knowledge from a variety of sources and individuals to develop his expertise within the property market that he now shares with others.
It was Steve and Dave first up. Robert Kiyosaki was someone I thought was great for driving decision and mentor perspective, and a can-do attitude. I adopted a lot of his philosophical approaches. Dr. DeRoos was someone who I had vague interest in, but I just was inspired by the guy being able to get with Robert Kiyosaki and the concept of joint ventures, etcetera, like that.
I had a number of them. From a head-space perspective, there was Anthony Rollins and Allan Pease from Body Language. Those sorts of things. From being able to read people, understand people, thinking. There’s a variety of people – while I didn’t necessarily know, I looked at as role models or sources of inspiration and how to by way of thinking, by way of approaching.
From childhood, Kelly’s aspirations were unlimited, a position supported heavily by his parents. But it took the experiences of life to consolidate this potential.
A bit of a story around that came from my parents. Brendan, you can do anything you want. Now, that’s a twin edged sword. I was doing university – no, high school. I was doing high school at the time. Life was life and as a student, what do I do? How do I spend my time? I hit my 15 year old and inquisitive phase about well, what’s my role on this planet? I’m one of six billion. What’s my role? How do I make a difference? What’s the point?
In that, I asked my parents – what’s my place on the planet? They said, you can do anything you want. I said, what should I be doing? They said, you can do anything you want. That didn’t help me at all. As much as it was inspiring and encouraging, if I can do anything I want, how does that narrow the decision about making a difference? How does that narrow the decision about what is the right thing for me to be doing? It didn’t help.
Anyway, years and years later I was in a position after doing my multiple journeys through career and came up with – you know what? It’d be a good idea to get some feedback from people about where my skills and passions and desires best fit. So, I went to a consultant and I got IQ tested and I got skill assessed. My IQ and my skills came back. I sat down. So, what should I be doing? They looked me square in the eye and said, Brendan, you can do anything you want. Bloody hell. How is that helping me? That’s not helping me narrow down my search at all?
That said, what it allowed me to do is I had that equal. I had that mean for me. If I can do anything I want, then I can solve anything I want. I can solve problems. I can create solutions. I started to adopt the – if I can do anything I want, I will do anything and I can do anything.
It’s this positive sense of ambition that Kelly not only utilizes himself but seeks to convey through his RESULTS Mentoring Program.
When people raise the question, can we do that? I say, we can do anything. Now we need to choose what we want to do. It really opens the thinking up into, okay, on the premise I can do anything and I get to choose what I want to do, you start to put on a different mindset of how and what, and what can we create? Rather than, no you can’t. As soon as you say no you can’t, guess what? You can. It’s something that I continue to live by.
Then we have the RESULTS Mentoring Program, which we run. That’s going great. Like I said, we’re changing lives and more and more people are choosing to trust what we say and at the back of the work they take on, they’re actually able to leave work. They’re actually able to live the life they want to live. It works. It’s proven. It’s wonderful. It’s just a joy to be a part of.
Then on top of that I’ve got – I work with John Lindeman. John Lindeman is a gentleman who is a research analyst and I work with John Lindeman in the development of the database for being able to forecast suburb price movement. I’m working with John in the background on that. I think that about covers it.
On top of all this, Kelly still maintains an ever-expanding investment portfolio.
Currently, we have two boutique developments going on. In Melbourne, Clifton Hill. Which is about two kilometers north of CBD. We have a boutique development of three retail outlets, eight luxury apartments, four stories. It is about to turn soil. It was a $2.5 million block of land with about a $4.1 million build and about a $3 million profit. That’s one of the deals we’ve got going on. The other one is in Ivanhoe. Again, boutique development, six retail outlets. Another 18 apartments. Five stories. $3.8 million block of land. About a $7 million build and about a $5 million profit. That’s what is in the background.
With such a consuming range of commitments and enterprises it’s no surprise that Kelly’s key habit is a never die attitude.
An unrelenting commitment to the outcome that I’m after in life. It is just a fair to complete. It is a foregone conclusion that I will achieve what I want. It’s just a matter of timing. All I need to do is follow the path that I’m creating for myself and keep stepping up to the plate. It’s just there. It’s just there.
If you liked hearing this podcast about Kelly’s story, strategy and mindset and want to learn more from him…
The best way to connect with me would be through the RESULTS Mentoring Program. If you contact the office on 9890-5600 or Brendan B-R-E-N-D-A-N at results.mentoring.com, would probably be the best ways to get to me directly.