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Hosted By Tyrone Shum

From Musician to Property Investor in NSW Real Estate

Lloyd Edge is the director and founder of Aus Property Professionals in NSW real estate. He is a driven property investor, licensed buyer’s agent and is the author of Positively Geared where he delves into his journey from being a music teacher to then building his impressive property portfolio, where he currently holds 16 properties. 

Join us in this episode of Property Investory to hear how Edge achieved financial independence while still on a teacher’s salary, how he changed career paths and how he educated himself on property and the market that has impacted his journey that could ultimately inspire you along yours!

When He Started

2000

Properties in Portfolio

16

Main Strategy

Buy and hold

How to Achieve Financial Independence with Lloyd Edge

After losing his passion for music, he kick started his property investment journey where he soon fell in love with teaching others about property and helping them achieve their own property goals.

We will learn exactly how the multitasking director and founder managed to accumulate 16 properties. You’ll also be able to hear the kind of mindset he has adopted to continue to increase his wealth and the kinds of strategies he uses to deal with the changing markets and much much more!

Key Highlights

nsw real estate

Video Interview

Resources and Links Mentioned

Note: Some of the resources may be affiliate links meaning I receive a commission (at no extra cost to you) if you use that link to make a purchase.

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"You make your money when you buy, not when you sell."

Lloyd Edge

Podcast Transcript

We find out what Lloyd Edge’s day to day role entails as well as some achievements.

Lloyd Edge:

I am the director and founder of Aus Property Professionals, which is a buyers agency. And I'm also the author of a bestselling Amazon book called Positively Geared.

Tyrone Shum: How did you come up with a book like that by the way?

Lloyd Edge: Essentially my property portfolio is now positively geared—which I’ve developed over a number of years. And essentially it's a story of where I started as a teacher, through my journey from transitioning from being a teacher into a full-time property investor, then starting my business and how my portfolio started from just a one-bedroom unit, which is negatively geared into what is effectively a multimillion dollar portfolio—which is now positively geared, hence the name of the book.

Edge delves into what a typical day looks like.

Lloyd Edge: Typically, I get up in the morning, I generally take our dog for a run. I've got a little Boston Terrier. Mainly just go get a coffee and stuff and then come back home. And then throughout the day, I'm generally just looking for properties essentially. So, looking for good opportunities for both myself and also for our clients and basically negotiating, looking for deals out on the road and in the office.

And yeah, that's generally what my day looks like. I have a few meetings. I do a lot of negotiations with agents and things like that. And just trying to help people get into good sorts of deals. And I spend a lot of time setting strategies for people because people are sort of looking for ways forward from where they are. So, a lot of my time is spent strategising on how people can deal with their portfolios.

He explains how his client interactions have been impacted due to COVID-19.

Lloyd Edge: We did do obviously a lot of stuff online through the COVID time. But we often did that anyway, so it wasn't that much different because our clients come from all over Australia—and we've actually got a number of overseas and export clients. A lot of our stuff is done by Zoom, FaceTime and Skype anyway. During COVID time, yes, we didn't have any visitors into the office for probably a couple of months; everything was done by Zoom.

One of the main things I've found [out] during that period, is not so much that people were not interested in property—but it was more about strategising on how they can actually improve their position for the future.

Tyrone Shum: At this point in time, there has been potentially a lot of opportunities because of the unexpected sort of black swan that has just come in. I'm sure that people are now realising, ‘Okay, this might be an opportunity to be able to take up something that wasn't ever there before’. And even myself, I've been looking at the market as well and looking for great deals out there.

Lloyd Edge: That’s right, Tyrone. And I think when the pandemic first happened the first three weeks, things weren’t really solid. I think people weren't expecting it, obviously, and then didn't know what to do. So, people were very scared and everything. But once that initial phase occurred, you know, people started to then sort of realise that there's actually opportunities to happen. And obviously some people had issues with losing their income and things like that. So, they weren't necessarily in a position to buy and things like that. Other people, however, if they had stable incomes and things like that, were seeing opportunities.

And we are seeing a very much a buyer's market at the moment, not the huge price falls that some, like the media would have some people believe, like economists because there is, as you know, there's still a shortage of stock on the market vendors are holding off listing. That coupled with the fact that there are buyers in the market that is actually keeping the process up.

So, we're certainly not seeing a fall in prices. We saw a minor rise in March and April, and only about a 0.4 decline—0.4 of a per cent decline in May—house prices in Sydney. So, it's very minor. So, they're kind of plateauing out, but we are seeing some good opportunities as a buyer's market without any major falls or anything at this stage. But, you know, it's a little bit early to see exactly what's going to happen later in the year and stuff.

From His Beginnings in Music and Teaching

Before delving into his property journey, Edge shares a bit about his upbringing.

Lloyd Edge: I come from Orange, which is a country town in Western New South Wales, about three and a half hours from Sydney. Grew up there on a farm with lots of animals and dogs and cows and my brother and my parents. I lived there until I was about 18 and then moved away.

Originally, I was a musician. So, I actually went to Sydney to study music and became a musician and a music teacher. And that's kind of my background there. And then, sort of moving forward from there, I sort of got into property investing a little bit later—so I wasn't initially interested in property. So, I wasn't one of those people that always had that taste of property from a young age. I actually developed it a little bit later on.

He goes on to talk about what kind of instrument he played and what inspired him to be a musician.

Lloyd Edge: I started off playing brass instruments. So, I played the euphonium, which is a brass instrument, and the trombone. Played a little bit of piano during high school and things like that. And then, you know, I competed in a lot of competitions and eisteddfods and things like that. And then it was just a real passion.

And it was interesting because when I was in high school, my best subject was actually economics, but that was actually not the path I decided to take. I wanted to take the musical path at the time. So, I could have sort of got into economics and, and sort of done that and taken the property route a little bit sooner probably. But I went into the musical path because that was really my passion at the time.

The former musician shares how he determined his musical path and how he became a teacher in comparison to other avenues he could have pursued.

Lloyd Edge: It was quite interesting, because when I went to study at the Sydney Conservatorium of Music, I really didn't have any real idea of what I wanted to do. I knew I had a passion for music. And I just thought I'm going to make a living from music one way or another. And then I sort of found out that it's actually really difficult to become a professional musician and [that] you also need to really be passionate about it and stuff like that.

And my passion—I guess, I started to lose some of that interest along the way. And then I sort of got into teaching as well, which I then became really passionate about, and absolutely loved the process of teaching. So, that sort of became my passion. And I found that I was actually good at teaching and then started to enjoy that more than I did with actually playing.

Edge explains how long he was a music teacher for and whether he did different types of teaching.

Lloyd Edge: I was a music teacher basically teaching instrumental. I wasn't teaching in the classroom. I was teaching instrumental and conducting bands and probably did that for the best part of around 15 or so years, maybe a little bit more.

He shares how his students were involved and engaged with his teaching, as it can be quite difficult for some to be focused.

Lloyd Edge: I was a bit fortunate that I wasn't actually in a situation where I was teaching in a classroom where you get a lot of kids like that. The kids that I got to teach were actually the ones that wanted to play instruments. I was quite fortunate. A lot of the time they didn't want to practice and all that kind of stuff. But generally, they didn't mind playing their instruments. So, it wasn't such a hassle to teach them there and stuff. So, it was quite a bit of a luxury from that point of view—teaching those kind of kids.

He reflects on moments during his teaching years that really drove his passion and encouraged him to keep going.

Lloyd Edge: I think seeing kids that you start from a very young age, and you'd take them sort of through to the senior high school years to year 12, and seeing them become very advanced. So, from beginner to very advanced and then putting them through to HSC music. But a couple of memories that stand out [are] when I was conducting the school band where we went on some overseas tours, where we went to America to Israel and things like that. So, some great opportunities there—and the band played at Disneyland and a few things like that. So, they're kind of a bit of a few standout moments in my teaching career within the school system.

Edge delves more into his time at the Sydney Conservatorium of Music and how many years it took to qualify as a teacher.

Lloyd Edge: I was there for about four years so that's sort of how long it took to get the degree. And I've got a couple of other qualifications as well. And then I left, and I was doing some professional performing at the time in a few orchestras and things like that. So, I was very much a professional player. So, I ended up sort of doing a lot of teaching as well. And as I said, that's something that I really enjoyed.

Going Into His Property Journey After Music

After 20 years in the music industry, he looks back on the timeframe where he actually delved into property.

Lloyd Edge: The first property I bought was actually a property to live in. And I knew that at some stage in the future it would be an investment. But I didn't have a passion for property investment at the time. So, it worked out well that it was kind of in a fairly good location because that's where I wanted to live. It was in Sydney; it was near the water and had amenities and stuff like that. But it was essentially just a unit to live in.

And I lived there for a couple of years and then decided that [from] what I was making in teaching, I didn’t feel I was making a stable income. I didn't feel that I would have much in superannuation. I didn't want to live in the pension. I wanted to sort of set myself up for a sense of security for the future.

I also felt that property would be a more stable and less volatile investment and a good path for me than elsewhere. So, that's when I started to look at options to start growing that portfolio. And that's when I actually moved out of that one-bedroom apartment, rented that out, and started to grow my portfolio from there. But at the time, I had no strategy. So, very much different to the way that I invest these days in the way that I teach other people to invest.

I really had no strategies. I was buying a few properties that were sort of negatively geared. They sort of turned out quite well by sheer accident because they were in Sydney. And if you’re buying in good locations like that, they tend to get good capital growth anyway. But I didn't have a lot of cash flow, and I was getting into a bit of debt.

It was a little bit later on when I started to look at strategies on how to actually grow quicker that my whole property investing scenario changed. And that all came down to the mindset I had and the goals that I started to put in place for what I wanted to achieve into the future, which did include wanting to retire from teaching. Because I did realise I started to lose my passion, and I decided that I didn't want to be one of those people that would be stuck, you know, here in a job for the next 30 years and then look back and regret that I didn't make a move to do something else that I was more passionate about.

He goes on to talk about the time in which he purchased his first property.

Lloyd Edge: That was around about 2003, and that was just post the Sydney Olympic boom. Again, with no strategy, not really knowing much about the markets at the time. I was also buying when the markets were actually starting to decline in Sydney, which is another reason why I didn't really get much growth at the time. And I’ve still got that property now. And it's more than tripled in value over the last 15 years or so. But at the time, it wasn't really getting any growth for the first few years.

Of course, at first, it was an occupied property, but then became an investment. But with no strategy and buying sort of I guess the wrong markets at the wrong time sort of inhibited my journey at first, which is something that I sort of learnt a lot more about later on—about how to buy at the right time of the cycle, how to read property market cycles and things like that. And then of course had a manufactured equity in properties, which is essentially what I do these days.

He further explains his thought process when buying his first property and what influenced him to purchase more.

Lloyd Edge: It was around about 2007 and we were just coming out of the Global Financial Crisis. But for me I started to attend some seminars. I was doing a lot of reading. I was getting inspired. And I realised that I could actually do well with property. And I also realised that I wasn't actually scared of buying in a market like that, because you know the market wasn’t doing so well. I bought another property, which ended up being better cash flow. And again it wasn't getting a lot of growth at the start, but good cash flow.

It helped the bank account and stuff like that. But then I sort of got really hungry, and I started to sort of check my service ability with banks and realised that I could actually go and get another property straight away. And then I started to get really savvy with, you know, cash flow. And then I ended up making probably one of the biggest mistakes I've made in property at the time, which is a lesson to be learnt and things like that as well, because you always make mistakes along the way.

On Building His Property Portfolio

The director and founder of Aus Property Professionals paints a picture of his journey, sharing how many properties he currently holds.

Lloyd Edge: At the moment I've got 16 properties in my portfolio. Obviously along the way, I've sort of sold some and acquired some and all that kind of stuff, so that number obviously fluctuates. It's not so much about the number; it's about obviously the quality of the properties and what they do for me. But the properties are spread across different States, different locations—both capital cities and regional areas.

And also, I've got units. I've got townhouses, houses and duplexes. So, there's a number of different types of properties that all form, you know, the strategies that I use and things like that.

Despite building an impressive portfolio over the years, Edge reveals one of his worst investing moments throughout his journey.

Lloyd Edge: It's interesting because probably my worst investing moment I thought was actually going to be a really good one. So, I bought a property. It was probably maybe my third or fourth property I'd bought. Again, I was starting to get educated, but I really didn't know anywhere near enough as I should have. And I was very attracted to buying something that was really high-yield.

So, I went and bought in a mining town—and I've actually written about that in the book that I wrote because that's a lesson to learn. I like to share with people about what not to do. So, I bought in the mining town in Blackwater, in central Queensland. The property was $260,000—and that's what I paid. And the rent coming in was about $900 a week—a massive yield on a residential property. And the growth in Blackwater was being quite consistent year on year, at the time of about 25%.

So, all those numbers stacked up really well. What I didn't realise at the time was that you should never invest in an area that is reliant on just one sector. Because when the resources sector collapsed at around about the end of 2012, my $900 a week went back to about $180 a week. And the cost of the property value plunged as well down below from what I bought it from.

And I remember having a bit of a sinking feeling then thinking about, ‘Oh, what have I done? I had this really good cash flow positive property in my portfolio, and now it’s negatively geared. And it's—I'm not going to be able to sell it and stuff’. But it's a good learning experience, because I've got a lot of properties and stuff like that.

It's actually swallowed up the maximum of my portfolio and that's actually negatively geared now—it's still rented and everything. So, it wasn’t actually too bad. But it's not the cashflow property that it should've been. Swallowed up against all my other properties, it's not really affecting me. Because there were people at that time who got really greedy and had about 10 properties in locations like that. And they did go bankrupt. So, I only got hit by doing it once, but there was a lesson to be learnt.

And something that I really enforce with everyone I talked to about investing is that you should buy in areas that have several industries of growth. You shouldn't just buy with one sector. Because if that sector leaves town, then the industry collapses. So make sure there's a lot of infrastructure, there's a lot of jobs, growth. And that there’s different types of industries, whether it's medical, whether there’s education with universities, manufacturing, all sorts of things. Make sure that you're buying in areas that have civil industries of growth and you won't have that sort of problem.

So, that was probably the single worst experience. But like I said, at the time, it didn't seem that bad; it was just a few years later.

Tyrone Shum: When you said it's ‘a few years later’, like three, four years or so, that's when it all sort of changed?

Lloyd Edge: I probably bought that in about 2009, and it probably went belly up in about 2012. I could've probably sold it at the end of 2011 and made a lot of money, but of course I've never been a flipper or never been a buyer and seller or try to time the market and sell.

My idea was always to keep properties for the long term to build wealth that way. And with this one, if I sold it a year earlier, I probably would've made a lot of money on it. But I was keeping it, thinking that, you know, like you do with any property. If you keep it for longer, it might give you more money or you could pass it down through generation as an asset for your family and stuff like that. So, for me, that was a bit of a mistake there, but you know, just a lesson learnt, part of the journey.

Tyrone Shum: Would you say over those three years, part of that loan got paid off anyway because of the high positive cash flow that you had from that? And then now, as you said, it's been swallowed up in your portfolio, so it shouldn't really affect it too much.

Lloyd Edge: Absolutely, and I don't really notice it anyways. It's pretty much swallowed up. I don’t really notice it; it doesn't really bother me. Now we're going back a bit, about eight years since that happened. So, I quite regularly talk about that.

And sometimes I do get clients coming to me, and they want to buy a property that's got like a 12% yield and I say, ‘Well, we might be able to find a commercial property like that’. And they say, ‘No, we want a residential property’. And I say, at that sort of yield, I know where he can get them, but I don't recommend you go there. When I try to talk to people, I'll share my story about why you should not go to a certain area to try to chase these big yields.

Tyrone Shum: That's the challenge as well, unfortunately, with a lot of these ones with high yields: It's mostly regional. And regional really doesn't have much capital growth, because there's not much demand as well, too. I can totally understand that's where I think it comes back down to fundamentals. Where are you actually going to be investing? And you've got to ask yourself what is your strategy at the end of the day? Because if you're just going for yield, you're going to have to buy lots of those, but you might not get much capital growth.

Lloyd Edge: That's the thing with yield—it really just sort of pays off the loan and the mortgage you've got to pay every month. But it's really the capital growth that creates the wealth. And whether you're manufacturing the growth or you're in a location where over time you're going to get the capital growth, whatever it is, your property needs to increase in value.

There's no point having a whole heap of properties that 10 years later they're worth the same as what you bought them for. Just because they have got high yields, it’s not going to benefit you at all. You might have money in the bank from the rentals, but it's not really going to give you that wealth or that lifestyle freedom that you're craving in the future. So, I think that's a very important thing. And that's why I think education in property is the first thing people should do all the time before they even contemplate buying a property. They really need to know the fundamentals before they make the first move.

The Moment Where Everything Just Clicked

Despite experiencing his worst investing moment, he goes on to share the moment where everything just clicked for him.

Lloyd Edge: My aha moment was when I actually bought my first duplex. So, I'd been investing for a few years and I had sort of properties that were a mixture of negatively geared, and some that were positively cash flow, like the one in Blackwater, but I still didn't feel I was getting anywhere. I wanted to turn my hand to actually manufacturing some growth.

So, when I built my first duplex and had it subdivided. And I got about $141,000 additional equity on that build. But I guess the real moment for me was the fact that as a teacher at the time, I was only on about $70,000. So, the equity I got was double my full year's income as a teacher. Yet I just got that equity, just doing a duplex on the side. And then I thought, ‘Oh well, I'm on to something here. I've just got to repeat this process’.

That's actually what changed my journey. That's actually what gave me the belief that I can actually do something and make it in property and actually move towards my goals. I can actually do some bigger things and create some financial stability and some lifestyle choices for the future. So, that was the moment where that really happened.

Tyrone Shum: And which property was that roughly in your portfolio where you built that duplex?

Lloyd Edge: That was probably property number five.

Tyrone Shum: It was still quite early on in your journey?

Lloyd Edge: Definitely. And I think it was quite early on in the journey. But using the equity in that duplex allowed me then to go into further properties straight away. So, I think I bought another three properties on the back of that using the equity.

And that just meant I wasn't waiting for capital growth. I had that equity. I refinanced the properties, the duplexes that were now in separate titles. And then just, you know, the following year just bought three or four new properties, or three or four more properties. And you know, it allowed me to save up. I had the deposit there from the equity.

He delves more into this type of property and how he came across it.

Lloyd Edge: It was just a vacant property, like a vacant block of land in a nice corner block; it didn't have any plans or anything on it. So, it was just available through the real estate agent. It was in a new estate, but the estate had already been built. So, it was actually one of the last remaining blocks there, which is also a resale. So that's sort of it, the finance had fallen over. So then, I came back on the market and that allowed me to get at a cheaper price as well.

So, I think I paid something like $159,000 for the land. It was originally priced at around $190,000 to comparable blocks around that were selling sort of close to $200,000. So, I got it a bit cheaper there because the developer just wanted to sell, and he had sold and then it came back on the market.

That was a good opportunity for me as well. And then obviously I needed to go and, you know, find a builder and things like that. And they're all very new to me as well. So, that was always a little bit nerve wracking—just needed to get a little bit of advice from people who've done it before. And the real estate agent who I ended up buying that block of land from: I’m actually still in contact with him now. And there are properties that I was able to be the property manager for their properties and stuff as well. So, sort of developed a bit of a relationship that way as well.

Tyrone Shum: It sounds like when you purchased that first block, that land was already entered with a profit in mind because, at the end of the day, most of the time when you make money, is when you actually buy the property—not when you're actually finished and building it and so forth.

Lloyd Edge: That's one of the things I always say: You make your money when you buy, not when you sell. So, you really do need to buy things at the right price, make sure [your] under market value. So, immediately, if you're buying the land at the right property price, then you are getting things under market value and making a bit of equity upfront as well.

But I must say having never done this before, I was kind of anticipating when the properties were subdivided that I might make $60,000 in equity. And I thought, yeah, that will be a good result. But what I ended up getting was much more than that. And subsequently, obviously, I've done deals that have resulted even higher than that. But that was a good first development I've done; that was a lot more than more than I was expecting. And it certainly changed things for me, particularly because it was so much more than what I was expecting. Because I didn't know what to expect out of this sort of a project.

Edge shares how long the process took on this particular project, and whether he encountered any obstacles along the way.

Lloyd Edge: That process probably took a little bit more than 12 months—probably 14 to 15 months—because the council was a little bit delayed with that. The council sort of kept coming back in and sort of asking for changes in the plans and the designs. We didn't put the right sort of landscaping in that they wanted. And they wanted to change the floor plans and the direction that the sun came in—things like that which are things where these days obviously come across regularly to address that.

But when it's the first time doing it, that delayed things a little bit there. So, the council approval probably took maybe six months or something, which is longer than it should take. But that just comes down to a learning experience. But normally, they are approved quickly if you're getting everything in that they need, you know, straight away.

Lloyd Edge Shares His Property Strategies and Goals

After accumulating 16 properties over the years, Lloyd Edge delves into the kind of strategy he utilises to continue to grow his wealth.

Lloyd Edge: My strategy has always been about manufacturing equity. So, I've done that with the duplexes—some of which I have had really good returns of, maybe two to $300,000. It's equity uplift and things like that. I've also done things about little renovation projects, things like that. And again, you can raise the equity and also raise the rental returns. And there's also things like subdivision and even things like one-into-three subdivision.

But it's always about the goals and what you're trying to achieve. In the end, I sort of set a mission to leave teaching and then to have a dream, which was sort of to set my family up for financial freedom and to also to make sure we sort of get that dream home and a few things like that. So, I always had a goal. So you need a goal.

If you don't have a goal, then you don't really know why you're investing. Because investing—whether it's property shares or whatever—it's just a vehicle. You need to know why you're using that vehicle and what you're trying to achieve with it. So, it's really having that end goal in mind and what you're trying to achieve, which is really important, and then understanding how each property fits into your portfolio and how that's going to get you there.

That's why if I'm going to build a duplex, for example, and I anticipate to make X amount of equity on it, what am I going to do with that equity? Depending on my serviceability, I may sell one of the duplexes, for example, if I need to. But they're not going to think about GST and capital gains tax and things like that. So, I've got to weigh that into the equation.

But a lot of the time, I'll keep the properties and refinance them if serviceability allows it, but what am I going to do with the equity? So, I've got to use that equity, purchase another property, or it might be to pay down some debt. So, I pay down some owner-occupied debt in the past, two of the homes I've lived in, in the past, have paid them down completely because of, you know, using the equity from the investment property. So, it’s having that goal and being able to pay down your debt and achieve what you want to achieve.

Tyrone Shum: As you mentioned, you keep most of the properties. Sometimes you might sell them and so forth like that. So, I guess once you've finished building these duplexes, then you would keep them, rent them out and then that would help grow your portfolio. Is that basically what you've been doing? And in the subdivisions of the land, you just sell off the land, use that?

Lloyd Edge: That's correct. And the duplexes: They're always positively geared. So, the cash flow is really good on them. So, they're always covering all the expenses there and then some—so, they actually return money back into my pocket after paying all expenses. So, that's the mortgage and all the outgoings. And then it puts some money into my account. And that's always good for serviceability because the banks, obviously, like to see good cash flow injection into your bank.

Generally, lenders will only sort of take about 70% of a rental income when assessing your serviceability. So if you've got even better cash flow, like dual income properties that are positively geared, then that actually just increases your serviceability more. So, that's kind of been one of my strategies along the way as well. Another strategy is granny flats, you know, auxiliary dwellings, and stuff on properties because they're really good for cashflow as well.

The successful investor talks about whether he would branch out on other kinds of developments other than these smaller developments.

Lloyd Edge: That's pretty much my niche. So, I have done some like triplexes and stuff like that. So, I’ve branched into some slightly larger things. And in terms of bigger things, we’ve branched out a little bit like in terms of the business. We have to help people build bigger things—because that's just a matter of sort of managing the process and having the right builders on board. But generally, it's all about the duplexes in the smaller type projects, because that's pretty much what I know and what I know works.

And I think and as an investor, you should always be investing in things that you understand and that you know that works.

The minute you start to branch into something bigger—so [for] townhouse projects, the timeframe in councils, for example, are longer. And there's also more risks—the risks are that the neighbours might lodge complaints that they don't want the properties being built near them and things like that. There’s more risks in getting approvals out, plus it’s a longer timeframe for council approvals. And the numbers potentially might be greater. You know, the feasibility might be really good. But you've got to weigh that up against whether you can do two duplexes in that same timeframe and get just as good a result with generally less risk and less outlay.

Obviously when you're doing townhouses, you're looking at sort of commercial funding and things like that, you know, duplexes will still generally fit within the residential funding. So, it's easier to get lending on them and things as well. So, there's a few things like that is a reason that I sort of stick to that kind of stuff—because that's what I know.

He goes on to further explain the differences with smaller and larger developments as he has experienced both, keeping in mind the risks.

Lloyd Edge: Even getting back to commercial lending when you're doing commercial, your LVR is generally less as well. So, you might have to put a 30% deposit in all the time. You can still do duplexes with some lenders and be able to put a 10% deposit in. I always recommend having a bit of a buffer there in case of valuation, shortfalls and stuff. But you generally can put in sort of less deposits, and you're generally borrowing less because it's a smaller project and things like that as well. So, I think that's just a little bit safer from that perspective.

He shares with us what else he has delved into in relation to his strategies and property portfolio.

Lloyd Edge: The other things I generally delve into have been smaller things in a blue chip area. So, I might do townhouses and apartments sort of for long term growth, but always trying to get them sort of at a really good price under market value. So, I'm sort of trying to build some equity there straight away. Or, if I can do that and also sort of buying older properties, if we're going to do that sort of thing, I want to buy a boutique kind of complex that has a bit of uniqueness that sort of hopefully outperforms the averages. And then I can maybe add some value to it through a bit of a renovation.

So, essentially I'm not a big one for apartments and I never buy generally off-the-plan. I think I bought one or two apartments off-the-plan myself, but I never buy them off-the-plan for a client or anything. But generally, you know, apartments and stuff are okay in some areas, as long as they're not in areas where there's too much supply and things like that. But you just need to be buying the right kind of property in the right location. And then generally, for long-term growth with a reason. So again, everything's done for a reason.

For example, I bought an apartment at the beginning of this year, which I'm going to hand down to my son who is 14 months old. I sort of have a joke that he's the youngest property investor in Australia at the moment; he owns his own apartment in Alexandria and Sydney. So, a pretty good blue-chip property he's got there.

Edge explains the process of when he has to manage investment properties remotely and how he ensures they are being cared for properly.

Lloyd Edge: Obviously that takes a lot of due diligence and research, a little bit of trial and error. I've got a lot of contacts around different areas, and then sometimes I've used people that I wouldn't use again. But once you find someone who's really good, they sort of form part of your team.

What's really important though, is having a property manager that you actually trust as well for their advice. Because I'm based in Sydney, and I've got property in Brisbane and stuff. Now, I go to Brisbane a lot—not at the moment because the borders are closed. But when I do go to Brisbane, I'll go and inspect the properties and whatever. But having someone on the ground there who can go and check the work—you know, send me photos, but also alert me if they think it's up to scratch or not up to scratch and that kind of stuff.

It's about actually leveraging off people that you can trust and things like that. And in most of those areas, I've also got professionals that I work with—either colleagues of mine in business or other fellow property investors who I can rely on for that kind of assistance. It's a matter of, again, just building up your contacts.

But you know, it's important to be a borderless investor because you don't want to just be investing near home just because it's near home—because it's really important that you invest in the best areas and that are right for your strategy. So, that's really important. You don't want to just invest near home just because you want to check on the property and all that kind of thing that some people talk about.

He discusses how as part of his investing strategy is to also have properties in different markets.

Lloyd Edge: Looking at the market cycles, so what's happening, is really important to sort of look at when the market's starting to rise and be getting into a rising market there, rather than you in a falling market or certainly not at the top of the market. Because at the top of the market, then you'll end up going to sort of lose a bit of equity straight away. So, that's quite important.

I also tell people not to try to time the market, but it's more important to have time in the market. So, some people are trying to, you know, they like to wait, sit on the sidelines, waiting to see when the bottom of the market comes. But it's really impossible to tell when the bottom of the market is because by the time when that's happened, it's already happened.

The other reason to diversify...there's other reasons. And one of them is, for example, land tax. So, you don't want to have all your properties in the one location. It's good to diversify across different States for that reason. And also, the different markets do operate differently. So, if we do have a time where the markets in Sydney or Melbourne start to go down, you might have markets in Brisbane or Adelaide that are doing quite well. Or, as we said a few years ago, Hobart did quite well for a bit. So, just to diversify means that you might have one property not doing so well, but somewhere else you'll have a property that is going quite well.

On His Big ‘Why’ and Key Mindset

Edge goes on to share his biggest ‘why’ for doing what he does as a buyer’s agent as well as helping investors.

Lloyd Edge: Essentially really, what I do and why I do what I do is to help people trying to achieve what I've done. And that's not saying to achieve, you know, specifically what I've done, but trying to achieve their own goals.

So, financial freedom and lifestyle choices mean different things to different people. But I'm a real advocate of helping people to understand that having a nine-to-five job and just having one form of income is not real security. That you really need to invest. And that even if you love your job, you need to have other forms of income. And if something does happen to your job, which I’ve actually seen with some people during COVID-19, that you should have other forms of income coming in that you’re not going to be worried about. That's really important as well.

From a business perspective, I like to sort of think on a larger scale. So, there's a big vision I have for what we do at Aus Property Professionals, and it's not just about the sort of the day-to-day grind of the business. But it is what we can actually do to help the greater community.

So, at the moment, for example, we donate to a lot of charities, you know—for example, the Cancer Council—ongoing. In January and February, we donated 20% of our revenue to the bushfire appeal and that kind of stuff. And one of my larger ambitions is to be able to help Third World countries, like Nepal and Africa—whether it be educational, or maybe, do some homes over there and stuff like that.

For me having the freedom to do that, so property has sort of given me the financial freedom and the lifestyle freedom and the time to be able to do things like that. And then the business itself, growing the business, allows us to be able to then contribute to the cost of doing things like that on a larger scale. But at the same time, we're also helping people achieve their goals and achieve their visions.

And for me, it's not about a transactional purchase. It's not about people coming to us and they buy one property. We really set a strategy. We look at what they want to do over the long term—10, 15 years—and we map out a roadmap, so they can actually see how they can get to where they are now to where they want to get to, basically.

The director and founder shares why he chose his particular path to start a business.

Lloyd Edge: I guess one of the things is that, as a teacher and as a property investor, this actually combines both those passions, because what I'm doing is I'm educating people on property really at the moment. So, I’m actually combining teaching and property, and it really comes down to helping people. And that seemed like the logical thing for me to do.

But it’s a bit of an ongoing joke between myself and my wife, because many years ago before I had my business going—actually before that, I was talking a lot about property and home and all that kind of stuff. And my wife said to me one day, ‘You should just start a blog and put it out there. That way I don't have to keep listening to you talk about property all the time’.

So I did, I started writing blogs and it was just a free blog platform, just putting it out there and for people to read and stuff like that. So, that was kind of the start. And then after that, that's sort of when I started to get, you know, my real estate qualification and stuff like that. And I started to sort of get enthusiastic about actually wanting to help people.

And I think, it initially started—getting back to your question—is because people were coming to me for some advice, because they were seeing some of my success in my own portfolio. And then, they were seeing some of my blogs and wanted some advice. And I guess, at the time I couldn't really give proper advice because I wasn't qualified as such in property. But one thing led to the other. So, I then went and got qualified, and then I started the buyer's agency to basically be able to help people.

Because I was already getting people who actually wanted my help essentially, so when I started off, I didn't actually have to start the business and then start marketing for clients. I kind of already had a line of clients waiting for my help essentially. So, that's kind of how I started.

Tyrone Shum: That's fantastic. And the blog is still available for people to read online?

Lloyd Edge: That particular blog is not. But I do have a blog on my website though, so it's a continuation. So, we do have regular blogs that we upload to our website, a blog page.

The Books, Advice and Habits That Paved His Way

Edge shares the kinds of resources that have helped him grow his portfolio over the years.

Lloyd Edge: I guess a lot of the education and a lot of the inspiration actually came from reading books and stuff like that. For example, reading the Rich Dad, Poor Dad series, so Robert Kiyosaki, and Cashflow Quadrant and those sort of books. And even Steve McKnight’s From 0 to 130 properties in 3.5 years is the sort of book that inspired me.

I mean, I went to various seminars and stuff like that to sort of learn about property—and of course some seminars are better than others. So, it's about sort of getting out there and making sure you just take what you can. You don't want to go to a seminar and then be sold something on the night, like some seminars do.

It's just a matter of getting out there and learning as much as possible. But even now, I still listen to podcasts all the time. I listen to the guests that you have on Property Investory, for example. But I listen to even, you know, American podcasts of people that have inspired many people like Ed Nightingale, for example. There's a lot of stuff that I just listened to that really inspires me. It’s not always directly associated with property itself, but it's associated with how you can actually better yourself and achieve your goals.

And that's what it really comes down to. And that's why I always refer to as property being the vehicle, because it's really about what you're trying to achieve at the end of the day, not so much about property. Because, at the end of the day, you can read enough about property and learn the fundamentals about that and use that as a vehicle to get there. But you really want to know where you're going. Otherwise, it can be a lonely road. But if you know where you're going, and you keep yourself accountable, then it becomes much easier to see the goal post at the end.

Tyrone Shum: That's the interesting thing with investing, not just only in property. I've been to all sorts of different classes of assets and so forth is, it's about a mental person, personal development. To actually improve on that, to be able to do it—because at the end of the day, it's what's between your two ears that actually helps you do that.

Most of it, I think is, 80% is mental and also just how you manage all those things between your head. But the 20% is the execution. And I think, if you continue to spend time doing personal development and growing yourself and taking on as many resources as you can to grow and implement, then obviously, you'll be quite successful—and following a great strategy, too.

Lloyd Edge: That's absolutely right. It is about belief, but it's about taking action. So, there's a lot of people that talk a lot and stuff like that, but you've got to take that action. I see a lot of people, even some of my clients who are hesitant to take action with something because they are seeking a better deal, or they're not quite ready yet.

You can always talk yourself out of doing something, but just remember 95% of the population do the same thing as everyone else. And they get the same result as everyone else. You want to be 5% of the population that actually gets out there and does something different and creates a real path for yourself. And that's what's really important. But you have to have belief, and you've got to take action. And sure, there might be a few risks, but my advice is just get out there and take some action.

He goes on to share some other resources that have inspired him.

Lloyd Edge: I really like Think and Grow Rich by Napoleon Hill, which I'm sure a lot of your listeners have probably read. And amongst the others that I've already mentioned, but you know, there's a lot of good property podcasts out there that always have a lot of good guests on there. And I think people just should immerse themselves around everything that’s out there essentially.

And if you just sort of look up ‘property podcast’, you’ll see who they recommend as the top 10 property podcasts. I probably don't need to list them all now or whatever, but there's a lot of good content out there. And I listen to them myself, and some of them are run by fellow investors or fellow buyer's agents and stuff.

I really respect what those people do and stuff as well. So, I listen to people, like my colleagues and the podcasts that they run, because particularly the guests that they have on, you can always learn from that. I love seeing the success of investors, whether it's people's clients or whether it's people themselves, I really love hearing about the success people are having. And I think that can be quite inspiring, even for me.

Even though I've had a degree of success, I like sort of seeing what other people are doing and just see. And then I think to myself, ‘Well, that guy actually did pretty well. Maybe I should do this better’ or something like that. So, there's always stuff we can improve upon or do better.

Tyrone Shum: That's the reason why I created this podcast—is to actually capture all of those successes and share them. And for me, it was also partially for selfish reasons because I want to learn from all the successes.

Because there's so many investors out there, and you think, ‘Wow, there's so many people in the population, but only like a small percentage, like 5%, or even less than that, who are actually property investors that have been successful’ and you wonder why.

Lloyd Edge: That's right. I mean, 90% of Australian property investors study to get to their second property—because they either had the wrong advice, they bought the wrong property, they got the wrong financial structure, those sorts of things.

I mean, I started my own property podcast for that same reason now, and that ties in with the book I wrote. So, it's kind of along the same title, Positively Geared. But it's the same thing, you know—I'm interviewing people and looking forward to having guests on and stuff like that. So, it's that same sort of thing. I think people just love listening to people chat and hearing about people's experiences and that's what it's all about.

Edge goes on to reveal the best advice he has ever received throughout his journey.

Lloyd Edge: I think the best advice—I can't remember exactly who gave me this advice—but this is the best advice I would give to someone else is: Treat others the way you want to be treated yourself.

So, at the end of the day, I think that's the most important thing above all else. Because I think in terms of my business and what I do, it's really about helping people. And you want to make sure that you're giving lots of advice to people.

As an example, for me, I would never suggest a property to a client that I wouldn't actually add to my own portfolio. So, that's one of the tests that I do for myself. If I wouldn’t buy it myself, then I wouldn't suggest it to a client because you're helping people with their greatest wealth and assets.

So, you really do need to treat people the way that you'd need to be treated yourself. And I think if we all live by that mantra, then it would be a happy world.

This is his biggest personal habit that he thinks helped him achieve this level of success.

Lloyd Edge: I like to read the newspaper in the morning over a cup of coffee and just relax.

Tyrone Shum: Talking about the physical newspaper or the iPad newspaper?

Lloyd Edge: Generally, the physical newspaper, if I'm sitting in a coffee shop. And this is usually when I've taken the dog for a run as well, because I think it's important to keep up your fitness and stuff like that. And quite often with busy days, it's hard to fit in getting fit and getting to the gym and stuff like that. So, you need to schedule that in.

So, I think that's really important: to just relax over a coffee, just to see what's happening in the news for the day and stuff like that. And that's a great way to start the day. To get in a relaxed frame of mind before you get on. And also for me, it's important to sort of balance your time a bit.

I get a lot of emails from a lot of people, but I also try to make sure that I don't have my weekends swamped with checking emails. I make sure that I don't do that. Or, maybe it's a Sunday night, I'll be checking emails in preparation for Monday to see what important tasks I've got to do. But I don't spend a whole week working and then decide I'm going to start checking emails all day Saturday and all day Sunday.

So, you just need to have that bit of life balance and make sure that you're giving time for your family and stuff.

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

Lloyd Edge: Probably get a little bit more education before rushing into a couple of those properties. I probably bought a couple of properties that haven't performed so well. And I was really keen at the time, and I think getting more education, and getting more of a settled strategy, having a roadmap and maybe seeking out a mentor that would actually put a roadmap in place for me. Because that's what I really didn't have.

I sort of set my own strategy and I built my own foundation from there. But I think, probably even going back more than 10 years, but if we're going back 12 to 15 years, I probably would have liked to have had someone put a proper roadmap in place to say, ‘This is how you can, you know, where you should be by now, how you can achieve your wealth’. But looking back on it, I think I've done okay. But it would have been interesting to see if someone had done that to me back then, whether it would have changed my path, whether I would have not bought a couple of properties and maybe bought something else.

Moving Forward Equipped With Hard Work

He looks forward to the future, where he shares what is happening for him in the upcoming five years.

Lloyd Edge: I think just growing the business and being able to help more people. And I actually think just watching my family grow up, I think, and that kind of stuff. So, I’ve achieved a lot of goals there. I sort of want to keep things more along the same track and just be able to sort of help people.

So, I don't have a number in terms of property. I don't think you’re going to interview me in five years’ time and suddenly find out I've got 50 properties or something like that—because I don't think it's about that. I could still have a similar amount of properties in five years’ time, sell some, and do development somewhere else and stuff like that. So, as I said, it's all about what they do for you, not the amount of properties.

And I may get into some bigger developments as we spoke about before. But it's really about growing my business, being able to help more people and things like that, and just spending time with my family.

Tyrone Shum: Last question for you is how much of your success is due to your skill, intelligence and hard work, and how much of it is luck?

Lloyd Edge: To be honest, I don't think that much of it is luck to be honest. And I wouldn't say I've got lots of skill intelligence or anything like that.

Tyrone Shum: I was going to say you have skill especially if you're a music teacher. It takes coordination to be able to play an instrument, especially to play it well, too.

Lloyd Edge: What I will say though is I do have a good work ethic. When I was a teacher, I was basically living and breathing property and teaching. And I actually did my real estate license and stuff while I was still a teacher. But I actually did that online at night, and I was studying. And I had a 3-year diploma that I did in three months. So, I actually sat up all night.

I was literally getting about two hours of sleep at night. I was teaching all day. I'd get home from school at 4 o'clock in the afternoon, and I'd sit up until about 3 o'clock the next morning just studying and stuff like that. And then I'd get back to school at like 6 o'clock in the morning for the next day's work.

That's the side of the work ethic there, which I probably had similar to when I was also a musician when I used to practice and stuff. But, yeah, it's hard work definitely. Even when I was investing property and teaching, I’d always be working on my portfolio at night and even maybe at lunchtime or after school and stuff like that. So, for me, I'm not one to sit down, put my legs up and relax. I'm always trying to do things.

Nowadays, I tend to do a little bit more relaxing, because I like to play with my son and stuff like that. But essentially, it is about hard work. It's not so much about intelligence. I think you can learn intelligence. I think I'm smarter now than I used to be. And you can learn that. But you learn that through hard work, and you learn that through who you're around. And I always say: If you're the smartest person in the room, then you're in the wrong room, and you should go to another room. So, I think that’s quite important.

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