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Hosted By Tyrone Shum

How Monopoly Inspired Owen Davis to Buy Properties for Investment

Updated 17/06/2019

Owen Davis is the principal director of Leifield Real Estate who’s not only been self-employed in the industry for fifteen years but has a portfolio which he’s been growing since 1997. Specializing in property management and the like, we’ll delve into how a childhood surrounded by numbers sparked his interest in finance when it came to property, how built up his own mortgage broking and property management business and how his interest in the game of monopoly grew into an interest for investing and managing.

Following this we’ll discuss how timing allowed Davis to sell his first home for $100 000 profit, why he decided to invest in Torrens Titled Duplexes and what he believes is the best advice when it comes to timing your purchases in the market. So what are you waiting for? Join us in this episode of Property Investory to learn all this about Owen Davis and much, much more. 

“It's the time spent in the market not timing the market… if you're able to borrow money now and get into the market, get in now.”
-Owen Davis

Having been in the property game for so long, Owen Davis is well versed in the area of property investing, finance and real estate… 

I’m the principal director of Leifield real estate and I’ve been self-employed in this industry for over 15 years, within the finance & real estate industry where we really focused on looking after the property. I started in the industry in the late 90s working for a number of different businesses and I really learned how not to do it really. But at the same time I was building my own portfolio of properties and in various different ways and yes so I bought my first house in 1997. So yeah 20 years now. 

From assisting other property managers, talking to business partners or property investors no day is quite the same for Davis...

On any given day how well it's working with all of our property managers as we specialize with property management across Sydney Melbourne and Brisbane. A lot of my time is spent working with them to help promote what they're doing through marketing. We do a lot of social media and we're talking to a lot of our business partners who are more or you're your mortgage brokers financial planners and accountants as well as builders and developers that we're working with to provide property management to all of their clients and purchases. So travel and our business are a bit different from the typical local agent who specializes more in owner-occupied science. So we're just focused purely on the property investors so it's out and about quite a bit, a bit of driving around Sydney. I was in Brisbane last sleep for a few days working with our team up there. It's talking to our property managers there on the ground all day every day dealing with their chance and our owners and all of the problems that come up and having to fix them and find solutions or whatever it might be in never a boring day in property management. 

Davis adds what he believes are the two important takeaways when it comes to managing property...

I've always said there are two key things that can turn any good investment property into a bad one and that's poorly structured finance and bad property management. 

Growing up in North West of Sydney and staying in that area for the most part of his life, Davis shares it was his early career combined with his childhood that sparked his interest in property...

I grew up in The Hills District of Sydney so spent most of my life there and haven't really got out of it. It was only a few years ago that I moved out of the Hills area near the Northern Beaches of Sydney. And yeah haven’t really mess around too much. Apart from that, I grew up there and I always knew that I wanted to do something with working with investors and working in the real estate area. I wasn't really the owner-occupied said a small city in typical local estate sales and it was okay but getting didn't really catch on to me. It was too transactional, I like relationships and looking after people and helping them to grow what they've got. I had a father who’s an accountant and public accountant so I grew up in a household that I was exposed to at least the tax environment. And you know it was not something that was talked about a lot. 

I guess I was exposed to it enough where I could ask a lot of questions and so I always had an understanding of what you could or couldn't do from a tax point of view. 

I tried doing the accounting thing after school but you know I wanted to have a chance of growing a personality, so I didn't go down that road. 

Completing his studies at the local public schools near him, Davis explains when he discovered further education wasn’t for him...

Went to a couple of different schools so just local, local public schools. And yeah their school for me wasn't really something that did a lot for me. You know I kept I think I already knew what I wanted to do but it was just working out how to do it. 

So yeah I mean I had a fun time at school that's about it. 

And why he decided to skip university and education in favour of work and experience...

Oh, university wasn't for me. I wasn't a good student, so yeah it's I wasn't interested in going to uni or anything at all. So I knew I always wanted to be self-employed. Yeah yeah. So what's the point of wasting four years and ramping up education to get that I wasn’t gonna use, so I went straight into the workforce. 

Davis shares the types of jobs he did prior to property managing and how he got into the property industry… 

I tried the accounting thing and yeah it just didn’t work out. I worked out that I had an affinity for numbers. And but yeah sitting in front of a spreadsheet all day not talking to anyone that wasn't for me and I learned a lot from reading different books about business and personal development and so on that, you had to be in business for yourself and you have to be good at talking to people, and good at sales and all that type of thing. So yeah so I started looking for jobs that would help me to get that kind of experience and because I wasn't known for naturally being an extroverted person. So yeah I went into a few different retail jobs where I was forced to talk to people and I walked in and said it was in the mobile telephone industry yeah. And yes I did a couple of years back and then I looked at moving more into a property and finance industry where I got some sales types roles in working for a finance or property related businesses and got some more experience and exposure to that industry. 

Deciding to go down the path of property management, Davis explains that he was initially questioned a lot about this career decision… 

Apparently I was told and I had someone who was trying to work out. 

Well, why did you go into property management as well even though? 

Owen Davis properties to buy

I had my mortgage broker business that I started 15 years ago 2003 and I went from there during the GFC to the real estate property management business and people who constantly try to understand why did I do that. You know when I'm just going to say well that's where all the big money is in good money's yeah yeah but I'm not really into that. And then I had someone whose show had hit my head once and lots of people would probably agree to still make it done more often but you know someone worked out where did this come from?

He shares that it was actually a popular household board game that prompted his desire to get into property management...

I used to play Monopoly lot as a kid as a young kid in primary school and I had two older sisters and so as the baby boy was kept being reminded that yes the two older sisters they weren't really interested in playing Monopoly and monopoly sort of the board games got a lot of negative connotations about it. I talk to people about it and say oh yeah Monopoly is just boring it takes hours, it takes days to play it and it is true everyone tends to give up playing monopoly just as it's starting to get interesting because that's yeah it takes a few hours for all the properties to get bought up and then you can start boarding houses and hotels on it. But as a result of that much all of this is used to get sick of playing the game with me. So from there yeah they tell me I'll just take my turn take my turn and yeah they've gone off on my island or something. And so eventually I just end up playing it you know going by myself - which people laugh at and you know it's yeah and it's okay. 

I'm over it now, I’ve had much therapy. But you know it's a bit like that and it started and it probably started like that in a situation where I just kept on taking turns and for my sisters to eventually and not many people know that there are actually 10 pieces in their monopoly game. So I thought well let's make it interesting because it stopped being about who was winning and who's losing for me and that's basically you know the bottom line. Whenever I tell this story people say well you know oh so you know who would win. But that stopped being the goal of the game for me. So I ended up playing the board game with all 10 pieces of myself and it stopped being about winning. It's started becoming about making the game last as long as possible. So instead of it being a game of winning it became a game of managing the players. So I didn't really, I didn't realise this until it was about six or seven years ago and where it's like oh maybe that's where I got it from. And yes for me I was because this game would last for weeks. I'd get home from so I'm pulled out from under my bed and I'd have to make sure things in the same places and yeah the bank would run out of money every so often so I'd have to set up Bank accounts on the back of envelopes of the players and then I'd sort of pack it up and slide underneath. When I finished that these games the last for weeks. And so it can management process of me from my point of view of trying to make these players stay in the game for a long possible. 

Purchasing a property to live in, back in 1997, Davis explains that it was the property boom that came with the Sydney Olympics and that marked the start of his investing journey...

The first property I purchased was the first home that I lived in. We got into that, that was in 97 and we got into that with only six per cent deposit. It seemed like a huge amount and the purchase price was something like - that and that was in Glenwood in Sydney, between sort of Baulkham Hills and of Blacktown - and bought that for two hundred and thirty-seven thousand dollars and that was huge money. But they say yeah it was huge money and people were saying, oh yeah you're overstretching yourself yeah and why are you a bit concerned. And it was a brand new property like a house and land package. And they finally managed to scrape in with that hope lots of mortgage insurance and we were up and running and in India, the boom started to happen with the Sydney Olympics. So the property market went off and over the next few years had some good cruds. 

Three years later we resold that for a $100 000 profit. And so that was pretty cool as the site where went up by 50 per cent in three years pretty much. And yeah we were over the moon and so we then bought another block of in Kellyville, built that ourselves to live in and while we were halfway through that bought another block or going all around the corner and so and the market was still growing at this stage. And so we built on that. 

Having had background knowledge in tax and accounting, it was following these two purchases in Kellyville that his property journey and portfolio continued to grow…

Took advantage of the market and our experience with building and yeah the amount of money you can save rather than buying a finished product Yeah. And of course, having that sort of tax background or accounting backgrounds, I knew that if we were going to build something purely for investment because that second one in Kellyville we rented out. 

So there was the first investment pure investment property and we wanted to keep it for at least 12 months to get the tax deductions and reduce any capital gains taxes which ended up starting it. 

So that was that process and then the market started slowing down then and we kept on buying new. 

We looked into a commercial property which for a little while ran the business out of but that was that was a good investment. 

And then we look at another property of Torrens Title Duplex which we actually rented it out as a fully furnished property for a little while.

Expanding on these Torrens Title Duplexes, Davis takes a moment to explain behind the spike in interest in these types of properties while giving us a word of advice when it comes to investing in them..

That's something that we have a lot of people in our business coming to us especially now with the growth they've been doing and so on. It's asking us about. And so I personally have the experience of it. And yeah it's just I don't personally recommend it but it can be good at your expense. Yeah if you're obviously getting a higher return but there's a there's a higher management cost of either time or money depending on whether you're doing it yourself. 

And it's also getting out there can be other costs involved. Yeah, know you have to pay for the electricity and all the outgoings yourself as well.

Having had experience with the previous cycles of the property market, Davis talks about how timing has been an enemy of his when it comes to investing...

This is the third cycle that I've experienced in Sydney and I guess see the worst personal experience is I guess it all comes down to timing of the market or time in the market. And it's people always when people lose money in property is when they have to sell for a reason and it's usually at a time where they might not have any choice whether it's through sickness or real Marshall or the force or whatever it might be or losing their job then and there and all. A lot of the time those things can happen where the market isn't the best and they might have bought and at the top of the market. And yeah and that effectively happened to me it's where we had to sell some properties about 10 years ago. At the end of men in the market you can often Sydney around 2010 2011 and yeah it's always the timing of the market where you know it's if you have to sell then it's usually not always the best time to sell. 

Often asked about timing and buying property, Owen shares his take and advice about this topic...

On the reverse of that, it's I get a lot of people asking when is the best time to buy and the best buy is always land you can get the money because and as we've experienced in the last 12 months is the credit crunch we’ve been going through. It is happening in the rural committee and the way the banks have reacted. 

A lot of people who have never had a problem being able to borrow money have now got a problem. So the best time to buy properties is when you can afford to and this time is to sell is actually never very true. So yeah that's probably blackfly only sort of personal bad experiences yet having to sell a time where they're not ideal. So and so it's important to have buffers in place to the finance if possible to help you right and have appropriate insurances in place and to try and help you get through those tough times. 

Having been in a situation where he had to let go of his own property, Davis talks about the circumstances which forced him to sell...

We had a family situation, illness at the time where know it was really a case where we just had not any choice to having to sell to be able to pay off debt and reduce costs and so on and so on. So - and that’s just called Life. /

While most people associate a specific moment with their realisation that property is a life-changing vehicle, Davis shares that this wasn’t the case for him...

It comes out of the hard work you know and maybe a lot of people don't like to say this but it is hard work. 

And I think there is that starting point on one aha moment is maybe a bit too hard to do. There's no secret sauce. 

While all of his interest in property seemed to just build and grow as time went on, Davis states that there are certain things he learnt along the way that cemented his desire to get into the property game...

Maybe that's where I am a little bit special is people but for me, it's not always an isolated case. 

Maybe I was a bit of property and tax geek and you know and I always sought out these things. 

It was so from you know quite young I was always interested in these things so I studied it. It's yes I would have had to have been late teens early 20s. Yeah, I was I was learning about all the different tax laws and how you can use them to buy the property and yeah learn about how to structure finance I guess it's the memory starting to work yeah. Yeah. Well, when I learned more about being able to structure finance I guess that's actually maybe the aha moment was of of of how to. And then having to tell banks had it had to do it the bank employees and that's where I maybe decided to become a mortgage broker after a few years that I got sick of having to you know teach bank employees how to structure my debt. It's like learning how to do that is interest-only startups being able to then get reevaluations out of bed after it actually increases sit out to pull out their equity. 

And so using different lenders learning have different lenders. But let's say if you step back and say you can sort of use them against the other. But this is in the good old days we put it a bit more difficult now. I guess it would be the aha moment of of of working out how to yes reclaim the equity that you had in the growth in the properties and then in the capital both better than finance next one then using line of lines of credit wackily available back end to the cash flow the building process and an end but also being aware of of the markets just keep growing all of the time so I, I did look at the past in terms of learning you know how long these cycles last fall and to try and take advantage of that as quickly as possible. So yeah I guess that would be the aha moment as of just learning how to take advantage of those finance structures. And so I think a good year to teaching myself how that worked out by speaking to lots of different things and there weren't as many mortgage brokers available back then as there is now. 

Multiple Strategies In Residential and Commercial Investing with Owen Davis

Going into detail about his portfolio, Davis shares how many properties he’s purchased and the strategy behind these...

Think it was about 7 have to name on the title either within or outside of Siever. And it's out of the mix as I said with residential and commercial and doing a few different things. 

But yes I guess it was various strategies and I always like to have a varied strategy with the properties. 

So looking at both our capital growth getting short term growth we've certainly got that when we were doing the house on land and doing the construction and doing. And we have time. 

So we did a lot of the project management ourselves myself and things and then look at some income options. 

We used that time style duplex as a fully furnished property and then the commercial one as well where it was a good income return and it's in other ways tried to avoid the key high-density strata properties. I don't have any strata in general. 

But it's more about staying away from the large developments. When you get to a Stratford property get you know a small development where you don't get caught up in in in a building or a complex it becomes a market you've been at such and I see that right across so many times right across Sydney and as well as Brisbane within our business especially now that you know some of the large buildings in complex they just become markets selling themselves. So I think I am fairly on at a fairly early on with trying to steer away from that. 

Having invested for quite a while now in both the residential and commercial space, Davis shares what has been his greatest learning experience.

Commercial Properties is not so and now. It's not as easy to understand as residential property. 

The cycles are usually can be on different cycles so it's it is a market within itself and then you've got the different types of commercial properties we give retail your industrial or your office started. It's almost like having to start from scratch again and people think oh yeah it's and I don't reckon in during my clients until the left for at least two or three residential properties just so that they get that experience and understanding of. 

Yeah yeah, the ups and downs of the expenses and maybe have a tenant for a while. 

Because even though commercial property can have a long term tenant they can also have a much longer-term vacancy as well. Yeah and that's fair. And so you see it and even though the expenses can be paid by the outcomes can be paid by the tenant and you're usually getting a high net turn. Yes you have to weigh that up with the possible much longer term. 

It all comes down to hard work... there's no secret pill or a secret sauce.”
-Owen Davis

I can see if. 

Given the high-risk high return factor that commercial investments offer, Davis talks about his experience in the commercial field and what type of properties he purchased to negate these risks…

It was a mix of office and industrial so it was like a professional industrial type unit. 

Yes I had a component of industrial was much storage and an office environment and I did that to give us the flexibility of types of tenants and you also look at the area and make sure it's a high demand area and what else. 

What sort of a development is going to be in that area and with this possibility of overdevelopment of commercial or that the development in that area is going to continue for a longer-term which means that it should provide more grass because actually it's fairly similar in that if you're in a business park there is projected development the next 20 years of a mix of commercial and residential then that might be a good area to buy-in? But you also need to look at the bit whether it's all going to be office or there's going to be a mix of industrial as well. 

Reflecting on whether it was the buffer potential that his mixed tenancy investments allowed him or another strategy that benefited him, he comments on how his choices have helped him with passive income or capital growth.

It's hard to pinpoint because you are focused on having a mixed strategy. 

I guess the one helps to pay for the others as well if you've got some negative. But. 

What's I learn from the experience of myself was and why I came up with this strategy of getting your first two or three residential firsts is one of what generally once you have own the residential property for maybe three to five years and you hopefully have some good rental increases at that stage by about the five Mark that the residential property should be pretty much paying for itself and might be positively geared at that stage. Just anywhere out in the market you bought in the circle in the cycle and so that's where it makes it easier to be able to hold on to that commercial property especially if there are any vacancies. So it's and it really comes down to the individual circumstances of the person or the client and how you can fit it into your mix of properties. 

And so it's not so much a cookie-cutter approach that yes if you're commercial and can provide good cash flow but you don't want to necessarily rely on that cash flow to help pay for the negative investment properties if he bottoms. Yeah. 

If that makes sense. 

Living a life so integrated with the property world, Davis explains why he chose to not only grow a personal portfolio but help others do so as well...

It comes back a bit to my Monopoly story. I think in terms of I just like things work. 

And I was motivated by Yeah through my mortgage broking business I could see that my clients are investors they just weren't being serviced properly by I term them the “lazy local agent” who is more focused on the owner-occupied sales and not looking after the clients properly. 

properties to buy

And I just want the things to work properly and make sure that they were set up right and because most most most of the time when things go bad it's those two reasons are poorly structured finance and bad property management. 

So you know if you and a lot of people spend so much time on researching what type of property they should buy and getting everything set up and where to buy the type of property and then they negotiate a great price. 

And it's almost like getting you to know people stay in you know all this time getting when they first get married and they spend the whole time planning the wedding that they forget about the marriage afterwards. 

If that's a good analogy. 

So if people are actually focused on what had to happen after they bought their investment property the experience of owning their first investment property, the process would be a lot smoother and lot easier. 

And that's where the finance is so important. So a good mortgage broker is a definite and. And then, of course, a good property manager. 

However, while his interest in property stemmed from an early age, he shares that there was a bit of a mindset block that held him back from diving headfirst into investing straight away...

There was probably a bit of analysis paralysis as they call it. But I think I enjoy it. I enjoyed that process. So it's so it wasn't too bad but it's yes you can spend a lot of time you know researching and researching to find the best property. 

And it's a lot of hair looking back if I bought one of the first 10 properties instead of waiting till the first 50 I probably would have done a lot better. It's a lot of the time it's you know if you're ticking off the basics you know you can't really go too wrong. But of course, you need to know what the basics are. And it's hard when you can get the money by then you can afford to. Because if he spent too much time waiting for the perfect place you might not be able to get into the market. 

He adds to this what else can happen if you wait too long before deciding to invest...

Either the property goes up in value and you miss out waiting for the best parts and or lending policies change like experience dramatically in the last 12 months and you can't borrow as much as what you've got anymore. 

In terms of resources or mentors Davis shares how they can help those wishing to get into the property world... 

It's probably more resources in terms of reading. Reading lots of books, doing lots of research. If it's something that you want to grow as a profession, whether it's building your own portfolio and knowing what you're doing you have to find. 

Good advisors, find that good property manager, find that good mortgage broker sign that good accountant and just ask lots of questions and read lots of books as well as lots of books out there about investing. 

Yes, some good some bad but it comes down to what you're comfortable with. So just because I don't like a particular book and what it says, it doesn't mean that it's not right you. Because it comes down to what you're comfortable with. But yeah find the accountant that's giving you the advice you want and what you're looking for and the same with financial planners and mortgage brokers. But if you speak to ten and they're also giving you the same answer then yeah maybe that's just the way things are and that yes they took at least three or four and interview them and say Yeah what are all the different choices and get educated that way. 

There's no better education then self-education. And just because someone is licensed to give you advice, doesn't mean they're licensed to give you good advice. 

Talking about what books he read and why he’d recommend it, Davis mentions Robert Kiyosaki's classic Rich Dad Poor Dad…. 

Probably the best basic book on investing was the Robert Kiyosaki Rich Dad Poor Dad book, which had put out plain English it's he talks about all of the different categories of investing and what's what to do when. 

And a lot of people want to jump in and do things straight away but also talk more about the business and the options there and talking about cash flow and basic financial education stuff which unfortunately we don't get in schools. Yeah, it really should be taught in primary school from that age. 

But yeah that would be the number one basic financial education book. 

When it comes to property-related advice, Davis says that the best advice he’s received is about just getting into the property market...

Around property investing, it would be it's probably the, I might have said it already 10 times but it's a get into the market when you can. It's about being in the market not and time in the market, not timing the market. Many yeah yeah. So it's really it's the time spent in the market not timing the market and so many people charged time the market so you know if you're able to borrow money now and get into the market, get in now. 

Yeah, a lot of people you know talking about is the Sydney property market going to keep on dropping. So it doesn't matter. It's if you can borrow the money now and get mad. Get it now and there will always be a bargain even in a burning market. There is always someone who has to sell for whatever reason. But unless you're there at the right time, in the right place to get that one property then you never know. You can't control those things. Focus on what you can control which is how much deposit you’ve got, whether you can borrow the money and get it in as soon as possible. 

And what personal habit he has that’s contributed to his success so far...

My personal habit with him within this industry is just to love it. 

So I'm continually here, I'm one of those people who just go is looking at open homes for fun or you know, it’s not quite as fun as looking on apps on your phone these days but in the good old days you'd pick up the old books and yeah I'd have an all of them next to my bed yeah it's just research it's research if you if you've wanted to look at a particular market you've got to get to know that particular type of market you'd be investing. 

So if you if your strategy is to buy a brand new, find out everything about buying a brand new property. Whether that be a unit or a townhouse and make sure you just get yourself educated. 

Looking back ten years in hindsight, Davis shares the important piece of advice he would’ve given himself...

It would’ve been doing whatever you have to not to sell.

If you can you just you can do whatever you can to not sell, you know even if you have to you know pay someone else out, get an investor that's coming for the other half of the property it's yellow. And a lot of time personal circumstances won't allow that but it's yeah it's you know I knew should’ve been said to me at the time. It's just like yeah circumstances allow it. Yeah. If I was to pass on what I knew should have been said to me at the time and it's yeah it would have you can not sell. 

So you would have gone to try and borrow from someone or?

Yeah basically because again it's about time in the market. 

And the more time you can spend in the market. And yeah there'll be five times where things don't move at different times in different markets around the country. 

Markets will be going off while others are stagnant and declining. 

But it sometimes in the area that is climbing. You can't afford the borrowing. So you might need to look to buy in and you might need to borrow in the market that’s a bit stagnant at the moment and then you say. 

Having achieved so much already and with so much more to look forward too, Davis shares what he’s most excited to see in the next five years...

I's getting to know new markets they were going through such a huge growth stage in even though you know people think that Sydney and Melbourne might come off. It's Sydney and Melbourne markets are still growing in terms of it. We still need more housing. We still need more development. There's infrastructure in Sydney coming out and that's providing opportunities. So there's so much opportunity out there. Yeah. It's just in the end all of them around these infrastructure areas and where this growth is happening and we're seeing prices even with brand new properties they're being adjusted and there is always good opportunity there you see your first home buyers, as well as investors, get back into the market strong. But then if we look at the Brazilian market it's overdue for growth. It's you know it's where Sydney was eight years ago and that's exciting as well because it's Yeah well I would if growth and anyone who has experienced their lives in Sydney and Melbourne you know it's it's going to happen again. 

It's all about time. 

So tell me how much of your success is due to skill and intelligence and how work and how much of it is because of luck?

It's all about hard work. It's yes I've got a natural skill as I had a born and bred in me for some reason. When it comes down to my new success it comes down to hard work and luck is all you. As the saying goes you always make your own markets. Luck is about you being in the right place but being prepared and you need to put yourself in the right place and be prepared to take advantage of it. So it's and that all comes down to the hard work. 

So there's not a secret pill, not a secret sauce. And if anyone tries to sell you that then yeah,

I've seen them all over the years. So yeah it comes down to the hard work. And yes if you just want to be a passive investor, you know, you don't necessarily have to put in hard work every day with it. It's about just putting in the hard work to find the right advisors. Once you find the driver advises that you're comfortable with it then you can take their advice. If you wanted to become a professional investor though then that's a career. And yet some people things years or a decade even studying to have a career. So yeah think of getting experience in the property market as long as you study period before becoming a professional investor. 

On that note, if you’d like to receive more great advice from Owen Davis or if you’d like to get into contact with him, here’s how you can reach him…

Through social media like Facebook. Our company page

Is Lei Field real estate that's Lie Field. I’m there personally as Owen Davis on Instagram as well. LinkedIn very active on. So there is also a company website. It's people's website saying that social media is taking over the world but yeah, Leifield.com.au 

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