Yes, I’m back blogging!! And to celebrate the occasion, I’ve brought some reinforcement with me!
Joining me today is Nhan Nguyen from Advanced Property Strategies.
Nhan has been on stage at our Property Networking Groups many times, and I don’t know many people who are more active than he is in the market.
Which means that when it comes to understanding the current state of the property market… and to understanding where it is headed and how to profit from it – there’s no one better person to listen to than Nhan.
I recorded a ‘short & sweet’ interview with Nhan this morning that you absolutely have to listen to. (There’s a full transcript below if you’re short on time).
What’s Revealed In This Recording:
- Where the eastern seaboard market is going? Should you buy? Should you sell? Should you wait? [2:30]
- What should be your biggest focus right now if you want to profit from property in 2019? [3:14]
- Is cash still king? [4:04]
- The opportunity in buying properties cash-only (and how to get it all back in 60-90 days) [4:24]
- Why you shouldn’t worry about the “Doom & Gloom” (and the Four things you DO need to pay attention to) [5:13]
- The crisis of compounding negative gearing that brings new bargains to the market [7:03]
- A market segment becoming desperate to sell – and sell quick (fastest way to get $80,000–$100,000 discount with virtually any kind of property right now – even in Brisbane City Council) – Check out Nhan’s FREE webinar to learn more about this strategy!
- How to win the race with cash offers – and make the seller drop the price once you’re in [8:40]
- The simple secret to being in the 1% that stay ahead of the game, while most tire-kickers get eaten up by the current downturn cycle [10:12]
- How to choose the right real estate agent to sell your properties (things are changing, you better pay attention to this) [11:03]
- Go beyond the theory and get the nuts and bolts of Nhan’s current property strategy – check out this FREE Online Webinar [13:03]
- Why many developers and subdividers will struggle big time in 2019 – and the simple solution to make sure you don’t fall into the same trap [13:32]
- How to overcome the fear and find the right properties for you BEFORE the next boom comes and you’ve missed the boat [14:13]
- The #1 Money Making Truth that will NEVER change in property [14:55]
- Key tip for every active investor in the current market – how to guarantee you have a “safe passage” to protect yourself in any market environment [16:13]
Click ‘Play’ now:
Here’s the link to Nhan’s upcoming webinar: Find More Deals Than You Can Handle – With This Unique “Motivated Seller Detector” Strategy!
It takes place on Wednesday, November 21st – so make sure you save your seat NOW. According to Nhan, no re-runs will be made available.
That’s all for today. If you enjoyed this blog post, please leave a comment to let Nhan & I know.
Matt Jones: 00:00 G’day everyone, this is Matt Jones here from the Property Resource Shop today and I have got a special guest in the Zoom Room with me that I wanted to pick his brains a little bit and I’m sure everyone listening in will get a stack of benefit out of me chatting to Nguyen. His name is Nhan Nguyen, from Advanced Property Strategies, and he’s joined me many times on the stage at our networking group in Brisbane. He’s been touring around the country, he’s been doing a whole stack of deals himself, so there’s no one better to be chatting about the property market in its current state and where it’s headed from here. So let’s get him on the line. Let’s welcome Nhan Nguyen.
Nhan Nguyen: 00:39 Hey buddy, how you going?
Matt Jones: 00:41 Good mate, thanks heaps for your time today, I know you’ve got plenty of stuff going on in your world.
Nhan Nguyen: 00:46 Yeah it’s pretty crazy at this point in time. It’s not just towards the end of the year, but lots of activities and deals and events and trainings, so … I mean I love it mate, wouldn’t want it any other way.
Matt Jones: 00:57 It’s a great time to be taking stock of what you’ve done this year and where you’re going next year, particularly with I guess a lot of uncertainty in the market and lots of people saying different things about what they think’s going to happen. I know you’re at the coalface, you’re on the ground, you’re teaching people, you’re doing deals yourself, so I’m really interested to hear what you reckon the current challenges are and how to overcome them and how to make the best of everything that’s going on.
Nhan Nguyen: 01:23 Thanks mate. Look it’s been a very interesting time, especially the last 90 days, especially after the Michael Matusik seminar. I know that a lot of the listeners out there were there at the Brisbane Property Networking Group. I know Matt, yourself and myself, we attended a one-day master class with him and he’s getting a lot of interest right now because people do want to know where the market is going, should they buy, should they wait, should they sell. It’s a lot of interesting questions out there and I think a few things that I’ll mention on today’s recording, is that they should definitely take the fear out of the consciousness wherever they can. People have a lot of fear when markets correct.
Nhan Nguyen: 02:05 There’s two things that Kiyosaki talks about, there’s emotions in the market, whether in shares or in property, fear and greed. When the greed happens and all the herd is jumping in, that’s when the market increases in price, and in fear the market goes the other way. When there’s less buyers, more supply than there is demand and markets pull back accordingly.
Nhan Nguyen: 02:30 I think the main eastern seaboard is probably where I’ll focus today. Not from a analyst point of view, but just from a general principles point of view, because it is pretty congruent. I know that Sydney and Melbourne are pulling back significantly. When I say significant, in some places 5%, in some places 10%, some places more, depending on the areas. However, I am finding that Brisbane isn’t as rapid in terms of the correction you could say. I’d say it’s probably more of a stability. There is less investors definitely in the marketplace, and finance. I think one of the things that most people haven’t prepared themselves for, and I’ve been spending many years preparing myself for, is finance. That’s one of the biggest things I learnt in the GFC is liquidity.
Nhan Nguyen: 03:14 So post-GFC I spent I reckon at least two years getting myself deal ready. So moving forward with people, whether they’re planning to buy now, or the next 90 days, 180 days, I do believe there are some serious bargains coming and that people do need to get deal ready. Getting deal ready in many instances can involve various things. Whether it’s getting your tax returns in order so you can borrow, selling down assets that are non-productive, reducing personal debt, or creating relationships where people can get investors to fund projects. So deal ready is such an essential thing and like I said in the last five to 10 years, especially since the GFC, the first two years was getting my finances in order, companies, trusts, entities.
Nhan Nguyen: 04:02 I haven’t held a lot of property in the last few years, simply because I know that in times like this, when finance is critical … There’s two things that are critical. One is cash and the other one’s serviceability. People talk about cash is king, yeah absolutely. I put aside a fair chunk of cash to be able to buy sites with cash, but I don’t plan to leave my cash in there. Let’s say something’s worth $1 million, we can offer them $700,000, settle in two days, a week, whatever, ask for a 30% discount and then what my plan would be, would be to refinance at 80%, pull as much cash as I can out, get an investor to replace the rest of the cash, so I’ve got my $700,000 out within 30, 60 days of purchasing that property, then I’m ready to go again.
Nhan Nguyen: 04:45 I do believe that in times like this, you need to prepare yourself and if you haven’t been, it’s even more critical than ever. You need to know and learn how to raise capital, you need to learn how to get investors to say yes to you, need to know how to present those business plans to investors so that you can buy …. Because there will be blood on the streets, I believe that. You can’t do it overnight, if you’ve got no skills and no training.
Matt Jones: 05:13 There were some really good points there and stuff that we’re not really hearing in the market. You just often hear the doom and gloom, and everyone wants to get out or they’re just going to sit on their hands and do nothing, but you’re more of the opinion of preparing yourself for what’s to come.
Matt Jones: 05:29 A lot of people, you see in the cycles have gone by, don’t do that, they’ll tend to just get distracted by something else, whereas right now is a fantastic time to be preparing for the opportunity. In fact there’s opportunity there now but I guess the bigger opportunities are yet to come, and it’s really about pulling those key structural things together to make sure you’re ready to jump on them and take action. Not only from a deal point of view like you said, being deal ready with structures and cash and serviceability, but knowledge. Knowledge of what does a good deal look like, in this current market, and what sort of discounts should you be searching for to make sure that you’re risk-proofing the whole deal itself.
Nhan Nguyen: 06:14 Exactly. And oftentimes when the market is good, everybody becomes a property developer. They’re buying a house, putting a granny flat on the back or they’re doing a duplex and it’s fashionable, it’s cool and it’s very easy to make money, or it seems, but after … If you flip a few properties, after two or three or four and the market caps out, if you haven’t got the skills and you haven’t got the margins in there, that’s where you’ll definitely make mistakes. That’s what a lot of people are coming unstuck with right now. The guys and girls in the last 18 months who you could say who paid too much, who paid retail. There is a handful of things that will bring them unstuck.
Nhan Nguyen: 06:52 One is potential negative equity, if you’ve paid too much. I know people in Sydney who paid $1.6 for resi properties and they’ve come back to $1.3 in certain areas and they’ve got negative equity. So they sit there and they wait, so that’s one particular problem.
Nhan Nguyen: 07:06 The second thing is interest and finance changes, going from interest only to principle and interest. If people have got 5, 10, 15 properties and they’ve got millions and millions of dollars of debt, before it was yes, negative geared but now it’s even worse. Previously they were using equity to pay for that negative gearing and now it’s compounding. It might even increase their payments by 10%, 20%, 30%, 40%, which they couldn’t afford before, now they definitely can’t afford it and they’ve lost equity as well. It’s just essentially winding up the credit card.
Nhan Nguyen: 07:39 And the third thing is that, especially with this baby boom thing that people have been talking about and the changes, I’m finding in a particular deal that I’m negotiating right now, there’s a couple that’s moving into a retirement village and they’ve already committed to it. They put a property on the market, it went under contract and then the buyer’s finance fell through.
Nhan Nguyen: 08:01 So these guys are pre-committed elsewhere and they need the cash so from my point of view, I put in a low offer and seeing if they’re interested or not and they’ve basically taken my offer. Previously, they had accepted an offer of $530,000 and now we’ve come in with shorter terms and conditions, a seven day due diligence plus a 14 day settlement, and they’ve accepted $450,000 and it’s an 840-odd square meter block, potential to sub-divide into two. It’s still in the Brisbane City Council, which is my area of specialty, but my point is that because finance is harder to get and I have prepared for years to be deal ready, cashed up, ready to roll, it means that I can put in more aggressive cash offers. I don’t go unconditional, I go in cash offers. What I mean by that, it’s still subject to due diligence, it’s still subject to building and pest … Because with even the building and pest, in this instance, I’m going to see if I can get a further discount based on the building and pest conditions.
Nhan Nguyen: 09:01 You make your money when you buy, not when you sell. This area’s about 12 kilometers out, close to shops, close to schools, train line, bus line. So what’s my point in all this, is that a few years ago, Westfield, they started to put together a multi-billion dollar war chest because they knew that commercial, everybody’s going online. eBay, Amazon, Alibaba, they’re buying a lot of stuff online so the shopping centers … You look at the States, a lot of shopping centers have closed down, but they’ve put together war chests to be able to [get 00:09:33] most attractive shopping centers around. So my take on it, in the last couple of years I’ve been telling my clients to get themselves deal ready, cashed up, so that when the tide changes and the prices start … The buyers start to leave the market, there’s more opportunities and you have to be pushing yourself harder to get good deals because it’s just one of those things, you can’t just wait for the deals to come to you.
Matt Jones: 09:58 Yeah, and that’s the cool thing. This is the positivity in the whole thing, where the cycle weeds out the tire kickers. Everything’s going up, agents are writing orders everywhere, developers are doing whatever they want and it’s all fun times. When it changes, it’s not hard to be that far ahead of the game. All the tire kickers, all the wannabes are just falling by the wayside and you’ve only got to do a little bit more work, little bit more education, to be ahead of the pack, be in that 1%. So it’s a really good time to be knuckling down and getting deal ready, learning about these strategies and ready to jump in and capitalising on that. There’ll be a lot of transfer of wealth, as always with any cycle change, and it just depends on which side you want to be on.
Nhan Nguyen: 10:47 Exactly. I actually really enjoy times like this, whether it’s morbid or not, but I’ve found over the last five years, especially when the market’s so strong, a lot of the agents are so arrogant, that once they’ve got a listing, that they believe that they’re God. They won’t answer the phone, they won’t reply.
Nhan Nguyen: 11:03 Here we’re getting a lot of responses from real estates. Why? Because they’re hungry. A typical real estate agent, and this is not to offend any other real estate agents intentionally, it might unintentionally upset you, but maybe in 12 months’ time when you’re not a real estate agent anymore it won’t matter, but over 90% of real estate agents only last 12 months in the industry. And then essentially they’re commission salespeople, so if they don’t sell, they don’t eat. And if there’s a reduced number of buyers out there …
Nhan Nguyen: 11:32 This is the other thing is that reduced number of buyers out there makes agents more hungry. That’s what you’ve got to do, is find the agents who are smart enough to realize, or hungry enough to realize that they need to sell this house, even if they get the vendor to reduce the price by 5%, 10%, 20%. If they sell the property, they get to eat. If they don’t sell the property, they don’t get a sale and someone else is going to sell it, or the second or third agent. I know myself, I’ve got a property that first time around we couldn’t sell it, so we’ve had to drop the price, yep fair enough, but I know that I’ve got an agent who’s hungry and happy to move the property and we’ll still make a small profit on the property but it’s a good sign. Opportunity for me is, you make your money when you buy, not when you sell.
Nhan Nguyen: 12:13 In this instance, it sharpens me to buy even better. I’m even more aggressive with my margins because I know that if I buy at a deep discount, I can still sell at a small discount and make profit.
Matt Jones: 12:26 Mate this is all really good stuff. People are probably thinking, well this is all well and good in theory but getting to the nuts and bolts and the practical side of it is really the key, as we all know. Now I know you’re putting something together online where you can go into a bit more depth here with this and maybe even share some of your own projects or sites that you’re working towards. Is there something that we can give the listeners access to?
Nhan Nguyen: 12:52 Yeah absolutely. Look I’m doing my last and final webinar for the year in the next 24, 48 hours. Obviously if you’re getting this recording from that night, you’ll be able to access that. It’ll be my last hurrah basically for the rest of year, from introductory content point of view. We do have boot camps later in the year but this is the last opportunity for you to be able to access those boot camps and mentoring days. So we’ve got a three hour webinar. Think it’s a two hour webinar and looking at ways on how to buy properties under market value, how to find free blocks of land, how to get multiple streams of income, how to get money partners to fund your projects.
Nhan Nguyen: 13:32 I think the things that I’ve been talking about for the last three to five years, especially even more pertinent now when you can’t get finance. I’ve been capital raising for years, I’ve been getting my cash ready to buy under market value. It’s one of those things that previously you could make money in the property market without much skill, you just buy something that looks like it’s going up, probably had a year, two years’ growth, just jump on the bandwagon, but these days you actually need skills, expertise and knowledge to be able to do that.
Nhan Nguyen: 14:03 If you know what indicators you’re looking for, that allows you to get in very, very easily. But if you don’t have the indicators or the knowledge, you’ll be sitting around in fear, waiting for the next boom to come. Usually by the time you find out when the boom’s come, it’s probably too late, you’re probably two to three years into it and you’ll miss the boat. You really want to get in at ground floor.
Nhan Nguyen: 14:27 I’ve got clients in Townsville, who over the last three to five years, have made six figures consistently in a declining market. Whether you’re in Brisbane, Sydney or Melbourne, you can make money in any market environment if you follow the right principles. Billionaires who buy shares or buy businesses or buy property, they like to buy at a discount and this is using exactly the same principle, you make your money when you buy. That’s just so critical.
Nhan Nguyen: 14:55 If you’re an area expert, I think that’s another thing as well. A big mistake that people make is they spread themselves too thin, they try to do two different things, they’ve tried this zoning, that zoning, that council, this strategy, they just don’t specialize in a certain area, therefore they’re not getting traction. Traction is a result of expertise. You don’t get better at swimming by playing tennis. If you want to get better at swimming, you’ve got to focus on that and get better at it. What you will find is once you’ve mastered one skill, it’s very, very easy to add another skill on top of that skillset.
Matt Jones: 15:27 Awesome mate. No, takes us back to where we started really with general principles. It doesn’t matter what the market’s doing, up, down or sideways, it’s always going to be changing and if you’ve got those key principles in place then you’re always on a winner. Mate it’d be great. I encourage everyone to get along to that final webinar for the year, purely because … I’m not tooting your horn here too much mate, but I’ve been following you for many years, I was a student of yours years ago, and you’re one of the few that just continue to reinvent as the market changes. You’ve been through many cycles and having that knowledge is really powerful, so to be sharing it with others is massive. I’ve seen your guys get a lot out of it and make some big headway, big gains going forward.
Matt Jones: 16:13 I encourage everyone to jump on. There’ll be a link under this recording to click on and go and join and hear a bit more detail, couple of hours of you talking about that stuff is pretty special so that’d be great mate, thank you.
Nhan Nguyen: 16:25 Awesome mate, look I appreciate that and I think one of the other things that’s important in this marketplace is being flexible. When you’re doing a site, oftentimes people only have one exit strategy.
Nhan Nguyen: 16:36 I’m doing a 30 lot sub-division at the moment where we’re getting approvals to obviously sub-divide. It’s zoned for townhouses, it’s zoned for apartments, we can put three story apartments on it. Our two key exit strategies at this point in time is potentially selling the site with approval or developing the site ourselves. With my experience and depth and background of property and land sub-division and property development, I’m not attached to which outcome I get. Obviously if I develop it, I want to make a lot more money, probably twice as much as if I sell it with plans and permits, as they call it in Victoria, or development approval, but my key point is you need to know how to, as we call it, safe passage. Get safe passage through these times, especially if you’ve got existing stock or you’ve got intentions of becoming a property developer long term. If you’re making money ongoingly, then you can keep doing deals within any market environment.
Matt Jones: 17:30 Awesome mate. Good to hear. It’s great to hear a positive side to the market against a lot of the spin that we get, and just get some fact. Back to basics sort of stuff, which is really valuable. So thanks for your time mate and I’ve got a stack of notes here, so I look forward to seeing you on the webinar shortly and you’ll go into a bit further depth. So mate, enjoy the rest of your year ahead and talk to you again soon.
Nhan Nguyen: 17:59 Absolutely mate, can’t wait. Cheers buddy.
Matt Jones: 18:01 Cheers buddy. Bye.
Nhan Nguyen: 18:02 See ya.