S2E25 - Our Biggest Property Mistakes: 30 Years of Lessons in One Episode

[00:00:00] Imti: Today we wanna put you in a time machine. Take three people, 30 years of combined experience across finance, property, selling, and management, and give you our three biggest personal mistakes that cost us time, money, and mental health.

Then we'll bring it home with the one thing you need to do to avoid each of these mistakes on your property journey. Here's the thing, most property mistakes sound obvious in hindsight. Buying in the wrong area, paying too much, not checking the numbers properly. Ours are a little less obvious, and honestly might confuse you a little bit.

Pete's mistake was buying based on land size, mine was actually researching too much, and Skye's was buying a property that felt safe. Right now, buying your first property is harder than it's ever been, and we hope this helps you avoid some of the painful bumps in the road by plugging into probably some of our most painful experiences. Let's start with why buying more land isn't always the smart move it sounds like.

Pete, I want you to kick us off. Why was land size so important to you?

[00:01:03] Pete: I think it just came down to the, Australian dream, right?

[00:01:05] Imti: Mm-hmm.

[00:01:05] Pete: Everybody, within Australia, everyone in our generation, it's always been buy that big home.

[00:01:10] Imti: Mm-hmm.

[00:01:11] Pete: 600, 700 square meters, and that's all you need to do. That's the ultimate goal in life, and I think that kinda flows through into the investing strategy as well.

And it's something that I just always had in my head, no matter what I bought, it had to have the biggest land size possible.

[00:01:24] Imti: Mm-hmm.

[00:01:25] Pete: And it didn't really matter where it was located-

[00:01:27] Imti: Mm-hmm ...

[00:01:27] Pete: in a sense. As long as it was located in a decent location, the bigger the land, the better.

[00:01:32] Imti: Mm-hmm. Where did you learn that from? You mentioned the great Australian dream, but looking at buying investment property, what did you read, hear, learn that made you go, " I need to get a huge block no matter what"?

[00:01:47] Pete: Uh, it was probably more family driven, because always at parties and events and whatnot with family, everyone would talk about, "Oh, I just bought a house," and their first question is-

[00:01:55] Imti: How big's the block?

[00:01:56] Pete: Yeah, exactly.

[00:01:56] Imti: Yep.

[00:01:56] Pete: How big's the land? It's like, "Oh, yeah, yeah, that's good. That's good." You know?

[00:01:59] Imti: Yeah.

[00:01:59] Pete: You can subdivide that, even though you probably couldn't. all that kind of rubbish that was just thrown around. and back then as well, we're talking, what, eight, nine years ago-

[00:02:06] Imti: Mm-hmm

[00:02:07] Pete: land size was still such a big thing-

[00:02:10] Imti: Yeah

[00:02:10] Pete: ... across, all the investment books. Podcasts were kinda new at the time, but they were talking about land size as well

[00:02:15] Imti: mm-hmm.

[00:02:15] Pete: And it just felt like the safer option as well.

[00:02:18] Imti: Yeah. I don't think I'm imagining it, similar sort of journeys in terms of our education, and Skye, I'm sure for you as well, everything that you read was all about the value of land.

[00:02:28] Skye: Mm.

[00:02:28] Imti: Like, it was all square meter dollar.

[00:02:30] Skye: 'Cause it gives you options later, right?

[00:02:31] Pete: Yeah, that's right.

[00:02:31] Imti: Yeah.

[00:02:31] Skye: Whether you could subdivide it or not-

[00:02:33] Pete: Yeah

[00:02:33] Skye: like you say.

[00:02:34] Imti: Mm-hmm.

[00:02:34] Skye: It's like, oh, maybe you could.

[00:02:35] Imti: Mm-hmm.

[00:02:35] Pete: It's nice to know that you could, you know?

[00:02:35] Imti: Yeah.

[00:02:35] Skye: Yeah, yeah.

[00:02:35] Pete: Like, that's all it is. It's not a strategy.

[00:02:40] Skye: No.

[00:02:40] Pete: It's a nice-to-have.

[00:02:41] Skye: Yeah.

[00:02:41] Pete: like I said, it's more of a safety net, even though you might not be able to do it, but mentally you're like, "Maybe I could one day."

[00:02:47] Skye: Mm-hmm.

[00:02:47] Pete: So you justify that decision.

[00:02:49] Imti: Rewinding back to when you made those decisions, you would've felt really comfortable about that though, right?

[00:02:54] Pete: Yeah. Yep. That's pretty much what got me over the line.

[00:02:56] Imti: So in hindsight, what do you think you might have overlooked in those properties because you were like, " I want a massive block of land, so I'm not gonna look at these issues with the property?

[00:03:07] Pete: Yeah. So it came down to location. I just tried to find the biggest block of land I could as close to the city.

So my, my threshold was like as long as it's over 600 square meters-

I'll be okay.

[00:03:17] Imti: Yep.

[00:03:18] Pete: Now, in hindsight, I probably could've got something a lot closer to the city and it would've outperformed the properties that I'd bought.

Because even though I probably could subdivide 'em, value in the land is always higher when it's closer to things that people want to be around.

[00:03:31] Imti: Mm-hmm.

[00:03:31] Pete: So location was key there. And then in terms of the property type, I didn't really care about the condition too much. I've talked about it on, the podcast before. I've bought old weatherboard homes-

[00:03:39] Imti: Yeah

[00:03:39] Pete: ... which have had a ton of maintenance. So we're talking 900 to 1,000 square meter properties, definitely subdividable, definitely could put a granny flat, but the maintenance on them has been significant.

[00:03:49] Imti: Mm.

[00:03:50] Pete: And the tenant turnover's been quite high, too.

[00:03:52] Imti: So really when you were looking, it was: open realestate.com, filter by kilometers out of, let's say, Melbourne CBD, filter for land size at over 600 square meters,

[00:04:05] Pete: Yep. And then if, even if something at 600 squares came up, it's like, "Well, could I do something at the rear?" So was the driveway wide enough to do a granny flat or something like that? And I would pass on properties that I look back on now that have well outperformed the properties I selected even though I'm not even gonna do the granny flat and the development and all that kind of stuff anymore.

So I guess in hindsight it was pretty poor decision making.

[00:04:27] Imti: Mm-hmm.

[00:04:27] Pete: But the reality is the decision was made, so we can't look back.

[00:04:31] Imti: Yeah. When did you realise that prioritising land size was maybe a mistake that you shouldn't have?

[00:04:37] Pete: It was probably three to four years ago when I started to look at options closer to CBDs, so in capital cities and regional towns, purchased those properties.

They were neater internally, maybe they had a renovation or a little bit more modern, so they might've been built like 2000s, but we're only talking like 300 square meters. And I've got strong, stable tenants, no maintenance, and the property prices in those areas have gone up more than the outer skirt suburbs where I'd previously invested.

[00:05:05] Imti: Mm-hmm.

[00:05:06] Pete: Purely because that's where people wanna live.

[00:05:07] Imti: Yeah. Would it be fair to say- Even if the smaller block performed as well as the older block that you bought, you would've preferred to actually buy the smaller block?

[00:05:18] Pete: Yeah. A- and look, it, definitely restricts my options in the future, but I think from, like, the headaches point of view ... and the maintenance and the constant tenant turnover, yeah, I'd definitely go the smaller blocks.

[00:05:28] Imti: So talk to me more about the tenant turnover and maintenance, because someone listening to this might be like, " It's a big block of land.

Why is there more maintenance- Mm ... or why is there tenant turnover?"

[00:05:40] Pete: Yeah. So when you're buying in these outer- suburbs, we'll quickly take a step back before we get to that, is you're getting a higher rental return.

[00:05:45] Imti: Yeah.

[00:05:45] Pete: And that was also what was attractive, the higher rental return.

But when you're buying these older homes, the maintenance isn't gonna be, $1,000 a year, which it could be on a smaller block close to the city which has been renovated.

[00:05:58] Imti: Mm-hmm.

[00:05:58] Pete: It's gonna be more like two to three. Could be even more. Could be four or five, because I've had issues underground piping because the infrastructure underground's nearly 100 years old, so it definitely needs to be replaced.

so that kinda compromises on the yield as well. So instead of getting a 5% yield, it's probably, a 3% yield.

[00:06:15] Imti: Yeah. And I know that we've spoken about it before, but it's the whole how much money are you actually gonna bank at the end of the year from that cashflow, right?

[00:06:24] Skye: Yeah. What's on paper versus reality.

[00:06:26] Imti: Yeah, yeah. Being a spreadsheet warrior versus what's actually-

[00:06:29] Pete: Yeah

[00:06:29] Imti: ... in the bank at the end of the month.

[00:06:30] Pete: Yeah.

[00:06:30] Imti: And for a lot of people with the big block and-

[00:06:33] Skye: Mm

[00:06:34] Imti: ... the big, amazing rental return on paper... to your point, they might overlook that the maintenance difference might be 3, $4,000 a year, and that eats up the extra $50 a week that you got in rent, right?

[00:06:47] Pete: Yeah.

[00:06:47] Skye: A hundred percent, I see people miss that all the time. Mm.

[00:06:49] Pete: Yeah, easily eats up. And then you got the tenant vacancies too.

[00:06:52] Skye: Mm.

[00:06:52] Pete: So every time you re-lease a property to a new tenant, you gotta pay-

[00:06:55] Skye: it's more cost

[00:06:55] Pete: ... a higher property management fee or you got a vacancy. it all adds up.

[00:06:58] Imti: Mm-hmm.

[00:06:58] Pete: So really a lot of people will get

And I did this. It's spreadsheet, yeah, $1,000.

[00:07:03] Skye: Mm.

[00:07:03] Pete: Or there's like a, 1%. People do 1% of the purchase price or something like that as a maintenance buffer.

[00:07:07] Imti: For maintenance. Yep.

[00:07:08] Pete: Yeah. Like, you just use these, numbers-

[00:07:10] Imti: Yeah

[00:07:10] Pete: ... and you don't really think twice.

[00:07:11] Imti: That someone on the internet plucked out of the sky-

[00:07:12] Pete: Yeah

[00:07:12] Imti: and told you to put in a spreadsheet. Yep.

[00:07:14] Pete: Yep. And I've done that. I-

[00:07:15] Imti: Yeah, we've all done that

[00:07:15] Pete: ... you know, and I still do it with clients. We have to come up with some form of a number. But if it's an older home, I definitely bump that up.

[00:07:21] Imti: Mm-hmm. let's take you back to when you made those purchases.

If we were to take you back 10 years and land size was still important to you, but you knew what you knew now, would land size have been your highest priority, or what would be your highest priority now when you're looking for a property?

[00:07:38] Pete: Uh, yeah, it definitely wouldn't be land size. It would probably be buying in areas which are gentrifying quite quickly.

[00:07:45] Imti: So for someone who doesn't understand the term gentrifying or the impacts of that-

[00:07:49] Pete: Yeah

[00:07:49] Imti: ... can you break that down a little bit?

[00:07:50] Pete: So it's basically 30 years ago people didn't wanna live there.

[00:07:53] Imti: Mm-hmm.

[00:07:54] Pete: Now we do. That's really how it is. Because they're changing, so we're getting cafes and lifestyle, and older homes are getting knocked down and, rebuilt with townhouses or units, and people are wanting to live there because it's somewhat affordable as well.

So If you grew up living four kilometers out of the city, you might be now looking to go out nine, 10 kilometers, and that's often where the gentrification is happening.

[00:08:15] Imti: Mm-hmm.

[00:08:15] Pete: So I would have targeted those kind of suburbs in and around Adelaide, as opposed to, I guess, some of the outer skirt suburbs.

That's definitely what I would've done.

[00:08:22] Imti: Mm-hmm.

[00:08:22] Pete: Um, I don't like that answer Yeah. What was the question again?

[00:08:27] Imti: Yeah, let me re-ask it.

[00:08:28] Pete: Yeah.

[00:08:29] Imti: Um, Pete, if you were to go back in time, back to 10 years ago, and you're reprioritising what was important, land size not the most important thing in the world to you anymore, what would be the number one thing?

[00:08:42] Pete: It'd be ... That's a good question.

[00:08:45] Imti: Thank you.

[00:08:46] Pete: Yeah.

[00:08:46] Skye: Hmm.

[00:08:46] Imti: It's a great question.

[00:08:47] Pete: It is, it is. If you think about it. I don't even know. It's just, yeah. '

[00:08:52] Skye: Does it not-

[00:08:52] Pete: Like, it's-

[00:08:53] Skye: ... come back to your goals and what you're trying to achieve-

[00:08:54] Pete: Yeah. Yes ...

[00:08:55] Skye: at that point?

[00:08:55] Pete: That's exactly right. Yeah. It's coming back to that. Yeah, yeah.

[00:08:57] Skye: 'Cause you're-

[00:08:57] Pete: It's like everyone's so different ...

[00:08:58] Skye: you're taking yourself back to, like, that point in time.

[00:09:00] Pete: Yeah.

[00:09:00] Skye: But your goals are different now.

[00:09:02] Pete: Yeah.

[00:09:03] Skye: It's tricky to answer.

[00:09:04] Pete: It is, yeah. And then also trying, like, to make it-

[00:09:06] Skye: Your goal at that time, right, was just to get as many properties as possible.

[00:09:09] Pete: Yeah. Mm-hmm.

[00:09:10] Skye: That's changed.

[00:09:11] Pete: Yep. But then-

[00:09:12] Skye: Maybe it's that ...

[00:09:13] Pete: yeah. Because y- yeah, but your question was what

[00:09:15] Imti: what would you prioritise the most?

[00:09:17] Pete: What would I prioritise?

[00:09:18] Imti: So your search was being led by-

[00:09:21] Pete: Land size ...

[00:09:21] Imti: land size.

[00:09:22] Pete: Yeah.

[00:09:23] Imti: If you went back, what would you lead your search with?

[00:09:26] Pete: Yeah

[00:09:26] Skye: Is it asset or location?

[00:09:28] Pete: Yeah, location. Yeah. Or it would be both, actually. Yeah, yeah. Okay, yeah. Yeah, taking it back to the asset. What I talked about location and property type, didn't I?

[00:09:36] Skye: Mm.

[00:09:36] Pete: Yeah, so yep. Okay. bringing it back to asset and location.

[00:09:39] Imti: Mm-hmm.

[00:09:40] Pete: So from an asset point of view, I'd be looking at a property that isn't gonna cost me a fortune. So making sure that it's somewhat renovated, modern, and a tenant is gonna wanna live there long term.

[00:09:49] Imti: Mm-hmm.

[00:09:50] Pete: And then from the location point of view, it's trying to buy, and probably closer to the CBD-

[00:09:55] Imti: Mm-hmm ...

[00:09:56] Pete: and compromising on the land size in terms of not looking for the 6, 700 square meters, but, maybe the minimum was 3 to 4, 500 square meters and going from there. That's probably what I'd adjust.

[00:10:07] Imti: Yep. So land size would be part of it, but it wouldn't be the deal breaker.

[00:10:13] Pete: It'd be third or fourth-

[00:10:15] Imti: Mm-hmm ...

[00:10:15] Pete: on the list, yeah.

[00:10:16] Imti: Yeah. Instead of, I guess, what is-

[00:10:18] Pete: Number one, and only.

[00:10:19] Imti: Yep. Drilled into number one with all of us around, and we see it all the time, right? Social media content, buyer's agents, due diligence checklists where they won't look at anything that's, under 700 square meters or anything like that.

[00:10:31] Pete: And that's what I did, and I missed out on some great deals.

[00:10:34] Imti: Hmm.

[00:10:34] Pete: When I was looking, it was like, oh, like I said before, I couldn't put a granny flat at the back, or it was 595 square meters, but internally the property was perfect.. And it would've rented at a higher rental as well compared to the property that I ended up choosing.

[00:10:46] Imti: Yeah.

[00:10:47] Pete: So, yeah.

[00:10:47] Imti: for someone who is looking at starting their journey, someone who's listening to this, they might actually not start their journey because they think that they need to buy a property with 500, 600 square meters, or it needs to be a house, or it needs to be this certain type of property.

And so it would almost stop someone from starting. Would you agree?

[00:11:08] Pete: Yeah. Yep, because if they can't buy something on 600 square meters, then what's the point?

[00:11:12] Imti: Yeah.

[00:11:12] Pete: That's, that would be the thinking, yeah.

[00:11:13] Imti: Yeah. You just go, "I'm just gonna keep saving until I can buy this property that has a 6, 700 square meter block."

But really the power would've been starting and buying in a place that made sense with where they're at.

[00:11:27] Pete: Yeah.

[00:11:28] Imti: That they could hold long term.

[00:11:29] Pete: Yep. Met their strategy.

[00:11:30] Imti: I think that was a really good way to unpack that, because would I be fair in saying we've all kind of fallen into that trap, right?

[00:11:36] Skye: Mm.

[00:11:37] Imti: Prioritising land size when it's not as important as you think, especially when you're talking about, " I might do a duplex one day," or, "I could do an extension," or, "I could do a granny flat." Realistically, and all of us have done this , you won't. I've done it once, and I think that's between what? 15 purchases between-

[00:11:56] Pete: Yeah

[00:11:57] Imti: ... all of us, and even then it still took me eight years to do the thing, and part of me wouldn't even do it again. So land size, definitely one of those things that I think too much confidence gets put into, and if you're listening to this, don't let it throw you off guard basically.

Would there be anything else that you would add on that, Pete, around that mistake or anything that you would do differently, or alternatively what you do with clients now to help them avoid making that mistake?

[00:12:28] Pete: Yeah. I guess the last point around what I help clients with is getting an understanding of their strategy.

[00:12:33] Imti: Mm-hmm.

[00:12:33] Pete: And understanding the type of property they're comfortable with, and going from there, and not even talking about land size. So I've bought properties as small as 250 square meters-

[00:12:42] Imti: Mm-hmm ...

[00:12:42] Pete: up to 800 square meters for clients, and a lot of them are now falling in that sub 400 square meter range. That seems to be the common trend, because clients want obviously a decent land component, but they want the house on top to be quite low maintenance at the same time too.

And now that does mean we sometimes go into the outer suburbs, but if that's what the budget allows, then that's what it allows. But yeah, I think really understanding the strategy, taking clients through that, explaining why the biggest parcel of land is not the best option these days. I mean, to develop it, you need to at least do one into three or four these days

to make

[00:13:17] Imti: it-

[00:13:17] Pete: to make money.

[00:13:17] Imti: Yeah.

[00:13:18] Pete: So there's also that, that we talk about with clients as well, and that kind of brings them back around to that smaller land size, and then looking at the asset on top of the land to make sure it suits their strategy and what they wanna do with it.

[00:13:29] Imti: No, I love that. Skye, was there anything that you would add about Pete's mistake?

[00:13:33] Skye: Only, when you were talking about how you help clients now, I think just around people not having that bigger picture around what the asset type is going to cost them in the future. We were only talking about it before we started recording though, that we've got a mutual client who didn't read the building and pest inspection, and what that's now costing her.

[00:13:52] Imti: Mm.

[00:13:53] Skye: Not that the problems weren't going to go away, but they're a surprise, 'cause she didn't absorb it. She didn't think forward past settlement date-

[00:14:01] Imti: Mm-hmm ...

[00:14:01] Skye: as to what this is realistically going to cost her.

[00:14:04] Pete: Yep,

[00:14:04] Imti: Yep. And anchoring it back down to like, " Oh, but I've gotten amazing land size and I think that that's gonna be a great property, so I'm gonna overlook all these issues."

[00:14:13] Skye: Absolutely. Yeah. But that comes back to her goals, though ...

[00:14:15] Pete: them, yeah, that's r- and they're, maintenance items.

[00:14:18] Skye: Yeah.

[00:14:19] Pete: Like, it's just shit that goes wrong.

It's not structural, it's just all the maintenance items that you thought you'd might spread out over a couple years.

[00:14:25] Skye: But so she's bought in, a less than desirable suburb-

[00:14:27] Pete: Mm ...

[00:14:28] Skye: which is how we end up with squatters and break-ins.

[00:14:30] Imti: Mm.

[00:14:30] Skye: Than if she'd taken that exact same money and maybe bought in Prospect, or not bought the house, maybe bought a unit. She'd have less of these challenges.

[00:14:39] Pete: Yes and no.

[00:14:40] Skye: It depends on what her goals are.

[00:14:41] Pete: Yeah, depends on, yeah, and then it depends on the strata group and the-

[00:14:43] Skye: Mm ...

[00:14:44] Pete: it would be an older home, too.

[00:14:45] Skye: Mm.

[00:14:45] Pete: An older unit. There's so many layers to it. So that was my mistake. Do you wanna take us through yours?

[00:14:50] Imti: Yeah, mine, similarly to yours where, land size is good mine was actually researching too much.

[00:14:56] Skye: Surprise, surprise.

[00:14:57] Imti: Yeah, right. for a-

[00:14:58] Skye: If anyone knows Imti.

[00:15:00] Imti: Yeah, for anyone who knows me I definitely don't overanalyse things to the death. And it's helped me with clients, but it didn't help me on my own property journey, where I would consume information like anything, books, podcasts, YouTube videos, Reddit threads, which is hilarious because now I just throw shade at people who get their property opinions from Reddit. But I was that person.

[00:15:22] Skye: I think we all did that-

[00:15:23] Imti: Yeah ...

[00:15:24] Skye: to a degree. It's the hyper-fixation on-

[00:15:26] Imti: Yes. Diving in, needing to know absolutely everything. But what I found was that it created this false sense of confidence in me, and honestly I'd probably call it arrogance. Or ignorance, or a bit of both. Where I had consumed all this theory, and so I felt super confident about my property journey. And so when people would suggest, " Why don't you speak to a property investment expert," whether it be like a buyer's agent or a mortgage broker or whoever it was.

[00:15:58] Skye: Anyone. You're like, "No, no."

[00:15:59] Imti: Anyone.

[00:15:59] Skye: "I've got this."

[00:15:59] Imti: Yeah, yeah. I was like, "No, no, no, like, "I'm good. I've got this. I've consumed all the knowledge and I know the textbook. I just need to go out and do the thing." To the point where my circle around me wouldn't have even challenged me on it because I was the kind of authority, which in hindsight's an issue, right? If you don't have someone in your circle who's better at the thing that you're trying to do, then you're the ceiling. For me it was, yeah, tons and tons of research which then led to arrogance and ignorance on my journey.

[00:16:32] Pete: But you actually made the decision though in the end, which is cool because a lot of people will overanalyse and do nothing with it.

[00:16:37] Skye: Mm.

[00:16:37] Imti: Mm-hmm.

[00:16:37] Skye: How'd you move from overanalysing through to actually making a decision?

[00:16:42] Imti: So the funny thing is, researching too much didn't make me slow down. It probably just made me make decisions that I shouldn't have been as confident with in hindsight. So I thought that I was doing the right thing because the textbook said so. Reading books and posts around loan structures and doing a duplex, like the ability to do a duplex for me was the overarching it was my equivalent of land size, But that was because I read books on it. I was surrounded by people. I did the math. I broke it all down, and I could do it. And because of that, that's what I was fixated on. No one in my circle could call out the risks involved. But also, I probably wouldn't have wanted to hear it. You know, if someone came up to me and went, "Oh, have you thought about this?" I'd be like, "Oh, you're an idiot. Don't worry about it."

[00:17:32] Pete: I've done all this research.

[00:17:33] Imti: Yeah, I've done all this research.

[00:17:34] Pete: Look at the numbers. They stack.

[00:17:35] Imti: Well, the equi- the equivalent now is the ChatGPT, right? Back when it was me, it was, books, podcasts, all that sort of stuff. Now it's a three-hour-long thread on ChatGPT that's made you convinced that you're a property expert.

Mm.

And it gives you such a false sense of confidence that instead of being stuck with analysis paralysis and not making a decision, I walked forward with confidence, not knowing that I could actually just be making a massive, expensive mistake.

[00:18:04] Pete: Can you give us an actual example then of a property?

[00:18:07] Imti: Where I ... Yeah, I can.

[00:18:09] Pete: Yeah, one where you overanalysed, you thought it was a good thing-

[00:18:12] Imti: Mm

[00:18:12] Pete: ... and you did the deal.

[00:18:13] Imti: Funnily enough, I still convince myself it was a really, really good deal. And it was a purchase in regional New South Wales pre-COVID, so obviously, you know, got the benefit of the COVID bump and all that sort of stuff. But for me, back then it was cashflow. Cashflow was the biggest priority, so it was big land. All the research told me that's what I should do. And so I bought a three-bedroom '70s property, just on the outskirts of Wagga. Was 125 grand. It was amazing.

[00:18:43] Pete: So cheap.

[00:18:43] Imti: Best day of my life. The-

[00:18:45] Pete: At the time, though, that wouldn't have been cheap for that area though.

[00:18:47] Imti: At the time-

[00:18:47] Pete: Yeah

[00:18:48] Imti: ... it was on the market for nine months.

[00:18:49] Pete: Yeah.

[00:18:50] Imti: And the rent covered the P&I repayments, and this was before rates went down to, like, 2%, And all my research convinced me that it was a great move. Did I get an equity uplift and sell it and roll it into something else, which makes me think, yeah, it was a good move? Yes. In hindsight, what the research component did was stopped me from getting people's opinions who had a long-term lens and had-

[00:19:18] Skye: Mm

[00:19:18] Imti: ... made big mistakes at a structural and strategic level. So instead of me just having eyes on this one deal and going, "It's a great deal. It ticks all the research boxes. I'm gonna do it," if I had someone pull me aside and go, " Do you know if you tie up your borrowing capacity in that, and your income doesn't go up at all, you're actually not gonna be able to make another purchase." Or back then, the logical move would've been to structure it in a discretionary trust, which I didn't do because it was positively geared out the gate. And so if I had've done that, I would've preserved so much borrowing capacity and I'd still hold it today. And instead of it going from 120 grand to 165 when I sold it at exit 18 months later I'd still have it, it'd be positively geared, and it'd be worth circa 280, 300 now. And that would've only come from me being able to eat some humble pie, realise that there's experts out there who have done it and understand it more than me Because would I have made the buy? Probably. But the biggest mistake was actually not structuring the loans and the setup and the accounting side of it the right way.

[00:20:25] Skye: So was it not actually thinking long term that was actually the mistake though, ' cause you said you would buy it again 'cause cashflow was good-

[00:20:33] Imti: Mm-hmm

[00:20:33] Skye: but you didn't think far enough ahead.

[00:20:36] Imti: The long-term piece is part of it. I think the bigger mistake was not speaking to someone else about it.

[00:20:43] Pete: Was it doing the wrong research or not enough research in the sense that you nailed the location, but you didn't really do the research on the structuring side?

[00:20:51] Imti: Well, I think it's just that you could only research what you know to research.

[00:20:56] Pete: Yeah, that's right. Yes.

[00:20:57] Imti: Right? Like-

[00:20:58] Skye: So

you, you don't know what you don't know

[00:20:59] Imti: ... you don't know what you don't know.

[00:20:59] Pete: Yeah.

[00:21:00] Imti: And-

[00:21:00] Skye: Which is why we have this podcast.

[00:21:01] Imti: Yeah. and talking about structure wasn't a big thing back then, right?

[00:21:03] Pete: I was gonna say, like

[00:21:04] Imti: But I know people in the industry from being on this side of the fence now who have been talking about correct structuring for the last 20 years, but they didn't have a book or they didn't have a podcast, and they did charge a fee. And me being cheap, ignorant, and overconfident-

[00:21:20] Skye: Hmm

[00:21:20] Imti: ... was like, "Oh no, I don't need to pay that guy like five grand to hear him blab on about stuff." And if I actually had eaten some humble pie, paid the expert, had someone challenge my thinking, that would've made that move 10, 15 times better because realistically, I would actually just hold that property for the next 15 years, 20 years, 30 years because it'd just be sitting on the side doing what it does. That's where the research component really just shot me in the foot was The moves weren't bad, but they could've been great.

[00:21:53] Skye: so what would you say to someone who has done their research, they're going into it, they feel very confident. What advice would you give them now?

[00:22:00] Imti: Really simply plug into someone who has made mistakes in the space that you want to do something in. If it's someone who's happy to talk about the stuff that they've stuffed up, you can learn from it.

[00:22:11] Skye: Good plug, by the way.

[00:22:12] Imti: Thank you.

[00:22:13] Skye: All three of us.

[00:22:14] Imti: All three of us, yep. Made car crashes upon car crashes, all of us, but also done well. Um-

[00:22:19] Skye: Talk to people who've done the thing, right?

[00:22:19] Imti: Talk to people who have done the thing, but talk to people who have stuffed up the thing. I put a lot of stake in people who are really good at telling good stories, and not showing the other side of the fence, that's what happens a lot in the property space in general, people will talk about all these amazing things they've done-

[00:22:38] Skye: Yeah

[00:22:38] Imti: but they shy away from the mistakes.

[00:22:40] Pete: Yep. And- You have to ask the question, though.

[00:22:41] Imti: Yeah.

[00:22:42] Pete: Most people, if they can see that you're gonna do good things and you're gonna take on the advice, if you ask 'em directly what their mistakes are, I do feel like most people will share.

[00:22:51] Imti: Yeah.

[00:22:51] Skye: Mm. Yeah, but people get lost in the good news stories.

[00:22:53] Pete: Yeah.

[00:22:54] Imti: Yeah. And to boil it down, it would be, " This is what I'm thinking of doing. I need you to point out every single thing that's wrong with it."

[00:23:02] Pete: Yeah. Not just the good stuff.

[00:23:03] Imti: No.

Like, Don't tell me ... Yeah, don't tell me I'm great. Don't tell me that I've come to you really well-researched and all of that sort of stuff because especially right now in the influencer and education almost overwhelm that we've got going at the moment, we've got so much information-

[00:23:17] Skye: Mm

[00:23:18] Imti: that everyone that we're speaking to is so educated and so they feel confident, we feel confident with them. But be able to step back and just be like, " What are all the things that I'm not thinking of, and this is what I'm thinking of doing. Pull apart every single decision that I'm trying to make And that would be the thing that I would tell anyone that's going into a property journey

[00:23:41] Skye: Well, you did that with Pete recently, didn't you?

[00:23:43] Imti: Yes. Speak to someone who's done the thing and then ask them to criticise every single decision that you're looking at making.. Treat it as a learning experience. Don't get offended by it.

But yeah, for me the number one mistake and the thing that made it feel safe to me was research. And the more that I did, the more confident that I got. And for anyone listening to this, there is a line where too much will either slow you down and you won't do anything, or you'll do something but you won't get someone to point out the things that you're overlooking. Speaking about things that make you feel safe, Skye, your mistake was buying a property that felt safe.

[00:24:25] Skye: Yes.

[00:24:25] Imti: Talk to us more about that.

[00:24:27] Skye: Yes. I, um, maybe had the opposite problem to what you had though. Very impulsive. There wasn't really any research done, and so I made a safe decision, 'cause I was like, " I wanna be a property investor."

[00:24:39] Imti: Yep.

[00:24:39] Skye: "I need to just buy a property, anything." There was no thought, which is why I think the two of you are very analytical-

[00:24:45] Imti: Mm-hmm ...

[00:24:45] Skye: absolutely won't understand where I'm coming from. But It was an ego purchase. wh- we've talked about before, but I bought in a country town where I was living at the time.

[00:24:55] Imti: Mm-hmm.

[00:24:55] Skye: I bought a unit, so there was no land value.

[00:24:57] Imti: Mm-hmm.

[00:24:58] Skye: There was no thought process into it, but it was there, I could see it-

[00:25:02] Imti: Mm

[00:25:02] Skye: ... I could touch it. The only plan I had was, "Oh, I'll renovate it one day." That was it. There was no thinking around how this sits in a portfolio for 10, 20 years, what's the exit strat- there was just no thinking around it, but because I could physically see it and touch it, it felt safe.

[00:25:19] Pete: Mm-hmm.

[00:25:19] Skye: And it was in the area I was living, which is a mistake we see often.

[00:25:23] Imti: So I wanna unpack that more, because the way that you're talking about it now is that it was obvious that it was a mistake, right? You're looking back at it and you're going, "Yeah, that was dumb."

[00:25:32] Skye: Yeah.

[00:25:32] Imti: But if you were to take yourself back to baby Skye who made the decision-

[00:25:36] Skye: I feel like it became obvious really quickly-

[00:25:38] Imti: Mm-hmm ... '

[00:25:39] Skye: I am older than the both of you. So I bought before you did. I was 19.

[00:25:44] Imti: Mm-hmm.

[00:25:44] Skye: And at the time, we had just started to see property prices in Adelaide skyrocket. Like, I remember going to auctions and they were going for 100 grand over reserve, which we've just lived through that cycle.

[00:25:55] Imti: Mm-hmm.

[00:25:55] Skye: This was the cycle before that.

[00:25:57] Imti: Yeah.

[00:25:57] Skye: And so I think it became very obvious, because I'd bought this property-

[00:26:01] Imti: Mm-hmm

[00:26:02] Skye: kinda like what you touched on, I then couldn't buy much more. So my, borrowing capacity at that point was 350, and these properties at auction are going for 450, and we're like, "Oh my gosh, we're getting priced out."

[00:26:13] Imti: Yeah.

[00:26:13] Skye: Can you imagine that now?

[00:26:14] Imti: Yeah.

[00:26:15] Skye: And so it became very obvious very quickly that I'd made a rush decision to buy this property-

[00:26:21] Imti: Mm-hmm

[00:26:21] Skye: ... just because I wanted to call myself a property investor.

[00:26:23] Imti: Yeah.

[00:26:24] Skye: Yeah, I bought something that felt easy.

[00:26:26] Imti: Mm-hmm.

[00:26:27] Skye: As opposed to thinking what's this actually going to perform like as an investment. And when we were seeing the prices skyrocket in Adelaide- Going, that's the sort of goal I should've been working towards.

[00:26:39] Imti: Mm-hmm. You said something really interesting there. Tell me more about- ' it felt easy.' So taking yourself back to making that decision, why did it feel easy, and why did it feel safe?

[00:26:51] Skye: Honestly, I think 'cause it was cheap. It was a unit. Mind you, I paid more for my unit than you paid for your house in regional New South Wales, but anyway. But yeah, it was cheap affordability, I wasn't really taking a risk. There wasn't a lot of skin in the game-

[00:27:06] Imti: Mm

[00:27:06] Skye: ... 'cause it was just a unit.

[00:27:07] Imti: So was it almost the fact that it didn't scare you?

[00:27:09] Skye: Yeah.

[00:27:10] Imti: Like it felt too easy to make the decision?

[00:27:12] Skye: I think so, yeah.

[00:27:14] Imti: Talk to me about the location piece of that because that conversation comes up all the time.

[00:27:19] Skye: And it wasn't a lesson that, that I learnt the first time. I repeated it the second time. Mm-hmm.

[00:27:23] Imti: that's the power of emotions, right, is that-

[00:27:25] Skye: Mm ...

[00:27:25] Imti: when something feels safe, it-

[00:27:27] Skye: Are you calling me emotional?

[00:27:28] Imti: It's a no-brainer. No, no, I'm calling everyone emotional. As much as it- Property is emotional ... as much as it's spreadsheets, it's all emotion.

[00:27:34] Skye: 100%, yeah. Even if you tell yourself you're not getting emotional, it absolutely does because it's tangible. You can touch it.

[00:27:41] Imti: You can touch it. You can feel it. It's a big life decision. So for you, what was the, safety piece? If you were to talk about maybe the three things that made you feel the most safe about the purchase?

[00:27:52] Skye: Definitely that I could drive past it

[00:27:54] Imti: Mm-hmm

[00:27:54] Skye: That's a huge one. I don't think I would've felt as safe buying interstate, even though I was actively looking at properties interstate

[00:28:01] Imti: Yep

[00:28:01] Skye: these were in the mining towns at the time

[00:28:03] Imti: Mm-hmm. Probably dodged a bullet there anyway, but-

[00:28:06] Skye: Yeah ...

[00:28:06] Imti: conversation for another day

[00:28:07] Skye: But, yeah, I don't know. But that wasn't safe for me 'cause I'd have to get on a plane, I'd have to go see it and-

[00:28:12] Imti: Mm-hmm ...

[00:28:13] Skye: no. So definitely being able to drive past it.

[00:28:16] Imti: Mm-hmm.

[00:28:16] Pete: Did you ever drive past it?

[00:28:17] Skye: All the time.

[00:28:18] Pete: All the time? Yeah. Yeah, you see,

[00:28:19] Imti: okay. Yeah,

[00:28:20] Pete: so- Is that because you had to though?

[00:28:21] Skye: No

[00:28:22] Pete: Just out of cur- so you actually went out-

[00:28:23] Skye: No, I had to actively go out of my way-

[00:28:25] Pete: You ac-

[00:28:25] Skye: Yeah, to drive past it

[00:28:25] Imti: to drive past it

So you were the creepy landlord that like-

[00:28:28] Pete: Yeah

[00:28:28] Skye: Yeah ... then you'd drive past But look, I never told them to mow their lawns, okay? Like I-

[00:28:32] Imti: Yeah. They had no lawns ...

[00:28:33] Skye: I just wanted to see it. There were lawns

[00:28:34] Imti: Okay.

[00:28:34] Skye: But but the comfort of being able to see it- Yeah ... I think is is a big one But you actually did it though.

[00:28:39] Pete: A lot of people will say, "Oh, I wanna be able to drive past it," and they never drive past it

[00:28:42] Skye: And they don't

[00:28:42] Pete: So, yeah Yeah, and they don't do it

[00:28:43] Imti: So credit, credit to you on that. Yep, so-

[00:28:46] Skye: I mean, look, I lived in a country town. There wasn't much else to do Yeah So

[00:28:48] Imti: You just went on a drive on a Friday night so That's my unit

[00:28:52] Skye: No

[00:28:52] Imti: Being able to-

[00:28:53] Skye: It wasn't every week, but you know, maybe every six months and be like, "Oh"

[00:28:55] Imti: Yeah. So being able to drive past it, what, were the other two things that made it feel safe?

[00:29:01] Skye: I'd lived in this area for at least a decade

[00:29:02] Imti: Mm-hmm

[00:29:03] Skye: And I was young, like I was 19

[00:29:04] Imti: Yeah

[00:29:04] Skye: So it was all I knew

[00:29:06] Imti: Mm-hmm

[00:29:06] Skye: And I think that's the piece that the familiarity-

[00:29:10] Imti: Mm-hmm ...

[00:29:10] Skye: of it, and I hated the place. I couldn't wait to leave this particular town Yeah

[00:29:15] Imti: Yeah, the irony that you're like, "I'm leaving the country behind and I'm going into the city," but then you're like-

[00:29:19] Skye: Right

[00:29:20] Imti: "But it feels safe to buy here"

[00:29:21] Skye: Yeah

[00:29:21] Imti: Yep

[00:29:22] Skye: Like, where's the logic?

[00:29:23] Imti: Mm-hmm

[00:29:23] Skye: There wasn't any. But even on my second purchase When I think about when I made that decision-

[00:29:29] Imti: Mm-hmm ...

[00:29:30] Skye: it was cheaper than rent, so it felt-

[00:29:32] Imti: Yeah

[00:29:32] Skye: ... like a good decision. Again, the feelings.

[00:29:34] Imti: Mm-hmm. Or financial safety, right?

[00:29:36] Skye: Yeah.

Like, it seemed to,

[00:29:38] Imti: At the time

[00:29:38] Skye: ... make sense. As much as that second one was my PPOR-

[00:29:41] Imti: Mm-hmm ...

[00:29:41] Skye: I was like, "Well, this makes sense. I'll build some equity."

[00:29:44] Imti: Mm-hmm.

[00:29:44] Skye: It's cheaper than rent. But it was in a terrible location.

[00:29:48] Imti: Mm-hmm.

[00:29:48] Skye: That again, still felt like a safe thing to do-

[00:29:51] Imti: Mm-hmm ...

[00:29:51] Skye: because it was cheaper than rent. Did I think about how that property was gonna perform? Absolutely not.

[00:29:56] Imti: No, 'cause it was rent money's dead money.

[00:29:59] Skye: Mm.

[00:29:59] Imti: I'll go buy this property.

[00:30:00] Skye: It was safe.

[00:30:01] Imti: Yeah.

[00:30:01] Skye: Yeah.

[00:30:01] Imti: Safe, right?

[00:30:02] Skye: It's comfy. Yeah.

[00:30:03] Imti: Would it be fair to say the third thing that made you feel safe was the fact that you were investing in property, and property as an investment felt safe?

[00:30:13] Skye: Oh, absolutely. I wouldn't have even known that shares was even an investment class at that point-

[00:30:18] Imti: Mm-hmm

[00:30:18] Skye: ... because all the information I had was, "Be a property investor. This is great. We made millions."

[00:30:24] Imti: Mm-hmm. "

[00:30:24] Skye: Oh, sounds good." Yeah. "I'm in."

[00:30:26] Imti: Forget about all the costs and everything.

[00:30:27] Skye: And I read Rich Dad, Poor Dad, and he talks about multiple asset classes, business ownership-

[00:30:32] Imti: Mm-hmm

[00:30:33] Skye: shares. It's like it did not register in my brain. Property was it.

[00:30:36] Imti: So it was almost like this funnel of being able to drive past it made you feel safe.

[00:30:41] Skye: Mm-hmm.

[00:30:42] Imti: The fact that it was cheaper to buy than to rent made it feel safe. And so the location you forgot about completely.

[00:30:50] Skye: Absolutely, twice.

[00:30:51] Imti: And then-

[00:30:51] Skye: Not just once. Yeah ...

[00:30:53] Imti: and then the property component- property feeling safe as an investment- then made it a no-brainer to you.

[00:31:00] Skye: Yeah, the property type-

[00:31:01] Imti: Mm-hmm

[00:31:01] Skye: ... because my first one was a unit, in my head, I was going, "Well, it's a low entry point."

[00:31:06] Imti: Mm-hmm.

[00:31:06] Skye: Less risk, right? So that's where the safety part come in. The second purchase, I built it. Same deal. I was like, "Ah, no repairs and maintenance."

[00:31:14] Imti: Mm-hmm.

[00:31:16] Skye: Safety.

[00:31:17] Imti: Yeah.

[00:31:17] Skye: Was it the best decision at the time? Probably not.

[00:31:20] Imti: We've covered off that, you know, Pete and I might be a little bit more on the analytical side of things.

[00:31:25] Skye: Just a bit.

[00:31:25] Imti: Just a bit. For someone who is very much led by their emotions-

[00:31:30] Skye: Intuitive

[00:31:30] Imti: right, intuitive. Which again, I'm not saying which one's better or worse. I would rather be more emotional sometimes. For someone who makes emotion-led decisions, what would you say to them on a property journey if they're looking to buy their first property, and they're chasing that feeling?

"This decision needs to feel right, and it'll just be a vibe, and I know it."

[00:31:52] Skye: Mm. "

[00:31:52] Imti: And when I feel it. I'll make the decision." What would you say to them?

[00:31:56] Skye: I really hope that some of our listeners are like me and a bit more intuitive-led. Definitely speaking to other people to a degree. Like my third purchase was all very, very different. It was purchased with the long-term view in mind.

Mm-hmm. So I had a strategy for, it's going to serve a purpose for this amount of time, and then this is my future plan. Always. And I remember at the time many, many people saying, "Oh, just buy here," like in neighboring suburbs.

[00:32:23] Imti: Yeah.

[00:32:23] Skye: And I was like, "Absolutely not."

[00:32:24] Imti: Mm-hmm.

[00:32:25] Skye: "I'm doing this for a reason. I've purchased in the wrong locations before."

[00:32:29] Imti: Yep. "

[00:32:29] Skye: We're not doing that again." And that one property has performed better than the other two properties-

[00:32:35] Imti: Mm-hmm

[00:32:35] Skye: ... in a shorter space of time. So location's key. But you can talk to people, but understanding even if you are more intuitive, what is the bigger picture here, not what is serving me right now.

[00:32:47] Imti: Mm-hmm.

[00:32:47] Skye: And I think the first two, they served me in the moment.

[00:32:51] Imti: Yep.

[00:32:51] Skye: I did not think forward to what's it going to look like in five years' time, in 10, 15.

[00:32:57] Imti: Mm-hmm. '

[00:32:58] Skye: Cause I held the first one for 14 years before disposing of it. You need to think really long term when you're playing with property.

[00:33:05] Imti: Mm-hmm. So it's almost lean into your emotions short term, but then lean into your emotions long term.

[00:33:10] Skye: Yeah. Yeah,

[00:33:11] Imti: And not just sit in the it needs to feel right, right now.

[00:33:15] Skye: Good right now. Yeah.

[00:33:15] Imti: It needs to actually-

[00:33:16] Skye: It needs to feel good

[00:33:17] Imti: ... feel right in 15 years' time.

[00:33:18] Skye: Bingo. That's exactly what I was trying to say, just more eloquently. Yes.

[00:33:22] Imti: Awesome. I love that. 'Cause I think it's spot on. Someone who's more emotionally led, the worst thing that you can do is tell them to be logical.

[00:33:29] Skye: Yeah. It, it doesn't compute.

[00:33:29] Imti: 'Cause they'll just look at you and they'll roll their eyes, right? It doesn't compute.

[00:33:32] Skye: Yeah. And sometimes you guys get into the depths of the data, and then I'm just, my brain cannot hear you.

[00:33:37] Imti: Yeah. But if it feels safe, you'd be like- Yeah ... "Yeah, let's do it." No, I think that's awesome. On that note, I'll wrap us up because I think that's a really good place to bring us to a close. In terms of our individual mistakes, hopefully this has helped you on your property journey, whether you're about to buy, in the early stages. We really wanted to break down, 30-plus years' worth of property lessons and drill them down into what was our single biggest mistake that we made, and how do we change that? So to recap this and bring us home, Pete, your mistake was prioritising land size.

[00:34:13] Pete: Yeah.

[00:34:14] Imti: What would be the one thing or one lesson you would want someone to take out?

[00:34:17] Pete: Yeah, it'd be to shift that priority and look at location first, then the quality of the property, and then land size.

[00:34:24] Imti: Awesome. Skye, yours is about purchase, feeling safe.

[00:34:28] Skye: Mm.

[00:34:29] Imti: If there was one takeout to the more intuitive listener... what would you say to them?

[00:34:34] Skye: Don't just think about what feels safe or what feels good now, what's going to feel good long into the future.

[00:34:41] Imti: Mm-hmm. for me, on the over-researching side of the fence, it would be-

[00:34:46] Skye: Hmm ...

[00:34:46] Imti: eat some humble pie. Understand that you don't know everything.

[00:34:50] Skye: It's a life lesson.

[00:34:51] Imti: Yep, it's a life lesson. And be vulnerable. Open yourself up to being criticised about the things that you want to do from the people who have actually earned the right to criticise that decision.

[00:35:01] Skye: Mm.

[00:35:01] Imti: So it's not a-

[00:35:02] Skye: Yeah, from the right people.

[00:35:03] Imti: Yes. It's not a uncle at a barbecue, it's not a family member. It's someone who's done the thing that you want to do who can give you an opposite point of view that's actually an awesome place to close us off. Again, for most people listening to this, these three mistakes will pop up through your whole decision-making journey.

You'll want emotional safety, you'll have an idea about the type of property that you want, and you'll feel confident and overconfident at the same time. And so hopefully listening to this, you're just able to pick up on it and then do something with it to make sure that you just make a better decision for yourself.