John Carney - Real Estate is a Team Sport: The 9 Players You Need to Profit

Real Estate is a Team Sport

THE 9 PLAYERS YOU NEED TO PROFIT

JOHN CARNEY

Published by Palmer Higgs Pty Ltd

First published 2015

2015 John Carney

The moral right of the author has been asserted.

All rights reserved. Without limiting the rights under copyright restricted above, no part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the above publisher of this book.

Disclaimer

Every effort has been made to ensure that this book is free from error or omissions. Information provided is of general nature only and should not be considered legal or financial advice. The intent is to offer a variety of information to the reader. However, the author, publisher, editor or their agents or representatives shall not accept responsibility for any loss or inconvenience caused to a person or organisation relying on this information.

A Cataloguing-in-Publication record is available from the National Library of Australia.

ISBN: 978 0 9942683 0 3 (pbk)

978 0 9942683 1 0 (ebkePub)

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Photography by Beth Jennings

Typeset and printed by Palmer Higgs

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Distributed by Dennis Jones and Associates

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For my father

You have to think anyway,
so why not think big?

DONALD TRUMP

You want to become a property investor because its a tried and tested, safe path to wealth creation and passive income, right? Perfect!

This is absolutely true when you plan correctly.

Everywhere you look there are signboards advertising properties for sale or for lease, from charming family homes to modern sky-scrapers. When we move out of home, waving goodbye to our parents, where do we move to? Today, you live in a home that you either own or rent, and I bet the majority of us rented the first property we lived in. Did you ever think, Who are those lucky landlords that get my hard-earned money every month?

Im going to make an assumption: You want to become a successful property investor, and by successful I mean profitable. You want to buy property, and make money youre imagining early retirement and a lifestyle thats easy and fun. Great! This is one of the most important things to remember when youre buying property, and one of the easiest to somehow lose sight of in the process. Making decisions and buying with emotion just wont cut it in the property investment game.

People dont invest to lose money. Period. Remember: SUCCESSS = PROFIT. This is the baseline that Im going to be bringing you back to over the course of this book, because its the most important metric to track.

Lets review the basics of the property game to make sure we are on the same page: tenants pay rent, which in turn pays down your debt (mortgage), and increases the equity position of your investment property. As the years pass, the debt you owe the bank decreases and you become wealthier. Real estate also increases in value over time when you buy right, and this is known as capital growth. There will always be a percentage of the population which will pay for a roof over its head. This is good news, because there is always demand in the market for your product. Your property is right for someone and they are out there looking for a place to live right now. Theyre your tenant and they will live in your house. Its as simple as that.

This book isnt about where to buy or what to buy. This is not a how to identify the perfect investment property or a how to become a real estate tycoon in 1.5 years book. This book is about who you need to surround yourself with to achieve success. I talk about all of the specialised people and professions that you will have to engage in order to be a smart property investor. How you prepare to become a successful property investor is mission critical. Real estate is all about building the right team of key advisors and skill sets across the variety of industries that are required to achieve success as a property investor.

The only way to be ultimately successful as a real estate investor is by being active in your investments and building the team that will take you to success. Let me explain what I mean.

The events that inspired me to write this book also formed the foundation of my thinking about the realities of real estate investment, and what differentiated successful investors from those who lost money and opportunities. Those events centred around two identical properties, which were alike in every way, except for their owners.

Investor #1 was active and built a team around herself while investor #2 was passive, with no inclination to build a team.

Investor #1 regularly checked in with the property manager and had built a positive relationship with him. She read, understood and questioned her monthly reports and had a system in place to handle urgent repairs and the standard maintenance associated with owning a house or unit. Investor #1 knew her numbers and was thinking about the next addition to her portfolio. She was always talking to her accountant, her property manager, her insurance broker. She had a number of estate agents in her rolodex, and a mentor who she went to for advice. Investor #1 was active, and she had a team.

Investor #2 never checked his bank account to see if rent had arrived on time. He only called the property manager when he was notified of a repair request or change in tenancy. There was no plan in place for maintenance, so the property manager scheduled repairs with the first available tradesperson with no regard for cost. Investor #2 didnt know his numbers and couldnt make important decisions regarding the health of the investment because of this. Investor #2 was passive and therefore had no team.

Investor #1 went on to build her portfolio and build her wealth. Investor #2 neglected to perform regular maintenance on his property and made no effort to maintain contact with his property manager. This eventually led to a major repair that resulted in the loss of a tenant and a capital expense in excess of $10,000 associated with fixing the problem. Investor #2 was not only out of pocket, his experience as a property investor had been soured.

After watching these two investors in action and noting the incredible difference in their results, I was convinced that I had seen the secret to successful investing happening in real life, right before my eyes. The fact is that being active in your investment brings success.

The key that most people miss is this: property is a relationship business. And relationships take work.

In this book I focus on the basics for investing in your first residential property. Whether its a unit, townhouse, a single-family residence (SFR) or a holiday home, Real Estate is a Team Sport, is applicable across all types of residential investment properties. If you want to invest, then building up your team of trusted professionals into people who you know you can call on when you need them, is the single most important thing you can do to move towards your success.

We all have jobs that get us out of bed in the morning. We all work in X profession in Y industry. What I love about the real estate industry is that property investors come from all walks of life. Anyone can do this. Introduce yourself as a property investor to another property investor and boom! The conversation, stories and networking begins.