INTRODUCTION

This book is for first-time property investors and first home buyers and for those considering their first or next step. It will help you understand how to find your first home or investment property, how to budget for it and how to read the markets.

ON HELP?-?GIVING AND RECEIVING

My role as a buyer's agent is essentially to help people, and I take this role very seriously. Yet, after many years' experience, I'm still amazed and inspired when my advice and example help give my clients a new perspective, opening up a world of opportunity they'd only dreamed about.

The media is full of noise about high property values, and how first home buyers can never break into this 'unaffordable' market. But it isn't true. There are always ways to manage it. If you can't afford a property where you want to buy right now, as you'll read in Buy Now, there are all sorts of strategies you can deploy to build the equity you need to be able to buy the home you want down the track. But this doesn't mean putting things off.

LLOYD'S STRATEGY

BUY NOW. I never advocate waiting to buy: I don't think anyone ever got ahead by waiting.

Of course it can be difficult initially to break into the property market, and some people find it hard to ask for help. They don't know who to believe, what advice to take and what will work for them. New clients come to me and share their frustration: they feel they've done everything they can and are still getting nowhere. They're working long hours and not spending enough time with the kids. They have a home, but they've got a big mortgage on it, and they're trying to work out how they're ever going to pay it off before retirement. Because, let's face it, if it's going to take you 30 years to pay it off, how will you ever be able to afford your dream home?

Even clients who own a really nice property feel like they're stuck. One I recall was living in the Sydney suburb of Burraneer, quite close to where I live. He had a beautiful house, but the $1.8 million mortgage on it was killing him.

After coming to me for advice, he sold that beautiful home and moved into a rental so he could invest his equity into doing some developments. I helped him build a duplex, which he's making a huge profit on. Now that client is looking towards his next development.

And best of all, he's now living debt-free.

THE IMPORTANCE OF STRATEGY

At some point everyone needs a mentor?-?someone with hands-on experience to help them get on track. I didn't start out with a strategy. If I'd had someone to advise me from the beginning, I probably would have done better, faster. My own experiences, both positive and negative, have helped me set up my clients strategically far better than I was, and I look at some of those in chapter 6.

At the time, I simply wanted to buy a principal place of residence, and if that's what you want as well, I cover it in chapter 4.

But if I'd had a strategy back then, I probably wouldn't have started out by buying that unit in Rockdale (more on this in chapter 1). I definitely wouldn't have lived in it. Instead, I would have 'rentvested' and built up a portfolio faster. And I would have started investing when I was younger but, of course, I didn't know any of this back then. A mentor might have advised me, 'Don't buy a home to live in?-?just invest'. Who knows? I might have been advised to buy Rockdale anyway. Being close to amenities and close to the water, it was a sound investment (albeit an accidental one). All I know is I had no strategy, because I didn't know what I was trying to achieve. I didn't have a clear goal.

In fact, I wasn't happy with my first few properties, because in those days I had quite a bit of debt. Those properties were negatively geared, and it frustrated me because I wanted to create money through property. So you see, even after I'd started buying investment properties, I didn't know what I was doing.

That was almost 20 years ago. Today I've achieved a lot of what I set out to do. My goals included buying my dream home (I cover that in chapter 5) and building security for my family. I have a strategy in place for how to pay my property off through my investments. I no longer dream of what I want to achieve in the property markets. I've got other dreams, but they're a little different.

My advice to my clients is not predicated on a hypothetical strategy, but on long experience helping hundreds of clients each year work towards achieving their own goals. That's what's important. It's about achieving your big goals and enjoying life to the full.

AN INDEPENDENT INCOME

Everyone needs a roof over their head, but that's not the only reason to focus on property. Today we can see just how important it is to be able to control our own income. Even in times of crisis, when job security goes out the window, property will continue to generate a passive income, which is why it remains the safest and most effective way to shore up your income and lifestyle goals.

But to really make it work for you, you first need to understand why you're investing. Everyone gets into property for a different reason. For many, particularly investors, it's to try to build wealth and set themselves up financially.

Many of my clients start out without a strategy. They don't know where or what to buy, and they underestimate how much a property will actually cost. So for every client who walks through my door, the process starts with goal-setting (more on this in chapter 1). This is a vital first step because, before you create your property investment strategy, you need a reason to begin investing, and you need an objective that motivates you to stick to it.

Think about where you would like to be in 10, 15 or 20 years' time. Once you have your end goal in mind, you can begin working on strategy and finance, and taking the steps needed to build up a property portfolio and achieve that ultimate long-term goal - financial freedom. We'll get into all of that in this book.

THE TRIFECTA STRATEGY

Fifteen years ago I was a full-time music teacher on an income of less than $70?000, still paying off that one-bedroom unit in Rockdale, and I realised that if I kept doing what I was doing, I was never going to achieve my goal of securing my dream home.

I could see that negative gearing was going to keep me at work forever, because I was subsidising the mortgage through my income and waiting - potentially for decades - for capital growth.

So I looked into ways to create positively geared investments and bought a high-cashflow rental property in a mining town, which lost most of its value and rental income when the resources market bottomed out. I've never made that mistake again!

Now I research the markets for high-growth properties with good rental demand in areas with multiple stable economic drivers. I'll cover this in chapter 10.

When investing in property, I also look for ways I can 'manufacture equity' rather than relying solely on the organic growth of the markets. Manufacturing equity might mean anything from a cosmetic to a structural renovation to boost the value and rental yield of a property. We will explore how to create your own equity in chapter 7, and cover this renovation strategy in depth in chapter 8.

While you might be priced out of the markets in the capital cities (we cover reading the markets in chapter 9), there are still many properties available across the country that you can buy, subdivide and then sell off the backyard (known as a battle-axe lot). These properties can offer a great cashflow injection for your portfolio. I did this a few times while building my portfolio.

The investment strategy that really launched my property portfolio like a rocket came through my discovery of the power of building duplexes. When I built my first duplex and subdivided it, I made twice as much in equity as I earned in a whole year from teaching.

THE TRIFECTA STRATEGY

After this aha moment, I started to acquire several properties a year, just using equity and manufacturing capital growth instead of waiting for capital growth to occur organically. I have regularly seen this strategy create upwards of $200?000 in manufactured equity as well as providing positive cashflow through the dual income.

Doing this allowed me to take control of where my portfolio was heading and accelerate that growth. This meant my portfolio was growing, regardless of what the markets did.

The real power of the trifecta strategy is that you're able to manufacture instant equity then hold properties as they earn you more money than you're spending. By holding these properties over long periods of time, you'll also benefit from their ongoing capital growth.

Better still, it's a process you can 'rinse and repeat'. By using my trifecta strategy, you can very quickly grow your property portfolio and your income, and before long you'll find yourself among the 1 per cent of Australians who hold more than five investment properties.

And best of all, those properties will be earning you an income in the...