.jpg)
The Finance Show With Joe
Why should finance be boring? Joseph and Michael cut through the jargon by talking property, money, and entrepreneurship with real stories, laughs, and special guests.
New episodes released every fortnight!
Follow us on our pages;
www.itssimple.com.au
Instagram: @itssimplefinance
Instagram: @thefinanceshowwithjoe
Linkedin: www.linkedin.com/company/itssimple
The Finance Show With Joe
Your Buyer's Agent Might Be Working Against You. Here's How to Know
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
The 5% deposit sounds like a win… until you realise a small mistake on suburb choice, timing, or holding costs can leave you owing more than the property is worth. We sit down with Nick Khzouz, a buyer’s agent (and former lawyer and banker) from B Money Property Group, to unpack the real-world risks behind low-deposit buying, refinancing, and trying to leapfrog into your next property. If you’ve been watching the Australian property market and wondering whether the First Home Guarantee is helping or hurting, this chat gets specific fast.
We get practical on what to look for before you buy: stock on market trends, supply saturation, land constraints, and why days on market can be one of the simplest demand indicators to track. Nick also breaks down return on capital versus return on investment, why some investors grow faster with the same cash, and how strategies like interest-only lending and negative gearing (with proper accountant advice) fit into the bigger picture of serviceability and risk.
Then we go straight into the messy stuff people whisper about: off the plan property deals, hidden incentives, “rebates”, and why conflict of interest is the line that separates an advocate from a salesperson. We share horror stories, talk transparency reforms like a conflict register, and run through how we assess a buyer’s budget, time horizon, goals, and when they want to extract equity. We also touch on areas we’re watching across Sydney, Newcastle, and parts of Victoria, plus why policy changes can push eager first home buyers into repayments they can’t comfortably carry.
This episode is for informational purposes only and does not constitute financial, legal, or tax advice. Please consider your personal circumstances and consult a licensed professional before making any financial decisions.
Follow us for more property news and mortgage advice!
▸Website - https://itssimple.com.au
▸Instagram - https://www.instagram.com/itssimplefinance/
▸Facebook - https://www.facebook.com/itssimplefinance/
▸LinkedIn - https://www.linkedin.com/company/itssimple/
DISCLAIMER This podcast contains general financial information only. That means the information does not take into account your objectives, financial situation, or needs. Because of that, you should consider if the information is appropriate to you and your needs before acting on it.
The Hidden Risk Of 5% Deposits
SPEAKER_02Too many people don't know that the catch 22 to getting into the market on a 5% deposit, if you're buying in the wrong area at the wrong time and you refinance, pull out, and go get another property, there is a scenario where that property can be worth less than what the finance is owing on it. I have a personal horror story from a buyer's agent that I worked with. Bought a property off a buyer's agent in Lavington in New South Wales, bought it for 393,500 sight unseen. As you do as a client, you expect buyers agent to know what they're getting into for you. He significantly understated the amount of work required to get it into a tenantable condition. Man, I spent about$60,000 in eight months of my time getting that into a tenantable condition. Lost rental income for eight months. You name it, everything was broken.
SPEAKER_01The 5% deposit scheme on its initial inception was to help lower income borrowers get access to the market. A 5% deposit on a million dollar house. That's a$950,000 loan. That's an owner-occupied loan, and$6,000 a month is going to your mortgage. If you can't afford it anymore, that's on you. And we're not going to increase the supply of anything, so your inflation's going to go up and your interest rates are going to go up.
WWE Connection And A Wild Gift
SPEAKER_03What are the warning signs? Yeah, well, the warning signs are, you know, uh welcome to the Finance Show with Joe. He's Joe, I Michael, and we have a very special guest today. Nick Cazuz. Is that how I pronounce your name correctly? Ah, nailed it. I'm becoming Lebanese myself.
SPEAKER_00I don't think he's left, but we'll go with potato potato.
SPEAKER_03High energy, cut that. We welcome Nick today because he's a buyer's agent with a great story and great, well, great stories, I should say, as well, all surrounding the property market, the wins and losses. And honestly, a few tips for you guys at home.
SPEAKER_01Just before we do go any further, I do want to say that all the advice that you hear on this uh on this show is general in nature. Only speak to your finance professional. Nick, I want to start off with how you and I first connected. Before we get into anything else, before we get into property or anything like that, because uh we're gonna do a quick snippet. Uh Liam's gonna show the reaction and everything, but Nick gave me something that is super sentimental and probably the best gift I've ever received, like ever, ever. He got me a WWE belt, um, a championship belt.
SPEAKER_03You should have heard the squeals, audience.
SPEAKER_01What about this thing? What about that? Oh my god. Oh my god! Did you know this was coming? No, hell no.
SPEAKER_02Everyone's just as surprised as you are. What the fuck is this for?
SPEAKER_01You're the trouble chief, but Nick, just told the world how we connected and how you ended up on this show.
SPEAKER_02Look, I've um I've networked with a lot of brokers in in everything that we do, we have to, you know, meet in your people and get out there. But Joey is the only broker that I have networked with that we have a mutual love over. WWE. Yes. Definitely do. So, you know, I was gonna kill you by the way. You're welcome. You're welcome. Um, yeah. So we love WWE. I think I put up a post, something to the effect of I went to uh WrestleMania 41 last year in Vegas with my wife. Yeah, that was a bucket list item. We picked it off, and I used property to do it, coincidentally, like an equity release and stuff like that. So good story to talk about. You resonated with that, and then we just hit it off in the DMs just talking about what you did in uh you know back in your days with WWE.
SPEAKER_01Yeah, it's a good connection point. We'll put some pictures up. I wasn't always this professional uh individual that's you know trying to write policy or rewrite policy. You know who I'm talking about right now. Um but uh you Nick Nick and I started to share some stories, and he was like, Oh, this is how I went to a WWE event. I was like, Oh man, this guy does not know what war he is starting running out. It was a real rom-com start to a relationship. I sent him like a uh like a photo of me uh dressed as Pentacles, which is Pentagon Jr. for anyone that's on the Indies, which is just a luchador. Man, I have to get super specific, which is a WWE wrestler. Um, you know, and then he sent me one back, and then I was like, okay, I'm gonna have to bring out the the ultimate trump card. I went as the full demon king to uh Halloween once, which is body painted in full. It you've seen the picture, like it was it was proper, like it was a proper job, and I had nothing to top it, so I kind of left it there.
SPEAKER_03I can't, yeah, I can't imagine, Lim, if we can get that, source that photo.
From Law And Banking To Buyers Agent
SPEAKER_01Acknowledge me. But it was it was a really surprising gift. But Nick, we also have some other some other mutual things that we've we've both gone through in our lives as well. You're about to have your first baby as well. So congratulations for that. Thank you. As you know, I've had my first recently. But there's a second thing, you also worked at Macquarie. So tell us about the start of your professional life. Oh gosh, well, Macquarie was on the uh I wouldn't say the start, but like just tell us how you've led up to you know starting the B Money Property Group.
SPEAKER_02So, decade-long career in uh law, banking and finance. I started off I'm a lawyer by trade, so I went through, got my law degree, got admitted, figured out it wasn't for me, did two and a half or so years at a at Clayton Newtes at a law firm, doing a lot of banking and finance stuff, figured out it wasn't for me. Then I'm hopped into banking and finance more in the compliance and the risk world. So I'd been doing that for pretty much seven and a half or so years and built up a pretty good um pretty good resume. So I hopped between there to uh Riberbank, which not many people surprisingly know of. Um Ribo Bank, then I moved into PwC, did a bit of consulting. Fun fact, I used to work in this very building. I was gonna say PWC's here, yeah. Yeah, it takes source. Yeah, yeah. And that that's good. View, right? Um PTST. So thank you very much for welcoming. Um comes into the elevator is having a freak out. I rocked that belt up on the elevator.
SPEAKER_04Yeah, I'm back here.
SPEAKER_02I'm gonna show them why I'm back here. Yeah, and then after that, moved over to Combank, did a stint there, and then Macquarie Bank.
SPEAKER_04Yeah.
SPEAKER_02Macquarie was the last three years of my corporate career, and um, throughout all that time, I you know accumulated a few properties in my portfolio. Yeah, by no means am I a millionaire, I'm not Harry Triggerboff, I'm no one like that. I just developed a very, very good passion for property, one that if I ever had to do anything for a career, I found my thing. Yeah. And I jumped effectively headfirst into it. So I tried to actually get an outside business activity approval from a quarry to set this up on the side. Yeah. They threw an ultimatum my way and told me, you gotta quit. Or you do that pretty much. No, you can't have one foot in, one foot out. Wow, really? So they pushed me in the right direction, where I said, you know what, man, I'm gonna do it. Yeah. And without a doubt. Yeah. But you know what I have to say, I wouldn't have been in the position to take that risk if I didn't have my head screwed on, I had my money right, I had everything right in the back end. I wouldn't have afforded to take that risk. So jumped head first. Now, how he ended up in B Money Property was all the properties and all the cars that I've I've bought, the finance were done through B Money Prop uh finance. Yeah. So through Bora.
SPEAKER_01Yeah, yeah.
SPEAKER_02Bora was my guy.
SPEAKER_01Right, Bora's a G. Yeah. I'm just gonna put that like Bora was uh like I think he started the social media videos around the same time or just before me or so about man, Bora's like he's a guy. No, but like this is what I love about him. He's so uh relatable, you know. He's so he he makes sure he connects with people and just helps them helps them try to understand um what's possible because like he's Turkish, right? Yeah, I'm Lebanese, so we come from a similar background. Okay, he's more European, I'm more Arab, we don't, but it's it's when people come to Australia, they don't know what is possible for them.
SPEAKER_03And like as new, new like newly arrived, yeah.
SPEAKER_01And like for example, you're Croatian, right? Yeah, okay. Every WOG, what do they say about the banks? They hate the banks, they'll they're sitting there and they're going, no, they don't never lend money and all that stuff. But that's why like you need people of our colour to be able to do stuff, but no, is it bro? Like, shout out to Bora. I just wanted to put that one out there, but yeah, that is the J.
SPEAKER_02I love him. But off camera, I'm gonna roast soon. So, Bora, if you're watching, yeah. So you connected with Bora? Yeah, connected with him. So, um, as you know, he'd he'd done all the finance for myself. So when the time came for me to branch out and I was going to go out on my own, I had my company and everything set up. I hit him up and I'm like, let's do some referral work together, man. We know each other, we trust each other, you know, we get along. And then he hit me back with uh, why don't we do something more permanent together? Why don't we do B Money Property? Yeah, that was the beginning of a three or four month-long discussion, which eventuated into B Money Property, which we officially launched in July last year. Congrats for that. Thank you, man.
SPEAKER_01That's awesome, man. That's awesome. So tell me something about like what type of clients are you advocating for, or what type of properties are you trying to source for your particular client group? Are we looking at, you know, the individual that's a high-end professional, you know, solicitor that wants to go buy a development site, or are we looking at off-the-plant properties? What is B Money Property specializing in right now?
Established Homes Over Off The Plan
SPEAKER_02So B Money Property, we're we're very, very big advocates for going for homes that are typically established builds. You know, we're talking 70s, 80s, 90s type of build. Yeah. Good foundations, good bones. Um, stuff where if you have an appetite to do a cosmetic renovation, add a bit of value. That's where we really love to dive dive into that level of detail, find really good value there. So we don't do off the plan or anything like that just because we don't like to navigate in that world. So we stay clear of that, but everyone has their own flavor and that's fine, right? Our ideal client, um, they come from all walks of life, man. I've I've had clients that are tradies and they've they've got three or four properties, they want to buy their fifth and build that portfolio even further. I've also had, you know, first-time buyers where they just they just want to get their foot into the market and they're very keen to do it. The the catch to that, to dealing with people who are first-time buyers is they're not always aware of what actually is needed to get into the market. Not just in terms of having a 10% deposit or even a 5% deposit, but in terms of if you're going to go 95 or 90% LBR or even borrow the full amount, you have to understand the holding cost behind it. You know, too many people don't know that$700,000 asset. If you borrow 95%, you're gonna have to pay maybe$1,500, two grand a month to maintain that property. A growth asset, not a yield asset.
SPEAKER_01Yeah, don't even get me started on the 5% thing.
SPEAKER_03I just we've spent too many episodes talking about it. Let's talk about it.
SPEAKER_01Nick Nick brings up a Nick brings up a great point, but it's not being explained thoroughly enough that a 5% deposit, like on a million-dollar house, okay, you get a 5% deposit, that's a$950,000 loan. Yeah, that's an owner-occupied loan, and six thousand dollars a month is going to your mortgage.
SPEAKER_03Do you know how many first-home buyers are spoken to that don't even know they have to pay stamp duty? Yeah, like that's a and that's a not a small cost, it's almost as large as the deposit, depending on what you buy, obviously. 50 odd thousand on a million dollar property. Exactly.
SPEAKER_01Yeah, so yeah, I went pretty hard on that one last year, too. But uh, I just it's good to hear that I'm not the only one that's screaming about this online. I don't it actually you just made me feel a little bit more comfortable.
Warning Signs In A Cooling Suburb
SPEAKER_02Um can I can I just like on that too? The catch 22 to getting into the market on a 5% deposit, if you're buying in the wrong area, Joey, Mick, if you're buying in the wrong area at the wrong time and you refinance to pull out and go get another property, there is a scenario where that property can be worth less than what the finance is owing on it.
SPEAKER_03Interesting. I elaborate on that. What does that look like as in like what areas, what are the warning signs? Do you know? Do you know anything like that?
SPEAKER_02Yeah, well, the warning signs are you know, off the bat supply and demand on the high end, right? So we want to see how how much stock is on uh market at any particular time. Right. If we're seeing over the past 12 months that stock is starting to cool off in terms of we're seeing more on the market, yeah. There's more supply saturation, and we're not as confident that that will be absorbed as quickly into the market. For investment grade areas, we want to see not only stock on market down at very critically low levels, we want under supply. Um, but also in terms of demand, days on market, how long does it take for a property to sell? We want that to be below 35 days on average in any particular area. Yeah, not only at 35 days, we want that trend to be going down. So you know that in the future it's it's gonna proportionately going to decrease in in in days on market and the demand will increase over time.
SPEAKER_01So, like there's I know there's areas like Box Hill that aren't growing as fast as expected because there's an now an oversupply in the market.
SPEAKER_04Yep.
SPEAKER_01But I also know there's places in Victoria that uh that their days on market are starting to decrease.
SPEAKER_03Yeah.
SPEAKER_01Now I was against Victoria, then I was advocating for, and now I'm completely against it again.
SPEAKER_03Well, the Victorias that they're not they're not going for investors, right? Like because they're the only ones that have been able to increase supply to some some extent. That's why property values and stuff are not so much going down but staying stable.
SPEAKER_02There are markets within markets, they're probably looking into areas where they are cooling off because you're seeing a ton of buildings being put into certain areas. Yeah, okay. That's good for people who want to get into affordable markets because they're building new homes and I think about a pretty quick turnaround in terms of build times too, which is good. Yeah, good for Vic. Good on it. Yeah. Um, but uh we're particularly advoc uh advocating for areas in Victoria where markets are there's not much to play. Yeah, they're not building new land in areas. So we want land constrained that makes complete, you know. So we're looking at like Brighton's or because I know Brighton's really expensive. It is. So maybe I'll go a little bit further down and go into maybe the Frankston LGA. Okay. That's a gem, by the way, for anyone at the moment looking at property.
SPEAKER_00Frankston's general advice only GA. Yeah.
SPEAKER_02Uh Frankston LGA is a wonderful area. And obviously, when we talk about LGAs, there are some poor areas I wouldn't touch uh with my life depended on it. And there are some areas that uh, you know, I'd I'd put my money in there any day of the week. Yeah, okay.
SPEAKER_01So would you be able to tell us like what is a real success story from Victoria that you've had?
Return On Capital Vs Return On Investment
SPEAKER_02Yeah, actually, a client of mine we purchased in the Melton LGA that's up uh northwest of uh of Melbourne. Melton LGA purchased it settled in October for I think about 684,500. Um, and we just got a reval back, it came back at I believe it's 725,000.
SPEAKER_04Oh.
SPEAKER_02So that's four months. Yeah. Effectively about 10,000 of capital,$10,000 worth of capital growth on average every month for the past four months. So that's what I used to make back in Macquarie. I used to make 10 and a half a month in my pocket every month net. Yeah. This lady bought a property and you know, bless her, she's pretty much on par with what I was making back in corporate.
SPEAKER_01The problem is I find with individuals when they're looking to borrow or they're looking to invest in property, they don't understand something called return on capital. And return on capital is actually a bigger thing than return on investment. Do you know what I'm talking about here?
SPEAKER_02Uh well, when you're talking about return on capital, you want to know that you're getting your your your kind of dollar for dollar plus back on your investment. So if it's costing her about on a on a$500,000 asset, it's costing her maybe$70,000 to buy the property, she's effectively almost made that return in about four months.
SPEAKER_01So that's the best way to kind of people always look at ROI, but they don't look at ROC.
SPEAKER_03So when we're talking about return on investment, for those who don't know, what numbers are we looking at?
SPEAKER_01Are they not the same numbers? No, they're not because the return on investment is this is how much I've invested in it, but this is the total value of the property and the money that I keep putting back into the property. Okay. Return on capital is a little bit different. So let's say you bought a million dollar house at Sydney, how much did you need to buy the million dollar house? You needed$100,000 for the deposit and$50,000 for the stamp duty. So$150,000. But that property grows to one and a half mil, let's say, for example, in a year. Your return on investment might be 150%. Okay, but your return on capital is also higher because you only injected initially$150,000 to be able to purchase that. And if you've got a good broker, it doesn't have to be me. Um if you've got a good broker, yeah, and they set you up with, hey, you've got some good cash flow. Why don't we go for an interest-only option here? Speak to your accountant, that might be a great idea for you. Then you could possibly offset the losses on the interest as negative gearing.
SPEAKER_03Okay.
SPEAKER_01So not only are you getting an asset that's growing, but you're also getting a higher return on your income via the negative gearing aspect of it. So people with good accountants or good financial advisors know how to advocate for this. And this is how you're getting individuals out there purchasing more and more property because they know how to set up these sorts of facilities. Unfortunately, people see these individuals with these facilities and go, I'm gonna go buy a property, I'm gonna use a 5% deposit. And that's where they get stung because they don't have the cash flow that these other individuals do. So, like return on capital, let's say you spent 150,000, now it's worth 1.5, 5, or 1.5 minus, you know, you're getting a 300% return on capital, 400% return on capital, something along the lines of that. 50K, 450,000 growth.
SPEAKER_03If he's got the maths wrong, let us know in the comments.
SPEAKER_02That's a brain tickler.
SPEAKER_01No, no, but a million dollar property,$50,000 CFG, that's$150k. Okay, so that means you spent a million and$50,000. It's gone up to 1.5 mil. That means that there's a$450,000 increase.$150,000, uh,$450,000 divided by$150,000. Three, 300%.
SPEAKER_03There you go. I'm gonna take your word for it.
SPEAKER_01I could be wrong, guys.
SPEAKER_02I could be wrong. Nick's looking at me right now. I'm computing in my mind right now because I think your brain is working off uh a time where you're at your mental peak right now, considering you might have been awake from what, 3 a.m.
SPEAKER_03There are times where he comes into the office and starts throwing numbers at me, and uh honestly it's just a monkey playing symbols in my head. Joey, I'm on I'm on coffee number one, man.
SPEAKER_02Let me get to number three.
SPEAKER_01I've got a degree in maths.
SPEAKER_02Well, there you go, man.
SPEAKER_01Yeah, like it's like this is uh all right, it looks like we're gonna last time that we're having a bit of a joke here, Dow. But um I don't know what I was gonna do after uni. I had no idea. I got a degree in economics and maths, and I am the world's biggest salesperson. You're gonna get me to be an actuary? I would lose my mind, I would bounce off the walls, I'd smash my head into a wall, sort of thing.
SPEAKER_04Yeah, that's crazy.
SPEAKER_01So I applied, I thought applied for jobs. I thought I was like when I was at Macquarie, I thought I was gonna be at Mac Cap or something like that. I thought I was in capital markets, bro. They gave me a credit policy and they gave me a calculator and they said go, go write home loads.
SPEAKER_04I was like, okay.
SPEAKER_01I didn't know the first thing about a mortgage 10 years ago. No, I'm like, thankfully, you know, I do. Um thankfully, we're in trouble. But yeah, that's the thing.
SPEAKER_03We're not even dissimilar because I did, I didn't know what I was gonna do after school either. I ended up doing business in English, and then eventually down the line, and now I'm in marketing, which I guess is a mixture of those two. There you go, man.
SPEAKER_01It was a teacher for a while as well.
SPEAKER_03Yeah, I was well, yeah. I was a hot, hot second was gonna be a teacher. Then I realized no. Yeah, nothing.
SPEAKER_01But that's like this is the good thing. Like you're a co-host on a finance show. If you're able to be a teacher, you're probably the best sort of co-host. Except you don't have kids screaming at you in the class.
SPEAKER_03It's true. I actually had very good rapport with the kids. It was more the staff room that I star from politics. Yeah, honestly. Yeah.
SPEAKER_02Now look, you pivot where you need to in life. You know, you never know where you're gonna end up in five years, let alone two years from now.
SPEAKER_03Sure, as long as you sort of keep like chipping away at what you like to do, you never know where where life takes you.
SPEAKER_01Tell me why you stay away from off the plan.
SPEAKER_02Oh well, let's ruffle a few feathers, shall we? Yes, let's do. Um, look, off the plan, I don't like them off the bat because of the stigma associated with wise agents getting involved with off the plan. Now, I know you know what I'm gonna say. I'm licking my lips here. So there may be situations where it could be worth it, right? People can make money by the time it settles in yada, I get that. But um, to I I don't want a perception of a conflict of interests in the work that I do in the sense that I don't want anyone to think, nor do I, nor will I accept a commission from a developer to uh give an give an off-the-plan property to a client. Because effectively I'm I'm a salesperson at that point, I'm not a buyer's agent, I'm not, in my opinion, I'm not acting in my client's best interests. What I do look at though is before I even look at a property or a suburb, I'm looking at their brief. What do they want? What are they trying to achieve? Ten times out of ten with all the clients I've had so far, they're not pointing to off the plan. Yeah, it's supply saturation is another point. I mean, I can go into that, we can talk about that forever. Yeah, you know, um, but they're just two very big reasons why I don't like off the plan.
SPEAKER_01Man, I've got some horror stories for you. I'll deal with the buyer's agent right now. I'm not gonna name who because I don't like disparaging anyone, but except for Albo.
SPEAKER_03Um but you're right, it's his job as a prime minister.
SPEAKER_01Yeah, that's right. Um, but listen to this horror story. And this is this is cooked, and this is a warning and why you should go to buyers agents that are ethical. Um they sold the client a property a few months ago, the client got the uh completion certificate. Um the property's based in WA, they've got different laws to New South Wales, and they said 20th of the second, we received the completion certificate. 24th of the second, the valuation report was complete, and there was a little bit of commentary on it that confused us. It said as if complete, and then we went further down and there's a garage door missing, and the kitchen's not done. So we've got a developer that has said, Hey, this property is finished, we need you to settle. We've got the buyer's agent kind of sitting there and going, Hey, like you need to settle. And I'm sitting there and I'm like, Hold on a second, this isn't ready to settle. I email them, I emailed them, and they go, Oh no, no, no, wait. They didn't even say anything. They completely ignored my email. We got another email saying, Are you ready to settle on this date, 6th of March? And I go, Is the property done? I'm like, this doesn't make sense to me. We're approved subject to valuation. And they go, Yeah, yeah, it's done. We send the value out again, we get the value out issued report back, and it says the property is still not complete, still missing a kitchen. And then they issue the client a notice to complete and say, if you don't settle by the 13th of March, we're gonna rescind your contract and put you in default. Now, this client, great client, she's got the money needed if she needs to settle. But like this is really unethical behavior that I've never seen before. What which and they're also ignoring, like I I'm just don't get me wrong, if there's a completion certificate, you should have a kitchen kitchen, right? Hopefully, right. Right? You want to be able to do that?
SPEAKER_03I'm just double checking because I feel like it's one of the major things you do in a home, right?
SPEAKER_01Like you need doors. Doors are important. Like, you know, you need security, right? Like, I'm just I'm just part of baffled at the fact that it seems arrogant that they sent out the completion, the the notice to complete or the notice to default.
SPEAKER_03Was this the developer or the agent?
SPEAKER_01I don't know what I don't know. Okay. I don't know what I don't know, nor am I gonna say anything. However, I'm pretty sure the completion certificate needs to be certified, doesn't it?
SPEAKER_02Pretty sure it does need to be certified. How can they certify it if it's not in a if there's no, you know, um, if it's not occupational worthy, right? Yeah, I'm gonna sign off on that. No kitchen.
SPEAKER_01So I I'm actually going through this right now. I don't know what's going to happen. I've I'm very perplexed. We've got the lawyers involved in everything, but yeah, you gotta tell me, man, because this is more your world than mine. I just handled the money. You got you gotta hand, you gotta be a part of the legal stuff, you know? And you're also a lawyer. Uh, you still admitted? I am, yep. Yes. All right, perfect.
SPEAKER_04We can ask you this above us.
SPEAKER_01Now, correct me if I'm wrong, but isn't the developer liable in this situation?
SPEAKER_02Like any lawyer will tell you, it depends. It depends. Off the bat, based off what I know, and again, not legal advice, however, um, there's a duty on the developer to build it to to agreement to what they agreed on. I'm sure they're signed a contract to the effect of what's meant to be included in the home, right? Um, I don't imagine a world or a scenario where a developer will be able to omit any certain developments in part of the home and get away with it and uh owed their full fee. Um, so go for roll. Okay. Thank you for putting the KP out there. Thank you.
SPEAKER_01Thank you, my but like I think I think going back to like off the plan properties and stuff and like why you're specializing in established, I think that story that I've just given, even though I have bought off the plan before and I have invested my money into that stuff, you gotta dot your I's cross your T's. Have you bought have you bought off the plan before?
SPEAKER_02I haven't. I almost actually fell victim back in 2018 to a buyers agent who um tried to get me into off the plan. They didn't tell me it was off the plan, they just said to me it's a house. Okay. So I figured this out after the high pressure sales pitch in their office when I walked out. They told me, okay, here's you're gonna buy one property, you're gonna structure it this way, and you're gonna get a portfolio and you're gonna make that much money. And then he said to me, Look, our fee is about$30,000. However, when the property settles, we'll refund you about$25,000. So it's only costing you about five grand. What's going on there, right? Yeah. I walked out, did a bit of digging, and effectively they're offering you the buyer, they're offering me a rebate because they're getting a clip off the developer on the back end. So when the developer pays them on settlement, they're getting paid it could be 30 grand, it could be 40, could be 50 grand. Whatever, you don't know. So they're making money on both ends. I just don't, I don't like that. Double dipping. Double dipping. Yeah. How how can you, as a buyer's agent, how can you go to bed at night knowing that you like you've you're not taking care of your clients? Start with the brief. I think a lot of them, because they have these agreements or relationships with developers, and the developers have a bunch of sock to get rid of, their first priority as a buyer's agent is okay, how many can I get off the developer to sell to my clients? So you're not a buyer's agent, you're a sales agent.
SPEAKER_03Yeah.
SPEAKER_02Um, that aside, and land as well, man, land. These lots are being cut into two, three hundred square meter blocks. Yeah, can't do anything with it.
SPEAKER_03Yeah, we've seen the we've seen the pictures of the roofs.
Cleaning Up The Buyers Agent Industry
SPEAKER_01Yeah, it's not quite touching. Yeah, yeah. So, can I ask you? I've got my issues with the broken industry and how easy it is for somebody to be able to handle passports and tax file numbers now. And that's why you know I started home line uni. Can I ask you, what changes would you like to see in the vise agent industry? A conflict of interest register, number one, off the bat.
SPEAKER_03I can't believe that's not already like part of the legal framework that you're operating in. Interesting.
SPEAKER_02I think change is coming and change is coming big for the industry as it should. Okay. Um, there's too many cowboys in the industry. Admittedly, we're not uh breaking any news here, but there's a low barrier to entry in our field. And what do you get with a low barrier of entry? You get low quality people because I think a lot of people have seen the ads online make 10 to 30k per deal. If you don't have anything else going for you, I'm sorry, but and you see that ad and you fall for it, front of mind is money for you, not the client. Yeah. So let's have a lot more transparency in the industry.
SPEAKER_03And what and do like what kind of qualifications do you need for a buyer's agency? You have to get like a cert for or is there no qualification?
SPEAKER_02So, in order to have your own buyer's agency operation, your own business, you need to have a class one real estate license, which which uh with which I have, and anyone that has their own business has. So if you're a real estate agent, whether you're on the buy or the sell side, you need the same qualification. Okay, okay. So there is there is some barrier to entry.
SPEAKER_01Yeah, but it's a one-day course online, isn't it? Like with one of those registered certifiers, and then you could just it's chat GPT assignments basically.
SPEAKER_02Pretty much. And um, a lot of them will probably even give you the answers on the call too. You know what I mean? Like, okay, here's what here's what you need to fill out, and then you know what I mean? It's like getting your boat license. Pretty much. Oh, okay.
SPEAKER_01Right, right, right, right, right. And like that's that's what she just kept saying to us. And yeah, and it's scary, man. I think I think a change is necessary because I've I've been a broker now for, you know, I've I've been in the baking industry since 2018 or 2016, sorry.
SPEAKER_04Yeah.
SPEAKER_01And but a buyer's agent when I first started was very rare. It wasn't a common, this is an everyday thing. Now it seems like you can't even buy a property if you don't have a buyer's agent. Like it's got it's gotten to the level where you can't source or you can't find something unless you find it get a buyer's agent. So people are going more towards it. However, if we had this conflict of interest occurring, man, fuck, that's that's bad.
SPEAKER_03Well, it's a it's a perfect storm, right? New, uh, a new popular thing with a low barrier to entry, with almost like a requirement for people who are uneducated in the property market trying to enter. And yeah, it's gonna be some dodgy dealings on the side. Well, like within within that, um, so yeah, you gotta you know do your research and on the who you're working with.
SPEAKER_01Do you have any horror stories of like people that worked with a previous buyer's agent and then came to you?
A Costly Buyers Agent Horror Story
SPEAKER_02Well, I actually have, but I've even had I have a personal horror story from a buyer's agent that I worked with. I paid a buyer's agent and I got my money back off them too. So even I can speak from my own personal experience. I bought a property off a buyer's agent in uh Lavington in New South Wales, right? On the border near Aubrey with Longa, down Victoria region. Um, 393,500 bought it for uh sight unseen. As you do as a client, you expect the buyers agent to know what they're getting into for you. And he significantly grossly understated the amount of work required to get it into a tenantable condition. Because look, you got a cheap deal, mate. Just do a you know, lick of paint, maybe some flooring. Yeah, good to go. Man, I spent about$60,000 in eight months of my time uh getting that into a tenantable condition. So that was untenanted for eight months. I lost rental income for eight months. Yeah, and you name it, everything was broken. It was an 80-year-old lady that lived in there, and it was a 1960s build, I think, and it was very unmaintained. Jeez, uh 60 grand out of my so I bought it for 393,500.
SPEAKER_01Yeah, that'll cost you 450, yeah, yeah, and then all the interest repayments and everything. So let's go another 25k. Yep. So so you're out of pocket already 485.
SPEAKER_02Exactly. Guess how much I sold it for a year later.
SPEAKER_01I'm gonna go with 350.
SPEAKER_02No, actually, I'd I I think I'd uh I I went lower because like this is a horror story, so but it's a horror story, but thankfully not that much of a horror story. A happy ending. So yeah, yeah, yeah, kind of. So in in for about 485 total, I sold it for 500. So I held it for a year. 15 grand, right? But 15 grand to hold for a year, that turned me off completely because um everything that could go wrong did go wrong.
SPEAKER_03Yeah.
SPEAKER_02Um, and I told that particular buyer's agent, my here's my brief. My brief is I want a hotspot, I want an area that is intentionally volatile, where I can take advantage of its rampant growth in two years or less and have some significant equity upside go off and then buy into a more uh a better area with better fundamentals. Yeah, I've got the opposite of that. And I wasn't and I wasn't any of the wiser until I put my money into it and I found out the hard way. So that shapes my experience.
How We Assess Risk And Goals
SPEAKER_01That shapes how I work too. So, what are the top five things you're asking a client to help mitigate or help understand their risk profile? Well, number one, their budget.
SPEAKER_02Their budget's gonna dictate the market they can get into. Their budget, their investment time horizon. So, how long do you actually want to hold the property for? Do you want a short-term, medium-term, long-term, seven plus C hold? That's gonna dictate the level of fundamentals and how solid the fundamentals in the area need to look. Economic diversity, population growth, yeah, um, stuff like that. And then we look at how soon do you want to be able to extract equity? They're the kind of the top, top three. And if they want to extract equity in two years, we need something that's doing at least 20% growth on average over two years to be able to go back up to a reasonable LVR. If they want three years, it's a different area. If they want four years plus, again, it's a different market. So that's gonna dictate the velocity of growth in a particular area that we that we enter. And then, moreover, on top of that, we layer on top their goals. You know, why do you want to buy property? Like you we don't just buy it for the sake of it, we buy it for a reason. So I get to really, really understand, and that's a fun part of my job, understanding what they want to get out of it. What are their long-term goals, short-term goals, and then we'll reverse engineer it from the end all the way back down to that first purchase. Makes sense to me. That's pretty amazing.
SPEAKER_01This is how I can tell mix different. Yeah, fasting out the buyer's edge of that question, they're gonna be going, uh, what's pay?
SPEAKER_03Well, who's he? He's the only other buyer's agents that I've ever heard that I've ever heard bring up ethics.
Suburbs We Like Right Now
SPEAKER_01JP, we love you, Manny, we love you. I love those boys. No, this is all true. They say ethics as well, don't worry about that. They're good boys, man. That's that's awesome, man. So in saying all of that, what are your top three areas right now that you're purchasing in? General advice.
SPEAKER_02Yeah, general advice only. Yeah, uh top three areas. So this is based on again, client's brief, it'll vary, but personal experiences as well.
SPEAKER_01This is this is uh discretionary, objective data? It's not objective. No, no, it's not objective, subjective data. Subjective, subjective opinion, yeah.
SPEAKER_02Yeah, very subjective. So um at the moment, we're looking in the Penrith LGA. Yeah, if they have a budget of up to 1.4. Oh, Penrith's psycho right now. It's absolutely bonkers. Yeah, again, there are areas I wouldn't touch if my life depended on it, but there are areas in there that I will absolutely put my money in any day of the week. Penrith LGA, Newcastle LGA. So we're talking Sydney right now. Um, again, some really, really good areas. I'll I'll drop one. We'll drop a gem. Charles Town, Charlestown in Newcastle. Uh, and there are obviously a couple others we'll we'll um we look into within the Newcastle LGA. To get into there, give yourself a budget of anywhere, you know, from to get into Newcastle good areas between 900 and 1.4, you'll get something really, really, really beautiful. Yeah. Okay. Um within you know half an hour drive to the middle of Newcastle, CBD. Um, in Victoria, though, there are a couple really good areas. So I touched on the Frankston LGA. Frankston, you need a bit of a higher entry point to get in there in there. So um Frankston, uh, Hume LGA, Casey L G A, Melton LGA, Whittlesey LGA. Man, I'm dropping gems here.
SPEAKER_01Brother, I've asked you for three. You went for 10. Yeah, there you go.
SPEAKER_02So a lot of really good areas, man. And um, I love Victoria. There it's an affordable market to get into for people who can't get into an entry-level asset in Sydney or in New South Wales alone. Let's go to Vic. And the fundamentals are there, and I'm a big fan of it, man.
SPEAKER_01I hate Victoria.
SPEAKER_03I was gonna say very, very different opposing to see.
SPEAKER_01No, I'll tell you why. I I I love, I actually love people from Melbourne.
SPEAKER_03Yeah, no, we're just talking about the property market. No, no, no.
SPEAKER_01But you know, Nate, no, but we talked about property before. We talked about all that sort of stuff. I only like buying places where I can imagine myself living, and I am an empathetic person. So I will sit there and I'll go, if I was a trainee here, would I want to live here? Yeah. Sort of thing. And right now, they're doing work from home two days a week, uh, two days a week in legislation. Okay, like it is that she wants to legislate it. Yeah, um, the crime's up. There's police. Uh look, bro, I'm sorry, I'm I'm ragging on here. This is opinion only. Crime's up. Um, there's issues with uh, you know, corruption in the government, all that stuff. And I just kind of sit there and I go, do I personally want to invest somewhere? Or would I look at somewhere and this has been a hot market for a minute now, like Brisbane? Yep. And I kind of look at it and I go, man, kind of want to park my money up there because Gold Coast exploded over the last seven, like seven years.
SPEAKER_03Well, they've got the Olympics coming as well. There's a lot of investments.
SPEAKER_01But the Olympics are still six years away.
SPEAKER_03No, but what I mean is like there's money being funneled into well, Queensland State. Correct.
SPEAKER_01And I just kind of look at it and I go, bro, I want to park my money up there as opposed to parking it in um as opposed to parking it in Vic. And I do understand barriers of entry, price points, all those sorts of things. But just I don't know, man. I don't know. I I can't I can't advocate for my money. Yeah, yeah. Okay, this is just my opinion for my personal situation. I can't advocate for my money going there. I was I was I was planning to buy down there last year, and I just kind of nothing.
SPEAKER_03What about Adelaide? I never hear anything about Adelaide. I know growth has been solid there and stuff like that, but nothing crazy. Is there anything going on there?
SPEAKER_02Insert the cricket sound effects right here. Yeah, Adelaide. Um, look, I'm not I'm I'm not uh I'm not dumping on Adelaide at all. I'm just not active in that market. Um I I I I believe for that same dollar value you can get into uh better markets. You know, when you think about Australia, you think Sydney, Melbourne, yeah, the primary ones, yes. Primary ones, right? So they're they are in my opinion, they're global cities. Sydney more than Melbourne. I agree, yeah. Brisbane's up there too. Don't get me wrong. It's starting to grow. It's definitely.
SPEAKER_03I was there recently. It still feels like a small, big city, almost like a big town. It's not like quite reached that level of like a big metropolitan. It's Wool and Gong. A little bigger than Wool and Gong, but yes, it's dominant. It's got that vibe, yeah.
Why The 5% Scheme Surges Demand
SPEAKER_01It's got that vibe. Yeah, yeah. So can I ask you? You don't like, you know, you like activate you like working in places that you've got to experience everything. The 5% deposit scheme, which we all know I'm against, okay, or the changes to the 5% deposit scheme, has that affected your line of work? And have you seen a massive uptick in demand from those particular individuals? Absolutely.
SPEAKER_02Yeah. Unequivocally, without a doubt. Now, where we run into an issue though is you're getting a lot of uh unassuming and very eager first-time buyers to get into the market and take advantage of that scheme. Yeah, only for them to find out that unfortunately, more often than not, um, they they can't afford the finance on the 95% remaining on that monthly repayments.
SPEAKER_03Exactly.
SPEAKER_02Can I ask you why they can't afford it? Do you know income's not there? The affordability is not there. And also, don't you have to be um you have to live in the property, don't you? Yes, that's correct. So, I mean, how are you gonna live in that property if you can't afford uh yeah?
SPEAKER_03The way I had to do it was buy with my siblings. It's the other it was the only way, just with Sydney prices and everything like that, unless it was a small apartment. Yeah, yeah.
SPEAKER_02So if you have a million to spend yeah and you live in Campbelltown, but to buy an investment property, there's nothing investment great in Sydney, I would say, for a million dollars, hypothetically speaking, and that only viable location would be in another state or somewhere far away from where you usually live. How are you going to be eligible for that scheme?
Policy Flaws And Smarter Lending Options
SPEAKER_01You're not. This is this is uh I'm so happy you have someone else saying this. I feel like all this relief is off my shoulders. That's true, though. Like let me let me say it from a broker's perspective I've got somebody in front of me that earning 95k a year and they want to go and purchase an investment property. I could probably get them about 750 to 800k as a pre-approval, as long as I've got a deposit yaddy. If they use the first home loan deposit scheme as it used to be called, or if they use the first home guarantee, you don't get to apply the negative gearing rules, and you also don't get to apply the rental income rules, okay, or assume your rental income, your tenancies and stuff. So you're losing, let's say from the rental, you're losing 30 grand a year there, shaded down to 80 percent down to 80 percent, you're at 24,000, and then the negative gearing, that's all the interest extra or payments that you make. So you can't service the loan. And this is my key issue. The government released this last year, okay. Well, they made their changes last year in October, okay, without making any changes to supply and people are going to be put in financial stress. Why? Because now they're increasing the interest rates. So if you had a broker that had you servicing by a dollar or two, and then your interest rates jump 0.75%, you can't turn it into an investment property and move out of it without being stung for LMI, without being stung a fine because you lied to the government and didn't tell them that you were moving out. So the government's gonna, I I I believe they're gonna face a backlash, even though I was the only one screaming about this last May, and now all of a sudden everybody's on this thing. Um, but genuinely, I am proud of the fact, and I've said it time and time again, I'm proud of the fact we only use the scheme three times last year. Because if you're investing in property, and this is you know, so if you're investing in property, number one, your borrowing capacity is higher. But number two, there are lenders out there that are actually supporting people investing in property now. UBank. Okay, UBank will let you buy, uh, borrow up to 90%, no LMI for two million dollars. Wow, yeah. Wow, okay. Then we've got lenders like Resi Essentials, okay, which is connected to our uh uh panel or our aggregator, sorry, Yellow Brick Road. They'll let you do monthly LMI. Okay, okay, yep, and then refinance out and you don't have to pay the whole lender's mortgage insurance about and use it as an investment as well. Okay, those two lenders on their own are doing more, I believe, for people that are looking to grow their asset portfolio. I'm not talking about people that want to just buy a house to live it. Okay, if you want to buy a house, you want to live in it, that's cool. You can have your million-dollar mortgage, but young people in Australia, what are they trying to do? First home buyers, what are they trying to do? They're trying to buy an asset, they're trying to invest, and they're trying to grow. And that scheme is not letting them do that. Yeah, but setting them up to fail. Sorry.
SPEAKER_03Yeah, no, no, no, no, you're fine. So I I I'm just curious, is the issue the the issue was the election and Alba wanted to win it.
SPEAKER_01That's it. No, no, no, that of course.
SPEAKER_03No, I meant the the actual the removal of the income caps. Was that is that what's really causing this? Well, obviously, supply was already was already an issue because we haven't we haven't increased supply um that nationwide. Um so that and then with the removal of the income caps, because this whole point is that it's the first home guarantee, it's not the first investment guarantee. Correct. Um, so you're supposed to live in it, it's just a place to live in. But now if you are and it what was the income cap before? 105,000?
SPEAKER_01125,000.
SPEAKER_03125,000.
SPEAKER_01So the 125,000 as an individual, 200,000 as a couple. But you brought up a good point. The removal of the income cap was the biggest issue, I believe, personally. And the reason why I say I and the amount that you could purchase for. So they were the two, the other, there was one other change, but they were the two major. Now the reason why they are the biggest issues is because the 5% deposit scheme on its initial inception was to help lower income borrowers get access to the market.
SPEAKER_04Yes.
SPEAKER_01So if you're earning$150,000 a year, your competitive advantage when going to auction was I earn$150,000 a year. I can save a 20% deposit faster because I earn more than you. The person that's earning$60,000 a year had a competitive advantage where, well, you've got bad savings patterns. You can't you can't actually get to a 20% deposit. But I've had good savings patterns and I've been a good person. I should afford my own home so I can get a 5% deposit. And this is where the issue is they've removed the competitive advantage for any lower income earners, but also told the high income earners just go buy a property up to one and a half mil. And the high income earners are now also getting stuck because all of a sudden the interest rates go up and they're being told, oh, you can buy just a 5% deposit. But guess what? If you can't afford it anymore, that's on you. And we're not going to increase supply of anything, so your inflation's going to go up, so your interest rates are going to go up anyways.
SPEAKER_03And really, it all just boils down to a supply issue. Like that is the biggest, like, really when it boils down. Because it if you No, no, no, no, no, no, no, no.
SPEAKER_01It's not just a supply issue.
SPEAKER_03Yeah. No, no, no. Just in this specific scenario. No, it's not because it's all right.
SPEAKER_01But they did not, but they did not need to change the policy framework. Okay.
SPEAKER_04Yeah.
SPEAKER_01Entirely.
SPEAKER_04Yeah. Okay.
SPEAKER_01Why did they remove an income cap? It's contrary to the policy intent, right? Yes. So I I agree. Yeah. Yeah. Like I so it was initially the initial inception, low income owners. Low income was considered what 25 or under just over a year ago. Yeah. Now, go.
SPEAKER_03So question hypothetical. If they kept the income cap but didn't remove the um price cap, would that have changed? Was that even feasible? Because property prices going up.
SPEAKER_01All that would have happened is all the apartments in Sydney would be going for 900,000 or more.
SPEAKER_03Okay.
SPEAKER_01Yep.
SPEAKER_03Okay. Well, that's what I was curious about.
SPEAKER_01Yeah. I think to myself, this scheme probably gonna get removed.
SPEAKER_03Well, it's not doesn't seem like it's sustainable.
SPEAKER_01It's going one way or the other. It's either gonna get removed completely because they're gonna be like, oh shit, we lent out a bunch of money we shouldn't have, and now all these people are gonna get hit with fines, or they're gonna increase the caps again because they're gonna be like, oh, you can't afford property. Again, here you go. And it's going to qualify for these mortgages, you need to be earning. And I've you've heard me harp on about this before, but to get a$1.425 million mortgage in Sydney, you need a$75,000 deposit. You need to have$67,500 left aside for stage duty. And then on top of that, you need to be earning an income, a household income of$250,000. Do you know how many households in Australia earn an income of$250,000 without rental income? 3%.
SPEAKER_02And might I add, they're not the people who need to rely on a 5% deposit. Yeah, exactly.
SPEAKER_03They're the ones that can afford these things already. Yeah, well, that is all we have time for today. Because if we keep going, oh boy, we will just keep going because this has been a good chat.
Where To Find Nick And The Team
SPEAKER_01No, no, I'll go for it. Don't worry about that. I'm well aware. Nick, Nick, you provided some genuine insight that most people don't hear from bias agents. And you provided some very strong ethical and uh moral grounds to build your business on. Where can people find you online? Easy.
SPEAKER_02So uh Nick.bmoney Instagram, um, or just hit me up uh directly, even like I'm accessible on my phone. So 0457-177-550. I'm easy to get in contact with. You are brave. Or nick at bmoney.com.au, hit me up. I'm you know, I'm looking forward to it.
SPEAKER_01And if you need help with any of your finances, you can reach out to bmoney uh finance as well. But if Hamish or Yusuf are busy or Bora's busy, you can go to itsimple.com.au. Uh we're more than happy to assist you with your refinances, your purchases, or any anything that you're looking to do either. Thank you so much for tuning in. I'm Joe. He's Michael, that's Nick, and thank you for tuning in to the Finance Show with Joe.
.png)