The simonjulie Interview

Welcome to The Interview Number Six

This time we have two interviewee’s simonjulie……….Julie has kindly answered a lot of the questions, but you will find Simon’s answers in Italics. Hopefully this is clear enough for everyone.


Interview with simonjulie – 15th November 2006]

How did you get involved in property?

When we got married 10 years ago we had a house each and 6 kids between us. Neither house was “quite right” for our new family blend so we bought a property together – a real renovators delight (or fright more like). That was back in 1996/97 in Canberra and the market was low. Both of our houses were worth less than we had paid. We were far from educated investors but it did not make sense to us to sell at a loss. As it happened the rental returns were good at that time so we rented both our houses out and lived in the new purchase.

Five years on, with several more properties and renovations under our belt we gave up work to more fully enjoy our real estate ventures. What a wonderful decision that was!

What is your property investment philosophy (CF, CG, renos, houses, flats, buy and hold, develop, flip, wrap, etc)?

I guess we would best be described as renovators as we love to buy property with “potential” and add value. We love the double whammy of achieving a higher market rent and increasing the value of a property, so cashflow and capital gains and always in our sights. We tend to buy and hold because we become quite attached to our properties. Rather than sell we tend to use CG to fund further purchases through refinancing. We both love old houses so haven’t felt tempted to get into developing yet. Simon really enjoys renovating and it suits his creative nature.

What is your IP / property story so far?

We have bought most of our properties in Canberra where we are now living. We have a beachfront unit on the Gold Coast and four properties in Sydney. We always endeavour to buy as far below market value as possible, usually buy “don’t wanters”, then renovate. Over the past few years we have built up some great contacts with real estate agents and like minded investors. Several deals have been handed to us on a platter, so to speak. We are glad we have stuck with it long enough that some things come easier. It gives you scope to stretch yourself further in other ways. We are looking forward to bigger and better deals in Sydney – my favourite city on the planet!

Is there a story of a really good IP that you would be prepared to share with us?

The duplex we bought in Canberra a couple of years ago that was featured in our last API story was a good one. A real estate agent we knew phoned us with the deal. Purchase price $315,000 and a $20,000 reno over 8 weeks. The market value of the property improved well over $ 100,000 and the rent was $540 per week. We are now getting $575 per week and I’m about to do a rent review!

Is there a story of a really bad (or not so good) IP that you would be prepared to share with us?

The short answer is “no”. There have been times when we have made less than brilliant choices and we’ve had a few interesting learning curves but no regrets. We have learned to think outside the box to find solutions as no property is perfect.

Do you invest in other asset classes (shares, commodities, businesses, managed funds, cash, forex, etc)?

Simon dabbled fairly heavily in shares for a while. He didn’t lose any money but didn’t make a lot. He decided to turn his attention back to property simply because it is more fun for him. More hands on and more profitable for us.

What criteria do you use when selecting a property to purchase and renovate?

Some of the things we look at are:

  • Location close to amenities, shops, schools and transport etc.
  • Price – is the property good value in the current market, how long has it been on the market?
  • Land value and development potential (even though we don’t develop ourselves we always consider the possibility of selling to a developer in the future)
  • Rentability – who will want to rent the property
  • Rental return
  • Potential for capital growth (we need the crystal ball for this)
  • Amenity of the suburb/area/street – how does it look/feel eg tree lined street, parks, close to beach etc
  • Views/outlook – not a must but certainly desirable and not always priced correctly
  • Internal/external flow (feng shui)
  • Aspect
  • Potential for improvement - both the dwelling itself and the block of land eg quite a bit of value can be added outside with fencing, landscaping and gardening.
  • Finance and interest rate available at the time

Your thoughts on the next 12 months and the coming cycle?

My crystal ball may not work for others. We are keen to buy more in Sydney. We want to be well stocked when the market takes off there.

How does LOE fit into your investment strategy?

That has been a contentious issue with forumites in the past. We make no other income other than rent and the occasional property sale. With a negative cashflow the only other form of remuneration is the equity recouped from capital growth. This is the only way that our strategy can continue to develop. So far so good!

If a budding property investor asked "what are the top 5 things I should do", you would say?

I would firstly tell them that I don’t give advice but I am happy to share what works for us. Each individual needs to find their own way but here are some tips.

Think about what you’re really good at and how you can apply your skills to property investing
Talk to other property investors to get an idea of what PI strategies feel right for you
Read and gather info from reliable sources to find your niche
Take manageable steps while you are learning
Be true to yourself and act with integrity. Treat others with respect (especially real estate agents!) and remember to have fun and enjoy the journey

And if that same budding investor asked "what things should I avoid", you would say?

We began investing without knowing a great deal. We soon began to recognise things to avoid as our experience grew. Different investors have different risk aversion and will not necessarily need to avoid the same things.

Number one for Simon would be letting other people take control of our money.
Number one for Julie would be getting ripped off because I didn’t do adequate research or failed to listen to my lucky hunches.

How important do you feel a team of professionals (eg, property manager, broker, accountant etc.) is to a successful investor?

It is important to have a good team but what is more important is that you develop a great understanding of what you want from them.

We know you are real team, but what strengths and weaknesses do you each have when it comes to your partnership?

Funny but we never talk of weakness, only strength.

Early on in our marriage we sat down together and wrote out a list of things that we loved/admired about each other. It was the most amazing thing. We lean on each others strengths which makes working together a pleasure. We don’t always agree on things but our discussions make the game more interesting and we always find a compromise. We also give each other weighted decision making in our particular areas of expertise eg Simon gets the final say on renovation decisions and Julie in property management. We find this works really well.

We are a great team! Simon can do anything he wants as long as it is alright with Julie.(joke)

Do you consider that there is any natural progression for an investor? (eg. From owning a few properties, to owning many, to being a developer)

I think “natural progression” has a lot to do with the vision and belief systems of the individual. Some investors will shoot for the stars, some will just plod and others will watch and wait and maybe never get started. Each may see that as their own “natural progression”.

For me, it is a natural progression to climb out on a limb every now and then. Even though I might get a bit scared what scares me more is the thought of stagnating. I like challenge and change as it brings growth and expansion into my life and makes me more resilient. It also makes the journey much more fun!

Do you have any thoughts on the CF vs CG debate or on the issue of metro vs regional, units vs houses?

CF or CG – we look for deals that will give us both but CG keeps us in the game and gives us a nice lifestyle.
Depends what you call regional. I think of Canberra as regional because it is like a big country town. Although Canberra has been good to us we are now keen to invest more in Sydney.
Houses and duplexes (on one title so only one lot of land tax) any day over units – not keen on dealing with body corps. But yes we do own several units.

What do you prefer, fixed or floating interest rates and why?

Floating interest rates give us more flexibility to re-finance.
Like “timing to buy” in the market it is equally difficult to predict when the best “timing to fix” is. Some investors I know have used the strategy successfully to suit their investing schedules. We may use the strategy in the future on long term acquisitions

Finally, knowing how important goal setting is to you. Do you have some advice on kicking winning goals?

The first thing is to know what you want. Define a clear target and a strong focus. Then imagine that you are already there, that you have already achieved your goal. How will you feel when you have achieved it? How will it make your life better? How will you life be different?

Simon and I have both watched the movie “The Secret” and both enjoyed it immensely. I have been using my imagination for years to achieve my goals. I imagine what it will be like when I achieve my goal. I conjure up the feelings of already having it. Maybe I’m a dreamer but it works for me every time.

Comments etc.....
As everyone knows the interviews’ are a great resource for all members, so we thought it was worthwhile giving an update on one of our interviewees.

Julie has finished her long awaited book and it is being launched on Sunday the 11th of April, so for all those Sydney people who’d like to make it along, details can be found here.

We wish Julie great success and hope her new book is very well received. If you’d like to ask Julie any questions, they can be added to her interview comments thread….