My $62,000,000 Property Portfolio - FULL BREAKDOWN

What I'm going to do is I'm going to run you through my current state, current portfolio, the value, the debt level, the equity position, the cash flow position, and then we're going to rewind it back all the way to where it started. All right, and I have a computer next to me here where I can see all of the comments. Awesome. All right, cool. So my current portfolio value, let's get into it. So the current portfolio is valued at just over 60 million bucks. It's sitting at around about a 65 to 70% loan to value ratio. So you can see there's just over 40 million dollars worth of debt on the portfolio. There's just over $21 million worth of equity in the portfolio. I've got around about $8.5 to $9 million worth of available equity that I could cash out of the portfolio and obviously put into more deals. Now there's about three million bucks sitting in the offset accounts of the portfolio. That's obviously my buffer to make sure that I can ride through any good times and also any bad times. And I've got just over 300 grand sitting in my super fund, which I will end up investing very soon and I'll run you through what I'm going to do in the super fund. So all of the projections moving forward, just so everyone has context. I just have the growth rates in all of the properties at 7% per annum. These rental yields are essentially reflective of the current yields based on the income that is being produced. And if I go back to the screen here, essentially what happens is as I move from year to year, so you can see here I'm hovering over the 2026 year. If I move to 2027, just so everyone has context here, what happens is it shows the date as of December 31 of that year. So it's assuming a full year's worth of growth based on 7% per annum growth rate, which is obviously the Australian average or close enough to the Australian average. And the other assumptions are total savings. You can see increases by the surplus rental income and then the savings amount that I've got sitting in there that goes into the buffer account. And that's how everything calculates. So you can essentially see assuming we have 7% growth between now and the end of next year, the portfolio will go from being just over 62 million to being 66 million. You can see my debt level doesn't change and the reason for that is because all of my loans are on interest only and they continue to be refinanced to interest only. And obviously I cash out the equity. You can see that the equity position would grow from just under 20 or so just over 21 million to 25 million. So what you can see is 20 years into the future. Again, assuming I did nothing and the property market continued to grow at the 7% per annum that it's done for the last 50 to 100 years, the portfolio value would be plus or minus 230 million bucks, which is obviously extreme numbers and it's not for everyone, but this whole webinar is about me and what I've done and what I'm doing and how we build clients, portfolios, not what you should do. Okay, maybe you should do it, maybe you should. But what you'll notice is even when we go 20 years down the track because I assume interest only repayments, you see that the debt level still sits at 40 million bucks because I've obviously assumed that I'm going to continue to refinance the debt out and just offset everything. But because over time we have rental growth and I've also assumed a 6% interest rate over this period of time, that could be plus or minus, we don't know. But what happens is over time we slowly get more and more cash and lower offset accounts, which means we're paying less interest, which means more rental income goes into the offset account. So we are well and truly debt free by 2046, even though we're carrying 40 million dollars worth of debt. We're not paying any interest on it because it's fully offset and essentially the portfolio has no debt associated with it. And the rental income that it's producing based on these numbers would be $6 million of net income, which would essentially be the same as if we go 250 of today. It would be about the same as $3 million of income today plus or minus. So that's what it looks like right now. My portfolio is going to change dramatically between now and then, but I just wanted to give you guys some context on it because, and then I also probably should let you see what the cash level overall. So you can see the cash level overall on a portfolio value of that size is not all that negative. So you can see the rental income based on the portfolio value today is just under $2.5 million bucks gross. The mortgage repayments on that are just under $2.3 million. The running cost down the bottom there are 320,000. They wouldn't be 100% accurate because there's lots of land tax and stuff that comes and changes every single year that's not in there. But regardless, it's probably costing me a few hundred thousand dollars a year to own the portfolio based on a $60 million plus asset base. So by and large, we've kept the portfolio relatively cash flowing. The usual there has obviously been points in time where it's been significantly negative, but based on current rents and the current position of it, it's not all that bad. Obviously, I think there was a question earlier and if rates went up to 9% would it change? Well, what you could assume is it would be 3% more expensive based on $40 million per debt, which means that it had $1.2 million worth of cost to the portfolio because, you know, we're shooting 3% on $40 million per debt. That's what 3% would cost in assuming your rents didn't grow. You know, it would be, it wouldn't be very pleasant, but having good cash and offsets means you can ride through those times. This is the portfolio. Okay. So the portfolio overall has 17 properties. I believe that's right. Isn't it 369, 1215, 17 properties in the portfolio total? These are the properties. All right. So if you want to go hang out at any of them, you can. I don't live in any of them. So you won't find me there, but this is them. And essentially, this is the order that I've also purchased them in from ADZ. Okay. Starts here, ends here, and we're going to go through them one by one. Now, a few things that you'll notice. The first four properties that I purchased were not houses. They were apartments. You can see, Brainstreet is an apartment, Bonoista Avenue is an apartment, Memorial Drive is an apartment, the other Memorial Drive is an apartment. And then I bought one block of land before I then bought another apartment. And then, you know, since then, there hasn't been any other apartments that I have purchased other than another apartment in the block of apartments that I already own to in everything else has been Torrance Tartel dwellings. So let me unpack it now. So this was the first property that I ever purchased. The people who follow me, they probably have heard me talk about this property a lot of times. But essentially, this is my first purchase that happened back in 2015, which is 11 years ago now. I was 18 when I bought this property, 18 turning 19 back in 2015. And I paid $720,000 for this property. I was the first time buyer. Obviously got some incentives to buy it. And I have openly said as well that I would not buy this property again today if I knew what I know now back then. And the reason for that is because it's a subterranean or two bedroom apartment, meaning that, you know, you can see here, this is road level. My apartment is actually under the road. It's down here. You can't actually see it. So it is subterranean. It has no parking. The second bedroom is very small. It doesn't have any outdoor space. So these are all the things that I know now. But this property was the one that got me started. And you can see that it is still performed relatively well. It's done just under 6% compounding. And it's essentially made me over $600,000 since 2015. So it's not the greatest property, but it is still the property that's allowed me to go on by a lot more properties. And everyone needs to start somewhere. Now, the thing that I got really right with this property is the location. You can see it is in Kujip, which is one of the most blue chip properties or one of the blue chip suburbs in the country. It's walking distance to the beach, literally. And it's a great block of apartments, very well maintained, clean strata. And the reason I bought this property is because Chris Gray, who was my mentor, was doing this. He was buying properties in these locations. And I thought, why don't I follow in the footsteps of someone who has been there and done it. So that is why I bought this property. And that's also what led me to buy. The next part. Now interestingly enough, this is what a lot of people don't understand is that you can see here the rental yield is 4.6%. Now that rental yield is based on $1,200 a week of income, which is here, which is what this property generates me and I'll explain how in just a minute. And at the 4.6% is relative to the $1,200 a week on the value of 1.35 million. But if you look at $1,200 a week versus what I paid for the property being $720,000, that works out to be, let me have a look here on my little calculator. That works out to be, I would assume like 1,200 times 52 divided by 720 is, that's an 8.6% yield. So again, what people need to remember and understand about investing is the rental yield that you buy the property on is not the rental yield that that property stays on because over time what changes is your rental growth increases. But what doesn't change is the price you paid for the property. Okay, so against the purchase price, I'm getting a near 9% rental yield, which is awesome. But obviously against the value of the property, it's a 4.6% yield, which is still not that bad. The reason I'm able to get $1,200 a week of income for this property is not because it is less full time. But it is because it is a short-term rental. This is actually an Airbnb and that's how we're able to get $1,200 a night. We get roughly $300 to $400 per night for this property. Obviously, that depends on the time of year and how many nights people book for. But that's what it's generating at the moment, roughly $1,200 a week. I've actually done a few videos on it, how that was really just a test for me to actually try something before I share advice on things. I always want to do it before I share advice. So that's what's happening. And I would probably get $800 a week as a full-time rental. So it's about 50% more income. And fortunately enough because I have the other company that does this stuff, we self-manage this through my asset management business. Alrighty, so that was property number one and that is what got me started. Now, if we go back, you can see our ball that property in 2015, the following year, this is the next property that I purchased. And the reason I was able to buy this property the following year is because of two reasons. One, I obviously had rental growth, sorry, I had capital growth in the first property, which I was able to cash out and I paid lender's mortgage insurance to do that. So I cashed out equity plus I still had cash savings to put into this property. Now, remember, at this point in time, I would have been 20 now because I bought this at the back end of 2016. I was 20 years old and I was still living at home with my mum and dad. So I didn't have a huge amount of expense associated to my life. And I was still saving a lot of money. That dream street property was my own rocky pie property for a short period of time before it then was rented out. So I was able to save and this is why I always encourage young people to do is continue to save as much as possible again. So there's a few questions here that I want to answer. Why do you hold this property when the capital growth isn't great? Well, the capital growth is not not great. Like 6% compounding is still a relatively strong growth rate. And the reason that I hold them is because like to obviously sell these properties, I'd have to pay CGT on the gains, I'd have to pay selling costs. I'd have to roll into another property which may or may not get longer or more capital growth. Like 6% compounding over the last 10 years, I think is is strong growth. And my cost based on these properties is relatively low and it's going to be worth a significant amount more down the track. So if you look at this property again, I actually used Chris Gray to buy this property. He was my mentor at the time. He had a buyer's agency and I used him to buy this property. 875 is what he paid. The last valuation was 1.55 million, which I cashed out against and pulled equity out of this property. Again, 6th to same boxes, walking distance to the beach. This is one southern down from Kudji. This is in Marubra. It's in a small block. I believe of 9 apartments is in this block or 10 apartments, one of the two. And again, it's done well. It's on 6% compounding. This is a better property than my first one of the reasons are it has parking. It's a larger apartment. It's got much more sunlight because it's got east windows, it's got south windows and it's got west windows. It has a balcony, which is off the bedroom, which is not ideal for an apartment. Usually what that off the living area. And it has views of the beach. So you look out the back here and you can see down Marubra Beach. This ticks nearly every single box. And it's a really solid asset. So again, the reason I bought this property was because it's what my mentor did and it was working really well. He actually owns an apartment in this block of apartments still today. And this was me, I had two properties 20 years old and they were worth, you know, 875. That was probably worth just under 2 million bucks. And you can actually go back and listen to a lot of podcasts that I was doing at this time. I was on the smart property investment. I was on Ben Kingsley and brass holdways podcasts are the property couch. And I was sharing my journey as I was going. So I talk about these properties a lot. And I haven't done really anything to these properties. I've done nothing to this. There's been a special levy in the past that I've had to pay for some building works, which is not a great deal. And the could you apartment hasn't really cost me much at all. Now again, if we look at the rental income today, $900 per week versus the purchase price of 875, we're probably sitting at a rough 5.5% gross yield. And again, if you look at that on the on the gross yield versus the value, it's 3%, but because what doesn't change is the purchase price, but what does change is rental income. It's about a 5.5%. But because I'm obviously cashed out equity from these properties to buy more properties, you can see it's costing me about 40, 43,000 ish idea. And these properties are owned individually. This is personal name stuff. I didn't have any idea about structure or anything like that back then. So these are owned of my personal name. Now this gets on to property number three, which essentially the strategy that I had here was the exact same as the first two, except I didn't have enough service ability to buy another property in Sydney at this point in time. Now this was two years later in 2018. And by this time, I had moved out of home, I had moved to Newcastle and I was working in the mining industry. So my income had increased. And I was actually living in a sharehouse at the time with my girlfriend, who's now my fiance. And I knew I wanted to follow the same strategy as I had in Sydney, the same strategy that my mentor had taught me, but in a different location. So what you will notice, it is almost identical to the first two properties. It's a small block of six apartments. But this time it's on the ocean. So this block is directly across the road from from, you know, bar beach and the rocks. And I bought this property very, very cheaply. And the reason for that is because the building had some issues that had some strata issues, there was major works that needed to happen replacing windows and doors and a lot of a lot of stuff needed to be rectified. So I bought the property for $665,000. Now by this time I had learned a little bit more about about property. I was surrounded by a few more people that had much larger portfolios than I did. And there was a few reasons other than it was a good deal and it was what my mentor had done. Another one of the major regions was I thought, well, over time, I can slowly acquire the other apartments in this block and have a 650 odd square meter block of land right on the beach. But I don't need to have the money right now to buy it all I can slowly acquire the apartments over time. And obviously at this time I was, you know, 21, 22, whatever age I was back then. So I thought I can acquire these apartments over the next 20 or 30 years. And I will eventually own this whole block. You know, I didn't think about this over a 12 or 24 month period. I thought about it. What am I going to, if I continue to buy these one every five or so years, you know, let's say the six apartments, it takes me 30 years to buy them. Eventually I will have a block of apartments on the beach that I can then redevelop into whatever I want. So that was, that was also going through my head, which the reason I tell you that story is because when I go through some other properties, it'll, uh, the dots will start to join up because when you have a goal and you, and you work at that goal, cool things can happen. Now, this property again is performed better than my Sydney apartments, which people would go, wow, I didn't think an apartment in Newcastle in one of obviously the best suburbs in Newcastle would perform better than two apartments in the eastern suburbs. Sydney, that's a, that's a big misconception people have. Now they're both blue chip, you know, locations. They both follow the same fundamentals, but these properties or this asset, I should say, has done better. You can see it's compounded at 7.7%. Um, just on that actually the compound growth rate is not used often so often what growth rates you'll hear when people say it's growing. and it's 10% or 20% or whatever, it's not compounding, it's annualized. So compounding growth essentially means it grows by 7% this year and it goes from a million dollars to a million and 70,000 dollars. But then next year it grows 7% on the million and 70,000. So you would create $77,000 with a growth. And then the following year it grows from 1.147 to whatever it is. Where annualized growth means if it was a million dollars and it grew at 10% annualized, it's growing at 100,000 every single year because the 10% is on the initial purchase price not the compounding value. So the compound growth rate to generally allow a rate because it's calculated different to annualized. So Stuart, how do I fund that negative cash flow? Well obviously I earned good money back then as well. I was earning $15,000 to $200,000 a year as a 20 year old, 22 year old guy with very little expenses that I will get to all of the intricacies. So it's done really well. You know, it's made me almost $600,000 in the time that I've owned it which is 8 years, 7.7% compounding. And this is also only my personal name. So the rental yield, again, not all that crash hot against the value of the property, 3.47 percent. But $800 per week against the purchase price of $665,000 is very good. And we're talking 6% plus or minus maybe even a little bit more, 6.5% growth, which is obviously a very, very good growth rate. So this is a great property. I've renovated it since I did live in this for a short period of time. And when I lived in it, I rented out the bedrooms or the other bedroom to other people. So it was always like I was generating. Yes, he's a still in my personal name, Jared as well. So that was the first three properties. Now, the reason I mentioned the story about this is because only a couple of years later, and I'll tell you about this, this property come up in the same block of apartments 2021. So you can see it was three years later that this apartment come up. Now the reason that there was three years between my third purchase and my fourth purchase is because I changed careers. I went from being in construction, mining to chasing my passion of property investment. And that is when I got into the real estate world, which was back in 2019, I started in the property industry as a buyer's agent. So often what people forget is they just think that they can do the same thing forever and the same amount of income and grow this massive portfolio with the reality as you can't. So I knew once I bought that third property that it was going to be very, very challenging for me to one, grow my income to the level that I needed to grow it in my previous career. And two, if I couldn't do that, I wouldn't be able to invest in any more property. So I chose to not do anything for a few years, take one step back or two steps back and move into a new career. Okay, and that is what I did. And obviously it's worked out okay. But that's why there was three years between the two. But as soon as this property come up and it was the apartment directly underneath the first one that I bought in this block, I then bought it. And purchased it and I purchased it for $710,000. Again, the most recent valuation on this property was 1.2 million. And this one is renting for slightly less than the one above. It's renting for $750 per week. But again, against a $710,000 purchase price, we're talking five, five and a half percent ish. Are these still another person on any? So again, great asset, awesome block and now I have acquired two in a block of six which means I essentially own 33% of the block. So I'm continuing to obviously just by foundational assets. What you will notice is I haven't developed anything yet. I haven't gone and done any crazy renovations yet. I've just simply followed a really clear framework of buying the best quality assets that I can buy for the budget that I had at the time and the best suburbs that I could have buy in. And I've just allowed these properties to grow in value. Okay. This is where a lot of people go wrong. They try and overcomplicate things too much. They try and do things that they shouldn't do based on their experience. Now, if I try to do any of the stuff that I do now back then, it would have been a massive failure because I knew one tenth, probably one 20th of what I know right now. So, you know, I just think that the number one rule and the way that we build out all of our clients portfolio is to just simply buy really good quality assets that have value weight potential down the track, but that you don't have to necessarily go and do right away. So that's the strategy that I followed and it's proven to work really well. Calamass-Y buys agent, not a real estate agent. And the reason that is because they didn't really have a passion for selling real estate, I had a passion for property and investment and I was starting to build a bit of a brand as a young investor. So, which is the natural career progression to do this. Okay. So, look at the first four properties that I bought and they were all apartments. They weren't houses, they were apartments. Okay. So, anyone who says that apartments are not good investments, you know, really probably doesn't understand apartments and what a good apartment versus a bad apartment. It looks like I mean, my parents unfortunately bought a bad apartment and it didn't work out so well for them, but they bought incredible houses and they did work out really well for them. Now, there's a few things that had happened between this property and the one that I'm about to run you through. This was a bit of an emotional purchase. It wasn't the best investment, but, you know, I was starting to make good money in the real estate industry. I had some good growth in my portfolio and I wanted to buy a property on the river because it's where I grew up and it's, it was something that I always wanted to do. So, I did it. All right. I would advise people not to do this because, you know, it probably wasn't the greatest investment. It's done well, as you can see, but I have spent some money on this property. And again, I bought this strategically. So, you can see this house here next door when I bought this block of land, it didn't look like this. I always bought this block of land knowing that one day I was going to buy the house next door. I didn't know when it was going to come up, but I just knew that I was going to do it. Okay. Turns out it come up much sooner than I thought it was going to come up. And now I own that property too, which I won't use you in just a second, but I always knew it. I bought this block of land for 750 grand. Now, I thought that was an absolute bargain because there was properties and there is properties on the street worth many, many millions of dollars. And the reason this property was so cheap is because you could never actually build a house on it. It didn't have a building envelope for a house that only had a building envelope for a boat shed, which is what I've got there. But I knew one day I would buy the house next door and I would then have a double block on the river and it would be elite. Turns out that's what happened. So, generally when I'm buying assets, I'm always thinking a few steps ahead. I'm not just thinking about the here and now, which I think is a lot of where investors go wrong. Again, this property was purchased in my personal name. It was not purchased in a structure. So, this is a great investment and again, it's a very long term thing. And eventually, when this is all finished, this will be a short term rental and it will generate incredible income during the summertime. Okay. So, as you can see, it's got no rental income because it's not generating any income for me. So, this costs me a pretty penny to own. All right. So, the next purchase is the one when I started to go into structures. Okay. This is a penthouse that I bought in Newcastle and I bought it for a few reasons. One, because I needed to place our business was growing in Newcastle. I needed a place to stay up there. So I bought it for that reason and also because the development, I thought was incredible. And this is a very, very good short term rental. Now, at this point in time, so you can see this is in 2022. So I'd been in the business now for three years. My income was obviously growing pretty substantially. And around this time, I had bought a few assets in structures. Okay. So, I had purchased an office building in Sydney, which I no longer have. That was in a structure. And I had purchased an office in Newcastle that I also no longer have. So, this is where I started to think about my portfolio very different. Okay. So, from this purchase onwards, is when it started to be different. Okay. So, this is when I started to buy within structures, so within trust and companies, this is when I started to buy assets that I could add a huge amount of value to. And this is when I really started to see the rewards of all of the properties that I purchased previously. Because with these five properties that I own, you know, previous to doing all this, I think I had about 15 million dollars with the assets or 12 million bucks with the assets with these six. We bought this asset short term rental. It's amazing. Now, if you look at this property, this is a development site, right? So, I started to buy things that needed more capital that I could generate a lot of equity through. And I could start to use the skill set that I had created. This purchase, again, is in an entity. And a lot of the cash started to come through not only equity from the other properties, but also started to come through the business. And the cash that was being generated. So all in for this purchase, you know, we're say plus or minus three and a half million, we've created a million dollars where the capital. Now this is still under, this is still in progress, this, this site. But the portfolio really started to grow from this point moving forward. This asset here, same thing. It's a development site, it's approved. This asset here is a duplex site, which is almost finished. That valuation is the as if complete valuation. So it's probably going to be worth more than that once. It's actually complete. This asset here is one of the wedding venues. So again, we've created a huge amount of value with this property. It's got a lot of cash flow. Again, was bought in a structure. This asset here is the house next door to the block that I bought. Like I said, that come up a lot sooner. That was bought in my personal name because this is going to be my own rocky pie property. This asset here is again a commercial asset purchased in a structure. Our office operates from this and again, it's a future development site. We're going through approval at the moment to get a seven-story apartment building approved. This asset here is another wedding venue, purchased through a structure as well. This asset here is another apartment in that block that I mentioned. Now I'm three, I own three apartments in there, which is obviously 50% of the total block. This asset here is a commercial property and a residential on top. So I bought the full building, purchased within a structure. Again, this asset here, purchased within a structure, building a big luxury duplex on at the moment. And then this asset here is our Sydney office, which again was purchased within a structure. Let's talk through some of the examples. So let's talk through, say, this asset here. The reason that this asset is within a structure is because the vast majority of my income now is generated through a company structure. I run multiple businesses. The majority of my income is made in those businesses. Within a business, you are taxed at a 25% tax environment. It is the lowest form of tax in Australia for the most part. Unless you are a really low income earner, there aren't too many people that pay a lower tax rate or blended tax rate than 25%. So for example, if I make a million dollars in a company, if I was to push that million dollars out to myself as an individual, then I would be paying $470,000 with a tax on that million dollars. So I'd be left with about $5,500 and $550. If I keep that money within a company structure, meaning I move it from my trading entity to another company, I only pay $250,000 worth of tax on that, which means I essentially end up with $220,000 more money than I would if I was to push it out to an individual. And it's the same if I was to push it out to a trust. I don't want to get into the intricacies of a trust, but you can't push money from a company into a trust and then invest that money straight away. If you invest it in the trust when it's been pushed from a company and it would be a classic division 7a loan, essentially the money needs to end up in your personal name first before it goes back into the trust to be invested. So that is why I personally like company structures so much because I can get money out of my trading entities into real estate assets or anything else and keep it within a 25% tax environment. And then also the serviceability stays within a 25% tax environment, meaning all the servicing, meaning this cash flow that it's negative gets funded through a company tax environment as well. And then also all of the costs associated, say, with developing this property, the planning and approvals, all stays within a company tax environment. So the more cash that I generate, the more money that I generate, it is a much more tax effective structure for me. Now, people get worried about the company tax rate or sorry, the 30% tax you pay if you sell an asset in a company, which is true. You do pay 30% tax on assets if you sell them down in a company structure. But it is only slightly more than you would pay based on a discounted capital gain of 23.5%, so it's 7% variance. And the reality is you never want to push that money out of the company to your personal name anyway from a capital point of view, meaning if I was to sell this property in 10 years time, but then we didn't develop it and I saw it off of $6 million, there'd be a $3 million gain sitting in the company that I owned it in. Now, I wouldn't push that $3 million out to myself as an individual because that money is useless to me because I would have to reinvest it anyway. So the money always stays or the capital always stays within the company from my point of view. And it just goes from being a growth focused asset maybe to being a cash flow producing asset. And when the asset produces cash flow, you push the cash flow out to yourself, not the actual capital itself. And you're only pushing up cash flow out that you need to live on. All of those assets are the same. Now, obviously I've built a much larger business now. A lot of people know me, so there's more risk involved in my life. They also provide a lot more structure and asset protection than properties do in my personal name. Someone asked the questions about Land Tax. Now, in New South Wales, which is where all of my assets are, inside of companies, if they're set up correctly, you actually get a new Land Tax threshold. So Land Tax Treatment inside of a company structure is better than what it would be in your personal name, just not a lot of people understand that, which essentially means if you get a new Land Tax threshold inside of each company structure that you set up, if it's set up correctly, you're saving yourself $16,000 a year because you're not paying Land Tax on that million and 75. You get as a threshold. This building here is, again, is our, you know, padding to the office that we moved to in July. All of the cash from this purchase didn't, like none of the cash come from equity from other purchases. This is funded through earnings that I had and cash that I had. So again, company tax rate, the money's coming from a company to fund it. So why wouldn't I put it in a company structure and keep it within a company tax rate? So that is why these things are structured, the way that they are. New company for each property. Generally, I have new companies for each property, correct. Are your companies owned by a trust? No, my companies are not owned by a trust. My trading entity is owned by another company, not a trust. And the reason it's owned by another company is because that is how you keep your money within a company, a 25% company tax rate environment. If the company was owned by a trust or my trading entity was owned by a trust, it would go into the trust. And then even if it pushed to a bucket company, there would be tax leakage there and I would pay an extra 5% top up tax just with how just with how the ATO treats that income. So it's not a bucket company. It's not a bucket company. That's the thing that people misunderstand. A bucket company is when the money goes through a trust and ends up in the company. The money that comes out of my trading entity goes into a holding company, which is still treated within a 25% tax environment. And then from there, I can lend it to what you call bucket companies and I still don't pay the top up tax. But that's a good conversation for an account. Why is your PPR going to be in the location you can live anywhere in the world? Because I rent where I live and that property would be worth three to four million bucks. And why would I not have that as my own rocket, but I can do it in my personal name. So now a few other things that I want to run through. So this asset here is a wedding venue. This asset here is also a wedding venue and I'll run back to the portfolio plan and I'll show you some assets that I'm in the process of buying at the moment. The difference between my assets that I invest in now versus the assets that I started investing in is I've gone from being a passive investor. So all of these properties here, Brainstrape, Bonavista, Memorial Drive, Coromandel Memorial Drive. These are all passive investments. Many I can't really do all that much with them other than rent them out to earn income and obviously do a renovation to an extent. But buying larger isn't a great deal I can do with them. Now with the wedding venues and the larger assets that I'm buying, you can see that if I'm spending five and a half million dollars, there's nothing I'm spending nine million dollars on another property. If that was just simply invested like a standard commercial asset, for example, I would generate a five or a six percent rental yield on those properties, which is okay, but unless they've got a relatively low loan devalue ratio onto them, they're not going to be generating much income if any. So the reason I go active now is because I can own the real estate asset. I can still generate my six percent yield from a rent point of view. But instead of having a tenant in their paying rent, I am the tenant paying rent back to myself. And then I operate another business out of that asset being a wedding venue. And the reason I do that is because I can generate a six significantly higher yield overall than what I would be able to have what was rented to someone else. And I've obviously got the skill set and the team to be able to do that. And that is why I do it. Someone asked a question here around the trust lending and bank tightening up around the trust lending. Now that is true to an extent. I have zero issues than with getting loans through entities. And a lot of people have zero issues getting loans through entities. It is getting harder for people who are just trying to use entities to protect their borrowing capacity and they earn limited income. All of the bank's largest clients and the wealthiest people that the bank's harvest clients are never investing in property or buying assets for their personal and they are always buying through different entities and that's how they borrow money. So it's never going to be eliminated. What they are trying to do is tighten up the so-called loophole that was happening where every day punters were going and leveraging up and getting huge amounts of debt when they couldn't actually afford it because obviously there's risk involved with that. So that is what, for example, everyone thinks CBA does no longer lends the trust. That is not true. If you're an existing CBA customer and you go directly through the bank, you can absolutely lend through trust as you normally could. NAB still do it. WestPAC still do it. ANZ still do it. There's lots of banks that are still doing it. Majority of the non-bank still do it. So that's the reality. Now, people ask around the principle and interest versus interest only. Now the reason all of my loans are uninterested only is because I don't care about the debt itself. OK. As long as the cash flow coming off my portfolio is going to eventually become positive, then whether I pay interest only or principal and interest makes no difference to me, other than on interest only my repayments are lower than what they would be on principal and interest. Now what you can see here is assume I get some rental growth between now and next year. You can see the overall portfolio would be producing and to be about neutrally geared. That's just neutrally geared. And then what starts to happen over time is as I get rental growth, the portfolio starts to produce income. OK. Based on an interest only repayment. So I'm still paying my interest. You can see the mortgage repayments on the debt. As of next year, my mortgage repayment is roughly 2.25 million bucks per annum. OK. And the rental income coming off the portfolio is 2.7 million dollars. OK. So it is slightly above. You obviously got running costs in there as well. Like I said, that's probably not 100% accurate because you're going to land tax and all the rest of it that comes in that I don't probably track exactly as I should. But what you start to see is because I'm paying interest only as I start to put more money in my offset account, my interest repayment starts to decrease. You can see it goes from 2.25 next year to 2.2 million dollars a year after and my rental income grows and I'm putting more of my offset account. And the following year, the interest is less and the following year, the interest is less. Because what's happening is as the portfolio has started to produce more income, I'm not living off that income. The income is going into the offset account, which means I'm paying less interest now, which means next year that we more surplus rental income and eventually gets to a point where I'm not paying any interest at all because the portfolio is now paid off. So you can see, if I did nothing at all of my portfolio, I just continued to offset itself. By 2042, my portfolio would be completely offset. Now, it's not debt-free because I still have 40 million bucks worth of debt, but it is offset, meaning I have 40 million dollars worth of debt and 40 million dollars worth of cash. So I'm paying no interest now on the overall portfolio. So that is why I don't care about P&I and interest. All I care about is that I've got cash sitting in the offset accounts. And if I have interest, I only repayments versus principal and interest repayments. The interest eventually gets diminished because the surplus keeps going into the offset account. And you were essentially paying down debt anyway because by putting cash in the offset account, you're offsetting your debt, which in my perception is like paying it off altogether. Someone asked, how many times can you renew an interest only loan before needing to change lending entity? You can renew an interest only loan unlimited amounts of time as long as you can service the debt. So you know, you can do a five-year interest only and then at the end of that five years, if you can show serviceability, you can refinance that debt again and go another five years interest only. The only time you will not be able to renew an interest only period is if you can't service the extra debt. When you use that cash to buy more, then will your interest not exceed the rent? Sure, absolutely. But what people also need to remember is we are all in different stages of our lives. As of 2026, I'm 30 years old. Now, assuming I work for another 30 years, I am not even, you know, 30% through my work in Korea. So I know a lot of people think that, oh, let's get income and let's retire and never have to work again. When you do what you actually love to do every single day, then you don't actually want to retire. Like, what am I going to do? If I today sold everything down, lived off income, I would have nothing to do. I would go and start another business. So if I work for another 20 years and I'm earning active income, I don't need my portfolio to give me income. So it would be silly of me not to continue to grow the portfolio overall. So yes, the portfolio will probably continue to cost me money like it is right now. And eventually, if I don't want to work anymore or something happens, then I will sell some assets and decrease some debt and live off the income. But I've had lots of friends and lots of clients, really, really wealthy people. A lot of these younger clients of ours are on the young Rich List and the AFR Rich List. They're a lot of our clients. And they sell businesses. They buy a nice home. They go on some nice holidays. They buy some nice cars. And then two years later, they start another business because there is no fulfilment in sitting at home doing nothing. So that is why. In terms of one offset account or offset accounts against each property, it doesn't actually matter. From my point of view, I generally will just offset whatever the largest or the highest interest rate is because that means you're essentially getting the highest return on your money. So if you have an interest rate of 8%, versus 6%, you would probably offset the interest rate of 8%, because you're essentially now getting 8% on your money versus 6% if it was in another offset account. So that is how I think about my offsets. But to be honest, I'm probably not on top of it as much as a lot of people are. All my money just sits in an account and it's offsetting some debt. I don't know what debt it's offsetting to be honest. This next purchase will be in super. It'll be $10 million. I'll buy it with my partner. And again, I don't have enough money right now sitting in super. But there are two ways you can get money in superannuation or that I can get money in superannuation. You've got your concessional contributions, which is what I've done to date. So what have I got at the moment in there? 300 odd. What is it? SMSF? Yeah, 300,000. And then there are non-concessional contributions, which means it goes in after tax. So I will put in non-concessional contributions. My partner will make sure, you know, he's got enough in his super. And then we'll actually go in, we'll buy this asset in our super funds. And that will be another wedding venue, which will add another $10 million with a massive value. And the reason we are doing that is long-term, we think it's a really good idea. What does lending look like for a wedding venue? Lending look for a wedding venue. It's the same as any commercial loan. So if you're buying any commercial, I said it's the same. Why wedding venues? The reason we like wedding venues is because it's a high ticket sale, meaning that you can get 50 to 70 clients a year, at 50 to 70 weddings a year. We just do venue hire. And you can generate $30 to $50,000 just for venue hire, which you can see is rent. And you have no real other expense other than property maintenance. So I know how to generate customers online, obviously. And it's a good business model for us, plus obviously with a rural property. It's also Land Tax exempt if you're a primary producer. So, you know, assuming you've got a large rural property and it could be over many titles, one title would be for the wedding venue, and then the rest of the titles will be primary productions. So you should pay little to no Land Tax total, which is why I like them as well. Alright guys, our aura of wa go and take this information and absolutely implement it. None of this shit works unless you do something with it. Alrighty, Ciao for now.