BREAKING NEWS! SMSF PROPERTY LENDING CHANGES + Q&A (LIVE STREAM)

[00:00:04]All right, guys. I think I'm live.

[00:00:06]Can I get some thumbs up in the chat so we know that I am live, you can hear me, you can see me?

[00:00:14]You guys are on. Can you hear me?

[00:00:23]You might not be able to hear me.

[00:00:25]I'm not getting any thumbs up. There might be a bit of a delay.

[00:00:28]Uh All right. Uh yep, can hear me. All right, perfect. Usually the first minute of every live session is the most awkward because I got no idea if people can hear me and see me. So, then there's [laughter] a bit of a delay. So, we're going to cover off a lot of stuff here. Uh I've also got some questions coming through, so keep them coming.

[00:00:54]Uh I want to see viewer activity and see how many people are on. I have 130 people on live at the moment. Amazing.

[00:01:02]All right, love it. Thanks, guys. Um so, some big news obviously coming out today, which was in regards to the SMSF lending space. I'm going to cover that off. I want to cover off any other questions you have, obviously post budget. Um you know, I had a question up here that I'll come back to, but it was, you know, how badly do you want this government gone? Um We'll we'll address that as well, but just to sort of create some context uh for anyone that's new to a live session here, uh if you enjoy this sort of stuff, you should subscribe to the channel. It'll allow you to actually comment. Uh if you can't comment, it's because you're not subscribed to the channel. So, that's how we're going to do that. The other thing we're going to do is um we are able to go back to any other videos. So, I say we, you can uh always go back to any of the other live videos that I've done, as well as the pre-recorded videos, which you can check out. Um and we're going to try and make this as authentic as possible. I try and get out to every single person that comments. If I don't, it's not because I'm ignoring you. It might just not populate on my screen here. So, I'm happy to answer anything you've got. If I don't know how to answer it, I'll let you know as well.

[00:02:07]But, how we all feeling?

[00:02:10]Lots happening in the world in terms of the budget.

[00:02:13]I can't believe it's still a budget we still still speak about.

[00:02:17]But, anyone that sort of doesn't know what's happened with the SMSF lending space. I have a dedicated video about this, by the way, which is coming out on Thursday. So, today's Tuesday, it'll come out Thursday. It's going to be a deep dive into it. It is a big change, and I'm not going to lie about it. But, at the same time, there is still a small window of opportunity for anyone to get in. So, that's not me, you know, pumping up the market or anything like that. It's like literally that is the rules. So, we'll go through that in a second as well. So, scroll up and let's start answering some of these questions.

[00:02:52]All right, so thoughts on today's SMSF changes.

[00:02:56]What's being proposed? Would existing existing holdings be grandfathered? And how likely are these changes?

[00:03:01]Interested in the potential impact on current SMSF property investors. Okay, great question, Richard and Fathom Weber.

[00:03:09]Appreciate it, mate. Okay, so I always knew this was going to come up.

[00:03:14]Um the SMSF changes are essentially that the Greens party has said, "Hey Labor, we will support you in terms of your tax reform and the changes that you're proposing. So, we're happy to support you on that if you go ahead after SMSF borrowing for residential properties."

[00:03:32]Of course, Labor has said, "Yes, we will support that." And so, now what we'll effectively see is the Greens supporting Labor in terms of making the decision or supporting them in making the decision and changes regarding negative gearing changes and CGT.

[00:03:47]What this means is that we have a small window. Now, at this point, they're saying that once it becomes law, effectively, we have 45 days after that.

[00:03:57]Anything that's been purchased before the 45 days, no problems. Grandfathered in, you're good. If you already have property, grandfathered in. So, it seems like that's pretty much the approach they're taking with any of the changes moving forward. It's whoever's got into the system, whoever's bought the property, grandfathered in, you don't have to worry.

[00:04:15]The only part you have to worry about is if the strategy was, cuz this was the current system, is that people would go out there, they'd buy an investment property, it would go up in value, and then, cuz you can't pull out the equity, you would sell that property, you would then have a larger deposit, and you could go to two different properties.

[00:04:32]That'll allow you to continue multiplying your wealth and building up with leverage, cuz that's the reason you get into property in your super.

[00:04:39]Now, it means that if you've been grandfathered in, you're not really looking at selling, because then you won't have the opportunity to get any leverage to be able to buy property in your super, full stop.

[00:04:48]This doesn't affect commercial property, though. And so, obviously, a lot of people go, "Oh, that's fine, you know, SMSF, I can just go buy commercial property." Which isn't as easy, it is very difficult, and I would go on to say there's more risk associated with commercial property than there is with residential property. So, that's the first big thing. The second big thing is the conversation around how so many people are now going to get rope pulled with how many people over the last couple of weeks have gone in and put extra into their super, cuz they've said, "Hey, you know what? The budget's not great for personal properties, I'm going to put more into super."

[00:05:20]Then I'm going to roll over from super fund into my self-managed super fund.

[00:05:24]I'm going to pay accounting fees to get this set up, and now I'm waiting for all of this to happen, then I can go and buy a property. Well, guess what?

[00:05:32]You might not even have enough time now, because you're still waiting on the rollover, or you're still waiting on the accountant to set things up. And so, now you've just spent all this money to effectively get a self-managed super fund with the aim to buy a property, but now you can't even do that, cuz you have 45 days to basically execute. So at this point, um and I've got a meeting with uh the team tomorrow, but essentially what's been told to the rest of the team is as of right now, it is very likely that we see the bill passed in the next 2 weeks. If that's to be the case, then you have 45 days from there to be able to go and transact on a property. The only part that's a bit of a question mark at this point, and I've got my thoughts about this, is they haven't specified if it's a signed contract before the 45 days, or if you have to be unconditional with finance before the 45 days.

[00:06:21]That's a big difference, because you could sign on a contract and then wait for finance, cuz finance for SMSF is a lot longer. It's a tedious process versus buying in your personal name.

[00:06:30]So if that is the case, then it means, okay, great, you can sign, you have a bit more time, as long as you get that signed contract, you're sweet.

[00:06:37]But if they go it's unconditional finance, the biggest issue that could pop up is, say you sign today, and you're waiting for finance. Now, the second and third tier lenders, they take like 25, 30 business days. So if you sign today, and then say you you've signed obviously before the 45 days, but it takes you 46 days to get finance, and just let's assume the bill got passed today, then technically you wouldn't be able to get finance, which means technically you would have to rescind the contract and not be able to buy the property. So now you could have gone through the process of paying for a pest and build. A lot of um second tier and third tier lenders also have application fees, they also have valuation fees. So you may have all paid for all of those things and still not end up with the property. So it's a it's a really weird approach that they've taken. Um their reasoning was that, oh, we want less people to be buying residential property.

[00:07:30]Um I my thoughts are on it my thoughts are that one, I think they're going to have they're going to allow for it to just be signed contracts, but I'm working with all my clients and we're going to prioritize everyone that's in an SMSF, we're bringing them to the front. So, if you're watching and you've been sort of sitting on the fence, you've maybe you've already engaged us.

[00:07:48]If you are thinking about that and you want to be making that move, you need to contact contact us ASAP. Um that's not me creating FOMO, it's literally these are the rules that are getting passed on to us today. Um and I guess this is always the case. I remember speaking about this years ago. I think it was one of my first videos on YouTube and I said I think there's going to be a coordinated move towards uh the government stopping people from buying multiple properties. And at the time, I said, "What happens if the government comes out and says you're limited to two investment properties? What What if you're limited to four investment properties?" And then therefore, that vehicle's gone. Like you cannot build wealth in that anymore. And I remember when I said it, like people would, you know, like sort of be triggered by it saying, "Oh, well, I don't know. Like it sounds so stupid. Like why would they do that?" Reality is, like they've effectively gone down that path.

[00:08:41]Servicing buffers, they're creating rules in the um in what banks can lend and can't lend to. They changed the the rules around trusts, negative gearing, now SMSF. I honestly think we're headed into an environment where everyone who's purchased is grandfathered in. Anyone that wants to build wealth with real estate, unfortunately gets left behind.

[00:09:00]So, you suddenly go, "Okay, well, if I can't build wealth in real estate, which has made the most millionaires in the world, by the way, if I can't do that, I need to look for something else." Um so, I think we're headed more and more towards that world.

[00:09:12]You know, it's so much harder buying five, 10 properties now than it was 10 years ago, um despite the fact that there's more lenders and more flexible uh conditions uh out there.

[00:09:22]So, that's my thoughts. Um I think that the government is, well, at least the current government, uh coordinating this move to get everyone, mom and dad Australians, everyday Australians, uh to not escape the rat race, continue in the system, and that's what they prefer. So, while some people think, "Oh, this is so bad for people like Ravi." Guys, I've already got the properties. They're already grandfathered in.

[00:09:45]Does it affect my business? Maybe. Like, maybe it slows down a little bit. But, the reality is I've already built the wealth in the machine. So, like, don't come after me.

[00:09:54]I'm just telling you that this is not It's It's masked as I'm going to target the people like Ravi.

[00:10:00]What really they're trying to do is go, "Actually, I want everyone that can be in the system to stay in the system."

[00:10:06]Cuz people like Ravi are going to find another way anyway. People that investors that have large portfolios, they're going to figure out ways to go buy in different entities, go and get the borrowing, get the equity, they can sell some real estate. Like, there's options. This is what I've always said, always create options because you never know when they change the rules. And it's changing right before us.

[00:10:26]So, I know it was the first question, but I had to address it cuz it's the biggest thing at the moment. All right. Next one. Wife and I have been making voluntary super contribution last 2 years to be able to buy property in SMSF. This is exactly what I was talking about. Not anymore after today's announcement, Labor and Greens protecting the union owned super funds.

[00:10:44]That's correct. It's unfortunate because you get the strategy. Like, I remember speaking to the accountant as well, and it was like, "Look, we're not going to prioritize it now, but we will in the next 2 years start pumping more money into the my super." Why? Cuz then we can buy more property in super, and it's a good, you know, tax environment.

[00:11:00]Now, it's not an option.

[00:11:02]But, I haven't even started doing that.

[00:11:04]A lot of people are going to get stuck with all this money now in their super, which they can't do much apart from, okay, maybe invest in shares and ETF, but you could have done that outside of super anyway.

[00:11:12]I'm not saying that, you know, investing in super is dead, but a lot of people that at least I speak to, you know, I'm a property guy, so they come to me and say, "Well, I can use leverage to get into, you know, self-managed super fund to buy a property."

[00:11:25]So, it's unfortunate, but I agree. I think there's bigger things at play in the background. It's like, "Whoa, actually, if people escape the rat race, suddenly they can do what they want and they are living their best lives. We want to hold them back. Um we need them to be taxpayers and pay the most tax, work in the system, and support the big super funds.

[00:11:44]All right, next uh question.

[00:11:46]How badly do you want the government gone? Um Look, it's not ideal. I don't know what they're thinking. And I'm not the only one talking about it like this. Like, there's a lot of people thinking the same thing.

[00:11:57]If you're going to go after assets, you're going to go after houses, you're going to go after shares, whatever. Why would you go after businesses? Like, how do you not have the foresight to say, "If I don't create an environment that is um you know, promoting people to take risks?"

[00:12:14]You effectively get rid of the people who are the risk-takers, and usually they're the people that are the top, you know, 10%. So, they just go, "See ya.

[00:12:21]I'm out of Australia."

[00:12:22]And then those are the ones that create jobs. So, if the private sector doesn't create the jobs, is the public sector going to create jobs? Like, government jobs? We've seen such a rise in employment in the public sector, and I would go on to say that it's made the economy actually less efficient. And there's so much data to prove it. It's not my opinion, but yeah, I I don't think the government knows what they're doing, to be honest.

[00:12:44]Um all right, next one.

[00:12:46]Um I don't have it on yet. Ravi must be buying another house. Oh, cuz I was being late to this. It's uh it's interesting cuz like we Sandro was making a roast chicken, and it was sort of delayed. So, we're just waiting. And um I was like, "Look, I've got to have the roast chicken, otherwise I'm not going to have enough energy for this uh to go an hour." So, thankfully, smashed it, but I was a couple of minutes late. Sorry.

[00:13:10]All right, next question. Putting money into SMSF to purchase resi property has been pulled out from underneath us all.

[00:13:16]Is purchasing more property in personal name now the best avenue going forward, even though it's slow?

[00:13:21]Well, look, with SMSF lending, only second tier and third tier lenders could do it anyway. So, my bigger like bigger issue with this is what happens to second and third tier lenders.

[00:13:33]That was their bread and butter against the majors. The majors generally have better rates. They don't have as much in terms of borrowing uh in most cases. So, the second and third tier lenders, they make they make a lot of money from the SMSF lending. Now, that's been pulled from them. The majors used to be able to do it and they got pulled from them a few years ago. Uh so, do I think that you well, the answer's pretty simple. If you can't buy in your SMSF, you now have to look at alternative structures.

[00:13:59]Has to be your personal name, trust, company.

[00:14:03]That's as much as you got now. So, uh everything goes back to hey, if you can't borrow under your like outside of super cuz it was two different borrowing capacities. If you got maxed out in your personal whatever your structures you were using here, if you went into super, they were going to use different numbers for it. So, you could still continue moving. Now, if you can't purchase here and you can't purchase here, guess what?

[00:14:22]You're stuck with what you have. Um and that's really unfortunate because there's some people that actually want to build wealth so they can retire and give their family what they need, um but this will this will slow things down, definitely.

[00:14:36]All right. Next question. Um Well, okay. I don't like how YouTube does this. Like I'm scrolling down like a a nice individual that's trying to stream and try and make a living here and um and then it just scrolls me all the way down so I end up missing questions and then people will give me a hard time.

[00:14:56]All right. Next question. Uh how much money do I need to start investing with you? I'm going to say if you're purchasing a 600k property, 10% deposit plus costs, you're looking at probably about 100 to 120k. So, that's going to include all of your costs including like a B&A fee and things like that.

[00:15:15]Uh next question. What would happen to my Melbourne property I recently bought in Craigieburn last 3 months? Which will I gain capital gains in the next few years? Yes, you are purchasing property in the right locations with the right strategy, set forget as long as you can make your repayments, come back in 5 years time and you'll be thanking yourself.

[00:15:33]There'll be growth in the in the meantime, but I think that we get so caught up with instant gratification. Oh, did my property go up today? Did my property go up? This isn't shares, guys. Like you don't need to know what the value is every day. I live and breathe this stuff and I look at my portfolio a lot less now because you know, things are busy, but I used to be able to look at it like once a week. If you ask me when I was in crypto and like buying Bitcoin and all coins and all that other rubbish, then yes, I was checking my my accounts frequently throughout the day. So I'm glad that real estate moves slower. I've always said like I don't want 15 20% growth. Give me the Give me the 5% growth. Fantastic because it's leverage returns. I've explained this before where if I'm putting in a 10% or 20% deposit, I'm getting a 10x or 5x return on that number. So if I get 15% worth of growth, like that's a lot.

[00:16:25]But to be honest, I'm happy if it grows by 5% and I get a 5x return or 5x multiplier, that's 25% I'm getting year-on-year cash-on-cash return. I'm not getting that anywhere else. So I'm happy with that. Things slow down, it's actually a good thing. It stabilizes things.

[00:16:41]Uh Chantel walking pad drives livestream Tuesday evening combo. Let's go Chantel.

[00:16:46][gasps] I still need to get the walking pad.

[00:16:48]Chantel works in the office.

[00:16:50]Um all right, what would happen to my property Okay, I've answered that question. No longer to lend for property in SMSF anymore from 1st July 2027. It's not from 2027, it's actually coming in like the next If they do it in say 10 days, then you have 55 days left. Isn't that wild? That's how quickly they want to make moves.

[00:17:10]All right.

[00:17:11]Does it still stack up to buy property outright in SMSF if possible based on SMSF balance? This is a good question um because you technically have the ability to still buy property in SMSF but without taking on debt. Okay? So, if we're now thinking about solutions, so you go, "Okay, I still want to buy property in my SMSF. How do I do it?"

[00:17:33]So, hypothetically, and this is me spitballing, so this is an insight as to how I would think. If I can't borrow money to get in, so I'd need the cash.

[00:17:41]If I don't have the balance in there right now, can I contribute enough from my personal into my SMSF to purchase? You would then have to be faced with a question, which is if I have, let's call it 150k, um I'm able to access 150k, whether it's cash or equity, but I can't go and buy more property in my personal name.

[00:18:03]But if I was to get that 100k and I was to go into my super fund, where I've already got, say, 400k of cash, can I now use the cash plus the cash that I've import to go and buy a property? Yes, you could. And the reason one would think about doing that is because of the tax environment you have there. It's more lucrative than it would be outside of super.

[00:18:24]But now comes the biggest question, which is is property still better if I'm buying it with no leverage?

[00:18:32]And I've actually said before that I don't think it's the best investment if you're buying it outright. And so, for all the haters that go, "Oh, this guy just pumps up property and like he wants everyone to buy." I'm telling you the exact opposite here. If you're buying property and you don't have leverage to it, the the results don't really stack up, especially if you can go, "Well, instead, I can just buy ETFs and maybe I get my 8 to 10%." It would effectively be the same. So, if you get a house and I've got all these holding costs, yeah, you get some cash flow, but the cash flow plus the capital growth you get without leverage, I don't know. I don't think it's going to make as much sense. Um personally, that's how I I look at it.

[00:19:12]Uh Peter's got uh statement question.

[00:19:15]Love your work. Thank you.

[00:19:17]Keep up the great content. Perhaps some update on the little one as well. Would love your thoughts on how regional markets such as Townsville will hold up after the budget changes.

[00:19:24]All right. Well, Peter, um the little one is doing well. He's 4 months and 1 week or 4 months and 2 weeks. So, it's it's passing by real quick. Um and he's literally in that room there.

[00:19:35]So, if he starts crying and you hear it, you'll know exactly what's going on in my life. Uh he is amazing. Uh there is nothing, honestly, that can prepare you.

[00:19:43]But, also the feeling of when he looks at you and he smiles or he reacts, honestly, like I'm getting a bit soft here and a bit emotional, but like wow. Like there is nothing else like it.

[00:19:55]And I can't even describe, you know, the fact that I still in my mind have it imprinted seeing my baby for the first time. Um I saw everything. That was pretty insane. But, um the fact that I saw him is just crazy.

[00:20:07]And yeah, just seeing him grow up is is incredible. So, that's the little update on the little one. As you can tell, I'm very happy about it. Um now, how would regional markets such as Townsville hold up? I think they will flourish during these times because if you think about it, again, we bring up the pyramid, not the Illuminati, but the pyramid, which is the higher end of the market, we have least amount of buyers.

[00:20:28]At the bottom is the foundation, which is where I like to buy property and keep uh buying cuz it's more affordable and also everyone can buy there.

[00:20:35]So, what happens is everyone up the top that, you know, has their borrowing capacity reduced, they come into the next segment. And everyone else from there goes into the final segment, which is the most affordable property. And regional markets, Townsville included, um are affordable. And I know it's crazy to say because the prices have gone up by a crazy amount, but people are moving there. And uh when you compare that to, you know, let's say you're getting a four-bedroom house for $800,000 10 minutes from the beach, tell that to someone who lives in like Now, you could even say it with someone who lives in Perth, but say that to someone who lives in Sydney. And arguably, the weather's better up there.

[00:21:11]Sure, you get some hot cyclones and tornadoes and things like that, but generally, people like living up there.

[00:21:18]And then if you think about that compared to the Sunshine Coast, it's very different pricing. So, I think places like that will do really well.

[00:21:26]Don't you think shares are far better than property now? Um if you're talking about SMSF, then that concept I was talking about, yeah, I would say that there is a case now to be made that ETFs and shares would technically be better than buying a property outright.

[00:21:41]That was a big thing for for property is like the the growth rates are lower than shares and ETFs, right? Again, depending on what you buy and when you buy it, but generally, they've outperformed property.

[00:21:52]The reason why you could get such a big return uh with property was because you get leverage. If you don't get that, what's the point? You take on the headache of, "Okay, I've got a I've got a tenant in there. Got to manage it.

[00:22:02]It's active, right?" As much as people say it's passive, there's an element of active uh behavior there.

[00:22:07]Whereas ETFs, set forget. So, under the super fund, maybe that seems like a better option.

[00:22:13]All right, next question. Hi Robbie, what would your advice be to a woman in her early 40s who has started her working life late, has minimal super, and around 400k borrowing capacity along with the 80k savings?

[00:22:26]Interesting.

[00:22:27]My first question would be, do you have your own place? Is it paid off? Is there equity available there?

[00:22:35]If you're building your career and you're in your early 40s, it's sort of like in my next 5 years, 10 years, what skills can I develop?

[00:22:42]Uh what skills can I learn to be able to earn higher amounts, and then therefore will allow me to get into more real estate, acquire assets?

[00:22:51]Um and if 80k is all I have, can that be enough to get into a property? Probably not, and there's probably far too much risk associated with that if you don't have an emergency fund. So, it's probably as much as I could probably think of.

[00:23:04]Um 30% CGT on taxes. Uh 30% CGT on shares. Uh yeah, well, I don't really like personally, I don't buy any shares, right? I don't have any shares. I don't Apart from like privately invested in startups and things like that, I've got that. Um but anything on the share market, no.

[00:23:24]30% CGT like I I know they keep changing the rules. Um let's see what they finally come up with and then we can assess whether if shares are going to be better. I Just from the high level, if you can't borrow, I don't think property makes sense.

[00:23:37]That means in super, maybe doesn't make sense, but outside of super, absolutely, I'd choose property every day of the week.

[00:23:43]What's your take on Mount Gambier and overall property investment supply is still too low. I think Mount Gambier is going to do really well. It's continuing and uh funnily enough, I actually purchased a property there in 2020.

[00:23:56]Um and it was a video that I made on YouTube actually. So, if you guys ever bored, you can go watch it. 11% yield. I think I had bought it for 265 or 260 and it was renting for like 530 a week. Um and that property is now like pretty much doubled in value. So, um yes, this is the regret I talk about. I wish I bought more. Obviously, I couldn't buy any more. I bought as much as I could at that point. Uh but I I honestly think that 5 years from now everyone's going to look back and say it was so obvious.

[00:24:24]Like we should have. You've got the government slamming on it. You've got the budget absolutely cooking us. You've got consumer confidence at 50-year lows.

[00:24:31]You've got every headline coming out saying the market's crashing.

[00:24:34]Why didn't I make the move? Like I get taught contrarian view. Everyone likes Warren Buffett. He tells you buy when others uh What is it? Oh my god, I've had a complete mental breakdown.

[00:24:48]Sell when others are greedy and buy when others are fearful. That is exactly what's happening right now. Yet people love that [ __ ] until you're in it. And I literally said a year ago, when the markets are going to correct, and they will at some point, who do you think is going to make the move? It's not the people that are going, "Have got a large portfolio, I'm losing value. Oh my god."

[00:25:08]It's the people that sort of go, "Yeah, oh well, it could go lower. I I knew this was going to happen. I knew the bubble was going to pop. This is it."

[00:25:14]Okay, 5%. There you go. Maybe 7%. Yes.

[00:25:18]It's gone back up. Why does Why is it gone back up? Like, I thought this was a crash. Oh my god. Suddenly, it's up 2, 3, 5%, and suddenly you've not been able to get it back in the market. So, those people never make moves anyway.

[00:25:30]Uh okay. Uh are select regional areas still the best place to buy not metro? Um yes, but I also do like parts of Melbourne, so metro Melbourne, I suppose. Um but depends on what you're after.

[00:25:43]Uh Jordana, what's up? Uh so, to confirm, you need to have your contract go unconditional before the 45 days is up in order to be grandfathered, right?

[00:25:51]At this point, I'm going to say unconditional, right? Unconditional finance has to be approved.

[00:25:57]They may come out and say it's signing of the contract. The signing of the contract makes more sense, but I'm going in saying I assume it's going to be unconditional finance, cuz as we know, you could sign the contract, it'll still take like 3 weeks to get unconditional finance.

[00:26:12]And technically, they could still pull the plug.

[00:26:14]If you unconditional finance, you're sweet. So, to me, we work with all the clients, and we'll speak about this tomorrow in the office, but it's basically going, "Hey, we need to prepare to go and move as fast as possible with the right due diligence."

[00:26:27]And this is where like, you know, if you're with the right buyer's agent, they're going to move fast. How are you going to do this by yourself?

[00:26:32]Uh it's going to be wild. So, um I think there's small window. I would I'm going to say if they say it's unconditional, then we have 2 weeks.

[00:26:40]If they say it's signing of contract, then we probably have 6 weeks. Again, not much time either way.

[00:26:45]Uh is it true that if you have signed a contract already, you're grandfathered in? Just answered that. If I own one investment property now in Melbourne, age 35, what should be my plan?

[00:26:54]I have no idea what else you've got as part of your strategy. Um so again, it would be have the strategy first. But one investment property in Melbourne, age 35, it's starting to go, "Okay, am I in the peak of my career? Can I make moves higher and what other expenses do I have?" This is why building wealth in your 20s is so important because once you get into your 30s, you're generally having a family, you're generally bigger expenses like weddings, cars, things like that. You weddings.

[00:27:24]Wedding.

[00:27:26]>> [laughter] >> Um you also then go down the path of like maybe having kids. So your expenses just keep racking up. But you also have to think about your income. So your borrowing capacity increases with your income. But once you have dependents and you have all these other liabilities, your borrowing capacity basically gets capped and goes yellow way until you can start making more money. So that's how I would approach it is first figure out what's the oil in the machine.

[00:27:50]Can you increase the amount of oil that goes into the machine? It builds the machine to be even bigger.

[00:27:55]Okay, next question, Mary. Uh brand new house and land package in Armstrong Creek, first investment thoughts. I don't like a brand new house and land package. Uh I understand why you'd be looking at it. I'm not and this is like something to clear up. I'm not opposed to new properties, all right? Uh I talk a lot about house and land packages and why it doesn't work. Is there a case where it could work? Potentially.

[00:28:18]Uh and that's something that I'd love to explore a little bit more of because other Is the growth going to be the same? No, absolutely not. If I buy a house and land package, I get the negative gearing benefits and the CGT benefits, but I'm losing out on the right um you know, amount of growth, the ability to take out equity until it's, you know, built.

[00:28:39]So there's pros and cons to it and I think it is really now starting to shift in terms of how people have to think about their strategy. Maybe you're okay if the house and land package grows at 2 to 3% whereas the established property grows at 7 to 10%. You might be okay with that because the negative gearing benefits are giving you more back in your pocket. That starts to make a little bit more sense. So, I don't think it's a case of just house and land [ __ ] I think you need to find the right people to work with and then you got to find the right developers to work with cuz if we see that the cost of materials to build a house increase, you will see prices higher.

[00:29:13]And a lot of developers, if they find that the prices come down, like this is something to consider.

[00:29:18]If a developer's building and then they realize all of their projects are going to be worth less so they can't actually sell it, they may stall or not build at all because they're not going to make profit. So, why would they continue building? And so, that's the part that you're going to have to get like really on top of.

[00:29:35]Otherwise, you might get caught out where you've put a deposit down to build a house and the builder's gone bust. That's what we saw during COVID.

[00:29:43]And in the in COVID, we just saw costs increase but we also saw the price increase. If we don't see prices increase and the cost increases, who's building homes?

[00:29:51]All right.

[00:29:52]30 minutes in. First water break. How we feeling? 56 likes, guys. Come on. Let's get to 100. We need more people to watch content like this on a Tuesday night.

[00:30:02]What else do people watch on Tuesday nights?

[00:30:08]All right.

[00:30:11]Next question.

[00:30:14]Can I buy a house and land package in the 45-day window under SMSF? Okay, this is a good question. All right.

[00:30:22]Now, going back to the example, if they say that you need it to be unconditional, then technically you can't buy a house and land package.

[00:30:33]Because you can only get unconditional finance once you know the land is registered and therefore, you would be able to go and buy the property and settle on the property. Usually happens 14 days before settlement. Now, if it's going to get built and takes a year and a half, well, you'd have to get unconditional finance at that point. And this is where I'm thinking more it's going to be a signed contract. Because how many people have gone ahead, bought a house and land package, signed contract, but not unconditional finance? I think that is the biggest takeaway from this is if they go it's unconditional, everyone that's got a house and land contract is completely left, right?

[00:31:11]Because everyone's going to be pulling out.

[00:31:14]It makes more sense for it to be a signed contract. And I hope for everyone's sake that has a house and land package underway at the moment in their self-managed super fund, I hope that it's the case that it's signed contract. Otherwise, that could get real nasty.

[00:31:29]All right. Um Hey Ravi, how's your Pokémon card collection going and what's your most valuable card or slab? Hey, Pokémon video. I haven't made a Pokémon video in ages. I still watch the videos. I absolutely love it.

[00:31:42]Um the portfolio, um all right.

[00:31:45]I don't have my entire portfolio on this, but we'll go with it anyway.

[00:31:49]So, I'm using the Collector app, um and it tells me how much it's worth.

[00:31:54]Uh so, I don't know if you can see that, but it basically says $412,000.

[00:32:01]It is up $102,000 in the last 180 days.

[00:32:05]So, I would say that cuz I didn't, you know, add everything in there, I would say it's probably worth closer to maybe 450k at the moment, which is pretty crazy. Um but I love this stuff, so I like watching it. Uh I don't know if you could see that on the screen.

[00:32:20]Uh but yeah, I continue to see it increase. I've actually stopped buying.

[00:32:25]Um I've been holding off, so it's been 6 months now I haven't been able to buy anything and >> [snorts] >> I don't know. I I told I told Sanja, I said, "Look, you know, I'm not going to buy anything, um but I think I'll probably get in maybe again in like 6 months time cuz I think there's a few things happening in that space. But, I don't think anyone cares about Pokémon.

[00:32:43]If you do, comment down below and I'll make more videos about Pokémon.

[00:32:48]Um by the way, with Pokémon, it usually increases by about 20 to 30% a year at the moment. So, even despite the corrections that you get, that's why I like it because to me it's liquid. I can go on to Facebook. I could probably get someone to come tonight to buy Pokémon cards if I needed cash right now. I can't get that with real estate, obviously. And with shares, if the share market's closed and I can't take out money, I don't even get that. So, it's the most liquid thing I have, which is awesome. Plus, I like it.

[00:33:14]Uh in terms of how expensive, I actually have no idea.

[00:33:17]Um I've got like some boxes that might be a couple of thousand dollars worth.

[00:33:24]Uh it's 45 days after Royal Ascent. So, practically, you are looking at 2 to 3 months.

[00:33:30]Depends. If If it happens to be in the next Look, I hope it's 2 to 3 months, but it's looking likely that if it passes in two 2 weeks, that's 14 days.

[00:33:40]14 days plus 45, you're looking at 2 months.

[00:33:43]Could it be 3 months? I'd love that.

[00:33:45]Um Hey Ravi, what's your thoughts on buying residential property to live in, grow equity in the house, and then sell the house later on, say 2 to 5 years, to speed up deposit on an investment property?

[00:33:55]Great question. So, a lot of people were focused on uh the principal place of residence hack or upgrading hack. So, what it is is that you would go out and you'd buy a place to live in. You would then, in most cases, they would go and renovate the property while living in there. And then, they would sell the property and go into the next one. And that's how people continued upgrading their principal place of residence.

[00:34:16]The reason why that, you know, it worked quite well was because the principal place of residence has no capital gains taxes cuz it's your own place.

[00:34:24]And you would go in and you'd renovate it while you while you live there, which, personally, I'd hate. But, then, what you could do is you'd eventually go tax-free money, tax-free money, tax-free money, and then eventually get to your goal.

[00:34:37]Problem with that is that you'd then just have a really nice house, and that's it. Like, you don't have any other investments.

[00:34:44]But, you could go in there and take out equity from that property and then go and buy something. Or, you could say, "Okay, I'm going to use that upgrading hack, and I'll do it twice." With the excess cash, instead of upgrading the house, I can use the excess equity, and I'll use that to buy investment properties. Um, that is definitely possible. Uh, is it the best way? Is it the most efficient way? I would say no, because people buy that first house with emotions, and they're buying it in most likely an area that's really unaffordable, and you're not getting the gains that you want anyway. So, if you're going to invest, invest properly.

[00:35:13]If you're going to go and buy your own place, buy the best house you can emotionally. Which is exactly what I'm doing, and I'm making a loss on it. It's fantastic.

[00:35:21]Um, All right. Hi, everyone. Tapping in a little late this evening. You can always go back. So, if you've just you've just jumped on, um, we've got almost 500 viewers. That's cool. I like that. And we've got 93 likes, so we're about to hit the 100, which is nice.

[00:35:36]Um, and I'm glad that people are taking this stuff seriously. Like, there's a lot happening, and it's very confusing. So, if you're sort of stuck, and you're going, "I don't know what move to make."

[00:35:45]You're not alone. There's a lot of people out there going, "What do I do?

[00:35:49]What structure do I use?" Like, the rules aren't set in stone. All I can tell you is that we signed someone today who is buying three investment properties, and the conversation he's having is going, "Cool. I know how this works. I bought one. I want to buy three more. I need to sign up ASAP. Let's do this."

[00:36:05]Equally, you've got some people who've never bought property before commenting and saying, "Oh, yes, the market's going to crash."

[00:36:11]There's a winner in that, and you don't doesn't take a genius to know who's going to win that fight. Um, in that someone who's going out there accountable, taking the steps, taking the action to make, um, stuff happen.

[00:36:22]So, that's my thoughts on it.

[00:36:25]Um, what are your thoughts on buying Okay, so I've answered that one. Uh, Mate, Australia is done. What is your prediction for the next election? Um I can't see the current government get reelected. I think they've completely lost it.

[00:36:40]Is there a chance that they have cooked it so badly that the swing would have to be the whole way round? It can't even just be that they'll lose the election. Like at this point, I am like 99% sure they will lose the election, okay?

[00:36:54]But the problem is not, will they lose it's will they lose by enough for us to then have the conversation around changes to the reforms and, you know, dialing all this stuff back. Because that's what would have happened in New Zealand is they would have gone, okay, we've won the election. They cooked the economy. The new government comes in and they were able to reverse everything because they had that many seats. So, I think there's a case of all the people that are sitting there on the sidelines saying, this is the best thing ever, screw the investors.

[00:37:23]Over the next 12 months, their rents are going to explode. Then they're going to blame the government to go, what the F?

[00:37:28]You said this was going to be better for me with my $250 money that I was getting, the tax refund or whatever.

[00:37:36]They realize they're cooked because rents go up by more than the $2 per week that they got promised.

[00:37:42]Um and then they realize maybe Labor isn't the answer and maybe Ravi was right from a year ago when he was making YouTube videos. And we have seen rents already starting to move higher. And so at that point, they're going to turn on the government and then I think the government gets voted out.

[00:37:58]And then I think it could be a situation where they're like there'll be enough seats won to be able to reverse changes.

[00:38:04]That's how I see it playing out. It's going to be very interesting the next 18 to 24 months.

[00:38:10]All right. Um will they stop debt recycling between grandfathered properties and post-budget property?

[00:38:16]Okay, let's work this out. Anything that's been purchased before the budget came into effect is grandfathered. It doesn't matter if it's a principal place of residence, it doesn't matter if it's a an investment property, because you could always move out of your invest You could always move out of your principal place of residence because you still had that as a um an investment or you can turn it into an investment, okay? We'll go back. Totally butchered that. You can tell it's live.

[00:38:44]Okay, so the the principal place of residence, because you've purchased that before budget date. If you decide to move out of there, you would then be able to still get negative gearing benefits cuz the rule was any property before the budget.

[00:38:59]What you're asking is debt recycling dead.

[00:39:02]So, debt recycling for anyone that doesn't know is you have the debt attached to your principal place of residence, which is non-tax deductible, so it's bad debt, right? Which is why people say your your house is not an asset, it's a liability.

[00:39:15]So, you go out there and you've got the property.

[00:39:17]Traditionally, you would then take out the equity to go and buy properties. And because you would go and buy properties, you would now have that as tax deductible debt. Now, does it change the fact that debt recycling is dead? No, because you're still going to get tax deductibility on that portion of the loan that goes towards the investment property.

[00:39:38]Can you go and claim it as negative gearing? No, you cannot.

[00:39:42]But, you can carry forward the loss. So, you're still getting the benefit of negative gearing in the form of a carry forward loss. You just can't claim it in that year. So, no, it's not dead. It's absolutely alive.

[00:39:54]Labor has just lost the next election with these changes. Agreed. If contract is signed but settlement not till late 2027, again, it'll be very interesting. I I definitely don't think it's going to be uh you have to settle within 45 days.

[00:40:05]That's that's stupid. Um I think it's going to be it's either unconditional finance, which is less likely given how many people are going to get screwed with house and land packages.

[00:40:15]I think it's more likely it's going to be a signed contract. If it's signed contract, you get unconditional later, you get settlement 6 months from now, should be fine.

[00:40:25]Tesla band code >> [laughter] >> Ooh, I love the rat race. Want to work till I die.

[00:40:32]It's pretty wild.

[00:40:33]It's honestly, I don't know what they're thinking.

[00:40:36]Um what options can one invest into other than property? Uh I like Pokémon cards. So, I Okay, this is how I do it.

[00:40:43]Okay?

[00:40:44]Property, my own business, Pokémon cards, and other people's businesses. So, not I'm not talking about Tesla, I'm talking about startups.

[00:40:53]So, I'll make investments in people I know, in people that have reached out, and I'll go, "Cool, I can go and invest in this startup. I might get a multiple of 3 to 10x in the next couple of years, because I believe in the founders and I think they can do well." That's pretty much how I do it. My own business, full accountability, I can control what happens. If I screw up, it's on me. If I do really well, I get the max benefits.

[00:41:14]High risk, high reward. The property is my machine. Sits in the background, accumulates, compounds. That's the stuff It's the set and forget. I continue going, "Cool, I've got some ex- extra cash, go and put into property."

[00:41:26]A lot of people will get the extra cash, either spend it, or they also go into, say, buying shares and ETFs. For me, I would go, "Cool, if I can't buy the property, I'll go into something like collectibles, which I know really well and I enjoy. And I can get 20 to 30% returns there. What do I care about shares?"

[00:41:42]So, that's my approach.

[00:41:44]Uh okay, everyone watching, let's go back to work. We need to work till we get to 100. Watching videos not allowed anymore.

[00:41:51]>> [laughter] >> Hey, there might be a time when they're going to shut down my channel.

[00:41:56]Imagine that. They shut down my channel, I walk away, have the portfolio, call it a day. I'd be very sad.

[00:42:03]That would be like if there was a scenario of going, you know, what would make Ravi move countries, that would be one of them. Where I would go, they ask me to shut down the channel, I'd say F that, I'm out. Um but I also can't move too far cuz I like family. I like family, love family. So, I don't know, something like New Zealand.

[00:42:24]I also go for the New Zealand Warriors, so that would work out well. Might have to sponsor them then cuz I live there.

[00:42:29]Anyways.

[00:42:31]Um All right, 100% I feel bad for people who don't understand this. It's bad for young people. It is absolutely absurd for bad people. Uh it's absurd for bad people.

[00:42:42]>> [laughter] >> It's absolutely absurd for young people.

[00:42:45]Uh young people are going to Yeah, young people gave up a long time ago. You People young people are screwed. Like this is the sort of stuff this is the mentality and honestly like I see it, you know, a lot of people young people have given up. They sort of go, well, if I can't buy a property, it's too out of reach, I'm going to go on the holiday, I'm going to go spend it on clothes, I'm going to spend it on, you know, going out, experiences and never never buy a property, which is not the Australian dream. Um and it's sad. And I don't think people should lose lose hope because there is always opportunities. When I started 13 years ago, people said it was expensive back then. People say it's expensive now. Is it still possible? I know young people, you know, [clears throat] coming through Search Property Buyers Agency, people are still buying and they're young. So, if you put in dedicated time for the next 3 to 5 years, you can make this work. But no one's willing to put in the hard work or very few people willing to put the hard work.

[00:43:33]Nathan, uh client uh so, clients of yours and have been Okay, so clients of yours that have paid and are waiting to acquire the next investment now get on the back of the back burner if they aren't buying through SMSF, that doesn't sound fair.

[00:43:46]No, no, so it's not that you guys will be put on the back burner, we're still purchasing property. Um it just means that there might be some people who have the SMSF. And if they have the SMSF situation, then we would go in and say, okay, well, we need to prioritize these things, but it doesn't mean just because they Let's say they sign up yesterday and they go, I'm buying an SMSF. No, it doesn't mean you go straight to the front of the line. Um so, no need to worry. And if you have any concerns, reach out to me or reach out to the RM that you're dealing with. We'll be able to fix it figure out figure that out.

[00:44:16]Um Uh next question. Uh what's the biggest mistake people make when buying their second investment property and what should they do instead?

[00:44:25]>> [sighs and gasps] >> Good question. Uh I think the biggest issue is that when people purchase their first property, they generally purchase under their personal name, which is fine.

[00:44:34]Um generally they think that the first one, the way that it worked, is the way that it should work on the second one. They have the same expectations from the first one and let's say some time has passed by. So, if you purchased the first one in 2024, you walk into 2026 expecting it's going to be the same sort of thing. So, you go, "Oh, well, back in 2024, I could buy a property for 400k in Perth. Let me buy something for 400k.

[00:44:58]Maybe not Perth, but somewhere else."

[00:44:59]And you're like, "The times have changed. It's been 2 years, guys."

[00:45:02]Um so, I think a lot of people sort of get stuck thinking that what worked back then is going to continue working. You have to adapt, which is why I like to, you know, forward plan, but also if I have the ability to buy, I'm buying. I had an I had a catch-up with a client who's got six properties with us.

[00:45:20]And I asked him for his advice and he goes, "Well, look, if you can borrow and you can buy, you should buy. Like, it's pretty simple." And um like, it's worked out for him. He's made over a million bucks in a couple of years. So, I'm not saying everyone will be in that position, but usually it's someone's got into their first property, the second property needs to be in the right structure, otherwise you pretty much could get stopped in terms of your borrowing capacity.

[00:45:47]Uh after today's announcement, can we still buy the property in SMSF before the law comes out? Yes. So, what you can do is you can go straight to the front of this episode and then you'll be able to see what my thoughts are.

[00:46:00]At the end of the day, we'll continue to do what we Property will never be a bad option. Us at SP will keep business as usual and the twist and bend as needed to ensure our client's success. Exactly.

[00:46:10]Like, honestly, it's you know, Jordana has put it the right way. From the outside world, it's like, "Oh my god, F buyers agents." You know, we had recently Dashdot, one of the biggest buyers agencies in Australia, go down to liquidation, going to liquidation. I would go on to argue that that wasn't to do just solely on the budget, by the way.

[00:46:29]Um And I I think their list of creditors came out as well and it's pretty wild.

[00:46:33]So, if you want to check it out, you can. But, it also shines light onto the fact that the industry is so young.

[00:46:39]People are doing the wrong thing and that's why you need to have more due diligence done with the right people and people you trust. Yes, you could go and pay an extra like you know, a little bit less to go with one of the smaller guys or someone who's not as well versed in this environment.

[00:46:55]What happens if you if they go bust?

[00:46:57]It's likely they're probably only handling a couple of clients. But, all of a sudden, if they get no clients, they make no money. So, why would they continue business?

[00:47:05]We have plenty of internal conversations around how do we navigate through this period? How do we go, "Okay, like there's changes and clients are being, you know, confused by these things?"

[00:47:14]That's where we want to continue helping and supporting. So, Search Property ain't going anywhere and neither am I. And neither is Jordana.

[00:47:21]Jason, yeah, here we go. Ravi needs his protein.

[00:47:25]Chase.

[00:47:27]Um all right.

[00:47:30]See, did it again. I scrolled down and I'm going to scroll Oh my god, there's so many questions.

[00:47:34]Holy crap. Where did these questions come from?

[00:47:38]Oh dear. Okay, well, I have 13 minutes.

[00:47:41]We're going to speed run this thing.

[00:47:43]All right. So, I'm not yet set up with my SMSF. I'm guessing it's way too late now.

[00:47:48]I would go on to say yes. Depending on where you're at. Like, if you don't have the SMSF set up with the accountant, then you'd have to to the rollover, then you'd have to buy property. I don't think it's possible.

[00:48:00]Hey Ravi, Living the Dream Podcast is the best. Hey, I'm a huge fan of you, by the way. When are you going to give us a home tour with Lavindi?

[00:48:07]>> [laughter] >> Ah, I haven't moved into the new house. It's been delayed. Ah, so I think maybe in 2 months. I've been saying 2 months literally for the last 6 months, so it's pretty irritating. Ah, Vindi, I know you didn't mention anything but like you didn't mean anything bad by it, but it's triggered me. Ah, yeah. When when I finally move in, I'll do a bit of a tour.

[00:48:27]And I appreciate that you listen to the podcast. If you guys are wanting something more light-hearted, ah, then Living the Dream Podcast, check it out on Spotify.

[00:48:34]Ah, pushing everyone to the big four banks, not a fan of this government. Ah, Shawn, the big four can't actually do ah, any lending with SMSF. So, yes, it means second and third tier lenders, I think, you know, they're not going to get wiped out, but they're all making a lot of money from this.

[00:48:52]Ah, Asif, ah, I have one under SMSF and I was literally thinking last night to get another one till this morning I hear the news. Question, is there any chance to get in? I need to apply for the finance, too.

[00:49:03]Ah, yes, you still have a chance and I would go on to say that you need to be moving pretty fast on it. So, if you need the help, reach out. Ah, more than happy to help. Ah, but yeah, I imagine there's going to be a bit of ah, a bit of a frenzy ah, over the next 2 weeks just to get stuff sorted. And this is the thing, people sit on the sidelines thinking nothing will change and fair enough, like no one thought this was coming today.

[00:49:27]But this is the thing is like when you can buy, you should buy cuz if they change the rules, you're cooked. You may not get in. This is ah, this is where the regret starts kicking in like I know it. Like we're seeing it already. People would have woken up today, seen the news and gone, "Shit, I've been thinking about this. I should have done it."

[00:49:41]And the opportunity's gone now.

[00:49:45]Ah, what's the biggest mistake people make when buying their second investment property? Well, I've answered that one.

[00:49:51]Sounds like even 5% growth would be a good start. Yes, that would be nice. Can I use equity from my grandfather property to buy another property and will that portion be negatively geared?

[00:50:00]I don't believe it would be because technically it should be the purpose of the loan that should dictate whether it's tax deductible or not.

[00:50:08]Negative gearing I assume is going to be the same way. We don't know yet. Like accountants don't know how it's going to work because it's not passed yet. Um so my understanding would be that I don't think it will be. Um okay, so my understanding cannot buy through SMSF until 45 days or 55 days.

[00:50:23]Is that correct? No. So go back, watch the first part of the video. If it wasn't clear clear enough, let me know.

[00:50:29]Um but I've got a detailed video coming out um on Thursday.

[00:50:34]I have a property in Taylors Hill, Melbourne. I bought it 2 years before.

[00:50:38]Big property, rental very less. Can I sell or keep it? Um I don't buy in Taylors Hill, but uh Melbourne is starting to feel a bit more pressure given the recent rate changes. So I think it's going to be slow and steady rather than explosive growth. Um so if it's in a good area and it's good property, then you should be okay, but I don't I don't really know. I can't help.

[00:50:59]What's the better structure to building a portfolio, trust or bucket company to max out borrowing power and whatnot?

[00:51:04]Again, if it's the current rules, most people have been told buy under the trust not the company. If it's the new rules, the company sort of starts making a bit more sense. I personally, because I have a company I have a business that I operate, instead of going into the trust where I'm going to cop a bunch of taxes, I'm now going, "Okay, cool." So for the better part of last year, I've gone and been purchasing under a bucket company.

[00:51:27]And in that company, I only have to pay a top-up tax of 5%. So 25% versus 30%.

[00:51:32]Build my wealth there, then I can pay myself uh whenever I want to later in uh life.

[00:51:38]For someone living in Sydney who hasn't bought a property yet, is rent vesting still generally the better strategy or would it be purchasing a principal place of residence using the Rent vesting is not dead. Like it is definitely alive. I did a I think it was for the for Yahoo Finance. I think I did a segment for them.

[00:51:53]Um that would have been a couple of weeks ago. So, if you want to just search up on Google Ravi Sharma rent vesting um article Yahoo Finance or something.

[00:52:01]Or was it AFR? One of those and I break down exactly why I think that rent vesting is still very powerful. It it's a bit harder, but it's still powerful.

[00:52:11]Okay. Uh I have an investment property Hillside, Victoria built in 2015, rented it out in 2022 and used all the equity to buy my second house. Now it's costing me 1,200 a month. Should I hold on to it or sell it?

[00:52:23]As much as I'd love to be able to help with those questions, I have 8 minutes and that would require me to ask a bunch more questions and I don't think you're going to be able to answer me before I go through all of the uh the rest of this uh conversation. So, I apologize.

[00:52:37]Um I'm currently evaluating the viability of purchasing a purpose-built co-living property as long-term investment using SMSF. What are the pros and cons? I personally don't like that.

[00:52:48]Um No tornadoes, thanks. I just opened my SMSF and if I can't get into investment, what are my options under the SMSF? This is again the problem that people have is you spend all the money to set it up and now you can't even buy. Um so, other options, you can invest in pretty much anything. So, it's not just property, you can do other stuff. Cans, you need to buy in the right area, the right street, agreed. If I have a signed contract but settles in 2027 late, again, we don't know yet. Uh how will existing, not new land based Melbourne properties perform over the next 5, 10, 20 years? Melbourne's one of the best places to live in Australia according to these lists. I personally don't want to live there, but I know that people want to live there. So, over the next 15, 20 years, I know that the population expectations are huge.

[00:53:34]They're not building like a huge amount of property relative to how many people want to live there. So, to me, prices go up.

[00:53:41]Hi Ravi, I have a couple of properties in Victoria.

[00:53:44]Um bought in 2020, 2023 respectively.

[00:53:46]Not gone up much. Should I keep those for 5 years or sell and buy somewhere else?

[00:53:50]Um as part of the cycle, I feel like you're going to get some gains in Victoria a lot more now than you have.

[00:53:56]Uh I have an investment property in regional Vic, uh near Ballarat, and I bought that in 2020. Had little to no growth for a couple of years, and now last 12 months has gone up by about 20%.

[00:54:08]So, that's where you need to diversify.

[00:54:11]That's why buyers agents like Search Property exist. Uh you can search search us up at searchproperty.com.au.

[00:54:17]But, that's where you want to go, "Okay, I want to be in the right markets at the right time." Imagine if you got into Adelaide in 2020, you went into Perth, then you went into Townsville, and then you went into Victoria. That's literally what we did with clients. Um and those that trusted us with going, "Cool, I'll go wherever you want me to go." They would have made a killing.

[00:54:37]Okay.

[00:54:39]Is it a good time to buy a principal place of residence, then rent vesting?

[00:54:43]Us in Sydney struggle to get into the market traditionally. Context, I'm in my early 20 early 40s. Your BA fees is 20K.

[00:54:49]Yes, 20K plus GST is our fee. Um and it's lower for when you repeat. So, like when you purchase the second and ongoing, like it it's reduced from that.

[00:54:58]Um is it a good time to buy the principal place of residence? I still prefer rent vesting if you're trying to build out a portfolio. If you want to buy your own place, that is all you buy and you get stuck with this one property. You can't go and take advantage of the cycles.

[00:55:11]Hey, Ravi. What do you think about areas like East Gippsland? Um Yeah, I think it'll do well.

[00:55:19]Uh co-living property in Ballarat, good option. I don't like co-living. Um I like Ballarat. I have two investments uh purchased pre-budget. If I use the equity to purchase, uh will I still get the negative gearing? Still a question up in the air. Um we don't know how accountants and the ATO is going to look at it.

[00:55:36]What sort of side hustles can you recommend to earn more money for a deposit? How lucrative is being a drop shipper seller on Amazon? No, don't do that. Um I don't think it's actually well like I don't think it works out well. If I personally wanted to start up a side hustle, I would learn one thing that I'm really like interested in. So, for me, I I really like Pokémon cards for instance. I would go and learn everything I need to about that and I could go and flip it and if that became my side hustle, I could probably make 40 to 50k a year.

[00:56:02]That's huge. So, go and find what you like and I'm sure you can make a way uh that you can monetize it.

[00:56:09]Netflix or Amazon?

[00:56:11]Mm, I like Netflix.

[00:56:14]Uh if they only grandfather on unconditional contracts, there are going to be a lot of angry people who have spent thousands setting up SMSFs in the recent weeks. Agreed.

[00:56:23]Even if it's not unconditional and it happens to be just signed contract, it still takes time for the rollover of funds to happen. So, yeah, it really honestly it's like a you've got a timer now and you've got to figure out do I get There's going to be people literally sitting here and if you're not one of them and you've send this part to the of the video. There's literally people here that are going to go I want to do this myself.

[00:56:47]Can I find a property in the next two three weeks? If I cannot and I've done the due diligence or I have to do the due diligence to do it. If I can't, you're better off paying the 20k to search property to go I need them to find me a property because they're going to be able to do the due diligence faster than I can and also if I don't pay the 20k to buy the property with a buyer's agent, I may not be able to buy a property at all in my SMSF. That's the situation in a nutshell.

[00:57:14]Uh hi Ravi, going back to your rice What? Going back to your rice and repeat Oh, rinse and repeat strategy with trust structures. Has your strategy changed in any way post budget? If so, can you give us a short brief? Um I actually stopped buying under my trust. I was buying under my bucket company anyway uh for the better part of what We're in June now. So, yeah, the better part of a year. So, has it changed? Not really.

[00:57:37]Like I was always going to buy into the company after after the situation that I was in in terms of trusts, personal. I wanted to buy in company because of the top-up situation, top-up tax.

[00:57:51]Is there a possibility that the new government can change the new rules?

[00:57:54]Spoke about that. Don't vote labor.

[00:57:56]Agreed. Uh new government is the only answer to get this country moving.

[00:58:00]Yes, agreed. Ravi for PM. At least you know how to run a successful business.

[00:58:04]Thanks, Albo. Cheers.

[00:58:05]Yeah, to be honest, like I don't know much about politics, right? Let's be real.

[00:58:09]But, I reckon I'd have a better chance at running it more efficiently than these guys because they've never run a business in their life. And I seem to run a business that, you know, is doing well enough to be able to hire like 50 people.

[00:58:20]Yield is what keeps you in the game, but capital growth gets you out of it. Is this still the case? Definitely.

[00:58:26]How do you think the property market will change if and when labor loses the next election in Victoria? I definitely think Victoria has a lot to run, um which is why I like purchasing Victoria.

[00:58:38]Pest and building inspection first and foremost versus getting contract signed first with a pest and build clause to pull out if needed. What's the process like with Search Property?

[00:58:47]Uh the way that we do it, so I'm in I know it's 58 minutes.

[00:58:51]Um we'll go for like the next 10 minutes cuz there's still so many questions. I appreciate that, but you're making me work tonight, guys. Um all right. At least you can get the likes up. Like we're on 124. Come on, please.

[00:59:03]Let's get that to 150 at least. All right. Um Okay. So, pest and build. So, the way we have it is we have clauses in the contract, which will have the pest and build as well as uh the clause for finance.

[00:59:16]So, obviously, you'd have to satisfy both to be able to go ahead and you know, uh um settle on the property. Um if that's what the question was about. Hey, Ravi.

[00:59:27]definitely accountant question but you tell it better. Should I sell negative geared investment property to free up cash to buy in a company structure with new business dividends can be moved there, too.

[00:59:39]This is the type of question that like I get really excited about and I'd love to answer but I can't answer it right now.

[00:59:44]So I know it's a real big cop out but this is sort of stuff like I like talking with Tynan and Frank in strategy sessions at work as well. So yeah, I can't help.

[00:59:55]I purchased two home and land packages in 2019 520 both at 1.1 each. Awesome.

[01:00:00]You did well.

[01:00:02]Do people still prefer Tasmania as investor and how many people want to live there I suppose? Yes, people buying in Tasmania making good money. Love your content. I've watched every vlog for years now. Thanks, mate. Let's go.

[01:00:12]I love that. Thank you.

[01:00:14]Is it better to invest in commercial than residential especially if I can get 1.2 mil loan in commercial than 550k loan in residential?

[01:00:22]Yes, so now obviously if you still want to buy property in SMSF you'd have to go down commercial if you want it with leverage. So yeah, it would make sense but just be careful with what you buy.

[01:00:32]If I get an SMSF loan now, will I be able to refinance it later or will I be locked into that loan?

[01:00:37]That's a good question.

[01:00:40]You'd be stuck cuz no one can give you new loans.

[01:00:43]Yeah, it's interesting.

[01:00:44]Now, why would you refinance? You'd want a lower rate. You'd want to continue the interest only period maybe but I think a lot of them are investment interest plus principal. So really refinancing would just be because you want to get a lower rate cuz you can't take out equity anyway.

[01:01:00]I said years ago, I've been saying it. I said the asset is not the property. The asset is the debt. If you can get access to the debt, that becomes the asset. The asset is not the actual asset and people are like, what the F does that mean? It means that if you have the ability to take on debt, it means you have access to more capital to control more of an asset. So really you can go and buy the house without having the debt. But, you need the debt.

[01:01:26]And the debt becomes really difficult to get. So, that is what you need to protect, and that's why I've been a big fan of when you can borrow, you should borrow.

[01:01:35]Some people listen, and some people just say this guy's an idiot.

[01:01:39]Uh what's your thoughts on One Nation split income tax policy? I don't know what that is.

[01:01:44]Hm.

[01:01:45]Uh what do you think Greens online taking notes here? After reading today's news, is it clear they are listening to social media advice such as this? Uh I don't think the Greens know what's going on.

[01:01:55]Uh Pokémon caught how?

[01:01:58]I don't know what that means.

[01:01:58]Collectibles in general, yes.

[01:02:00]I haven't seen any public wording requiring unconditional finance approval before commencement. The protection appears to focus on the contract signed before commencement and arrangement already in Yeah, look, at this point it should be signed contract. But, I'm operating on the sa- on the case that because they're going after the lending portion, it might be unconditional.

[01:02:21]I don't think it will be, but that's how you should prepare is like the worst-case scenario. I think we're going to hear a lot more. What do you think of a Parmi burger box at KFC? Keep it up, love your work. Uh I can't I just can't get my head around a Parmi burger at KFC. I did have KFC on Saturday. I've been taking care of myself. Hopefully, you can see it.

[01:02:39]>> [laughter] >> But, I've had KFC, and it's the standard Zinger Box.

[01:02:43]How do you source your Pokémon cards? Um Facebook groups and people I know. So, in some WhatsApp groups.

[01:02:50]If I take out equity from a pre-budget IP and lower the post-budget IP debt, this will make the pre-budget more negative.

[01:02:58]This is debt recycling, I mean.

[01:03:00]I think it's going to be interesting how people get around it cuz there's always like the thing that happens and then the solutions that come. If that's the case and they allow for that to happen, yes, then people are just going to take advantage of it.

[01:03:11]Hey Ravi, interest rate predictions for the next 12 to 24 months. I absolutely suck at these, but I'm going to give it a go anyway. It looks like no more rate hikes, maybe one more. I don't think we will see another one after they're going to kill off everything here.

[01:03:23]Um Unemployment starts rising by the end of the year. Um 2027 becomes a really good year for property. Um as a bit more confidence comes in. By this time next year, I think the headlines will completely shift, and I think we may have seen at least one rate cut.

[01:03:40]That's what I'm thinking.

[01:03:42]Uh if you already have SMSF with a property and some cash, what is the main amount to purchase uh red property required? I don't know what that means.

[01:03:53]Uh maybe live in Paraguay.

[01:03:55]I've never I've never been to Paraguay, so I'm not sure. Love my own parmesan.

[01:03:59]If a new government later reinstates negative gearing, would this apply from the date? Um so, if the negative gearing changes happen, uh if it happens similar to New Zealand, what they did was they reversed all of it. So, anyone that had bought, even after the fact that it had been changed, everyone got back onto negative gearing.

[01:04:17]Uh okay. Oh, but Albo's helping the young ones here. Yes, they love the young ones.

[01:04:22]>> [laughter] >> All right. Uh final couple of questions because my throat's hurting.

[01:04:28]Albo is Australia's richest rank master.

[01:04:30]Bloke's an idiot.

[01:04:32]Ravi for PM.

[01:04:34]Uh okay. So, what do you think of Port Macquarie, New South Wales? I like it.

[01:04:39]Albo is uh okay. Hey mate, I've been in touch with your team lately.

[01:04:43]Let's go. Yeah. If you haven't heard back, message me.

[01:04:48]Let's make it happen.

[01:04:49]Ravi, thanks for all the investment inspiration. I appreciate it. Could CGT apply when the land is purchased or after a house is built on it?

[01:04:57]Uh CGT would apply irrespective. So, if it's land and you sell it, you make a profit, you pay taxes on that.

[01:05:03]Um All right.

[01:05:06]Couple more questions. I'll answer these, and then I'm done. Uh okay, what's your plan to sell the Pokémon investments, similar values besides investment properties, when's a good time to sell? I have no plans to sell.

[01:05:19]Um that would be like one of the last things I'd have to sell. Um it is liquid with cash, you know, but obviously I'd have so many buffers in place now um to avoid having to get to that point.

[01:05:30]So, if I had to sell, I would go straight to some of the connections I've made in the industry and just go cool, let's go private sale, done.

[01:05:37]Uh will a lot of people end up selling their property that's tied to the SMSF because of the recent changes? No, I think what you've done is you've seen anyone that's been grandfathered in will hold on to those properties and not sell. Anyone that's been grandfathered with negative gearing benefits will not sell. Suddenly, there's no properties to sell. State governments are going to hate it because now their budgets are out of whack given they don't get stamp duty and they're going to go, "Hey, federal government, change it." And then they're going to have to figure out what the next move is.

[01:06:04]Um okay, you still think people with 75k equity be able to reach retirement as you did a few years ago?

[01:06:10]Uh unfortunately, I don't think it's possible.

[01:06:14]Crazy, huh?

[01:06:15]Thank you for the powerful information, Ravi for the people. Let's go. Is it a good time to upgrade from my townhouse to an established house in Schofields?

[01:06:23]Uh I don't think so.

[01:06:24]Uh I bought my first commercial under my name. Should I buy the second one under my name, too? Then after that, buy the rest in future in the company structure?

[01:06:31]Depends. If you have the ability to borrow, then maybe. But also, why would you want to do that? Cuz if it's under your personal name and you make all this income, then you're just going to get taxed at the highest percentage anyway. So, it doesn't give you any flexibility.

[01:06:46]Uh minimum requirement for another SMSF property. Already have SMSF with commercial property. It depends. If you're buying commercial or you're buying residential, if it's commercial, you'll need uh 30% plus costs. If it's residential, you need 20% plus costs.

[01:07:00]And that's it.

[01:07:01]Jordana, thank you, Ravi, for the stream and thank you for the awesome clients who took time to be educated and ask the right questions. I'm very proud, RM.

[01:07:08]Let's go. Thank you, Jordana, and thank you for everyone joining. I appreciate you.

[01:07:13]That is it for a Tuesday night. I will be back next month.

[01:07:17]Um I appreciate you.

[01:07:20]What is the time?

[01:07:22]8:11, perfect. I usually get into bed about 8:30 nowadays.

[01:07:26]So, thank you very much.

[01:07:28]If you want to watch the entire thing again, you can go back. You can watch it double speed. If you want to watch the other lives that I've been doing this year, so every month been hitting one at least, then you can go and check out on the YouTube channel. It should have a little tab at the top that says live. Go and click there and I answer a bunch more questions. So, enjoy Enjoy the rest of your evening and thank you so much.

[01:07:50]Thanks, guys.