27 Mar Learn from case studies – Luke Harris and Matthew Bateman
How to get a helping hand on the investment Ladder? If that is what you need Luke Harris and Matthew Bateman from Property Mentors might be your answer.
Kevin: I picked up a book the other day – well, it was actually sent to me – called Let’s Get Real. You probably guessed, yes, it’s about real estate, as you would expect. It’s been written by Luke Harris and Matthew Bateman, who are my next guests, and they run a company called The Property Mentors, which is Melbourne-based.
Gentlemen, hello. How are you?
Matt: Good, Kevin. Yourself?
Luke: Very well. Thanks for having us.
Kevin: Good. Matt, tell me about The Property Mentors. What is the business all about?
Matt: As the name suggests, The Property Mentors is a business that’s designed to assist investors at whatever level, helping to get them to the next level. So, if you’re just starting out, you’re new to the game, and you want to know how to shortcut the learnings and learn how to do things properly from the start, then that’s an invaluable service that we offer.
And then if you’re a little bit further into the game, so you have a couple of properties, or you might even have 10, 20, or 30 properties but you’re looking to take your portfolio to the next level, we have experienced investors who really work with our members one on one over a period of time to help them really accelerate their results.
Luke and I came together really because we were doing very similar things. I was a chiropractor by training, of all things, and spent 20-odd years helping people get healthy. And during that period of time, I used my business income to build a sizeable property portfolio.
When I got to the point where I was questioning what I’d do next and stopped doing the health and wellness business, I thought, “Well, what do I do?” I had a bit of an extended break, and there was only so much golf and sitting on the beach I could do before I got a bit bored. Friends and family said, “Hey, can you show me what you did?” And I actually got a lot of emotional satisfaction out of helping other people set up and build really strong portfolios.
I was doing that, and at the same time, Luke was doing that. It might be a good time for Luke to jump in and give his story.
Kevin: Just before you do, Luke, if I could just ask a question about the book – and I was going to direct this at you, Luke. A lot of it has to do with mindset, from what I’ve been able to pick up. Do you think this is a key thing for property investors to actually get the mindset right?
Luke: Absolutely. Matt and I both realized this after going through the same process that a lot of property investors do. They go out in the marketplace and they start looking at property. We go to barbecues all the time, and the first thing that people say is “Where should I be investing?” We think that’s an important part of the process of becoming a successful property investor, but having the mindset and the strategy behind your long-term investment plans is more important than the actual property a lot of the time.
Kevin: While I have you, the book is called Let’s Get Real. And it’s not so much about real estate; it’s about getting real with your attitude, getting real with your mindset, isn’t it?
Luke: Absolutely. And obviously getting real with your current financial situation before you go out there and throw your money at any particular investment.
Kevin: Matt, back to you if I could, talking about strategies for a minute. What do you see as some of the common mistakes that you’ve tried to highlight in the book here that may be pointing investors in the right direction?
Matt: I think personally, the number one thing that you need to have if you want to become a professional property investor is you need a clear plan. The amount of people out there who are literally jumping from one strategy to the next, whether that’s buy and hold, looking for some tax deductions, or they’re buying out regional mining areas looking for some cashflow, they’re doing some renovations, or they’re trying to subdivide or develop, they’re often doing it without any clear structure as to – first and foremost – why are they doing it? Second, how are they doing it? Who are they doing it with? And in what sort of timeframe do they want to get the results that they’re ultimately trying to achieve?
Really, it’s that plan that is lacking and missing. We travel around Australia every year and we speak to thousands of investors, and I often ask the question “Who here has a clear, written plan for how they’re going to use property to help them improve their life?” And very few will ever have anything that they can actually show us.
Kevin: One of the things I love about the book, is the number of case studies in there. There’s so much you can learn from other people’s mistakes and their successes as well.
Just looking back on some of the things that you guys have learned over the years, what do you think were some of the challenges that other generations faced over the years?
Matt: That’s a very good question. My investment journey started when I was 20 when I bought my first property in Perth, and quite naïve going into the marketplace just looking at properties that I could improve or renovate.
I think one of the things that I’ve learned from that I’ve been able to implement here at The Property Mentors is being able to teach people that it’s not just about the property; that it’s just about understanding finance and the tax systems and structures and how to really set out a plan to maximize your portfolio rather than just going out there and adding a property to your portfolio every year or two.
Kevin: Just on that point about the financial plans, how do you help someone get clear on that? I would have thought that most successful investors are fairly clear on that, Luke.
Luke: The key point there is that most investors aren’t successful. Most successful investors probably do have a plan, but I think if you’re talking about the average investor out there, most real estate investors in Australia only have one investment property.
The reason we found that they don’t have more than one investment property is they don’t have a plan. Not only a finance plan to help them get more than that, but they don’t have a clear, defined plan of attack to actually help them to build a successful property portfolio.
Some people might invest in property because the media is telling them that property is doing really well right now, but as soon as the media changes their view on real estate investing in general, people will go and sell their portfolio because they want to jump into the next best thing.
I’m sure there are quite a few people who got out of property in the last 12 months and put all their money into Bitcoin.
Kevin: Really? I don’t know about you guys, but I’m lost when it comes to Bitcoin.
Matt, what do you hope that people will get out of your book?
Matt: The reason we wrote the book… When we sat down, we asked a couple of really deliberate questions, because there are a lot of books out there that will teach you a little bit about property and tax and accounting, renovations or whatever it is you want. There’s heaps of knowledge out there. What we wanted to do with this book, one of the questions we asked was how can we add value to our audience?
The first thing we said was “What’s really fundamentally missing for many investors?” And as we said, it was really that awareness of themselves and what they’re actually hoping to achieve and why they’re hoping to achieve it as well.
I think oftentimes, people just go “I’m in property to make money.” Yes, so what? But what does the money actually help you to do? How does it change your life or how does it change the life of the people around you? Whether that’s at a local level, meaning your friends and family, or how does it change the community?
Realistically, we get clear to start with as to why they’re investing in the first place, and then we’ll lay out structures and strategies and opportunities on top of that. That will just help them hopefully. We ask questions: How do we do it safer? How can we do it faster? How can we do it more predictably than just being out there on your own in the marketplace?
Kevin, you’ve been around property for a long time. You know that property is not an individual sport; there are so many allied professionals you need to have at least some knowledge of and have some working relationship with in order to get really superior results.
Kevin: Yes. Luke, you mentioned Bitcoin just a minute ago and my reaction there was one of horror, I guess. One of the things I think about with Bitcoin is that people try to get results quickly. They look for the quick, fast buck. Good property investing takes time, doesn’t it?
Luke: Absolutely. Look, the fundamental structure of our business really is that we didn’t come into this place from some other business where we thought “Hey, let’s just do property investing and make some money.”
We were first and foremost property investors, like everybody else probably listening to the show. And we started the same way a lot of people do. You go out in the marketplace and buy a property, and then you go and buy your second and third and fourth property. And before you know it, you’re a property investor.
I guess through that, there was no real structure or planning with that. We look back in hindsight and say “Hey, how could we have done it better? How could we have actually put a plan in place and actually structured a long-term plan?” Because as long-term property investors, we want to help our members long-term as well.
We don’t want to help people just to go and buy one property; that’s not really going to give them the results that they want. There are a lot of people out there these days looking for that silver bullet, and that’s why they’re putting their money into the stock market or putting it into Bitcoin or even putting it into real estate without really understanding the fundamentals of why that investment may or may not work for them.
Kevin: Matt, I just want to ask you a question about fear for a minute, the fear of failure and the fear of success. How much of that actually holds us back from succeeding?
Matt: It’s hard to probably quantify, and everyone is going to be probably a little bit different, but as a general rule, obviously fear is what stops people from moving forward in all different areas of life. It’s the fear of missing out.
The fear of success for some people means that they might lose their friendship group, because in Australia we have this thing called the tall poppy syndrome, which is whenever anyone starts to show signs of success, the rest of the herd tries to pull them back to their level, which can be emotionally challenging.
But again, this is the thing that we work with with our members over the longer term. We look at not just the financial strategies, but we look at the emotional strategies. How can you control fear? How can you use fear to your advantage? How can you recognize the fear and actually recognize what’s driving that fear at an emotional level?
Whilst we’re not psychologists and don’t want to be and we’re not marriage counselors and don’t want to be, we tend to do a lot of work with our members on life skills and on becoming not only better investors but becoming better human beings along the journey.
Kevin: Guys, we’re out of time but it’s great talking to you. I wish you every success with both the company, The Property Mentors, and also the book, especially the book because I think it’s a great read: Let’s Get Real. My guests have been Luke Harris and Matthew Bateman.
Thank you so much for your time, guys.
Luke: Thanks, Kevin.
Matt: Thanks, Kevin.