Lunch Money Property Investing - Step 7 - Duplication


The seventh and final step to successful investing is Duplication.  Using the power of the compounding growth to be able to invest again and again, continuing to use the increasing value of your portfolio to invest further and really head towards the Vision you set for yourself at Step 1.

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Transcription

Hi, I'm Phil Anderson from LifeCorp, the home of street smart property investors. I believe when you purchase a property, not only should it be incredibly comfortable on your pocket, but it should go to work for you. I believe the properties should do all the work themselves. I don't believe in rolling up your sleeve and getting out a paint scraper and creating a second job for yourself. I wanna get back to having a life. I wanna minimize the impact on my pocket by having a lunch money holding experience, but I also want to be a lazy investor. I want to plant a wealth seed that goes to work for me. It's a process that I call duplication. Today, we're gonna have a look at it together.

So, how do we get these properties working for us? How do we get true duplication happening under our property portfolios? Well, it is, of course, all determined by property cycles. Property cycles is something that I'm very, very big on. If you've watched any of my lessons in the past, this is a cornerstone of how we get great duplication happening under our property portfolios. The reality is, all cycles kind of can look like this. Now, typically, 2/3 nothing happens, 1/3 everything happens, and then it'll flatten out again for another 2/3 period. But it's getting close to this curve that I notice is the best time to buy properties, and getting close to this, what I call, 7 o'clock timing in the market, watching these indicators that drive these markets into growth stages, and determining to buy at 7 o'clock in the market, is the absolute best way to start the duplication process. It's a lot like the fruit tree principle. The fruit tree principal that I often refer to is, if you're gonna plant a fruit tree, why wouldn't you plant it in the most fertile soil, where there rain's about to come, and you're gonna get the fruit bearing on your tree as soon as possible? And that's what will happen if we use 7 o'clock market determination of where we buy.

Now, inside of this local market- and this market may only be an okay market, not a fantastic, incredible growth market, just a good-quality Australian property market, but great timing. Great timing into a good market. Now, in this space, and this may be over a 1/3 period of the cycle, it might be over a three year period, or whatever it is, but as that property grows in value, and as the value continues to build, there will be times in that cycle where the fruit will be bearing on this tree. The equity will be growing in this property, allowing us to buy another property, potentially two, during that growth period. And as we get the ability to buy, of course we're not gonna buy in the same cycle. That wouldn't make any sense. Why would we buy higher in the cycle? If that's gone up by $100k, we'd just be putting the $100k into someone else's pocket. We'd wanna use this equity to take that equity out, that fruit off the tree, and plant another wealth seed in a different 7 o'clock market. And there are hundreds of these cycles all over Australia.

Now, as it goes on, and like I said, you get the ability to plant another one or two fruit trees, of course they're gonna be in different cycles. So, what you're gonna end up with is something that looks a little bit like this, this initial cycle. And of course the peak's gonna come, then it's gonna flatten out, then you'll get another growth and it'll flatten out. And until you sell it, you can continue to see growth 20, 30, 40 years from now, if you decide to hold on to that property. But whenever these cycles are, just like the seasons for the fruit trees, there's gonna be a fruit-bearing season that reappears over the years. And there's gonna be flat times as well. And that's okay. You can't expect the property to be growing in value all of the time. But, when you take the equity from this property, you take the equity and you plant it in another 7 o'clock market, what you're doing, of course, is you're creating another cycle. You're creating yourself the ability to have a fruit tree in a whole other cycle, where, if you took the equity here and went and planted, say, the equities from a Melbourne property and you planted it in the Brisbane market, and the Brisbane market gets its growth at different stages- of course you start developing a little orchard or properties where the equity is used to transfer into different seasons. So, as a farmer, you're not just reliant on, "You know, I've either got fruit being beared, or I've got nothing for years." You're putting yourself in a situation just like the farmer mentality, where you're controlling the fact that you'll have equity growth much more regularly, allowing you to take equity, like I said, from Melbourne into Brisbane, from Brisbane into Sydney, and so forth and so on.

And it's this orchard or properties that's changing everything for A-grade investors around Australia. The old Uncle Bob investors would buy all in one- I talk about Uncle Bob, you'd see the Uncle Bob's at the barbecue, "Buy all your properties in this suburb! Boy, it's the best suburb in Australia!" But the reality is, when you buy all in one suburb, you tend to get all your growth at once, and no growth for six, seven, eight years, up to ten years at times, until the growth comes again. And of course you'll look like a rock star eventually, but how many hard years are you gonna go through? It's just no fun. As an A-grade investor, I would be encouraging- Any A-grade investor would encourage you to split that growth. Make sure. It's a great safety mechanism, it's great way to accelerate your wealth, it's a great way to have more control of your finances, because if, at some point, here, you decide, "You know what? I need to sell a property." You're not gonna sell one that's in the middle of winter, and you go, "Oh, now I gotta sell it for a price I'm not happy to sell it for." You're gonna sell one that's perfectly positioned to sell. There are so many great elements, but knowing how to work these cycles, knowing where to plant at 7 o'clock, letting the properties do the work for you, getting back on with your life, knowing that you've only used small deposits, you've got very low holding costs- all of these properties should go cashflow positive within the first six or twelve months, particularly if you're buying with less than $20 holding cost up front right from the start. So, you're talking about building a portfolio of cashflow positive properties with equity growing in all different stages, giving you the ability, whenever you want, to go, "Wow, I really like the look of Perth. We might grab a property over in Perth, the cycles look to be perfect." What fruit tree has fruit on it at the moment, let's use that fruit and go and plant another wealth seed. $1 deposit, equity from the existing property, perhaps at a Brisbane property or wherever it may be, and that's duplication.

Duplication is step number seven in my process, and it's a seven step process. I've laid it all out. It's a great formula that's working for hundreds of property investors all over Australia right here, right now. I've put together an inforgraphic, it's attached below and it's yours free of charge. If you click on the link below, you'll get to see all seven steps. It's a great infographic that I think will be incredibly valuable to you.

And don't forget, guys- grab the infographic, but don't forget- at the end of the day, when it comes to buying these properties, when it comes to identifying these 7 o'clock markets and purchasing one of these properties, my golden rule always applies. If you're gonna buy a property, make sure it's with your lunch money. If you can't buy a property with your lunch money, don't buy it.

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