Real Estate Start Up

THE ULTIMATE MINI GUIDE TO
PROPERTY
INVESTING
HOW TO WIN IN TODAY'S
PROPERTY MARKET
CAM MCLELLAN & MICHAEL BERESFORD
BESTSELLING AUTHOR CAM MCLELLAN GIVES

YOU STEPS TO SUCCEED IN THE
PROPERTY MARKET
THE ULTIMATE MINI GUIDE TO
PROPERTY
INVESTING
THE FORMULA FOR SUCCEEDING
IN TODAY'S MARKET
CO N T E N TS
ABOUT THE AUTHORS
Cam McLellan
5
5
ABOUT THE AUTHORS
Michael Beresford 5
Cam McLellan
INTRODUCTION 6
Successful property investor and businessman Cam McLellan shares the knowledge that
Why Have We Written This Guide? 6
allowed him the option to retire in his 30s, build a substantial property portfolio and a
What Is Cam McLellan Investment Strategy? 8 group of companies employing more than 150 people.
What Is Long-Term Growth? 9
His companies have been named in nine BRW Fast Growth lists. He is the bestselling author
The Power Of Compound Growth 9 of My Four-Year-Old the Property Investor, a jargon-free investment manual he wrote for
his children. The book is a step-by-step investment manual for those who wish to secure
PART ONE 10 their financial future.
Inside The Property Industry: Why You Should Ignore The Hype 10 As an expert in Australian Property Investment, Cam now helps others by sharing
Rising Interest Rates And What It Means For Investors 10 his knowledge and expertise. Through his company OpenCorp, he empowers clients,
When & Where Should You Invest In 2023 12 colleagues and friends to build successful property portfolios.
How Do Market Cycles Work? 13
Counter Cyclical Investment Strategy 13
OpenCorp Development Activity Chain 14
Michael Beresford
Market Cycles: How To Catch And Ride Each Wave 14 Michael Beresford is an experienced Australian property investment consultant and
Appreciate Depreciation 17 advisor.
Flipping While Factoring In Future Market Growth 18 Michael purchased his first investment property at 25 and then proceeded to buy four
Balance Your Portfolio – Yield And Growth 19 more properties on a single income over the next five years, providing him with a solid
Become An Expert In Your Chosen Market Or Sub Market 20 foundation from which to continue to build his investment portfolio.
Forget Short-Term Predictions And Bank On Long-Term Gains 20 As Director of Investment Services at OpenCorp, Michael is committed to sharing his
Why You Need To Toughen Up 20 passion for property and broad investment experience to deliver outstanding returns for
The Biggest Mistakes Made By Property Investors 21 everyday Australians. He has helped over 1000 OpenCorp clients add over $865 million in
value to their property portfolios.
Be Aware Of Analysis Paralysis 22
Knock Out Poor Investment Options! 22 Michael attains his greatest satisfaction through empowering his clients, to see them grow
their portfolio and achieve wealth they didn’t know was possible when they began their
investment journey.
PART TWO 24
The Straight Line To Wealth 24
Market – Area – Property 25
The Circle of Duplication 28
PART THREE - TOOLS AND CHECK SHEETS 29

Straight Line To Wealth Tools And Checks 29
The Circle of Duplication Tools And Checks 30
5 THE ULTIMATE MINI GUIDE TO PROPERTY INVESTING

INTRODUCTION in 2023 and beyond, and where those opportunities are. It will sharpen your focus, when
investing in property.
Why Have We Written This 2023 Guide? Ultimately, the most important skill in property investing has nothing to do with property.
It has everything to do with mindset. Investing is not what we’re brought up with. We are
taught debt is bad and not to talk about money. Bad news sells and we are bombarded by
This guide will give you the tools to make sound investment negativity in the media. We are taught to follow the herd, whereas successful investing
decisions so you can reduce risk as you build your wealth. requires you to be one of the minority.
The property market in 2023 is very different to what we saw two, five and ten years It isn’t hard to invest in property, although it requires a different way of thinking about
ago. While our investment strategies generally remain the same, it is important to money. It requires a growth mindset rather than a minimalist mindset. The pension may
understand the landscape you’re in and what it means when reducing risk and identifying have been sufficient in the past. But it’s not today and will definitely not be enough in the
opportunities. future. You need to take control of your own situation and take action to create a better
financial life for yourself and your family. If you are feeling nervous about investing for the
In over two decades of investing, we’ve seen it all across multiple property market cycles. first time, we understand as we were there once ourselves. But the pension for a couple
While the media peddle ‘property boom’ or ‘imminent market crash’ headlines depending right now is around $700 each per fortnight. Which is worse?
on how consumer confidence is at any point in time, the reality is far different.
We want to be really clear with you. There is never a perfect time to invest and conditions With dedication to your goal and a long-
will always be changing, whether it be interest rates, inflation, unemployment rates, term view in mind, amazing things are
consumer confidence, wage growth, rental growth, capital growth, government policy possible. This guide is designed to help you
proposals and so on. The list of variables is endless. But none of these variables change take the first steps towards achieving these
in isolation and none of them are the 3 fundamentals we’ve focused for over 20 years that goals.
have allowed us and our clients to outperform the market by over 25%.
The strategy we adopt is not get rich quick.
For example, in mid 2020 the headlines were creating a lot of fear around a rapid sell-off of It takes time. It’s get rich slowly, safely and
property and pending double digit vacancy rates. It never eventuated and from experience securely by applying a proven process to
our perception of the opportunity was much different. Our clients who invested back achieve a measured outcome and mitigate
then have all made over $200k per property. Some of them bought 3 or 4 properties and risk. There will always be talk of a property
started to change their financial life. While 2022 saw 8 months of consecutive interest rate bubble and the fact prices can’t keep rising.
rises, this re-balancing of interest rates was inevitable (we can’t have record low interest
rates forever) while the cost of money is still below long-term averages. An article in the Sun Herald, written on
December 13, 1970 talked about how markets
Over the last 2-3 years, house prices have been appreciating at an incredible pace before are unaffordable and the dream of home
seeing small corrections in the last 6 months. The beneficiaries of this growth have been ownership is lost forever. It goes on to say
the people that already own property. With prices increasing overall, it’s even harder to that the median house price in Sydney has
save for a deposit to get into the market. For many, this means missing out on the growth grown to $17,000 and the median house
that’s ahead. price in Melbourne has grown to $11,000.
The recent reduction in demand based on the rate rises however, means there are more This is proof, that in 1970 people had the
good opportunities out there, and that first home buyers are increasingly active. Given same doubts they do today because the
rents have increased up to 20% in the major capital cities, they’re trying to get into the same material is printed year after year,
market using any means possible, including using the government grants that are available. decade after decade. If you took a long-term view and bought property in December 1970,
Because of this, the next few years will see a lot more uneven growth across Australia, with I’m sure you would be pretty happy today!
some areas clearly primed for growth while other areas look set to lag and decline.
Filtering fact from fiction and taking the first steps to invest in property can be daunting.
There are definite opportunities to be had, if you know what you’re looking for. This guide will give you the tools to make sound investment decisions so you can reduce
risk as you build your wealth.
The purpose of this guide is to help you understand what the property market looks like
6 THE ULTIMATE MINI GUIDE TO PROPERTY INVESTING 7 THE ULTIMATE MINI GUIDE TO PROPERTY INVESTING
As Part Of The Process We Will What is Long-term Growth?
Question your motivations. This is important because your reasons will define your
strategy.
Not everyone will have the same definition I do. My portfolios are built for my kids and
their kids, so I define a long-term investment as one that will continue to grow in value for
Demystify the industry. We take away the smoke and mirrors so you gain a clearer
generations.
understanding of the property industry.
When you think of property investment this way, it makes decisions easier because it
Identify excellent investments. We reveal our strategy for identifying investment
reduces your options and cancels out some of the risk. There are plenty of opportunities
properties with exceptional long-term growth potential.
that suit my investment criteria but most simply don’t stack up.
Explore how headlines differ from reality. We explain what motivates media stories and
how these don’t help you achieve long term growth.
Guide your decisions with tools and check sheets. Our systems will help you select
The Power Of Compound Growth
excellent investment properties and manage your portfolio, so you can leverage equity and
build wealth at a much faster rate.
I achieve my goals by taking advantage of compound growth; it’s incredibly powerful but it
takes time. Einstein called it the eighth wonder of the world.
Compounding starts slow but it is amazingly powerful over time. I run a course called
Cam McLellan shares his Investment Strategy Money Smarts for secondary school kids. Here’s an example I use to get their head around
the power of compound growth.
Property investment portfolio earning $250K in passive income Let’s say you started with one cent which doubled every day, over a 31- day-month. Day
per year one you have 1 cent, day two you have 2 cents, day three you have 4 cents and so on. After
a week, you would have less than a dollar but at the end of that month, you would have
The first step in creating your investment strategy is deciding what you want to achieve.
about $21 million!
When I started out, I had a clear goal. I wanted my family to be financially secure, so I didn’t
have to work to have the lifestyle I wanted. The main reason people don’t achieve success through investing is because they want
results immediately.
Most investors I meet want that freedom and flexibility. They aren’t chasing a private island,
helicopter, mansion or mega yacht, although it is fine if that’s your thing. You just need to When it comes to investing in property, be patient, build your portfolio and play the long
be specific about your intentions. game. It takes time but it’s very effective.
Figure out how much money you need each year to achieve your goals. Put in place an
investment strategy that has you doing everything you can, as soon as you can, to achieve
them. In property investing, aiming for a target keeps you focused and motivated.
As a teenager, I remember casually asking my mate Bruce what he wanted out of life.
Without hesitation he replied, “A wife, two kids, a dog, a house and a Harley Davidson”.
Bruce had a vision that was very real to him. I wasn’t surprised when he had the dog, the
house and the Harley by the time he was 20. His wife and two beautiful daughters followed
a few years later.
Knowing what he wanted was the key to his success.
Don’t be afraid to set goals because you might fail. Even if you don’t reach your target, you
will be much closer than if you never tried. To be successful, you need to be happy being
uncomfortable, rather than comfortable and unhappy.
PART 1 There is a housing under-supply crisis in Australia that you can
capitalise on
Inside The Property Industry: Why You Should Ignore The Hype There is a huge housing under-supply problem at the moment in Australia. The population
is growing more rapidly than the amount of housing being built all over the country. The
government has admitted this.
The most successful media content elicits an emotional response. In other words, bad
news sells. The government also has a vested interest in keeping the housing sector (specifically in
construction) afloat, given the industry is such a large employer of Australians and they
For this reason, it is important to ignore hype surrounding the boom and bust stories don’t want to impact the unemployment rates.
we are exposed to every day. This media is motivated by selling excitement and fear and
buying into the hype has the potential to derail your property investing journey. What does that mean for you, the potential investor? It will take years (if not decades) for
the housing numbers to catch up with demand, meaning rents will continue to rise, and any
Most people trust the media to educate them about the state of the property market, yet houses that become available will be snapped up by Australians looking for somewhere to
according to the Australian Bureau of Statistics Census data 87 per cent of Australians live. We are seeing vacancy rates at record rental lows. Rents are up dramatically.
retire on the poverty line, reliant on a pension of between $300 to $400 a week to survive.
At OpenCorp we believe that either at a state or federal level there will be intervention by
In 2020 when the COVID pandemic crept over the world and Australia went into a the government to stimulate the property market. The last time this happened was 2020,
government-imposed lockdown, media outlets around the country were predicting doom when the HomeBuilder came in.
for the property market. I know a lot of people were panicking. Their worst fears were
being stoked by the media hype, but they couldn’t stop themselves from reading the I’d much rather have bought a month before HomeBuilder started, or three months before
articles every day. HomeBuilder started, than three months after it started. Why? The price of land and the
price of building went up instantly, as soon as the government made the announcements.
Unfortunately, the journalists reporting on the property market didn’t pick up a copy of
the book Investing In the New Normal. A book I co-authored with my colleagues Matthew Ultimately, the incentive they gave went into the pockets of developers and builders,
Lewison and Michael Beresford (released in August 2020). We predicted that prices would because their prices just went up. It did create momentum in the market, which did result
skyrocket over the next 2 years, despite most of the country being in a full lockdown. We in prices continuing to go up.
also predicted that there would be a jobs boom and migration would increase to above
pre-Covid levels. All of those things have subsequently played out.
What does this mean?
If you want to get ahead you don’t want to sit and wait and be a follower. You want to get
The most important thing to remember is that the hype will pass. As a successful investor,
into the market before the announcements - the sooner the better.
you need a stable, consistent mindset. Remove emotion to what’s going on and commit to
your long-term approach. You need to leave emotion at the door
This property is not your forever home. You don’t have to imagine your life here. You don’t
Rising Interest Rates And What It Means For Investors
need to calculate how long it will take for your friends and family to come and visit. You
don’t need to see how far the commute to work will be. You don’t have to consider whether
your couch will fit in the lounge room. This house isn’t for you. It is for your renters.
When you look at the media it seems that everyone tells you the right time to invest is
when the economy is on the up and up. It was a similar story post the Global Financial Think with your head and not with your heart. This could mean the difference between you
Crisis. Government motivation to regrow an economy, commitment to population growth, buying one investment property, or building a portfolio of two, three, four or even more
especially first home buyer incentives. The story was that it was great to jump aboard properties that will one day allow you to buy that dream forever home (and maybe a new
the positive whirlwind train when everyone’s flying high, when things are recovering and couch to suit!).
people are much more comfortable. What if I was to tell you that the smart investors make
their money when the demand is less. I bought a property in the middle of the GFC. My It is also not about what you earn - it is about what you have to offer.
mates told me I was stupid, the world was going to end, et cetera. In the 18 months after
OpenCorp has helped people from all walks of life enter the investment property market.
that, prices were up over 30%.
Teachers, retirees, tradies, mums, dads, singles, couples, divorcees, corporate high flyers,
even nurses. It isn’t about how much you take home each week. How Do Market Cycles Work?
It is about your borrowing capacity and what you have to offer, which is why it is so
important to do a financial health check.
In 2017/18, media hype made it easy to think property market growth would continue forever.
Historically however, capital city property markets see a sustained period of rapid growth
When & Where Should You Invest In 2023 over four to five years. Afterwards, they experience a minor correction and stay stagnant for
the best part of the next five to seven years, before another growth cycle starts.
To put it simply… you probably should have invested yesterday, but today is a great day to So, a minor correction, like we saw in Sydney and Melbourne through 2017-19 is not
jump in. unexpected when they experience above-average growth and create a temporary
oversupply of new housing. It is a natural part of the growth cycle and prices in these
The property market is dynamic. Our advice is to look into the future, but not too far. We markets will grow again down the track.
don’t want to get too far ahead of ourselves.
Don’t get caught up in all the talk of doom and gloom. Between 2013 and 2017 the Sydney
The data’s pointing toward Victoria, Queensland and Western Australia being the best market grew 75 per cent. Homeowners who were in the market for the full growth period
investment options in 2023. were still 65 per cent better off after the minor correction that followed. Those that held
through the slower growth phase were rewarded by a further 20% growth between 2020
Let’s look at the stats and 2021.
There are three markets, Victoria, Queensland and WA that we see will have continued solid Therefore, it is important to invest for the long term and get into the market as early as you
growth in 2023 and meet our key fundamentals. We’re big proponents for diversification. can, to capitalize on the growth cycle. Property that is generating an income for you can be
So, if you’ve got a principle place of residence in Victoria, you actually might be better off to held through the slower phases, knowing that on the other side will be another growth cycle
invest in another state.
Counter Cyclical Investment Strategy
Getting into property investing is not about getting rich quick. It is about buying counter
cyclically and entering a market before it sees that period of growth, so you can take full
advantage.
A counter cyclical strategy also means while there’s a buying frenzy going on, you need to
look at other markets.
I see a lot of investors come unstuck because it takes them three or four years to feel
comfortable enough to take the plunge and they end up buying at the top of the cycle.
Then, because their property value doesn’t grow for eight to 10 years, they lose confidence
and think investing doesn’t pay off.
Really, it just comes down to market timing and location. Smart investors know how to buy
counter cyclically and that supply and demand affect prices over the long term.
Property developers have the greatest impact on supply in any city market. When I say
developers, I mean medium and high-rise apartment block developers and broad acre land
sub dividers (developers who bring new community estates to the market, such as master-
planned estates).
We designed the next diagram to demonstrate to clients, how developer activity affects
market prices.
OpenCorp Development Activity Chain to have a more ‘grounded’ investment head start. So I tell them about market cycles, and
the pitfalls of trying to time these. Long ago, I found the way to help kids grasp financial
concepts is to show them something they can relate to in real life.
PRICE STAGNATION / STABILISATION PRICE GROWTH PRICE STAGNATION / CORRECTION
We’re fortunate to have a holiday house on Victoria’s Surf Coast. The kids love surfing. Last
summer, we did something different. Armed with a stop watch, I took the kids to some of
DEVELOPERS STOP
DEVELOPERS BECOME ACTIVE ACQUIRING NEW PROJECTS
my favourite surf breaks. Not what you’d expect for a property economics lesson, right?
SHORT-TERM SUPPLY & DEMAND
PRICE GROWTH STARTS We set up at our first beach, overlooking a bunch of beginners. I asked each kid to pick a
surfer, then tell me whenever they caught a wave (which we timed until they fell off). After
AVAILABLE STOCK BOOM AVAILABLE STOCK
(CURRENT SUPPLY) (CURRENT SUPPLY) 15 minutes, we added up the time each surfer was surfing waves.
New surfers favour easy beach breaks, where it’s safe. You paddle out from shore, wait on
your board for a wave that you think is big enough, then paddle like mad to catch it. These
are fun to ride. But, as my kids learnt, time spent surfing waves is just a small fraction of
PROSPECTIVE PROSPECTIVE
PURCHASES PURCHASES
time in the water.
(CURRENT DEMAND) (CURRENT DEMAND)
WINDOW OF INCREASED
DEVELOPMENT ACTIVITY
They were surprised to find that, in the 15 minutes we watched, their beginner surfers
(3-4 YEARS) spent less than 15 seconds surfing waves. But the lesson wasn’t over…
TIME DANGER TIME
BUY ANY OTHER TIME THAN THIS
We drove to Bells Beach and found a spot overlooking a group of surfers. The kids each
Look at the supply and demand lines in the Development Activity Chain. You’ll notice picked a new surfer for our game.
that at the point where demand outstrips supply, prices start to rise. Developers see
If you’ve ever watched good surfers (who know a local break, and are there whenever
opportunities to make profits again and begin the process of buying and delivering stock
the swell’s up) you’ll have seen them waiting on their boards, just off the point. They don’t
to the market. This is indicated by the shaded section of the diagram.
wait for the biggest wave. They’re there to surf. They start paddling when the swell builds
It takes time to bring any large-scale development to market. During this period, there’s a behind them, long before the wave is ready to break. When the wave catches up, and the
shortage of dwelling stock resulting in further price growth and usually, rapid growth. surfer feels it working for them, they stop paddling and jump on their board.
Most developers become active at the beginning of this and it can be two to four years Good surfers can even stay on a wave when it peters out, keeping momentum by bouncing
before their projects are ready for sale. By this time, the market has often dropped off and the board. This lets them catch a second, smaller wave, all the way to shore.
there is an oversupply for up to 18 months as stock continues to enter the market.
They then walk back along the beach, across the rocks, out to the point where they
As a result, prices correct and stagnate until the excess supply has been sold. When jumped in. And, after a quick paddle out, do it all again.
demand drops below supply, developers will stop taking on new projects.
In just one wave, a point surfer clocked more time surfing than any beginner in 15 minutes
As this timeline shows, there’s only one small window of time, ‘the danger time,’ when it’s at the beach break. Back in the car, I asked the kids what they’d learnt about surfing. Five-
not advisable to invest in property. year-old Ruby asked, ‘Why won’t you just let us play at the beach?’ The older kids worked
it out. Hannah said, ‘If you’re smart about where you catch the wave, you don’t work as hard
or get tired paddling around, and you get a much longer ride’.
Market Cycles: How To Catch And Ride Each Wave
Lucy said, ‘I’d rather catch a long wave fast than wait ages for a big one’.
Angus said, ‘My surfer sucked. He kept waiting for the biggest wave, and let heaps of good
Australians realise they must invest for a good financial future to avoid a poor retirement.
waves go. When he finally got a big one, he fell off!’
Yet many delay decisions, hoping to ‘time’ the market.
They didn’t realise it, but the kids had learnt a property investment lesson. When they’re
Such investors wait for a magical sign that the ‘perfect’ investment moment has arrived.
old enough to grasp it, it’ll last a lifetime.
When it finally does, they summon the courage to spend their hard-earned cash.
Many property investors are so focused on making the biggest return (i.e. catching the
By this time, unfortunately, they usually miss most of the growth in the cycle. I want my kids
biggest wave) they let more reliable opportunities go by. When they finally get a live deal, Appreciate Depreciation
they’re often out of their depth. They make poor decisions (like the surfer who fell because
his wave was too big).
Depreciation is the best tax benefit available to property investors, so it’s surprising
The most successful investors I know haven’t made one or 2 hugely profitable investments.
that few take advantage of it. Negative gearing is a good kick back while you build your
They’ve learnt the best way to make money is to be smart, enter the market early, in the
portfolio but spending $1 to get 50 cents back, is not a wise long-term strategy.
right spot, then ride the wave for as long as possible – even if it’s not the biggest.
Somewhere between 50 and 80 per cent of investors do not claim depreciation as a tax
benefit. The taxman undoubtedly parties every year in celebration. Especially when you
consider investors could net $10,000 to $15,000 on a new house, in the first year alone!
There are few downsides to depreciation. You don’t have to spend more money to claim
depreciation (apart from having a depreciation schedule drawn up).
If your property was built after July 17, 1985, tax law states that it will depreciate over a 40-
year period. This is because while land appreciates, buildings always depreciate. The ruling
currently allows investors to offset their investment against income at 2.5 per cent of the
construction costs. Fixtures, fittings and furniture depreciate at a faster rate.
Make sure you get a quantity surveyor to arrange a building depreciation schedule for
your accountant so you can maximise the offset allowed. The cost of the depreciation
schedule is also a tax deduction.
Flipping While Factoring In Future Market Growth Balance Your Portfolio – Yield And Growth
Flipping property is the art of buying and adding value through renovation, then selling a Balancing yield and growth is one of the keys to a healthy investment strategy. For exam-
property as quickly as possible. ple, before my wife and I had kids we decided to rent until five years ago although we had a
substantial property portfolio.
When I was growing up my folks tried flipping a few properties. I still remember my Dad
saying, “hurry up, holding this thing is costing us, let’s tart it up”. The plan was simple: paint, We decided to live in numerous inner-city Melbourne suburbs, close to the beach, where
carpet, tanbark, flip, but this game plan didn’t always pay off. we rented two-bedroom apartments. Elwood was a particular favourite.
Flipping a property is all about numbers and timing. We loved living in that apartment and could have bought it easily, but we decided to rent
because the high holding costs would have made it a bad investment for us. I’ll explain
Most of the time investors forget to factor in all the costs involved:
further with a few basic figures.
° Stamp duty
° Legals
° Renovation costs
° Interest
° Marketing costs
° Agents’ costs
° Capital gains tax
° More legals
° Opportunity cost
After paying this lot, you will be lucky if there’s any profit left. Flipping property is
essentially trading. If done successfully, flipping is an income, not an investment strategy.
One of the reasons most property investors only own one property, is because they buy a
two-bedroom apartment in a blue-chip area like Elwood. In reality, this $800,000 Elwood
property will cost you about $300 a week to hold.
Compare that with an investment property valued at $550,000, with a conservative holding
Smart investors buy well cost of $100 a week. If you’re smart with your investments, you can hold three properties
with a total value of $1.65m for the same holding cost as an apartment in a blue-chip area.
and hold for the long term.
Even if we give the blue-chip area an advantage of nine per cent annual growth over a 10-
year period as opposed to eight per cent, for the $550,000 property in a less suburb, you
will be $1.67m ahead simply because you made a smarter investment choice.
Become An Expert In Your Chosen Market Or Sub Market The Biggest Mistakes Made By Property Investors
When you decide to invest, it is important that you take the time to become an expert on ° Listening to media hype
your chosen investment suburb. The best way to do this is through good, old-fashioned ° Buying a property close to home (so they can drive past)
legwork. Talk to council planning departments, builders and shop owners. Find out about ° Self-managing tenants
local amenities like shops, schools, infrastructure, roads and rail. The more research you do
° Buying at auction
before you buy, the better equipped you will be to assess potential investment properties.
° Buying older properties (without potential to add real value)
° Buying based on the look or feel of a place
Forget Short-Term Predictions And Bank On Long-Term Gains ° Asking a real estate agent for advice
° Overcapitalising
Beware of short-term price increase predictions. Even though city markets are a passion ° Selling for profit (when they should refinance and save the tax)
of mine, I would never predict market price movements in this way. I can tell you why I think ° Paying off debt (when they should create a redraw facility or use an offset account)
one market is favourable to another over a two or three-year period but I can’t say how ° Selling property to transfer into self-managed super funds (to purchase property)
much a specific house price will increase by in the same period. No one can.
° Not including a finance clause in the contract
What I can tell you is, well-chosen properties will double in value within 10 years. Poorly ° Cancelling a contract under the ‘cooling off’ option rather than the finance clause
chosen properties will sit stagnant for three to four years slowing your process of ° Failing to get an expert to review the contract
duplication. ° Buying in regional or rural areas
° Not having a strategy for mitigating risk
Why You Need To Toughen Up ° Waiting for the deal of a lifetime
° Buying for ‘future development upside’ on the open market
° Chasing the lowest interest rate option
When you invest in property, you have to accept that you’re not buying your own home.
So, don’t let emotion cloud your judgement. Conduct your due diligence on the market and ° Not having the correct ownership or financial structures in place
stick to your investment criteria. Remember there are plenty of options out there. If you ° Not allowing for all purchase costs (stamp duty, mortgage registration, lenders
don’t find a property that ticks all the boxes, move on. mortgage insurance)
Equally, don’t be swayed by a real estate agent’s hype. They know how to work every ° Taking an approved finance limit as an unconditional commitment from the bank
angle. It’s their job. If you live in the area, they will press all your emotional buttons with ° Selling property to finance lifestyle
comments like these.
° This is a lovely safe area.

° Doesn’t it feel homely?
° You’ll definitely get nice tenants here.
° You can drive past the house and keep an eye on it.
This is a total crock. Don’t let them fool you with these emotional hooks. Toughen up.
There’s no place for emotion in property investment.
Be Aware Of Analysis Paralysis yields plummeting, which is very unfortunate for investors.
I like medium-density housing located in infill areas. In my opinion, medium-density

housing includes a house or townhouse, on its own land title.
When I bought my first property, it’s fair to say I didn’t have a clue what I was doing. When
I went to sign the contract at the agent’s office he asked for my conveyancer’s details. I Since I was a kid, the average house block has more than halved in size. As an investor, I
gave him a blank look. What’s a conveyancer? I bought that property because a mate had know that prices will double on a 300m2 block of land, the same as the they will on a 600m2
bought one in the same street and his dad was a successful investor. So, I knew the odds block. The advantage is that a smaller block requires less equity to enter the market. Also,
were pretty good that it was a smart buy. people rent bedrooms, not backyards so the rental yield is better on smaller lots.
Education and research are keys to smart investing but be aware of analysis paralysis. If you can’t afford to get buy a house or townhouse, then the next best option would be
If you spend all your time trying to find the deal of a lifetime, you may pass up good a low-rise apartment in an area with great local amenity. Low-rise apartment buildings
investment opportunities along the way and end up missing out in the long-term. that are surrounded by gardens and have access to trains and local shops, can provide
reasonable returns with strong rental demand. But research is required to ensure you buy
Do your research and then take the plunge. Enjoy the rush that comes from taking action. in areas with limited new development opportunities. I often use the term “stepping stone”
investment, when I get asked about low-rise apartments. I would never recommend it over
Knock Out Poor Investment Options! a house. But if it helps you to get into the market and allows you to capture the market
growth cycle sooner, rather than missing out altogether, then that’s a positive.
Once you’ve decided on your investment strategy, it’s time to select your investment What does infill mean?
property. Start by ruling out all the options that don’t meet your criteria. It’s much easier
than sifting through every option on the market. It’s a bit like buying a new pair of shoes. If An infill area is land surrounded by established housing. When all the land has been
you’ve worked out that sturdy brown shoes are what you need, you don’t have to look at developed in the area, the resulting pressure on supply usually means prices will increase.
every shoe option.
I also like master-planned estates with limited competition. A suitable master-planned
When it comes to property, I like infill areas or master planned estates that have limited estate will have quality housing, local infrastructure and a good community. I stay away
land supply. Medium density housing is my investment choice. from master-planned estates that have an abundance of vacant lots nearby. I’m talking
thousands of lots, enough to build a whole new community. Be sure the master plan you’re
considering doesn’t have large amounts of land that could be developed in the future
Why medium density?
because this will slow price growth.
I’ll explain this by a process of elimination. I spend a lot of time analyzing different areas so I can choose an estate that gives me
High-rise apartments are a flashy investment option. There is something cool about the the best potential for long-term growth. I’m writing this on a flight to Melbourne, after
thought of owning an apartment that towers over everything, but most don’t meet my spending a few days interstate checking out land estates, looking for one that fits my
long-term criteria. The reality is that most investors don’t have the know how or resources criteria. It’s important to put in the hard yards to find good investments. I think the lady
to review the potential supply of additional apartments that may come onto the market sitting next to me is reading over my shoulder as I write.
in high density areas. This additional supply will potentially slow the growth of their
investments. So, for most people it’s safer to stay away from apartments as an investment.
For most people, if you like high-rise apartments in the city, rent one.
Regional properties generally double every 15 years as opposed to city properties which
double every 7 to 10 years. The long-term compounding growth difference is staggering. I
don’t buy in regional areas.
Mining towns, at the time of writing are being given the hard sell. In most cases, by the time
the infrastructure has been built to support the mine, the work force will drop by as much
as 70 per cent, leaving a massive oversupply of dwellings. What we see is prices and rental
PART 2 Market – Area – Property
The Straight Line To Wealth ° The first step is to choose a city market with the best potential for growth.
° Secondly find an area with a balance of yield and growth, along with good
infrastructure.
The Straight Line to Wealth is the process I follow when selecting investments to add to ° Finally, select the optimum size and quality investment property for the area.
our portfolio. The straight line guides me from the initial idea stage, all the way through to This is the opposite approach to your typical investor who invests close to home.
securing the right tenant. Each stage is designed to reduce risk. Smart investors use the market - area - property approach because it fast tracks your
portfolio’s growth potential by allowing you to catch each city’s growth wave. The faster
your property value rises, the sooner you can leverage your equity and acquire more
properties.
Remember, it’s always Market – Area – Property.

Make it your mantra.
Let’s go over the process in more detail.
Market
In this mini guide, we’ll focus on the investment identification Growth trends. Stay away from markets that have undergone a period of strong growth
section of The Straight Line. This is the process experienced (10 to 15 per cent per annum) for more than two consecutive years, and where the rental
investors use to choose property. vacancy rate is over 3%. After a strong growth period you can expect a price correction if
the growth was not underpinned by an under-supply of housing.
Check out other markets to see if they’re better positioned for future growth.
Consistent population growth. When you’re looking at markets, always check population Optimum size and quality. Every area has a property that is optimum in terms of size
forecasts. A low population growth forecast is a sign you should steer clear of that city and quality. What I mean by this is, you will reach a point where you’re over-capitalising
market. because you’re not adding to the property’s value or rental yield. For example, if you
decide to build your property with a media room, it might not add to the value and you
Employment, wages and consumer confidence. People won’t buy when they’re feeling may not receive additional rent, although you’ve incurred significant costs. If you do your
insecure about their jobs. Higher wages mean people can afford more expensive research and get to know your investment area well, you’ll be able to identify the optimum
houses and we all want the best, it’s human nature. Invest when consumer confidence is quality and size of property to aim for.
recovering.
Established capital benchmark. Check how much owner-occupiers are paying for
comparable homes in the area. For instance, if you’re buying a property and the maximum
Area
sale price nearby is only 10 per cent higher than your purchase price, it doesn’t give you
much room for growth. Aim to buy in an area with an established capital benchmark at
Employment. Check whether the property is located close to diverse employment centres
least 30 per cent above the value of your potential investment.
like offices, factories or industrial areas. Suburbs with a large range of employers have
more potential for long-term growth. Land content. This is the golden rule of long-term property investment. Land increases in
value and buildings decrease. The floor area of all buildings on the site must be no more
Excess supply. Check that the area doesn’t have an oversupply of dwellings or a large
than double the total site area. This rules out high-rise apartments and small units.
supply of vacant lots near your potential investment.
Owner-occupiers. You should always buy in areas where the majority of properties are
Close to amenities
owner-occupied.
Your investment property should be close to:
Vacancy rates. Ensure there is strong rental demand and that properties are leasing within
four weeks of being on market. ° Public transport, including train stations and bus routes
° Education facilities, including primary schools, high schools and private secondary
Essential services. The area should have schools, local shopping and major retail centres,
schools or colleges
public transport, parks and sporting facilities located nearby.
° Retailers, including local supermarkets and within the catchment of a major shopping
Planned future quality of housing. Check whether there are controls over the standard of centre
house that can be built in the area. You don’t want to find that a tin shack has been built ° Parks, including playgrounds and open spaces
next door to your investment. New over old. Over the years we’ve bought many established houses and added to the
value. I think my wife Felicity must have painted at least six or seven houses before she
Value indicators. Check whether there are plans to build new infrastructure such as
went on permanent strike. We now buy new property instead and the main reasons are:
railways and roads in the area.
° Tenant appeal
° Maximum taxation benefits
Property ° Minimal ongoing maintenance
° Builder’s construction warranty
Low holding costs. It’s important to achieve a good balance between rental yield and
capital growth to maximise tax benefits. The more you receive in rental income and tax In some rare instances, buying established is the right way to go for an investor. It is
back, the less you pay in holding costs. Think growth first then achievable yield. Rental important to get the right advice around this, because it can have a big impact on your
yield is usually viewed as a percentage and compared against the cost of the property. ability to grow your portfolio if you make the wrong call on this.
Calculation In the tools section, you will find a ‘builders due diligence check sheet’ and a ‘tenant
assessment sheet’ to help select a builder and then a tenant.
Rent = (weekly rent x 52) / purchase price x 100 Rent = $430 pw.
Now that you have your investment and your tenant, you will need a system to manage and
Purchase price = $550,000 grow your portfolio. I have included some tools to assist you.
Yield = (430 x 52)/550,000 x 100 = 4.1%
The Circle of Duplication I know it sounds like a lot of work but you’ll only need to do this every six months. I can
honestly tell you it’s worth the effort, so make a note in your diary or calendar to check up
on your equity. You may find that there are periods of little or no movement. That’s just part
Sounds very Zen doesn’t it? Being a disorganised guy, I needed a system to help me of the cycle. You need to sit tight through these periods because when the market turns
manage my portfolio and identify increases in equity that could flag when it’s time to invest you’ll be making hundreds of dollars each night while you sleep.
again. This is how it works.
PART 3 – TOOLS AND CHECK SHEETS
These diagrams explain the Straight Line to Wealth and the Circle of Duplication. The tools
and check sheets are listed next to each section.
Feel free to download them from the OpenCorp website: www.opencorp.com.au
Straight Line To Wealth Tools And Checks
Let’s break down each of the three points.
Part One
The Straight Line to Wealth. As you’ve already seen, this is the process that enables you
to identify worthy investments. The Straight Line to Wealth is the first part of the circle.
In the next section of this guide you’ll find a diagram of the Straight Line to Wealth and
associated tools.
Part Two
Monthly portfolio check. It’s important to check in on your portfolio each month. On our
website, you will find a check sheet called the Portfolio Management Review Form.
Part Three
Six-monthly equity and rental check. This will determine if you have enough equity to
duplicate your investment. To do this you need to compare sales of similar properties in the
same area by using the Property Review Check Sheet for each one. When you’ve checked
each property, compile your data into the Portfolio Equity and Rental Check Sheet to get
an overview of your portfolio.
The Circle of Duplication Tools And Checks
NOTES
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My Four-Year-Old The Property Investor
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Enjoy a complimentary 20-minute discovery call where we will understand your financial
everyone would be doing it, right? In this book, ‘A fun read that helps break down complex
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Breaking down comprehensive strategies and notes stuck through the book where it cleared Property Investment Journey may work for you.
complex ideas into simple, easy to follow advice, up previous ‘unknowns’ or where a complex idea
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‘Very well written and extremely hard to put
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WHY is this book so good? ° Finance options through our broking team
Because nothing like it had come before. ° Optimised house plans & specs
° Management plan of your property portfolio
WHAT YOU GET: YOU'LL ALSO LEARN:
 A clear understanding of the investment  How to pay off your own home in 10 years, not 4. Ongoing support – lifetime guidance & coaching
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 Three Steps that allow you to find the deal of a  Telling signs to avoid the sharks who circle the As part of our commitment to your success, we will assign a Portfolio Manager to oversee
lifetime, every day of the week. property industry. your investments. This means you can let go and enjoy your life while we take care of your
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the best performing investment property, every successful investing.
time.  How passive income from growth property
can fund a life you never thought possible.
32 THE ULTIMATE MINI GUIDE TO PROPERTY INVESTING 33

NOTES NOTES
NOTES THE STRAIGHT LINE TO WEALTH
In simple, jargon-free language, this mini guide is a step-by-step

guide to illustrate why following a proven system is so important when
investing. Essential reading for anyone wishing to walk the straight
line to wealth.
Its vital lessons include:
 How to select the right city market, the right area within that city
and the best investment property for that area.
 The key ingredients to be a successful investor in todays financial

environment.
 Where the opportunities are in 2023
Published by OpenCorp 2022
www.opencorp.com.au
© 2022 OpenCorp Group Pty Ltd
This publication is copyright. All rights are reserved. Except as permitted under the Copyright Act 1968
(Cth), no part of this publication may be reproduced, stored or transmitted by any means, electronic or
otherwise, without the specific written permission of the copyright owner.
Disclaimer
THE ULTIMATE MNI GUIDE TO
PROPERTY INVESTING
While reasonable care has been taken producing this guide, no guarantees are given in regards to the
accuracy of its content or the material provided in the web links. Property investing is a complex field and
it is ever changing. Every person’s circumstance is different, and therefore no reader should rely solely or
partially on the information in the guide or the material in web links provided by the author. Any person or
organisation reading this guide or obtaining the material provided in the web links is responsible for their
own investment decisions. The OpenCorp Group of companies, its directors and employees are neither
liable, nor responsible for the result of any actions or losses incurred, whether whole or partial, from the use
of the content, information or tools provided. The author is simply sharing information that he personally
uses himself when investing.

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THE ULTIMATE MINI GUIDE TO

CAM MCLELLAN & MICHAEL BERESFORD

BESTSELLING AUTHOR CAM MCLELLAN GIVES

PART THREE - TOOLS AND CHECK SHEETS 29

5 THE ULTIMATE MINI GUIDE TO PROPERTY INVESTING

Knowing what he wanted was the key to his success.

Counter Cyclical Investment Strategy

° This is a lovely safe area.

I like medium-density housing located in inﬁll areas. In my opinion, medium-density

Remember, it’s always Market – Area – Property.

Let’s go over the process in more detail.

Yield = (430 x 52)/550,000 x 100 = 4.1%

Feel free to download them from the OpenCorp website: www.opencorp.com.au

Straight Line To Wealth Tools And Checks

Let’s break down each of the three points.

What the industry experts say about Getting Started

32 THE ULTIMATE MINI GUIDE TO PROPERTY INVESTING 33

In simple, jargon-free language, this mini guide is a step-by-step

Its vital lessons include:

 The key ingredients to be a successful investor in todays financial

 Where the opportunities are in 2023

Published by OpenCorp 2022

© 2022 OpenCorp Group Pty Ltd

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