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“yeah, I loved my full-time job at the time but this was my real passion and this is the first thing I thought about when I woke up, the last thing I was thinking about before I went to bed, doing it every spare chance I had. So I thought, you know what? I'm gonna turn this into a business.”
This week’s conversation is with buyers agent Jay Anderson. Jay’s the director and owner of the Property Buyers Agency, Jay Anderson Property. The agency specialises in emerging markets, acquiring properties below market value and using research and data to ensure those properties are aligned with their clients investment goals. Jay also offers a bit of a different perspective, from the lens of his background in the hospitality industry - taking a look from both the business analysis and acquisition view.
His First Investment
Jay made his first investment in 2010, during the peak of reno shows like “The Block.” A bit inspired by what he was seeing , he and his wife (then fiancee) bought a two bedroom apartment in Potts Point; it was, as Jay says, in terrible condition. They went to work and spent nearly a year renovating (what he also says was a terrible decision, although a great learning experience). The rest is history and, to date, that apartment has been one of the top performers in their portfolio.
His Strategy
As mentioned, Jay’s background is in hospitality. His grandfather started the family business in the ‘50s, buying a motel. Eventually, Jay’s father and uncle started investing and working in the space. Jay actually spent 9 years of his life living in one of the hotel’s that his father ran. That experience set the foundation for his entrepreneurial journey into the property space, as he moved into the analysis and acquisition of hotels. He and his father built a commercial portfolio and they sought out hotels that were either poor in condition and/or performance, located in areas with a business draw. They'd purchase the property, take over management or license with a chain, and eventually revamp the business.
His residential strategy looks for properties with potential, either via reno, land subdivision, future development, secondary dwelling, etc. He prefers an active approach and working to stimulate a bit of growth as opposed to relying solely on the market with the buy-and-hold method. On the commercial side, he says it’s all about risk mitigation. He likes the commercial properties that are in the hospitality space (of course). Despite being at a higher price point, they usually have a 30 year lease and the tenant (the guests) covers 100% of the outgoings. The transient nature of the business also allows for a continuous flow of tenants (guests).
Getting into the Business
As with many of our guests, Jay entered the business by being a prime example of success. After their first purchase, he and his wife continued investing; not long after, family members began seeking their advice, followed by friends and then colleagues. Things grew organically from there and he found himself very much enjoying what he was doing, both with his own personal investments and with helping others with their portfolios. He says, it became his passion -
“yeah, I loved my full-time job at the time but this was my real passion and this is the first thing I thought about when I woke up, the last thing I was thinking about before I went to bed, doing it every spare chance I had. So I thought, you know what? I'm gonna turn this into a business.”
Buying Off Market
The majority of the properties that his buyers agency acquires are off market, with either no plans of going to market or are pre-market listings; that’s where the benefits of having a strong network comes into play and you're given a “heads up” or "preview" before the property is listed. He says that those opportunities tend to provide him with better leverage for negotiating due to some listing costs not being a factor. He says there are various reasons why someone would consider selling off or below market, typically one of the 4Ds: death, desperation, divorce or distress. In those cases, sellers are usually happy with a quick, seamless, stress free sale.
His Key Piece of Advice
Educating yourself is key! Jay spent a lot of time learning and networking with key players in the industry, seeking out the best of the best. He also paid attention to what the top investors were doing, eventually learning that many of them were Buyers Agents.
His key piece of advice is, if you’re working with a Buyers Agent, make sure that you understand the “why,” behind their advice. Why are they suggesting certain properties or certain areas? Also, make sure to ask lots of questions. He says there’s no such thing as a bad question; it's just a matter of building up your self confidence, self knowledge and self education around your personal “why,” and all that's entailed in the process of achieving your goals.
Original article written by Mike Mortlock can be found here