15 Apr Supercharge your portfolio growth
Frank Valentic, who’s a judge in the current series of the Block and a managing director of the Advantage Property Consulting, tells us about fast-tracking a portfolio and gives us some “super charge ideas” to manufacture growth.
Kevin: I’m delighted to be able to introduce him to you my next guest, Frank Valentic, who you may know from The Block. Frank has been a regular on The Block and, in fact, is one of the judges on the current series of The Block.
Frank is a founder of Advantage Property Consulting. They are buyer’s agents and are very well known. He has built a great portfolio over the years, too, and has been involved in the industry for 15 years.
Frank, great to have you on the show. Thanks for your time.
Frank: Thanks, Kevin. Looking forward to chatting to you and hopefully, giving some tips out to the listeners.
Kevin: Yes. Obviously, you bring a wealth of knowledge to the table. I thank you for that. Tell me a little bit about your own portfolio. How long have you been working on that?
Frank: Twenty years, Kevin, so it’s been a while. They say Rome wasn’t built in a day, and usually, a portfolio is a long-term strategy.
I’ve bought investment properties and built a portfolio. I have probably bought over 50 in the last 20 years, and currently, have a portfolio of around 20. I’m continuing to try and grow that portfolio and doing some cash flow, selling, and developments as well.
Kevin: Obviously, you’ll be able to give us a few great tips on building that portfolio, which we’ll talk about in just a moment, but your business, Advantage Property Consulting, has taken the Real Estate Institute of Australia’s buyer’s agent of the year title, as well.
Frank: Yeah. We’ve done that a few times in the Victorian awards. We’re proud of that. We’re probably up to about 3000 client purchases over the 15 years that we’ve been operating. We’ve seen what works and what doesn’t work with an investment portfolio.
We currently look after rental properties, as well. We have our own property management division, which gives us first-hand insight into what tenants like and what works as an investment property.
Kevin: Well, help me now. How can we go about building a good, solid portfolio over a period of time, or how fast can you do it?
Frank: I think, Kevin, the first thing is looking at ways you can – I call it – supercharge your portfolio and fast-track it and rather than just waiting for capital growth, where we’re trying to manufacture growth from day one.
There are a number of strategies we use there. One of them is we go out and we buy whole blocks of units for our investors. I’m involved in that. We try to buy under market value and create equity, because you’re making money when you’re buying well. That’s one really successful strategy that works for us.
We’re trying to go out there and not buy one property in the marketplace but buy for a syndicate of investors and hopefully create that instant equity by purchasing under market value.
Kevin: Are those properties hard to find?
Frank: Well, they are. You have to try and find a whole block of units that’s owned by one owner or owned by a couple of owners who are family members. But we’ve bought over 130 of those in the last four years. It’s a strategy that can work really well.
I tend to find that a lot of people, when they’re buying, might pay above market value –they’re buying retail – so if you can develop a strategy where you can buy with family and friends and be able to purchase a whole group of units, you should get a discount when you’re buying over $1 million.
Only 8% of the market generally buys over that level, and a small percentage invests in one property or one group of properties at that level rather than the 80% who generally invest at the median price in each capital city.
Kevin: Asset selection, too, is pretty critical, isn’t it, in putting together a good portfolio, knowing what to buy? Could you tell me a little bit about that?
Frank: Yes. We’re always looking for properties that we can buy that have a bit of a twist, using the Michael Yardney phenomenon there. He talks about that. So properties there that give us an opportunity to add value. Typically, they are older style properties that have a value-add potential there that we can add value with either renovations or subdivisions or also through developing them and maximizing the use of that land value.
It’s really about properties that are able to be twisted, added value to, and creating a bit of equity there, so if you spend money on a renovation, then you’re increasing the property’s value generally by double the value of that renovation – again, fast-tracking and supercharging your portfolio and getting to your end goals quicker.
Kevin: Frank, there are so many things I want to talk to you about. We’ll get you back in a future show, as well. But thank you so much for giving us your time today.
My guest has been Frank Valentic who is the founder of Advantage Property Consulting, and you can see him, of course, on The Block, as well. We didn’t even get a chance to talk about that. Maybe next time, Frank.
Frank: We will, no doubt. People will hopefully see us on the show giving some advice to the contestants on what buyers are looking for.
Kevin: Good on you, mate. Thank you for joining us today, and we look forward to catching up again soon. Thanks, mate.
Frank: No worries. Cheers.