28 Feb The biggest mistakes investors make – George Raptis
George Raptis, from Metropole Properties in Sydney, talks to us about one of the biggest mistakes he sees investors make. At the same time, we discuss the difference between buyers agents and strategists.
Kevin: This is a fascinating subject. I love talking about it because it’s something that a lot of property investors totally miss out on, and that is the importance and the value of bringing people who have already experienced a lot of the things you’re going to experience along the way, and that’s building a team, because so many people think that you can learn a lot more by doing everything yourself. That’s a great way to lose some money.
George Raptis joins me from Metropole Properties in Sydney.
Good day, George.
George: Hi, Kevin. How are you going?
Kevin: Good, mate. How often do you see that, George, where someone thinks, “I’ll do it myself; I’m going to learn a lot as I get along the way”?
George: I see it a lot, unfortunately. Sometimes people think they can do it all themselves, but I’m always a big advocate of surrounding yourself with a team. For example, if you look at myself personally, albeit I’ve been in properties for many, many years – I don’t manage my own properties, I don’t do the maintenance on them, I don’t do my own tax, that sort of thing.
I guess, for me, I learned a very valuable lesson, and that was somebody said to me, “George, if you think it’s expensive hiring a professional, wait until you hire an amateur.”
Kevin: There is another saying, too, that a good friend of both of ours uses all the time, and that is that you should surround yourself with people who are better at doing things than you are, and if, in fact, you’re the smartest person on your team, then you have a real big problem.
George: Exactly right. You need to surround yourself with a team of professionals, Kevin, definitely.
Kevin: Let’s look at property, then. On your team, who would you have? There are the no-brainers, like you need an accountant who is familiar with property.
George: Yes, you definitely need a good tax-savvy accountant. You need a smart lawyer, someone who can help you with asset protection, a proficient mortgage broker, someone who can sit down with you and go through finance strategies, not just get you pre-approved for pre-approval’s sake, and obviously, an independent property investment strategist, not someone who sells property or who has a vested interest in helping the project marketers and the developers of the world, but someone who is independent and truly on your side.
Kevin: Yes. Let’s have a look at a few of the issues that you raise there because they’re quite real. That one that you talked about getting someone who is a property strategist as opposed to just a buyer’s agent who may, in fact, even be representing the properties that they’re suggesting you should buy.
George: Correct. What’s happening is, unfortunately, if someone is representing somebody else and trying to push somebody’s else’s agenda with regard to offloading off-the-plan type properties or house and land packages – that sort of thing – I always say to potential clients, “How can somebody like that give you untarnished or independent advice when they have a big carrot dangling at the end of the day?”
You really need someone who doesn’t have a vested interest, somebody who is going to give you truly independent and unbiased advice. Like we say, maybe sometimes you also need an unreasonable friend, someone who is going to tell not what you want to hear, but something that is actual matter of fact.
Kevin: Yes, to tell you the truth, as it is. Also, when you’re looking at a solicitor, I’ve always found it’s good to make sure you have a solicitor who understands or at least has some affiliation with solicitors in other states because property laws do vary state to state.
George: Yes, they do. Unfortunately, we can’t use a Sydney lawyer to do conveyancing, for example, for purchasing a property in Brisbane, and that sort of thing. But they need to be au fait with what’s happening up there. Also, a lot of these solicitors, like you said, have colleagues and affiliates in various other states.
Kevin: Yes. I know as an agent, I used to roll my eyes every time if we had someone from another state who said, “I have my local solicitor who will handle it for me.” I’d know straightaway that we’re in for trouble because contracts are so different state to state.
George: They are. A property-savvy conveyancer is also very important. I’ve seen over the years where people have missed out on potentially really good deals as far as purchasing property is concerned because the solicitor they were using would be litigating in court all day, and their file would be underneath a pile of other files and they’ll get around to it when they can. Conveyancing wasn’t really top of mind as far as their priorities were concerned.
A good firm that’s very property-conveyancing-savvy is really important to have on your team.
Kevin: George, just to wrap it up, I guess the big lesson here is certainly learn from having other people around you but don’t think that you can learn on the job. That’s the quickest way to fail and actually lose money.
George: That’s right. Exactly right, Kevin.
Kevin: George Raptis from Metropole Properties in Sydney.
George, thanks for your time. I’ll let you get back to you and your team.
George: Thank you, Kevin. Have a good day.