The Journey - Chris Ashenden

[ChrisAshenden]

Hello Wada,

Congrats on your success and all the best for the future.

Thanks mate, same to you.

I graduated wing 192 and spent a year and a half at Section 3 Wiri. I will know your face for sure

I am guessing Dannevirke has a slightly different pace to Counties and I'm glad you are still loving the job.

Stay safe mate.

Regards,

Chris Ashenden

(aka CAI87

[ChrisAshenden]

Hello The Dog,

Cool avatar mate. I was asked a similar question by someone on another forum a long time ago. I decided to tell a story about it and it was my reply then:


Let me tell you the story of the cappuccino, the fax, and the photocopier.

"One day a little boy who had taken property investors out to lunch one time too many decided he wanted to buy lots of houses. He studied a bit, met some property investors for lunch again, and realised this would require that he make lots of offers.

So the little boy met many agents and told them what he was going to do, and what he wanted. This had mixed success but the little boy soon found out that the whole process went a lot better when undertaken in the company of a CAPPUCINO.

The agents liked the CAPPUCINO too and soon enough informed the little boy that they would try to help him. The little boy thought that was great and told the agents to send their listings to him along with basic details concerning deferred maintenance, expected rents, GV and some idea of FMV.

Realising that time is the most precious commodity the little boy asked the agents to send these listings to him by FAX.

The little boy then headed home. On the way home he had another CAPPUCINO, and while enjoying it congratulated himself on this new found idea that time was precious. Taking this thought one step further the little boy sourced himself a photocopier and put it in his home office.

There the little boy took the 7th edition (2nd) of the Auckland District Law Society "Agreement for the Sale and Purchase of Real Estate" and set his creative 'little boy' mind loose. He created a standard "further terms of sale" page which included a finance/due diligence clause and a fax clause. He also created a generic back page to the agreement, with his solicitor's details. In his creative masterstroke, the little boy filled in the parts of the front page that he knew would be generic for all houses, such as purchaser (little boy and/or nominee), settlement date, possession, nil deposit etc. The little boy placed the agreements in the photocopier, and pushed the magic green button.

By now the FAX was chirping with listings. Completely wired on all his CAPPUCCINO's the little boy remembered that time is the most precious commodity, so he got another little boy to help him FILL IN THE BLANKS on the agreements. All that needed entering on each one was street address and purchase price. Thanks in part to so many CAPPUCCINO's this process was very rapid, although punctuated with frequent trips to the little boy's bathroom.

Soon the photocopier was running hot and the FAX was literally singing with offers.

Soon enough some of these offers got accepted and with a few more well placed CAPPUCCINO's the little boy bought enough houses in the next three weeks that he was able to leave his Policeman's costume at home and take up investing full time."


As my mumma tells it, the moral of this story is that if you value your time, then you should invest in a few CAPPUCCINO's, a FAX and a PHOTOCOPIER.


There is a sequel to that story, but it is much shorter. In the sequel the little boy realises that of all those magic ingredients, the most important was the CAPPUCINO.

Regards,

Chris Ashenden”


The reality is that if you are going to shotgun offers then it does no good at all if there is no one at the other end of the fax who is going to pick up the offer and present it to a vendor. I have been sitting in a realtor’s office as 100 offers came in the fax to much swearing and complaining from the principal who had to pay for the fax toner. Every single one of those offers was presented personally to the recycle bin right in front of me to the chorus of “bloody seminars”.

The point of this story is that I went looking for agents FIRST, and while most of them were not at all interested in doing what I wanted (especially the first 150 or so offers) I gradually picked out the agents who were willing to work to my format of the time (which I detailed above). This was largely a case of me SELLING myself to the agents and I got better at it and much more FOCUSED over time, which is why I went from a broad brush to a ball point.

Your relationships, your positioning and your time in the market all have a lag effect. Do NOT burn bridges where you can build one.

For your information the top agent from those first few months went on to sell me (she would also sell FOR me) well over 50 houses over the following 18 months. Agent number two would have hit the 15 mark and agent number three around about 5. Agent one and three would have gone further but both got a bit greedy (especially the first one, who came to resent my success, though I had made her a TON of money?) and fed me a dog each (at different times) and that was pretty much the end of that. Any way you look at it, that is a LOT of commissions and not once did they have to put me in a car and show me a house.

We work with a broader range of agents now (and do a fair bit of private buying mostly by referral) and we are much more targeted. I am no longer totally up to speed on the market as I have passed that role on to my buyer who represents us/me to the market to various agents. My position on the market is such that we are now one of the three largest ongoing buyers and are on the very short list of who to call with hot listings. I have NEVER FAILED TO SETTLE a house that was brought to me and met my criteria. This is vitally important. We also reward success and if an agent brings me a good do-up deal then we are likely to hand them a listing when it comes time to sell.

As for renegotiating, yes I will. I was originally anal about this but for a couple of thousand dollars here and there you miss out on a lot of good deals. Obviously the house must still stick to my buying rules.

For your information I did subsequently buy a few houses from offers that were originally rejected. Quite often by re-presenting the offer a month or two later and sometimes from the vendor calling us asking: “um, about that offer”

If I was starting in a new market, I would do a couple of things:

1) Especially if I was a beginner, I would pick one market and get to know it very well, this gives you a performance advantage over 95% of the other buyers out there.
2) While you can buy well in any market if markets are hot where I am and I was a beginner I would move to where the going was comparatively easy, yes MOVE - or at least commute. This will make life a lot easier, there is no need to fight the herd.
3) I would go looking for agents and build my BRAND with the agents. For me it was I WILL SETTLE ON EVERYTHING THAT MEETS MY CRITERIA (this is great for agents) and especially now I CAN BUY HOUSES FOR CASH - IN THREE DAYS (this is great for anyone motivated to sell quickly). On this note, it is not uncommon for a listing agent two months into a listing to get a call out of the blue from a vendor saying, “my house is being taken by the bank tomorrow” – especially in circumstances where the mortgagee will list the house with a different agent, don’t you think you would now have an agent AND a vendor who want to sell this house quickly? Who are they going to call if the Ghostbusters' phone is busy? In this position, your track record and your positioning in the eyes of an agent are vital if you want to be the recipient of a phone call. Just as important is your ability (and market knowledge is huge for this) to take ACTION.
4) Make written offers. Look at houses (either before or AFTER your offer, depending on you, but if you look at a house, MAKE AN OFFER). Repeat.


I hope that helps.

Regards,

Chris Ashenden

[ChrisAshenden]

Hello Ivi,

Hi Chris, reading your posts with glee, roll on boredom.

Thanks mate. And its true. I doubt Graeme Fowler or any other recidivist property purchaser on this forum finds it any different........."oh look honey, another mortgage"

Regards,

Chris Ashenden

[ChrisAshenden]

Hello Cliff,

Great, inspiring post Chris.

Thanks mate.

Your post has inspired me to look at increasing the velocity.

Those sound like majic words to me mate. I'm stoked.

Which of KCs events would you recommend?
Business School for Entrepeneurs or Numbers Don't Lie?

Having been to both, if you are serious about wealth and the financial knowledge that needs to go with it I would say attend both.

Business School is a priority and if you can only do one, it would be this one all day long. They are very very different. KJC's Businss School for Entrepreneurs program is the single coolest thing I have come across for anyone SERIOUS about spectacular. I have made a lot of good investments and this is number one. I would SWAP the LOT rather than have missed out on this course.

Numbers Don't Lie is pure "Tool Belt" and a very different type of course. I thoroughly recommend it, as Keith takes the complex and makes it remarkably simple. I haven't seen another teacher for this type of course who has played at Keith's level with the tools he is teaching. I am going to repeat the course in Australia this year.

So if you can, do both.

Regardless of anything else - do the Business School for Entrepreneurs AS A PRIORITY.

Regards,

Chris Ashenden

[ChrisAshenden]

Hello Robot,

For you or anyone else interested in Keith Cunningham's Business School for Entrepreneurs your best bet is to email

[email protected]

Rita (Keith's assistant) will email you back pretty quickly. Tell her what you are after and that some annoying skin head property guy from NZ told you to email her.

Feel free to check out the website too, www.keystothevault.com.

Were I you I would book a spot fairly quickly.

Hope that helps.

Regards,

Chris Ashenden

[ChrisAshenden]

Hello Marcus

.....
I have been out of the loop so to speak for the last few days as I have been tied up playing in my new swimming pool. It was however a garage prior to the torrential downpour the other night.

Hope you are ok mate and thanks for your comments.

Is KC cutting Australia out after this year, or is he winding up his programme altogether?

John L is correct. Keith is not looking at coming back down under unless he boosts numbers to make it worth while parking up across the world in a hotel room for a couple of months a year. He operates by referall only and while the US events regularly sell out early his Australian exposure has declined with a corresponding drop in numbers.

I am referring everyone that convinces me that they are hungry but I would still suggest booking for Australia sooner rather than later to save the cost and time of flying to Austin, Texas a couple of times to do the course. There are major networking advantages to doing it in your own back yard too.

We should talk and arrange a day to meet up before you run off to Europe. I'll drop you a line in the next few days.

I am now leaving for Europe a week earlier so will be flying out next Saturday. When you stop floating around your house, give me a bell, it will be good to catch up.

Regards,

Chris Ashenden

[ChrisAshenden]

Hello duvetray/Ray

A great read, i loved one of your key words ACTION thats whats its all about and one key word i keep on my goals list, and what each and everyone of us has to battle with, I find once you take that first action you are immediately thinking if it was a positive outcome of taking it to the next level and the act of Action creates MOMENTUM which need constant FUELLING from INSPIRATION which you have just given me another boost of.

Thanks mate. I am glad you enjoyed it and I am in complete agreement about the importance of ACTION.

Like I said earlier, ACTION is my drug of choice.

Regards,

Chris Ashenden

[learner]

Hi Chris

Very impressive progress in such a short time! Well done!

Two questions: you mentioned being "rent reliant" a couple of times in relation to how banks view investors. How do banks view investors who are rent reliant, and how do banks respond to them when they are approached about more loans?

[drelly]

Isn't saying that you're "rent reliant" like telling a retailer that they're "customer reliant"?

[Marcus]

Isn't saying that you're "rent reliant" like telling a retailer that they're "customer reliant"?

... or a fish, "you're water reliant!"

[Josko]

Hi Chris, I could'nt resist....

recidivist
A noun
1 recidivist, backslider, reversionist

someone who lapses into previous undesirable patterns of behavior
Category Tree:
entity
╚object; physical_object
╚living_thing; animate_thing
╚organism; being
╚person; individual; someone; somebody; mortal; human; soul
╚bad_person
╚wrongdoer; offender
╚recidivist, backslider, reversionist

I like that, I like any word that has ivi in it, though it does look like one of those discriptions one captures from the force.

Yes, no doubt it is a habit, I am sure only a small part of the many habits worthy of accompanying the job. I'll try not to be too didactic, two favourite words of mine being, divine individual, victory over any habit falls into the following adapted mantra;

"Today is victory over yourself of yesterday, tomorrow be victorious of yourself a better being..."

Thank you for the additional notes mate, I am buzzing with new vigour...

My Best Regards,

[ChrisAshenden]

Hello Learner,

Thank you.

Two questions: you mentioned being "rent reliant" a couple of times in relation to how banks view investors. How do banks view investors who are rent reliant, and how do banks respond to them when they are approached about more loans?

Banks look at a number of things when trying to decide whether or not to give you money for a purchase but at its most basic level it comes down to the individual in the bank and it being easier for them to say yes than to say no. This generally requires you to tick all their boxes, and (assuming they are happy with the asset/security) can be broken down into three broad strokes:

YOU, your history, your situation, their exposure to you, etc
LOAN TO VALUE RATIOS, both on the loan you are applying for and your entire position
DEBT SERVICING, your total existing income plus the expected income from the purchase. Most banks will look at around 75% of a residential property's gross income as being available for debt servicing. There are many interesting formulas that the different banks use but this is a general guide.

You are rent reliant when the amount required for total debt servicing exceeds YOUR ability to service it in the absence of receiving rent. Hence you are reliant on the rent. Being in a rent reliant position will actually occur to most property investors quite early in the growth of their portfolio, and the banks just treat it as part of the equation. It shouldn't slow you down until you get to a reasonably large size and/or you grow very fast.

Lenders will also get concerned about their exposure to you and as this number increases you will tend to be moved to a different part of the banking organization. Some banks will still advance you money as you grow but will want to move you to a commercial (or asset) lending basis quite quickly which will generally result in lower lending ratios. Lenders all have their own rules and people so expect much variation between them.

I have found Wizard for example to be very good despite the size of my portfolio and each time their exposure (actually the underwriters exposure) hits a new level it is normally a matter of waiting 6 months or so and then they will lend me a bit more.

I may be wrong but I am guessing you are reasonably early in your REI career so to be totally honest with you, DON'T WORRY ABOUT IT.

If you want a large portfolio make sure every property you buy to keep IMPROVES your debt servicing ability. Keep your LVR at 80% or lower where ever possible and move to different lenders early. Some lenders are much more conservative re your overall position than others. So if you want to be HUGE a good idea is to borrow from the conservative ones early while you can and move slowly towards to more aggressive lenders as you progress. Talk to a good mortgage broker and arrange financing before you NEED it.

I hope that helped.

Regards,

Chris Ashenden

[The_Dog]

Cool avatar mate

This avatar has provided me with hours of memorising fixation. Hours, sometimes days can pass without me tiring of it, despite my body being deprived of sleep and food. Comparisons between finding this avatar and the discovery of Tutankhamen's mummy are flooding in.

Chris, thank you for the comprehensive answer. Not only did you answer the questions I asked, but also questions that were 'between the lines' and also knock on questions from your answer. It's apparent, from your pro-active answers and holistic view where your success comes from. Here is a brief summary of companies I have found don't offer such comprehensive answers yellowpages.co.nz .

A key factor in your approach is that the leads come from the Agents, and therefore the 'shot gun' approach is actually firing at clays launched from the Agents, rather than indiscriminate pop shots at passing birds in the local park. Given that the deals are actually pre-filtered before they get to you (by the Agents), the 1.4% hit rate certainly puts things into perspective as to how much effort is required to find the deals.

.....and fed me a dog

What can I say? Appalling behaviour!! I can only hope it was not a relative of mine. ( )


It's encouraging that deals continue from previously rejected deals, and this is where the sustained relationship comes in.

I was opposed to the 'shotgun' approach believing that it brings the IP community into disrepute, and although I'm sure 'random shootings' still occur, I can now see that it can be made to work in a professional manner. Thank you Chris.

Regards
The Dog

[drelly]

Hi Chris,

This continues to be a great read...

I'm interested in how you train your agents? Is it simply a case of "I'll buy anything I can get a 9% return on" or is there more to it? What exactly are your criteria?

[ChrisAshenden]

Hello The Dog,

Good sense of humour mate, I like it.

You are welcome re the reply to your post. Keep em coming.

You asked specifically about the period when I made the 350 offers in the month. These days we make a lot less offers, but they are more targeted and our hit rate (or conversion rate if you prefer) is correspondingly much higher - say 1 every 20 offers.

My buyer is very good but I am still continually pushing him to make more WRITTEN offers. I am currently in the process of broadening some of our 'funnels' to make this process easier. As fpr agents, the good ones when you find them are well worth their weight in gold. Buy them lunch every week if that is what it takes.

Good luck and happy hunting. If you have any more questions, put them out there mate.

And don't be afraid, ever, to hear the words NO in business or investing.

Regards,

Chris Ashenden