CURTIS
Welcome back to another episode of Brisbane Property Pulse. We are lucky today. We've got our very first guest on the podcast, a good old mate of mine, Andrew Ready, who is in the finance world, working at The Brokerage now.
Like I said, we go back a little way. We started playing against each other in rugby back in school, maybe Year 9 or 10.
ANDREW
Yeah, against each other. Terrace, State High.
CURTIS
Then post that, we started playing representative footy together, made a few rep teams together and went on and spent a few years at the Reds as well. We've stayed connected and now we're working adjacent to each other in the property field.
It's good having someone you have a lot of trust in and a long-term relationship with to bounce ideas off and talk client scenarios through.
Andrew, do you want to talk a bit about your journey to today?
ANDREW
Yeah mate, thanks for having me. It's a different setting to where we usually found ourselves - on the rugby field or the training paddock.
CURTIS
Or the bar.
ANDREW
Definitely at the bar. Don't forget we also lived together as well. They were all good times.
Like Curtis said, we've both finished up rugby now and are back in the real world. Curtis has obviously been there a little bit longer than I have, but I've jumped into the finance industry in residential mortgage broking at The Brokerage, which has been a fantastic two years nearly.
I've learned a hell of a lot. I think having that rugby background has really helped with my network, talking to people and creating those relationships through rugby, then following them through post-rugby as well. I guess that's how I found myself here today, reconnecting with long-term mates through rugby.
CURTIS
Who's the main client that you typically service in that space? You mentioned residential, so I imagine you're talking homeowners.
ANDREW
At The Brokerage we have three arms. We've got the commercial side, residential side and a private fund.
For my typical client at the moment, being new into the industry, it's first-home buyers - our mates, family and friends who are looking to enter the market and get their foot in the door. That's mainly been the client base for me so far.
But that's not to say I haven't arranged more complex deals. My first ever deal was a self-managed super fund deal with my auntie and uncle. Very complex from the get-go, but I'm glad I went through that because it put me where I am today and helped me progress quite rapidly.
Especially with the help at The Brokerage. There's a lot of care and a lot of knowledge there. I'm never going to say I know all the answers, but I know where to find them at The Brokerage.
CURTIS
Access to different lenders is one of the main reasons you use a broker, right? One of the first four or five questions I always have with clients is, "Where's your finance at?"
If they say they're speaking to their bank, my next question is, "Do you actually have your own broker?" Because the difference between having access to one bank and its products versus a panel of 40, 50 or 60 different lenders, each with a number of products, means the scenarios can obviously be quite different.
If you don't have a good broker, go find one. Give Andrew a call. They're worth their weight in gold.
ANDREW
The stats now show well over 80% of new lending is done through a broker. Gone are the days where you just go to your bank and they say yes or no. That's our job. If one bank says no, there are plenty of options out there.
CURTIS
It's obviously been a busy few months and the market has shifted. What are you seeing when you're talking to people on the finance front? Are people delaying decisions, reassessing their whole finance structure before deciding what they do next, upsizing or downsizing? What are the conversations like at the moment?
ANDREW
It has definitely changed since the federal budget. A lot of people are probably conservative at the moment, waiting for other people to start making the first move.
People are restructuring and finding out what the best path is for wealth creation. Normally it was, "Go get the investment property," but now there are all sorts of avenues they can take.
With the negative gearing changes, people's borrowing capacities are reduced quite significantly at the moment.
CURTIS
In real terms, what are you seeing? Say someone was pre-budget pre-approved for a million dollars. What has that actually shifted to, generally speaking?
ANDREW
We're probably seeing a reduction of $100,000 to $200,000 in serviceability, which is quite significant.
Again, it depends what your strategy is. If you're buying existing, that's not going to help you. But if you're going to buy something brand new, we can use those old rules to get the deal across the line.
CURTIS
It's become a bit of: I've got a million dollars - do I deploy it here, or $800,000 or $850,000 and deploy it there? It's not really comparing apples with apples, but it's weighing up the different scenarios and what you think is actually going to give you a better return. You're still deploying the same amount of capital on your end; it's just the leverage.
ANDREW
Absolutely. It's how much you're borrowing. It definitely helps to have a good accountant or financial planner in your corner as well, advising on those structural changes.
CURTIS
A lot of people are refinancing and restructuring. Are you seeing people just sitting on those refinances, or are people actually making property moves? There's been a lot of chatter around people upsizing in this sort of market.
ANDREW
Very much getting their ducks in a row. But as you said, it's a great opportunity to potentially upgrade your owner-occupier.
We're seeing a lot of people consolidating debt - personal loans, credit cards - so they can get their ducks in a row to make their next move.
Construction loans as well. If you've got a renovation you've been putting off for a while, now the market has slowed, it can be a time to put some capital to work on a renovation, potentially sell and then upgrade to the next property.
As life goes on, families grow and you outlive the space you're in and want to upgrade.
CURTIS
Whatever someone's next move is, the finance piece is critical. If you can front-foot that - whether that means restructuring things, rolling or consolidating debt - having the funds available and ready to go once the opportunity presents itself can often be the difference between getting a deal or not.
If you find an opportunity and then you're scrambling with a broker or your bank to figure out whether it's actually doable, you've wasted time and the opportunity might slip.
ANDREW
Exactly. We're also finding people looking at their current owner-occupier and wanting to purchase their next house, but they can potentially use that existing property as an investment property under the grandfathered negative gearing rules.
CURTIS
That's definitely something I've discussed with a few clients recently. The original plan might have been to sell the family home and move somewhere else, but now it's become a discussion about whether they turn it into the investment.
Whether it's a good investment at the end of the day is another discussion, but the reality is they may not be able to get those same tax implications elsewhere. So it becomes a real discussion for a lot of people at the minute.
ANDREW
A perfect client scenario: I had a friend with quite a large portfolio - four properties - and he wanted to buy a fifth property. He came to me and said, "Am I going to have to sell everything to get this larger place?"
I said, "Let's look at this holistically. If you sell some of those properties you already have, you're going to lose that benefit forever. This new place we're buying isn't brand new, so we're not going to be able to negatively gear it."
We put it all together and managed to keep the four properties, then went to a different lender that allowed for a bit more capacity in servicing and enabled him to secure this big property down the Gold Coast.
It's his forever home, but he can't live in it at the moment because he's overseas. Having a good broker in your corner was probably the key there.
CURTIS
Again, moving to a different lender shows why access to lenders matters. Policies change from one to another, and how much you can borrow changes from one to another.
That's obviously a huge difference from selling everything to buy a place, versus being able to retain it all and still get the place. If you forecast that out 20 or 30 years to retirement, it's potentially a huge game changer.
ANDREW
Absolutely.
CURTIS
Talking about people moving - either upsizing, downsizing or moving on to the next family home - there are obviously a few pieces of the puzzle that need to move to make that happen seamlessly.
From the finance side, what does that look like? How does someone actually go about moving from, say, their first home and upsizing into the next?
ANDREW
The number one thing is a bridging loan.
Effectively, if you have a $1.2 million property - your first property - and you only owe $200,000 on it, you've got about a million dollars worth of equity there.
If you then want to purchase something for $1.5 million, the bank can take both securities and give you a short-term loan of about $1.7 million - the $1.5 million purchase price plus the $200,000 existing debt.
You'll have $1.7 million peak debt over that period of time. Then, subject to the sale of your house, if you sell it for $1.2 million, the net proceeds can clear that debt back down. You'll be left with approximately a $500,000 end loan on your new $1.5 million purchase.
That doesn't include costs or stamp duty, but those are the basic numbers and how it works.
CURTIS
So in simple terms, you're basically buying your next property before you sell this one. The bank is funding both, understanding it's a short-term arrangement.
ANDREW
Correct. It can be pretty expensive. We're not talking normal 6% interest rates. We're probably talking closer to 8% to 10%.
CURTIS
But it's over a short period of time if you've got your ducks in a row and you're moving.
ANDREW
Correct. They can be done very efficiently. I had a client scenario where, luckily for the client, she was in real estate. They managed to do it and I think the bridging loan was only active for about a week.
They did really well and achieved their goal - upgraded from a townhouse to a house. They've got a young family now, two kids, so it was a really good outcome for them.
CURTIS
Is there much in the way of setup cost with those facilities, or is it really the added interest cost over that period of time?
ANDREW
The lender will want to take both securities, so it's all done in-house at one lender. The costs are pretty similar to a standard residential loan.
There are obviously pros and cons. If you have sale issues, it's going to increase those costs each month.
But there are many ways to do this. That's the bridging-loan component. There's also simultaneous settlement, which we try to achieve.
That's where it's crucial to have the sales agent, buyer's agent and broker all on the same page. We're all talking and we can help the client achieve what they want without significant cost and risk.
If you have a genuine client who's looking to upgrade and purchase, it's good if their current house is well maintained, issues have been fixed and it's ready to be put on the market so we can arrange 30- or 60-day settlements and align them together.
CURTIS
Risk is an interesting point. If you're doing the bridging finance option, the risk you take is that you've already purchased the home and then you're in a situation where you have to sell your original property.
Until you take it to market, you don't really know how the market is going to respond and what the offers are going to be. You hope you've got a good agent and a good feel for what it might be worth, but the risk is that it's unknown until you're in that situation.
If you can arrange a simultaneous settlement, that risk is removed.
ANDREW
Exactly. The best way to do that when you're making the purchase of the next property is having a subject-to-sale clause in that contract. It gives you the ability to market your property and get the price you need to make that next move.
CURTIS
It's obviously a pretty onerous condition to put on the vendor of the property you're trying to buy. Depending on how competitive that property is and the other offers on the table, it's not a favourable term for the vendor.
But if you can negotiate it in, it eliminates that risk and the extra costs involved with bridging. Most importantly, you know what you're getting for the property you're selling and how that pieces into the property you're buying.
With bridging, if you're out $50,000, $100,000 or $200,000, that's a big difference on your mortgage at the end of the day.
ANDREW
Then it comes back down to income and servicing. It's good to have your ducks in a row and make that transition as seamless as possible.
CURTIS
For me, the way I see most clients do that is: get your place ready and engage with sales agents early. Get everything ready so the moment you find a property and we negotiate that subject-to-sale condition, you're ready to pull the trigger on the sale straight away.
The clock is ticking. The vendor isn't going to give you three months to sell your home while they sit on the property. You need to be proactive - get your finance in order and have the sales agent ready to take your place to market.
ANDREW
How are you finding that on your side? It is a bit slower now. Vendors aren't necessarily getting desperate, but they are wanting to move. Are they becoming a little more relaxed with these types of clauses and arrangements?
CURTIS
Twelve months ago, subject to sale was almost impossible to get in unless you were paying an ultra-premium to get that condition, which has its own issues attached to it, including valuations.
But I've seen it creep back into the market now. I think most agents will tell you it's a condition you can negotiate into a purchase a lot more easily than you could over the last 12 months.
That's good because it gives people confidence to make a move. It's obviously not ideal for the vendor, but if that's what it takes for them to get the price they feel the property is worth, we're seeing that happen more and more.
CURTIS
I know this is something else we've been speaking about over the last few weeks. With the grandfathering of negative gearing, we're seeing a lot of people who might have been looking to buy an investment property now looking to turn their first home into the investment property while they make their next move or upsize.
Those first-home buyers are moving into that sort of situation and retaining the current property as the investment property to have a little bit of growth. They get the rental income and it might be close to neutrally geared or still a little negatively geared, so they can get a little boost from retaining their existing home as the investment.
Are you seeing similar people come to you with that sort of strategy?
ANDREW
It's a strategy we've seen a fair bit through enquiries from people who purchased under the first-home grant four or five years ago with a 5% deposit. They've discharged the government and now have a healthy amount of equity sitting there to deploy for the next purchase.
People are starting to think outside the box with the new federal budget outcome. How can we retain the existing property that got us in the door and benefit from those older rules with negative gearing?
It's definitely a viable option for people to explore.
CURTIS
I think it's a particular profile of person that it suits more than others. Anecdotally, from the conversations I'm having, it's probably those earlier-stage owners. It's their first property.
I'm not seeing it so much with a middle-aged couple with kids. They're not looking to move out of the family home to turn it into an investment - that's their home.
But for those first-home buyers, where it was probably never their forever home anyway and they were probably going to sell to upsize into the next home, now it becomes a consideration: maybe this turns into an investment.
It's easier because there may never have been as much emotional attachment to the property in the first place. They realise the first home was probably never the forever home.
It's also a way they can lean on some of those benefits to get into the next one.
In situations I've seen, over that period they've probably had a few pay rises, a promotion or a business that's started to kick off really well. They have the extra serviceability to get the second property compared to when they purchased that first one and got their foot in the door.
The slight negative gearing of that older property isn't as much of a concern because their position in life, through their career and income, is offsetting that.
It's a way they can keep the investment property without all the extra transaction costs - sales agent fees, potential capital gains and the costs of selling and replacing the asset.
ANDREW
Exactly. It's definitely something to consider, especially at the moment with the new rules. But everyone's circumstances are different.
You're probably looking at clients who are a young couple, got their foot in the door, have had a few pay increases, are climbing that ladder and thinking about a young family.
Moving from that apartment or townhouse to a house is definitely something worth exploring.
CURTIS
Being able to retain it and get the rental income means it might be close to looking after itself. Any slight losses may also have tax implications. It's definitely a conversation we're having a lot more since budget time.
CURTIS
We touched on it earlier. Brokers give you access to a wide range of lenders and their products, and each lender will calculate someone's situation differently in terms of how much they can actually borrow.
It becomes particularly important for self-employed people. We've walked through scenarios before where the variance between what you can borrow with Lender A versus a second-tier lender might be 40%, 50% or 60%.
One bank might be offering you $800,000 and the next one offers you $1.5 million. It's obviously a wildly different scenario in terms of what you can do.
What sort of difference do you see when assessing self-employed deals and what's actually achievable for people? Because if you just go straight to your current bank and they say, "You can only do this," that may not be the whole picture.
ANDREW
I obviously can't give you a solid figure because it definitely varies.
Even at the top-tier lender side, self-employed can be very complex, but that's our job - to find the answer and the solution for the client.
There are top-tier lenders that love the self-employed space and other top-tier lenders that shy away from it. That's the benefit of having a broker, because we know where we need to put these particular deals.
It depends whether it's trust or company income, whatever it may be.
As a broker, we love the complex stuff because we try to avoid having to go down the alt-doc, low-doc, accountant-letter or one-doc scenario where we can. We talk to the BDMs and different lenders to get them familiar with how the company is structured.
Again, it's good to have an accountant on your side who can paint that picture as well.
It differs massively. We talk about top-tier lenders, but then we go down to second-tier and even non-bank lenders, which can be really flexible with self-employed income. They want to get deals done.
When you look at it holistically, the pricing isn't necessarily that far off a top-tier lender, but you get the deal done. It becomes a matter of whether you want to secure the property or you're happy to let it go and sit on it for another year, two years or three years.
CURTIS
What are some situations where self-employed people or business owners put themselves in difficulty with financing?
We've spoken before about trades, for example, where they'll have a lot of trade accounts open. Is that a big hurdle because that all comes up in your credit score? What are some things you see that can put a handbrake on their ability to borrow?
ANDREW
In the trade space, we definitely see that a lot - some not-so-healthy credit scores, but there can be a good reason behind it.
As long as we can paint that picture and tell that story to the lender and get them comfortable - "This tradie has multiple trade accounts open; cash flow comes in, cash flow goes out" - most of the time they're willing to look at it.
Again, it comes down to which lender has the greater appetite for that particular client.
CURTIS
How do clients respond when you're walking through scenarios and showing them a big difference - maybe $800,000 here and $1.5 million over there, for example?
An entrepreneur or business owner is probably going to be excited to go and do things and get stuff done. But there's probably also some internal anxiety around lumpy cash flow, because for most business owners the income is different month to month.
The repayments between $800,000 and $1.5 million are going to be significant. How do you see them grappling with that?
ANDREW
It's always a great conversation with the client. A lot of self-employed clients are comfortable with risk and have a mindset of making things work.
Someone could be conservative and take the $800,000 option, while others may have a greater tolerance for risk and choose the larger loan.
They've also got support behind them - a good accountant, financial planner and broker - so they know they have professionals helping them make those decisions.
CURTIS
I think there's definitely an aptitude for those sorts of people. Their internal monologue is already, "Let's have a go and get it done." Right or wrong, that's often the dialogue business owners have: we'll make it work.
But every business is so different, so it's about piecing together their situation and then being comfortable making those payments at the end of it.
ANDREW
Exactly. It doesn't necessarily have to be tradies either. These are business owners across different industries.
We've seen scenarios where parents have a family trust and distribute funds to their kids to help them get into the market. The kids may be on starting wages looking to buy in Brisbane.
There are lenders where, even though the kids aren't controllers of those family trusts, they are beneficiaries, and we may be able to include that income in addition to their PAYG salaries.
The structure is there for a reason and it can also have the benefit of helping the kids buy their first home.
CURTIS
Maybe your kids.
ANDREW
Maybe your kids.
CURTIS
I appreciate your time, mate. To wrap it up, we've both transitioned from rugby into property-related fields. What drove you to get into the space? What was your motivation to get into finance and property?
ANDREW
I retired in 2024 and had no idea what I wanted to do. I came back from France and the world is a scary place - there are a lot of avenues you can go down.
I've always had an interest in property and property development. I went through my network and went down to Easts and played another two years there.
The club president, Troy, who's one of the directors, threw me a bone and said, "Do you want to come in and do some work experience on the finance side of things?"
I thought, what better way to learn about property and property development than going down the finance route?
I know you tried to get me to come work for you, but I didn't want to work Saturdays.
CURTIS
Although you do find yourself working Saturdays now.
ANDREW
I do. I work Saturdays now to be an extra support for clients when they go to auctions or open homes. I've attended a few auctions now just to give clients a little nudge and say, "Yeah, that's probably where you're at."
I'm nearly two years in and complete my mentorship midway through this month. I'm absolutely loving it and I'm glad I've gone down this route.
On the flip side, mate, I'm loving what you're doing as well and putting yourself out there. When you start rugby, you always look up to people who drive and do the extra things, and what you're doing in your space is admirable.
CURTIS
Cheers, mate. I appreciate that.
One thing I've enjoyed about watching you over the last two years is that you've been able to help so many ex-players as well.
There's only a small group of people who ever get to experience that professional sporting environment. It was one of my triggers for getting into the advisory space too. I was seeing teammates saying, "My manager put me into this property," and I'd look at it and think it was rubbish.
Knowing there was potentially a referral arrangement from a manager who was meant to have that client's interests at heart pushed me to want to get into this space.
It's cool for me to watch you now being able to help people, especially those playing overseas, get their finances sorted so hopefully they've got something when they retire.
Professional sport is a short game. If you don't get your stuff sorted in a relatively short amount of time, a lot of people can leave that space with not a lot.
I love seeing you help a lot of players as well, mate.
ANDREW
Mate, thanks for inviting me. I've loved it.
CURTIS
Cheers.
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