How ‘incompatible’ mortgage brokers almost derailed these property investors’ journey

According to him, the husband-and-wife team that they got acted as their mortgage broker and financial planner without a deep understanding of their goals, capabilities, and limitations as property investors. The wife, who is the financial planner, told the couple to “slow down” because they’re young and they already have two properties—they could be spending their time and money to pay off their home loan.

Brendon said: “That sent [Courtney] into a spin.”

“I was gobsmacked,” Courtney reiterated.

Aside from suggesting that they should slow down, the duo also recommended cross-collateralizing.

According to Brendon: “I said ... ‘What happens when we go to sell our owner-occupied or move on and these are all 100 per cent leveraged against our owner-occupied?’ And she said ... ‘That's alright. Just wait until they've gone up 20 per cent in value, then you can just untie it.’”

Having only started their property investment journey, Brendon and Courtney decided to trust the property professionals they are working with—a decision that almost totally affected their portfolio.

Courtney said: “I knew I really should've fought harder. I remember sitting at our table saying ... ‘We would like them not tied’ … [but] she really pushed us in that direction.”

“I really should've said ... ‘Thank you but no thank you. We'll find someone else,’ but I think [I] was so [enthusiastic] ... that I wanted that next property and, therefore, we moved forward,” she added.

Lesson learned

Smart Property Investment’s Phil Tarrant believes that Brendon and Courtney are among the many budding property investors whose decision-making become clouded by their “over-enthusiasm” about wealth-creation.

According to Phil: “It's easy to rationalise something if you really want to rationalise something … You [can] go, ‘It's okay because of this reason and I'll still [get] the same output.’ ”

“It's nice that you ... look back on that and go, ‘You know, maybe I didn't do that right ...’ Hopefully, you won't do it again,” he added.

Brendon and Courtney soon found a new mortgage broker, who has already helped them get pre-approval for their next property purchase. They are also looking into working with a buyer’s agent to assist them in researching about the best suburbs to buy properties in.

After their unfortunate experience with their first mortgage broker and financial planner, the couple now strives to be part of a productive teamwork instead of entrusting the big decisions to the property professionals.

According to Brendon: “It's a bit of a team effort, I guess. Like, the mortgage broker, the buyer's agent, the financial planner, and the accountant, they all work together closely, so, I foresee that it would be a matter of sitting down with the financial planner and the buyer's agent and seeing what property we need next to compliment the others [that we already have].”

“We're at a point now [where] not any old property will do … I would definitely be grilling them a lot more than I had in the past,” Courtney added.

‘Keep challenging yourself’

Despite having a negative experience with property professionals, Brendon and Courtney recognise the value of a good financial team in their property investment journey.

However, as much as they need their guidance and advice, they also need to continue educating themselves to be able to challenge these professionals and make sure that they are actually steering them towards success. After all, an expert’s advice does not always equate to the best advice which is specific to your portfolio’s needs.

Courtney said: “I am actually scared of that, to be giving our money to someone, saying, ‘Do what you want with it’ because they're not going to work as hard for you as you would work for you if you ask my opinion … I'm a lot more on our side than I was previously—I think we’re a little bit too trusting to start with.”

At the end of the day, having a good relationship with property professionals is about striking a balance between trust and discernment.

According to Phil, take time to listen to your financial team’s advice, have a “legitimate look” at their recommendations, and communicate—be open about any thoughts or misgivings that you might have so you and your team can arrive at the best possible decision together.

“I always like to keep learning and challenging myself and we've obviously got a passion for property, so we'll probably be those type of annoying hands-on people,” Brendon concluded.

Tune in to Brendon and Courtney’s episode on The Smart Property Investment Show to know more about how they made the transition from being property buyers to being property investors, as well as what they have learned through the properties they bought and how it has impacted each purchase.

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