YIP Investors Forum: Mortgage expert Scott McCray

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Sara Terrill:  You know we have talked about an interim investment plan, but if: (a) you don’t know how much money you can spend and (b) if you haven’t got that structured correctly then you can end up in big trouble.  So that leads us perfectly into the next presentation, which is straight on finance.  
So it gives me great pleasure to welcome Scott McCray.  Scott has more than 12 years of combined experience as a property investor and mortgage advisor.  You might have seen him showcase in the July 2011 edition of Your Investment Property, where he shared his story about how he built a 5 million dollar property investment portfolio.
Crucial to his success was self education, just as you are getting now and understanding property finance and that was quite a frustration when he first set out, was not understanding the banks lending criteria.  So let’s welcome Scott, he’s going to share his knowledge in that area.
Scott McCray, Smartline
Scott McCray:  So today I am going to share some things I have learnt about property, what’s worked for me.  It’s only one strategy, how the banks work and how to best position yourself to borrow money.  Usual disclaimer, general advice only.
Okay, my background.  So I am not from a property or finance background.  Actually I was born and grew up in Melbourne and I left here when I was 23.  And it’s always good to come back and hear people talking about proper football again.  
I worked hard, put myself through learning, went down to the corporate world, I moved to Sydney when I was 23 and I got a career in the fuel and fast food industries.  So Caltex and Ampal, KFC and Pizza Hub and I was doing okay.  And but I wanted to work at, I wanted more, I wanted more and I was just trying to, you know the corporate world wasn’t for me.  
So I wanted to build some serious wealth, I wanted to have more choices in the future and I wanted to get out of the corporate world.  So I looked at ways to make money which I am sure we all are.  And this was, I thought this about 12 – 13 years ago.  So you can build a business, you can invest in the share market or you can invest in property.
So which was the best way? Now back 12 -13 years ago all three ways were working pretty well.  So I did a whole lot of research and what I discovered.  I discovered three things, the majority of self made millionaires in Australia did it through property.  Property, this sort of blew me away, property in Australian capital cities, there is always cycles, but tends to double in value about every 10 years and there is a 100 year history there.  And the banks are always keen to lend for residential property.  
So I became an absolute junkie.  I went to every course, every seminar, read every book, I sought every strategy and trying to sift through it like Ian was talking about it, there is just, there is so much information, it’s worse now with Google.
So I was looking for that secret like we are all looking for that secret.  So I did is, I just took  what made sense to me, the common core strategy that had relatively low risk and I could do while I was still working.  So I suppose there is lot of strategies out there, but this is the most proven, most reliable, most consistent way to make money in property in Australia.  Quality property, quality suburbs and hold.  There is no more to it.  There really isn’t.  There is timing when to come in and out, but that is it.
So the secret, the more properties you hold the more wealthier you become, fairly straightforward.  As I said there is more to it, where to buy, what to buy, how to add value, how to raise finance, how to do it faster, but the core strategy is exactly the same.  Quality property, quality suburbs and hold.
So my story I did it.  I purchased 6 properties in 3 years, 5 in Sydney, one here in Melbourne and I only had the deposit for the first one.  So we bought well, I did minor renovations, waited some time, [really waited to the equity] to the next one.  So the result, so 10 years later, hold the 6 properties, they virtually doubled in value and there was a 5 million dollars [tag].  So it does work.  
Now there are so many strategies out there and there is no right or wrong.  All the different strategies work at different points in time.  Everyone has their own views on which is the best.  So regardless of your strategy, you have got to get finance.  So that’s what I am going to cover today.  How do the banks really work?

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