Smashed Avo Property Podcast with Jordan de Jong

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"Property Investors, banks are your best friends, even though you might not feel that way. Banks are in the business of lending only. If at all, they are saying 'no', it is more for your (consumer) protection."

Who agrees to this?

Education is the key differentiator between Property owners and successful Property Portfolio owners.

Podcast Transcript

Jordan de Jong:
Welcome to Smashed Avo Property. Today, I'm speaking with Rasti. And boy does he have some credentials, Rasti has had three major careers, all in separate industries, studied all over the world including having a Master's of computer science, being an MBA and completing his CFA. Today he walks us through how all of these previous experiences, had led him to build a personal portfolio of 15 properties and has now driven him to help shadow others and guide, others on themselves.
So without any further ado let's get on with Rasti.

So, for the people who don't know you're going to give us a little background about yourself and what you get up to.

Vaibhav “Rasti” Rastogi:
First of all, it's an honour to be here talking to you and as well as reaching out to your audience out. Thank you so much for having me on board and talking to you and your audience. Very quickly, I'm, I'm Vaibhav Rastogi people like to call me Rasti. I hail from India. I came here in Australia about 14 years ago. Background wise, I got few qualifications so pretty qualified and very competent what I'm doing now. And that actually helps me do what I'm doing now which is basically helping people build portfolios so not just talking about property, but building portfolio for us to get ahead of financial well being. My business name is Get RARE Properties, which is an acronym for Get Rich And Retire Early. And that is actually what I do: helping people to build wealth, so that they can retire early and pursue their passions.

Jordan de Jong:
Yeah, that's awesome, and when we talked the other day, you've got quite an extensive background at university and study sooner, walk through the list is a bit of that story.

Vaibhav “Rasti” Rastogi:
I've been honest passionate about properties from childhood. I enrolled myself in entering college with a specialization in architecture and, so I'm an Architect, but it was change in circumstances that aperture in my career, moved into it so became more of a data person with a lot of information systems. I got a Master's in Computer Science. But what was really great enjoying what I was doing. Then, because I was making money by investing in share market and properties. And I realized that the money that I make in my investments is not only taking less of my time by the head is more rewarding. And I realized that if I'm able to do this on my own. How good it would be if I can actually learn from from from the best of breed and learn and executed and serving the purpose of helping others I thought like making money is what I really want to do. So I let go everything I took sabbatical rather went for a full-time MBA, went to UNSW, Sydney and then later on to Chicago us to pursue my Master's in Business Administration (MBA), with a specialization in Finance. Of course, just by going for an MBA doesn't mean, get in a finance role. So I have to do Chartered Financial Analyst, which is a CFA designation, one of the best in the investment management world. So I pursued that, and combination of my MBA and my CFA got me in a role in Big 4 bank and worked as an investment manager. So in the last role, I was actually managing money in a tune of $2 billion, so it was pretty awesome what I was doing. I really thoroughly enjoyed it just that I found a bigger purpose for me what I'm doing now.

Jordan de Jong:
Yeah, I love this I love that you've got such an extensive background and. So, so many degrees under your belt like I love that, you know, one that you and I get on because you've got the computer science background, you're an architect as well studying to be an architect like that's just phenomenal. You can sort of see how all of these degrees have sort of transfixed into where you are now even there the CFA side and working for a big bank and managing large amounts of money and understanding how that'll work and bringing that to the property sector. So, you obviously got a ton of information in that head of yours, and I'm keen to share it with the listeners. At what point did you start investing?

Vaibhav “Rasti” Rastogi:
Yeah, so, it actually happened about 16 years ago, and in the year when I got married, we realized that we are spending a lot of money. And so the typical balance sheet was like we earn money, we spend money, and whatever was left while we were saving. We realized that, because I was kind of from personal research and, you know, trying to take some advice from people who have done it much better way before me. So that was what I got from the books and the people around was that we have to make a plan of force, saving and nothing beats on a regular mortgage on your head when the system change turns around, and it's more around the likes the lines off, you save you on money then use. Save, and then whatever's left your spin on it. So, that was the idea so within my first year of management. These were pretty much obvious like where we are heading towards. So we got ourselves a mortgage, so not a home but a mortgage.

Jordan de Jong:
Yeah, that's great. I think that's a common one when people are like, trying to park their money and trying to park their savings into an asset at least, and the more Australian dream it's you know when you've got property running through our veins in Australia so yeah it's a pretty common one and then from that.

How have you seen, I mean I know the size your portfolio because you told me the other day but for the least news, how did you transform that into what you've grown into today.

Vaibhav “Rasti” Rastogi:
I am an owner of 15 properties, built over seven years. So the property that I just talked about, like I bought actually was in India. But I love investing. So I started investing in the Australian market in 2011. I had a strategy to build a portfolio up to $5 million, because I'm very much of a believer that there has to be a plan, there has to be a strategy. And then it's more about being consistent and persistent in that approach. So, I envision myself having a goal of building a portfolio of $5 million. And within seven years I was luckily able to achieve that. And since 2017, I've not added on to my portfolio. Okay, now it's as a matter of letting it grow, consolidate it and get them mortgage-free. At the end of the day, it's the passive income from the properties that matters.

Jordan de Jong:
Yeah, that's the dream that everyone gets into it isn't it throughout the portfolio pay them down and then have the cash flow coming through and it sounds like you're well on your way.

Were you able to like leverage any equity or anything of that Indian property over to Australia or did you have to start from scratch over?

Vaibhav “Rasti” Rastogi:
I started from scratch over here. It gave me the confidence that I can go big over here or, I think, as you can appreciate that the two parts of it. One is the mindset like what do you want to do, how you can do it, and then getting to know the know-how of doing that. So, I had the mindset of investing and making money work for me. So that was pretty easy bit, for me personally. I've seen that people sometimes get stuck on that. But, once you know your why, once you know what you want to achieve, then it's more about finding the ways to do it. As we say like, if there is a will, there's a way. So, having the will I've spent so much time, energy, and money to get massively educated. And when I started to look for a property in 2011, I actually waited for maybe about 14 months just to figure out what to do or how to do in Australian market context. My Indian investment just gave me an exposure to how we can borrow money to make more money as it's more of a leverage that can make it work harder for you.

Jordan de Jong:
Yeah, using leverage I started from scratch, started. Yeah, yeah. Now that's awesome. And I'm curious about like, considering your following your passion now and doing what you love every single day and providing that education piece to so many people that need it, do you value your university degrees, to the extent, like how it's gotten you through your career, how what businesses you've gone through, you know, going to a major bank and having all that experience do you think that's still extremely valuable and transitioning to what you're into today or if you could turn back Tom would you go straight into what you're doing today.

Vaibhav “Rasti” Rastogi:
No, I believe that what I've actually gone through has actually helped me in every sense to do what I'm doing today. So just running through my career, I have studied architectural studies, so I know how spaces work because it's more about the appeal to the people, like don't we say property is bricks and mortar. To me, it's still about people like supply and demand. Demand is based on how people perceive the value of the property. The designers like to think how much productive the spaces will define the usability of the property or the area or the space the volume. So that has actually helped me a lot to visualize. To me, these are the spaces as compared to just the rooms. Second one is like when I've entered Information Systems, as an IT industry where my focus was more around database information systems. To me, what I have been doing now is like I'm very much data-driven person when it comes to the research. I'm not really just thinking that okay how do I feel about the design or how do I feel about the valuation actually get to the bottom of it like why or how a component of a property so for example swimming pool in the vicinity, like within the neighbourhood. How much is valued at, of course, I'd run different various ways of valuing the property. So one way is making the comparable sales. It's an art and a science at the same time, so I rely a lot on the data. So, having an understanding of running my own models like forecasting models, tracking systems of my own like actually building on my own. Now it's more of our data predictability. When it comes to my third career, which is investing, it's all about rewards returns people think about, to me, the first thing that comes to my mind is a risk because risk and reward are two sides of the same coin. And whenever we are talking about risk which is defined it isn't a paucity of expected, you know, like it's expected return that we can expect it, we have to also think in terms of a probabilistic model like what if we don't really go and bullish more from here but go bearish. How do we put it together in a property? I think of a particular property to serve me a purpose.

So the essentials of risk, and portfolio, are the key things when it comes to the lessons learned from my investment industry. And at the end of the day, we are talking about building wealth, and building wealth is all about investing, and there are lots of theories, lots of things comes to mind, and also understanding the risk appetite of people. The current circumstances or where they want to be. And that's what actually deploy as well as my philosophy, because we are designing something for individual. So financial planning is the key element that I take into account. So in my conversation with anyone property is probably, you know, third or the fourth topic that we are talking about. We're still talking about in our first few sessions; we are talking about what do you want, where you want to go. Are we okay to the doctrine of risk, what's the mindset that we are talking about that people are so scared sometimes?

Jordan de Jong:
Yeah, hundred per cent I think you know you can see how all three careers have really tied this whole process in together for you. You've got so many fundamentals and understandings of the whole process of not just investing but really starting with your why. And I think, you know, you've touched on that a few times so if a client was to come to you. Let's start with the process what is the process look like what are some of the questions that you'd ask about their why and what are some of the responses and tracks that you'd like to go down with, with a particular investor.

Vaibhav “Rasti” Rastogi:
First of all, I'll send a disclaimer that everyone is not at the same starting point, like they are different in their level of journey that they've taken their own risk appetite, their own understanding of financial freedom. It comes to the fundamental conservation approach that I take the first question is, where are you today like what do you do in your life, like in terms of what have you been doing since last few years and where do you see yourself in next few years. If you keep continuing to extrapolate on where we are with the journey, of course, we are all progressing so if you extrapolate that progress. Most of us are struggling with, with our money and time, along with energy. So it's a combination of three that we really need all the time, to be able to enjoy life and pursue our goals or pursue our passions. It's just that we feel so constructed around the pillars of life, that we have actually kind of given up on our passion. As a parent of two kids myself, I know how time flies very quickly. So how do we go and cherish those moments with them without really worry too much about our future or our career? So that's how I start. Probably enlisting like I talk about my own journey where I was 10 years ago, how I built my own portfolio. And would that be something, they will begin to consider and gauging their interest gauging their risk appetite. That's when we start talking about, you know like, there will be lots of questions on the way like why property or what if this goes wrong or what that was wrong. And as I said Jordan that we just couldn't really hope for the returns, without really taking into account the risk underlying risk around it. So I talk about my own strategies about risk, like what everyone should be talking about not just related to properties but also about the life, for example, human capital is the most valued thing in our portfolio. Have we actually showed the admiring of income protection. So having that kind of discussion around that, most of the people I've actually come across they said oh yeah my super has income protection. But my question to them. Do they really know what it actually means, because it can only cover the money for two years? What happens in the cut in the fourth and the following years, you know, So having that kind of financial planning element to mind discussions and property is just a way to achieve the financial freedom. I'm not saying, use only property. So to me again coming from a financial background, it's all about diversification of assets. When it comes to properties, then diversification can be very multiple kinds of ways that we can do it, whether it's for demography for location type budget. Even the types of the property, whether it's our unit or our house or land properties and then talking about strategies out there, such as a bit of a journey like there's no one size fit all kind of thing like it's more of a consultation process that I take.

Jordan de Jong:
Yeah, and I love that I think if covered, and I love how you said not everyone's in the same position and they're not like they're all starting at different sides and you might find that like you know someone, someone wants to get into investing because they do financial freedom like they don't want to be working their job and never retire at 65 they want to actually, you know, might be able to retire at 45 if they start investing now and you know, be able to pay off the house at that age or whatever it might be, but then along the journey as you say they might have kids and then they might realize well it's not really about the money as per se, it's not really about financial freedom it's more about giving me more time to spend with my family giving me more time to do the things that I want and you can actually see their journey transition or their, their reasons their why reason transition throughout their life and I think one thing that you touched on the other day when we were talking which really resonated with me is being a buyer's agent you know it's sometimes it's common to view a buyer's agent as, you know, someone who just buys one property for one particular person. And I think, you know, one thing that really got me with you was that you said look, I'm here to build a portfolio I'm here to walk you through that journey, I'm here to buy you know, six properties 10 properties whatever your goal is throughout the process it's not just a one-off purchase that, you know, we're going to get the commission and move on, you're actually there throughout the journey and there to help them build their portfolio and get them ready for the next stage and, you know, buy under market value. I think you're even telling you about a store the other day how you were able to use you know, keep a solid amount of money in that in a particular client savings. Then within a couple of months, the property had grown in equity you could refinance and then go against right away because of the way you position the transaction. So talk to us a little bit about how that journey looked for you throughout the process.

Vaibhav “Rasti” Rastogi:
Sure, it's a huge question so let me know if I actually missed on any of the aspects there so I'll try my best. So, rightly said that I'm not just about a property. So if somebody wants to just talk about a property, probably, I'm not really the right person. That's a disclaimer. However, who am I, is more about the financial freedom. It really depends on the individual how they define it from my consultation approach; I'll help them define it because this is the culmination I do daily. And of course, as I said, property is a way to get there. So if somebody wants to achieve financial freedom by investing in properties, I can potentially help from my knowledge from my experience from exposure. And from the education that I have behind me. How do I do that is, I'll probably share some statistics which you probably are very aware of is that 72% of property investors, hold only one property under 18% hold on the second property. So, essentially, 90% of property investors, hold only one or two properties. And it's only less than 1% of property investors who hold six or more properties. Now, if I go back to that statistics of 90% holding one or two properties. Because what the statistics say is that we need six or more properties, to be able to change our choices. What I'm saying is that, let me help you in your own journey you as a client of mine, you are the one bearing the risk. You are the one bearing, or enjoying the rewards of that. I'm just coming as a friend to handhold you educate you and take through the journey. I probably call you back. Suppose you're taking the wrong step. So it's like I've done, I've done things on my own. Again, going back to my qualifications experience. I will be able to help them. So, that is what I'm talking about too. It's more about, okay, what is the amount of passive income, you want to create for you to feel confident that you have a financial freedom. So start with that number to me. The end goal in mind with what we have is my start is our study point in the journey.

What people talk about what should be the typical asset base for people to retire. Not just financial freedom but also like to retire like what sort of numbers we're talking about. And that's me from my own background of financial planning because in my banking role. I was actually helping the financial advisor, so I was in a research advisory. So I used to sit with private bankers, they were talking to hundreds of individuals and the whole thing that I learned from those organizations was to have a very good clarity, not only your vision, but also the journey the milestones that you would that would help us to evaluate our journey, or like are we on track, or not. So having an end goal in mind having understanding where they are today, and where they want to be and then having kind of a mapping around there, and Jordan, as we know, planning is incomplete when it comes to property investing without really taking into account the leverage story, or the leverage strategy.

Because banks are best friends here, so I have made my own team around it, like qualified people who have worked, early, not just to get a loan, but rather think of it as a portfolio. So, my good mortgage broker friends will actually help me, evaluate the strategy, they are looking at their borrowing capacity, not just for the immediate purchase, but after we do this, what is the borrowing capacity looking like for the next one, because, you know, going back to the statistics were buyers shared that 90% of people get stuck with one or two is for a reason because they either are not really getting the benefits what we have told them, or as it's not working for them, or they're getting stuck with a boring capacity. So, having that kind of an obvious strategy evident thinking. Being aware of the roadblocks that what might happen. What might not. I get in front of the discussion. Those someone who's looking to buy only a property of course will be buying our property for the next few months. But my approach is, how do we plan for the whole thing. It's like the example that I talked about is, is building a tower, a 12 storey building right. We should not want to. We do not want to go and build one story and think, okay, now we are done, have a solid. Let's come back later on three months later on six months and then we'll put another story in and see the resources and then you think about the third story. To me it's blueprint the strategy is a blueprint that you want to put a per story building, that means how deep foundation we have today.

Jordan de Jong:
Beautiful. Well thank you so much again for your time today. I wanted to say a massive thank you again to Rasti. It's always very insightful to listen to other success stories, learn where they started, how they did it and how we may be able to replicate it. I'm always looking for more guests to come onto the show. If you're under 30 and have one or more investment properties, whether it's good, bad or ugly, I would love to talk to you about it, even if you're interested into getting into the property sector.

Let's have a chat. The main focus is to help other soon to be young investors with tips and tricks along the journey, learn from the mistakes that we have made and ignite the fire to set themselves up financially for the rest of their lives. If you want to see what else I'm up to, you can go to YouTube and find the smashed property podcast being hosted on YouTube, and plenty of other content that I'm putting out consistently. If you came for more content like this, make sure you subscribe and please leave us a review with any feedback for future.

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