in the right place.

Hey, friends. Stephen Michael Miller here and we keep getting

questions from many of you all across the world that are saying, hey, how do I

do real estate in my area? And I'm gonna go ahead and address some of these. I'm

gonna start today with Australia. A lot of you in Australia want to know how to

do real estate the best in Australia and to be honest with you, I've never done

real estate in Australia, we've done a lot of real estate here in the US but I

believe that there are some similar things that you can be looking at when

you're looking to do real estate in Australia and some things that you can

be aware of as you're taking steps either to do real estate in Australia or

to not. As you're doing your research, things that you want to be aware of

before you take any steps, okay. I don't want to slow anyone down actually, I want

to get you going faster and faster towards your financial goals and doing

the right things in real estate but for me, as I got that question, I thought, hmm,

why would I or would I not want to do real estate in Australia? So I've got my

computer here and I'm just doing some some quick searches to kind of show you

my thought patterns and some of the things that I go through as I am diving

in and doing some research as to maybe why I might want to do some real estate

in a specific area. So I'm right here on Google, that one website that hopefully

you've all heard of before, right? I just went right onto Google, put in Australian

home values and started doing some searches and you can see right here on

my computer, you've got several different articles that are coming up,

this one right here says home values across Australia will continue to

diverge in 2019 which means that they are currently diverging here in 2018.

What does that mean? Well that means that all across Australia, home values are

going different directions. You've got some areas, I'm going to click on this

site right now that listed this article and it actually goes through different

areas. In Australia, it shows that in Sydney and in some parts of Melbourne

they're expected to continue to decline in value so maybe not the best places to

be investing right now and in Australia Sydney and Melbourne but

then you have other areas like Adelaide, Brisbane, Canberra, hopefully I'm

not completely murdering the names of these areas, Hobart. These are expected to

see further growth so some areas in Australia and this is not unlike

the US, in the US we have markets that are going up in value, we have other

markets that are declining in value and other markets that are holding steady

so you just want to be aware of which areas that you're going into that are

experiencing those different types of fluctuations because it's going to

determine what type of real estate you might want to do in those areas. As I did

some other search, looking into different property bubbles that have happened in

Australia, I know, you know, I looked here on good old Wikipedia and although

Wikipedia is not the end-all be-all, it's a good source for information. This one,

this article in particular wasn't necessarily the most current. Although it

was talking about a property bubble in Australia, a property bubbles or things

that happen in every market all across the world, this isn't any one country

specific but I looked at the Australian property bubble, it looks like over time,

since the 1980's or even 1990's, property values in Australia have been increasing

fairly rapidly as a matter of fact, more than a lot of other places around the

world. It talks about, their average growth has been around 6 or so, maybe

even 7% over the last many many years since the early 1990's and I know that

this article or this information, some of this was was pulled in 2015 and

here we are right now, it's 2018, not to date this video but you know we're

experiencing some as we've seen some of this you in Australia,

those of you that are there, you've experienced a lot of this growth already.

What happens with massive growth typically is when growth exceeds the

income levels, right. This is one of the things that it's been experienced in

Australia is the the home markets, the housing market, has grown past the income

growth and right now or at least when this article was written in 2015, you're

seeing income levels at about, or housing value levels, six

times as much as the annual income level. That just means that people can't afford

the housing as much right so whenever you get to a point in any market where

housing becomes too expensive for the individuals that are earning there then

you're creating a bubble that has to be corrected at some point so that more

people can actually purchase property. We're seeing a little bit of this, I

actually, I looked to another forecast and you can see here on my screen right

now, this is the Australia house price index and this is over, you know,

the last several years from 2015 which again, we saw in that last

article that those are prices from the 1990's up to about 2015. Well here you see

from 2015 till today, you're seeing a general trend southward. Now we're not

seeing a massive decline necessarily but we are seeing a difference from a house

index of 4.7, now we're down to right now this month or the last

couple months about a - 0.7. Again so this isn't necessary time to jump

ship or stop doing you know, any type of real estate but it is something you want

to be aware of and this could be indicating a future trend so you want to

be just aware, you want to be looking at it. Some other basic things and I want to

kind of maybe go away from these specific articles and just talk about

generals right now. In all of real estate, no matter where you're buying real

estate, there are some things that you want to make sure that you are keeping

track of, that you're aware of as you're looking to get into doing real estate in

your area and one of those things is, can I buy a home that will cash flow? There

are a lot of people that sidestep that really basic rule of getting into a

property that will cash flow for you. As a matter of fact, there's something that

was really big happening in Australia for a long time called negative

obviously, negative gearing. Negative gearing isn't exclusive to

Australia, they just call it a little bit different than we call it America but

negative gearing is basically buying a home,

going negative on that home, oftentimes giving a interest-only loan, going

negative on that home for a period of time with the hopes or the belief that

the increased property value, right, if it's growing at six or seven percent a

year that the hope is that that increased property value will make up

for that that period of time where you're going negative. Negative gearing

is something that a lot of investors have done in Australia which has

actually artificially inflated some of those values and so you want to be aware

of some of the things things that are happening and my recommendation would be

to never be in a situation where you find yourself in a negative gearing type

of situation and the reason for it is because, if there is a bubble and if that

bubble is ready to burst, if it's ready to pop at some point and you're stuck in

this negative gearing situation where you bought a home, maybe that was worth

more than you bought it for, maybe the monthly payment on it is higher than

you could afford and maybe it's not being covered by the rents that you're

renting it out for, if you're in that situation and the market continues to go

in a downward slope, well then you're stuck, right? And those types of situations

you could be stuck in a really bad situation and find yourself losing money

on the deal, maybe getting even into a situation where you may get a bad taste

in your mouth for real estate in general because of some of the bad decisions you

made so I would recommend never getting into a situation where you're trapped in

that negative gearing type of scenario so cash flow, cash flow is important, cash

flow is king, cash today can help you to invest in more today as well and so you

want to be aware of that, you want to make sure that you're getting into homes

that are providing a positive cash flow for you. Now I know what a lot of people

will say and I bet I'll have individuals that will say hey, here in Australia, you

can't find a home that that cash flow is positive and I'll tell you right now, if

you say that to me, I'll say two things to you.. Number one, you're probably wrong.

I believe that across the world, no matter where you are, most real estate

runs on a bell curve and what I mean by a bell curve is if you understand

economics, a bell curve just basically illustrates that most homes are going to

be sold in the right space of right if this is the bell curve right

here and you've got your normal standard deviations then most homes are gonna

fall right inside of that first standard deviation. In other words,

they're gonna be priced at the right price, they're gonna sell

within the right timeframe and everything is gonna go according to plan

but in any situation and in any area, I would venture to say there are always

homes that are listed too high and there are homes that are listed too low

outside of that first standard deviation, right. That outside of that that initial

bell curve area so those homes that are priced too high, they're gonna stay on

the market place, they're gonna stay on the market until either the market

shifts or they shift, right until either the value of the home rises to meet the

price that they put on it or until they're willing to move their price to

meet the market so those are those homes that are priced too high. The

homes though, the other side of that, those 5% let's say of homes that are

priced too low, those are those deals that are often snatched up extremely

quickly and whether you're in Australia or India or UK or America or wherever

you might find yourself, those homes that are priced below the market, those are

the homes that I suggest you look for and having a belief, first of all, that

those homes are even in existence, well first of all, fuel your ability to find

them so believe that they're there and then start looking for them and as

you're looking for them, again, you're looking for homes that these these are

good homes, these are homes that aren't necessarily your fixer-uppers, these are

homes that people just price below market for whatever reason and there are

a lot of reasons for that, right. Sometimes it's divorce, sometimes it's

is people getting a job, sometimes people need to leave the country for whatever

reasons and sometimes people are, you know, maybe it's a family dispute. I mean,

who knows what it is, right? But there are reasons that cause people to price their

home below market value because they want to get out of it

quickly or they want to get their money fast maybe for a different reason or a

different investment and so those homes do come up so be aware of those

homes because when you can get those homes, you're more likely to cash flow. So

that cash flow is really important and cash flow really mix. I've kind of

cover two things in one.. Cash flow mixed with getting a home at a discount are

two things that I would almost always recommend when doing real estate no

matter where you are so I'll say this.. If you're in a situation right now, let's

just say that you're living in Sydney and Sydney's home values are decreasing

and you want to go buy a home in Perth or something like that, maybe where the

value of the homes are going up right now. You can absolutely do that but maybe

even ask yourself this question, do I need to be doing real estate where I

live? Is it important for me to do real estate here in Australia if this is

where I live right now or are there things that I can plug into?

Are there systems that I can plug into? Are there people that I could

potentially partner with that could help bring my investing outside of my general

area, right? Can I invest in Europe or can I invest in America? Does

that make sense and how do I do that? So that's what I would look into. There are

a lot of different articles that you can go online, again, just going on to Google

and typing in things like, you know, Australian home prices, Australian market

fluctuations, Australian real estate growth, you know, different things like

that, you can just plug in to Google and you'll see different things. You see

right here a home price guide for Australia, you see a blog right here, this

was written actually in April of 2018 of this year, it says Australia home prices

fall for seventh month, okay. Led by big city so looks like we've had some prices

falling. Actually I'll click on that on that real quick, that's like this was put

out by Bloomberg.com, pretty reputable source right there and if you look at

this article, it just says, you know, home values are, they're going down and

they've been falling, not tons, right. Says national housing prices fell 0.1% in

April from March so this isn't a massive decrease necessarily but it's something

to be aware of. You see some different charts so do some research, figure out. I

think one of the biggest things that keeps people at bay from investing

either in their home town or anywhere for that matter

we get this analysis paralysis, you know. You've probably heard that before. We get

so caught up in all the information that we don't know that we're afraid to make