Chocolate and deep discussions

"For me?" Grouchy said with unabashed glee written all over his face...Clearly displayed in the image below. "Seriously, all of it?"

"I've been hard on you lately bro, and I wanted to surprise you. Yeah, it's all yours." I responded with a smile. I knew how much he liked Kinder Surprise chocolate. He wasn't shy in ripping it open and getting stuck in.

I've been a little annoyed with Grouchy the last few days, but holding on to anger needlessly isn't productive so I decided to let it go. The little green fella stole my 4x4 truck and took it to the billabong for some off-roading after I expressly told him not to . Read about it here. I punished him but it was time to move on.

"Hey bro, I was thinking...Maybe it's time I grew up, started thinking about the future. I've been thinking about investments." Grouchy managed to get this out around huge bites of chocolate.

"Go on," I said somewhat dubiously.

Grouchy finished the mouthful of chocolate he was working on then went on. "Well, you've been in the property industry for twenty years as a job and invested for five prior to that right?"

"Yes that's right. I also had my own property development company for many years. What of it?"

"You are fully-conversant with commercial sales and leasing plus residential leasing right?"

"Yeah man, you know I am, get to the point." I was getting frustrated as I knew where he was going with this.

"Here's the thing G-dog...I think it's time I had my own investment portfolio and you can help! I heard about a new housing development just underway and I thought with the market depressed with that flu-scenario I might be able to pick up a bargain."

We had a chat about the potential future of the property markets: Supply and demand, tenant-default (commercial and residential), land tax, inflation and deflation, loan-default, unemployment, new "trends" that may emerge, slow-down in the building sector, failure of the AirB&B industry through lack of travel along with many other factors...More importantly we spoke about how those things may affect prices moving forward.

Of course it was all speculative however I see the effect of these things on a day to day basis, deal with them for my investor-clients, so have a lot of information available.

After a lengthy discussion he sat there with a contemplative look on his face, looking wistfully at the empty Kinder Surprise wrapper...He'd finished in minutes earlier but clearly wanted more.

"So you're saying that things will probably dip in the twelve to twenty-four months ahead so now's not the time to buy?" His right eyebrow raised and he tilted his head left fixing his gaze firmly on me to punctuate the question; Really the main question that needed answering.

"Based on what we're seeing it seems that moving forward market forces will push more property onto the market increasing supply and demand may drop due to unemployment and other financial motivators...So yeah, I think it's fair to say there may be some stressed property sales moving forward." I wanted to be noncommittal.

Grouchy nodded knowingly.

"I don't see it as a bad thing bro, at least you have some time to research it and all of the factors around property funding, purchase and ownership. There's a lot to know, and a prepared person will always do better you know." I wanted to give him a slight push into the research phase.

Grouchy understood what I was saying and accepted it however was very motivated to do some research right now. He isn't one for working through things for very long so he was dead keen to simply get started.

Today the little bugger dragged me out to that new development he mentioned for some research which I didn't mind; At least my suggestion sank in somewhat. For new off-the-plan builds our government have grants in place for first home buyers and with additional savings on stamp duties it can be a good way to enter the market. It was a good place for Grouchy to start.

When we got to the housing development we went straight to the display home...There was little else there to be honest. It was basically an open field, sub-divided into allotments, and not much more. There was a front-end loader digging away and the one single display home which is where the sales-guy was.

We took a look at the lay of the land then went inside for a chat and look at the master plan. Grouchy was surprisingly quiet and left me do most of the talking which was probably for the best.

I probed the sales-guy on the staged-release of the development, what infrastructure was coming in, when, and in what order and of course, the all-important questions about developer-encumbrances that always apply to these master-planned developments.

I never divulge that I am fully-conversant in all these matters preferring to let them talk, roll out their dialogues, and just soak it all in. I have found, in the past, that if the sales-guy knows I'm experienced in the industry they cut corners and make assumptions I have all the information. I normally do of course, but I prefer to let them talk as every master-planned development is different.

After chatting to the sales-guy we took a walk around at the allotments locating the ones Grouchy was interested in. He seemed more interested in watching the front-end loader work though and we spent a lot of time there. It gave us time to chat about his plans and what was required to make it work.

We talked about lending solutions, deposits, loan-to-value ratio (LVR) and the subsequent lenders mortgage insurance (LMI) which the banks make borrowers pay if their LVR is below 80%. We also talked about the return on investment he might expect, the challenges of leasing out a property in the middle of a barely-started master-planned development and all the other issues around tenants also. (Damage to property, failure to pay, absconding etc.) We talked about tax implications, capital-gains and income, fees and charges, property-purchase closing costs and conveyancing...Grouchy began to look dismayed...And then it came up...

...Grouchy fell silent for a minute and then...

"G-banger, you're loaded right? Why don't YOU buy my first investment, just to get me started. You know, as a motivator to push on and get more later." He was a little reluctant to hold my gaze, probably afraid that he'd overstepped the mark.

I figured that was coming, considering Grouchy doesn't have a job, has no income, and has to steal my credit card to pay for things...

"I'm loaded am I?" Grouchy had the good grace to dip his head away from my incredulous gaze.

"Here's the thing ya little nutbag, everything Faith and I have has been earned the hard way; Through effort, tenacity and perseverance. None of it came easy, and certainly none of it was handed to us. Nothing has come to us that has not come through our own effort. What makes you think I'm about to reward someone for showing none?" I'm pretty passionate about this topic as reward for effort has been my ethos and I've shown a lot of effort in my life.

"Besides, where did you get the idea I'm loaded anyway?"

"Well, you have a few cars, some property, metals, a little cash in the bank and some crypto, you travel around the place...You have to be loaded. Right?"

I had to concede the point that to Grouchy, essentially and outsider looking into my life, it may seem that way, but he has no clue about what's really going on...Perception isn't always reality.

"No mate, you can't judge things in that way. It's not an accurate way to determine someone's wealth. Sure, we have a few things and we work hard to build upon that, but that doesn't mean we're loaded. It simply means we're planning for the future and living a little now. We focus on the need over want ethos and work hard to balance now-life with planning for our future life."

I went on to explain a few other things about my life, what has happened to Faith and I, how difficult it's been at times, what we did to survive and finally to thrive albeit in a modest way. He sat there and listened.

When I was done he remained silent, almost sombre, for a few minutes. And then...

"So, after all of that, you and Faith are still married, still happy and still standing, able to move forward with the right attitude? How do you do it?" Grouchy screwed his face up. "How did you manage to come through the fire unscathed, to rise again, to start again?"

I looked at the little guy and didn't really have an answer. Looking back on my thirty three years with Faith and all the amazing things we have achieved, all the failures, trials and tribulations...Those times when we literally had nothing to our name... Sometimes I wonder how we managed it...I certainly didn't know how to clarify it in a way Grouchy would understand.

"Dude...I think firstly it's because we are so close to one another. Unbreakable. We also value each other more than material things. We accept failure for what it is; Lessons learned that bring us closer to success. We don't know how to quit and maintain the attitudes required to persevere, to push forward, pick ourselves up and try again...Ownership, responsibility and mindset." Grouchy sat looking intently at me as I spoke. "And no Grouchy, we are not unscathed...Just strong in will, spirit and attitude. It's all we can do."

I fell silent for a moment then added..

"Also, we choose to design and create our ideal lives rather than living them by default. It's my ethos and we both live by it. That seems to keep us moving forward." I stopped and looked at him, not really having much else to say.

"Mate, I get it." He simply said after a moment or two. "I GET IT BRO, yeah man I do. I understand much better but..."

"Does that mean you won't buy me a house?"

That's when I karate chopped him in the head, threw him in the back seat of the truck and headed home.