Investor in focus: Guy Williams, part four

Investor in focus: Guy Williams, part four

Financiers are your experts – get them working for you

As we have heard in the first three parts of our investor in focus series, Guy’s passion is his corporate training business, The Training Guys, while his 35+ property portfolio ticks along in the background creating generational wealth for his family.  To manage the financial side of the business, Guy is adamant that employing an expert accountant and mortgage broker has been key to his ability to grow his portfolio while keeping his day job. 

Guy has an excellent relationship with his accountant.  In the same way, Guy is upfront with his property managers from the outset, Guy took the time to educate his accountant in regard to his strategy claiming he is “an accountant, not necessarily a property expert”. At the end of the day, Guy admits he is no financial expert either and has no intention of becoming one, so is therefore very happy to pay for, and rely upon, his accountant’s expertise.

Gaining access to equity – Guy’s strategy in focus

With an LVR of 80%, Guy says he is “quite happy to have it at that level”. Instead of paying down the LVR, Guy’s strategy is to obtain equity as soon as it becomes available for another purchase.   He believes that having accessible equity is “like having money under the mattress”, arguing that he “may as well use it”. You get the sense talking with Guy that money sitting in equity feels as though it is stagnant and therefore not doing enough. Pushing his broker to access equity as his investments grow, Guy will get on the phone stating that he “believes there is equity in this property or that property – go and get it”. His broker’s task is to access the equity, and find a solution to any barriers that present.

Should you be tied to one lender?

Bureaucratic internal processes and systems won’t hold Guy back, “often it’s their internal policies and procedures that get in the way more than anything else”. His broker will ask the bank whether they can access the equity and if the intended response is not obtained, then Guys states he is “completely disloyal to any bank”. He has “loans with CBA, NAB, Macquarie and one with Westpac” – it’s just a matter of finding one that is interested. 

Guy does sometimes find that a financial institution will refuse to support his further expansion through refinancing - an occurrence he finds somewhat perplexing.  Guy argues that he “finds it strange that a bank will suddenly decide that [he has] too many properties and is too exposed”. He gives the analogy of viewing his income from his 35 properties as income from multiple jobs, suggesting “someone with one job is far more vulnerable than someone with 35 jobs”.  But rather than getting hung up on it, Guy removes emotion from the transaction and without a second thought, moves his business elsewhere – “as soon as someone doesn’t have an appetite anymore [he will] just move onto someone else”.

In regard to interest rates

Guy is confident that it is his broker who will know whether he “can afford a new purchase or not, it’s just who’s going to lend [him] the money” that is the issue.  With this being Guy’s first priority, securing the best interest rate is a secondary concern.  Guy suggests that he is,  “not too desperately concerned about the interest rate - that’s not the main driver. If [he is] paying a little bit over, but can get hold of borrowing, then that’s fine”. Again the stress is on getting the equity out rather than having it sitting there.

In regard to fixed or variable interest rates, Guy suggests that variable rates are becoming more attractive stating - “until recently fixed rates were better than your variables... fixing the rate for 2/3 years you were getting a better rate than your variables - in the last couple of months that’s beginning to shift”. So for Guy, at present, he is leaning more towards variable loans. Still keeping his eye on the political and economic landscape, he doesn’t “see interest rates going up anytime soon”.  In saying all that however, he is diversified with “probably a third of [his] loans fixed.”

Guy’s view on managing tax preparation

Guy suggests that “he needs his accountant to be good - part of his job is to minimize tax”.   While “it is a little harder these days to minimize tax as interest rates are so low and rents are fairly healthy”, Guy relies on his accountant to manage depreciation schedules and tax preparation to ensure his positively geared portfolio is as profitable as possible.

To streamline the process come tax time, Guy is happy for his accountant and broker to speak freely to one another. Guy views his accountant and mortgage broker as arms of his business. They share information and in many instances save him from being the middleman - which ultimately saves him time and energy sweating out the details.

Guy has a tip for keeping the necessary expense documents commenting that - “all invoices and statements are sent electronically,  [he has] a folder for each property and any invoice or statement just goes straight in and when it comes to end of financial year - [he] just gathers all of these together and off he goes”. Guy’s Property Manager is more often than not paying invoices out of rental income, so the system is quite streamlined whereby Guy is just facilitating the flow of information rather than expending hours upon hours on administration.

Stay tuned for our next interview with Guy, where he will be giving away some of his negotiation secrets!

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