Wendy Moore: Who’s Who of Australian Women…

We are so pleased to have Wendy Moore join our interview series and we are thrilled to have her join Women Building Wealth as a guest blogger! Wendy is our first international real estate correspondent!

Wendy will tell us what’s up with the market down under, what women are buying, what type of financing someone needs and how the Australian market differs from (or is similar to) other markets.
For those of you that don’t know Wendy Moore she is passionate about what she does and is living what she is passionate about. She is inspiring, she has a strong conviction and she believes wholeheartedly in empowering women through real estate. Wendy is not just passionate about what she does she is a true example of “putting your money where your mouth is”. She bought her first home in 1997 and in 2003 she bought her first investment property. She started her company called Affluencia in 2006.

Our conversation was over Skype so the typing was fast and furious! One of the most interesting things that we learned about Australia’s real estate in comparison to America’s is “negative gearing” which in the States we would say negative cashflow. Also in the US positive cash flow is king whereas in Australia its negative gearing that is culturally accepted because of all the tax benefits.

We started off the conversation by Wendy mentioning that “if a person didn’t get the tax breaks there would be no way you could afford the property in the first place…Negative gearing,” Wendy says, “has become an acceptable way of investing but you lose money, you only get 50% back at best.”

Wendy bought her first negatively geared investment property and “it bled her dry”, she was a secretary at the time and knowing that you don’t get tax breaks if you purchase a personal residence she had her sights set on investing.

Earning just enough to cover her own mortgage Wendy bought her first property property and then sold it after a few years. Initially she bought at the start of the boom in ‘97 and in 2003, at the top of the boom, she bought another property, all the while educating herself about positive cash flow.

“In Australia at the time you could get up to 106% lend, that is, borrow more than the property was worth, AND in Australia there is cross collateralization, which means banks tie all the properties are ogether” This means that instead of one property being security for itself, all the properties are combined and financed by one bank.”

Not the best move for Wendy she ended up needing a finance broker to step in and help her separate the bundled properties and refinance them to individual banks. It wasn’t cheap. Wendy had to pay “break fees. It was the only way Wendy could get equity from each individual property rather than as a group.

In 2006 Wendy was a senior IT project manager. One day read Kim Kiyosaki’s book . She remembers taking away a life changing philosophy to creating wealth, “If you can’t find an investment group you should create one!” Shortly thereafter she dropped her hours to 4 days a week.

Wendy looked around for investment groups for women to join, but at the time the only one offered cost $5,000 to join. She thought surely there must be a way invest without having to pay $5,000. In September of 2006 Wendy was driving listening to her mentor Brendan Nichols speak about the significance of “why are you here?”  and said, “In society, there is a tendency to keep up with “the Jones” and we buy the plasma tv screen and the nice car and big house, all on credit, and people never ask why they are here, what are you supposed to do on earth?” While listening to the CD Wendy had an epiphany - she wanted to educate and empower and it became crystal clear how she should go about getting her message and teachings out there in the world. So in October 2006 Affluencia was created. The first meeting had 10 women and it has continued to grow from there.

Wendy Moore is helping women build wealth through real estate.

women_buildingwealth: When you started Affluencia how did you first get the word out was it via word of mouth?

Wendy: When I started I was in the project management world and just told everyone what I was doing, I then went on to property forums on the internet and gave free seminars which ran on the 1st Tuesday of each month. I changed the model last year to just have a couple of full day events each year.

women_buildingwealth: When you were advertising Affluencia what was your elevator speech?

Wendy: I would tell people that I wanted to have a place where women could meet, and it would be women specific and somewhere where  it was affordable for women.

Not everyone has $5,000 to learn about real estate and investing which is what a lot of the programs charge so I wanted to get women to learn in a positive environment that was reasonably priced. We had monthly meetings and events for free about various real estate topics. I didn’t advertise. It grew by word of mouth, by emailing and from my website where I would list events…then I got business cards and eventually was able to build my business.

When we outgrew the free space and we had to find a venue that was bigger and in 2007 we started charging a $25 fee to cover the costs.

I was hesitant to charge a fee but it was interesting to watch, people turned up even when they had to pay. In May of 2008 the monthly events were $65 a head and recently the fee was $97 for a full day. $97 for a full day event was a palatable price point. Included was morning and afternoon tea, four guest speakers speaking about different areas of real estate and we also had networking opportunities. In March of this year the seminar was themed “getting started in property”.

I spoke about what you had to do to get started and we also had a panel of experts: a lawyer, accountant, a finance broker and covered the various topics and then a Q & A session. Our meetings have increased from 35 in a room to now having 100 in the room. The difference was the change in the climate of what was going on in the real estate market .

Sometimes the guest speakers sell their products other times they don’t. I have a property mentoring program where members get a weekly newsletter, they get a trial for $1 for the first month if they want they can continue the program for $49/month which involves a weekly eclass that adds to their real estate education, monthly teleseminars, I talk about my investing and what I’ve learned or I have experts on the line speaking about different topics. For instance we had an accountant in one of the seminars and we talked about the type of tax deduction you can get as a property investor…we cover topics that are relevant to what they are doing. I am doing a similar mentoring program with savvy web women.

women_buildingwealth: Do you do all the technical work yourself or do you outsource,
Wendy: I do more than I should! This year I hired someone to do the website maintenance and I have a number of virtual assistants. I have one virtual assistant in Texas that manages my affiliate management program. I also have a virtual assistant in the Philippines who does my newsletters and administration. I also have an assistant that manages www.getstartedinproperty.com and one who manages all of my websites. I also have assistance for updating my blog. Virtual assistants opened big doors because I don’t have enough time to do it all. With virtual assistants I can do so much more.

This year I’ve been more active with my social network sites: facebook, twitter, YouTube and linkedin.

women_buildingwealth: what stops women from taking action?

Wendy: It seems to be a combination… a lack of money is big especially where real estate is concerned, fear of getting it wrong is a big one, looking stupid, losing money and a non-supportive partner comes up as well.

Lack of knowledge is another one. Women feel they don’t know enough and people continue to buy books and attend seminars and get CDs but never take action… Women look at so many strategies, it is a case of just pick one and do it….

women_buildingwealth: As a real estate investor what ’s making you money right now?

Wendy: At the moment you need to buy a good property and manufacture your growth. Here we can tap into the first time home owner market. Higher end properties are not selling, the lower price bracket is selling, around $800K or less.

Also “vendor” financing is getting more and more popular here in Australia. Vendor financing is where the money is not coming from a bank its coming from the seller or a private vendor (ie selling a 300K property can only get a $200K loan and $100K - seller carry back)

women_buildingwealth: When you’re flipping are you targeting the first time buyer or owner occupied rather than other investors.

Wendy: Australia is different to the U.S. regarding owning your own home…Australians have a thing about owning their own home…we still have auctions in Melbourne and in Sydney when there was a boom. We have multiple offer situations and over bidding, people that fall in love with a house and it’s their dream home. They get emotional and all it takes is 2 families wanting one house to drive up the price. One home in a suburb in Melborne recently there were 6 bidders vying for the same house, one person pays over market value. Also, when things go to auction there are no “subject to” clauses.

women_buildingwealth: So how are your investments going and what else are are you investing in?

Wendy: Well, as mentioned earlier, in 2005 I eventually hit a glass ceiling…I bought all of my properties with one bank, the banks in turn would not lend me any more money even though some properties had equity in their properties. I had to get them all refinanced and then I could pull out money and buy something else.

women_buildingwealth: So how did you circumvent the bank not lending you the money?

Wendy: I was able to refinance and separate them to different lenders and it released about $80K for me to spend. Its called “cross collateralization” when the banks eventually won’t lend because all of the properties are somewhat pooled together.

women_buildingwealth: Why not go to different banks in the first place?

Wendy: At the time, I didn’t know any better, I know better now.

There is a little house we just bought in South Melbourne. That home is with a different bank.

women_buildingwealth: How about credit scoring? Does that impact you at all with financing?

Wendy: It’s not the same as the US. In Australia they have a crediting rating system, but it’s things like not paying a telephone bill and utility bill that can give you a black mark on your credit history and stays on your report for 5 years…same type of thing regarding credit cards.

women_buildingwealth: So how many properties do you have now?

Wendy: I have 18 or so.

Most are positive cash flowing, provided they have tenants. With the downturn of the market some tenants have vacated but they soon are occupied again.

I have a property manager and each property is managed individually by a person that is local to them. My properties are located in 3 different states of Australia. I use local real estate companies. Sometimes you don’t have a choice in who manages the property if they are located remotely.

I got smart about using a property manager from day one. I don’t want to run around after tenants, I made the mistake of buying a block of flats in Queensland where I bought them from the agent and it was managed by the same agents and I didn’t do due diligence and I took a hit for that….

women_buildingwealth:  Here in the U.S. 10% of the annual rents, what about Australia.

Wendy: In Australia, management fees are generally around 6% to 6 1/2 % of the weekly rents but I pay monthly.

women_buildingwealth:  In the U.S. we say $2000 per month

Wendy:  Australia has weekly rents

women_buildingwealth: What about leasing?

Wendy: 6-12 month lease is normal, it depends where the property is located

women_buildingwealth: So what is your ultimate goal…where do you see yourself in 10 years?

Wendy: I want to be empowering women everywhere. I want them all “getting it”. I want to be traveling the world, teaching women about building wealth and helping them to take the action. In 10 years I’d like to have set up my own charity and to be making money from something that I am passionate about.

women_buildingwealth: Wendy, thank you so much for spending the time with Women Building Wealth through Real Estate. There are a few websites that I’d like to announce so folks reading this interview can follow up with Wendy directly and find out more information about her mentoring program, Affluencia.com, Real Estate Women and Savvy Web Women.

Wendy: It was great Lydia. I look forward to being a part of Women Building Wealth as a guest blogger so women globally can find out what is going on with the Australian real estate market AND more importantly how women are building wealth through real estate.