The colourful world of property guru Chris Gray
The colourful world of property guru Chris Gray
This week we enjoyed an insightful chat with property market media commentator Chris Gray.
Buyers’ agent, investor and all-round property authority, Chris shared his thoughts and recollections on the sorcery and secrets of property buying, investment strategy and a lifetime in a dynamic industry.
And despite being a self-described conservative investor, he also shed light on his recent innovative dalliance with cryptocurrency.
Let’s start at the end. As owner of Your Empire Buyers Agents and Renovators you've recently decided to accept payment in a cryptocurrency known as Qoin (pronounced 'Coin'). What prompted this payment innovation?
When I started the business back in 2004, like many other start-up businesses, money was tight, you needed to make it go further and you needed to try many different marketing avenues to see what worked.
I used Bartercard for a number of years and then stopped after a while after my business took off and I had plenty of customers paying cash, which was easier to spend.
About six months ago an old friend got in touch and mentioned Qoin. I noted the similarity with Bartercard and said I was happy to give it a go as I had nothing to lose.
How did you decide upon this particular format given there are 240 registered cryptocurrencies?
I’ve never bought any crypto and know nothing about any of them – my skill is property and that’s all I know!
My interest in Qoin was purely about getting new business from customers from a new target market. While I would have no guarantee that by accepting Qoin it would have the same value as cash, I knew it would be worth something and that I would be able to spend it somehow – I’ve got a skill in knowing how to spend money!
I also didn’t have a lot to lose. They would need to market my business in order for me to receive business and I could do more due diligence into its value later on.
While I know nothing about Crypto, I do believe that it probably is the way of the future. Banks have a monopoly over our money and take days to transfer our money which doesn’t seem logical in this digital age.
You retired from full-time work having started investing in real estate at the age of 22 and since then have built a personal property portfolio worth more than $15 million. What drove you towards setting up a buyer’s agent as opposed to a traditional real estate company?
In 2001-2002, at 31 I was working at Deloitte and earning $60,000 after tax. At the same time, I had six properties worth $3.5m, which was growing at $600,000 per year in the boom.
I tried salary sacrificing a Ferrari 355 and the tax partner worked out the Fringe Benefits Tax on it was more than my wages – it was that turning point that both Deloitte and I knew it was time for me to give up being an employee!
Many people then asked how I could live on the beach, drive a supercar, skipper a boat and not work for a living, so I started teaching them for free. Everyone believed what I said as I was simply telling them my story and I had nothing to sell and therefore no vested interest in leading them down an alternative path.
At the same time, I was doing extras work for fun to see how they made movies and TV adverts. The $22 an hour I got paid wasn’t for profit, but it did pay for the petrol in the Ferrari to get me to the set.
I started helping other extras with their property issues and one gave me a lead for a TV show they were making, and I ended up getting the role as the real estate expert on Channel 9’s My Home TV.
That then led me to hosting my own show called Your Property Empire on Sky News and being the real estate expert on Channel 10’s The Renovators.
More and more people then asked me how to make money from property and so I set up a property education company to help teach and mentor them.
Years later, a wealthy client said that he didn’t want to learn how to do it as he didn’t have the time and didn’t want to deal with the agents. He said, ‘just buy me what you would buy for yourself’ and that’s where the buyers agents business started.
International buyers are thinner on the ground without international travel. Where is most of your clientele these days?
We’ve never dealt with many foreigners as I’ve always found they don’t see the value in our services. They would rather buy a $1 million property for $1.1 million and say they’ve saved $20,000 in fees rather than buy the property for $1 million and admit to their friends that an agent has charged them $20,000 – it’s just not in so many people’s culture.
We’ve always mainly dealt with Australian residents and citizens. A number of them are expats but they do have the mentality of “you’ve got to spend $1 to make $2.”
Without necessarily divulging trade secrets, what do buyers’ agents bring to the table that first-time buyers or more experienced real estate investors might not possess?
I give away all of my knowledge on property. I’ve created hundreds of videos and articles over the years, have written or co-written five books and have an online property course giving away all my secrets and what I have done to create wealth.
Many people ask why I would do that, and the answer is that most people still won’t be able to duplicate it without me and that’s because 90-95 per cent of people will do nothing, and they will spend the rest of their lives working for a living. It’s much easier to sit on the fence and do nothing than it is to make a decision.
If you are going to buy in the most competitive property markets in Australia, knowledge is part of it, but then it comes down to personal contacts and the way you interact with people.
We rarely go to auction as even though I’m a confident public speaker and know the auctions tricks, I can’t compete with an uneducated buyer who has plenty of money and will pay what the bank will lend them, rather than what a property is really worth.
Selling agents and auctioneers are good at what they do, and they can easily get someone to pay 5, 10 or even 20 per cent above what a property should sell for.
Therefore, we need to persuade selling agents to sell it to us before it even gets listed or in the first few days of the campaign. That’s not an easy feat, especially in a boom market.
However, every single property we’ve bought for a client has been based on a completely independent bank valuation known to be 5-10 per cent below what it might sell at auction.
I looked at setting up a Melbourne and Brisbane office but even with my knowledge, it’s very hard to compete with a buyers’ agent that went to school with the selling agent, their families are friends, they drink at the pub with them and they’ve done hundreds of transactions together.
That’s why I decided to set up affiliate offices with buyers’ agents that I had dealt with for years that were locals. That way clients can still get my expertise and guidance on strategy, but then have a local expert that will implement the plan.
All capitals except Melbourne recorded September quarter price increases according to new ABS data. Where, and in what price ranges etc, do you see the national opportunities and risks for looking to enter the market now?
My strategy has been the same since age 22 and even though I’ve done hundreds of TV interviews and get to hear the conversation behind the camera that’s not shared with the public, my strategy has never really changed.
If I’m going to leverage up to 80 per cent and bet millions and millions of dollars, I want the assets that I’m investing in to be solid and to ride out any GFCs, credit crunches or Covids and that’s exactly what they’ve done.
I avoid CBDs as there’s no limit of supply due to the limitless height and not many people want to live there. The inner-city blue-chip suburbs that are 5-15kms from the CBD do have three storey height limits and that’s where all the young highly paid professionals want to live.
My rules are:
- stick to the blue-chip suburbs – they’re not going to double in value overnight, but they won’t halve either
- Buy around the median price as then the majority of buyers and renters can afford it - i.e. unit in Sydney, townhouse/villa in Melbourne and a house elsewhere
- stick within one kilometre of the centre of the suburb
- buy what’s suitable for the area and the locals want i.e. in Sydney it would be three-storey walk up, double bedrooms, parking, no lifts/gyms/pools.
So, I never pick the market or try and predict the trends – I go for the (near) guarantees.
If you pick regional towns, off-the-plan, or go for the latest government grant then you’re gambling.
Innovation is clearly an ingredient in your business success. What other changes might we expect to see from Your Empire and in the wider property sector in coming years?
I am innovative at times but a lot of my thinking is still very old-school and consistent. We suggest clients should put 95 per cent of the money they allocate to property into blue chip, long term, buy and hold, just like I do for myself.
Eighteen months ago, I set up a speculative property options fund for some of the successful clients that we had already made money for or had dealt with for a long time.
We target a block of 50 units or 10-15 houses in a row, offer them an option for two to three times what their property is worth and then invest say $1 million into a development application to turn it into 300-400 units. There’s no guarantee that it’s going to go to plan, but if it does, the returns are very high.
We also tried to set up a blue-chip property fund for those people that either can’t borrow or don’t want to borrow. We would just buy blue chip property in blue chip locations and hold for the long term.
We tried to launch in the midst of COVID to make the most of the market, but it didn’t take off and I’m not sure if it was because it was for sophisticated investors only, people were scared of COVID, we didn’t market it right or there was something that wasn’t quite right. I would love to get that up and going as I really believe in it.
Where would you like your business to be in five or ten years?
My goal in life is to live life to the fullest and for my team to do the same. I assume I could be dead tomorrow and so I need to do everything today. I don’t have a bucket list, if I think of something I want to do, I just get on and do it.
My business is in effect a hobby with friends and colleagues. We’ve got clients in their twenties buying their first property with a mate and we’ve got ultra-high net worth clients that have hundreds of millions of dollars and I enjoy working with them all.
You've become a bit of media darling over the past few years. Has anyone yet recognised you from your media appearances or done the "I've seen you somewhere" routine?!
Ha ha – Yes, I’ve had a couple over the years, but it’s only when people are really into property – non property people wouldn’t have a clue and wouldn’t really care either.
I got into TV just out of a personal interest and my love of teaching. My first job on MyHome TV on Channel 9 had me travelling the country, seeing the latest penthouse in Melbourne or putting a house on a truck in Queensland – it was a dream job for a property guy, and I would definitely do it for free rather than for the money.
And that’s what I do a lot of now – 95 per cent of what I do is for free; teaching, educating and sharing my knowledge. However, it’s also marketing and the more I do it, the more people get to know me and my philosophies and the more business continues to grow.