Introduction: 0:02

Thanks for joining us for this Small Talk, Big Ideas podcast, a podcast to enrich yourself where we have conversations with inspiring people about all things, property, business, and life . And now the host of Small Talk, Big Ideas. Ian Ugarte

 

Ian Ugarte: 0:23

Hey , welcome to Small Talk, Big Ideas. And today we are talking to Rob Flux , who is a property investor, and just like me actually wants to get people into a better position by using the skill set in his brain and teach other people to do it. Learn today how he actually got into property very young, just like I did and had to wear through a fairly significant cyclone in the, in the whole history of Australia, and where he’s got to now. Let’s enjoy Rob Flux and his version of the world. We have Rob flux with us here. Extraordinary property developer educator. Very similar to me. How ya going Rob – not too bad. Are you good? You I’m looking quite healthy through all of this.

 

Rob Flux: 1:06

My, I dunno how, because I literally have not left this room. Um , probably , uh , two weeks ago that , um, I went out to get some mail out of the letterbox and I went Jesus as the first time. I’ve seen sun for two weeks. Um , so it’s,

 

Ian Ugarte: 1:23

If you heard a few stories of people going out , I’ve heard a few stories of people going out to clean their letter box , just so they can go outside. It’s crazy.

 

Rob Flux: 1:33

Right . If everything above the waist is looking good, but everything below the waist I think is , uh , they’re calling it the Corona curve. Yeah . But yeah ,

 

Ian Ugarte: 1:42

Flattening one curve and increasing the other one. So Rob, obviously behind you, you’ve got a couple of banners there. You’ve got the , Property Development Network , and you’ve also got your Save Card. Do you want t o talk about those?

 

Rob Flux: 1:58 

Oh, you want to go straight to plugs mate? Let’s go for it. Yeah. Okay. Um, we run two brands, so I guess the two they’re sitting behind me. So property developer network is a community that where we have monthly events in Brisbane, Sydney, Melbourne, and growing to connect like- minded, people that are up and coming property developers. We figure that none of us have, uh, all the knowledge, but collectively we do. And we kind of do some masterminding to help each other’s projects out. We get industry expert in every month and we have people sharing real deals, so a good community. Um, I think of it more of a drinking club with a property problem. Um, and, uh, and so, so that, uh, that’s my social outing is that, is that, that group where the largest networking group of its kind in Australia. So, um, and quite proud of that and have delusions of grandeur of going global mate. So, uh, and the RenoSave Card is a, a subscription based card that gets trade level pricing, um, at , uh, 40 odd suppliers and better than traded at a number of suppliers, including Bunnings, National Tiles and Wattle , et cetera. So, and we were getting massive discounts on that because of combining the spend of everyone using the card.

 

Ian Ugarte: 3:15

Yeah. And you were just saying that there’s some builders now coming on and using the RenoSave Card because it’s cheaper than what they can buy from Bunnings. Yeah , correct.

 

Rob Flux: 3:22

So , um, because they know that, you know, I’ll do a hypothetical if they’re doing 10 homes a year and they, they come on board and there’s, you know, 20 or 30 other builders doing 10 homes a year that combined spenders massive. Yeah . Um, yeah . And that applies to all of our suppliers, not just funding, so

 

Ian Ugarte: 3:42

yeah. And so, um , plugs all out of the way . Good. Let’s get on with the rest of life. Um, you, uh, like me bought a property pretty young and uh , like me, I think you had the assistance of your parents ,

 

Rob Flux: 3:55

uh, in a roundabout sort of way. So I bought my first house at the age of 18. Um, the backstory is that I grew up in Darwin. They , uh, Mum and Dad had a brand spanking new house that was eight months old. They got blown away in Cyclone Tracy and with no insurance or anything like that, they were in a pretty terrible way financially. And when they rebuilt the house, instead of being a nice up in the air, airy, breezy thing that you need in the tropics, they bought, they built this concrete bunker on the grounds that, you know, concrete, reinforced and hot as hell. And , uh, so basically I bought the house off of them and they stayed and paid me rent because that was the only way that they could financially help me. Cause they were in a, in a bit of a tight bind themselves.

 

Ian Ugarte: 4:42

So it’s actually the , the way around, i t actually helped you helped your parents out rather than, um, and I mean, obviously they assisted you by selling you a property, but it was the other way a round really,

 

Rob Flux: 4:52

it was mutually beneficial, but , as an 18 year old, uh, you still go out partying and drinking and doing all the things that 18 year olds do. And, uh, eventually, uh, t hey s at me down and said, you can’t continue this lifestyle. And I went, well, it’s my house, it’s my rules. And at that point they went it’s time for us to go. And, uh, that happened to be in the middle of the, u h, 1990s recession when interest rates were up at the 17 and 18% mark. So started renting per room, mate, that way back then.

 

Ian Ugarte: 5:31

Did you live here and you lived in there as well? Correct. Okay. So you were , one of the first products, one of the first adopters of the high income real estate system, it’s pretty awesome. So with the benefit of hindsight now, how do you see that situation with your parents?

 

Rob Flux: 5:53

Well, that was the best thing that could’ve ever happened to me. So, um, I went on and bought my first investment property at 21, the nine, my first house outright at 24. And , um, yeah, I guess a good run that was largely buy and hold in the first stage of things and a negative gearing. And I would never, ever, ever do that ever again. And it’s probably the worst advice I ever got. Um, but it served its purpose. Uh, and I learned plenty from it.

 

Ian Ugarte: 6:22

Pull up, pull up that shot again of Cyclone Tracy because it devastated Darwin , like it absolutely wiped it out. And you know, that I actually spoke to a guy who was daddy , he’d still be alive. Um, quite a few years ago who um, was telling me that they went around Australia and they bought every caravan that could possibly buy around Australia and drive them all up there. And his job was to nail stop. He gets in and chain them down to the ground. Um, and he got paid a ridiculous amount of money to put that in. And then once all the houses were rebuilt, he then went back and for the same amount of money and the same charge, all he did was took a grinder to four post and took the chains out and the caravans got taken away. Like , it’s just amazing what happened to me.

 

Rob Flux: 7:08

Yeah. I can’t say that. Um, we certainly lived in a caravan for about three years underneath the floorboards of what used to be the house. Um, we showered in the backyard under a garden hose , uh, with some corrugated iron, um, wrapped around as , the shower screen. So, you know, times were tough mate.

 

Ian Ugarte: 7:26

Oh yeah. That’s what builds character. Yes. Uh , so were you, were you actually sitting within this Island when it happened?

 

Rob Flux: 7:34

No, we were very fortunate in that. Uh, we had already preplanned to come on a driving holiday down , uh, down to Brisbane. My dad’s family is down here. We had the car packed up, we were ready to go. And when they said the cyclone was coming, mum and dad went well, let’s just stay, make sure the house is okay . Uh , and then we’ll kind of leave the next day. So Christmas Eve lunchtime, we were sitting at home with a car fully packed up and at that point, the cyclone turned away and they went well, we’re already packed. Let’s go. So walked downstairs, jumped in the car and we left and we didn’t realize that it actually hit until we got to Mt Isa . So it turned back that night and took out the house.

 

Ian Ugarte: 8:20

Yeah. Okay. So it would have been pretty devastating to come back to that. I presume, but character building nonetheless.

 

Rob Flux: 8:27

Yeah. Well, I was quite young. And as a kid, you don’t really know the , uh , the ramifications, you just kind of, it is what it is. So, you know, we didn’t feel like we were, um, poor, but we certainly were. Um, uh, one of the experiences that I remember distinctly was our, uh, our primary school was, was flattened. Uh, so we had to go to, to school at the high school. So we had to go past the primary school every single day. And there was a giant hole in the wall of the library. And so on the way home, we would just walk through the wall, grab a book, go home, mum and dad had read it to us. And then the next day on the way to school, we just pulling it back through the hole again and , and return the books. And it was , you know, we were never stealing, but , um,

 

Ian Ugarte: 9:15

It’s amazing. It’s amazing the things that happen . So you’ve gone off, you’ve bought investment properties are fairly young and you make your way to Brisbane, obviously.

 

Rob Flux: 9:24

Yeah. So, uh, family relocation, uh, the, the wife at the time and now ex-wife, uh, was in a fairly high job in Optus at the time Optus had the contract for Northern Territory Government. And , uh , when they lost the contract, we had a choice to why they get, um , fully-funded relocation, uh, or redundancy. And we went, well , what’s a free ride. Why don’t we see what’s happening in Brisbane? And then we came,

 

Ian Ugarte: 9:52

so, uh , what year was that roughly

 

Rob Flux: 9:55

or whatever today is minus about 16 years. So

 

Ian Ugarte: 10:01

early two thousands, early two thousands. Um, so, and ha you were investing in property, but you’d had, had you ever done any development up to this point in time?

 

Rob Flux: 10:12

Uh, I’d done value adding, so renovating properties and forcing a additional yield onto them and that sort of thing, but not, not development per se. No.

 

Ian Ugarte: 10:21

Right. And so you then decided that you did want to get into development. Um, and you know, you’ve got the largest network in the country at the moment with property development . It wasn’t always that way. It started pretty small.

 

Rob Flux: 10:33

Yeah. And so I like many others, uh, went and did a number of actual education courses and, uh , paid some exorbitant fees for some that may not necessarily be the value that they’re protested to be, uh, without putting any disparaging remarks against anyone. But what I found out of that was that there were two real common challenges with most of the programs out there. They were generally inspirational. So they get you to do something, but they don’t tell you what the something should be. Um, so there’s no detail. Uh and then the mentoring is very generic and doesn’t really give you the guidance that you want. And, uh, me and about five other mates went well, we’ve all paid for these programs and we’ve got some knowledge, but we don’t have all the knowledge. So we kind of started helping each others projects out, just sitting over my kitchen table. And as we started to get success, each mate would kind of invite a mate and they’d invite another mate. Then all of a sudden I found I was running a public networking group that was never the original plan, but here we are.

 

Ian Ugarte: 11:39

So you decide that you’re going through, you’re doing a number of, um, groups starting to ask questions. You’re helping each other out doing developments, which is what you really need. You need mates in the game to be able to bounce off and ask questions of, um, and then the network starts to grow. Um, how many of the regional, um, six of you, um, are still part of the Property Development Network?

 

Rob Flux: 12:05

Uh, there’s two others that are, that are in the group. Um, but there’s only one being me who’s I guess, um, uh, gen genuinely active. So the couple of others, um , one became extraordinarily successful in their own. Right. And doesn’t need the network and has kind of gone off on their own boat. Uh, and, uh, a couple of others that just went well, probably development isn’t for me and yeah, but a couple of quiet achievers mate, that sit there in the background.

 

Ian Ugarte: 12:37

That’s good. What’s your, what was the first real development deal? So either a subdivision or duplex build or whatever.

 

Rob Flux: 12:44

Uh , it was , it was a townhouse projects that , uh, had a couple of, a couple of preexisting 46 houses that were rooming a com uh, at the front that was student accom . And I know how you feel about student accom, how’s it going right now? It actually really awesome. Good. Yeah. I haven’t had, I haven’t had a single person asked for rent reduction. I haven’t had a single person leaves, so it great . Um, yeah. And that it comes from , uh , irrespective of what your strategy is. It comes from proactive property management. So there’s nothing recognizing the issue. Yeah .

 

Ian Ugarte: 13:21

Yeah. There’s nothing more important in property than having the right managers, putting people into your property and managing them once they’re in there because you know, the days of I just don’t understand some managing agents that sorta just pick whoever, put them in there, then complain when they have to track them down and I’d stopped paying bills and all the rest of it. And then they take my responsibility as well, which is why we always make sure that we’ve got some, like, you know, we’ve , we’ve got con. So when they come up and say, well, here’s our agreement with you. We’ll go with, we go , here’s our agreement with you. We want you to sign this too . We want you to send us photos every six weeks. We want you to do all of that sort of stuff as well. So , um, I hear you, I hear a lot with the management side of it. Um, go on

 

Rob Flux: 14:02

We’ve got tenants that , uh , I’ve got one tenant that , um , I’ve had in that property for 10 years, because if you get the right tenant doing a degree, it’s going to be a three and a half or a four year degree. If you treat that tenant, right. You’ll have them for the entire period. Um, there’s a lot of misnomers about them going home for holidays and things like that, and then not paying rent. And that’s actually not true. Cause they signed a 12 month lease knowing that they need some way of safe to store their gear . And when they come back, they want somewhere to come back to. And we only sign 12 month leases with our guys and, and most of them stay for a good two to three years.

 

Ian Ugarte: 14:40

Yeah . Uh , so what did you do on the rest of you built some townhouses on the rest of the property?

 

Rob Flux: 14:44

Uh, yeah. Put six townies at the back and, uh, turned for them into rooming accom as well and yeah , a gorgeous , healthy cash flow mate .

 

Ian Ugarte: 14:53

What , um , did you sell any of them?

 

Rob Flux: 14:55

Uh , yeah, I had to sell it a couple just to , to appease the bank , um , just for pre-sales, but , um, yeah , uh, managed to keep, uh, effectively 19 rooms out of those. And that is essentially the cashflow that I need to , to live if I, if I pulled up stumps and did nothing else that now that one project got me out,

 

Ian Ugarte: 15:16

you know, you don’t , you know, you can’t do that though. Cause you’ll end up bored shitless. Like most people that pull up stumps,

 

Rob Flux: 15:22

which is why I still work 18 hour days, mate.

 

Ian Ugarte: 15:27

I’m with ya, I’m with ya. Uh, so , uh , you, you know, you’ve done Brisbane deals, but you don’t just have a network in Queensland. You do this all over the country.

 

Rob Flux: 15:38

Yeah, correct. So, uh, we’ve got Brisbane, Sydney, Melbourne as, as to where we run our physical events and uh, the concepts apply everywhere. The legislation is different, so there’s different terminologies. There’s, you know, different buttons to click on different pages. But the, the essential, and you’d know this from your own teachings, that the essential framework that everything works under is the same. It’s just really plugging in, you know, use this website and say that that website use this terminology instead of that terminology, it all applies. And there’s a couple of little idiosyncrasies. You have to worry about 537 councils means 537 variations of how to interpret the same thing. But that’s the fun of it.

 

Ian Ugarte: 16:20

Yeah. What did you, what are you actually trying to in other than the property stuff? What would , what did you do for work?

 

Rob Flux: 16:27

Uh, 20 years in IT? So designing multimillion data centers and , um, disaster recovery solutions and doing , uh, like, yeah, big shit for big people. So flight center, Virgin Blue BHP, people that couldn’t afford their stuff to stop working.

 

Ian Ugarte: 16:45

Right. One-tel , just checking back then when email first came out, I think we went to three different providers of email and all three of them went broke. It was One-tel , um, Orange and there was someone else. And then we went to Telstra and one of my mates sent an email out to everyone that we knew and said, just be careful ever on because it didn’t end , Christina sent three broken and Telstra’s next. So , um, it was crazy back then , uh , that .com era and what they were doing. Uh, absolutely.

 

Rob Flux: 17:18

Yeah. All going, I guess, going through that.com era, I rolled out Y2K at, at, uh, I was working for a credit union at the time. I’ve done some crazy stuff working inside prisons, inside prison walls.

 

Ian Ugarte: 17:31

What’s your take on Y2K ? I think it’s, you know, I’ve got a very strong opinion around a lot of things would happened . I don’t know if you’ve ever noticed it. I’ve got a strong opinion, but um, Y2K is one of them. Yeah. Y2K is one of them where I just go, what a load of rubbish with a huge amount of money spent for now outcome, what’s your view?

 

Rob Flux: 17:50

So I will counter that , um, in that there are actually a number of disasters that did happen, but because of the proactive stuff, it was actually very well managed prevention is way better than cure when it comes to any, uh, incident. Um , we were working at the time I was working inside a financial institution. We did our tests on that. And if we didn’t do the work that we did, we would have been crippled. So, you know, for us, that was critical working in the N.T at the time and the Northern Territory Government, their email system actually had a, a massive failure , uh, because they didn’t roll out the patches correctly. Uh, and when they went to put the patches in, there was a U.S owned software product and U.S and Australia have our dates. And our months back to front, you’ve not read your email for three months. Let’s delete every email in the entire government. Um, so, you know, I saw some, some, uh, some hairy things, but they were recovered pretty easy.

 

Ian Ugarte: 18:54

God . Yeah. So I, you know, I , We actually built so I was still, um, plumbing back then, and my brother and my father’s company built a $350,000 , um, three bedroom apartment in a plant room on the Harbour, looking at the opera house and Sydney Harbor bridge for the three families of the engineers to stay there on new year’s Eve. So $350,000 for one night is basically what they did . I thought it was bizarre and nothing went wrong for them. So it was lucky obviously. Um, what do you do in your spare time? The six hours?

 

Rob Flux: 19:33

What spare time mate ? Um, now I, uh , very much love rugby, so local rugby fanatic, and I got season tickets to the , to support the Queensland Reds. So I like going in and enjoying a beer while watching them lose, um, followed them up, follow them from the first time they were shit, uh, until they won the, they won everything and they, they’re shit again. So you can tell if you’re a fan that brightly, if you, if you’re still there. Um , so I do that , um, like socializing with mates and I , I’ve kind of built a family out of this, uh, Property Development Network community that we , we hang around and socialize after our events. And yeah, I take pleasure in, in , uh, watching other people grow, mate.

 

Ian Ugarte: 20:22

Yeah. That’s awesome. What’s, what’s one of the, uh, what’s one of the most quirky deals you’ve done or a good story about some of the deals you’ve done.

 

Rob Flux: 20:32

There’s some stories that I’d like to tell you about the current one, but I’d like it to finish first. Cause I still get to work with some of the consultants. Mainly it all comes down to human interactions and, you know, people are people and they come in and all sorts of variety of flavours. And so you’ve got to navigate some very dominant personalities, some very quiet personalities, and there’s, there’s always backstories. And in that interaction, don’t worry about the money. The money happens as a byproduct.

 

Ian Ugarte: 21:01

It’s um, it’s just one of these things. I, that people go, Oh, I want to go into development or I want to invest in property. And it’s not that easy. It’s not, it’s not as simple, easy thing.

 

Rob Flux: 21:12

No, no. It’s, uh, I like to think of it as get rich slow, rather than get rich, quick and slow and steady. And you can do it safely. Yeah.

 

Ian Ugarte: 21:24

I think, um, someone asked me once before, how, how do I end up with a million dollars in my bank account as a developer at the end of the year? And I said, start with 10 million and you should have a million left at the end of the year. That’s about how it works. If you’re going to start with, with eyes wide shut, um, what’s your advice to someone who wants to get into that? There we go get rich slow. Seth Godin rich quote. Yes. Um, what’s your, what’s your advice?

 

Rob Flux: 21:52

I have some very basic philosophies in get your strategy right. First, once you know, what your strategy is that then determines all of your next steps. A lot of people struggle with bright, shiny objectitus, and they see every strategy works, but they see somebody gets success with one strategy. And then so they jump over there and they’d stick there for a little while. And then they see somebody else on a different strategy gets successful and they jump over there and they don’t stick to it long enough to break through that learning curve. And so when they’re flipping and flopping, a lot of energy goes in, but not a lot of productivity comes out.

 

Ian Ugarte: 22:29

Yeah. That’s what I call it. Yeah. It’s what I call the restless puppy dog. You know, they’re just from backseat to backseat using all the energy look, you know , running across the backseat of the car. And then finally when they get to the park, they’re so stuffed from running the back of the car that they’ve got no energy to do anything else. So we’ve got to , and I’ve noticed that’s one thing that you consistently say, and I always agree with this that you say as well, is that not one strategy is right for everyone.

 

Rob Flux: 22:55

Correct. And so we take quite a bit of pride in, in running an event then to just help people choose their strategy. And if that strategy happens to be something that we don’t teach all power to them, because now they know that the course that they go and do is going to be the right course, because what I see consistently in my community, which is one of the things that really peeves me, is that they’ll go to a slick presentation and be sold into the fact that that’s the only solution. And when they get there, they find out that that that solution didn’t fit their circumstance. And it wasn’t that the solution was wrong. Cause the solution has helped many, many people, but it just didn’t suit their circumstance. And so if we can get them to work out well, what, what strategy suits me, um, go and do the right course. Then, you know, you’re going to get much better value out of that. Cause two people sit in doing my course or your course or the next person’s course. If it suits one person’s strategy, they’ll think it’s massive value. And that’s the person sitting right beside them will think it’s a waste of time. And I prefer to have people that just get value.

 

Ian Ugarte: 24:08

Yeah. I know we’re pretty strong on both of us. You know, I’m very strong when I am talking about my program that I say, this is not a silver bullet. This is not easy. You’ve got to be committed. And if you’re not willing to talk to people, this is probably not a program for you. And if you don’t have the money, this is not a program for you. Like I’d, you know, I’d much rather say you financially stable than financially unstable on the, on, you know, betting the last dollar on joining a program. That’s for sure. And we’ve seen that time and time again. And both of us push people away. I mean, I really liked the fact that one of our first interactions was actually about creating a group of property educators that are on the same page about actually protecting people and helping people rather than watching some of the things that happen in this industry. It’s an awful industry to be part of. And luckily someone like you and you know, we’ve got Jane Slack Smith and we’ve got a whole bunch of other people that are, you know, I’ve got some integrity about them and I’m moving forward to that. What’s the best way to get in touch with Rob Flux.

 

Rob Flux: 25:05

Well they can come to our Property Developer Network, Facebook page, or they can come to our Property Developer Network website. Um , if they Google Property Developer Network, we pretty much own the first two pages of Google and think somehow they’ll find us. Yeah. And we’ve got three or four different ways that you can engage. We’ve got the , the meet ups we’ve got, I guess the Facebook community. Yeah. Awesome. Just Google.

 

b25:32

Tell him, tell him that Ian . Sent ya right. Tell, tell her . All right . Um, any final famous last words, what’s your favorite quote?

 

Rob Flux: 25:44

That changes from time to time as things are changing around me. So right now , uh , one of my favorite ones is a Warren Buffet quote. Um, I’m going to say two Warren Buffett quotes that kind of , um, work back to back. So be , be greedy when others are fearful and fearful when others are greedy. And I think in this current market that is very apt. Uh , and the second one is that, um, risk comes from being uneducated. And so in the current market, there’s a lot of people thinking it’s risky, but if you’re educated, you’ll see through that. And that allows you to be greedy by being educated. Yep , absolutely.

 

Ian Ugarte: 26:24

No worries. Okay, Rob, thank you for your time. Thanks for your story. Um , I love the Darwin part of it. That’s really awesome.

 

Rob Flux: 26:32T

Thank you, man. Appreciate it. Have a good one.

 

Ian Ugarte: 26:34

Thanks for hanging around and Small Talk Big Ideas podcast. We hope you enjoy that and pulled out plenty of information. That’ll help you move forward. If you want to find or listen to more podcasts , please subscribe, follow us on social media or go to ianugarte.com.au to find out much more about what we do and we’ll see you next time.

 

Voice Over (26:55):

Thanks for tuning in to the Small Talk Big Ideas podcast. We hope we’ve succeeded in our goal to inspire and challenge you. And we look forward to catching you on the next episode of Small Talk Big Ideas with Ian Ugarte.