Cherie Barber runs Australia's leading renovation course Renovating for Profit, and is a household name due to her appearances on Today Tonight, The Living Room, and her starring role in HGTV’s Five Day Flip. Now with over 110 renovations under her belt, Barber freely admits she came into her renovation and TV careers by accident, but it was the best thing that happened to her.
Join us as we discuss how she went from high school dropout to Australia’s renovation queen, taking her family’s troubles and turning them into motivation and inspiration. We’ll delve into her first uneasy steps on the property ladder
, where she discovered the importance of doing your due diligence, and how that led to her third step selling for just under $1 million! You’ll also hear about how she ended up the star of a US renovation show, and the neighbourhood party that showed that sometimes the wealthiest people can come from nothing yet end up on one of Sydney’s most prestigious streets.Timestamps:
02:33 | One Step— or Renovation— At a Time
04:21 | A Proud Westie
08:08 | No Silver Spoons to be Seen
11:13 | Survival Mode
15:02 | What Have We Done?!
17:47 | Take Two
20:18 | The Accidental Renovator
25:04 | Life Was Unbalanced
29:35 | A Weekend Warrior’s Costly Mistakes
34:41 | BYO Equity
40:42 | Keep Up the Momentum
42:31 | Renovators Live off Lines of Credit
46:32 | Move Your Mindset
50:23 | I Could Have Been a Disaster
55:35 | Time to Slow Down a Little… Sort Of
58:20 | Not Just the Accidental Renovator— the Accidental TV Renovator
Resources and Links:
[00:27:39] We took that property to auction as soon as the renovation was finished, and the auction hammer went down at— we were hoping for $800,000— and we're done at $955,000. So we ended up walking away with a $268,000 clear net profit margin, totally tax free.
This is Property Investory where we talk to successful property investors to find out more about their stories, mindset and strategies.
I’m Tyrone Shum and in this episode we’re speaking with Australia’s renovation queen, Cherie Barber. We’ll hear how the Aussie battler earnt $60 for 2 years’ work, spent her 20s painting kitchens instead of clubbing which led to her having $175,000 in her bank account by the time she was 29, and so much more!
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Barber begins her busy days early in the morning, giving her plenty of time to perfect both roles as Renovation Queen and Supermum.
[00:00:42] My day normally begins at 4AM. I try to go for a run, I normally sneak in about an hour of emails. So literally from about five [AM} to six [AM], emails. And then most days, I actually have a makeup artist at my house, doing my hair and makeup for television. That'll normally get done by about 6:30. Then I'm travelling to site. I'm normally on site most mornings at seven or 7:30. And then from seven till about 2:30 I'm on site renovating.
[00:01:15] I normally leave site about 2:30 so I can pick up my daughter at 3:10 from the school gate, then I normally ferry her around in the afternoon to her activities, get home, make dinner, and then I pass out about 8:30. That's a pretty typical day. And obviously, during the day, I do my TV filming and be a TV presenter. So yeah, it's a very full day. Some days on the weekends, I don't do any of that. And you normally find me at numerous airports on the weekends doing public speaking gigs.
[00:01:54] Oh, wow, that is full on. And I guess I'm curious the reason why you get up so early to go on site? Is it because that's when the tradies are usually on site to catch up with them?
[00:02:06] Most tradies, core trade hours are 7AM to 3PM. So it always helps if you are on site at that time. But I have a really good team and they can quite often get the site started for the day. If there's something on where I'd have to take my daughter to school, they'll open the site for me, get it underway. And then I can just come in. So that's the great thing about renovating. It's a perfect job for mums who are juggling kids and all sorts of stuff.
One Step— or Renovation— At a Time
[00:02:33] Wow, you are definitely a supermum. That's awesome. And are you currently running multiple projects at one time, usually, it's that what happens?
[00:02:46] I'm always working on at least three or four projects at a time. I normally have one renovation in progress at any point in time. I don't like to overlap projects. So what I do is I do single projects at a time, but I do fast renovations. So typically I'll renovate a whole house inside and out in eight to 10 days. And you don't want to be doing that juggling and other projects. So even though I have other projects in progress, just from a planning perspective, I don't physically do any more than one at a time. However, I have been known to do six. I think my worst one ever was six at a time. And that was a bit chaotic.
[00:03:28] Most people get stressed doing one renovation in their lifetime. So when you've got six on the go at the same time, it's Bedlam. And it's not what I recommend most people to do to! Stay focused on the project at hand. Do it, do it well, get it done, and then move on to the next one. If you can do that, you'll remain sane. And you'll stay married, too!
**Guest’s personal story/background**
A Proud Westie
She grew up in Kingswood, a suburb in Sydney’s west, and is proud to call herself a Westie.
[00:04:21] [There are] four children in my family. I'm the oldest. My dad was an earthmover. And all through the '70s— I was born in 1970, and I'm going to tell you that anyway because believe it or not it's the most Googled thing on me on the internet. Yes, people just want to know how old I am. And second most Googled thing is 'Cherie Barber married'. So for anybody listening, no, I'm not, stop Googling! But I'm very close.
[00:04:51] So I was born into a very average Aussie battler family. We certainly never went overseas. Our holidays were Budgewoi Caravan Park, and that was about it. And they were fun times. And my mum was a stay at home mum. So she raised us four children, my parents got married pretty young, when they were 20, and had kids straight after. So they were married at 19, I was born at 20. And she was a stay at home mum, which is very common to what a lot of women did back in the 1970s.
[00:05:27] But then what happened was an event happened in my family in 1985, that sort of turned my family's world upside down. And I won't go into all the gory details, but my parents got divorced the following year as a result of that. And so my mum was suddenly single, and [had] four dependent children. She applied for every single job, and nobody would give her a job because she had no career history. Obviously people don't, a lot of organisations, companies back then didn't value somebody who raised children.
[00:06:01] So then she was pretty much... didn't have a terrible amount of skills from an office perspective or anything like that. So she struggled to get a job. And so what she did is she somehow managed to go to the bank and get a $30,000 loan to buy a shop. So she thought, 'Okay, if I can't get a job, I'm just going to go and create my own income through owning a business'. And unfortunately, that business didn't go very well. So she bought the shop, and it didn't even cover the rent. So in all truthfulness, she dug herself into a bigger financial grave.
[00:06:36] What happened was she tried to sell the shop, nobody wanted to buy the shop. She started applying for jobs again. And she managed to get a job in a nursing home, just emptying bedpans and lifting older people into beds, just a very laborious sort of job. I had just started year 11. I was the youngest kid in the class in year 11. And I literally came home from school one day, I was only a couple of weeks into year 11, when my mum said to me, 'I've got to rip you out of school, you've got to go run the shop'. She'd tried to sell it but couldn't sell the shop. And I said 'What?' And she said, 'You've got to go run the shop until the shop is sold'. And I said, 'How long is that going to take?' And she said, 'As long as it takes, I don't know'.
[00:07:20] So at the time I was around the early 16 mark, I was either late 15 or early 16. I don't recall exactly. And so she ripped me out of school and I went and had to do a four hour commute every single day as a... let's just call it 16, as an early 16 year old. Had to do a four hour commute there and back on public transport every day. I sat all day in a shop that made no money. And then I closed the shop home. And I did that six days a week. I did that for two years, and I got paid $60 for two years' work. Because that's all that my mother could afford to pay me.
No Silver Spoons to be Seen
Her mum’s experience gave Barber the drive to work hard and taught her very different lessons than she would have learnt at school.
[00:08:08] I very rarely talk about my personal life. And it's something that somebody... about a year ago, actually, somebody put something on my Facebook page that said, 'Oh, it's so easy for you to make money because you come from a wealthy family'. And I just actually got quite offended at that comment on the time. And I thought, 'Oh my God, it's so further from the truth. We had no money and the wealth that I've created, I've earnt every single dollar of it with my own hands. By not being the smartest girl on the planet, just by working incredibly hard'.
[00:08:40] So recently, I've started to talk about my personal life, because I think a lot of people are in my situation. A lot of people don't come from a wealthy background. They weren't born with a silver spoon in their mouth. They weren't raised in families that had all the airs and graces and the best education. That's not representative of the average Australian. So I started to share my story in the hope that it does actually inspire people who maybe came from terrible childhoods or not so great upbringings, that it doesn't define who you are as an individual.
[00:09:12] Quite often, if you look at a lot of entrepreneurs, or a lot of really successful people in life, most of the wealthy people have been the people that have come from nothing. Because they've got that drive inside them to want to get a life. So I sat in that shop for two years, and then she sold the shop. So it was two years that she saw the shop, she saw this shop for a loss. So she walked away with the financial debt from that as well.
[00:09:39] And then a couple of weeks after my mum sold the shop, I got a phone call from the hospital saying 'You need to come up, your mother's actually had a nervous breakdown'. That was quite a terrible thing to witness that. And at the time my mum sort of became addicted to certain things. And it wasn't a good time. It wasn't a good time for her. It wasn't a good time for myself. But I look back on that experience and I think even though it was terrible for me at the time, I actually look back and I think it was probably the best thing that ever happened to me.
[00:10:15] Because at a very young age, I was running a small business. Even though it was a failure of a business, it taught me the meaning of hard work. It taught me the meaning of how hard it is actually to make $1. And what it most importantly told me is that even though I love my mother dearly, I didn't ever want to be like my mother and struggle financially. I never wanted to be that person. And so what I did is I literally walked out of that experience— actually, when the shop was sold I went back and I thought, 'Okay, I'll finish my education, I'll re-enroll back in year 11'. Because that got taken away from me at late 15, early 16, whatever the age was, I can't recall that exactly. And I went back, I re-enrolled in the same school. I was now the oldest kid in the class. And I lasted six weeks. I just matured beyond my belief that I couldn't readjust back to the classroom environment. So I went out and got a job.
[00:11:13] That's really strong adversity that you've come from, especially from those experiences that you had. And that first job that you got, was it anything related to property?
[00:11:26] I wasn't brought up in a wealth creation sort of mindset family. My family mentality was more one of survival. And so I didn't get brought up with any form of knowledge about wealth creation. There was a lot of things that I didn't learn in my childhood, and the same for my siblings. And some of my siblings weren't so lucky, they didn't turn out them, you know, they didn't scale that environment very well.
[00:11:59] By the time the shop was sold and all of that happened, I was about 18 years old, turning 19. And I just thought, 'Okay, I've got to go get a job'. That was my mentality back then. So I went and applied for a job at 3M Australia. And this company was really great. I actually attribute this company to part of my success, because 3M is a great company, it's a big global international company. For the people that are listening who may not have heard of 3M, they make all the Scotch products, Post-It notes, 40,000 products worldwide. So they're a huge company.
[00:12:34] I started in customer service, just answering phones, product inquiries, just on the phone, a very junior job. And I'd spend the next decade of my life there. I just progressed through the ranks, went from customer service coordinator to marketing assistant to marketing coordinator, Junior Product Manager... and by the time I left 3M, I was the senior product manager.
[00:12:59] But this company was really powerful because they invested heavily in staff. And I needed that, I needed an education because I felt like at school, I didn't really... I went to year 10, in effect. I'd only just started year 11 when my schooling ended. And so what happened was, they really invested heavily in staff training. So they taught me about business plans, strategic planning, checklists, templates, systems— all things that would become absolutely vital things in my career as a renovator, that I didn't know back then by default.
[00:13:32] So I stayed there for 10 years, I joined 3M when I was about 19, I was there from 19 to 29. And at the same time, I was with my boyfriend, and I was with him for about 11 years. And at the time, we were pretty serious about each other. We weren't married, we were still very young. And he came from an area that wasn't too dissimilar to mine and a similar background. And we're crazy in love and we thought, 'Okay, we're going to buy a house together, we're going to save and buy a house'. He wanted to do that, I wanted to do that at a young age, and we weren't thinking [about] buy[ing] 20 houses back then, we were just thinking, 'Buy one house that we can live in forever, happily ever after. We'll probably get married and this will be our forever home'. We were quite naive.
[00:14:24] I went and got a second job at a leagues club. And I worked at that second job for eight years. Just a local leagues club, and some nights I'd work in the Keno desk, some nights I'd work in the bar. It was like a bit of a gopher sort of job. And that's how I got my deposit to buy my very first property. We went halves, so my first property deal was a joint, like a co-ownership. My boyfriend went halves, I went halves. We weren't married, so we weren't sharing money at the time. So he saved up his money, I saved up mine and that's how we bought our very first property together at age 21.
What Have We Done?!
**Property investing journey**
[00:15:02] I thought that was a really good thing for a girl out west who really had come from a quite reasonably sort of Aussie battler background. I thought I was doing well. I bought my first property at 21. What happened was we bought this property, and we bought the first property on a six lane highway. So we didn't do any due diligence, because I didn't even know what that meant back then. So this was in 1991. We bought our first property at 21 as I was born in 1970.
[00:15:35] So we bought the property and as soon as we moved in, I just went, 'Oh my goodness, what have we done?' This house was so noisy, from all the cars and trucks zooming past. It was one of those houses where you just think a runaway truck's gonna come slamming in your front window at any moment. And I just said, 'We've gotta get out, this is horrible, we've gotta get out'. So what we did is we embarked on a quick cosmetic— a quick cleanup, actually, you can't even call it a renovation.
[00:16:10] We bought some paint and we painted the inside of the house ourselves. We just lightened it all up because when we bought the house it was heritage colours, like Fisher green wall, colour walls and heritage green. And it was quite a dark house inside. So we just bought some paint and we lightened and brightened everything up. We did it ourselves because we never had any money to hire any tradies, our bank account, literally by the time we bought the house, it had a couple of dollars left over because we scraped together every dollar to buy the property in the first place.
[00:16:43] We just ripped up the grungy carpets, we didn't polish the floorboards, even though the floorboards needed a polishing, we had no money to hire floor sanders. And we largely went on a rampage with a set of garden clippers and a lawn mower, and we cleaned up the unruly front and back yard. And that just made the property a little bit more presentable. And we put the property back on the market straight away. Now, we weren't looking at making a profit. We were getting out of this property purely to get ourselves out of a bad decision. And we were hoping that we could cover all our costs and not lose any money.
[00:17:17] And we did exactly that. We covered all our costs, our initial costs that we had to outlay, our stamp duty, our legals, our mortgage. And we sold it and we made a very small modest profit, it was only, like, $2,000. But we didn't lose money as 21 year olds. I turned from 21 to 22 in the process, and when we sold the house I was 22. And what we did is we actually went and bought another property and we thought, 'Okay, we stuffed up that first property, let's go buy in the same suburb in a quieter street'.
[00:17:47] So we went and bought in the same suburb, this time an unrenovated property in the quiet street. And then we literally just would spend the next eight years of our lives renovating that house, inch by inch, room by room. And when I wasn't working my full time job, and I wasn't working my five to seven shifts a week at the leagues club, any spare time I had off, I wasn't in a nightclub, I was painting walls on a Saturday night. We just did that. And we added a bit of value to the property. Again, we weren't professional renovators, we weren't... none of that was even in our mind back then. We were just renovating this home to create a beautiful home that we were going to live in forever.
[00:18:30] Sounds like the perfect home.
[00:18:34] I look back on that renovation now and I think it was so disgusting on so many levels. Like, the way we renovated it back then was terrible. Because we just didn't know. We were winging our way through the process. We were just like a lot of people, you just don't know, you don't get taught renovating at school.
Barber and her partner renovated the home room by room and were happy with it at the time, but she looks back on it differently now.
[00:19:01] It was our own home. It was just our own principal place of residence that we just renovating slowly, room by room, as time allowed. And I look back now— I actually found some photos of that property in a box that I had. And I was really happy to find the photos, but I look back on the photos now, we installed just the worst kitchen ever. We got incredibly ripped off at the time. That property, when we installed the kitchen was in 1996. And we paid $15,000 for this kitchen in 1996 which I just look back on that now and think 'Gosh, we got so incredibly ripped off'. The layout was fundamentally flawed. The colours were all wrong. We hired a painting team to paint external colours that now just send shivers down my spine. We were just clueless, like a lot of people.
The Accidental Renovator
[00:20:18] What actually spurred you on to get into renovating, was it after renovating your principal place of residence or was it something else?
[00:20:28] I do a lot of media interviews each week with the Australian press, and one of the common questions that people ask, as you've just done yourself is, 'How do I get started in renovating?' And I always call myself the accidental renovator. I never woke up one day and went, 'I'm going to become a renovator today!' I never went to a seminar and went, 'You know what, I'm gonna become a renovator'. I fell into renovating by accident. In all truthfulness, that first property, when I sold it, and I made that small profit, that was my first taste at making money a different way outside of a traditional job. And I sort of went, 'Oh, that's all right! That was sort of nice, and we didn't lose money. Let's go buy another unrenovated house'. So even though I wasn't still thinking, 'Okay, be a professional renovator', I thought, 'Okay, well, maybe I can just buy something unrenovated and add a little bit of value to it'. So yeah, I fell into renovating by buying a totally dud— my first property deal, a total dud.
Just like some renovations, sometimes relationships just don't last forever, and Barber and her partner broke up when she was 29.
[00:21:53] I was fine. We're still actually great mates today. But we just grew apart, like we were together quite young, and we were together for a whole decade, that's a long time when you're in your 20s, to be with somebody for 11 or 12 years, that's actually a long time. And we just naturally grew apart, but we're still like really good mates today. So we actually just decided to split very amicably.
[00:22:14] We put the house up for sale, so we sold the house fairly quickly, and the bank got paid back the mortgage, and then we split whatever was left over after the settlement proceeds, we split 50/50 down the middle. And so just to give you some perspective of where I was sitting financially, that was the only house that we had owned, we didn't own any other properties. So when we sold it we had no property. And when we split the money 50/50 down the middle, I was aged 29. And I had $175,000 in my bank account, that was my net wealth.
[00:22:50] Even though I hadn't made a huge amount of money, I think that people should put things into perspective. $175,000 isn't anything to be sniffed at either. A lot of people go their whole lives and they don't have $5,000 or $10,000 to show for their name. So even though it wasn't millions, I felt like I was heading the right way, like renovating, painting houses and doing the gardens and all that sort of basic cosmetic stuff. I felt like I was heading in the right direction financially, never to be broke like I saw my mother. I saw what a lack of money did to my mother and I just knew I never wanted to be like that. So I felt like I was heading in the right direction.
[00:23:32] So then what happened was I was single, I turned 30. And then I actually met my next partner. And I spent the next 13 years of my life with him. So I'm very much a long term relationship girl. I've only really had sort of two long relationships in my life. And so I met him and he was quite interested in property as well. And what we did is we— well, mainly myself— I thought, 'Okay, I'm gonna actually give this renovating thing quite a serious crack now'. Because I felt like I'd made good money with what I'd done in the past, with those two properties all through my 20s.
[00:24:14] So when I turned 30— this is really the beginning of my professional career. I spent three months doing it. I chose a suburb in Sydney. And I researched everything. I call it my 'intensive due diligence period'. It was a three month intensive due diligence period. And I'd researched everything, the suburb, the demographics, the suburb attributes, the historical capital growth, the future capital growth, the demographics, the housing types... I researched, I went to all the open for inspections. I went to the attended auctions, I found out who the best real estate agents were, who the best auctioneers were, and I was preparing myself for me. I was doing all of this in preparation for me buying my next property that I was now going to do a lot more strategically, not winging it.
Life Was Unbalanced
[00:25:04] So we ended up— with my partner Steve, we ended up buying this little house in Rozelle, which is about 6km out from Sydney CBD. It's an inner city suburb. And we ended up buying this property for $537,000. It was a house that had good bones, it was structurally fine. It was perfectly livable, but it was just cosmetically tired. And what we did is we got in and did an eight week renovation. So we both still had our full time jobs. And how we managed this was we popped on site of an evening to make sure the tradies were doing what they were supposed to be doing. Not all of them did what they were supposed to be doing! Yeah, so we definitely had some road bumps, we had some issues with two sets of tradies.
[00:25:51] One of them was painters, where we came to site one night and we discovered that the painters had failed to wash the house externally prior to painting, so there were cobwebs under the paint, there were bits of grit and dirt under the paint, you sort of run your hands over the weatherboard and you could feel the clumps of dirt. So we sacked the painters on that project and [did] a bit of rework, so it wasn't all smooth sailing, but it was nothing catastrophic, either. Nothing that couldn't be fixed, it was just a little bit of rework.
[00:26:25] My due diligence told me that I could comfortably re-sell this house for $800,000. So my total project costs on that project, we bought it for $537,000. And we outlaid in total just a tad under $150,000. So that was stamp duty, legals, reno costs, resale cost. We did that project as our principal place of residence. So it was totally tax free. We were hoping and praying that we could sell it for $800,000, because that's what my due diligence told me should be a comfortable target for that. So we were thinking, 'Okay, the project owes us $690,000, if we can make $100,000 quick profit while we're holding down our full time jobs, while we've got that income still coming in, we thought that was a bloody great result. So our life was very unbalanced during that eight weeks. This was prior to prior to us having our daughter together.
[00:27:25] We were working really hard. Life was unbalanced. It is what it is. If you want to get ahead, quite often your life will need to be unbalanced in some respect. You can't have your cake and eat it as well. And we took that property to auction as soon as the renovation was finished, and the auction hammer went down at— we were hoping for $800,000— and we're done at $955,000.
[00:27:49] So we ended up walking away with a $268,000 clear net profit margin, totally tax free. And when that auction hammer went down, it was my Sliding Doors moment that I just went, 'Oh my gosh, what are we doing?' I saw that money that we made, it was like winning the first division of Lotto. And we threw ourselves into renovating and I've never looked back. So fast forward 18 years, and I've now personally completed 110 projects.
Barber elaborates on her Sliding Doors moment and how it changed her life.
[00:28:31] I was a very conscientious worker working at 3M and the office jobs, I've only ever had two office jobs, [at] 3M and I moved across to L'Oreal. So the last time I was actually in full time employment was back in the year 2000. So, when that auction hammer went down, I quit my job a couple of weeks later and just threw myself in. I hate to say it because it sounds so cliched, but it's absolutely 100% the truth.
Coming up after the break, Barber reveals why she completes her renovations so quickly...
[00:40:53] I know that every day that I get slack on my renovation, it's costing me money, it's costing me lost rent. And sometimes people say, 'Why do you do renovations in such a fast time? Why do you put yourself under that pressure?'
She explains how she pays herself her wages...
[00:43:57] And so when I go on holiday, or if I want to go buy myself a new dress, it comes out of one of my lines of credit. Renovators live off their lines of credit. They're like their equity lines. Equity is your wages as a renovator.
She shares her advice on how to know what you want, and how to get there.
[00:49:41] The sooner you know what you want, what you're aiming for, then you've got to put the goals. Go, 'Okay, I want $1,000 a week rolling in passive income until the day I cark it. How am I gonna make that happen? What do I need to do to make that happen?' The sooner you can have that awakening, the better.
And that’s up next. I’m Tyrone Shum and you’re listening to Property Investory.
Barber has completed 110 renovations in 18 years, and she has one that became a turning point for her.
[00:29:35] I guess what was beneficial for me is that very early on... that project that I did, that project number three, where I did it a lot more strategically, I call that my first professional project. And I did that very strategically, I really put in the time to research everything on that. And luckily, I was able to learn what I learnt on that project. I was able to roll that into future projects. And so for me, the process actually became easier and easier, not harder and harder.
[00:30:09] I can honestly say there's been no project that I've actually found extremely difficult. I've never lost any money on a property. But what I have lost, I've lost hundreds of thousands of dollars in mistakes. I haven't found the actual renovation of properties hard, it's the mistakes. It was things like paying too much for stuff, getting ripped off by tradies, paying too much for stuff, shopping, buying the wrong fixtures and fittings, shopping in the wrong shops, paying too much for stuff. It was maybe spending money where I didn't need to spend money, getting too fancy and getting all designer when I didn't really need to be getting designer.
[00:31:00] I think the biggest thing that I've learnt now, I've been renovating now for 28 years, 18 years full time professionally, the first 10 years I say, 'Look, I was a hobbyist, I was a weekend warrior, I was just kicking around with my own two homes in my 20s, nothing serious. But I became a hardcore renovator in the year 2000. And obviously I've been doing that professionally for the last 18 years. But what I would have done differently is what I didn't do back in my early days, I didn't strategically map anything out, I was just winging it. I'd finish one unrenovated project and then I would go and look for my next unrenovated dump.
[00:31:39] And I look back now all these years later, and I think, 'Gosh, if I'd just sat down back on project number one...' What I failed to do on that first professional project, I failed to sit down and say to myself, two questions, essentially— 'Cherie, when do you want to retire? And Cherie, when you retire, how much money would you like rolling in passive income each week?' I didn't look back then at 'What can my ideal life look like? And what would that ideal life cost me?'
[00:32:10] That's the biggest thing, a lot of people don't do that. They don't know when they want to retire, how much money they want to have rolling in each month, each week, coming in retirement. So they don't know that, therefore, how can you set your goals? And so I didn't do any of that. And I look back now and I think, 'Well, if I had actually mapped that out, I would have completely bought a completely different property than what I actually bought all in my early years of renovating'.
[00:32:35] So just to try and simplify that and make sense of that, what I did is my first renovation, I started about six or seven kms out from the Sydney CBD, I was buying property around $537,000. I sold that property for $955,000. So very quickly, I was inching up around those properties that were... I was buying in my first couple of years a million dollars in value, unrenovated, spending about $300,000 or $400,000 on them, and then reselling them for high one [million].
[00:33:04] So I'd normally make about $300,000 profit. But I look back, I actually tied up a lot of my money, like I couldn't do multiple projects, because I had so much money invested in the project that it was on the go. So I couldn't jump into the next one until that was either sold or revalued. I did a lot of that, and I look back now and I think, 'You know what, I probably shouldn't have done those really expensive properties. I should have been buying properties, for example, in Sydney's West'. Where 18 years ago, I could have been buying those properties for like $120,000 that are all now worth like, $800,000 [or] $900,000. Back then I probably could have bought 100 of them.
[00:33:51] So I could have been... even though I'm a wealthy person today, and I'm not complaining, I think if I had strategically mapped it out, I could have been a hell of a lot wealthier if I just knew what I was doing from a strategy viewpoint. I had no strategy. And it's really not until the last five years that I've really sort of harnessed the power of strategy first.
For Barber, the decision to buy, renovate and hold or buy, renovate and sell all depends on the market and the person’s situation.
[00:34:41] A lot of people will do the buy, renovate and sell strategy where they'll get in and out very quickly. They'll manufacture that instant equity, they'll sell and they'll cash out. But it's not a strategy that I'm really endorsing. Because A) not every suburb in Australia is a buy, renovate and sell suburb— some suburbs are buy and hold suburbs, some suburbs you can buy and sell.
[00:35:15] It also depends on what stage the property market cycle is in. As you know, Tyrone, the property cycle goes through four key stages— the boom, bust, recovery, slow down. Not in that order. And your ability to renovate and sell and your ability to renovate and rent depends on what stage of the cycle you're actually in. And it also depends on how much equity. If you're starting out from a very low base where you haven't got much money behind you, you might find that you might need to do a buy, renovate and sell for your first couple of projects. And as you start to build equity, then you can transition to the buy renovate and rent strategy.
[00:35:53] So you've just got to take your personal circumstances [into consideration], there is no right or wrong answer. What I do say to people, though, is most of my students I'm encouraging to buy, renovate and rent. Because when you do make the decision to sell, there's a lot of costs, you lose a lot of your profit margin, capital gains tax, agent's commission, marketing costs, property styling cost... on a low budget property, those costs alone can be $30,000. And that's a lot of profit that you never get back. Also when you sell you lose a bigger chunk of profit, which is called long term capital growth. At the end of the day, it's compounding capital growth that makes you wealthy. So I say try and avoid selling at all expenses unless you absolutely need to.
Several years ago, she moved from structural renovations to purely cosmetic renovations and has found that this works best for her situation.
[00:37:13] The reality is when you buy a structural renovation, as soon as that auction hammer goes down, or you buy it for sale, you need to go off and you need to get a site survey done, you need to go engage an architect. Then your architect produces their plans which will take anywhere between one to three months depending how slow or fast your architect is, or your draughtsman.
[00:37:48] Then you've got to lodge it in Council. Most councils these days are taking between on average, six to 12 months to actually approve your development application. They say 40 days, but none of them ever do 40 days. And so you'll do the best part of the year just into the planning process, and then you've actually got to build the extension or do the new build, and most builders will quote somewhere between six to nine months to do that. So a structural renovation, pretty much the timeline [is] one and a half to two years typical timeframe for a structural renovation from start to finish.
[00:38:25] The market can also vary. The market can drop within two years. From the start of a project to where it's finished the market can look completely different. So what I did is I transitioned out of structuals and I moved 100% solely into cosmetic renovations where A) I can buy the properties at a lot lower price. I can get in very quickly as a renovator. So with my cosmetics, I do my cosmetics, I'll transform a whole house in eight to 10 days.
[00:38:53] Now, I'm not advocating anybody try to do a whole house in eight to 10 days, it is a bit like renovating on crack. So I say to the public, just try and do your cosmetic renovations over the course of six to eight weeks. And that's a very comfortable time for most Australians, while they're holding down their full time job even. So you have the ability to get in and out very quickly as a cosmetic renovator, in a lot of the changes you make as a cosmetic renovator don't require council approval. You may not need a licenced builder depending on which state of Australia, so there's a lot of really good reasons to be a cosmetic renovator because it's like turning over your money fast.
[00:39:40] After you've done the renovation, then would you go back to the bank to re-evaluate so that way you can get the equity back out to move on to the next project?
[00:39:50] Renovators, we live off our equity lines. So you just go back, you're obviously creating that instant equity in the renovation. You bought the property at this price. You've got in and done the renovation. You need to spend the right amount of money. And then you obviously get it revalued at X amount higher. So in the game of renovating for profit, it's all percentages. You buy here, you multiply by this, you resell here. What I do now, instead of doing one structural renovation, I do multiple cosmetics at a time. So depending on how my diary is going, I may do two renovations, two cosmetics at the same time. Very similar projects where I can just move my trades from site to site, I can negotiate two bathroom tiling jobs, so you can lower your cost a little bit better. So there's lots of ways you can do it if you're smart.
Keep Up the Momentum
[00:40:42] As you said, it's a numbers game at the end of the day, and ensuring that everything's met within timeframes to make sure that the project’s delivered on time as well.
[00:40:53] I know that every day that I get slack on my renovation, it's costing me money, it's costing me lost rent. And sometimes people say, 'Why do you do renovations in such a fast time? Why do you put yourself under that pressure?' And the simple answer is every day that that property sits lingering with not a significant amount of work happening each day, it's actually lost rental income.
[00:41:15] And just from my experience, also, your trade team tends to get on a roll. Because we're doing our renovations in a fast period of time, even if it's going over two or three weeks, they're focused on that project. Like there's an end goal that's very, very touchable. So I find that the momentum stays much higher in a faster renovation, rather than one that trickles out over six months.
[00:41:44] It’s almost like a manufacturing process. Once you start on one section of the build, you can't really quite pull it out and stop doing it. It's kind of no different when you're doing renovating.
[00:41:56] Well, tradies also have other jobs to go to. So when they're on yours, they're focused on that, and then they can go to the next one. So lots of reasons to do quick renovations. But obviously if you're going to do that you need to make sure that the quality of those renovations is not suffering anywhere down the line. And that's very easily managed during the renovation.
Renovators Live off Lines of Credit
She funds her renovations using her lines of equity, which helps her to manage her cash flow and make sure she doesn’t blow the budget.
[00:42:31] On all of my properties, I have lines of credits on all of my investment properties, I have those maximised up to the maximum lend, typically 80%. It's not to say that I owe 80% on those properties, I don't. But there'll be lines of credit in place for all of those properties.
[00:42:57] So in my bank account, for example, I'll just pick a random figure out of my head. For example, I have a lot of properties out in Sydney's West, I might have one property where the property might be worth $600,000, I have a line of credit for whatever that is, 80% of $600,000. What's that, $480,000. So, [the] line of credit will be $480,000, but I might only owe $350,000. So I have $130,000 available equity sitting in that account.
[00:43:33] And that's all I do, is every time I do a renovation or I need to pay a deposit on something, I just pull it out of one of my lines of credit somewhere and I fund my renovation from my lines of credit. And obviously, you need to make sure that you're accounting for absolutely everything from an accounting point of view, so that you can maximise all of those tax deductions at the end of the year.
[00:43:57] And so when I go on holiday, or if I want to go buy myself a new dress, it comes out of one of my lines of credit. Renovators live off their lines of credit. They're like their equity lines. Equity is your wages as a renovator. So it's just a bit of a different way that you look at your mindset. It's a mindset matter. People say why would you be eating away at all of your equity, but it's not eating it away. It's actually continuing to do deals, you're generating an income from your equity lines, you're taking some out, you take out to refund your deposit, your renovation, your meals, your dresses, whatever, and then when you do a renovation, it tops back up. A bit like a funnel that goes in and out.
[00:44:56] Constantly a bank account is going up and down. So when you sell a property, your lines of equity go up. And then when you buy a deposit, when you pay the next deposit, the next property goes down. And then when you pay tradies it goes down, down, down. And then when you get it revalued it goes up again. It's a concept that a lot of people struggle to understand,
[00:45:16] How do you get more of a consistency in your cash flow situation? Because you've got your business running as well, too, your courses, and also speaking, as well. Is that also helping with regards to cash flow?
[00:45:29] It's a completely separate business. I don't involve my own personal properties, my property renovation projects are completely separate to my public speaking business. Two totally separate entities.
[00:45:59] My public speaking business pays me a wage as well. But I also have obviously my lines of credit that come from my property.
Move Your Mindset
Barber is a big believer in education changing people’s mindsets, having moved from a survival mindset in her early years to where she is today.
[00:46:32] One thing I just wanted to mention as well, and also I have all of my properties, because I buy and hold a lot of stuff, I also have all my rental income as well. So my properties generate rental income, and most of my properties are positive cash flow, so each property after the mortgages, they still put surplus money back into my bank account as well. So I do generate an income through my property investments from that way as well, besides the equity loan creating.
[00:46:57] I think money mindset wise, how can somebody create that? For me, the way that I wasn't born with that mindset. And as I said earlier, I was more survival mindset. I think the best way [for] people to do that is education. It's what I did back when I did that first professional project. And I started reading books, I went to a couple of seminars and all that sort of stuff. And I started to educate myself.
[00:47:23] But in all truthfulness, it's something that people just... they don't really learn. A lot of people struggle with strategy, they struggle with mindset. I just think you need to be very clear on your goal and try and put yourself in that mindset. I don't know, I speak to a lot of Australians around the country and a lot of people are just very unclear about their strategy. They're very unclear about what they need to do from a mindset perspective, a lot of people just don't think about it. A lot of people think mindset is rubbish. But it's not. It's everything.
She recommends asking yourself two simple questions to set yourself on the right path to adjusting your mindset.
[00:48:15] I think when I say— and I say this a lot in my public speaking gigs, because I try and give people a very sort of simple basic approach— and where I start with them is essentially those two questions that I stated before. I say, 'Look, it's not about how many properties you own. It's truly not about that. What you essentially need to find out is when do you want to retire? How much money do you want in retirement?' That's really all people really need to know. Because from that alone, if people go away and calculate what their ideal lifestyle looks like, then they can actually put strategies in place to actually go 'Okay, this is what I want, how can I actually achieve it?' I believe it can be a very simple thing. Don't overcomplicate it.
[00:49:04] The average Australian typically, like when you look at the average profile of most Australians and they work out their ideal life, most Australians if you base it on a property that's worth around $500,000, most Aussies need to try and reach somewhere between three to five properties fully paid off at retirement. We know that the average Australian doesn't actually achieve that. And largely because they don't set these goals early, these financial goals early on in life. And then they sort of learnt stuff like this later in life and sometimes that can be a little bit too late. It makes it extremely hard to achieve that. So the sooner you know what you want, what you're aiming for, then you've got to put the goals go 'Okay, I want $1,000 a week rolling in passive income until the day I cark it. How am I gonna make that happen? What do I need to do to make that happen?' The sooner you can have that awakening, the better.
I Could Have Been a Disaster
Barber has achieved her success without any assistance from mentors, which she attributes to not being exposed to successful people in her early years.
[00:50:23] I just wasn't fortunate enough to have somebody to hold my hand and say, 'Do this, do that'. I wish I did. I've really had to learn things the hard way, I've really had to figure things out for myself. And look, I've done very, very well for myself, I've done very well for myself surprising, I could have turned out a complete and utter disaster. But I didn't.
[00:50:44] I think the thing that really got me through that poverty background into a wealthier space is... I just... my biggest thing, I think, is that I just worked hard. People say 'Work smarter, not harder'. I agree with that. But I was the person that worked hard. I've worked incredibly hard over the last 28 years. The reality is, being on a renovation site, it's not glamorous. You're covered in dust, you go home with dust in your hair. Most days, you look like somebody who doesn't have 20 cents to their name, because you're covered in paint, dust, crap, construction waste. I just worked hard, I just thought, 'Okay, I'm going to renovate, I'll just stick my head down'. I just did it. And I winged my way through a lot of renovations, made a lot of mistakes.
[00:51:41] But I just think my biggest attribute is I'm a hard worker. Not the smartest girl! Like, I'm not stupid. I'm not a university qualified whatever. I don't need to be that. A university degree doesn't agree, it doesn't guarantee wealth. What will largely guarantee wealth is your mindset and your willingness to work hard.
[00:52:04] I just want to tell you something, Tyrone. I live in a street in Sydney, and my street is a pretty exclusive street. It's actually the wealthiest street in my whole region. And I have a lot of very wealthy people on my street. And in fact, I'm the poor kid on the street. And all of my neighbours, my neighbour next door, he sold his business for, like, $420 million and the neighbour next door, he's a high flying barrister that charges some crazy amount per hour to his clients. And then the guy next to him, he builds all the freeways between Sydney and Brisbane. He's loaded! I'm the poor kid!
[00:52:43] But you know what, we actually got together a couple of years ago for the very first time for a New Year's Eve party where all the neighbours came together. And I didn't know my neighbours from a bar of soap. So I thought, 'Okay, I'll go along and meet all these guys'. I'm really glad I did, because they're lovely. But we had one common thread between all of us. When we started talking about our backgrounds, we all discovered that none of us had a university degree, none of us. We were all like year 10 dropouts or year nine, one of them was year eight. You know I got pulled out at year 11. None of us had even literally done our High School Certificate. But all of us were hard workers. We just worked really hard. And we built our wealth.
[00:53:22] So I always say you don't have to be incredibly smart. You've just got to be willing to work really hard at something and just do something you're passionate about. For me, I love renovating. I spring out of bed at four o'clock in the morning super excited to put my work boots on. Because I get to go and renovate ugly houses that I turn into beautiful homes. I get to have fun and lots of jokes with the good tradies that I work on site with every day. It just feels like a hobby I happen to earn fantastic money from. I think if somebody can find their passion and then be willing to work incredibly hard at it, wealth will come.
[00:54:04] If you met yourself 10 years ago, what would you say to her?
[00:54:24] I think it would have just been strategy wise, I think I would have said 'Hey, get out of these higher value properties and get yourself into the cheap end of town, because there's a lot of money to be made in the cheap end of town'. I think that's what I probably would have said to myself, I think that's the only thing I would have changed differently.
[00:54:52] I'm happy. I've earnt a really... you know, I'm very comfortable financially, my daughter's set for life. I have a really blessed life, I can honestly say I have a blessed life. I have a blessed life because of one thing: renovating. It really is. And it's not a free road to wealth. Anybody who's renovating that's listening to this and who's a renovator at the moment, they know it's not easy. Some days you'll be on site and you'll be absolutely loving it and then other days you'll think 'Why in hell did I ever want to become a renovator?' But that's like every job. So that's the only thing I'd change differently.
Time to Slow Down a Little… Sort Of
[00:55:35] What are you most excited about your renovation journey, say, over the next five years?
[00:55:44] For me now, I'm just trying to slow down a little bit. Obviously I've been, like I said, a renovator on crack, just renovating all these houses. I do between 15 to 20 houses a year. I do about six or seven of my own personal projects every year. And I did somewhere around 10 to 15, just depending, 10 to 15 TV renovations a year where I'll be renovating a whole house or I'll be renovating somebody's kitchen or bathroom for television.
[00:56:15] And as I get a little bit older, I'm almost turning 50, I just want to slow down a little bit. So for me, I'll still be renovating when I'm... I'll still be renovating until the day that I can't see my renovations anymore. You know, like I've gone completely blind or deaf or whatever. I love what I do. And I still know that I'll be renovating in the next 20 years, but I won't be going at the intensity that I am [now]. I'm definitely keen to renovate a little bit less.
[00:56:40] And I'm definitely still continuing down the education path. I absolutely love that because I feel like... I've been educating for 10 years now and my programme Cosmetic Renovations for Profit has become Australia's leading renovation course in Australia by far. We've got over 12,000 students around the country that no other education provider can boast. So I've got a lot of students from word of mouth, just from people coming into the course and then going out saying to their friends, 'We've got to go do this course'.
[00:57:13] And I really enjoy the education part because for me, I'm living my dream renovating. But now if I can share my passion and help other people not make the same mistakes that I did, well, I'm absolutely going for that. And that's what I've been doing. So we'll continue down the education path because I love just being able to help people not make the same mistakes that I had to make. And so yeah, pretty much just slightly less projects, not crazy. I'll go from like 20 to maybe 10 a year.
[00:57:44] Still quite a bit!
[00:57:45] It is, yes! And then obviously still continuing down the education path fairly strongly.
Not Just the Accidental Renovator— the Accidental TV Renovator
She got into media as accidentally as she did renovations, and therefore calls herself the ‘accidental TV renovator’.
[00:58:20] In my early years, back in the year 2000, I was bidding on a lot of property. I'd go to auction, I'd miss a lot of properties. And back then from time to time, they'd have a journalist and a photographer taking pictures of auctions and what was happening and reporting on entrepreneurial auction results.
[00:58:37] And a journalist actually said to me one day, she came up to me, she goes, 'Who are you? I actually see you bid on quite a lot of properties'. And I said, really flippantly, I just said, 'I just buy houses and I get in and renovate them. And I'll either sell them or keep them,' and she's like, 'Oh, that's really interesting. You know, you're quite a young person'. I was only 30. And she said, 'Do you mind if we do a story on you?' I think it was the Daily Telegraph. And I said okay.
[00:59:03] So she did a story on me, about young people buying property and renovating property. So that that was in the newspaper and I thought, okay, nothing will come of that. And I wasn't expecting anything or wanted anything to come from that. And then Channel Seven's Today Tonight saw that article and they rang me up, they tracked me down somehow. And they rang me up about two weeks later and said, 'Oh, we saw your article in The Daily Telegraph. Do you mind if we do a story interview on you?'
[00:59:29] I did that. And then they kept calling me in for about two years. They called me in to do sort of renovation related stories. And then from that, Foxtel saw me and I did some home institutions through them. And then the producer from Foxtel became the producer of The Living Room. And that's when I sort of became my serious TV sort of presence. And so I've been on The Living Room now, I'm one of the original cast members. So I've been on that show for... I'm just finishing this week on my seventh season.
[01:00:02] And then obviously Channel Nine saw me on Channel 10. And they called me up and said, 'Could you do a few renovations for us?' And I said, 'Sure, no problem'. And then I think the biggest break was HGTV in America did a worldwide casting call for new renovation shows. They contacted an Australian agent and they said, 'Look, do you know anybody who's like a hardcore renovator?' And they said, 'We do know of a girl but she's not on our books'. So they contacted my office. All of this happened without even me knowing!
[01:00:35] And apparently, my team— I've got about 20 staff in my headquarters that look after my public speaking— they sent some photos over and they sent some videos completely unbeknownst to me, I could have killed them! And they sent that to America, and they said, 'Oh, we sort of like the look of her and she looks okay and she looks like she knows what she's doing'. So they contacted my office, and then they flagged it with me. And I actually landed the gig of Five Day Flip in America by accident as well. It was a bit of a process, I had to go and audition and I had to actually do a real life renovation in five days, and I passed all of that with flying colours, and then I got my series of Five Day Flip in America. So all of it's been by accident, like my very first renovation project, my whole career is one big accident!
Thank you to Cherie Barber, our guest on this episode of Property Investory.