Property Investory
How to Pay $100,000 For A $1.8 Million Property With Dawn Canale
November 13, 2017
Dawn Canale is a self-claimed serial entrepreneur, taking on the roles of strawberry farmer and mother as well as property investor. After growing up in various places in Australia and overseas, she took the adaptability skills she learned and combined them with her mum’s investment skills to create her property portfolio which is now standing at $23 million.
Join us on this episode of Property Investory where you’ll hear Canale’s stories of regularly dealing with $20 million checks at a young age, how when she started at the strawberry farm she inspired others to simplify their lives, the property decisions she’s made that scared her husband, and how sometimes, investment headaches can lead to amazing potential.

Timestamps:
00:50 | Serial Entrepreneur
04:04 | A Champion Chameleon
06:55 | Through the Generations
10:00 | Onto Bigger and Better Things
12:33 | Money Vocabulary
15:44 | Starting in Strawberries
19:03 | Determination and Due Diligence
22:16 | $20 Million? Blah, Blah, Blah
26:02 | Doin’ It For the Kids
27:56 | Factory FIghts
32:20 | The Power of Leveraging

00:25 | Jump In, the Water’s Fine
04:32 | Thanks for Coming to My TED Talk
05:49 | A 100 Year Old Strawberry Farm Retreat
10:55 | Conservative, or New Car?
14:24 | The Road From Residential to Commercial
18:50 | Look at the Lesson in Everything

Resources and Links:

Transcript:
Dawn Canale:
[00:19:03] The first property we bought... as I said, I could see farming was hard, hard work. And I didn't really want my husband doing that when he was in his 70s and living off a measly pension. So I thought, 'Well, if we can get some properties going, and some rental income coming in, hopefully replace our income, then we won't have to work so hard'.  
 
**INTRO MUSIC**
 
Tyrone Shum:
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 strawberry farmer, property investor, mum, and self-described ‘serial entrepreneur’ Dawn Canale. In the last two decades she has built over $20 million in property— tune in to find out what got her started and why, who her ‘Gods’ are and why Channel Seven has been chasing her for one of their shows!
 
**END INTRO MUSIC**
 
**START BACKGROUND MUSIC**

Serial Entrepreneur

Tyrone Shum:
They say you can’t do it all, but Dawn Canale is proving them wrong, one industry at a time. She took on accounting before diving into farming and motherhood, and doesn’t plan to stop learning and earning any time soon.

Dawn Canale:  
[00:00:50] I've been a strawberry farmer for about 23 years. My husband grew up on the strawberry farm in the Yarra Valley. I have an accounts background as well and a Diploma in Financial Planning. I'm pretty much a self-taught multimillionaire in property, learning from books and other successful people. And I've accumulated over $23 million in property, returning over a million dollars in rental income, plus running a successful strawberry farm seven days a week. And I have two amazing teenage daughters aged 16 and 18. 

Tyrone Shum:
With so many things going on at once, what does a typical day look like for Canale? Is there even a ‘typical’ day?

Dawn Canale:   
[00:01:46] Well, at the moment, it's not really strawberry season. So actually this year, I've taken a year off. It's like a gap year. So I'm studying. I'm doing lots of research and study to actually write my own book. I get up at 6:30 in the morning, and it's pretty much go go go with family life and studying until I go to bed at night. 

Tyrone Shum:   
Canale expands on what she’s currently studying. 

Dawn Canale:   
[00:02:15] I'm doing a I Love Real Estate course with a lady called Dymphna Boholt, and I've been doing that for about three or four years. So I'm a platinum member in that. We have monthly meetings and seminars all year round. And I'm also doing lots of other seminars as well. So life coaching, I've done NLP, I'm doing a Tony Robbins, Unleash the Power Within next month. I've just done lots of seminars this year, one comes up, and I'm available, I go to everything.

Tyrone Shum:
As an avid learner, she has found this has helped her with her property investing journey and helped to where she is now.

Dawn Canale:   
[00:03:03] I feel you never stop learning. I just want to learn everything and just help people by putting it all in a book. I'm just trying to cater to the younger generation actually, where they're still like a nice young sponge that want to learn. I have a bit of a motto that I'm happy to help anybody who's prepared to help themselves. I get a lot of people come to me as a mentor. And I just give them some advice on what to do and how to do it. I really enjoy it. I found that's kind of my calling at the moment, which is why it's kind of inspired me to write a book as well. 

A Champion Chameleon

Tyrone Shum:
We know she didn’t grow up on the strawberry farm, so where did Canale sprout from?

Dawn Canale:   
[00:04:04] Well, I was actually born in Wagga Wagga. My father was in the Air Force, so we moved around a lot. And by the time I moved here on the farm, I'd moved house 15 times. We just moved around a lot. I was the Victorian champion in karate when I was 15. I trained six days a week. I was the year 12 school captain and all of this has kind of taught me a lot of discipline and to be very adaptive in life.

Tyrone Shum:   
Between her father being in the Air Force and Wagga Wagga being in New South Wales, and Canale now living in Victoria, she has moved a lot in her life so far.

Dawn Canale:   
[00:04:46] I was only there for a month after I was born and then we moved to Perth. I was in Perth until I was seven and then we lived in Malaysia— Penang, Malaysia, overseas— and then we came back to Melbourne when I was about 10. And I've been in Melbourne ever since, but I feel like I've lived in about 10 different places in Melbourne, moving around everywhere. I feel it's made me really adaptable. It's a bit of a chameleon. So whatever fields I choose to do, even being on the farm, I never had a farming background but I was quite keen to learn. As soon as you get on, it's 'Okay, what else? How can I learn this?' and you just become really adaptable.

Tyrone Shum:  
Making friends as a child can be difficult enough, even without frequent moves— did this hinder Canale, or perhaps add strength to her character?

Dawn Canale:   
[00:05:45] That was quite hard, actually. I always feel like I'm a bit of a black sheep, because you're always changing schools and having to build rapport with people and become friends with them. I find it's really easy to meet people now. Even at the seminars I go to, I love networking and meeting new people and fitting in with new people. Even with the I Love Real Estate group that I'm with, I try to sit near different people every time. And don't just sit in your comfort zone. You just go 'Okay, I'm gonna meet 10 new people today', and you just go and meet different people. And I find that really easy. I actually enjoy it.

Through the Generations

Tyrone Shum:
With her dad being in the Air Force and travelling a lot, Canale explains how she learnt a lot about life from her mum, and how she passes that onto her children today.

Dawn Canale:   
[00:06:55] Because Dad was away a lot, my mum kind of had to control the whole house, she handled all the finances. And she really took control, which is kind of like what I do in my life now. I'm the one that handles all the finances and controls the kids and a little bit of that military style with the children as well, which I like. It teaches them discipline. 

[00:07:20] My kids are real tough when it comes to that, especially being on a farm as well. I think it just sets you up for life. You virtually tell them 'It's not negotiable, this is what you've got to do'. They fight it a bit when they're younger, but now they're older they're just so strict in their own discipline, which is amazing. Their work ethic is amazing for 16 and 18 year olds to just know there's jobs to do, and they just go and do it. I really love seeing it now. All the hard work when you're a mum, pushing your children, and then you see it's paying off when they're young adults is really rewarding. I really enjoy that.

Tyrone Shum:
We get a glimpse into the work ethic she’s instilled in her children as she details her eldest daughter’s promising career aspirations.

Dawn Canale:   
[00:08:25] A lot of education starts at home. It's not just at school. So if you can teach them to have good beliefs— not limiting beliefs— it sets them up for life. And discipline— I'm not saying physical discipline— I'm just saying mental discipline that sets them up for life and just say 'Look, it's not negotiable. Not everyone likes doing the jobs they do. You've just got to suck it up and do it'. They're doing really well at school. My oldest daughter's at university and she’s just finding it really easy. She is studying photography. Her work ethic is amazing. And she's had her own business for two years, even while she was doing year 12. I can talk a little bit about that later. Her attitude towards working and not being afraid to make phone calls and reaching out and getting business. And she's 18. I learn a lot from her! It's like, 'Did I teach you this stuff? Wow!'

Onto Bigger and Better Things

Tyrone Shum:
Shifting into property, Canale explains how her interest and savviness in this arena came from her mum.

Dawn Canale:   
[00:10:00] Because we moved a lot, we did tend to... my mum would buy a house and always went for a bigger, better house. And she'd explain how 'Oh, and then we sold this place for $115,000 and then we went and bought this house that's five squares bigger in a better location, and we built it for only $10,000 more'. So you see the value in properties. Sometimes my dad had just come home, and there's a For Sale sign out the front of the house. And he'd be like, 'What are you doing?' She'd be like 'Oh, I found this really nice house, it's bigger and better'. And all of a sudden we're moving again. 

[00:10:41] But each time she gained equity in it. And my brother turned out to be a builder. So she started taking advantage of that as well. It's like 'You can build us a bigger and bigger house!' And seeing that, that was probably my first experience with property. Seeing how you can gain that equity in houses by building. Yeah, that was probably the start.

Tyrone Shum:
Canale has a portfolio of properties— did her mum have the same, or did she stick to family homes, one at a time?

Dawn Canale:   
[00:11:29] Mainly just their own home. She had said to me, she wished she knew all this kind of information years ago, but I think the majority of people just think of their PPR, their home, as an investment. And it's not. To me an investment is something that provides an income. My mum, and a lot of other people, tend to think that their house is an investment and they put everything into their house, and they don't need anything else. But what are you going to do, take a brick off to eat it when you want to retire? It doesn't work like that.

Money Vocabulary 

Tyrone Shum:
Canale delves into the first jobs she had and what they taught her— not just about work, but about life.

Dawn Canale:  
[00:12:33] When I was at school, my first job, I really wanted to work in the stock market, I loved that. But that's when the crash happened. So I actually had a job lined up and that got cancelled. So then I thought, 'Oh, if I try and go through the finance arena, through a bank or something, I might still get to the stock market'. So my first job was actually in a bank at Services' head office in South Melbourne.

[00:13:01] Then an opportunity came up to change to a construction company for double the income. So I took that pretty quickly. Then that company went broke, we went into receivership. Then I worked for another construction company as a personal assistant for an estimator, which was very interesting. And I worked for Fletcher Jones, head office and accounts receivable, in customs, doing account payable. And one thing I've found working in lots of different industries is they're all one like an apprenticeship to life. You learn little bits out of each job. And it kind of helps you with your financial journey. 
 
[00:13:49] It also helps you with your money vocabulary. I always use this term, 'money vocabulary'. I don't know if I've stolen it off anyone but I use it a lot. I thought I created it. So I kind of think of it as your money vocabulary, like dealing with lots of money. When I worked for customs doing accounts payable, I was paying over $20 million a year in checks. So when you're seeing that kind of money turning over all the time, and budgets of, say, $14 million in advertising every year, it just makes you think of money a little bit differently, as opposed to just filling in your $500 paycheck every week and how you're going to budget that. So I would say your money vocabulary, like when you're so used to hearing millions of dollars in figures, that it's not unusual for you to start thinking in those terms. Like my kids, I make them aware of the million dollar properties and the hundreds of thousands of dollars in rent each one gives you, and loans that you're taking. So they're familiar with these kinds of figures all the time. I think that's really important.

Starting in Strawberries

Tyrone Shum:
She details when she jumped into strawberry farming, and how her wise words helped others to help themselves.

Dawn Canale:   
[00:15:44] I think I was about 24.

[00:15:51] My husband wanted me to quit my job to work on the farm. And at the time, they weren't making a hell of a lot of money. They only had a couple of staff. But because I'd worked for big corporate companies at hundreds or thousands of staff, and they had four staff. And I said, 'Well, you know what, I'm kind of earning $50,000 a year at the moment'— at that age, which was excellent. I did have three jobs— and I said, 'Well, if I'm going to quit my job, you kind of have to plant a few more strawberries to cover my income, plus do your income. So I'm not quitting until you do that'. So then he started expanding. 

[00:16:37] They're old school. Italian farmers don't like paying for wages, and they tried to do everything themselves, manual labourers, hard back breaking stuff. I'd say to him 'Why are you doing that? Isn't there a machine, some kind of instrument you can put on the back of a tractor to do that? What are you doing that by hand for?' So I kind of came in looking at the big picture, and they are so programmed to do everything manually, that he'd say, 'Oh, yeah, but that'd cost me $1,500'. I go, 'Honey, it's tax deductible. What are you doing? Look at how much time you're wasting doing it! Buy the instrument, will you?!' 

[00:17:18] So I started making him think in a different way. So he started buying more tractors, more machines, more implements, putting on more staff, expanding the business. From back then he's actually gotten over 10 times bigger than what he was then. And with everything back then you paid cash for it whereas I've taught him leveraging, getting loans for things and using them to your advantage. That's mainly in property. I wouldn't get loans for basic stuff on the farm. But tractors, definitely. Why not lease it? We started doing things like that over a three year period. Whereas before, they had to save up to actually buy it. I said 'Honey, sometimes the bank is your friend, if you use it to your advantage, and you're disciplined in what you buy even credit cards are good'. I don't pay one cent in interest on my credit cards, and I probably use $10,000 to $20,000 a month from my credit card. But I get some nice points!

Determination and Due Diligence 

Tyrone Shum:
Canale explains how she got started building her first property in her portfolio, and how putting her foot down really paid off— figuratively and literally.

Dawn Canale:   
[00:19:03] The first property we bought... as I said, I could see farming was hard, hard work. And I didn't really want my husband doing that when he was in his 70s and living off a measly pension. So I thought, 'Well, if we can get some properties going, and some rental income coming in, hopefully replace our income, then we won't have to work so hard'. So that was my strategy. Plus we were paying tax and I was like 'How can I minimise our tax?' So there's two things there. 

[00:19:37] We bought our first property back in 1998, when I was five months pregnant. I remember saying to my husband about buying a property, I said, 'I want to start buying', and he said 'No no no, I don't like loans. I don't want to do this'. And I said to him 'Honey, you need to do it with me or I'm going to do it on my own'. And I was pregnant at the time. And he's like, 'Okay, well if you're pregnant and you're that strong about it, we’ll start looking'. So we bought our first place in Ringwood, Victoria, and we did all our due diligence with this place in Ringwood. We knew the freeway was going to come through in years to come. So we went to council and made sure that we were in a safe area and it wasn't going to get taken off us. 

[00:20:24] We purchased this one particular block, knowing down the track it could have a commercial benefit to it because it was the last property right on the freeway. And as it turned out, Eastlink actually liked the property as well and built their head office on it. So they did compulsory acquisition and forced us to sell. And they saw the commercial benefit of it. So we were a little bit disappointed about that. But saying that, we did get legal action and we fought it for about three or four years, and we did end up making a 400% profit on it. It was pretty good. We paid about $190,000 for it and we ended up selling it for $880,000 which then gave us quite a bit of money to buy other property. So I split that and bought two other big properties out of it. 

[00:21:37] I kind of have a rule of not to sell. I like to keep my property. And at the start, once we bought that one at $190,000 I thought, 'You know what, I could do this every year. If we buy something for $200,000 every year for 10 years, in 10 years, I'm gonna have $2 million in property'. Well, I kind of achieved that in three years. So I thought, 'Okay, well, my next target's $5 million, then $10 million, then $15 million, and then $20 million', and then we just kept... I never told my husband these goals, because he'd have had a heart attack.

Tyrone Shum:
[00:22:11] I want to know how he feels right now after hearing that much about it!

$20 Million? Blah, Blah, Blah

Dawn Canale:   
[00:22:16] He's happy now! But at the time, he was really scared of loans. So if he knew I was just gonna keep buying to get more and more loans, then he would have freaked out. So we just did it one at a time. 'Oh, I think maybe we should buy another one now, I think we're ready for another one now'. But in my head, I had these goals and targets that I wanted to reach. In the end, the value became a bit boring. I suppose once you've got to $20 million it's like, okay, that's boring now, the next level, blah, blah, blah'. 

[00:22:49] Then I started focusing on the rental income. Dina was like, 'No!' We had a couple in there that would be the land banking. So even though the value was going up, your rent wasn't going up. It might have been going down because it was negatively geared. So then I started focusing on the rental income, and then I wanted a goal of a million dollars in rent. And I actually achieved that last year, I was quite happy with that. And sometimes it wasn't buying a new property, it was just redeveloping one you already had or changing tenants and just moving things around a little bit and changing the use of it. So yeah, that was fun. That was a good target.

Tyrone Shum:
How long has she been building up her portfolio?

Dawn Canale:   
[00:23:43] [Since] ‘98, so 18, 19 years.

Tyrone Shum:
[00:23:47] So about 20 years. You could literally say that you've increased your portfolio a million dollars a year if you want to put it that way.

Dawn Canale:   
[00:23:59] I do want to buy, like, a $2 million property every two years. So that's kind of what I was aiming for.

Tyrone Shum:
Heading into the reasons behind why Canale got into property investing, we begin with finding out how many properties she currently has in her portfolio.

Dawn Canale:   
[00:24:41] I have 15.

Tyrone Shum:
[00:24:23] Okay, and are they mostly located around in the Melbourne area or they're all spread across Australia?

Dawn Canale:   
[00:24:31] Most of them are in Melbourne. I don't do rural, so they're all not too far from the CBD. Except our farm which is the Yarra Valley and that's 50km away, but it's not 'rural' rural. And I do have two properties up in the Gold Coast as well, in Broadbeach Waters on canals. 

Tyrone Shum:
It sounds like Canale has a broad selection of well-located properties. What gave her the idea to invest in the Gold Coast, so far from Melbourne?

Dawn Canale:   
[00:25:03] I don't get emotionally attached to properties. But I do always have reasons why I want to buy them and the Gold Coast one was for future retirement. We go up there every year, we may as well get a tax deduction going up there every year. So we bought a property up there and every year now when we go— we do stay in hotels, because that's rented out permanently— but at least you can claim some travel expenses in going up there and it kind of pays for a bit of your holiday every year.

Doin’ It For the Kids

Tyrone Shum:
Initially, Canale started investing so that she and her husband wouldn’t need to do back-breaking work in their retirement years. Now that she’s achieved those financial goals, what keeps her investing?

Dawn Canale:   
[00:26:02] My husband still does the strawberry farm. And, yes, we could have retired quite a few years ago. But because my kids are still quite young, it provides a job for them as well. And it also teaches them work ethic, like they still see that 'Oh, Mum and Dad are successful, and they're still working'. So I don't want them to see Mum and Dad retired and— not lazy, but not working every day with a purpose. I just think that's really important for the kids to see by example.

[00:26:44] And it's a job for them too. So my 16 year old... they basically can work seven days a week whenever they want to. When we're really busy, they kind of have to. We do let them have some time to themselves, it's not that strict. It's not a real ball and chain! But the opportunity's there. My oldest, who's at uni now, she doesn't need to go and find a job elsewhere. Because she knows she can always earn income on the strawberry farm, basically get up in the morning and work. She is a professional photographer now and she does have her own work. But if she has a quiet week, she's always got a strawberry farm, so she can still earn whatever she wants to.
 
Factory Fights

Tyrone Shum:
Canale shares the hurdles she has overcome in property, including some she encountered in an out of the ordinary purchase.

Dawn Canale:   
[00:27:56] I find with property there's always hurdles. Every property we have ever bought has always had some kind of a problem. And sometimes when there's a problem, you can monetise it. For example, if there's a property that no one wants to buy, like, what's the reason? There could be some issues going on. In particular, I bought a block of factories at one stage and the owner was one of the tenants. There [were] four factories, and he was causing problems with all the tenants. They were all fighting, some of them had to share toilets, and they were locking each other out so they had to walk up the road... and it was just an absolute headache and no one wanted to touch it. But I thought it was really good value. And pretty much land value and you got good rent from it, just because it had a few headaches and I saw solutions to those problems. 
 
[00:29:05] So I bought that, and instead of having a body corporate— obviously when you own it all you have an owners’ corporation— I separated off all four of the factories so they all had their own entrance and driveway and a fence was there, I built toilets in the ones that didn't have them to keep everyone separate. They had their own space, their own carpark, car parking spaces, so no one had to overlap, there was no reason to get in each other's face and cause issues. 
 
[00:29:44] The owner, he obviously left once he sold it, so that was vacant. Which created another problem for people too. They didn't want a vacant property. So we leased that out and once we fixed up all those problems, and you go around to the tenants and say 'What are your issues? How can we help you? Because if you're not happy, I'm not happy'. And you sort out all their problems, they love you as a landlord. You love them as tenants. It's a two way street, you look after everybody. And that's turned out to be one of my best properties. Just because sometimes when there's problems, you can actually fix them.

[00:30:36] That's a commercial property. We actually had five leases on four factories, because there was a billboard as well, a large billboard.

Tyrone Shum:
Was there any opportunity to also adjust the rent due to the fact she had implemented all of these changes?

Dawn Canale:   
[00:30:56] All of them had opportunities, because we concreted areas, created more car parking areas, we fenced it off. So they had their own locked little area so we could increase the rent. We did that on a gradual basis, not all in one go. And his son also rented one of the factories, and they signed him up on a $12,000 a year lease, when it should have been about $36,000. And it was a three by three by three. He thought he was kind of safe for nine years, not noticing that there was a rent review after the three years. So that was only a year and a half away, we had to wait. And then when that came, we actually increased it to $30,000. And he wasn't happy, so we left. What can you do, hey? So we increased it to $30,000. So there was a lot of upside to it. We saw a lot of potential. But sometimes headaches can be potential.

The Power of Leveraging 

Tyrone Shum:
Many investors have that moment when everything clicks, and it’s different for everybody. Canale shares what made her realise investing was her destiny.

Dawn Canale:   
[00:32:20] Discovering the power of leverage. That one was a real 'Wow'. That was an 'aha' moment for me because we'd always wanted to pay 20% or 30% deposit on any of our properties. So when the block of four factories came up for sale, I was at the auction and again, no one wanted to touch it. And my hubby was back at the farm and I was actually going just to have a look. But I took my cheque book with me just in case. 

[00:32:55] It got passed in, and at the end of it, I kind of hung around because I could see the husband and wife arguing with the agent. They wanted to sell, because it was a divorce. And I went up to the agent and I said 'Look, I've got my cheque book here right now, I'm prepared to give you $1.8 million for the property. And I'll give you a check now of $100,000 if you want to take it.' So they went back to the owners and they obviously agreed on it. But the 'aha' part of it was that I only put $100,000 down and I borrowed the whole $1.8 million— which again freaked hubby out— but I knew my figures. 

[00:33:43] So I put $100,000 on it. And it was paying about $170,000 in rent. And the loan repayments are only going to be about $120,000. So it's $50,000 positive cash flow. And all I had to do was put $100,000 on. So when I worked out there was a 50% return on investment I was like, 'Wow, I can borrow the whole lot and only put $100,000 on'. That's when I was like 'Wow, I love this'. So my hubby is freaked out at the loan. 'Oh my God, it's a $1.8 million loan, what are you doing?!' And I said 'Honey, look at the figures, we can cover it'. Obviously you have to have equity in other property because you've got to have the 30% equity. But then I did that a couple of other times and did exactly the same thing and they all paid, like, $50,000 positive cash flow. So because we were earning good money from the strawberry farm, I didn't need the extra positive cash flow. So I'd always reinvest it or put it back onto the loan. So I paid off my loans quite quickly. And whatever I had from the strawberry farm too, it was really big for me to just pay down those loans as quick[ly] as possible, and then you're getting more equity in it, which is more borrowing power. So the power of leverage was I think my 'aha' moment. Not a particular property, just the power of leverage and compounding. Wow.

**ADVERTISEMENT**
 
Tyrone Shum:
Coming up after the break Canale discusses the people, books, and TED Talks that inspire her...
 
Dawn Canale:
[00:01:36] I've read a lot of books. I've read a lot of books since then. I do feel you never stop learning. So I do still love to see how other people do it. I do feel like I'm a bit of a chameleon in my mindset. 
 
Tyrone Shum:
She delves into the unique rental experience she offers on holiday letting websites...
 
Dawn Canale:
[00:07:17] But once we did it— we did spend $150,000 on the renovation— it had to be re-stumped and the whole frame had to be redone as well. It was fixed up. And it just turned out so beautiful. And now it's such a beautiful old weatherboard character home that I rent out for $650 a night.
 
Tyrone Shum:
Canale details her money-saving tips.
 
Dawn Canale:
[00:11:39] When I had my first job, I didn't earn a hell of a lot of money. So when I got my second job, which was double the income, I still lived as if I had my first income. And I banked all the extra money. So I was so disciplined with saving money that when it comes to buying property, if I needed a 20% deposit, I would just live off bread and water. 
 
Tyrone Shum:
And that’s next. I’m Tyrone Shum and you’re listening to Property Investory.
 
**END ADVERTISEMENT**
 
<insert money partner advert here>

Jump In, The Water’s Fine

Tyrone Shum:
Coming back, does anything hold Canale back in property— or in life?

Dawn Canale:   
[00:00:25] I don't feel like anything really holds me back. If I get set on something, I tend to face it head on and not kind of think about it too much. I kind of jump in. I always say, you kind of jump in the deep end and learn how to swim. So I don't really have time to let something hold me back. If I get my mind set on something, I just go for it and just do it. So I love that saying, 'Just do it'. I can't see anything really held me back that I could think of. I just face it head on.

Tyrone Shum:
It makes sense that after so many changes throughout her childhood, Canale adapts well and doesn’t let things hold her back. Did this mindset come naturally to her?

Dawn Canale:   
[00:01:36] I've read a lot of books. I've read a lot of books since then. I do feel you never stop learning. So I do still love to see how other people do it. I do feel like I'm a bit of a chameleon in my mindset. I wouldn't say easily influenced, but if I read a book on, say, Steve Jobs, for instance, and I look at the way he does stuff and his strategy, I will then implement it into my life. I love always trying to be like Tony Robbins, Robert Kiyosaki, Brian Tracy, all those kind[s] of people I do tend to... my mindset is mainly study and focus.

Tyrone Shum:
Sometimes mentors appear seemingly out of nowhere, and you don’t realise they’re a mentor until after the fact. Canale shares her experience in this area.

Dawn Canale:   
[00:02:45] I'd say at the start, the mentors that I had didn't realise they were mentors. I just saw a lot of successful farmers in the area that were making a lot of money off property. So I asked a lot of questions just like, 'Oh, I hear you got some property', and 'Why do you choose this property over that one?', and I learnt commercial property is usually positive cash flow and residential is normally negative cash flow. And they pay all the outgoings in commercial. So I just learnt a lot about the benefits of both of them. 

[00:03:24] And sometimes negative cash flow can be good too. I bought a property three years ago that I knew was going to be negative cash flow, but I knew the capital growth was double or triple what that was. And as it turned out, I ended up selling it two years later, and I doubled my money. So I didn't mind having a $50,000 a year negative cash flow because I knew that the capital growth was there. I knew that the zonings were changing so I kind of took advantage of that. But mentors and resources, I read lots of books. I love TED talks. I love YouTube. I study a lot and watch a lot of YouTube. If ever I need to find out something, I tend to go to YouTube.

Thanks For Coming to My TED Talk

Tyrone Shum:
TED Talks contain a wealth of information— which speakers inspire Canale the most?

Dawn Canale:   
[00:04:32] It's just what I'm thinking at the time. I've listened to so many different things, not just property. In fact, I don't think any of them are property related. It's just psychology. I love listening to how people do things, like how your brain works or how to deal with negativity, how to deal with depression. I do tend to mentor a lot of people and if you can help them change their state and their mindset and how to deal with depression and understand how your brain works... so I do tend to look up a lot of that as research so that if I'm mentoring or coaching someone, then I kind of know what I'm talking about, not just from experience, but scientific as well.

A 100 Year Old Strawberry Farm Retreat

Tyrone Shum:  
She shares the best pieces of advice she has received, and reveals her strawberry success on AirBnb.

Dawn Canale:   
[00:05:49] I'd say don't trust other people with your money. That's probably a good thing. And your past doesn't equal your future. Tony Robbins says that, and I just love that. So those two pieces of advice I really hold true. So in your financial side, don't be so gullible, giving people your money. Always have that control. I haven't really ever done a joint venture. And that's because I feel that if I can't afford to do it myself, then don't do it. I'm very strong minded. So if I get set in my ways, 'This is how I want to do a property' and then someone else wants to do it a different way, I don't like that. 

[00:06:39] I bought a farm next door and I turned it into a strawberry farm retreat. And I rent it out on Airbnb and Stayz.com. It's this 100 year old house and my brother's a builder and he helped with the renovations, and he told me to knock it down. And I said 'No way! Look at the character! I love the high ceilings and the Baltic pine floorboards...' Just the character of the house was absolutely beautiful. And I said 'No way, not knocking it down. This is what we're doing'. And I told him my ideas. And he's like, 'No, I think you're wasting your time'. 

[00:07:17] But once we did it— we did spend $150,000 on the renovation— it had to be re-stumped and the whole frame had to be redone as well. It was fixed up. And it just turned out so beautiful. And now it's such a beautiful old weatherboard character home that I rent out for $650 a night. It's four bedrooms, for eight people, and I'm booked out every single weekend till the end of February. It's like a phenomenon, it's unbelievable how popular this place is. And pretty good cash flow as well. 

[00:07:58] But if I rented that permanently, I'd only get about $500 a week. By putting it on Airbnb, and renting it out as holiday letting, I probably make $120,000 a year from it. But these are the things that I learnt through the I Love Real Estate community. It's just changing the use of a property. Dymphna Boholt is amazing. I have Tony Robbins as my male God and she's my female God. I just love the way she thinks. I think she has an accounting background, I think the same way as her. But she's very good.

Tyrone Shum:  
Character and uniqueness are powerhouses when it comes to holiday letting, and Canale’s retreat has those in spades.

Dawn Canale:   
[00:09:06] It's on a strawberry farm. It's called The Strawberry Farm Retreat. So they have their own patch of strawberries, like 10,000 plants of strawberries that they could pick all day every day if they want to. So it's something unique, you're creating an experience as well. So I take them on a farm tour, show them around the farm, they see how the farm runs. So it's not just accommodation, it's actually an experience and they come for the weekend and they just love it. I get really good reviews and I won awards for it through Stayz. 

[00:09:41] Channel Seven even contacted me to do a TV programme on it, which I declined. And that was because it was one of those reality shows where I would go and stay at other properties as well and then we'd all judge each other. And I said 'I don't like judging other people. I'd like to go there and tell them how amazing their place is, I don't want to go there and pick the hell out of it so that I win something'. So that I didn't like, so I chose not to do it, although I would have been a marketing dream.


Conservative, or New Car?

Tyrone Shum:
Having amassed over $20 million worth of property in her portfolio, Canale discusses the steps she took to get to this great place, and the missteps she sees others take.

Dawn Canale:  
[00:10:55] I like to start small. I'm a very conservative investor. So I don't believe in taking a lot of risks. But I do believe in starting small and paying off what you can, try and get some capital growth in it, like renovate it and make it better than what it was when you started with it. So you get some capital growth in there. And then you could probably have some more borrowing power to do another one. I kind of like the strategy of buying every year or every second year, cut back on your expenses to afford to invest as much as possible. 
 
[00:11:39] When I had my first job, I didn't earn a hell of a lot of money. So when I got my second job, which was double the income, I still lived as if I had my first income. And I bank all the extra money. So I was so disciplined with saving money that when it comes to buying property, if I needed a 20% deposit, I would just live off bread and water. I would scrounge and save and work twice as hard. I had three jobs when I met my husband. 

[00:12:16] So I always invested about 90% of my income. I know that's impossible for most people. I just worked harder to earn more. And then I invested 90% of it. And I actually teach my children that now— that everything they bank, I always say to them, 'Look, you can spend 10% of it on yourself, and reward yourself because that is important. But then save the rest and invest it'. Because when you start investing, it's not how much you earn, it's how much you keep. 

[00:12:54] So I know a lot of people that earn as a salary, they might earn $200,000 or $300,000. And they're still paying off their family home and not investing. But Geez, they've got nice cars every year. And they change it every year when the latest one comes out, or every second year. They'll travel to beautiful holidays. They'll go to the best restaurants, wear the best clothes, they're always going out and having the best of everything. But if they lost their job, where's that money going to come from? So I think you should invest it to have passive income. And then once you have passive income, then you can waste it a little bit. 

The Road from Residential to Commercial

Tyrone Shum:
She reveals whether she has any self-imposed limitations on the types of property she buys, and if anything can bend those barriers.

Dawn Canale:   
[00:14:24] I have strategies when it comes to property. I do like to be able to see it. So I don't like buying regional or interstate. I like to be able to know that if it has problems, I can go there and help fix it. My criteria when I buy a property is definitely location, location, location. You could just say a particular suburb, and someone will just go buy something in a back street. Sometimes a main road can actually be really good. I actually love main roads for future potential, I always like to think five or 10 years down the track. So it might be residential today, but you can see one block to your left or to your right there's commercial property, that down down the track, that bit of a ripple effect might then turn that into commercial zoning. Location is everything. So you can have something at the front street and the back street. And I wouldn't touch the one at the back street. 

[00:14:53] But I might love the one at the front street, and even saying that, even all the ones on the front street, do a drive by. Drive past it. Because sometimes it can be in your blind spot. So to me, it's not a good property. I like to have that visual look because to me, it's advertising. And if you're looking at it from a commercial point of view, if you're going to have your office or shop there, and someone's driving past, and it's like a billboard, you're getting free advertising. People pay a lot of money to advertise on billboards, because you're driving past. So why shouldn't your property be like a billboard? Right? Like, location is everything to me.

Tyrone Shum:  
So could we say her strategy is to look for residential properties that could turn into commercial properties further down the track?

Dawn Canale:   
[00:16:47] Or even a commercial property, already commercial. I have some good main road frontage commercial properties, that at the time, I bought them pretty much for land value, and they were paying positive cash flow income. But I could see potential even down the track. One in particular I bought in Croydon. I could see the property behind was a four or five storey apartment block. So I thought, ‘Hey, I've got a single storey retail commercial property here, but down the track, I could probably have retail down the bottom and apartments up top’. So I'm always looking for the upside to any property as well. I'm not just going to go buy a normal house in a back street. I would never do that.

Tyrone Shum:
Canale has a great habit of thinking outside the box and making her property developable, seeing potential for adding value that others don’t see.

Dawn Canale:   
[00:17:57] Always think of value add. Always. Or even if you did get one in a back street, there's nothing wrong with it. I don't look for it, but other houses in the street, turning their one house on a block into four townhouses. I would buy something like that. If you know that you can turn one into four, there's still that potential there and that value add down the track.

Look at the Lesson in Everything

Tyrone Shum:
She has shared her professional habits that have helped her achieve success— does she have any personal habits that have helped in her career as well?

Dawn Canale:   
[00:18:50] I never give up. I never give up. If I believe in something, I just get focused on it. I know everyone has ups and downs in life as well. And it's how quick you pick yourself up and change your state. So my personal habit is if you are having a bad day, you absorb it in— you do have to feel it, don't be in denial— but then change your state and learn from it. Every experience, there's a lesson in it, good and bad. And so that's kind of my habit, I do tend to look at a lesson in everything. And I never give up either, if I believe in something, I just have my little vision and move forward.

Tyrone Shum:
Earlier she mentioned she loves to read books. She now shares some of her favourites about investing, mindset, and business.

Dawn Canale:   
[00:20:00] I do love Dymphna Boholt, she does have quite a few books. And that's all about real estate. So if you want real estate books, she's got lots. But as far as other books, I love the Audible app, and I get a book every month. I just love listening to how other people have done things, like Steve Jobs, Elon Musk, Richard Branson. At the moment I'm listening to The Five Second Rule by Mel Robbins. That's really awesome. So there's not one particular book, I think any book, when you read it, there's always one or two really good, relevant points in there that add to the big picture of success. There's not only one book, and there's no Bible. You have to find bits and pieces out of all of them. And they're all so inspiring, like Think and Grow Rich by Napoleon Hill. That's amazing too. So many good ones. Tony Robbins, I just love him. Unleash the Power Within.

Tyrone Shum:
She’s achieved so much in just over two decades. What would Canale say to herself if she could meet herself 10 years ago?

Dawn Canale:   
[00:21:24] I think all I could relate it to is the advice I give my children now. Which is more than 10 years ago! But I tell my children that they can be anything they want to be, if you put your mind to it. And I love this term reverse engineering. My 18 year old daughter's a photographer, and when she first told her dad she wants to be a photographer, he's like, 'How are you gonna make money out of photography? That's a stupid thing'. And I'm like, 'Stop it right there. Don't ever say that. She can make money out of anything she puts her mind to'. So I kind of said to her, 'Think of this thing called reverse engineering where you're going to say, ‘Okay, I'm going to earn $5,000 a week'. And she's only 18, and I gave her this target, $5,000 a week. ‘How many photoshoots do you have to do to get $5,000 a week?’ So she started working out all these strategies and stuff and how many photoshoots with models she had to do and how many a day and whatever. And she's 18, and she's now earning $1,000 a day. She's already done it. And she's 18.
  
[00:22:45] She does only do it one day a week, like she gets all of her... although this week, she's doing four days, which is pretty good. But she tends to focus on one day a week because she's at uni. But wow, next year when she finishes uni, if she keeps that up, she's just gonna... she's already had her photos published in New York magazines, L.A. magazine, and she's not afraid to just go out there. She's really good, all the social media. And she gets a lot of work from Instagram. And she knows how to build rapport with people. She's 18, and the way she organises a photography team of about six people... I'm in awe of her! I think, 'Wow, I taught you this stuff?! It's so cool!'

**OUTRO**

Tyrone Shum: 
Thank you to Dawn Canale, our guest on this episode of Property Investory.