Property Investory
How to Access That $170,000 You Have Tied Up in Equity With Godfrey Dinh
July 11, 2021
Godfrey Dinh is the founder and CEO of Futurerent, the groundbreaking fintech captivating property investors all over the country. He has been investing in Australia and internationally for over 15 years, and takes pride in helping landlords make the most of their money as soon as they can. Upon realising commercial investors could access 3 months up to a year's worth of their rent upfront but residential investors couldn’t, he jumped at the chance to revolutionise the industry.
In this episode we’ll hear about Dinh buying his first property at a very young age, then realising he hadn’t accounted for all the possibilities that come with buying property after the initial purchase. We’ll find out what happened to that property in Ermington and what became of its dilapidated tennis courts, discover how he came up with the idea for Futurerent, and how he got it up and running after several years of run-ins with red tape. We’ll also unearth the nitty-gritty ins and outs of Futurerent and how it can provide you with the upfront funds you need, fast.

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Transcript:
**SHORT SNIPPET**
 
Godfrey Dinh:
[00:04:53] I ended up basically selling it a couple years later. Made a little bit of money, but nowhere near what I should have. Next buyer came along, subdivided the block, made a fortune. And that's where I probably learnt one of my first lessons, where you just shouldn't sell. And it also was part of the inspiration for Futurerent. 
 
**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 founder and CEO of Futurerent, Godfrey Dinh. We’ll learn more about how he came up with the marvelous idea for the innovative business, along with how he finds creating wealth for himself more satisfying than working with one of the biggest investors in real estate on the globe.
 
**END INTRO MUSIC**
 
**START BACKGROUND MUSIC**

He Worked His Way Up

Tyrone Shum:
Dinh realised that there weren’t any services for property investors that gave them the ability to access their future rent, so he jumped on it. He spends his days solving investors’ cash flow and investment needs.

Godfrey Dinh:  
[00:01:00] I spend a lot of time talking to property investors every day, trying to help them with their investment goals, and whatever their needs are. I actually got started in property with actually studying property. So I studied property economics at UTS. And I was lucky in that my dad actually had a friend who was a developer and he'd studied the same degree and put me in contact with him, and I was talking to him about what to do. 

[00:01:33] I was really interested in property, because I think in property you just have so much more control, there are less 'ifs' that are out of your control. And you could be really strategic about what it is that you want to do. So I chose to go into the field. And I was lucky enough to start working at a company called Investec, in an area which was set up to basically lend money to property developers, and also invest in anything from shopping centers, to residential developments, office buildings, a whole range of things. 

[00:02:11] So I was quite fortunate to start my career there and have some really interesting learnings. And then I moved on to work for Deutsche Bank. And I worked my way up to Vice President of commercial real estate there. So I was really lucky in that I could cut my teeth with the bank's money, and also working alongside some really great clients, who had some really great experience. So over that time, I invested about $1.3 billion into property deals for those organisations. And a lot of quite active investment property strategy, so really buy, fix, sell type of stuff. 

Tyrone Shum:
He jumped on to the property ladder at that point, and realised he may have bitten off more than he could chew.

Godfrey Dinh:
[00:02:53] I remember the first investment property I bought was actually a house on a big block of land in Ermington in Sydney. And it actually had an old, dilapidated tennis court at the back of the property. And I thought, well, it'll be great, I should be able to— under all the planning controls— subdivide it into effectively two houses. 

[00:03:26] But I started very young, I bought my first investment property when I was literally just out of university, and I really emptied my bank account to do it. I had enough money for the deposit, for the stamp duty... but I don't even know if I really thought about all the closing costs that I had to come up with. And then I looked at my bank account, and I was like, 'Wow, how am I going to actually fund a subdivision? How am I actually going to pay for the council DA lodgement fees and all that sort of stuff?' 
 
[00:04:04] It was really interesting in that I had these two parallel experiences, working for some really big organisations, investing lots and lots of money in property, but then my own personal experience as a property investor, where I realised the banks, they do a good job of helping you buy the property, but after that you're on your own. The banks, they generally don't help you with your cash flow, with your investment needs, they’re not gonna help you generally, in an easy way, buy the next property or with capital to invest in whatever strategy it is that you want to do with your investment properties.

[00:04:46] With that property in Ermington, I made probably a pretty big mistake in that I ended up basically selling it a couple years later. Made a little bit of money, but nowhere near what I should have. Next buyer came along, subdivided the block, made a fortune. And that's where I probably learnt one of my first lessons, where you just shouldn't sell. And it also was part of the inspiration for Futurerent. 

A Day in The Life

Tyrone Shum:  
He currently spends his days talking to property investors, as he likes to have those conversations himself with his clients.

Godfrey Dinh:   
[00:05:49] At the moment, there's a lot of people and I can get into some examples with you later. But a lot of people, for instance, trying to make the most out of their investment properties. So with the banks, generally capping people out at a certain level, when they get to a certain number of investment properties, you really need to, I think, be quite deliberate about making sure your investment properties are working as hard as they possibly can for you. 

[00:06:19] We've been doing a lot in the renovation space. So helping a lot of property investors finance their renovations on their investment properties, renovating their homes, those sorts of things. Obviously, we don't get involved except for basically just helping people with the capital component, and actually giving them access to their rent early, so they can make their next move. 

The Old School Yard

Tyrone Shum:  
Dinh grew up in Cherrybrook in northwest Sydney, and started his schooling at Dural and Normanhurst Boys’.

Godfrey Dinh:   
[00:07:27] I think I had a very middle Australia regular upbringing. My dad was an engineer. Mum, after she spent a bunch of time looking after us, she actually dived into real estate herself and worked for a little bit as a real estate agent. And they really got ahead by buying— they weren't big investors— but buying a couple of investment properties. And I think I saw how much of an impact that had on their ability to meet their financial goals. And that was a big part of the reason that really got me interested in property. 
 
[00:08:24] I actually went to primary school in Dural. So if you know that, it sounds like you know the area pretty well. It was beautiful. It wasn't as built up as what it is today. We were probably one of the first families to move out that way. But it was suburban paradise. Kids could just go and ride their bikes and spend all day out, come home, and your parents would have nothing to worry about. So it was amazing. 

Tyrone Shum:  
After finishing high school, he didn’t waste any time and jumped straight into working on his career.

Godfrey Dinh:   
[00:09:53] I finished school and straight away I started just working. I got an admin job working at the place that my dad was working, just doing some admin sort of stuff before uni started. And then I started a degree, actually specifically in property. There's a degree called Property Economics at UTS, which is a really interesting degree. It's got a really good combination of the economics around property in terms of demand, supply, demographics, those sorts of things. Then, as well covering off on planning, urban planning, and those sorts of things and finance and development construction. So a really good, broad range of experience. 

[00:10:45] It's a four year degree at UTS, but the first two years, they have that full-time and the second two years actually try to place you into different property companies or different organisations. So second two years, I was able to start working for Investec. And that's how I got that job there. And I was still a kid, I think I was 20 years old when I started there, and it was a huge learning experience and a huge, huge growth opportunity. So I was very fortunate to be given that. 

In Hindsight...

Tyrone Shum:  
He learnt a lot working at Investec that he’s taken with him and helps him with his property journey today.

Godfrey Dinh:   
[00:11:53] We did a fair bit in the development space. And one of the big things that really stood out was in development when people are buy, fix and sell, you often— five years later, after you finish the project— look back and go, 'Wow, should I really have sold that? Imagine if I'd actually kept that, what the value of that would be today.' So I sort of think that— especially when you take into account the fact you pay tax and all of these sorts of things— unless the market really moves in your favour, you'd be quite lucky generally, to make, say, a 20% return on a project. 

[00:12:37] And then you spread that out over that period of time that it takes you to do the project, and take into account tax and all of those sorts of things. So your returns sometimes aren't as good as they would be if you'd just actually just kept the thing. So I think that's one of the first principles that I really took out was, if you can— buy, fix and keep. And then actually think about how you can achieve the same outcome and get the same amount of money, but through a financing strategy. 

[00:13:12] So I think I was lucky in that working at these organisations, within their property, investment and finance areas, allowed me to really understand the capital side and the finance side of the equation really well. And it's more about recycling your capital, and building a sustainable portfolio that can sustain itself. And you're achieving the same outcomes, you're just not paying tax, and you're able to grow and you're able to continue your journey. So definitely a couple of big lessons for a young kid. 

**ADVERTISEMENT**
 
Tyrone Shum:
Coming up after the break, we hear about Dinh’s time working at Investec during and after the GFC, and an old adage he lives by...
 
Godfrey Dinh:
[00:17:41] There was some phenomenal buying opportunities, really, for us from 2010 to 2014. And the market started to really heat up again. 
 
Tyrone Shum:
He shares the moment that led him to realise sometimes bigger doesn’t always mean better... 

Godfrey Dinh:
[00:20:25] One of the things that stood out to me was, working on those bigger deals sometimes can be less interesting and exciting than what you can do yourself, and how you can create wealth through property yourself. 
 
Tyrone Shum:
He delves further into how Futurerent came about.

Godfrey Dinh:
[00:22:34] Often, the tenants need to pay their rent a year in advance. But that's just not something that's available for everyday property investors. So I figured, look, it should be as simple as that. It should be as simple as a choice. 
 
Tyrone Shum:
And that’s next. I’m Tyrone Shum and you’re listening to Property Investory.
 
**END ADVERTISEMENT**
 
<insert money partner advert here>

Tyrone Shum: 
Dinh delves into the ins and outs of Futurerent, and has a tip for listeners that he usually saves for property investors.

Godfrey Dinh:   
[00:14:54] I think it's about thinking creatively about your financial solutions. And that's one of the interesting points that we're actually helping a lot of people with as well, where instead of having to sell, they can actually use their future rent to buy their next investment property. So actually one tip for your listeners, which we don't actually have on the website, but we actually give property investors— where they're using the money to buy a new investment property, we actually give them up to two years’ worth of rent up front. Which is quite considerable, that can really be the deposit for your next place.  There are a lot of interesting options out there. But you can, I think, do so much better if you just stick to that buy, fix, keep type of approach. 

Seeing Through the Noise

Tyrone Shum:  
Dinh worked at Investec from 2006 to 2010, which can certainly be described as an interesting time in property and finance.

Godfrey Dinh:   
[00:16:24] Obviously, there was the financial crisis in 2008, and a lot of that really trickled through in 2009 [and] 2010. So there were some really interesting buying opportunities, which when I moved across to Deutsche Bank, we did quite a lot of. I think buying at that time, a lot of properties, people couldn't really see a way out, or they couldn't really see a scenario where there was going to be growth again. 

[00:17:00] And I think, in those situations, it's about really being able to look through the immediate noise and the immediate fear. And see, 'Okay, well, where is value? Where can we actually see that we've got our downside covered?' And if we work out what the worst case scenario is, we think that, at that time we were buying things below replacement cost. So your downside is really, significantly covered. And then you work out what your upside can be on some reasonably conservative assumptions. And you can do really, really well. 

[00:17:41] There was some phenomenal buying opportunities, really, for us from 2010 to 2014. And the market started to really heat up again. It's interesting, that whole 'Be greedy when others are fearful and fearful when others are greedy', is a really, really good rule to live by. 

[00:18:34] There were, for instance, quite a number of shopping centers, those sorts of things. One of the things we did with one of our clients, Blackstone, was we bought Top Ryde Shopping Centre, which had basically just completed, but they got the tenancy mix completely, completely wrong, and all the rents were overcooked. And so there were a huge number of issues with the centre that needed to be changed and turned around. So yes, some really, really tremendous buying opportunities. 

[00:18:35] Then we did a reasonable amount in the residential development space. A reasonable amount in office, a whole range of things, really. 

Tyrone Shum:   
[00:19:25] And you mentioned Blackstone, because I have heard of Blackstone— that's an American company that has also got, from memory, a book they wrote as well, too, isn’t it? It’s quite a large fund?

Godfrey Dinh:  
[00:19:38] Yeah, they're a really big US private equity firm. One of the biggest investors in real estate globally, if not the biggest, actually. 

[00:20:02] They're huge. They own a lot of real estate here, industrial, a whole range. 

Tyrone Shum:   
[00:20:08] Wow, I wouldn't have known, but that's the thing. People don't really talk about that in the media and stuff, because it's sort of behind the scenes and big players that only play those kind of things, I guess. 

Purpose-Built

Godfrey Dinh:   
[00:20:20] Yeah. So some really, really good learning opportunities. But I guess one of the things that stood out to me was, working on those bigger deals sometimes can be less interesting and exciting than what you can do yourself, and how you can create wealth through property yourself. And also, how we can help people. And so that's really what my focus now is, is really Futurerent, and helping property investors with their journey. So we really wanted to create something which was purpose-built for property investors, and is a better alternative to refinancing or dealing with the banks. 

[00:21:09] It's interesting. I think, if you look at the process, like, a lot of clients we talk to now, they don't seem to get prioritised by the banks. So they might spend up to two months going through a refi process and ultimately seeing it fall away, or end up not pursuing it. I was staggered when I saw that something like more than 50% of refinance applications don't actually proceed. 

Tyrone Shum:   
[00:21:43] Wow, that's crazy. That is nuts.

Godfrey Dinh:   
[00:21:45] So it takes a really long time. People have to provide a ream of paperwork, documentation. And it was seeing how difficult that experience was for myself, and how easy it should be, that was a big part of the reason that why we started Futurerent. It sounds like a novel concept, getting a whole year's rent upfront, but on the commercial space, and I think this is something which most people don't realise, but a lot of commercial tenants actually get their rent paid quarterly, six monthly, sometimes even annually. If you look at specialised assets like service stations, where there's a lot of capex or a lot of money that often needs to be spent on the property. 

[00:22:34] Often, the tenants need to pay their rent a year in advance. But that's just not something that's available for everyday property investors. So I figured, look, it should be as simple as that. It should be as simple as a choice. When do you want to get your rent? Do you want to get your rent paid annually? Or do you want to wait for it to trickle in? 

Keen as a Bean

Tyrone Shum:  
He was super eager to get his foot on the property ladder as soon as he could, which compelled him to buy the property at Ermington.

Godfrey Dinh:   
[00:23:46] From my own parents' experience, they made so much more money through property than they did through their own earnings, in terms of their day jobs. And I think property is something that is really like that. It's quite an entrepreneurial thing where people are going out and trying to invest and achieve their financial goals independently. 

[00:24:10] So for me, I was just super, super keen to buy something. And that property particularly appealed to me because it was a big block of land. The market hadn't really moved a lot at the time that I bought it, it would have been 2008, thereabouts. So it was decent timing. I think timing is so important. It's really interesting where the situation that we're in at the moment, there seem to be areas that you look at and prices haven't really moved much in five [or] six [or] seven years. And then there are areas where in the last 18 months, it's gone absolutely nuts. So it’s something that I think people really keep an eye on obviously, and where you see that and when you start to see things getting below replacement costs starts to look really, really interesting.

Tyrone Shum:  
The house was built in the ‘70s, when the suburb looked very different to how it does today.

Godfrey Dinh: 
[00:25:27] It had a big old tennis court on the back, which was largely derelict. I think it would have been maybe one of the earlier houses that were built there on the big blocks of land. But at the time, there had been some other properties that had started to be subdivided, but generally not. It generally wasn't at the point where it would be super profitable, necessarily, to do it. You sort of need the cycle to sometimes catch up to a point where it'd actually make sense from a land value perspective. 

[00:26:07] I sort of had, I guess, part of the right ingredients, in terms of I had the right idea. The timing was probably pretty good. But I just sold it a bit too early, and they didn't have the capital to execute on the plan. 

He Wanted a Solution, So He Created It

Tyrone Shum:  
His original idea to subdivide it fell through, and after some time with it being negatively geared, he sold it and stumbled upon the idea for Futurerent.

Godfrey Dinh:   
[00:26:42] Well, at that time, interest rates were probably double what we're paying now. So there was a little bit of a shortfall every year. So it's not like now, I guess, where properties are largely positively geared without really even having to try. So I guess I was probably a little bit negatively geared. I sold because I wanted to buy another place. That ended up doing, still, reasonably well for me. So it's hard to point all the blame at selling. 
 
[00:27:30] But I wish there were other solutions out there for me at the time, like Futurerent, where I could have— instead of having to sell because I wanted to pull cash out— been able to extract money through other means. It's crazy. I think, on our numbers, something like the average property investor on our numbers has about $170,000 in equity tied up in their investment property. And that's a big number. 

[00:27:59] And it's not as though property investors earn more than anyone else. On our estimates, they're earning the same as everyday Australians, but they're trying to manage the household budget, the investment property expenses, other investment goals, all of these sorts of things. And how do you actually achieve that when you've got $170,000 in equity tied up in your investment property. It's tough, right? 

Tyrone Shum:   
[00:28:26] Yeah. Plus sometimes you have to actually make the shortfall as well, too, because sometimes you just don't have that. But you've just got equity in there, you can't access easily. 

Godfrey Dinh:   
[00:29:30] Absolutely, absolutely. Yeah, the banks just make it so, so difficult for people. And I guess we sort of realised there's nothing that's purpose-built for property investors.

Tyrone Shum:  
Dinh’s most challenging moment in his journey was not just a moment, but a year.

Godfrey Dinh:   
[00:00:26] It's probably hard to hear that and not think back to even last year, right? 2020. So, more on the business side in terms of Futurerent. March 2020, I think it was the Friday, when the government announced the moratorium on evictions. 

Tyrone Shum:   
[00:00:44] Yeah, I remember that very well, I don't even remember which day it was. 

Godfrey Dinh:   
[00:00:48] It was, I mean, as you can imagine. I mean, we're repaid from rent that's paid by the tenant. And the way the government announced it, where they didn't give any detail as to from a state’s or territory’s perspective, what it actually meant, what the laws actually meant, but basically, they just said, 'Okay, well, there are no more evictions.' So, we had a pretty similar experience to most agencies around the country where about 20% of tenants put their hand up and said, 'Look, we either don't want to pay rent, or we want to pay reduced rent', or all of that. 

[00:01:30] So I guess it was a scary time for us, but also just because a lot of our landlords were under quite a significant amount of pressure. But interestingly, the one thing that most people didn't realise until they called up was that our repayments, they pause automatically. So because we're only repaid from the rent that's paid by the tenant, so the tenant stops paying your repayments with us, they pause. So I guess it was something which generally resolved itself within about two months. So as more information came to light and people realised, look, it's not a complete abatement, it's just a deferral. You still need to pay rent. Most of those situations worked themselves out where people moved out, they found different accommodation. 

[00:02:24] Fortunately, the book kind of just stabilised and things sort of just got back to normal. So it was a pretty crazy time. But I think if anything, it made us realise just how important those flexible repayments are for people. 

Tyrone Shum:   
[00:02:42] It would have been a really scary time and very unknown, uncertain for you. Because you're thinking, 'What are we going to do as a business? If all these payments start to slow down and tenants are not paying, it really, really does have a huge impact on cash flow.' And then you might never know, it could be six months, could be 12 months. 

Godfrey Dinh:   
[00:03:01] Yeah, that's right. We're just so lucky, aren't we, that here, things seem to have— touch wood— largely, our little part of the world feels like it's getting there, back to normal. 

Tyrone Shum:  
[00:03:14] It's been a complete opposite experience, for me anyway, in the last year, because things have just gone completely opposite to what I've anticipated. And I think a lot of business I've heard especially in the property space have just gone absolute gangbusters.  

Godfrey Dinh:   
[00:03:36] Since about November last year, we've seen investor sentiment just go through the roof. Almost like a wealth effect, where people now are so much more comfortable spending money on their investment property, on their own home, buying more property. So yeah, it's definitely a good market at the moment and good time to be a property investor. 

Lightbulb Moment

Tyrone Shum:  
Although he realised the power of buy and hold with his property in Ermington, his biggest aha moment in his property journey isn’t about any particular property at all.

Godfrey Dinh:   
[00:04:23] I think that one of the biggest things for me was actually when I came up with the idea of Futurerent, and I realised, wow, people have all of these cash flow needs and you've got all this money, it's already coming to you. Why shouldn't you be able to get it paid early? And if people are doing that in the commercial world, why shouldn't residential and everyday investors have that same ability to get paid their rent early?

[00:04:49] Now, that was a real epiphany for me because it can be so powerful. The difference between having $3,000 paid into your account every month, and having $36,000 just sitting there to make your next investment— it's huge. It's huge. I think the difference between and that's really— and this is a little bit jargony— but that's the difference between income and capital. Capital is powerful, you can really do something with it. 

[00:05:19] And I think that, for me, has really kind of been one of my biggest moments. 

The Lowdown

Tyrone Shum: 
After keeping us in suspense for long enough, he dishes on the details behind Futurerent and how it works.

Godfrey Dinh:    
[00:06:08] Our clients, they don't borrow money. We actually just enter into a type of lease with them on the property, that under which we pay them rent upfront to enter into that lease. And it's rent that they're receiving, they're not receiving loan funds or anything like that. They're literally receiving a year or two years' worth of rent upfront. And then that lease basically gives us the right to collect a fixed amount of rent from the property. 

[00:06:37] Property manager stays in place. All that happens is we get the property manager to set up equal installments to pay us back. And they can do that over up to three years. So you can get a whole year upfront, pay it back over three years, that would be 36 equal installments. And because you're spreading that year out over three years, it's actually only taking up about a third of the rent to pay back that principal or that yield upfront. 

[00:07:07] So you're really just changing the timing of how you collect your rental income. And from a cost perspective, it just works out to basically half a percent per month, on the upfront amount, which I guess is the same as 6% of the annual rent. So this way, property investors, they're still able to have their cake and eat it too, because they're still able to get like a whole year's rent up front. But they still then are able to get the majority of the rental income to pay for their mortgage, or pay for whatever it is, their property expenses or anything else that they need to.

Tyrone Shum:   
[00:07:51] We're not getting money upfront from the tenants? Because they're not paying, say, 12 months of rent initially upfront, but then Futurerent is helping to pay that. Can you just explain in numbers, how that works and the times behind it? 

Godfrey Dinh:   
[00:08:06] Say for example, your rent is $700 a week, right? So you can either get your $700 a week, or you can get $36,500 which is a year's worth of rent upfront. And then you've got the choice as to what period of time you want to let your tenant pay that back. So say you want to let your tenant pay that back over three years, then effectively, you're going to be paying back... $36,500 over three years is basically $1,000 a month, roughly. Which needs to go to pay back Futurerent. So your property manager will basically set up 36 payments for $1,000 a month. And that'll go to Futurerent. But you're still collecting $3,000 a month gross from the tenant, less your $1,000. So you're still collecting basically $2,000 a month in rent. 

Tyrone Shum:   
[00:09:07] Yeah, but this is what I don't quite understand, who pays that rent upfront? 

Godfrey Dinh:   
[00:09:13] We do. Futurerent does. 

Tyrone Shum:   
[00:09:16] So how do you fund that, then? That's what I'm wondering, how do you fund that? Ultimately, you are going to get that money back from Futurerent, but how do you fund that to the landlords? Because obviously, the tenants are only going to be spreading out and paying over three years, let's say. 

Godfrey Dinh:   
[00:09:31] I guess we're very lucky in that we have not only our own equity, but also a wholesale debt that can grow our book. So yeah, we're very lucky that we've sort of got a lot of capital to help people do all sorts of things with their rental income. 

It’s Not All About the Money

Tyrone Shum:  
Dinh has created a fantastic business model with Futurerent, and not only does it thrive, but it’s sustainable. 

Godfrey Dinh:   
[00:10:29] We're not trying to make a lot of money on each deal, we don't make much money on each deal, we're a scale business. We really want to change the way and revolutionise the way that people collect their rent. So we see a lot of demand, we see a lot of property investors who would prefer to get their rent upfront, so they can supercharge their investment properties, or supercharge their investment strategy, whatever it is. And we're just giving people another option. 

[00:11:03] So for us, it's a scale thing, really. We really want to be the number one choice the property investors use, because we're quicker, we're easier, we're simpler than dealing with the banks. And in many cases, we actually end up cheaper as well. So yeah, we’re really trying to create a new category for property investors, something that's built for property investors and for their investment for their cash flow needs. 
 
[00:12:01] We don't do any property management. So we just work with whatever property manager you have. So they just set up the payments for us. And otherwise, nothing really changes. All you're changing is how you collect your rent. 

Tyrone Shum:   
[00:12:15] And what are the criterias, for say, for example, a landlord or property investor coming to Futurerent to be able to qualify to get this? 

Godfrey Dinh:  
[00:12:24] It's really simple, right? The only thing we really care about is that our clients are paying their mortgage. As long as you've been paying your mortgage, you're not late on your mortgage repayments, you're eligible. We don't need to see any other paperwork. So we don't need to see any income stuff, we don't need to see any expenses. So there's no extra paperwork required from the client's perspective, which makes things really easy. People apply in somewhere between three and five minutes, we just need their basic information, like their ID, contact details for their property manager. The property manager handles the rest. 

[00:13:10] From the property manager, we just get a copy of the lease, we get the property management agreement. But that's really all we require. And interestingly, a lot of people, they assume that they've got to have a year's left on their lease or something like that. They don't. Even if you've got a vacant property, you can get a whole year up front. 
  
[00:13:31] And all it means for us is if it takes longer to lease, then it just delays the period of time, it delays our repayments. So from a consumer's point of view, it's a super, super consumer friendly product, really built for property investors. 

Part and Parcel

Tyrone Shum:  
What would happen if a tenant is locked into their lease and doesn’t pay their rent, and you can’t go through the lengthy eviction process?

Godfrey Dinh:   
[00:14:09] We really rely heavily on the property managers. So the thing is we're all on the same page. Between the landlord, Futurerent, and the property manager, everyone wants to rectify that situation and have it resolved. We're very hands off, we don't really get involved. It's really the property manager to drive the outcome in the ordinary course. And that purely just extends the period. 
 
[00:14:39] I mean, we had some situations like in COVID, where rents in areas like Docklands were completely smashed. We had some clients where their rent was dropped from, say, $700 to $450 a week and vacant for three or four months. And that's fine. We understand that, that's part of the business and that just means that it might take us six months longer or so to collect the rent. But that's just part of the business, really. 

Tyrone Shum:   
[00:15:12] I guess what I'm just trying to think is worst case scenarios for, say, for example, the landlord. Landlord's on a positive side because Futurerent's covering the rental 12 months in advance, then does that mean then once they've been paid that 12 months in advance, they will have to wait until 12 months later to get their next payment? And it's essentially just every 12 months, the landlord would be getting that, because that helps them with their capital? 

Godfrey Dinh:   
[00:15:36] It depends on the repayment term that they select. But you’ve got to remember Futurerent is only repaid from part of the rent that's paid by the tenant. So you as a landlord, you're always going to continue to collect some of the rent from the property. So yeah, if you pay us back over over three years, you're still going to get over 60% of the rental income. And then once Futurerent's repaid, you can do it again.
 
[00:16:08] The shortest term available is one and a half years, because effectively, the landlord still wants to generally collect about 25% of the rent as a minimum, just to pay basic property costs. But we want to make sure there's just always enough rent coming in to pay at least your property manager and your basic outgoings. 

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Tyrone Shum:
Coming up after the break, Dinh explains how it took years to get Futurerent set up...

Godfrey Dinh:
[00:17:31] A lot of work went into getting things set up. But now it's seamless. People apply in minutes, and they're paid generally, within two days. So super, super quick. 

Tyrone Shum:
What Futurerent can do for you in addition to giving you your rent upfront...

Godfrey Dinh:
[00:20:39] We've even been helping people invest in the share market. We had one client actually who took out a whole year's worth of rent, and he used it to buy shares in Zip. And he told us that it's actually gone up seven times since he bought those shares. 

Tyrone Shum:
He shares the positives of mortgages.

Godfrey Dinh:
[00:22:54] And you can compare that to borrowing money for a business or borrowing money for a commercial property investment. And there are so many more strings attached. But in the residential world, it's like one of the most stable forms of capital you can get.

Tyrone Shum:
And that’s up next. I’m Tyrone Shum and you’re listening to Property Investory.

**END ADVERTISEMENT**

It Was Years in the Making

Tyrone Shum:   
Dinh explains how he set up the business, and why it took several years to do so.

Godfrey Dinh:   
[00:16:45] It was something that took a long time. Even before we started doing what we're doing, we spent basically two years working through all the regulation. So we got a sign off from the tax office, we actually got a ruling for the benefit of all of our landlords, basically to make sure that their position wasn't negatively impacted. And there's all of those details available online. 

[00:17:10] But basically, there's no stamp duty, there's no GST, the income tax kind of works as it usually would, effectively. We spent a lot of time and energy making sure from a regulatory point of view, and then from a tech point of view, things worked. 
 
[00:17:31] A lot of work went into getting things set up. But now it's seamless. People apply in minutes, and they're paid generally, within two days. So super, super quick. 

It Takes a Village

Tyrone Shum:   
[00:17:44] And what kind of technology and people and so forth did you need to be able to put all this together? Because it's not a one man band kind of website, it requires a lot of engineering and design and so forth, to be able to put something like this together. 

Godfrey Dinh:   
[00:17:58] It takes a village. It honestly takes a village. So it takes a village and a lot of work, a lot of testing and experimenting, and just figuring things out. But we're very fortunate that we had some good advisors and very lucky that early on, we got a group involved, our innovation fund, who are a Venture Capital Group, who were able to sort of point us in a couple of good directions. So yeah, I think it's just for us been about learning as much as we can, reading as many books, listening to as many great podcasts, trying to continually educate ourselves so that we're able to deliver what we want to deliver. 

Tyrone Shum:  
With Futurerent rightfully picking up steam, he sees the business growing even larger in the coming years.

Godfrey Dinh:   
[00:18:58] At the moment, we're still really building awareness. It's been really rewarding to see our property investors grow with us. We've been around helping people for over two years in terms of helping people with their investment and cash flow needs. But yeah, we just want to continue to grow. And we want to make it as simple for people as a choice around when they want to collect their rental income, and we want to help people do a whole lot more. I mean, there's a whole lot of examples that I could walk you through in terms of what people have been doing. I think we really want to do a lot more of that. 
 
[00:19:44] We've been helping a lot of people renovate not only their investment properties, but also their own homes. So people actually cashing out rent on an investment property and then renovating their principal place of residence. That's been big. We've been helping a lot of even small business owners, because small business lending is really challenging. I don't know if you've ever tried for your business to get a small business loan. 

Tyrone Shum:   
[00:20:11] A lot of paperwork.

Godfrey Dinh:   
[00:20:12] A lot of paperwork, and it's expensive, really, really expensive. Whereas if you're lucky enough to have an investment property, you can get your rent early instead. And it's a much more consumer friendly solution. So we had a great client who's got a pizza shop that we helped buy another pizza shop, and an accountant, a whole range of sort of small business owners. 

[00:20:39] We've even been helping people invest in the share market. We had one client actually who took out a whole year's worth of rent, and he used it to buy shares in Zip. And he told us that it's actually gone up seven times since he bought those shares. And now he's paid back that future rent and he actually, last week, took out another year worth of Futurerent to help him buy a house with the money that he made from the shares on Zip. So some interesting cases. The thing is, there's endless possibilities. We're not prescriptive about what people use the money for. We figure people can do what they want. We just want to continue to help people with their investment goals. 

Philosophies and Podcasts

Tyrone Shum:  
His biggest mentors are those he worked with at Investec, who took him under their wings and taught him the ropes.

Godfrey Dinh:   
[00:22:14] I was really lucky in that when I started working at Investec, like I mentioned, I was a kid. And there were a lot of people who were older than me and wiser than me and able to teach me a whole lot of really valuable lessons. Learning the difference between good debt and bad debt, and understanding and getting comfortable with leverage. And realising that in for instance, generally— and obviously, everyone's situation is different— but in Australia, if you have a mortgage, as long as you meet your interest payments, you're all good. 

[00:22:54] And you can compare that to borrowing money for a business or borrowing money for a commercial property investment. And there are so many more strings attached. But in the residential world, it's one of the most stable forms of capital you can get. So I think I had a lot of really good mentors who shared that type of philosophy with me really early on. And were really integral in cultivating that sort of mindset for me. So, I'm a big believer in continuous learning, and trying to really get specialised knowledge in as many different areas that you can. And doing that by actually doing. Because I think that's often really the only way. 

[00:23:53] We're lucky in this day and age, there's so many resources out there. Podcasts like this. Books. The whole world is a classroom. 

Tyrone Shum:   
[00:24:05] Absolutely. And you mentioned that you spend a lot of time learning as well, as you said, you've got podcasts, books, and so forth. If you're an avid reader or avid listener of audiobooks and stuff, do you have any particular book or resource that you can recommend to listeners that you found really helpful in your journey?

Godfrey Dinh:   
[00:24:24] There's a whole range, and I generally try to find something which is a particular challenge or problem that I'm trying to solve. But one of the great general books that I quite like is Danny Kahneman's Thinking Fast and Thinking Slow, where he really talks about the difference between, he calls it system one and system two thinking. System one is your immediate reaction to something, your immediate gut response. And that's how we're wired as humans to survive. From hundreds of thousands of years of evolution. 

[00:25:03] But often, you actually really need to think much more deeply about something and slow down, to really understand the situation or to really understand what's happening. And often that's really completely counterintuitive. 

[00:25:15] And in real estate, for example, the only way you're actually able to see through all the mess and buy well when everyone else is fearful, is by engaging that type of philosophy. By really actually thinking deeply about something and analysing things properly and not just moving with the crowd. 

Always Borrow, Never Sell

Tyrone Shum:   
[00:26:37] If you were able to visit and meet yourself, say 10 years ago, what do you think you would have said to him? 

Godfrey Dinh:   
[00:26:43] Oh, gosh, I think for starters, it would be, ‘Never sell.’ Don't sell the property, just keep it. I think buy, fix, keep. I mean, I had people saying it to me previously, but I still don't think I fully took advantage of how much. Borrow as much as you can, when you can. You've got to plan your financial goals around your life events and situation. Yeah, I think probably those two things. 

Tyrone Shum:  
With so many things to be excited about, he’s most looking forward to the fulfilling feeling he gets from helping others.

Godfrey Dinh:   
[00:27:34] I'm just really excited about continuing to grow the business and continuing to help property investors. I think we still haven't really scratched the surface of the universe of property investors out there. And we want to make this as simple for people as a choice over how do you want to collect your rent. And it's so rewarding to be able to see clients who now send us snaps of a renovation they did on their home, or get in touch and tell us like, for instance, that customer in the Northern Territory, is getting an extra $15,000 a year in rent, from a really simple, clever renovation. Hearing those sorts of success stories that our clients are having, and hearing them describe us as a real breath of fresh air compared to dealing with the banks— for me, that's sort of what makes me jump out of bed every morning. I love it. 

Tyrone Shum:   
[00:28:35] That's fantastic. And I'm also curious, because you're the creator and founder of Futurerent, how have you been able to use Futurerent for yourself, in your investment properties? 

Godfrey Dinh:   
[00:28:46] I think that might be a bit of a conflict of interest. So I have had to sort of steer away from that one, unfortunately. But we're just really trying to help our clients. 

Tyrone Shum:   
[00:28:58] Yeah, fair enough. That would have been interesting, because I was just thinking, ‘Okay, if you did have the potential to do that, what would you use it for?’ 

Godfrey Dinh:   
[00:29:05] Well, everyone's different, right? Everyone has something different in mind. It's amazing. It's amazing, the use cases are endless, really. 

Tyrone Shum:   
[00:29:16] True, true. Just as long as you don't go out and start buying, like maybe a liability, then it's okay.

Godfrey Dinh:   
[00:29:22] That's right.

Tyrone Shum:   
[00:29:24] Fantastic. All right. Well, Godfrey, how much of your success is due to your skill, intelligence and hard work, and how much of it do you think is because of luck? 

Godfrey Dinh:   
[00:29:35] I think all of those things are prerequisites. Like, I think you have to have all of those things in some combination. And I think hard work is probably a big variable there. But I think for me, I've been quite lucky in that the circumstances have really been kind of favorable for me, where the banks have kind of made it really easy for us in a way. Where they've been treating property investors like second class citizens for so long. And they haven't done anything to help property investors specifically with their own goals in an easy way and giving people access to an easy solution that's consumer friendly, that can help them grow their wealth. Instead, they're so caught up with red tape and regulation and all the rest of it. So I think circumstances for me have been really, really fortunate. 

**OUTRO**

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