Lockdown Economy Australia in Property Investment with Uwe Jacobs
The interview was transcribed and adapted into an article by Tapasya Das
Lockdown Economy: Interviews by think tank AlterContacts.org with real entrepreneurs sharing insights, challenges and successes during the COVID19 global pandemic to inspire, motivate and encourage other entrepreneurs around the world.
In this interview, we meet Uwe Jacobs, property investment strategist and founding director of Property Friends, located in Melbourne Australia. Uwe spoke about how he counters falling levels of confidence in investing during the lockdown by organising webinars for clients. He enlisted the help of experts in the property industry to create a framework of knowledge to help clients and the wider community overcome the shock of the lockdown economy and understand the sudden changes in legislation. By surrounding his team with experts, Uwe was able to collect all the knowledge necessary to guide his company through the challenging lockdown months and out of the other side. He is now looking to help increase confidence in investments in the coming months as Australia recovers from the pandemic, and is using new forms of online marketing to increase the visibility of Property Friends in across Australia.
Tell us a little bit more about “Property Friends” and what you do as a business.
Uwe: In essence, we provide solutions to people that aspire to financial independence. Some people are looking for choices in retirement and some people are wanting to leave a legacy. So we tackle property investment from the other end, from the “What do we want to achieve” end. And it’s not like 85%-95% of the industry that tackles it from “What have I got to sell?” End.
How long have you been doing that?
Uwe: Only 18 years and loving every minute of it! I’ve got a corporate background of 25 years. I used to do big industrial projects, power stations, trains and trams, and that sort of thing on the commercial side. And that kept me in good stead for the contractual and project management expertise that I’m needing in my business.
Do you have many employees with you at “Property Friends”?
Uwe: Now after having spent these 25 years in corporate and having led up to forty-five people, which was mayhem and craziness, I’m very grateful to run a small company. And we can scale the business up and down pretty much to our liking. My wife and I like travelling. So to answer your question, there is one employee and one “…..”. And that’s just the way I like it.
That makes a nice change from the chaos of many employees like you said.
Uwe: I’ve only got to look after myself and that’s hard enough.
How many clients do you usually have with “Property Friends”?
Uwe: That pretty much depends on what we want to do in a year. Typically we do 30 to 50 deals per year. We typically do wholesale buying, so that everybody gets a bigger bang for the buck. So we do sets of 5 or 10. But I won’t compromise quality for quantity. And it depends on what the economy is doing, how much demand I’ve got. But ultimately it gets back to where do I see the best deals. And sometimes there’s more and sometimes there’s less. So we are quite flexible in that regard.
So tell us, when the lockdown hit in Australia, in Melbourne. Obviously, you work with a small team. So I guess you didn’t quite have the problems that many people had. Like the one of having to deal with employees during this period, whether to keep them or not. But it sounds like your business is really based on close communication. And I guess that was affected. So tell us what did you do during this period to change the way you work and stimulate your business?
Uwe: Well, for starters, our business is set up to be location independent. We operate over all of Australia and generally I travel every six weeks to somewhere for a week. So I’m used to operating through computers or the internet. And that held us in very good stead. To answer your question, the first thing that we did was to help our clients and help the wider community in the property investment arena to overcome the shell shock. So we immediately put on webinars on themes like — what is the impact, what is the legislative impact, what can we do to pivot, what other things to look out for and just created a framework for information flow. So from a business point of view that worked really well because we became the hub for getting clarity of options and possibilities. I don’t know what it was like in Europe, but here in Australia, especially in the first three-four weeks, there was a lot of confusion. It was also with regard to legislation, government support, financial support and business issues that needed to be taken care of and to be known about. So we built a panel of experts and we had weekly webinars.
So tell us a bit more about the content of these webinars. How exactly did you run them?
Uwe: That was very much in a collaborative approach. We have a statement that we live by. That is “It is hard to soar like an eagle when you are surrounded by turkeys”. Accordingly, we have got a great team of advisors around us, all at arm’s length, all non-financial ties. We don’t get anything out of it but the whole idea about our business is to operate as a team. The leverage as a team is great. So if I can surround our team with specialists with experts, then that’s a great synergy that can only propel us forward. So I invited the legal expert, the legal eagle, I had a rental manager, a local property agent, an insurance expert and a mortgage broker. I have a financial planner now with me as a property strategist that pretty much-covered everything. And whatever we didn’t know, we took on notice, ran through five to ten minutes each of our subject matters and then opened it up for question. We just took a panel round of questions and that kept it really interactive and really alive. The feedback was tremendous.
So you collected knowledge, I guess, and you were able to share that with people who really needed it in this time. That sounds great. Is this something that you are continuing to do now or was that just for a few months or so during the lockdown?
Uwe: It is fair to say that we have stabilised and the general situation in the industry has stabilised even. Victoria and Melbourne are out of lockdown. We are quite opposite to Europe. We have done the hard yards and we are looking forward to a “free” Christmas where we can interact and be with our families. That sort of thing! So the situation is pretty much stabilising here. I still do online training. But the actual webinars have decreased.
Did you implement anything during the lockdown, that maybe you could advise people about and that which didn’t work so well? So you have talked about the benefits of information sharing. But were there any things, which may be through trial and error, you realised weren’t working?
Uwe: I think hiding behind electronic media was the worst thing that one could do. I actively picked up the phone and spoke to people. That was really really good even though it was very surprising to a number of people. But it also came from the webinars. The panel discussions gave us a great forum to fully interact with people and say, “Look, I don’t know the answer to that question but I’ll get back to you” So we by the specific intent picked up the phone, spoke one to one and then put that online to the audience as well. But the biggest mistake I would suggest is if you hide behind electronic media. All of that works but the personal interaction in time of chaos or in time of challenges, especially when you are like us and locked on for 14 weeks in a row, that really made a difference.
I think that’s really valuable advice for everybody out there, who like you said is experiencing this lack of face-to-face communication. You can still pick up the phone, you can still talk to people like a normal human being and not just behind the screen. So tell us a bit more about how “Property Friends” is going now. So you’ve mentioned that in Melbourne you are coming out of the lockdown period. What is the situation of the market that you are finding now?
Uwe: Well, it is fair to say that during the lockdown and in times of uncertainty, we are all pretty much the same. We sit on our hands and wait for “What the heck is going to happen!”. The good part about that is that we are getting out of the phase. People have found their directions mainly. Our economy is picking up again. Luckily, our unemployment rate is lesser than what’s expected and forecasted. The government subsidies were taken up in the second round to a lesser extent than forecasted. So the signs are pretty good. And that is what I think is the biggest challenge in the business in an economy. It’s in the eyes of the beholder. If we are all thinking of doom and gloom, nothing much happens. If we can swing that around and see some light at the end of the tunnel and reassure ourselves that it’s not an oncoming train. Then everything is good! Everybody is more inclined to do something and to get up and going again.
That’s a great message. We need some confidence and positive thoughts during this time to stimulate the economy, exactly as you said. What about your outlook for the coming months?
Uwe: Well, I am very positive that the growth rates are surprising in the industry, especially in the real estate industry. There were horrendous forecasts by some marketeers and forecasters, of 40% slump in property prices. None of that happened. There were some minor drawbacks but some areas even grew through the period of the lockdown. So fascinating! And that again proves the point that nobody can predict anything, in my view. Just my view! So yes, people are coming out of the woodworks and people are waking up. The smart investor knows that when times are tough, the deals are best. So we have done two deals that are very interesting property investments. It’s hard to beat and the circumstances haven’t been better. If you are prepared to take a bit of risk. We structure our deals so that there are required risk-averse. So I’m very positive and our sales show that.
That is good to hear and hopefully, that will continue for you, as confidence comes back to the economy. So you have mentioned lots of things and there are lots of advice and clearly, you were able to share a lot of knowledge and a lot of help to many people in your industry and also outside, during the lockdown. But I’m sure with “Property Friends”, there are somethings that you also need help with. So if you could name three things that you need help within the current day, just to finish the interview. What would they be?
Uwe: Electronic Media became more and more important. Our business was and is mainly based on personal referrals. 76% of our business is based on personal referrals. That didn’t work that well in the lockdown. I haven’t travelled for nine and a half months. Normally, I go travelling every five weeks. So it became more important to be really on top of social media. I started to work my way into SEO, of the website. I took on the website and actually revamped the website. That is certainly not my strength. So I need help there. We pivoted into online training another heck of a learning curve. So I’m still learning there. There is no business in the world that wouldn’t like to have more leads or clients or sales. So marketing is also an area that became really important. It is amazing to me. A lot of companies pulled back. We did the opposite. We pumped energy, not money, into marketing. So that’s an area where I am learning and where I am being coached as well.
Do you have any final words for anybody watching?
Uwe: Just keep going, that’s the biggest thing. It’s easy to put your thumb in the mouth and go in the foetal position. That’s the worst thing that you can do. Get up and fight.
About the Guest
Since 2003 Uwe Jacobs, the founding director of Property Friends and published author of several books, including “The 7 Secrets of Highly Successful Property Investors”, has assisted clients with property investments. His ultimate aim is to provide solutions for people aspiring to financial independence, choices in retirement, or leaving a legacy.