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if you have a property portfolio with a largeamount of properties in it, it can be very difficult to manage the finances of thoseproperties. you are talking multiple loans across multiple different banks, incomingexpenses coming from everywhere. so, how do you financially manage a multi-property portfolio?so today, i brought on ben everingham from pumped on property, who is my buyer's agentof choice, but who is also a very successful investor who has achieved financial freedomhimself and has a large portfolio of properties. ryan: how many properties is it now ben?ben: yeah, we are not going to talk about that but it is definitely growing.ryan: okay. so, it is somewhere around the 10-property mark, i think. is it?ben: yeah, we are getting close.

ryan: okay, cool. so, let us start by talkingabout the structure of the loans across your properties because people talk about separatingtheir loans out, having different banks for every single property. is that what you havedone with your portfolio and separated everything out?ben: yes. if you would look at my iphone for example. on the home page of the apps, thereare at least a couple of rows worth of lines now, which is a little bit time-consumingand a little bit tiring, to be honest with you. but from an asset protection perspectiveand everything else that i am looking for, obviously, it makes a lot of sense to stockyour risks between lenders. ryan: so you have lots of different banks.are you saying those app icons are all the

different banking apps?ben: all of the different banks, yes. so you know, the big 4 there and some of the othersas well. ryan: okay. so when you have a property portfoliowith so many different banks, how do you manage things between them? obviously, you are gettingrental income for every single one, which you need to work with the real estate agentin order to get paid, then you get expenses from all of them; do you somehow pool themtogether? do you treat them separately? what do you do and what can help people in theday that they manage all of it? ben: this is a little bit of an up form andit has taken me a long time to get to this point. but basically what i have is one loanaccount for each property, like one home-loan

account; and then i have one offset accountfor that property. and so the offset account is where the rent is paid into each month,and then that offset account is where all of the expenses for that one property aretaken out of as well. so, from an interview reporting perspective, it is completely cleanand the data-in and the data-out is super easy for me to get because it is just connectedto that one property and nothing else. ryan: yes. so each individual property hasits own offset account, which is like a bank account that obviously offsets your home loan;and so all of your expenses are paid out of that. all your income goes into that so whenit comes the time at the end of the year to do tax time, which we will talk about in aminute, you can say, "okay. property number

1, here is account number 1," and all yourincome and expenses are in the 1 account. is that right?ben: exactly. and it is just pooling that 12-month financial statement off and justallocating that as a lone item into a spreadsheet so you know, "here is the total rent received.here is the total electricity cost, etc.," and just breaking them down. it is so easyto do once you have done it a few times because you know exactly what you are looking for.ryan: okay. so for positive cash flow properties, you would probably have enough money in thataccount to pay all of the expenses and things like that. but what about some propertiesthat you may have that are negatively geared, or that cost more in a year for one reasonor another, than you actually have in that

account. what would someone do in that situation?ben: yes. i think about the properties that i own in the past that were negatively geared and in terms ofeach of those properties, i would just allocate a certain contribution at the start of theyear. let us say that it is going to cost me $2,000 a year to hold that property aftermy after-tax income. i would just transfer that amount of money into that account intothat offset and just leave it for the year. and then any surplus money that was left over,obviously pay myself back at the end of the year. but i just like to have that bufferthere. ryan: and with - this may be too personalso you do not have to answer it, but with the properties that are generating a positivecash flow, do you let that build up in the

offset account just to offset the loan? orwould you like to roll that out for personal reasons, holidays, future investments, etc?ben: in the old days, i used to take that money out and not really reinvest that backin. but now, these days i now that i have learned a little bit more. think anythingof your base income, any tax breaks you get, any chunks that you get of money. i must leavethat positive income accumulating against that property until the end of the financialyear until i have done the return for that particular property. and then these days iactually pretty much just put that money straight back into repaying the debt at the end ofthe financial year because all you reap - advantage of it sitting in the offset which means youhave not paid interest on that money anyway,

but i am in a debt reduction stage in termsof my portfolio so that money just goes straight up the bottom line debt.ryan: and so what is the value of paying it off of a bottom line debt instead of justleaving it in your offset account? ben: look, my mortgage broker says that iam crazy repaying that debt. but i am a low-risk person and the older i am getting i am becomingmore and more low-risk, so... ryan: yeah, yeah. you are pretty old now.you are what, thirty or something, you know. you have a couple of years left.ben: back when i was a spring chicken like you, i was a bit crazier. but what i am doingis repaying that debt because i do not want to get to 50 and have $5 million worth ofdebt and a $10 million property portfolio.

i want to get to 50 with $2 million worthof debt and a $10 million property portfolio. it truly is passive income and you can sella few of those properties to completely wipe that debt. that is what i am personally workingtowards but i am in a... ryan: so really, it is a personal reason foryou to pay down that down that debt in terms of where you want to be, the goals that youhave set for yourself and what you want your portfolio to look like. so, what about managingall of - the income is pretty easy, right? is it just the real estate agents pay you,how do you follow up if you have not been paid?ben: so, you always get paid like legally, they have to disperse the funds for you every30 days max. you can even ask to have them

disperse every 14 if you would like to, andif you would like to. so, you always get your money from the real estate agent and legallythey have to send you an end-of-month and an end-of-financial-year statement as well.so from that perspective, your money is going to come in. it does not always come in inthe amount that you think it is because, for example, i get my property managers to pay,water expenses, rates, they pay my insurances, they pay absolutely everything for me beforei receive that money. and the reason i get them to do that is to outsource all thosetasks so i do not have to think about them all year.ryan: well, that is genius! i have not actually heard of people getting their rental managersto do that for them; to pay water rates, council

rates, insurance, etc. do many people do thator is that something...? ben: no. not many people do; a lot of peoplepay it themselves. but you think about that: there are 4 water rates, 4 council rates,1 insurance bill, 3 or 4 other maintenance related things that you come up per year.if you have a decent sized portfolio that could be 40 or 50 things you have to do yourselfper year that you just do not want to do. ryan: and are they happy to do it? the rentalmanagers? ben: absolutely! i have never had a singleone of them come back and push against it, like they actually ask to do it. some of themare more proactive ones. ryan: yeah, because i was going to say, okay,how do you deal with all the expenses like

water rates, council rates, insurance, maintenance,and how do you stay on top of those bills and make sure that they are paid. but i guessthe way that you do it is to get your rental manager to do it for you.ben; so you just ring those providers and say, "hey, i would like to change the addressthat my statements are sent to," or "i would like to set up email statements," and theyemail them to you. you just forward them straight to your manager or you obviously just getthem sent directly to there. the only time - when i get my end-of-year statement, i justgo through my cell phone and look at every expense throughout the year because sometimesi do pay things that i do not want them to pay. and at that time, i will question themand ask them for a refund or question their

logic in terms of paying them and get a logicalreason why they did that on my behalf. ryan: what would be an example of that wherethey would pay something that you probably would not have wanted them to pay?ben: it might be not so much as paying something that i did not want them to pay because itmight not be so much they paid something i did not want them to pay because in my tenancyagreements i specified that any expense over $200 that is not this or this, they need tocall me or email me before i will pay it. it is more - they might have overpaid thecouncil rate and i challenge the water charge which is $70 or $80 off. and it is more fromthat perspective because they are paying it and i do not have the time to review it andmake sure it is absolutely perfect. then the

management layer over the top...ryan: so you have to really go through manually checking all of those bills either once aquarter or once a year just to make sure that everything has been paid correctly, therehave not been mischarges in those bills. so you are outsourcing it like 90% outsourcingit but then you outsourcing it but you still have as you said that management layer whereyou look over it; just double checking everything, making sure it is alright.ben: yeah. and as you know i am a bit of a control freak so that is probably just mypersonal nature. ryan: yeah. i think if it was me, it wouldprobably slide a lot more because i am not like, i do not enjoy doing finances and doingall those administration tasks and stuff like

that, or i would get my assistant to do itfor me because she is really good with that sort of stuff.ben: good idea. ryan: so, management of the day-to-day stuffyou get mostly outsourced. there must be expenses that you cannot outsource to real estate agentsso you have to pay yourself. or no? ben: no. i do not have a single expense thati cannot outsource to those guys except obviously a renovation, or the hot water system shitsitself or the stove stops working and i do not want them to find one for me so i willjump online and find one and get them to buy them on my behalf.ryan: okay, cool. and then for people who are not getting real estate agents to do itfor one reason or another, before you got

them to outsources, there are strategies thatyou can recommend to people to stay on top of bills, make sure they pay them on time,etc? ben: definitely correct. (1) create one folderfor each financial year for that property. put all of your financial statements in thereand then break your expenses up into categories. so let us say you have a folder with 6 or7 plastic sleeves in it, and you just put all of your electricity bills in it, all ofyour water bills, all of your expenses, all of your capital works, renovations, etc, yourinsurances, and just have one folder for that financial year.ryan: so this is like keeping track of your receipts, right?ben: that is all it is, state tracking system

so that at the end of the year you can pulloff all those plastic sleeves together, dump it all in one, and that is the financial yearfor that property, which i think you need to keep those receipts for 5 to 7 years.ryan: yeah. and some people - i was talking to an investor just the other day, a customerof mine who now has 6 properties in the last year, and he was saying that he has a bigannual calendar on his wall. and so he is not doing what you are doing in terms of managinghis bills so i might let him know about that. but he puts the bill's due date on that calendarand so each week or each month he will look at the month ahead, see what is due so heknows what he has to pay. if you are not as organized as ben, getting other people todo it for you, then maybe that is the strategy

that you can consider.ben: that sounds depressing. that sounds depressing just looking at your calendar and having 52bills to pay every year, 6 properties. ryan: i think if it was me, what i would dois i would do the receipt folder like you said but unpaid bills i would have a separatefiling drawer or something with like 12 folders in it, and i will put stuff in these we paidthat month in like each folder; so like january, february, march, april, may. chuck them inthere, and then at the start of each month i will get them out, pay them all, and i willput them in my receipt book. ben: that is pretty much - to be honest withyou, if we are paying anything ourselves exactly what we do is we pool the invoice until thevery last date that it is due and then pay

it on that day.ryan: yeah. or you could use like my wife's strategy, which is like we got a peg on thefridge and everything goes on the peg and you just forget about it until the overduestatement comes or something like that. but that is probably not recommended.ben: i will get a peg. ryan: yeah. we got like a speeding fine theother day and i was like, 7 days over or something. we almost forgot to pay it because it waslike behind 6 sheets of paper on the fridge. ben: yeah. you get your overdue notice whichis twice as much as a speeding fine and you are like, "well, i should pay that speedingfine now." ryan: yeah, before it triples or it couldtriple again. okay so, the last thing to talk

about would be tax time; doing your tax returns.is that something that you do yourself or do you just pass everything onto your accountant?ben: have you ever heard of the navy seals, how they talk about hell week? so this isthe week to become a navy seal, right. you go through this week called hell week andit is basically separating the men from the boys. and those that are going to be acceptedin the navy seals program - and i think 15% or 20% of people actually make it throughhell week that start, and we are talking about the fittest of the fittest and mentally capablepeople in the world. and they just screen them out through doing this ridiculous stufflike primitive primal stuff like carrying telegraph poles on shoulders across the beachwith 30 kgs and making them swim all night

non-stop with 30-kg backpacks on, just bullshitstuff, to just test the capability of these people and their leadership qualities whenthey get challenged and they do not let them sleep for 3 or 4 days and they do not letthem eat. and tax time for me is like the intensity of hell day. once a year i do notget my accountant to do it because he is going to charge me $300 or $400 an hour to do it,which is probably a good use of his time to me, to be honest. now that i think about itand now that i stop logically justifying it but i basically look at every property. ihave a spreadsheet and on that spreadsheet it has a tab for each one of the propertiesand it has total income, total expenses, total initial outlay for the property at the bottomin terms of the expenses that i cannot claim

at the moment but i could claim when i sellthe property in the future. and i just work through 1 property at a time, breaking itdown so i just give him the spreadsheet. i keep the receipts and he does everything onthe spreadsheets which takes him heaps of time. he can focus on strategic stuff ratherthan punching in hundreds of receipts which is a waste of his time.ryan: so, do you go through your bank statement and enter every single line? do you do itonce a year, you will print off the yearly bank statement of income and expenses andyou will go through and basically punch that into excel and generate like an annual reviewcolumn that has everything in there? ben: exactly. exactly that, so i just workon it all on one day once per year because

i am working for myself. i cannot get thevariation to assessment that an employee could get. and because i am working for myself ido not really get a cash tax return anymore so there is really no point in doing it ona monthly basis that i might have as an employee. so i just literally have 12 columns of theyear and put the expenses in the column that i would have incurred the expense on duringthe financial year and just work my way through it. it is a punish but it saves you thousandsand thousands of dollars every year so it is worth it.ryan: and i do that for my business like i have a spreadsheet where i have every dayof the year actually and i put expenses incoming based on categories and stuff like that. andthen at the end of the year, i summarize that

with all the category and things and i sendthat off to my accountant and they can do my tax returns super easy because i have doneall the hard work for them. so that is some good advice for people there if they wantto do it themselves and they do not want to pay $300 or $400 an hour to get someone elseto do it for them. ben: what did i think about, did you wantyour advisors giving you strategic advice and not focusing on the doing but focusingon the how can - now that we know what we know, reduce your tax bill, or increase yourtax return, or tweak this. always go on for a tax planning session with them in marchso that i can go, "this is what the financial year to date is looking like for this property.is there anything you need me to do now before

the 30h of june? it is going to save us afortune. or should i make some expenses or this property is looking too positive or thisone is looking too negative; how can we look at the portfolio property-by-property as awhole to obviously get the best outcome using the legal framework that we are allowed touse. ryan: let us just quickly talk about thisbefore we close it off, like this tax planning session, what is it? is it once a year yousit down with your accountant? i am guessing you have to pay them for this session, andyou sit down and go through each of your properties and say 'here is what the year is projectingto be,' and then other things that you recommend for me to do this year that will improve....ben: that is exactly what i do like i spend

an hour with him that costs me a couple hundredbucks and we sit down and just go, "this is where we are at. what are your thoughts andsuggestions to improve this?" i might be like, "i have just had a chat with ryan and ryansuggested this which i have not heard about before. why have you not brought this up forme?" and he will be like, "ahh, sorry if we forgot that. let us look at the last 2 previousyears and add that." you know, you are constantly running and your job is not to sit there andlisten to what they have to say. your job is to go on with ideas and go, "i am not happypaying tax each year. i want you to help me turn this around so that we can put ourselvesin a better situation," and part of that is also knowing that you want to buy a propertyin the next 12 months so what does my income

have to look like? what do expenses have tolook like against that property so that i can move forward in the pursuit of my goalsnext year as well? ryan: yeah. so why did you choose to do thatin march over in something like september or just after the end of the previous financialyear: september, october, november? ben: because march is the time that you canactually do something about it. september, you really cannot do anything about your taxsituation for another 9 months; wherein march, there might be things that you are doing rightnow that if you have 3 months to tax time he might say, "hey, the property is lookingreally positive. we are going to have to pay tax on that money this year because we donot have any losses. you have been talking

about renovating it for 5 years, why do younot strategically do these expenses now so that we can right off $20,000 worth of coststhis financial year and the property looks it breaks even on paper?"ryan: yeah. ben: all of those sorts of creative thingsthat you and i know nothing about but licensed professionals do.ryan: so it is kind of like you are far enough into the year that you can see 'okay, thisis going to happen in june or july. this is what your tax is going to be like. but youhave enough leeway like 3 to 4 months to actually make decisions to counteract that. whereasif you did it earlier, like july, september, etc, you do not really know enough of theyear yet in order to make those decisions.

and even if you did, it is probably too earlyto spend that money because they are not going to benefit you tax-wise until a year later.ben: yeah, exactly. why would you spend the money at that time of the year when you canspend it 9 months later and every dollar you spend then, you get the dollar back out thenext week? and most people just wrap up to their accountant on the first or second weekor third week of july, it is too late to do anything at that stage. and you are alwaysreacting rather than being proactive on the front foot. and these are just the littlethings that you originally go through the process of buying more.ryan: yeah. well, they are definitely some great tips so thank you so much for that.guys, ben is a buyer's agent. as you can tell,

he owns a lot of properties himself and heis financially free through his properties. but he also helps a bunch of on property audiencemembers to buy their investment properties. so if you are feeling stark, if you want ben'sexpertise, if you want some help in finding a great area, finding a great property, thenben is offering all our onproperty-ers a free strategy session if you are interested. thereis a limited number per month. if you are interested in sitting down with ben, go intoa free strategy session of 'here is my situation now, here are my goals' and talk with himabout how you can achieve them, then head over to onproeprty.com.au/session and youcan request your free strategy session over there. so thanks, ben so much for offeringthose free strategy sessions to our audience.

and a lot of people going through them havebeen really grateful. a lot of people have used your services and have been really happy,so thanks for that and thanks for sharing your advice on managing your finances. isthere any last tidbit of advice that you would like to give to people or leave with peoplewhen it comes to financial management? ben: yeah. do not do your own tax return,number 1, regardless of if it is going to save you a couple hundred bucks. secondly,do not use a rubbish accountant. go find an accountant that owns a lot of properties himselfor represents a lot of people in the real estate industry because the extra hundredbucks that you are going to pay them for that tax return is going to save you literally- probably hundreds of thousands of dollars,

to be honest with you; that would be a lotof times. so, ryan and i cannot give you that advice but the right people can and if youneed any introduction, ryan and i know some great people ourselves so just ask these sortsof things. ryan: awesome! thank you guys so much anduntil next time, stay positive!