Q&A: How to Invest $1M, Buying in the Best Markets for Growth + Off-the-Plan Traps

**Sammy Gordon** (0:05)
G'day, listeners, and welcome to another episode of the Scouting Australia Podcast, powered by Australian Property Scout Buyers Agency. I'm your host, Sammy Gordon, and today, guys, we are back for another highly requested Q&A. We're bringing these out more regularly, answering your questions in real time. And as always, I'm joined by my regular co-host and semi-good-looking bloke with a full head of gray hair, the silver dog himself, Mr. Jimmy Ibrahim. Welcome back.

**Jimmy Ibrahim** (0:30)
G'day, Sammy boy. G'day, listeners. It is great to be up here. But you know what? As soon as I walked in the studio, I thought I'd seen it all. But the fact that I'm seeing you in a jacket and you're recording with the jacket on, does that just tell you what's happening on the state of bloody Queensland? It is freezing up here.
I literally should have put my hoodie on, kept it on with the beanie and done this podcast. Because what the hell is happening to your state?

**Sammy Gordon** (0:58)
It is raining up here and yet it's sunny in Melbourne and it's still warmer temperature-wise here than it is in Melbourne. So that's all I can say. Let's rip in. Let's go.

**Jimmy Ibrahim** (1:07)
The team have been... We've had so many questions, Sammy.

**Sammy Gordon** (1:10)
There has been a lot going on in the market recently.

**Jimmy Ibrahim** (1:12)
People are loving it.

**Sammy Gordon** (1:12)
We've been quite vocal in the media as well.

**Jimmy Ibrahim** (1:14)
That's unlike you.

**Sammy Gordon** (1:15)
That's very unlike me.

**Jimmy Ibrahim** (1:17)
The first question, let's get into it. This is from Mercado.

**Sammy Gordon** (1:20)
Mercado?

**Jimmy Ibrahim** (1:21)
Yes. Yeah, wow. We've got an international audience. Mercado, fresh off of Argentina. Argentina in the World Cup. Hey, boys.
I don't know if he's from Argentina, but... He does sound like he's from Argentina. He does, doesn't he? Thanks for all the info. Question for Sammy. Sammy, if you had $1 million to deploy into the market right now, what would you be buying? And what wouldn't you be buying?
I'm assuming $1 million of borrowing everything, not $1 million of capital, right?

**Sammy Gordon** (1:53)
Wait, read the question again.

**Jimmy Ibrahim** (1:54)
It just says if you had $1 million to deploy into the market right now.

**Sammy Gordon** (1:57)
Bro, I think that sounds like cash.

**Jimmy Ibrahim** (1:58)
$1 million cash.

**Sammy Gordon** (2:00)
What?

**Jimmy Ibrahim** (2:00)
Mercado? Is he doing different... Is he from Colombia? He's South American. Is he Colombian or Argentinian?

**Sammy Gordon** (2:05)
Leave Mercado out of this, all right?

**Jimmy Ibrahim** (2:07)
He's asking you a question, leaving out of the foreign line.

**Sammy Gordon** (2:09)
Maybe, maybe.

**Jimmy Ibrahim** (2:11)
Via Miami?

**Sammy Gordon** (2:13)
It sounds like you. Minus the 10 and the good looks.
And the big booty.

**Jimmy Ibrahim** (2:17)
All right, can we do two scenarios quickly? $1 million of cash.

**Sammy Gordon** (2:20)
No, I'm just doing $1 million cash. I'm presuming it's drug money. He's come in, we're ready to go. He's got a million bucks. He's washed it and we're ready to go. All right, so $1 million worth of capital. What would he do and what would he not do?

**Jimmy Ibrahim** (2:30)
Yeah.

**Sammy Gordon** (2:31)
Okay, sweet. Well, what would I do and not do? Yeah, yeah. I think it's a great question. He's asking me both sides of the coin. What would I not do?
I think I'd probably dive into that first because that'll probably paint a picture of what it would lead into in terms of what we would do. Reverse engineering, that component of it, what would I not do is I would understand the markets right now that are at what we would consider top of their cycles.
Right now, I would probably call that peak unaffordability. I think that the environment that we're in right now, it's understanding what is that peak unaffordability and that is what I would be avoiding going and buying into.
That primarily would include probably cities like specifically say like a Sydney, especially the price ones out that the income to house price ratio is sitting at circle like 14x the city average. It's a very expensive for what it is right now. We can see that with the pullback it's had post budget, post lower sentiment, it was already sliding and slipping a bit as it was coming up to it, because the interest rates where they were and the unaffordability level that it was at. So I think that things like that, places like that, locations like that, also throw in the mix potentially like some more expensive parts of, like realistically probably the most expensive cities, sorry, most expensive sort of suburbs across almost all capital cities across Australia right now. So throw Melbourne to the mix with very, very low yields as it is. You've got a higher land tax, it's never really been in there, it's now come into it. And man, like they aren't considered affordable areas either in an environment like we're in right now. So I would be understanding that, and that's not just Sydney and Melbourne. Sydney is almost like a blanket approach for me right now, pretty much. But when you look at say, you're Melbourne, you're Brisbane, you're Perth, you're Adelaide, it's like everywhere in reality, the top ends of markets are probably gonna see a bit of correction, a bit of pain right now. And also it's just what I would be avoiding, regardless as an investor, but I think they're the sorts of things to really be avoiding.