In this episode, Damien and Jeremy dissect a marketing email Damien received from an unnamed buyer's advocacy business, one Jeremy notes has a reputation for embellishing the truth, working through the numbers to test whether the claims are realistic for an average investor.
The Email in Question
The email describes two clients ("A and B," not their real names) who, with the company's help, secured five properties within a 24-month period, generating $76,500 a year in net profit and reaching their "financial freedom number," followed by marketing language implying similar results could be achieved for the reader, before noting these particular clients were in "a very special circumstance."
First Red Flags
Damien, drawing on experience sitting in on more than a thousand initial client consultations, notes he can't recall a single client purchasing five properties within a 24-month period, an immediate red flag. He also questions the specific $76,500 net profit figure (designed to sound precise and credible) and the vague "financial freedom number" framing, and notes that "net profit" implies a larger gross figure once tax is factored in.
Testing the Numbers: How Extreme Is This, Really?
Jeremy works through what it would actually take to achieve this outcome via typical sequential equity-funded purchases (buy one property, wait for growth, draw equity, buy the next, and repeat). At an 80% loan-to-value ratio, each successive purchase would require around 33% capital growth on the prior property to fund the next 20% deposit, meaning the compounding growth required to fund five purchases this way within 24 months would need to be extraordinarily high, well beyond plausible.
The far more likely explanation, Jeremy suggests, is that the clients were fully cashed up from the outset, potentially via a large equity release against an existing home. Using an illustrative example, a $2 million home with minimal debt could support releasing around $1.2 million in equity, enough to fund 20% deposits and purchase costs across a $4.8 million portfolio of five properties (borrowing the remaining roughly $3.8 million at 80% LVR). Jeremy stresses that owning a $2 million home with little to no debt already places someone well outside the circumstances of a typical Australian household.
What It Would Take to Reach the Claimed Outcome
To grow a $4.8 million portfolio to the implied $7.64 million (referenced later in the email) within two years requires around 59–60% capital growth in that period, an extremely high rate, particularly given that interest rates roughly doubled over the same broader period discussed. For the portfolio to still be cash flow positive after tax by around 1% (after accounting for all mortgage interest, property management, insurance, council rates, and maintenance) at that scale, is described by Jeremy as an extremely rare outcome for standard residential property.
Jeremy notes that a portfolio composition capable of producing a 1% post-tax net yield at this scale would more plausibly involve commercial property (which typically requires larger deposits, around 30% rather than 20%, implying an even larger required starting equity position) or unusually high-yielding residential categories such as NDIS-compliant or dual-income properties. Either way, he concludes the scale of pre-existing capital required strongly suggests these clients started with significant wealth already in hand, potentially from sources like a lottery win, an inheritance, or drawing on a substantial existing superannuation balance in retirement, none of which are disclosed in the email.
Putting the Numbers in Context
Jeremy references a standard retirement benchmark: a comfortable retirement lifestyle nets around $71,000 a year for a couple, or around $50,000–$51,000 for a single person (after housing costs are accounted for). Against this benchmark, a $76,500 net profit figure is designed to sound remarkable to an average reader, without disclosing the exceptional starting position required to achieve it.
To illustrate how misleading this framing can be, Jeremy proposes an exaggerated hypothetical: a billionaire paying cash for a $100 million portfolio at even a modest 3% gross yield could plausibly net around $1.5 million a year after tax, a marketing email could describe this as "we just met someone who retired on $1.5 million a year after buying 25 properties in 12 months," which would be technically true but wildly misleading without disclosing the starting capital involved.