The Brady Marcs Podcast

Episode 8 with Jonathan Mosslar

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Episode 8 with Jonathan Mosslar

In this week’s episode, we have Jonathan Mosslar, founder of Marquette Financial, a thriving mortgage broker business in Canberra. Jonathan shares his journey from employee to successful entrepreneur, emphasising the importance of processes, systems and strategic planning. With an unmatched competitive spirit, Jonathan’s real estate insights are sure to spark your imagination. I know you’ll love this inspiring discussion that promises to motivate and enlighten. It’s an episode not to be missed.

Please note that this episode was recorded in October 2023. As Jonathan anticipated, the Reserve Bank of Australia increased the official interest rate on 7 November 2023.

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Episode Transcript

Voiceover: Welcome to the Brady Marcs Podcast with your host Brady Yoshia from Brady Marcs Buyers Advisory. Enjoy discussions with a variety of guests and pioneers from diverse backgrounds, each sharing their unique perspectives on property, business, industry and more.

Brady Yoshia: Jonathan Mosslar is the founder of Marquette Financial, a thriving mortgage broker business. He’ll share his journey from employee to successful entrepreneur, emphasizing the importance of processes, systems and strategic planning. With an unmatched competitive spirit, Jonathan’s real estate insights are sure to spark your imagination. I know you’ll love this inspiring discussion that promises to motivate and enlighten. Let’s learn from one of the best. Welcome, Jonathan.

Jonathan Mosslar: Thanks, Brady. Good to see you.

BY: Good to see you too. I’m impressed. You bought your first property at the age of 23?

JM: Yes.

BY: Do you want to tell us a little bit about that?

JM: It was, well it meant a lot of, not a lot of avocado toast is the sort of rhetoric in the media is. Not a lot of takeaway coffees, calculating how cheaper lunch I could make every week

BY: Lots of savings.

JM: A lot of savings. And it was just, yeah, it was just, I just sort of made a decision, I’m gonna make about 18 months of sacrifice for, yeah to buy a property and just dug down essentially, and did it, which is good.

BY: It’s brilliant. So looking back, would you do anything differently? If you were to buy your first property again?

JM: Not necessarily. Like obviously, there’s always a better suburb you can buy or a better property, you can buy, but realistically, I think I did it as probably as soon as I can. On the income I was on at the time, I was probably on about 50 grand a year when I when I bought that property. And you know, saving that $35,000 deposit on that income is pretty difficult. So no, I think besides getting a better job, you know, much better I could have done really?

BY: Yeah, I think it’s fantastic. So what was different when you bought your second property.

JM: The difference was probably your level of income as you get there. So on your second property, you can make more of an educated decision and a more of a conscious decision. Whereas I think that first one is essentially the foot in the door, just buy something, get in there, create a bit of equity. Whereas the second one was, I spent a bit more time looking at where to buy, what to buy for more of an investment purchase.

BY: And what was the timeframe between the first and second purchase?

JM: It was about two and a half years. About two and a half years between.

BY: That’s still very impressive at such a young age. So a little birdie told me you’re very structured and disciplined. Have you always been like that when you’re at school and in general in your life?

JM: No, no, no, I’d learned a pretty harsh lesson on that. So probably until I was in the mortgage industry for maybe my second year, I was a little bit just haphazard, just sort of, I was pretty young when I joined the industry. And I learned after about two years that I was just going nowhere, really. And I had a really good mentor at the time, David Thomas, from Trilogy Funding getting camera, and he was structures and processes. He was big on that. And I spent about 12 months just sitting next to him and learning how he ran his business. And that really sort of opened my eyes from there.

BY: Yeah, there’s nothing better than to learn from a mentor, and then to implement that in your daily life in both professional and personal.

JM: Yeah, correct.

BY: So how did you get started in the financial industry?

JM: It was essentially a phone call. So I started through cars. So initially selling cars then move briefly into car finance. And a girl that I was dating at the time her dad did the IT for a mortgage business in Canberra, and one of the one of the big ones down in Canberra. And they were just looking for someone so he floated my name, got a call at a coffee and yeah, they gave me a go, which was good. I was 22 I believe at the time.

BY: And did you have a nice car?

JM: No, no. I think I had an old Holden Commodore at the time, essentially. Yeah.

BY: So you had an investment property, you had a car, which was okay.

JM: Yep.

BY: Then you got your second property. And you moved into the finance industry. So a lot happened in such a short period of time.

JM: Yeah, correct.

BY: So have you always had an entrepreneurial side? Or is that just evolved as you’ve matured?

JM: It did evolve, sort of as I matured through my early 20s. So before that, I’d never really thought about running a business, etc. I was always quite competitive. And then I think as I sort of pushed more into a career and away from sport, I needed somewhere to push that competitiveness. And I think just naturally I push towards that, I’d say.

BY: That’s excellent. And so how did you start your own business?

JM: So similar. It sort of started with a few, one of my business partners, Joshua Morrissey from Hive Property.

BY: We love Josh.

JM: He is phenomenal. He had referred a few of his customers to me to organize finance, and then he just gave me a call one day, wanted to have a bit of a coffee catch up, I thought it was to talk about a client or two. And it turns out that he was pretty happy with a lot of the client feedback that he’d gotten from people he’d referred to me and he wanted to have a chat about, would I be interested in starting a brokerage because he sort of, he was sick of referring people to other brokers and not getting a great service. And yeah, he just wanted somewhere where he could trust, and yeah, that’s where it started from there in 2021.

BY: Brilliant story. So referrals is always the best way to get business. And in your case, to start a business.

JM: Yes.

BY: So you never know, whatever you’re doing wherever you are, to always have exceptional customer service and make sure you’re doing the right thing by people.

JM: Yeah, I always sort of say, just try and impress everyone always, never turn off. Because you never know. Like, you could be working at a hardware store or a gas station and the right customer could come in. And if you’re impressive enough, then they’ll give you an opportunity.

BY: That’s right, you never know what can happen. So the property market is quite complex. And we always say to our clients, and particularly first home buyers to make sure they’ve got their finance in place. What are the banks looking for at the moment when approving a loan? And do you still need to have a 3% buffer to make sure you can service the loan?

JM: Well, essentially, what they’re looking at now, which is the biggest change over the last 12 to 24 months is a clean credit file. So previously, what they brought in was something called Open Data where every single loan facility you’ve got, your monthly repayments get listed on your credit file now. So if you are late on one repayment, by about four to six weeks, it will actually get listed on your credit file, and it’s there for 18 to 24 months.

BY: Do you want to give some examples of where people could innocently be late on a payment.

JM: It’s essentially things like not setting up direct debits. So that’s the biggest one that I see is people where it’s just I had a credit card that I barely use, the annual fee came out, and I didn’t have a direct debit set up. So it was just a mishap essentially, like they had money in the bank. But it was just they forgot to make the payments. So the biggest thing I was advise my clients, especially if they’ve got a lot of loan facilities is direct debits are your best friend, then it just happens. As long as the money’s in the account, the loan will get paid.

BY: Yeah. And it’s so easy, because you don’t even have to think about it, it gives you more time to do other things.

JM: Yeah, you spend a couple of hours setting it up, and then it’s done.

BY: And how long does it take to get pre approval?

JM: Anywhere from essentially 3 to 7 business days, depending on the lender,

BY: And is that for three months, the approval?

JM: So most pre approvals will have an initial period of three months. And then if you’re still looking and you haven’t quite found a property at that stage, if you just provide a couple of updated pay slips to your broker or the bank, they’ll extend it for another three months.

BY: Okay, so it’s not that difficult once that expires, then it’s pretty simple?

JM: Some people in the industry will put a little bit of pressure on you to try and get you to buy something because obviously, they’ve got an invested interest, but I wouldn’t feel too much pressure to buy in that first 3 months. Take your time, as long as you don’t think your financial situation is going to change. Take your time, get an extension, you’ve got plenty of time.

BY: Excellent. So what’s the benefit of using a broker as opposed to going directly to the bank? I mean, a lot of people say they’ve had a relationship with the bank for the last 10 or 15 years they feel comfortable. Even though the bank managers change all the time. What would you say to people that are looking to get finance?

JM: The biggest thing would be time saving, I would say, so you’re not necessarily going to get a better deal at a broker compared to a bank. You’re going to get the same interest rate, essentially, brokers don’t have a better interest rate. It’s more that ability to compare between multiple lenders, we’re meaning you’re not getting home from work and sitting there with your partner on your laptop, trying to figure out is that bank going to give me a better rate than that bank. But you might not know that the bank with the best rate, you might not be a suitable customer for them, so you’ve wasted some time. That’s the biggest advantage is just not having to deal with researching.

BY: And so many people are time poor today. So it’s important that we maximise on having the right time to do the things we love as opposed to what we have to do.

JM: Correct. Yep.

BY: So different banks and economists have been saying conflicting things. And I know none of us have a crystal ball, so we don’t know what the future holds. But what do you think we’re going to see in the arena of the interest rates over the next 3 to 6 months?

JM: I would say there’s probably going to be one more rate rise. I would say November, I wouldn’t be surprised if there was a rate rise. I also wouldn’t be too surprised if there’s no more rate rises and we are at the top. So with everything going on with energy costs at the moment, everyone probably noticed that their energy bill went up by about 25-30% in July. That as well with petrol costs going up is putting a lot of pressure on inflation, which is going to then put a lot of pressure on the Reserve Bank to increase rates to curb inflation, which is why we’ve been going through this rate rising exercise in the first place is to bring inflation back in order, so I’d probably say a rate rise in November would not be surprising.

BY: And then next year going down or you’re not sure?

JM: Yeah, I’d say next year coming down, but not quickly. So I wouldn’t expect a big clip of every single month seeing a rate drop, like we saw the rates go up every single month. I would say it would be a slow progression down, because I can’t imagine the Reserve Bank wants to move too quickly. And then inflation skyrockets again.

BY: Yeah. So a question that I’m interested to know. Because quite often, buyers come to us and they have found a property. And they just want us to negotiate on their behalf. However, they don’t have any finance in place. I know I asked you how long it takes to get pre approval, but how quickly can you really get their approval if we have, we run the risk of losing the property, what’s the quickest you’ve ever gotten approval for a client.

JM: Probably the quickest I’ve gotten approval is same day, so probably within 4 hours from there, but that would require the client to provide absolutely every detail we require really quickly, the biggest thing that delays a loan approval is lack of information. So if someone has a debt that they might have forgotten to tell their broker, or they forgot to give you a pay slip that you asked for, that’s the biggest thing that will delay the process. If you can give everything upfront, then realistically, you can get an approval within 4 hours.

BY: Just four hours is fantastic. I think I’m coming to you next. Although I think I’ll have my finances in place, and then I’m going to look for a property.

JM: We try and avoid as many of those really quick approvals as possible because they can become stressful for all involved.

BY: And I know that there are listeners out there that are thinking to themselves, does it cost me more to use a mortgage broker?

JM: No, no, the answer is no. So most brokers will not charge a fee to the client. So we get remunerated by the banks themselves. So whoever we send the loan to will pay us essentially an upfront fee. They’ll also pay you a management fee is a broker, which is essentially a trailing commission as its otherwise known. So every month, we get a very small amount, essentially, which means that in six months time, rather than you clogging up the banks line and waiting on hold for four hours, if it’s a very small adjustment to your loan, or question you’ve got, you can just call your broker, which is why we get paid that management fee so that we do answer those calls.

BY: Yeah, it’s important and clear communication, being able to pick up the phone, sometimes when you want to get in touch with the bank manager, they don’t even call you back. So it’s important to feel comfortable with who you’re dealing with

JM: Correct.

BY: Often misconceptions that buyers have out there, are that buyer’s agents are only for people with a large budget, which is not the case, because buyer’s agents work with buyers that have got smaller budgets, first home buyers, you name it, all different types of buyers. What are some of the misconceptions with using a mortgage broker?

JM: Well, there’s probably that regarding the fee structure. A lot of people do think that similar to maybe a financial planner, you’re gonna have to pay a fee for your first appointment, and then a fee for them to organize the loan. As well as there’s a bit of a misconception where people may think brokers have a certain alignment to one bank compared to another, for example, which is not really the case. All the banks essentially pay us the same within a very small margin, which means we’re not really influenced one way or the other, the biggest influence for my business is how quickly are they going to get the approval, we do try and avoid certain banks that traditionally take a long time to approve loans, that’s probably our only influence.

BY: So that’s great. I mean, the listeners out there that didn’t know that it cost them nothing are now we’re going to have the opportunity to reach out. So we’ll talk about at the end of the podcast, how they can reach out to you, so you can make that a lot easier for them. Self Managed Super Funds are becoming increasingly popular in terms of a lot of people looking to buy property in this with their super. Are you seeing that there’s an increase with these type of loans?

JM: Over the last 3 months or so, yes. So there was a large decrease probably for the last 3 years potentially. Whereas this year, I have actually seen it tick back up with Self Managed Super Funds. And that’s probably a space where a broker is more important than most others, because there is a record low number of banks that are lending to Self Managed Super Funds at the moment.

BY: Yes. And why do you think that there’s been an increase?

JM: I think people are just looking at ways of getting in the market as interest rates have become quite expensive. The traditional purchase of an investment property is becoming more difficult. And I think people are just exploring other ways of purchasing property, which is why people are looking at Self Managed Super Funds and ways that they can build wealth.

BY: Yeah, I think it’s a great way to build wealth. So for someone who’s starting out on their property journey, and have no idea what to do, how to put things together, what would your advice be to them in order to get their finances in place?

JM: I probably say setting a defined goal is is the first step so similar to when I bought mine I said I’m going to spend the next 18 months and live like a monk essentially and try not to spend any money

BY: Live like a man and create wealth.

JM: That’s probably a first step as well is showing yourself that you can, if you were to purchase a property and all of a sudden you’ve got a $3,000 a month repayment, you want to be able to show yourself that that’s not going to be financially stressful for yourself. So being able to set a goal, say I want to buy a property in the next however many months, my first step is I’m going to start saving as much as I can. That’s probably where I would start.

BY: That’s a good start. So as a savvy investor yourself, where are you looking for, in what areas are you looking to buy your next investment property?

JM: in Canberra, we have a unique sort of market down there, it’s pretty protected by the large percentage of public service. So the rule of thumb in Canberra is you put a pin in the center of Canberra on Parliament House, basically, and draw rings around it, and you want to buy as close to the center as you can. So for me, it’ll be I’m looking more at land size over the type of property necessarily. So I’m trying to buy essentially as close to 1000 square meters as I can, as close to the city as I can, probably within 5 to 8 kilometers, if I could.

BY: Yeah, that’s very smart. We’ve had very positive experiences in Canberra buying for both investors and for primary residence clients. So I’m very passionate about Canberra. And so I can really understand what you saying. Another thing that’s been spoken about a bit are green rates?

JM: Yes.

BY: I’m sure there’s a lot of listeners out there that don’t understand what green rates are, could you tell us a little bit more about what they are.

JM: So a green rate is essentially a discounted interest rate that the bank will give you for having a green home. So every banks got a slightly different way that they interpret that some push more towards solar, others push more towards your energy efficiency rating in your home. So if you’re building a brand new home, that’s where probably a broker is very important. Because if you just walked into your local branch of whatever bank, you might not even get asked about how many energy stars your property has, for example, that you’re building. So they’ve pretty cheap as well, to be honest, they’re very cheap, they’re very attractive.

BY: So that’s an incentive to build an any energy efficient home.

JM: Yeah, definitely. It’s probably a way of, I’m not sure if it’s incentivized by the government in any way. But it’s definitely a way that pushes people to build more energy efficient homes.

BY: So that’s another good tip there. Especially for those looking to build a home. So being a mortgage broker, and also an entrepreneur and an owner of a business, I know that you pretty much on call 24/7. Well, maybe not 24/7, but like how we are in the real estate arena. What do you do to unwind?

JM: Golf, essentially, as, yeah, as a lot of people do these days, it’s a pretty popular sport now. So I try and play golf as much as I can. I never play as much as I’d like to. But yeah, similar to in real estate, it’s everyone’s got my mobile number, and most of the calls come through there compared to the office phones. So it’s you start at 7 and finish at 10. Essentially, most days and weekends don’t really stop either. So I just try and find little windows every few weeks where I can get out for 90 minutes, turn the phone off and just play some golf.

BY: Yeah, it’s important to have a little bit of downtime. I know sometimes it’s not that easy. But it’s the discipline again, coming in there to make sure you block out that time.

JM: Definitely, otherwise, you just burn out. Otherwise you’ll burn out.

BY: It’s not healthy.

JM: No, definitely not. I’ve done it. I did it when I first started the business for a good 12 months there. And I realized I needed to make a change because I was just grumpy all the time.

BY: You’ve got to have fun along the way.

JM: Yeah, you do. Yeah, you gotta find you’ve got to find a little little break for your brain.

BY: Yes. So you mentioned earlier on, you had a really good mentor that really was a game changer for you. Have you had any other mentors? And was there anything that stood out that has helped you along the way?

JM: Yeah, well, I probably say, I’ve had three really good mentors in my life. My first was actually at the car dealership, the dealer principal there. He was the first person that sort of taught me about juggling different balls of life in a way and sort of you can’t just put all your attention in this one thing you need to balance it from there. The next one was when I first started in the broking industry. I started with a lady called Deanna Ezzy. She actually runs her own brokerage now as well from there. And on the very first day, she looked at me and said, I suck at training people, I’m really sorry. She was chaotic. She had, she was probably the opposite of David. But she, the way she could communicate with people and the way that she sort of taught me on how to communicate with people. So things like structuring an email so that rather than just responding to their email, you’re thinking about what their next response could be to save you time in the future. Because if you can send that email and it doesn’t get to a bunch of questions in response, then that customer is happy. And then I was lucky enough to then I spent about 12 months with her when I first started, then spending that 12 months or so with David I got to see sort of both ends of the spectrum where she was pretty chaotic and a people person and he was just a systems and a master operator. So I got to sort of pick my favorite things from both of them. And, and sort of that’s where I channeled towards starting Marquette I’d say when I started that was my inspiration is to say, I want to be not quite on that side as Dave, but not quite on that side as Dianna. I want to be somewhere in the middle with both of them, and yeah.

BY: That’s such a good balance to take a little bit from each. And where did the Marquette come from?

JM: Essentially, it was a marketing company, essentially. So not too much inspiration there, I believe it is the name of a French explorer. And there’s a town in the US, a college town, which is big in college football, which is called Marquette too. So it sounds good, I quite like the name of it.

BY: It’s got a good ring to it.

JM: But essentially, we worked with the marketing team for about 3 to 6 months, when we were starting the business. We spent a fair bit of time before starting the business, working out what the structure is going to look like. Because, you know, I don’t really like doing things in halves, so yeah.

BY: Yeah. So I always say if you do something, do it properly, otherwise, don’t do it at all.

JM: 100%. Yeah.

BY: So you have achieved a lot in such a short period of time in your life. Marquette’s going exceptionally well. Where do you see it over the next 5 years?

JM: Over the next five years, I’d probably like to be at a headcount of somewhere around 10 to 15. From there, and I’d like to be doing a little bit more commercial finance, too. So at the moment, we do probably 85%, residential finance and about 15% commercial. I’d like to increase the commercial side to probably 35-40% of our business.

BY: Is there any other finance you do? Do you car finance?

JM: Yeah, we do. So we do a little bit of car finance. We probably specialize in self employed is probably where if we were to be a specialty broker of some sort, self employed customers and investors would be our largest client base, purely because we actually enjoy it the most. And I think if you’re going to do something for 60 hours a week, you want to do something you enjoy.

BY: Yeah. No, I think that makes sense. Yeah. And it’s good to have a little bit of a niche as well, you’ll have a differential from all the others.

JM: Yeah definitely, we spend quite a lot of time trying to train the entire team on tax returns, how to structure a loan, so that if you want to buy your third or fourth investment property, you’re not held back by that second one you bought, and you got the wrong loan with the wrong bank. We spent quite a lot of time trying to make sure we we train the team up on that.

BY: And are you doing a lot of refinancing at the moment?

JM: Heaps, that’s the flavor of the month or year, essentially, with everyone rolling off their fixed rates at the moment, they’re getting that letter in the mail from the bank, which says, you were paying 2%, you’re now paying 7, good luck. So yeah, so refinancing has been it’s been a big year for refinancing.

BY: So for the listeners out there that aren’t aware, what are the interest rates at the moment?

JM: Essentially, a good competitive owner occupier rate or regular home loan, you’re looking at about 6.89%? Would be sorry, 5.89%. Okay, shock. And then foreign investment, right, anywhere from about 6.09 to about 6.79 would be where you sat on investment, right?

BY: And are people fixing their rights at the moment.

JM: Not necessarily. The data showing probably about 90% of loans are on variable rates as they start new loans now, purely because most economists and most people in the industry believe we’re pretty much at the top, meaning, if you were to fix it now, you’re running that risk of if rates do start coming down early next year, you’re you’re trapped at 6% while you’re watching everyone else get four and a half, five.

BY: So it’s best to be variable at this stage.

JM: At this stage, it’s always changing at the moment. So it’s best to just do what you can what I say is just do what you’re comfortable with. From there’s no broker or bank is going to be able to give you a 100% answer on where rates are going from there. So just do do what you’re comfortable with. If you trust your broker, do what they say. If not do your own research and feel free to present that research to your broker. I always welcome that insight. If you’ve got your own research and you follow a certain economist on Instagram, feel free to send it to me I’m more than happy to look at it and and let that influence our decision.

BY: That’s a really good point. So you’ve given us a lot of information. To recap for somebody that’s looking to either refinance or get their finance for the first time, what are the things that they need to make sure that they have ready to come and see you.

JM: So number one is just start saving, get your expenses in order. So you want to stop going out for dinner, three, four nights a week, those kinds of things. Get your payslips in order as well. If you’re someone that takes a lot of days off work, for example, maybe in that three months before you buy that property, you want to start consistently turning up to work and just so you want to remove as many questions as the bank can ask just to make your process as easy as possible. So if you’ve got two consecutive payslips that are exactly the same, the bank’s not gonna ask any questions whereas if you’ve got one pay slip we earn $800 less than the next pay slip. Even when nothing wrong might’ve happened, the bank, well, they’re gonna ask a question from there. So try and simplify your situation is probably what I told most clients just get simple.

BY: Get simple and get organized.

JM: Yes. Correct.

BY: Do you have a favorite quote?

JM: Probably what I said earlier, I don’t know where it came from. But it’s just try and impress everyone always, essentially. If you, if that’s always in the back of your mind, you’re never going to always do it. But if that’s in the back of your mind, and every interaction you have, you’re always saying, I want to be impressive at least, and then I think you’re going to do okay.

BY: Yeah, that’s, that’s such a good quote. So if the listeners want to get in touch with you, what’s the best way for them to get in touch?

JM: The best way would be essentially either by my phone or email. So we’ve got a master email address, which is admin@marquettefinancial.com.au, flicking an email through there to book an appointment, or even if you just want to send your situation through and say, hey, this is my situation, what can I do? Go nuts. And that’s probably the best way, and with the world we live in post COVID. We do probably 50% of our meetings via phone and Zoom anyway, so you don’t have to be in Canberra. We probably 30% of our clients are around the country. We’ve got clients in Dubai, the UK, so yeah, you don’t have to be in Canberra. You don’t have to meet in person. Most meetings these days are yeah, phone or Zoom or Microsoft Teams.

BY: So you’re just a phone call away.

JM: Yep, just a phone call away. And if I don’t answer you usually hear back on the same day.

BY: Fabulous. Well, thank you so much for your time. It’s been a pleasure meeting you.

JM: You too Brady, thanks so much.

BY: Thank you

 

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