10 IPs by 25 - My Investing Journey

Jmillar · 21st Jan, 2018

sash said: ↑

Congrats John....

You mentioned mentors...did they recommend so much concentration in one area? - ie. Logan..Ipswich.....
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Hi Sash,

I never got advice from mentors re where to buy etc - more overall strategy advice.

I would like to have a more diverse portfolio from a geographical point of view, but I don't for a couple reasons:
1) I didn't believe it was the right time to buy into Sydney in the past year or so
2) I bought in areas I knew, and where the numbers stacked up
3) I didn't have time to learn new areas (would have liked to buy some in Melbourne)
4) I refuse to buy in regional towns etc

I am conscious of having too many eggs in one basket, so this is something I plan to change eventually. But I'm working very long hours at the moment and earning a high income so my time is better focused there for now.

Cheers!

sash · 21st Jan, 2018

Jmillar said: ↑

Hi Sash,

I never got advice from mentors re where to buy etc - more overall strategy advice.

I would like to have a more diverse portfolio from a geographical point of view, but I don't for a couple reasons:
1) I didn't believe it was the right time to buy into Sydney in the past year or so
2) I bought in areas I knew, and where the numbers stacked up
3) I didn't have time to learn new areas (would have liked to buy some in Melbourne)
4) I refuse to buy in regional towns etc

I am conscious of having too many eggs in one basket, so this is something I plan to change eventually. But I'm working very long hours at the moment and earning a high income so my time is better focused there for now.

Cheers!
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OK ta....think you are on the right...avoid concentration of risk..in one area..over time it has been proven it can being people undone.

Best of luck.

icic · 27th Jan, 2018

@Jmillar well done on your achievements! You are doing especially well for your age!
In regard your decision to sell and flip, it could be a very costly exercise with stamp duty and capital gains tax not to mention the time, effort and expense for sourcing new properties and finance.
Also bear in mind that you might not be able to borrow the same amount after you sold it because of the APRA change. Make sure that you are not in the position that you can not buy again after you sold those properties.
There are at times that the best way forward is to do nothing at all but wait.

TapTap · 27th Jan, 2018

Killing it JM. Well done and thanks for sharing.

Illusivedreams · 29th Jan, 2018

sash said: ↑

OK ta....think you are on the right...avoid concentration of risk..in one area..over time it has been proven it can being people undone.

Best of luck.
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Interesting not directly related.
But when you know you know.

A:
Billionaire investor Warren Buffett famously stated that "diversification is protection against ignorance. It makes little sense if you know what you are doing."

sash · 29th Jan, 2018

Illusivedreams said: ↑

Interesting not directly related.
But when you know you know.

A:
Billionaire investor Warren Buffett famously stated that "diversification is protection against ignorance. It makes little sense if you know what you are doing."
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I think you need to red more of about the Wozza.....you need to understand what he says in context...

Illusivedreams · 29th Jan, 2018

sash said: ↑

I think you need to red more of about the Wozza.....you need to understand what he says in context...
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I agree it' t broad and not necessarily what he. Means.
But some diversity for the sake of it.

If you understand a market your young you should double down your efforts and put eggs into that basket.

Sash you yourself is doing alot IN Geelong. What if told you, you should diversify. I think you know what you are doing in Geelong. I think you know why you are concentrating their now and for some. Time

sash · 29th Jan, 2018

Illusivedreams said: ↑

I agree it' t broad and not necessarily what he. Means.
But some diversity for the sake of it.

If you understand a market your young you should double down your efforts and put eggs into that basket.

Sash you yourself is doing alot IN Geelong. What if told you, you should diversify. I think you know what you are doing in Geelong. I think you know why you are concentrating their now and for some. Time
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I realize that I will have 5 in Geelong...but will sell 2....

As for Melbourne I am also planning to sell down 1 in Wyndam council....as have 2 there.already....1 in the North...1 in the Northwest..and 1 on the Southeast...and 3 in Geeling....

I am already diversified in Brisbane 22% of holdings....NSW 26% of holdings....VIC (Geelong/Melbourne) 32% of holdings....Adelaide 10% of holdings...Perth 10% of holdings.

The funny thing is next cycle i will be overweight in NSW again....that is how cycles work.....

Kickstart · 10th Feb, 2018

Jmillar said: ↑

Hi guys,

I'm a very private person which is why I've always been hesitant to share my story - I prefer to fly under the radar - my friends, girlfriend and most of my family don't know what I own. However I always get requests to do this on this forum, so I thought I might as well share some tips from my journey. I don't want to be on any magazines, I don't even want my real name to be known - I just hope my story can inspire younger people to keep working hard to achieve their goals. (also I'm in need of a bit of motivation at the moment so thought this was a good way for me to reflect and get some of my motivation back)

Background
Since I was about 10 years old, I used to buy and sell things for cash. Back then it was pet fish, and then I moved onto mobile phones, computer parts, motorbikes, basically anything I could make some quick cash on!

I started working in family businesses when I was 13 and since then I haven't stopped working. I didn't come from a wealthy family, my parents made me pay for my own expenses when I was a young age. I hated it at the time, but in hindsight it has taught me a lot.

When I finished school, I didn't know what I wanted to do but I've always loved business, so I started a business degree at university. For the first 2 years of uni I was there full time (3 days) and working 4 days. In my 3rd year I decided to get into the property industry as I have always loved property, so I started working in the property industry 3 days, studying 2 days and working elsewhere 2 days.

Property Investing Journey
In late 2012 (age 20) I decided I wanted to invest in property. I started reading books, magazines, researching online and joined the Somersoft forum. I probably spent 3 hours a day researching, for about 12 months before I did anything. In the background I was also saving as much money as I could.

I saw the Sydney property market starting to take off, so my first IPs were 2 units in Western Sydney at the end of 2013, when I was 21. I only just had enough to buy these at 90% LVR. Everyone told me I was stupid, that I should have bought at <80%, but I knew the market was moving up quickly and I'd rather benefit from the growth of 2 properties rather than 1.

I then bought 2 villas in the Logan area in 2014 as the market was taking off, using the equity from my first 2 IPs. I exchanged on these before my 22nd birthday. I bought them off-market, paying about $15k less than they were worth (each).

I didn't buy anything for 2 more years as I didn't have the serviceability or equity/cash to do so. So I was working hard at work, and saving hard.

In 2016 I bought 5 properties using equity in my first 4 IPs, as well as savings. By this time I was earning $200k+ so my serviceability and savings had improved immensely. The 5 IPs were:
+ 3bdr house in Ipswich area on 1,200sqm (bought $30k below market value through a buyer's agent, sub dividable)
+ 3bdr house in Logan area on 700sqm+ (spent $10k on it and reval'd for $70k more within 6 months, can add GF)
+ 3bdr house in Logan on 700sqm (bought $20k BMV, can add GF)
+ 3bdr house in Ipswich area for $230k (through a buyer's agent, cashflow neutral and can build 3 townhouses there in the future)
+ 3bdr house in Logan area on 700sqm+ (bought off-market $20k BMV, can add GF)

This year, I bought another one:
+ 3bdr house in Logan area, corner block of 1,150sqm (was planning on subdividing off 450sqm and building dual key, and then further developing the 700sqm corner block into a dual occ later on, but subdivision costs have blown out so I will sit on it for a year or so)

This last purchase brought me to 10 IPs before my 25th birthday (my goal was 10 before 26).

What Next?
I've more or less hit my serviceability limit due to the recent APRA changes, which has shaken me up a bit because I'm used to just being able to buy whenever I find a good deal!

I met with a few mentors for advice (property guys with huge portfolios, who have been doing this for years) and as a result, I've decided to sell my 2 Sydney properties. I never thought I would sell, but I'm at a point where I need to take a step back in order to take 2 steps forward. I assessed all my properties based on their likelihood of further growth in the short term, costs to hold and ability to add value, and the 2 Sydney properties ended up being the first 2 on the chopping block. I'm in the process of selling them now.

The next 2 on the chopping block are my 2 Logan villas because I can't add value to them, but I think they will have more growth in the short term, and they don't cost me much to hold, so I'll hold onto them unless I have to cull them. The remaining 6 properties have ability to add value, and will continue to have growth in the short and long term, so these will stay in my 'long term core portfolio'.

I'm now looking at opportunities to buy, add value and flip properties. I need to do this in order to make profits to add value to properties in my 'core portfolio', and to add more quality long-term high-performing properties into my 'core portfolio'.

Finding deals at the moment where I can buy well, add value and flip will be incredibly difficult in the markets that I know (Logan, Ipswich, Western Sydney) so I'm going to start getting to know other markets such as Adelaide and Perth. I have come to terms with the fact that I need to be patient (which is hard for me) and that I may have to sit on my hands for months, or even a year+ before the market is conducive of desperate vendors where I can buy below market value.

Tips
- Have a good team around you. Without my mortgage broker (Rolf Latham - absolute genius) and buyer's agent in particular I wouldn't have achieved what I have
- I prefer to buy in the low end of the market. It's easier to buy well (ie buying 10% below market value is easily achievable when you're spending $250k), yields are generally a lot better, they perform well when the market is strong (due to high yields, affordable) and when the market ***** itself they don't get hit as badly as markets with high price points
- Work hard, and don't expect it to come easy. I studied/worked 7 days a week, and researched every night, for over a year before I did anything
- Don't expect to be gifted a silver spoon - I asked a lot of questions, picked a lot of brains for advice, but at the end of the day you need to roll up your sleeves, get your hands dirty and invest a lot of your own time/energy in order to achieve your goals
- There are always challenges, and there are always opportunities. You just need to be creative and keep looking for them

This is all I can think of for now.

I'm certainly not here to brag - I'd prefer that no one knows my story (hence why i use an alias name), but thought I would put this up here so that when people ask for my story I can just send them this link. If you have questions, feel free to ask, but don't expect me to hand you a silver spoon and do it all for you - it's a lot more rewarding when you do it yourself.

Best of luck
John
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Well done!Thank you for sharing.

jyeung80 · 10th Feb, 2018

Well done! I'm pretty sure in my early 20's I was putting all my money into my car...

Mark · 3rd Mar, 2018

Amazing achievement!

Tom Rivera · 10th Mar, 2018

Can't believe I hadn't read this sooner. Makes me wonder what I'm doing with myself, haha!

BradH · 16th Mar, 2018

Incredible achievement, so much hard work has gone into your success by the sounds of it.

I’m totally new to all this property investing and was hoping someone could explain what people are talking about when they say they have ran out of serviceability, I thought I would ask here instead of making a new thread.

TAJ · 16th Mar, 2018

BradH said: ↑

Incredible achievement, so much hard work has gone into your success by the sounds of it.

I’m totally new to all this property investing and was hoping someone could explain what people are talking about when they say they have ran out of serviceability, I thought I would ask here instead of making a new thread.
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Having the required amount of income to pay down your loans under the Banks criteria.

LouisVuitton · 2nd Jun, 2020

Hey, how's your portfolio looking now?

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