Financially free at 32 – My 10 year property journey

So I just buy the time and do not borrow and invest at all! Perhaps upgrade my PPOR?
Imagine if I cannot duplicate and investors are pulled out from the market who would supply the housing needs for our population (54% migrant intake rest in via births - say around $1million every 3-4 years?), government couldn't compensate for that?
Also, if state governments currently receive around 50% of their revenues from RE, (stamp duties, land tax, rates), where would this revenue come from?

 

They are apparently looking to the US/Canada/UK for inspiration.. Large US funds coming in to do purpose built rental units/multi-family units/student accommodation, UK private/public ownership... They still get their taxes but risk (and profits) transferred offshore. They probably get extra $$ for infra as a condition to approve...

 

Thanks for your advice guys. No I won't sell in Sydney unless I have to but I have recently "swapped" properties (eg I recently bought OTP 1.5mil, rode the 25%pa growth for 18mth, sold annoying decaying terrace house with awful neighbours 1.1mil - possibly at peak, at last minute. My OTP purchase was then worth 1.8 by settlement but I'll keep it for a few years to benefit tax/depro and avoid extra CGT). So I made a few hundred thousand painlessly, and was able to swap a very stressful terrace house IP for a gorgeous brand new apartment rented to execs.

I have a sneaking suspicion Sydney will continue to stay warm (5-40% growth pa) as looking over and comparing with our friends in Vancouver they are in a similar situation - and no government attempt to tax or slow down growth has worked. It's funded by organised crime from Asia with endless funds. And so much pent up demand. New projects in Sydney / (new metro). All the new apartments are simply providing travertine marble Miele kitchens for newly arrived single migrants (or staying empty!) rather than actual housing for Sydney families. Development in desirable areas in Sydney is more difficult/rare (beach and harourside).

My gross rent is about 170k pa and debts about 1.6 mil. The banks are really only made for simple cases. They have made extraordinary mistakes with every of my settlements, over 15 times, with me. I appreciate their lending, but it's dried out. I have had to use the ombudsman help me with cases against the bank several times. They often mix up settlements. This last one they accidently locked up 300k of my cash and refused to give it back for 6mth. They released it one day out from settlement, and then apologised saying they would refund the interest but it still hasn't been done. Banks are to confused to deal with me....

I'm not really into renovating (I only do it when selling and only cosmetic) or developing. I'm too busy enjoying life - time with young kids; live on beach; swim every day; travel; time with friends and family and I really like working (retrained as teacher), it gives me energy and pride. I don;t want to deal with paint fumes, dust, concreters yelling in my face!! Shows like the Block make me feel sick

I think I'll have to consolidate and upgrade my Sydney PPR. I come on here to research strategies around this. Thanks.

 

From what I've read, Vancouver has pulled back...up to 20% in some cases. Not that I've studied the market there.

 

Make sure you say Hi over at the Peter Thornhill, LICs, and ETFs subforums. An absolute goldmine of information.

No exit strategy at this stage. Love the game too much to quit now Looking to get into developments to up my property game further, whilst still continuing to accumulate more shares with spare cash. PPOR has now been paid off, ahead of schedule, so it's full steam ahead!

No immediate plans to upgrade the PPOR, although still lots I can do to improve my current place. e.g. kitchen and bathroom is still mostly original condition.

 

Thanks for the kind words! Yep PPOR is now fully offset from savings with some spare equity pulled out and sitting on the sidelines.

Definitely going to take the time to smell the roses. I'm taking a three week Europe/Asia trip in October to celebrate my birthday. Looking forward to it!

What are you at in your journey?

 

@Jack Chen what a great read! I am 30 and have currently paid off PR and have 2 ip in the works! 1 in Melbourne and 1 brisbane ! This forum is inspirational!
Matt

 

Absolutely! Nothing quite like it out there.

Congrats on paying off your PR at such a young age and getting started on accumulating IPs. You're already light years ahead of the general population.

 

Started IP investing in year 2000 so 17 years up, my mentor thinks 30 years are required to be really truly wealthy from RE investing. So I am quite comfortable, could live off current portfolio, it is growing over the years (exciting moment when the land valuations surpass total overall cost of IP - e.g. Carina block value $115K in 2000 now $510K in 2017), have sold few lemons, have renovated, purchased larger corner blocks IPs for future developments (if not me maybe kids, or other developers?), now keep helping adult kids into RE investing, family, some friends. Also, concentrating on SMSF IPs to pay off in few years or maybe to buy one more?
Gosh, many nice choices I have..... I must say it is very rewarding but I love gardening on days like today the most!

 

Very cool @Jack Chen

 

Always a good problem to have Thanks for sharing! Why does your mentor think it takes 30 years?

Loving the weather right now and loving the fact that I'm no longer cooped up in a stuffy office. Now that I work for myself, yesterday I took a stroll to my local cafe and worked out of there for the afternoon.

 

Thanks @mickyyyy now it's your turn to share

 

One day more of a face to face kinda guy

 

Agree with the choices as nice problem to have. Also, not be bound by a clock to wake up for the last 20 years or so....
He suggests first 7-10 years are where you keep accumulating as much as possible to grow your asset base so more risky as your LVR is quite high (that would be the hardest), then next 7-10 years you offload some lemons (sell some rebuy some for long term forever), you unwind those IPs, the mistakes you made or refine and fine tune your investing strategy (unless you just keep holding them on - I didn't), then the next 7-10 year or so you have been about the third or fourth cycle in place hence permitting compound growth.... I must say if my portfolio just doubled in 10 years time or even 15 or 20 years time I can very easily live off it (8 digit portfolio and since my current LVR is around 28% only and all acquisitions generated 50% equity since inception - doubling would make this LVR 14% and so on...). Basically once you stop taking on extra debt the compounding effect is very powerful the longer you hold. Also, you realise you suddenly make more equity than your overall purchasing cost.

 

Great thread @Jack Chen! and great congratulations on such a position. You mentioned in your first post that it took you 6 years and then IP 6 to realise you didn't need to save for a deposit anymore!

so what was the process? equity release and then borrow against other IP or PPOR or what was your method in accumulating more IP's without coughing up your own funds?

 

Thanks! I'm glad to be able to share my story.

Yep, releasing equity and using that to fund 20% deposits + 5% costs for all future purchases.

Also, it was quite an ordeal to get comfortable leveraging up the PPOR. Probably due to my upbringing and wanting to have a fully paid off house ASAP. I've since changed that to getting my non-deductible debt paid off ASAP, which I've been able to hit very recently through a combination of debt recycling into shares and continuing to save like a madman.

 

I just read your post and I want to say congratulations on what you have achieved. It is an inspiration to see someone around the same age as myself doing very well. Maybe is should hit you up for some pointers

 

Can i have some details for your brisbane buyers agent?

 

Hi Jack, well done! can you please further explain your debt recycling strategy? Thanks.

 

Accessing that equity without selling is the hard nut to crack.