From $10K in Cash to $3.3M Portfolio

Very interesting and thanks for sharing.

How much of your portfolio do you think is built up from cap growth/rent and how much from savings otherwise?

 

Great story, but your title would suggest you bought your first IP with 10k cash, it is correct?

 

Good on you mate- well done & great share.

 

I dont know how I missed this thread. Good to read your story finally
Go, Ko Ko ! :-D

 

Bought my PPOR using $80k savings. From there, we waited for about 3 years to pull equity from it. Also, debt recycled another $70k to buy 2 Ballarat IPs. From there onwards, we only used equity to fund for other purchases.

 

I guess, YIP wanted to mean $10k cash asset to $3.3M property asset.

 

How is that misleading? He has a portfolio worth $3.3M. Not once has he claimed to have a net worth of $3.3M. What have you done?

 

I always read it as assets.

 

Yep! There's usually a different value between the portfolio & net worth.

 

Congrats! Great write-up. I understand that getting $1.5m-$2m+ loan is a massive hurdle in the current environment despite decent income and equity in one's properties due to low serviceability. I reckon it's the fundamental issue which challenges the concept of portfolio building exercise even if properties are positively geared at large.

I feel that if I am going to hit a road-block after buying 4 mid-value properties in non-metros, it can be a somewhat meaningless exercise in the big picture. What are your suggestions on this?

 

Awesome. Looks like you were lucky enough to see a consistent growth in value of your properties and hence equity position within a relatively short span of time. If that didn't occur enough for any reasons (e.g. suburb choice/ property choice went wrong, etc), what would have been your backup plan to continue your journey? I reckon many people would be in that situation.

 

Thanks. When you say "hit a road-block", I assume, you are close to hit the servicing wall. In that case, I don't see any other way, but to try to increase your income. Perhaps, if you have savings, paying down non-deductible debt could help as well.

 

If that was the case, I might have to find ways to increase my income/savings for deposit towards next purchase.

I've always believed the fact that there are opportunities everywhere; be it pandemic situation, recession or even during boom time. As my mentor always says, it's a matter of deciding whether I am driven by my fear or by my goal. When my goal is bigger than my fear, I would do whatever it takes to achieve my goal.

 

This resonates with me. I’m a bush walker (old one now). Paddy Palin has a quote “the only trip I regret is the one I didn’t do”. This is so true in all aspects of our lives. As you say, without action, all the other stuff doesn’t matter! Well said

 

Enjoyed this read Ko Ko. I am trying to implement a similar strategy in regards to investing regionally. May I ask if your properties are P&I or IO? Do you fix your rates? I ask as both of mine are P&I on variable. They're both cash flow neutral on P&I @ 3.19% but I have considered making at least one of them IO. Partner and I RentVest and both make about 75-80k a year so for the time being we've gone P&I to slowly pay off the mortgages.

 

All of them are I/O at the moment. One is becoming a P&I very soon. We are still accumulating properties at the moment, so not looking to pay down if it's going to affect my goal. When we think we have accumulated enough, we will look at paying down or selling some/keeping some.

With fixing, yes, I did fix some of them 2-3 years ago and regretted it. Look at the rates now. I won't try to beat banks by fixing in future anymore.

If you have accumulated enough, you might look at paying down the mortgage and getting into consolidation phase of the journey.

 

Great job Ko Ko and thanks for your contribution to the forum.

 

Thanks for your reply Ko Ko. I am also going to switch both my properties to IO. Thanks again, I appreciate it.

 

Very well done and congratulations! Thank you for the detail you have provided too