Hit my goal of 2mil+ portfolio at 28 years old!

Discussion in 'Investor Stories & Showcase' started by Frank M, 8th Nov, 2020.

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  1. Frank M

    Frank M Well-Known Member

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    Just wanted to give a massive thanks to everyone on propertychat that has helped with questions and also inspiration from others stories, which is the reason for this post so I can help inspire investors in their 20's to pursue their property goals.

    My goal was to own a multi-million property portfolio by the end of my 20's, happy to say I've completed that and setting new goals for before my 30's!

    A bit of my investing,

    IP1 - 2014 West Melbourne house purchase 360k, current value at 550k, renting 390 p/w

    IP2 - 2017 West Melbourne house purchase 320k, current value at 425k, renting 330 p/w

    IP3 - 2018 SE QLD house purchase 280k, current value at 315k, renting 375 p/w

    IP4 - 2018 SE QLD house purchase 282k, current value at 320k, renting 330 p/w

    IP5 - 2020 Geelong house purchase 400k, current value 430k, renting 350 p/w. (potential 4 townhouse site)

    To young investors, set your goals for your 6 month, 1 year, 5 years, 10 years and legacy. Then find someone that has done what your aiming for and mimic their journey. Create your team that has your best interest and then work your butt off pushing towards your goals daily

    Only a few regrets I have with my property investing journey I have is, not taking it more serious earlier on, wasn't untill 2017 I started studying property as wealth vehicle, and regretting not getting a good team around me until 2018 and setting feasible goals. Another Shoutout to friend/mentor/broker @Michael_X none of this would of been possible, forever grateful for your efforts
     
    Last edited: 8th Nov, 2020
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  2. Shazz@

    Shazz@ Well-Known Member

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    Thanks for sharing- well done.
    Questions:
    1) What was your income (not including rental income) during the accumulation phase? I assume you have now hit your servicing wall?
    2) Current debt levels? Are you going PI, IO or a mixture of both?
    3) do you have a PPOR as well?
     
  3. Frank M

    Frank M Well-Known Member

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    Thanks! Income has always been average, it's never been over 6 figures throughout my investment journey

    LVR is around the 75%, all interest only atm

    No PPOR atm
     
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  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    So with 75% LVR the portfolio isnt worth $2m.

    Net equity is $398K. Less 75K selling costs, Less $75K tax that is unrealised.
    Equity is $250K
     
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  5. The Y-man

    The Y-man Moderator Staff Member

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    I'm happy to take the $2m+ claim - @Frank M never claimed it was net asset val.

    The Y-man
     
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  6. spludgey

    spludgey Well-Known Member

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    So your income has been restricted to $999,999/pa? That's a bummer! ;)

    Sorry, had to do it!

    I completely agree with you how important it is to have a plan, especially in the beginning, it can be a great motivator. Congrats on hitting one of your early goals!
    I'm on track to miss the first one that I ever set: Being able to retire aged 40. With 1 1/2 years left, that won't happen. However we're now at the point where we're getting fairly comfortable. There's enough money in the bank for anything we want (our needs are quite modest) and we don't have to budget much. So if we were to just take our foot off the pedal, we'd slowly pay down debt and build more equity and get more of an income from property eventually.
    I'm glad I did much of the hard yards early on, as I've got a lot less motivation and time than I did back then.
     
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  7. Trainee

    Trainee Well-Known Member

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    A good achievement. Though there are a few things to keep in mind.

    Depending on your income, you might have trouble borrowing for ppor, and you probably want to soon.

    Be prepared to be locked into those current loans if you have hit serviceability walls. P&I is an additional 30k a year.

    If you can keep them, long term it'll be good. But be careful of the short term, especially liquidity and your assumptions about refinancing.

    Thinking about it another way, would a smaller portfolio (say, 2 x 750k Sydney or Melbourne houses) be better? Yield no, capital gains maybe.
     
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  8. Gen-Y

    Gen-Y Well-Known Member

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    At least he gave it a good crack at it.
    Didn't lose money like 50% of property investors out there.
     
  9. Closet

    Closet Well-Known Member

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    Still pretty impressive for a 28 year old though eh :)
     
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  10. Frank M

    Frank M Well-Known Member

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    Thanks Paul, net equity is a little more with the offset and some paying down of the debt.

    But I didn't realise thats how you measure a portfolio size by the net equity after expences/taxes, though I do agree it's pretty much all that does matter in the end.
     
  11. Frank M

    Frank M Well-Known Member

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    Thank you, appreciate it
     
  12. Frank M

    Frank M Well-Known Member

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    Thanks !
     
  13. Frank M

    Frank M Well-Known Member

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    Thank you
     
  14. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Congratulations Frank. So is the plan to be a broker or buyers agent now?
     
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  15. Frank M

    Frank M Well-Known Member

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    Hahah fair call!
    Thank you, that great to hear and very inspiring. Thanks for sharing
     
  16. Frank M

    Frank M Well-Known Member

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    Haha I thought someone would say this. But no I do not have even the slightest interest in becoming either.

    I'm a personal trainer/warehouse manager
     
  17. Frank M

    Frank M Well-Known Member

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    Thanks!

    Yeah I've definitely thought about those options.

    Currently what I'm trying to achieve is to increase my income to therefore increase borrowing cap.
     
  18. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Focus on present investment hides some truths....what many ignore is your initial investment. Lets say it was $200K. A hefty ROI (unrealised) and an admirable effort. And with time and further growth this will compound. And allow equity out of IP1, 2 etc to buy another maybe. Thats what non-property investors ignore. Your $2m portfolio value will all experience growth where your initial money in may be a fraction of that value. Its a leverage that is the secret to long term property investment...you have worked that out.

    People also will say - you have a lot of risk but in reality the risk is on paper. So if property vals dip 5% ...so what. They will bounce back. What important is you can sustain ownership through rent and loan rates. Time for the next few years will ensure rates are kept down.
     
  19. Lacrim

    Lacrim Well-Known Member

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    Me too, feel I'm getting a little lazier each day.

    Maybe it's because I know there's this large portfolio chugging away in the background (or forefront lol) and should I decide to call it a day, can sell down a few and achieve financial freedom. Not too long ago, I was an unquenchable accumulation machine.
     
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  20. Frank M

    Frank M Well-Known Member

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    Will take that in, thanks Paul