How hard was it for you..??

Nice work.
I call it investing on steroids, maximising returns.

 

I'm a little confused, did you settle on the land after the development was complete? What about stamp duties?

 

My god, I hope this comes to fuition @JDP1!

This is comforting to know

GTFO, this is one of my goals

 

Via a development lease rather than contracting and settling. Stamps paid on the two lots i have physically taken possession of.

 

i dont mean 100% gains in 5 yrs..bn will prob do 50% in 5 yrs..with the majority og the 50 occuring in the next 3 years.

 

Hi MTR, 6 years is very impressive, you must have started off with a lot of capital. Would you mind sharing your story and the strategies you used to achieve financial freedom so quickly ?

 

Gains from property was hard for us.
Took about 11-12 years to past the first mil since the first purchase in 2001.
A bit easier now having accumulated more than 10 mil more property in the past 5 years.
We are not very good property investors as far as returns go and have not achieved anywhere near as good returns percentage wise as most of the experienced members here.
However, we find accumulation quite easy after taking the time to build up the foundations for this.

 

These were the days where there were no doc/low doc days, servicing loans was not an issue if you had cash/equity for deposits.

There was nothing extraordinary other than buying during a boom cycle, I was just fortunate that this boom cycle went for 6 years and I went hard. Selling down prior to peak and generating income from property.

If we had no doc/low doc loans today I expect many on this forum would be able to increase their profits significantly. So you see it comes down to dumb luck someone's not necessarily skill

mtr

 

Yea, the family's trained us to be quite independent. Even today, we keep our finances , assets and businesses separate. I basically don't dabble in or make calls with respect to family assets or businesses except giving advice from my perspective and experience in finance and law.

If I wanted to raise capital from my father next month, which I've never tried before, I'd have to sell him a proposition and it'd only be invested on an 'arms-length' basis notwithstanding we're father/son.

Dad loves saying, I've given you an education, and that's all you need, haha.

 

It all adds up.. and lots of small numbers eventually become a very large number!

 

My approach is to generate high amounts of tax free yields and reinvest them in aggressive debt reduction. I want passive income for life - not net worth bragging rights.

I have already achieved complete financial freedom, but I need to be patient for the next few years to see it realised in full.

3 years ago I started Hibernian. I had 50K in the bank and a 440K mortgage, and a couple of pretty handy non NRAS INV properties that were traveling well under their own steam.

Since then, working 6-7 days of 14,16,18 hour days, I have turned the company into a success. I have no staff. I work from a home office and I take care of all details for all my clients . I source projects, I source NRAS allocations for those projects and I sell those projects and write most the loans for those sales. I have been fortunate enough that this has allowed me to pay off the 440K mortgage in full and accumulate a dozen NRAS properties and accumulate over 2 Million in after tax company profits, to date.

The company also has other income streams from loan trails, interest from high yielding accounts etc... totaling @ 130K . So rather than drawing down all of that profit and paying massive amounts of personal income tax, I am going to drip that money out at 200K per annum for the next 15 years and use negative gearing and NRAS to turn it into over 300K tax free per annum.

It is simply a dividend reinvestment plan using property. This is the nuts and bolts of how it works...

The dozen NRAS properties create @ 18-20K of deductible losses per property. That is sufficient to reduce the 200K salary I pay myself annually, to tax free. So there's 200K tax free.

The NRAS surpluses from the dozen properties then add @ 100K + in additional tax free income

So there's @ 300K + tax free, and thats AFTER all costs are accounted for across the portfolio. And I no longer have a PPOR mortgage.

This means that over 10 years I will earn a minimum 300K tax free per year... and the majority of that money will be reinvested so that after 10 years all of the debt on my portfolio is paid down, leaving me with
1. the entire portfolio in tact
2. no debt
3. a very strong passive income likely to be @ 400K plus - although it will be taxable as the NRAS will have ceased and the depreciation will have diminished.

But what this also does is creates capacity to expand further during that 10 years, or after 10 years, because all the debt is gone. I could quite simply sit for 10 years now and wait. The portfolio costs me nothing to hold. I have no mortgage... and at that time I could quite easily add another dozen properties to the portfolio to double the portfolio size and reduce the tax on 400K to pretty much zero... The strategy can just be recycled every decade or so.... but without the NRAS accelerant I wouldnt have been able to achieve anywhere near this.

And here's the bit many on here just cant get their head around- Although I want and expect and will enjoy large amounts of CG, I don't need a dollar of CG for this to work - you see, whether the underlying assets, which are currently worth 6Million + , are still worth 6 million in 10 years or whether they are worth 12 million in 10 years, is not relevant unless I am selling, as the 400K passive income for life is still going to be 400K passive income for life, no matter what the underlying asset value is... and who doesn't want a 400K income for life?

By the way - did all of this in less than 3 years...

I really wish we could count on ever falling rates, ever growing wages and ever easier credit policies and ever more generous LVR's and servicing calculators and lo doc/no doc products to drive the next decades growth as it did for the past 2-3 decades... but it's wishful thinking. No one starting out today is likely to be able to replicate what many of the very wealthy here have managed to, simply because they will enjoy none of the same advantages ...hard as it was for many of the first wave of investors , no doubt - no doubt at all..... but respectfully... it's much harder now since APRA and ASIC got their beaks into things, so if the first wave gave it all away today and started with $0, they more than likely couldn't get close to replicating their success again over the next couple of decades, and I think all on here would acknowledge that...

Unless you are going to become a developer... and get quite lucky doing that .... debt reduction strategies such as mine will get you seriously comfortable within 10 years with zero luck required. It's just simply a case of deploying dormant equity towards assets that reduce tax and increase cash flow, and then reinvesting those dividends to leave yourself with less debt, a bigger footprint and more scope for expansion ...

 

Hi @euro73 .... Since NRAS will be no longer available, what strategy would you recommend moving forward that could achieve similar outcomes?

 

Hey Euro73, this is brilliant.

 

Yep. But he still needed to use debt to do it.

 

Dual Occupancy.... but to achieve NRAS like results, it will need to be regional price points. But there are still a number of NRAS opportunities available so for anyone wanting to inject some of the above into their plans... can still be done if you move quickly

 

Yep... if I had 6Million in cash to start with I wouldnt need to invest in property

 

Loving this thread. Very inspiring, have just started writing out a new 5 year plan and with some of these stories giving me ideas. Sub dividing and a development is planned so I should be hitting the 1 mil within the next few years

 

I applaud the end result and the idea. No debt policy limits me with that kind of investing, but I don't need a 400k passive income. It's way too much.

 

10 years of debt for a lifetime of income... and about as close to zero risk as a property strategy can be

 

Right, if you ever end up with more than you need, I'm always happy to help you release some of that burden

Note to self: keep an impeccably kind relationship with Barnes.