How will Eric Wu expand his portfolio to $10 million

How this investor plans to double his portfolio within 10 years

Learnt a lot from the podcast. Great work, Eric!

 

After reading the title, I was hoping to see how one is able to increase serviceability from 5mil to 10mil, but did not see anything in there regarding this.

Good info there otherwise. Thanks for posting, and thanks
@Eric Wu

 

Nice one Eric Wu. Once again though the podcaster gos on about how his strategy is to buy BMV. There is no where on the east coast at the moment where this is possible. No vendor or agent is gunna sell there house BMV this is a myth. Maybe 2007 not 10 years later.

 

I strongly believe with your hold for the long term 20 plus years view or never sell. Like you said thats when the real money is made. You have to do the overtime to get the big bucks just like a normal job.

 

Thanks for this. Its a good reminder here!

 

just remember, where there is a wu there is a way

 

No idea where @Eric Wu will be in 10 years time, but I love the spirit of people like him and @Taku Ekanayake.

People who have great dreams and willing to risk a lot to go for it.

 

Yep set the bar high.

 

Eric has been quite generous in sharing his knowledge and experience with me. His transition from a high paid job to setting up his own mortgage broking business is a risky adventure but he handled it very well. Keep up the good work, Eric.

 

Hi guys, thanks for the kind words.

 

like most of ppl on PC, most of us want to have a go and try our best and, to see what we can achieve or reach. we all only have life once, why not try our best.

 

bought my PPOR at 7% BMV when I bought it which isnt anything amazing but I was happy and people do way better than myself.

 

Have to disagree here.

Yes, it's bloody unlikely to buy under market value but NOT impossible. Very challenging in Syd and Melb at the moment but still possible. Not as tough in Bris and surrounds if you are willing to aggressively pursue properties fresh to market with unconditional offers and push to have them accepted quickly. Sure, there's not many chances to do this, but again, still possible.

I'm sure other brokers with active clients will be seeing clients picking up stuff under value now and then all over the country as I am.

 

I agree with @Steven Ryan, definitely not a myth or impossible. The thing about value is a lot of people base value purely off sale price only and not what else could be done to the place.

Also if your willing to be super aggressive and go after a deal, the likelihood of nabbing a better value deal than the next person is significantly higher. Just been my experience.

 

How do you know you bought 7% below market value?

I believe that Market Value is defined by the convergence of what one person is willing to sell for and another is willing to buy for. It's also a range and can easily fluctuate across about 10% on any given day. By purchasing a property at a particular price, you've essentially defined the market value as what you paid for it.

Some will argue they bought 7% below the vendors asking price. Perhaps the vendor was simply asking too much (not uncommon for people to have an inflated price of the value of their property). Others will state that a valuation a few weeks later showed an increase in the value (valuations are quite subjective, I can show you valuations that varied by 20% from two different valuation companies).

 

in my 16 years of brokering I think I have seen just 3 valuations which have come in higher than the purchase price. but that doesn't mean that others were not under 'market value' but that it is very rare for a valuer to value higher than purchase price - less rare for them to go under.

 

I look at real value in a few ways. I know its not a science and very subjective so please no textbook/strict economic replies to my post.

1. If the majority of units are selling for 550-575 in an area and you are able to get it (very comparable unit to those other ones) for 500k off market deal or through x,y and z means, then to me that's 50k bmv.

2. Keeping it simple, If a house is selling for 700k (and is in line with many comparables for similar in the area) but if doing an 'add value' strategy will increase the sale amount to say 1mil and the extra cost to add value is 100k. In this case others may see the home as worth approx. 700k but I see it worth potentially more if I am willing to take on the risk to bring that value to fruition.

 

When you remove the contract...

... the valuation is lower than the purchase price 90% of the time.