My journey: How it started / How it's going

Hey folks. Thought it would be a cool idea to blog my journey out on here to share how things are travelling and maybe pickup some good pointers/lols along the way. Also it feels like things are moving quicker than I thought they would so it will be nice to actually go back and see it unfold in a few years time.

About me:
I'm 37 originally from Las Vegas. I moved here 10 years ago to be with my other half who I met in Sydney on vacation at that time. We originally lived in Canberra but I couldn't get a job for citizenship reasons so I got into the IT industry in Sydney as a software engineer. Still one to this day contracting out to large corps under my own business as an iOS mobile developer. My wife is a criminologist for the government.

How it started:
Me and my wife always had these desires to be wealthy and financially free. I'm a musician and my wife's a writer and we really prefer to do that and other creative things with our lives than be in the rat race. At this point in my career I love a good challenge so I took the idea and grabbed my bungee cord and jumped off a bridge with it.

"Why not??" I thought. Wife was on board (that's why I love her). Without having the slightest clue of where to begin, 2017 rolled around and bitcoin hit its all time high. I took a loan of $40k and put it all in to crypto I knew about bitcoin at the time but nothing too deep. AFTER that purchase (lol) I sank down the crypto rabbit hole for the next few years. Researching more and more about the ecosystem and what other opportunities were out there. I was quite hooked. I went from crypto, to investing, to just how money works in general. Me and my wife took a professional trading course, started doing some CFD trading for a short period and did quite well. It taught us a lot.

Also a big lesson, was that massive crash on crypto in 2018. But I was so energized about money by then and what I learned about crypto, I just bought more. I averaged down my bitcoin to around $5k. I had the confidence I was going to make it back and well I did and managed to pay that loan off with a small chunk of the profits, but my days of leveraging crypto are definitely over that was fun while it lasted.

Continuing our journey down the how to get wealthy path, I literally googled "how to get wealthy"
After so some spruiker ads, A book called "Rich Dad Poor Dad" by Robert Kiyosaki came up. Renowned reviews. So I bought it, and read it cover to cover. Just absorbed it. Injected it into my veins. That book changed our lives. Absolutely incredible. It gave us amazing perspective. We decided to take a proper approach and get a financial advisor.

We selected the best one out of 3 we interviewed. They assessed our comfort levels of risk and we wrote these 5 page letters about everything we wanted out of life lol. They don't think we can retire in 10 years but our personal goal is to prove them wrong. Anyway It was the best decision we ever made. We paid off the personal loan and our two credit cards, paid off our car loan with all the cash gains from crypto and trading. And then the property investing came along.

Our current portfolio
The first property we bought was in our SMSF. We created one so we could combine our supers and then our advisor recommended to put those funds in a property as property outperforms industry supers. The property is a 3 br 2 bath freestanding house in Northern SA (Salisbury), new build in 2019 purchased at 304 now worth 325. The process really excited us and we couldn't wait to start doing this in our personal names.

We got started creating our personal portfolio shortly after that in our personal name. We purchased 2 new properties off the plan through a buyers agent with savings. One is 3br 2 bath free standing house in Mount Barker SA and the other 2br 1 bath villa in Sorrel Tasmania. During the build phase is when covid happened, oil tanked, crypto skyrocketed! We sold some crypto and put our covid early release super funds into oil and got a few thousand barrels at around $15. When that shot back up we took some of that and some more crypto off the table and purchased another 3br 2bath in Andrews Farm SA. That one is still under construction.

How it's going
Sorrel finally settled earlier this year and got valued at 380 (purchase price was 340) on settlement. We are now attempting to harvest some equity from both Sorrel and Mount Barker which is now also valued at 380 (purchase price 350) to purchase 2 more properties in Brisbane. Pre-approvals for that is underway now (for 3 weeks! ). Will update on progress and asset selection etc. I'm a bit nervous about that pre-approval though because it feels like this is all happening a bit fast and just have this pessimistic view of the bank being like "slow down bro" but the broker seems to think there's still some steam so we'll see. I breezed through this a bit so I'm happy to elaborate on anything if interested.

Wish me luck!

 

Ironing out and adding a few more numbers to the story as I did sort of breeze through that.

3br 2 bath House Direk SA
Purchase price: $304k
Value: $325k
Rent: $330

2 br 1 bath villa Sorrell TAS
Purchase price: $340k
Value: $380k
Rent: $400/wk

3 br 2 bath house Mount Barker SA
Purchase price: $350k
Value $380k
Rent: $390/wk

Loan Structure: Interest Only 5 years

Combined income: $280k
Monthly surplus: $8000

 

Nice effort and great to see a story in here that speaks to more than just investing in house > house > house, etc.

I think we'll see a few more crypto > property stories in the years ahead

 

Much appreciated. I would say it's only a matter of time before the richest person in the world is someone from the crypto community but Elon Musk already made that happen!

 

Still nothing from the bank! Coming on week 4. I'm bothering my broker once a week with text messages asking if there's been any correspondence from the bank (lol). She's ghosting me. Which is fair enough because she said she would call me as soon as she got something. I just wanted to keep my profile fresh in her mind ^^;

I'm forming a conspiracy theory though... I'm curious if there is a directive from RBA to prioritise home owner applications over investor applications. Reports of home owners being the majority of the applications and investors closing in to the 30% range... I reckon that's being driven by the banks and not organically. Investors had a pretty good run leading up to covid and home owners for the longest time were priced out. I think this is RBA attempting to balance things out a bit more. But hey that's me just trying to keep my mind busy and not go crazy over how annoying long its taking for this bloody application!!

I suppose it's not exactly a straight forward application. I'm refinancing two properties and I'm trying to get preapproval for 2 more. I got a hold of a query report and found that they ran an enquiry on me on the 13th of April. Not sure if that means I haven't been rejected on means of credit due to the fact that it's taking so long or not. I'm gonna have a few beers and stop thinking about this now. Feels good to rant about it though!

 

Oh wow,
It was great reading that. I’m motivated. So regional areas can work hey

 

I started with nothing, And fortunately I still have most of it.

 

Thanks for reading! Glad to hear it.
Regional areas can absolutely work. They're becoming more and more liveable as government starts to invest more in infrastructure and people migrating as a result. It's been attractive lately due to covid keeping everyone locked down and working from home and it's since has sort of proved its liveability even more it seems.

What gets me is how it's almost textbook that these types of assets do not outperform inner city or provide sufficient growth at all. However everything is quite balanced with over 5% yields and growth is ~10% with the SA properties outperforming inner city Adelaide. Obviously a heated market however the growth wasn't a surprise going into this market. It's been trending up for a little while now due to all the fundamental reasons (jobs, infra, population etc). Supply is also freakishly low in the areas selected so that also helps.

 

Started with nothing and from nothing as well. Got a bit older and the dreams got a bit more vivid and plush. I just got tired of dreaming really. It was great to know that most of what I want is totally achievable if I stopped dreaming and started doing ¯\_(ツ)_/¯

 

I would have thought that a good broker would be able to give you an indication of your borrowing capacity prior to applying to a bank?

 

With a monthly surplus income of 8,000, that's 2k a week, imho you're investing in properties which seem to hardly grow you any wealth in the last few years.

 

I agree with Sackie. I can talk to those Adelaide suburbs and they’re not the kind of suburbs I’d put my money in if I had the money to support a cashflow shortfall.

 

I'll add to this that your gains so far, aren't really worth while to get a reval and draw equity out. Don't want to rain on your parade, but I think you need to do some more research before you go buying more.

 

My spidey senses are on high alert when I hear that buyers agents recommend off the plan!

 

Yep! Me too!

 

Almost certain to have conflict of interest shenanigans going on.

Personally, I'd likely never buy any property off the plan.

 

Same! Usually inflated prices and they take a long while to play catch up.

 

That's precisely why.

I find it hard to believe that I wouldn't be able to find my own stock that would blow the OTP buy out of the water. Not because I'm overly talented to find amazing buys, but OTP deals are generally just crap stock for investors (and ppor).

There will always be exceptions. But I wouldn't be banking on them.

 

I think the problem is that many newbie investors just gravitate towards OTP because they've been sold the dream by a slick sales agent. In the case of the OP, I can understand the use of a BA, since he's come from the USA. But he does need to know that BA's that sell OTP are usually just sales people packaged as BA's, and are often not working in the purchasers best interests.