My Story...

Discussion in 'Investor Stories & Showcase' started by Sam M, 4th May, 2020.

Join Australia's most dynamic and respected property investment community
  1. Sam M

    Sam M Member

    Joined:
    3rd May, 2020
    Posts:
    23
    Location:
    Brisbane
    Hi everyone,


    I have been on here since it began and was even on the Somersoft forum before this. However, I have barely posted any messages as I have always felt so out of my depth compared to everyone else on here and have also loved reading and learning from what the discussions have been about. So, while I have not contributed too much, I have certainly been reading nearly all of the posts over the years out of interest.


    However, I feel that now perhaps I should open up and share a little about myself and what I have done over the years and where I am up to (not that it is by any means a success story per se). So here goes…


    When I got my first job after uni, I managed to save enough for a 10% deposit for a property to live in as I was sick of renting (the previous two years I had moved 4 times due to owners wanting to sell up (round the 2003/4 time when property was rising south of Sydney) and thought that once I lived in my own place nobody can sell it from under me (as long as I make the repayments etc.) and remove me from the place. At the time I was ready to purchase my own place a great job offer came for me in Wagga Wagga (not the place that I would have chosen to live for sure…..but the right job at the right time) and so I moved to Wagga and purchased my first property (four bedroom house for $275k – fairly cheap property out there). The job was great for me at the time and I was happy that I was finally ‘on the property ladder’. I was also doing my PhD as a part-time study to my job and so I pretty much worked on that every weekend (not having any family within 10,000km helped in a way with that at the time). However, after about 18 months my family began to worry that all I did was work pretty much all day every day and so the friends that I had met, and my family kept advising me to get a hobby. I tried playing golf (which I didn’t mind so much but sucked at) and a few other things, but they weren’t enough to keep me away from work and I needed something a bit more stimulating to the brain and cognitively challenging. One day around that period I met with a financial advisor as I was making repayments to my mortgage, and some, and felt that while this would mean that my 25 year mortgage would be shortened to perhaps 15 years, there must be betters ways that I could manage the spare money as paying off a property in Wagga Wagga in 15 years would mean that by about now I would have paid that house off…..ummmm!


    Well, the meeting felt like a slap in the face (not literally) I was informed that there were many better things that I could do, and I was young enough to take a little bit of risk (such as invest in property). And so, the journey began. I started to research (which is what I am now….a researcher) about investing in property. I finally bit the bullet and used the small equity in my Wagga property to put down as a deposit on my first investment property. I purchased a house and land package in surrounding area of Brisbane (which I thought would be stressful, cognitively challenging and give me a break from my work and PhD)…..It did, I took three-four trips to Brisbane to check on the property and wondered how I would ever pay for two mortgages. Finally, the property was finished and tenants moved in….here we go I felt….no going back! Once tenants moved in the rent came in and the mortgage went out. Nothing had really changed other than I had more money coming in over the month and more going out, but was pretty much left with the same amount in my account at the end of the month. I hadn’t heard from the agent and so I called them to make sure all was ok. Their reply was ‘yep, all is fine’. I had nothing to worry about or to get stressed about (which was great….but didn’t solve my initial reason for doing it). And, so after spending four years in Wagga (which I did enjoy) I knew that in order to have a better work/life balance I needed to move on and so I fortunately ended up being poached to another firm in Sydney. I sold my Wagga property (which I have said to myself I will never do again as I sold my place and submitted my PhD all within a period of 6 days and was horrendous). And purchased a unit in Sydney for $700k.


    Again, as an investor (which I wasn’t at the time) it would not have been the smartest of moves as the price felt like I would never be able to pay it back. However, the lifestyle from 2008 onwards was much better for me. Once things settled down there and I felt comfortable with the repayments etc, this is when I began to feel like an investor. I started using my spare time just reading around investing into property and decided in 2011 to purchase my next property in Blacktown for $325k. Again, tenants moved in and was fairly neutral with income/expenses. The following year I decided the way the marked was I purchased in Holroyd for $410k. Again, tenants moved in and forgot about it (in fact the same tenants in Blacktown and Holroyd live in the place since I purchased them). In 2012 I had a little bit of a health scare (which is still ongoing) and so had a little bit of a reality check on what I wanted out of life and decided that I really just needed to have a break at weekends and so I decided to purchase a getaway place (1 bedroom unit) in Docklands ($400k) in 2013 which I was and still am using once every 3-4 weekends (go down Wednesdays and come back Sundays). At the time I felt it was either the stupidest thing I had done in my life or the best thing….7 years on I think I can say it is the best thing (for my health even if it is not for an investor). I have no interest in renting it out (I thought I would see how it goes with being able to pay for the repayments, flights, etc. and if it is a struggle then I would rent for short stays etc. However, it has been fine).


    In 2013 I had met a girl who today is my beautiful wife and around 2014 she moved into my place. However, I wanted to investigate whether I could get a place for ‘us’ to move into together and start in our own place (rather than her move into my place). Thus, as family began to advise me to slow down a little with the property purchasing I didn’t want to as I kept wanting to push myself (as much as I needed to be a bit cautious with my health I needed to keep challenging myself) and so in 2015 I was able to get a mortgage of up to $1.1m and so decided to purchase a place in inner Sydney by Hyde Park (purchase price $930k) and we moved in there to live the inner city life for a bit. In 2017 as everything was beginning to tighten and I knew that the land was going to change as far as property investing and getting mortgage approvals etc in which I wasn’t too far off of my service ceiling, I just wanted to purchase one more property (as my overall goal was to end up with an income later on in life of around $200k so that once you deduct about 50% from it for expenses, rates, strata fees, taxes etc, you’re still left with $100k). I also wanted my now wife to purchase with me so that she is on the title of one and can get interested in it and so together we purchased a 4 bedroom house just north of Brisbane for $563k. As we were both time poor away in the US for work at the time we used a BA for this purchase and couldn’t be happier. While I like to do the groundwork myself for the reasons myself, I was also aware of time and as I was time poor and felt that it needed to be done I had done so much to narrow the area and then needed somebody on the ground to close the deal. I had read about BAs and actually used a recommended BA from this forum and all went well providing a great purchase with top of the range rental income. In total at the moment we are receiving around $180kpa ($3,500pw) of rent which is just shy of my $200k goal but I am happy with that considering. If I really want to I can always rent out the Docklands unit for the other $400pw ($21k) to make my $200k goal. However, for me the challenge was to reach the income amount.


    Now I have reached the building of the investment portfolio I need to work on paying it all down. As it currently stands, I have the following:

    Mortgage: $3.395m

    Property Value: $4.955m

    Equity: $1.56m


    Now, this is not a story in anything really, just a story of how my last 15 years have unfolded. The worst performing property for me is probably the first one that I purchased (the house and land package) in the surrounding area of Brisbane. However, if I hadn’t purchased that property I probably wouldn’t have gone on this journey and purchased any of the others. When I do my taxes each year (and I still use the same tax man in Wagga I have used for the passed 15 years of so as he is excellent and why change), I find that some of these a slightly negative cash flow and some are positive cash flow and so overall, I would say it is very neutral.


    My current health means that I am unable to drive at the moment (it has been on an off, usually for about a six month period at a time – however, it has now been 12 months and still counting). My wife and I have just taken on a new job role in Brisbane for a few years and will look to move back to Sydney in about 4 years time. By that time, we will be ready to purchase our ‘forever home’. What that looks like, whereabouts in Sydney that will be, and how we will go about doing that I don’t know yet, but I am a little over the career and other challenging and stressful things in life and need to think about my health a little more (I am still young really). Times like the current climate that I am beginning to realise what is important. I suppose I am coming to crossroads at the moment as to what I want the big picture to be (whether I still want it to be what I wanted it to be when I started this journey or whether that has now changed a little). I am beginning to want the finer things in life too (for various reasons) and they come at a bit of a cost and so while my buffer is looking fairly healthy at the moment I am trying not to cut into it at all and continue to grow it.


    Would have I had taken this journey if I could do it again. Of course. I think the first step was the most important step (even if it was the worst step I took). I have also purchased places with an investor only mindset, yet some places (for example the inner Sydney place with a home to live in yet investor mindset too as I knew it would never be a place we would live forever. It is amazing what you learn when you just jump in an experience it. You can read many positive and negative things online depending on what side of the fence people sit, but you only get out of something what you put in. I still feel like a beginner even though I am more than happy with my 6 rental properties in NSW and QLD and holiday place in VIC. I still read and want to learn more. I am learning and working out now how I will take my next steps (in about 4 years time). I have time, but I have time to gain the knowledge and plan too.


    Anyway, I think that is about everything that has happened on my investment story. Sorry about the long story but thought I would share with anyone interested. Anyone can do it (especially if I can), you just need to take the first step and believe that you will swim. There are amazing support and networks out there to support you once you start…..just get started is my advice for anyone thinking of beginning….My only regret would have been not doing anything as I always would have wondered ‘what if?’…..at least if you try and it doesn’t work out you know the answer to it! The rules might have changed for the short term or permanently but we all adapt to the rules and still play the game…..but if you don’t start you don’t even get to play the game.

    That's my story...Not a hardcore investor story, but a reality check for me along an interesting journey...
     
    SBGP, Luke T, Redwing and 27 others like this.
  2. kingkub

    kingkub Member

    Joined:
    15th Apr, 2020
    Posts:
    16
    Location:
    Perth
    Fantastic story Sam, your first step is close to that of my partner and I. I think the main issue that I am having, pointed out in your story is the fear of biting the bullet. Doing so much research to find the 'perfect suburb' and 'perfect area'.

    Would love to hear more about your international buying experience in the US and what resources you found best when doing your research about investing!
     
    Sam M likes this.
  3. datto

    datto Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    6,675
    Location:
    Mt Druuiitt
    Welcome Sam.

    I'll be perfectly honest with you and say that I only skimped over you post, actually I read a few lines at the beginning and then scrolled down to see how long it was.

    Nevertheless, I'm sure it is a great read and I wish you all the best in property investing.
     
    S1mon, TMNT, Gladys and 4 others like this.
  4. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    27,095
    Location:
    Sydney or NSW or Australia

    You missed the gory bits o_O
     
    Gladys, Sam M and datto like this.
  5. datto

    datto Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    6,675
    Location:
    Mt Druuiitt

    I'll get around to it.

    It'll just have to go in that bucket of long lost posts that I will eventually read.

    I think there's one or two of yours from a few years back in there :p
     
    Sam M and Scott No Mates like this.
  6. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,436
    Location:
    Melbourne
    I got to the bit about the Phd and then figured the rest was a 100,000 word thesis and gave up....:D

    The Y-man
     
    sinizter, Sam M, Gockie and 1 other person like this.
  7. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,932
    Location:
    Brisbane
    Well, it’s about time you posted seeing you be been around so long and been pretty busy all that time too. ;):p

    Sounds like you are about 36 now with nearly $5m in assets.

    I’d say that puts you into a pretty healthy financial position and it also sounds like you don’t tip in much out of your own pocket.

    Of course you have large debt but if you are close to neutral then why not sit back and smell the roses and keep a life/work/investing balance (which it sounds like you are already doing).
     
    Sam M, Stoffo and iloveqld like this.
  8. David_SYD

    David_SYD Well-Known Member

    Joined:
    17th Feb, 2020
    Posts:
    782
    Location:
    Sydney
    It was a good read @Sam M. Thanks for sharing.
     
    Gladys and Sam M like this.
  9. Eric Wu

    Eric Wu Well-Known Member Business Member

    Joined:
    8th Oct, 2016
    Posts:
    1,603
    Location:
    Australia
    Sam M likes this.
  10. KingBendtner

    KingBendtner Well-Known Member

    Joined:
    9th Oct, 2015
    Posts:
    83
    Location:
    Melbourne
    Fantastic read, thanks for sharing Sam!
     
    Sam M likes this.
  11. ashish1137

    ashish1137 Well-Known Member

    Joined:
    12th Sep, 2015
    Posts:
    931
    Location:
    Sydney
    Good Read Mate,

    Congratulations and well done. keep accumulating. :)
     
    Sam M likes this.
  12. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

    Joined:
    6th Jun, 2017
    Posts:
    1,448
    Location:
    Sydney
    Really interesting read, thanks Sam! I totally relate to the 'jumping in' and learning as you go, as well as health putting things into perspective.
     
    Sam M and David_SYD like this.
  13. Sam M

    Sam M Member

    Joined:
    3rd May, 2020
    Posts:
    23
    Location:
    Brisbane
    Apologies for the long story......it was just as much a good exercise for me to tell my story for myself as it was for anyone who potentially wanted to read it :p;)!

    Thanks everyone for responding. It has and still is a journey but I'd be surprised if anyone who has multiple properties has gone the distance perfectly or without any hiccups. It is nice to hear the reality checks of the good and the bad and the positive support that is on places like here.

    I hope other people's journeys are interesting too.
     
    MTR likes this.
  14. whiteknight

    whiteknight Well-Known Member

    Joined:
    6th Feb, 2017
    Posts:
    78
    Location:
    NSW
    Thanks for sharing your journey, Sam.

    How do you plan on paying down the debt over the next 10-20 years? Are you making P&I repayments on your properties yet? Are you planning on adding any more IPs?

    Congrats on your achievements to date!
     
  15. spoon

    spoon Well-Known Member

    Joined:
    17th Nov, 2016
    Posts:
    1,762
    Location:
    Time-dependent
    Wouldn't happen to be in Estella? Just curious...
     
  16. Damo93

    Damo93 Well-Known Member

    Joined:
    26th Dec, 2017
    Posts:
    619
    Location:
    Perth
    Sam, you are a fantastic storyteller. Your journey has been not without trepidation and distress however the determined nature you have has persevered and you are in a very healthy position financially.
    Similar to you I see the benefit of hard work and sacrifice in our younger years which allow us to focus on the important things later in life such as family and health.
    Well done!
     
    Codie likes this.
  17. Sam M

    Sam M Member

    Joined:
    3rd May, 2020
    Posts:
    23
    Location:
    Brisbane
    Thanks Whiteknight,

    When I was accumulating the properties I was just paying the interest only and now that I have the portfolio I am looking at moving into the next phase which will be P&I. In about 4 years time they will change to P&I, however, in the meantime I have been putting away all of the spare savings into an off-set account attached to my Docklands property (as that is bad debt) so that it is paying that down over the next few years. Once they all turn to P&I I will then spend the time paying down debt on them. I am at least not feeling as stretched as when I was building the portfolio as I am building up a healthy buffer now. For now I have no plans to continue building any more IPs (6 is enough for me at the moment....sick of stretching myself and need a little R&R and just sit on it all for a little while)....next one might be our eventual PPOR, but that will be quite a few years (perhaps 5) away yet until we intend to think about doing (moving back to Sydney) that yet.
     
  18. Sam M

    Sam M Member

    Joined:
    3rd May, 2020
    Posts:
    23
    Location:
    Brisbane
    No...although I can't believe how that area has been growing over the years. It was in Glenfield Park back in the day.
     
  19. Sam M

    Sam M Member

    Joined:
    3rd May, 2020
    Posts:
    23
    Location:
    Brisbane
    Thanks Damo93. I didn't mean to make it more exciting than what it was. It was more of an exercise for me really to be able to talk through my experience and put it down on paper (so to speak) for the first time which was a great experience in itself. It has and eventually will pay off. One of my weaknesses in life tends to be that I don't stand on the mountain (wherever on it I am) and look at the view and admire how far up I have climbed. I just tend to see how much higher I still need to climb and sometimes just need a reality check and realise what I have achieved....maybe a lot of us are like that too!!!!!
     
    Damo93 likes this.
  20. spoon

    spoon Well-Known Member

    Joined:
    17th Nov, 2016
    Posts:
    1,762
    Location:
    Time-dependent
    I see. I used to own an IP in Glenfield Park. In my days, it hadn't increased in value for over 4 years. Sold it eventually. That was the time when Glenfield Park was full of cookie cutter kit homes.

    I saw you mentioned you were doing a PhD so thought you would have lived close to CSU. Nice to know someone lived in Wagga before. :D
     

Do you need help with investment strategies, don’t want to buy the wrong stocks, or you just need a regular income stream? We provide the research to ensure your investment selections achieve the goals. This is the value of advice.