Sometimes it is worth listening to your gut

Hi all,

Love reading all the stories here so I thought I would share my story with you all.

I don't have multiple properties, just one which I purchased about 10 years ago!

At the time, I was a uni student. I was on a disadvantage scholarship due to being from a disadvantaged school. I had saved this money as I didn't not know what to do with it.

An opportunity came up to purchase a property (around $600k, 850sqm), which was considered to be a very bad suburb in NSW (Western Sydney). Most people would think guns and violence.

I was told by countless people I would be making a mistake, I had no clue what I was doing, I would lose money (especially when house prices were dropping at the time) and I would have trouble with tenants. To be honest, I probably really did have no clue what I was doing, but somewhat the numbers made sense to me.

It was a property that had development opportunity (corner block with potential to subdivide to 3 houses), the rent covered the expenses, the government provided a first home owner grant and stamp duty exemptions, it was close to shops and transport. It just made sense to me, but not to others.

Looking at it now, I estimate the house has tripled in price based on latest sold house prices (for properties which are even older than mine).

I think what I wanted to share here is that, if things makes sense to you, it is sometimes worthwhile listening to your gut. It is definitely worthwhile listening to others, but sometimes the gems are the ones that other people don't see. It is these opportunities that I believe provide the most value.

10 years on, the people who I spoke to have been priced out in the area I purchased at, and wish they tagged along. They are now going out more west.

On the future, I am looking to subdivide the property into 3 as part of my initial plan, but I am not in a rush for that.

Thanks for reading my story!

 

Good to see young successful investors. Glad you went against the grain and relied upon your own instincts and research.

I've said it multiple times now when I started buying my very first house when I was in my early 20s in Western Sydney as well in St Marys and Mt Druitt not a single person, not one congratulated me.

If I look at them now some still have not bought anything and the ones that are buying some of them are actually looking to buy in areas I bought for quadruple the price I paid.

Congratulation now to keep going and build that portfolio!!!!

 

I have listened to buyers giving me a list of requirements to buy a house then turn around and buy something completely different, I always persuaded them to look at other homes in their price range and observed as their gut feeling took over as it did when I bought my last home ...

 

This is do weird …

I just posted prior to this thread…..and said…….. go with your gut….. always

 

Great story and what an encouraging one. Disadvantages, lack of knowledge, being young are not excuses. Actions make the difference. It might not be a totally correct decision, but learn from it and move on. No one is 100% correct 100% of the time. Like Thomas Edison failed 99 times and concluded: I didn't fail 99 times. I learned how not to make a light bulb 99 ways. Keep up the good work and keep investing. By the time you are retired, it would be a beautiful journey looking back.

 

How did you manage to get and service a 600k loan as a student?

 

Good question. It was a bit less than $600k since I hustled as a kid doing chores, had scholarship money, and the government grants, which imo ended up being fairly sizeable.

I wasn’t too far off from starting a full time job. I had to think outside of the box as the banks wouldn’t touch me, and I didn’t want to let this one get through.

I was very fortunate that I had an extended family member who was willing to finance the remainder. As soon as I started working full time a few months later, I got a loan and paid them off. We set up a financial contract with lawyers to detail the transaction. In hindsight, this probably was risky and could seriously damage relationships but I think both parties had a lot of trust in each other, and were comfortable.

Doing this actually motivated me harder to study as I didn’t want my relative to be let down.

I totally understand I was very lucky to be in this situation, and without their help, I wouldn’t have been able to achieve this. If I had not been able to get the funds for this, I think the impact would have been I would have purchased a property probably the year or two after, as at this stage, I was really keen on getting my foot in the door, and learning all things property was really fun. It actually caused me to switch careers from healthcare to business a few years later.

 

Many gut feely cases in the Druitt. Like buying shares,over time they blossom.

You done well devnew.