The money gods have been generous: 6 property 3.3M portfolio 6 years

Yes, Another accumulation story. But I wanted to share as a Thank you gesture to the forum and all members who supported.
Most members have been thanked in my initial thread:
Post 1
The credit continues to those and additional members.

This is my mid journey thread. Boy!!! What a journey and passion it has been. And like most other investors turned real estate professionals, a surprise at the end. Yes, another investor turned property professional.

I started with my first one back in 2015, second 2016, third and fourth in 2017, took a break, completed my cert4 in finance and mortgage broking, started helping friends, family, acquaintances, friend's friends and thereon.

2018/19, kept doing more courses, Certificate of Registration, Cert4 in Property Services, additional educational courses and I think the spree continues.

Bought two more in 2020 and these purchases have been so far, my best ones'. Why, because I kept doing what I did, along with distressed purchase (yes, there were areas) and markets kept going up as well. So those who want to call it sheer luck, may do so.

2021, I have bought another lot which settles late 2022. Why? because I can see a profit of 125k in a 700k purchase. But I will not include that in my numbers.

I am selling few now to consolidate some debts and move to other markets so before I sell, I thought I should be posting all numbers and some areas as well. Trying to keep it simple and refer to my Post 1 for details on my first couple of purchases:

Numbers (not including one time costs):
1.
When: March 2016, but land title and build completed first, First Rented around end 2017, bought with 5k only to start with
Buy price: 280k
Current Valuation: 500k
Current Rent: 410 per week
Mortgage: 250k
Buy Strategy: 10% down with LMI, IO till now
Location: Geelong VIC
Further Strategy: Hold

2.
When: Mid 2015, bought with 8k only and rode the wave, First Rented around end 2017
Buy price: 372k
Current Valuation: 580k (comparables)
Current Rent: 500 per week
Mortgage: 340k
Buy Strategy: 10% down with LMI, IO till now
Location: Geelong VIC
Further Strategy: Hold


3.
When: Early 2017, bought with 16k only and rode the wave, First rented around end 2018
Buy price: 368k
Current Valuation: 500k, on the market for sale
Current Rent: 365 per week
Mortgage: 322k
Buy Strategy: Hardly 50k down for entire property, NO LMI as used the valuations to my benefit.
Location: Wyndham Council VIC
Further Strategy: Sell

4.
When: Early 2017, bought with 19k only and rode the wave, First rented around end 2018
Buy price: 392k
Current Valuation: 530k (comparables)
Current Rent: 390 per week
Mortgage: 350k
Buy Strategy: Hardly 50k down for entire property, NO LMI as used the valuations to my benefit.
Location: Whittlesea Council VIC
Further Strategy: Hold

5.
When: Feb 2020, picked a distressed land sale.
Buy price: 410k
Current Valuation: 620k, on the market
Current Rent: 440 per week, if rented
Mortgage: 385k
Buy Strategy: Hardly 30k down for entire property, NO LMI as used the valuations to my benefit.
Location: Bellarine Peninsula VIC
Further Strategy: Sell

6.
When: Nov 2019, picked a distressed land sale. Build supposed to complete by end of this year.
Buy price: 480k
Current Valuation: 620k (comparables)
Potential Rent: 500 per week, if rented
Mortgage: 430k
Buy Strategy: 10% down, minor LMI and valuations to my benefit.
Location: Geelong VIC
Further Strategy: Hold

Total Buy price: 2.3M
Total Mortgage: 2.07M
Total Current Value: 3.35M

Last purchase:
7.
When: Mar 2021, land only, titles late 2022
Buy price: 360k
Build: 330k (premium) estimated at this stage
Current Valuation: 800k and above (comparables)
Potential Rent: 550-580 per week, if rented
Mortgage: NA
Buy Strategy: NA
Location: Macedon Shire VIC
Further Strategy: NA

Strategy in each purchase:
· Minimum 5% rental yield.
· 10-15% immediate growth.
· booming markets, focus on demand and supply
· Well below median.
· Property targeted at the lower end of the market.
· Property near to amenities or free way or station, low supply (mostly ), high demand, mixed and good demographics.

Learnings:
i. Educate yourself and spend on education.
ii. Trust in someone who has done what you want to do, even if it comes at a cost.
iii. Always have a long term plan.
iv. Stay focused.
v. Keep aligning your plan.
vi. Track markets.
viii. Always appreciate a professionals advice. No one has spare time to give to others, no matter how free they are.
ix. Be decisive, the opportunity is not going to present twice.
x. Know your numbers.
xi. Have a good team in place and always have a backup for that team too.
xii. Research area and products wisely.
xiii. Never let notions cloud your judgement, If someone is doing it, you can do it too.
xiv. A lot of land does not means all that you see will keep developing.
xv. Be grateful to those who have taught you.
xvi. Point vii. was missed to see if you were paying attention or not.

I have also been supporting forum members and everyone in my circle to find deals similar to what have been listed above for past almost 4 years. I now buy my own data which is collated from different sources, latest in terms of sales and rental, then combine census parameters to it to figure out regions that are growing and are yet to grow. Then pick the ones' based on least supply and high demand and affordable.
Still learning as it is a continued journey.

Thanking all forum members again for generous contributions in sharing knowledge.
Some special mentions: @sash , @Beano , @skater (for organizing meet ups), @Mel Morgan (for meet ups), @The Y-man (consistent in his posts and insights on a lot of areas).
@Simon Hampel (for the forum) and many more that I cannot even name here.....

The news:
Property has become my passion. Last few years, I got the opportunity to discuss and learn from so many forum members and inspired by many of you (continued credits to all as listed in my first post). Left my IT management job after spending 16 years in corporate.
Formally started operating independently as a Professional this year (not listing as what as I do not want this post to sound like an advertisement but I know it is easy to guess). In my last 4 months being a full time Professional, I have closed 12 clients and still decent pipeline.

This is also attributed to all my learning and support that I have received from this forum. In addition, the trust that most people have placed. I am currently tracking following regions : SA, QLD, VIC, NSW (in the same order). Since I left my job early this year, I will put a pause on my buying and consolidate debts to some extent (at least that is the plan) but will keep everyone posted further. Next post on my journey might be in next few years.

Let's continue to be in touch and keep posting the good work, Be generous in commenting please.

Regards
Ashish

 

Well done Ashish! I remember meeting you a few years back - few have shown the tenacity and passion you have. See you at the next meetup (whenever that will be...)!

 

What's your LVR? Just curious.

 

Well done. Follow your passion.

 

Around 62%.

Per numbers listed.
Tsking some money our as well, so can go around 65%...

Regards

 

Awesome story and great read, congratulations!

 

I worship the money god!

 

Get all the dudes and i will hang over my PC.
After all, most research has been done on PC.

 

Will u be able to spill the secret of paying $5-8k deposit only, and buying and built for $280k? How much was the built?

 

Great work Ashish !!!! & thanks for sharing the details of your journey

just wondering why are you currently only tracking following regions : SA, QLD, VIC, NSW (in the same order) ????

and why not WA ?

 

Its funny how different people look at things.

You say a $3.3m portfolio. But net equity may be $1.273m after allowing for loans with leverage of 63% and then the unrealised CGT could be ballpark 300K so equity is under $1m. But CGT isnt a cost until (or if) you sell. But it is an element of equity that should be considered.

Its a lesson I give many clients every year when they count their wealth as a step towards retirement. I have been told many times someone has a $1m portfolio but that doesnt mean a thing. Its your net equity that counts. I have seen those with $2m of property and $2m of debt. Thats a risk and equity builds you a wall so if things correct you arent someone who must sell.

But of course the key benefit is leverage. You have 6 properties so its a bit diversified. And the leverage is on the $3.3 m ...If values rise 5%pa then the $167K is a equity increase of 25% over the NET equity (example not real numbers) . Great work. Of course if rates rise then a multiplier effect kicks in and too. Leverage works for and against. And the state diversification is a key strategy to limit the cost of land tax which is a yield killer.

I also like to consider annual net cashflows (before and after tax) divided by equity. It helps reinforce why you persist even when you have a bad tenant or bad property day. Think of it like a return on investment. When selling compare the efect of missing that property next year and its impact on leverage and also realised tax etc Sometimes the net cashflows are so trivial its not even worth the sale aftre tax and fees etc. What do you do with the released net equity ? Thats important. ie pay down your own home and release further cashflow ??

 

Less or no knowledge on WA.

 

Thanks Paul,

Decent insights there. The portfolio does yields +ve eventually. And with what growth I have got, I am happy. Rents are good and all areas are still running high demand and low in supply (at least in majority of cases) .
We do not own a PPoR yet. Neither we intend to. Luckily, my business is going good.

I am also in process of grabbing a commercial deal and will make circa 23% to 32% with worst to best case return on development cost before taxes and after all expenses including contingency. So want to use the equity there but the deal is big and I am pitching in with 1 investor at this stage with potentially, adding another one later.

Regards
Ashish

 

Getting in early into estates in right pockets and areas with 5% deposit and if land titles after more than a year, use the valuations to your benefit.
Build was 175k. Land 105k. More details on the below link:
Starting 0 to 30k to 140k in 15 months

Regards
Ashish

 

Love reading about other investors stories, well done Ashish. Just wondering how you are stratgeising which ones to sell? Is it to go interstate to minimise land tax?

 

I am selling one brand new and one where I have seen least growth.

I am looking to try my hands on a commercial development.

Regards
Ashish