How did you start?

[RPI]

I have been reading the forum for a while & thought it time I actually registered.

I always find it interesting to here how others started, so thought I'd start it off.

1998 Finished uni and using (every cent I had ($7000) bought a very run down Queenslander for my PPOR in Coorparoo (BNE) for $105,000.
Spent the next 18 months painting & polishing floors - did all the work myself & renovated as quickly as my first year out teachers wage would allow. Revalued $135,000

June 2000 Bought a bigger and much neater QLDer with City Views in Annerley for $169,000. Has leadlights, panelling and archways but also carpet and 80's kitchen and bathroom. Painted bathroom & rented out for $240 p/w.

March 2001 Revalued Coorparoo and Annerley- increased to $145,000 & $200,000 repsectively. Bought a 4 bedroom 2 bathroom big house in leafy area of Indooroopilly for $165,000. Previous tenants had kicked holes in the walls, had animals inside and left in absolute pigsty -include clothes with maggots in them. Spent 2 weeks of holidays ,6 weeks afternoons and weekends and $6000 patching holes, painting, polishing the floors and landscaping. -Rented $300 p/w

September 2001- Revalued Indooroopilly -$235,000. Bought a 1 Bedroom fibro shack in Taringa on 253 sqm for $110,000. Opposite a park 2 minutes drive from University of Queensland, Towong shopping centre. Excellent location but a dump. Currently rented for $120. 2 months later tenants moved out. I polished the floors and built some timber cupboards for the kitchen. Rented for $150 p/w

Easter -September 2002 demolished the back landing of my PPOR in Coorparoo and added a dining room and deck, new kitchen, removed internal wall and made open plan with 8 french doors to deck.

November 2002 -Revalued Coorparoo, Annerley, Indooroopilly & Taringa at $200,000, $220,000, $235,000 and $150,000 respectively. (These valuations were prerformed by the bank by a very conservative valuer). As prices increased and yields fell started to adjust my strategy. Previously bought innercity property concentrating on capital growth, did some research and decided on a mix of growth and cashflow properties. Bought a block of 5 strata titled units in Eagleby for $275,000. New paint and new carpets throughout but vacant. Rented out for $585 p/w

April 2002 - Revalued Coorparoo, Annerley and Indooroopilly at $275,000, $250,000 and $300,000 respectively. Unmortgaged Taringa.

Currently:
1. Demolishing existing shack and put a removal QLD er on the block. Will completely renovate inside and out and build in under to be 5 bedroom 3 bathroom house. Will then rent to students.
2. Taking a different direction. Setup a company and buy projects to renovate and sell. Will still continue to buy and hold with other side but use the projects from this company to provide weekly income.

2004- Give up the day job !!!! Buy as many cashflow properties as I can find.

Well that's how I started and where I'm at. Looking forward to here from others out there.

Darryl

[always_learning]

What a great and inspirational lesson in generating cashflow and growth. For all of us it shows what can be done if we apply our minds, our labor, our self displine, our skills even with limited amount of capital.

Did you just fall into this or did you have a mentor? Did you have goals or was your buying just moving from one logical place to another?

I have friends whom have been "gunna" invest since 1998 and he's got much more than $7K!!!

For someone so young, after 2004 => have you though of becoming a politician? I want vote for you!

[RPI]

No I didn't have a mentor. My father was always hopeless with money. He left when I was 11, took every cent we had and left my mum to raise me and my little brother on a pension. She never got to own her own house because of dad. This was the 3rd time he'd left (he once left a long time before I was born and left mum with my 6 older siblings to raise when there wasn't a pension) and luckily for me the last.

Mum had always tried to reinforce the importance of looking after your money and started asking me at age 18 when I was going to buy a house. So though mum, through no fault of her own, has had to struggle financially for all her life, she had inspired all of us to be better than our father.

I bought the first one a bit blind, but I did know to buy the worst house in the best street I could afford. I also had read somewhere that 90% of all millionaires made their money from real estate. I read Jan somers books, the internet, talked to anyone I could and basically taught myself as much as I could. I never went to any seminars because when I started I didn't have any money to pay for them.

I now have 3 other brothers, who though they have a smaller number of investment properties are catching me fast! The 4 of us can't beleive we didn't start earlier. 2 of us are looking at the possibility of doing joint venture developments and another is investigating giving up work to do renovations also.

In summary no I didn't have a mentor and my mum may have had no experience and little knowledge of property investment, it was her education about the importance of being able to llok after yourself and your family that started me.
I hope this answers your questions and doesn't throw the original thread off course.

[Monstango_2010]

This thread has been full of inspiration for me, as i come from a similar background to RPI (apart from the father bit, i have a great dad, but he's still broke.). I can't wait untill i'm 18 and go out and finally get some investment properties that i have been looking at, but unable to get.
Thanks again RPI for that bit of inspiration, brings me closer to the day i get an IP (well that and being 18)

Cheers,
Eli

[SIMMOGRA]

Hi all my first post but as many others have been lurking for a while. Found the reading very interesting and there seems to be a vaste amount of experience here.

Our investment journey started as we transfered around Australia with my employment over a period of 10 years buying a house then moving on to another state.Currently have houses in Melbourne, Queensland and Western Australia. It is interesting to watch as the property cycle moves around our country.I guess it is only a matter of time until the interest rate cycle also starts to move up but we have already made our plans for that.

Must say I have found many people willing to voice their opinions on the subjects raised and with time I hope to be able to contribute to this forum in a positive way.

[isaprawn]

RPI
Thanks for outlining the details of your investment journey. It encourages and inspires me to continue on with the hard yakka of sourcing the deals and using other people money to get ahead. Although I get impatient to want to buy buy buy, your measured approach shows what a steady growth plan can achieve.

My short journey to date... I've had 2 units in Sydney - one in Dee Why and the other Manly which I purchased jointly with others but have now sold to unencumber myself)

I have recently bought in Chinderah a 1600sqm block with two houses for $420,000 (one house is a 50sqm modern brick the other an old shack). I intend to subdivide and sell both to make a quick profit to then reinvest.

My second purchase is a house with river views in Tweed Heads bought for $255,000. Included in the price the owner will reconcrete the broken driveway and turning circle. It's a spacious house in need of a little TLC so I intend to paint, polish floorboards and carpet some sections plus put in a new kitchen. Rent will be around $250 mark but in time it will be worth rebuilding so I'll sit and wait awhile.

So my journey has just begun and it's addictive. I have a mentor I'm working with who has been fantastic for me as I've had inertia for the past 18mths while reading posts and attending meetings of like minded people but just needed that extra kick that a mentor has provided.
Thanks for the effort other make in posting.

Isaprawn

[bram]

Only knew at this, so please bear with me. Have enjoyed this thread and like Darryl I am always interested to know how people get started. What a great story, Darryl. We actually got into investing in property in 1993, when we wanted to move house, go up the ladder, but were unable to sell, at the time. We did have a couple of offers on house, but thought we were able to get more, so took the option of renting it out, and what a great move it was. Unfortunately we had to borrow the money for the new house, but had it paid for in 3 years. In 2000, we bought our 2nd ip and was able to borrow 100% of ip number one. We purchased the house for 97k , and it has just been valued at 140k, not a bad return we feel. 3rd ip was purchased 2 years ago for 70k and not had much to do to it, only a paint and clean, and has just been valued at 125k. 4th ip January this year, 137k , and 5th house was purchased after going to Jans seminar in Melbourne for 159k. We are in Tassie, and at the moment there is a real property boom on. We hope to buy more, but may wait to market settles a bit more.ARe there any investors purchasing in Tassie at the moment? :) Regards David.

[wayneh]

Hello all, I am a newbie but have been lurking on the outskirts listenning and learning for some time.

How we started was, we bought a Qlder renovator in bayside suburb (emotional buy) Early 2000 with 10% deposit. Did not know at the time but was a challengeing learning experience. we had water problems (after extensive rain, seepage occurred in ground floor up to 35cm. Insurance would not pay, so after spending 30k we fixed it. and 6k to repair internall damage. reno was 10k
Initail cost approx 190k, sold 315k mid 2002

Bought a Qlder(slightly renovated) on 2 deeds(16pch lots), 1 house of water(good water views) for 440k (current eval 650k) we have just recieved council approval for additional house and sub div(after 8months of negoiating with council), this is a battle axe but with good water views. Approx eval mid 500k ks for both.

Bought IP reno post war cottage) 13 kms to city close to main train link Dec 2003 through good advice from relative. Is zoned low to med res(6 units or 4 town houses) Have been in talks with council to change to med res( 8-10 units or 6 town houses) Council has been very positive. Initial idea was to build ourselves however if we sell with DA approval, by our current calculations we will come out with 200k to 240k less tax, though we will make approx 20-30% less than building the project, mind you a lot less tied up with building and less stress on marriage!
* If anybody has been in this position, what did you do and why?
:confused:

We are currently in the market for another sub div or vacant block of land(currently have an offer in) close to city(5kms) to build replica Qlder on. House next door has contract on for low 600ks same size block, block will cost approx 290k plus 140K to biuld similiar but cheaper house. Approx eval i believe will come in at mid to high 500k and will become PPOR

While currently none :( of our IP's are cashflow positive they are capital growth positive. they are all currently x-collatoralised, not good either, after watching the forum for a couple of weeks.
I feel we need a cash flow positive block of units or similar, goal is to escape rat race by 35, now 32 and have created superiour wealth and opportunity to retire by 40.

I am extremely interested in what peoples thoughts are on our next move and do you you think we are doing something that is a too risky or could be doing something better??

wayneh

Not being true to youself has a much higher cost than sticking to your dream!
:cool:

[Deero]

Wow, amazing that people can make money in so many ways.

I started 1 year ago buying a property for $73000 which rent for $145. Current value $95K.
I have since bought 4 other houses as follows
1. $69500 + reno for $10K - rents for $170. current $125K.
2. $85000 - rents for $170. Current $130K.
3. $64500 - rents for $150. Current $90K
4. $54500 - rents for $140. Current $75K.

I also did 1 wrap (that is still running). Interesting but focussing elsewhere at present.

Over the year I have also renovated two properties the first one cost $73K and spent $35000 on the reno/holding and resold for $152K.
Currently have a another up for sale and should realise a good profit from it too. (around $30-35K).
Also just settled on a property that we have resold for $27.5K more than purchase ($95K) settlement in 1.5 weeks.

Also currently purchasing two other properties one to hold and one to reno.

This is where I am enjoying myself at present and looking to do more in this area. Currently looking for a dearer IP that I can reno and sell. It has been a busy year but a whole lot of fun.

My aim was to try most ways to work with property this year and I think I only need a lease option and a development to cap it off. We'll see if we get there next year.

[Brojac]

Hi Wayne Hockey,
If you can build a house in the Inner city for $140 you will be doing well. My wife and I have just started a sub division and the costs for building these houses are into the $250 range. It costs roughly $30k to just demolish, DA, BA, Sewrage and architect but if you are buying land sewrage should be connected. Do not under estimate building costs or it will kill you!!! It's hard to build a kitchen (decent not cheap) for under $10k.
Wayne what area are you looking in - if you do not have a bulder I could recommend mine, just pop me an email.

:D

I have always found cheap replicas in my area (Balmoral, Bulimba, Hawthorne) are difficult to sell and the prices are a joke. Go that step further and you will profit more. Personally I am big on Kitchens, ensuits and Bathrooms. (Always shock people into believing that these cost a fortune and they will fall in love)(and pay more)

Building can be painfull but worth the effort (and profit) DO YOUR HOMEWORK. Get an architect you like that will design what you want, not what they think is trendy, talk to every builder you can and if you like three of them find every house they have ever built and talk to the people that employed that particular builder. DO NOT SIMPLY GO ON YOUR PRECIEVED IDEA OF THEIR REPUTATION. We fell for that once and it was very painfull and stressful.

Building is fun if you're organised and plan well ahead.

Always buy the guys on site the first beer on Friday afternoons (late so building does not stop).

We are only a couple and this is our part time job (& it makes more than our primary jobs) we are not professionals, but both work in sales (not RE).

Get a good accountant - one that has properties themselves and then you wont have to train them to answer your questions..

[investor]

Hmmmm

How did I start, well I stopped buying cars and going on holidays. :)

Regards

Investor :)

[phm]

Hi Investor

So that's what we are doing wrong!!!!!

[rockyroad]

1998 ... did all the work myself & renovated as quickly as my first year out teachers wage would allow. ...

2004- Give up the day job !!!! Buy as many cashflow properties as I can find.

Darryl

So you don't like teaching Darryl?

RockyRoad

[anthos99]

Wow, this has been an inspirational yet somehow depressing thread! I am "new" too but unlike all the above posts, I don't have an IP yet & starting to wonder if I ever will.

We own our PPoR (sort of - parental payback continues!!) which gives us equity etc. I'm an out of work teacher (waiting for relief teaching to pick up a bit) so am spending massive hours each day researching (hub works). My major problem so far (have only been turned on to P.I. since 5/2/04 when I read Steve McK's book) is how I am going to find my first CF+ve place. Am starting with NQLD to see if I can find anything. Off on a roadtrip week after next I hope to check things out.

However, I am starting to think that this year may not be the time to buy (from extensive reading of these forums where alot of people seem to be 'watching & waiting' now as the boom is over). I am a little confused about that though as I thought if the market was flattening out in 2004 then isn't that a good time to buy (b/c prices plateauing or reducing?)

I am almost prepared to buy a CF-ve place just so I can get started, even though it goes against everything I have learnt here & doesn't fit with my preferred strategy. (I can hear the shouts of "no, don't do it..." from here)

Any advice? (yeah, I know, keep looking!) If anyone in Brissie has the urge to become a mentor for awhile & enrich their life experience further by helping someone else, feel free to contact me! I really am feeling a little discouraged...

Thanks to all for the incredible help so far.

Cheers,
Anthos99

[RPI]

Yes I like teaching and love the interaction with the students. I hate the beauracratic ******** and all the changes that are brought in purely to make people's resume's look good. If you have to have a job teaching is a great one to have, but you still can't choose whether you go in each day and you lose time from you're family and when you've got a 1 year old everyday seems to bring something new and exciting and I just don't want to miss it. I am enjoying my /retirement' more thean I ever though I would.

Darryl

[thefirstbruce]

very inspiring Darryl. you obviously have a very stable personality to have been able to commit regularly to more acquisitions. Your timing has been quite fortuitous as well.

I watched my parents' rental properties in Pine Rivers not appreciate significantly from 1988 to 2000. They then sold them just before the boom. Ah well, I tried to advise them......

I would be interested to know what car you drive? I'll give you brownie points if it is a bit of a bomb.

Further, I'd be interested in the books or resources that helped you decide on your strategy so early. Not many young people do what you do.

[rockyroad]

Yes I like teaching and love the interaction with the students. I hate the beauracratic ******** and all the changes that are brought in purely to make people's resume's look good. If you have to have a job teaching is a great one to have, but you still can't choose whether you go in each day and you lose time from you're family and when you've got a 1 year old everyday seems to bring something new and exciting and I just don't want to miss it. I am enjoying my /retirement' more thean I ever though I would.

Darryl

Fair comments. Thanks for the reply.

I really love teaching and would probably not mind doing it even as a volunteer if I was financial independent. I look at my investments as a way of feeling OK about staying a teacher on the fairly average wages, as they help me feel that I have both done the job I love, and still built a solid future for my family.

I like the security of knowing I have the option of retiring early, but I doubt that I will actually exercise it (though you never know what the future holds).

Cheers,

RockyRoad

[greenhorn]

i'm a newby as well,living in canberra at the moment.My parents always drummed into us kids to stay ouy of debt so at 32 i'm a late bloomer to PI.Had a marriage break-up 2 yrs ago,bit of money just sitting in the bank from settlement doing nothing.Got inspired and bought one of Jans books with totally swung around my line of thinking.I bought a house in towoomba last month...still repainting and some reno's in kitchen.$150000 with a rental return of $185 per week.I'm by no means a high income earner,renting myself in canberra,paying principal & interest on ip as I'm looking to use equity to continue buying. Open to any thoughts on how best to achieve this.
Very inexperienced and feeling rather insignifigant but sure in the knowledge that this is the future I want to make for myself

[Aceyducey]

Very inexperienced and feeling rather insignificant but sure in the knowledge that this is the future I want to make for myself

Greenhorn - welcome!

Congratulations on your first buy - it sounds decent...and I would doubt that for more investors their first investment property is their best, certainly it wasn't for us :)

IMHO it's a good idea to make your future for yourself, whatever strategy you choose & future you want - it sure beats having others make it for you!

You may find that initially it's better to take it slowly, digest your current IP, learn the ins & outs of renting & ensure that financially your situation is nice and stable before buying the next.

Once you've got a few investment places under your belt you'll find that your confidence, ability to find (and negotiate) good deals & the speed your portfolio will grow will increase significantly.

Cheers,

Aceyducey

[RPI]

About the car until about 15 months ago I did drive a bomb and sold it for $600. I bought a safer newer fmaily car for the birth of my son.

[dantheman]

RPI That's great growth in such a short amount of time! I am wishing I could have started earlier, but I'm also glad I discovered investment and got started when I am still young.

I am starting in a similar way just a bit later and slower.
I finished uni mid 2001 and bought a 3 bedroom in Canberra at about the same time for $140,000.
Before that though I had borrowed $12k and tried trading shares for a bit, after losing about 10% of that I realised that shares aren't the holy grail of making money. Also I was finding it difficult to find a place that would let to us (3 students - Canberra had a very low vacancy rate at the time). I heard about the first home owners grant and used the money from the shares as a deposit (instead of paying it off).
So I never really had to go through the pain of saving money, just the pain of paying 12% interest on the personal loan and the credit card (some of my other costs).
Later that year it became apparent that the house was worth a bit more than that and while in the stock market section of the bookshop I noticed one of Jan Somers books and grabbed a copy. I had also been reading about futures/currency trading and was convinced that was what I would do with the equity once I had trained myself enough (I may still do so one day but not till I retire and I can afford to take those risks).
While reading Jans books the argument of property over shares took me and I understood the massive leverage of using other peoples money to get maximum exposure to the market, which was in a way similar to futures (in futures you only need a very small % margin deposit).
The nice thing about property though is it's not as time consuming as futures, you don't have to work on it everyday for it to make money. And if property goes down in value (less likely than it going up) then you don't get a margin call. This also makes risk management easier with property.
End of 2002 I valued the property again at about $250,000 so I took out a line of credit to pay off the other debts and have some extra cash for some other things.
Start of 2003 the same property was valued at $290,000 it had doubled so I thought it time to follow the "method" and look for another one.
After looking at various properties I had trouble with finance because of my income level (was about $45k then + rent on the other 2 bedrooms my flat mates were paying). Even though I had trouble with finance, I had enough equity for a deposit bond and had caught up with an old friend in Sydney at the same time who was working for a bond issuer / mortgage broker.
She gave me some details of some marketers she trusted and I decided on buying a 1bedroom in the Motto development in Erskineville for about $300k.
It's due for completion next year some time.
In the meantime I had leftover equity in the line of credit, so what did I do? I had to go back to the sharemarket while I was waiting around ;-)
This time was a little better though and I put $25k into my employer company(Objective Corporation) in April 2003. After all the corporate scandals in the world I could only put my money where I knew enough that the company wasn't going down the drain! and would have good growth. I intend to keep them until I need the money, if I can settle on Motto without the share money I will keep them longer :-)
Price has been an uptrend and have received some dividends as well and claiming the interest as a tax deduction - so it is nicer than my first share market attempt...
The next step for me is paying the stamp duty that's due on Motto! A pain in the bum tax but that's the price you pay for living in the best country in the world isn't it!
Settling Motto after that, still not sure what LVR the banks will want at the time but there are lots of options if they make it difficult such as lo docs or selling my shares.
It has only been 3 years but it seems so long!
RPI you have done a great job and I hope to use your achievement to inspire me to keep leveraging myself into a third property some time so when the next boom comes along I'll be positioned and leveraged to the hilt and can ride the price trend to the top of that boom.
You must have been very happy to spend your investment years starting right near the start of the last boom!

Had to edit this to put the details of my bomb car, I love bomb cars they are the best investment vehicle!

I had the same car since high school a VL commodore, almost bomb but reliable and I loved it, it even had a nickname. Had it for 6 years and then in October 2003 work allowed me to transfer to UK so I had to sell it :-(
At that time it was worth $2000, other people said I should get an expensive car but it seemed unrealistic to buy a car that cost as much as a whole years salary!
I know it wasn't a REAL bomb but it was low enough cost for me and was on an interest free loan from the parents - which I am only just making my final payments on :-)

My new bomb car now in England is very flash. It is powered by my legs and is silver with stripes!
It is a £250 mountain bike. I intend to ride to work for the 3-4 years I am here and not own a car at all. Also nice to see the place on a cycle, I am a tourist after all and cycling around is nice.

[greenhorn]

thanksfor the advice,I fully intend to take it slow,spend lots of time in this forum,learning as much as I can.Trying to divert my enthusiasm to research,thanks again! :D

[bonecrusher]

Hi all
RPI

Can you go into the finanacing.

Did you borrow from the same bank on all your purchasers?

Were they cross collaterised? etc

regards
BC

[tomdaher]

Hi all ,

Its great to read about all these fantastic success stories .The way I started was by talking to someone that was in mega but managable debt
( approx 1.5million + ) he seemed very comfortable with it , I was always scared of debt ,my attitude was must pay it off asap , so I would work my self into the ground.

It finally clicked to me as long as capital growth exceeds interest you are making money so who cares about the debt.

Bought IP castle hill 1 year ago at $ 467k now valued at $560 k C/Growth $97k take away interest $28k ad rent , how easy was that.

I am in debt for 400 k but who cares , looking for another IP at the moment
hope to hit the 1 million debt mark , if things get a bit tight the beauty of property is you can always sell and if you bought at a fair price you more than likely make money

[Manish]

Hi RPI,

I must say that your story is very inspiring! I am just getting into property investment and at a very "old" age of 34. (wish I had done it sooner).

Thank you for starting this thread and best of luck to all.

Manish