23 properties in 5 years

Hi everyone,

I had a request in a previous post to post my story so here goes.

Just over 5 years ago my marraige broke down and I found myself divorced and living with my parents. I wouldn't wish it on anyone , a really difficult time in my life.

After a year or so I decided to buy my own place and settled on a unit in sydney. I was having a chat with a friend of mine that was really into wealth creation at the time and he mentioned a book he had read and suggested I read it. "rich dad , poor dad , by Robert Kiyosaki" The book really opened my eyes as to the power of real estate and motivated me to read more and get out there and buy more property.

I stumbled across another book by John Fitzgerald "7 steps to wealth" which taught me some great lessons like , land appreciates, buildings depreciate so from now I on I was set on buying affordable houses instead of units which has been a good strategy for me.

I was also introduced to the concept of the property cycle and during John Fitzgerald's seminar (it is advertised at the back of the book) in 2000 the presenter showed us information that suggested that brisbane prices start to rise after sydney prices start to boom. The presenter was recommending brisbane as the place to invest (of course they were selling property there, but I wasn't really interested in buying off them, feel more comfortable soucing my own deals)

I had never really considered buying properties interstate but after spending hours on the internet checking out brisbane I thought it was worth a look as prices were so much cheaper than sydney and it was easier to find properties there that were close to nuetrally geared than it was in sydney.

After doing some searches of key words like " boom suburbs, hot property" in yahoo search engine I came across some articles that suggested that redcliffe was an undervalued suburb , prices started at around 80k at the time so I booked a flight to brisbane and off I went to buy some property. I had a budget of $216k to work with and on that weekend I bought 2 houses. One for $108,000 renting for $140 per week and the other for $107,500 renting for the same.

When I was booking the flight over the phone I asked if she could organise accomodation in redcliffe and she asked me why on earth I was going to redcliffe to buy property, she said brisbane prices don't go up in fact she had a place and sold it because they never go up there and that redcliffe is a dump! ...hmmmm I thought not a good start. (lesson number 2, be careful of who's advise you take , it could cost you a lot of money)

Anyway flight was booked and I was going to have a look. Spent the whole weekend looking at properties (I had lined up appointments with agents in advance so had the 2 days fully booked) Offered on 2 houses and signed contracts on the monday.

When I returned I told a good friend of mine what I had done and he was a bit concerned suggested that I should only buy 1 not 2....also called my other friend the one that suggested I read the kiyosaki book and he told me to be careful not to buy in brisbane that all these people are getting ripped off....so as you can see I didn't have that much encourgament...except for my parents that thought it was great, they have always been supportive.

My strategy at the time was that in 5-10 years when prices doubled I could sell 1 and pay the other 1 off in full. Prices went crazy in QLD and 3 years later I sold one of them in the 280's

My first 3 purchases all occured in 2000. A few months after my purchase I was questioning whether I had done the right thing so you do go through that self doubt.

I then got a little distracted from investing as I met the man that is now my husband but that is another story all together so I will stick to property.

In 2002 a friend of mine asked me if I would go to brisbane with her and help her buy a property I thought sure why not and in the excitment of it all I bought another 2 properties. A similar property in redcliffe to what I orginally bought except it now cost me 145k and a house in redland bay for 167k

I then met through a property forum a young lady that was into positive cashflow, she had purchased many properties and spoke about buying blocks of units and properties that generated multiple rents. I had never heard of such a thing. I thought what a good idea...She mentioned that she had bought a house with 2 flats in broken hill for 49k and was getting 250 in rent...I though what the...so I had a dabble in positive cashflow ended up buying a block of 4 x 2 bedroom units for 175k renting for 440 per week. Also bought a house in elliott heads QLD for 150k (later sold for 225k) and and a house in sandy beach NSW for 169k (later sold for 215k)

I then read some more books, Jan Somers , Peter Spann and one that really stood out for me..."Ordinary Millionares by Jim McNight" it's a book about how ordinary people have become millionares through property investment and each chapter is dedicated to someone's story. Each story uses a different strategy but they all end up at the same place...financially free

I found chapter 4 Jesse's story fascinating, it talked about a guy that bought houses off the department of housing in Elizabeth SA for 25k and rented them for $60 per week, rents then rose to $95.00 and he had bought a stack of them , paid them of in cash after a number of years. It was an amazing story.

One night whilst searching for deals on the web I came across a house for 63k in geraldton WA (brick and tile, about 20 years old fully renovated) I rang the agent (this was Jan 2004) and he told me that there was nothing wrong with the house that it was the cheapest brick house in town but that it was in the worst street in town , there was a family fueding there. He said that he couldn't guarantee that I would get a good tenant but that in 12 months the area would improve as the dept of housing sold off houses in the street. He offered me another home he had for sale that was also renovated but fibro at the same price but in a better part of town so I bought that one along with 4 others in the 70,000 range, rents were 125 - 150 per week.

Having another chat with the agent about the house in the bad street I told him that I knew I would kick myself in 12 months if I didn't buy it now so I asked him to send me a contract and asked if the vendor (it was the dept of housing) would allow me to have a 6 month settlement. Somehow they just signed my offer without paying much attention to the settlment date and by the time they had it was too late it was all signed. I have an excellent tenant there and the value has increased to around the 115k mark if not more. (a fibro has just sold for 120k in that street, so I am being conservative)

The department has sold off the houses and the fueding family no longer lives there.

Anyway I purchased a total of 14 houses in geraldton, mainly off the department of housing at giveaway prices. I don't think I would have quite picked up on the opportunity if I had not read Jesse's story.

I have recently purchased a duplex pair in Cairns for 200k , a house in tassie, a house in goulburn , a house in kalgoorlie (all under the 100k) all in 2005

What has worked for me
1. Buying affordable houses in coastal areas with affordable rentals
2. Buying houses below market value off the dept of housing
3. Buying houses instead of units (land appreciates,, buildings depreciate)
4. Not listening to people that are negative
5 Following my gut instinct
6. Learning from other investors
7 Dedicating time to finding good deals
8. Buying whenever I can afford to buy
9. Managing cashflow and understanding impact of every new purchase to my portfolio.
10. Adding to my portfolio whenever I could afford to
11. Reading lots of books , attending seminars
12 Having a good relationship with lenders and not to give up if a bank says no , just try another one, a broker , you can find a way....

Have I made mistakes sure...read my post about being out of rent for 32 weeks..(mainly becuase I don't have time to check my statements)

What the future holds for me, I guess it's a bit like my original plan wait for prices to double and then sell down to pay down the debt and then live off the rents. In the meantime I'll add good deals to my portfolio. How long will that take not sure, maybe 5 , 10 years whenever the next cycle comes along.

Well that's it folks. Hope you enjoyed my story
Karina
 
Thanks Karina, a positive post, might get the better half to read this. It's funny, where do you think you'd be RIGHT NOW if you'd stayed in the original marriage?
 
In answer to your question where would I be if I had stayed in my original marraige, honestly not where I am today, my x-husband never would have allowed me to do this. It was defintly a bonus to be able to live with my parents and have no real committments when I got started. To all of those that are still living at home make the most of it. It only gets harder when you move out.
 
Hi Karina,
An inspirational story. Well done. Great tips. One question: Advice no. 3 when you say don't buy units/flats and buy houses. Don't you mention in your story that you did buy blocks of flats that brought in multiple rents?
Mustang
:confused:
 
Hi Mustang,

Good question , yes I have a preference to buy a full block of units or full duplex as that way you control the land as aposed to just a unit.

I am sure many people have been successful in buying units, I am not saying don't buy them. A good deal is a good deal. It's just for me it has been a successful strategy to buy houses. Not to say I won't buy a single unit if the deal is good.

Karina
 
Mustang said:
Hi Karina,
An inspirational story. Well done. Great tips. One question: Advice no. 3 when you say don't buy units/flats and buy houses. Don't you mention in your story that you did buy blocks of flats that brought in multiple rents?
Mustang
:confused:
Mustang, I think what Karina was referring to is that she will buy a BLOCK of units but not a single unit in a development. If you buy the whole block you have a lot more control.

Karina, fantastic work, keep it up.
 
Excellent post, karina! I love these sorts of threads. :)

karina said:
It was defintly a bonus to be able to live with my parents and have no real committments when I got started. To all of those that are still living at home make the most of it. It only gets harder when you move out.

It's a part of my plan already. :)

Just doing the numbers in my head of how much it would cost to live on my own, it is a huge increase. Ideally I would like to save as much as possible, eliminate my HECS etc. and aggressively save for an investment property.
 
Hi Karina

Ripper post !

Would be very encouraging to people, the most important words I reckon are to not quit on your dream nor let anyone else have a say.

ta

rolf
 
Karina,

What an inspiring story. I loved reading it especially for someone liike me who is just starting off, its given me motivation to do even more searching for deals! :)

I've spent the last 8 weeks looking at studio apartments in Sydney. Because I don't have investment experience in real estate I want to buy something small and in Sydney so I have the experience of the whole buying and negociation process.

I've put an offer in for $160K for a small 27sqm studio which is currently tenanted for $220 a week. The problem with studios is banks will only finance 80% I'm putting $9000 down and supplimenting the rest of the loan by drawing on my shares (margin loan) and paying 8.31% Waiting to see if the owner accepts my offer, hopefully they do!

Thanks for your story
 
Karina,

Thank you for an energising post!

I would love to know what your approach to property management is? How many different property managers, do you accompany on inspections, have the more distant properties been difficult etc.

Another topic I am interested in is how you manage maintenance? Do you have a plan? Once you have more than say 10 detached houses, maintenance issues can require some planning. I am talking stoves, hot water systems, carpets, dividing fences etc.

Regards,

Burbs
 
Hi Burbs,

I have several different property managers. The most contact I have is with my PM in geraldton as they have 14 of my properties. She is excellent and manages things well.

I made the mistake once of almost selling a property because I had a long period of vacancy and a property manager that didn't give a damn or take my calls. I changed property managers and never had a problem since so I would recommend moving on when you are not getting the service you need.

I don't really have a repairs/maintenance plan as such. Many of the properties I bought in geraldton were fully renovated which is a bonus however I carry out repairs whenever needed as advised by my PM's. Also if a property needs painting carpets etc I upgrade to ensure good occupancy.

In regards to inspections as I live in sydney and my properties are no where near where I live I need to rely on my PM's. It's important to have funds available for little surprises in maintenance issues so I have an LOC set up that I can draw down on if necessary.

I am now getting more involved in co-ordinating minor renos on new purchases as in this market I am finding some of the better deals are those that can have rents increased by minor cosmetic repairs such as paint/carpet/tiling etc.
 
Hi Karina,

Thank you for your contribution is this post....it is a welcome breath of fresh air to read the exploits of a doer instead of the fears and negative language of the "copy & paste" brigade.

Good hunting

Glenn
 
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HI Karina,
You truly are inspirational! Congratulations on a job well done.

Just remember to check your rental staments every month!

Kind Regards
Marina.
 
Hey Karina
Thanks for the post - inspirational. It's good to see that you have bought in 2005 - any more purchases for you this year? Are you finding it very difficult right now to find a good deal?
 
Karina, I'll add to every-one else's praise & congratulate you on an inspiring post.
I am interested to know if you saw the properties in Geraldton first hand or did it all remotely?
regards,
Jen
 
wow! Great! Fantastic!

Very good. Inspirational.

Out of hardship & devastation comes something good.

Kudos to you milady!

Cheers
alwayscurious.
 
karina said:
I then met through a property forum a young lady that was into positive cashflow, she had purchased many properties and spoke about buying blocks of units and properties that generated multiple rents. I had never heard of such a thing. I thought what a good idea...She mentioned that she had bought a house with 2 flats in broken hill for 49k and was getting 250 in rent...I though what the...so I had a dabble in positive cashflow ended up buying a block of 4 x 2 bedroom units for 175k renting for 440 per week.
Fascinating story Karina,

Congratulations and thanks for sharing it with us!!! :)

It's wonderful to see that you not only got through the heartache of a marriage break up and survived, but that you courageously battled on and prospered beautifully!!! ;)

Just one thing, like Mustang I too read that you ACTUALLY BOUGHT a block of 4 x 2 units whilst dabbling in positive cashflow, and although I completely agree with / understand your "preference" you neglected to address Mustang's original question. Perhaps you could clarify for me??? :confused:

Cheers,

Jo
 
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