A Collection of Somersoft Forum Stories, Lessons & Updates

Aaron Sice

Another 2008 post, this contribution from Aaron Sice

born 1980.

working class background - both sides for 4 generation. was a wealthy land baron in the line but he didn;t leave me anything!

bought first 51sqm 2x1 unit 2001 WEMBLEY WA $60k - renovated & sold mid 2004 for$139k

used money to upgrade to 3x1 in KARRINYUP WA on 360sqm opposite park for $242k - renovated & sold November 07 for $625k.

used equity in early 06 to buy 3x1 on 700sqm in BELDON WA for $192k - halves with wife's parents. sold November 07 for $355k.

bought block to build on in Burns Beach - 3 street back from ocean - to build 4x2 on 560sqm family home.

now already have solid equity in this house and is step one for a ten step, 10 year CGA strategy.

already on the lookout for step two.

this is now first step

There maybe additional posts or a full story within the forum vaults, but I only located this from Buzz in 2008

I found the hardest thing when I started saving was focus. One moment I would be doing the free ASX courses at lunchtime the next thinking about a house deposit, all the time convincing myself I was dedicated to investing.

I realised after a while I had no direction. So I took a weekend to work on my goals, not just financial but all my goals as I realised that I needed a balance. With a clear picture in mind I then created a budget.

The first step to the budget was working out what I was actually spending my money on. I was shocked to see what I spent on books, flowers, lunches and catching up for coffee/meals with friends. I tracked every dollar for a month and then decided what to cut out and what to spend my money on.

I started borrowing my books from the library and when they did not have the new release I wanted I ordered it from them and paid the $1 premium for the request. I took my lunch to work and at the same time worked on a contributing goal and lost a few kg's. I had friends over more often then eating out, they usually bought the cake/morning tea -as they knew my cooking skills were somewhat limited.

That was in 2000, we now have 8 investment properties in high growth capital cities and still keep to a budget.

In my mind, starting with the end in mind, ie the goal and a date to achieve it, then working out what you spend your money on and then working out a budget will get you to your goals alot quicker than a unfocused saving plan.

PS I found so many people struggled with this concept that I added to my members only section of my website a goal and budget tracker. Join the newletter and next time a newsletter is sent you will receive a link to the members section. In the meantime you will find the books in the recommended reads section in your library.

I hope this helps.
Mr Fabulous

From deep down in the crypt, another great 2002 post; this one from Mr Fabulous


Okay, you want details, you got 'em. Finished Year 12 (passed by one point) in 1992. Floated through various jobs and was on the dole for all of 7 years. Yes, seven years.

Got put on a Work for the Dole scheme in 1999 which gave me the incentive to finally put my money where my mouth is, and look for work/move to Melbourne which was something I'd been thinking of doing for about 18 months (I lived in Geelong (yuk!)).

At around the same time in '99 I started my first business with my bro. and a friend (a skateboard clothing company). Put a few thousand in, got a few hundred back after putting it to bed late last year. Didn't make any money, but the lessons learned were priceless. Currently looking at more business opportunities, after coming to a shocking realization just this week about working as an employee (the full story can be found at Freestylers forum in the Young Entrepreneurs section, can't remember which topic).

Just as a side note, if anyone wants some tees for their kids/themselves, contact me, I have a few left that I'm selling real cheap.

In August 2000 met my life partner (Hiroko), who got me seriously thinking about getting rich and we haven't looked back since. Started reading investment books (RDPD first) in January 2001 and like Dale, it was like a huge wake up call.
I knew that real estate was where I wanted to be, it was in the blood. Both my father and grandfather owned I.P.s. So this is where the rollercoaster ride of an education began. Since then, we have looked at many strategies before finally finding something that suited us.

We are going with Steve Navra's way of doing things. It was a total turn around for us, as we were looking at positive cashflow before we met Steve at his seminar in April.

At the initial one on one meeting with him afterwards, when he showed us what he would like us to do, I was rendered speechless, literally. Although it was completely the opposite of what we were looking at doing, what he showed us convinced us that this was the way to go. In the small amount of time that we have known them, Steve and Katrina at Navra Investments have been absolutely wonderful and very supportive.

Speaking of supportive people, I would like to mention a few other people here also: Dale, you are a dead set legend mate, you have been a real great help for us since we met you, Tony Camera (no, Tony, we haven't forgotten you). If it wasn't for Tony, we would have probably gotten ourselves into, what would have been for us, a bad deal. Thanks for looking out for us, Tony. Rolf and Medine at ASAP Financial for the help they've given us so far (we'll be using your services eventually, guys, we promise!). Finally, thanks must go to Jan and Ian Somers. If it wasn't for this forum, we wouldn't know these people, nor have garnered all the great info. that people out there so willingly give.

Anyway, back to the story. Well, we're at the present now. At this stage, I'm working (grudgingly), looking for business opportunities and looking at doing some courses which will eventually get me out of my current employ and into something that I actually might like (I'm a chef). I'm looking into such areas as: business management, accounting/bookkeeping and financial planning. Hiroko also works as a chef (we met when she was still working at Frown, the World of Disappointment, which is where I still work). She is currently studying to become a Shiatsu massage practioner, which should become a reality at the end of this year.

In the future, we plan to be out of the rat race in ten years max, the idea is to either become full time property/share investors or be working on our own businesses. At that stage we may look at starting to pay down the debts on our first properties while purchasing more at the same time, all the while building a share portfolio using Steve's software. Development and possibly a move into commercial property are also ideas being looked at. Investing in the U.S. is also an interest. Reading the Rich 200, it seems that a lot of people on there with property made their wealth via developing/commercial property, and I like to think it would be nice to see mine and Hiroko's names on that list one day. Basically moving onto bigger and better things each step of the way. But in reality, who knows what we may be doing then? It's still a long way away. But I am beginning to learn to look into the future at what may be, rather than being stuck in the present only. The future is where money is made (that's what I reckon, anyway).

I'm also learning to expand my context, as I find myself tending to be a little cynical and negative whenever I see or hear about a deal or opportunity that may not seem kosher. Now, I'm beginning to realise that by having this attitude, I'm closing my mind off from opportunities. It was actually Kiyosaki's new book that made me realise this so it is great to know that a book I purchased for $20.00 has now opened my mind up to new possibilites and opportunities that could make me millions. well, that's about it, thanks for being interested in my story Paul, it's very flattering. I know I've already nominated someone (where are you Eric?) but I would also like to nominate Steve Piggott from Adelaide, otherwise known as Neb.

Also from a 2008 thread an update from MoreIPs

Just barely a Gen Y (1980)...

Bought as follows:

2005: Birkenhead, 2 bed house - 180k (now 320k)

2006: Largs Bay, 3 bed strata titled "house" - 185k (Now 290k)

2007: Semaphore Park, 3 bed house near beach - 400k (revalued 450k)

LVI currently at 80% - mostly used to purchase the semaphore park property. Have about 30k in LOC's untouched for future use and no bad personal debt (ie CC's (all at zero balance just in case!), car loans etc).

The 3 bed strata titled "house" has been my best purchase. It is the orginal house and in the 70's 4 units were built behind it. 500m to the beach. Floor area is a massive 130 square metres (for Strata Titled) and lots of potential for value adding (boards under carpet / large powder room seperate toilet laundry bathroom prime for reno). Rented for $245 pw, but admittedly im being a bit too much like mother teresa with the rent asked (but tenant is good and has been there since purchase).

Will value add before end financial year for more equity (in a flat market) and look to the Port Adelaide redevelopment and local Defence (Air Warfare destroyer contracts) to add to further growth.

A lot has changed since AlmostBob wrote that first story.
We do very little renovating.We make the property safe.
Our tenants are not high earners. If they were, they'd buy their own house.
We go for cashflow, as that is what we live on.
Financing is more difficult, thus we need to be more creative.

2004-purchase 3 bedroom mobile for daughter to rent
cost is $21k. Rent was $405 month Now rents for $650 month
2005-purchase 11 unit apt building $310K. Was bringing in $2900 month rent when we purchased it, and we now get $7600 month rent.
2006 -purhase 3 bedroom house for $50K. Rent was $600 month.Tenant had a fire 6 months later. We rebuilt and cost us $20K more after insurance claim paid out. Now rents for $800 month
2006- purchase 3 bedroom house for $63k.Rent was $650 month. It now rents for $900 month
2007-purchase a 1 bedroom mobile home for $10k.Rented it $500 month. It now rents for $600 month
2007- purchase a very large house for $200k.Obtain a DA to transform each room into a furnished, all inclusive bachelor suites.Has 11 bachelor suites in it now.Initially rented them all $6050 month. They now bring in $7k month
2008-Purchase a 5 unit apt for $131k. Our 4 adult children and us all take an apartment. We all co-own it. When they finish paying their share, their names will be transfered to the deed.
2008- Our former PPOR -4 bedroom house is now a rental.Value is $249K. Rent initially was $1000 month, it is now $1200 month
2009- Purchase a 3 bedroom house on 4 acres for $125k Rent is $1060 month
2009- Purchase a 4 bedroom house for $149k. Rent was initially $800 month. Now rents for $1000 month. The best part about this property, it has 4 mobile homes on it. The previous owner didn't put any value on them. He was getting $2425 on the house and 4 mobiles. We now receive $3525 month rent.
2010-purchase a 2 bedroom mobile home for $20K. It is being purchased by our tenant in installments for $90k. If he misses a payment, all is forfeited.
2011-Purchased a 2 bedroom mobile for $10k. Vendor initially wanted $15k. We offered $16, if he would take installments over 30 months. He declined.A few weeks later he reduced his price to $12K..we offered $10k cash. It now rents for $650 month.

We retired in 2010, and live 8 months a year in Australia, and 4 months a year in Canada.
We self manage. We have 2 couples in Canada who are our property superintendants. They are not managers. They are our eyes,ears and hands. They work for us only. We give them a break, while we are in Canada.

We rent out our apt while we are in Australia for $750 month :)
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It’s the numerous investors’ stories on the Somersoft Forum and within the property magazines that garner and maintain a lot of my interest; I love to read individual investors stories, strategies utilised and the lessons learnt along the journey….

Thanks for this....as a new user it has been interesting to read these stories and inspiring as well.

Can anyone tell me how to start a new thread?

I am not seeing a New Thread icon.....and would like to post something.


It’s the numerous investors’ stories on the Somersoft Forum and within the property magazines that garner and maintain a lot of my interest; I love to read individual investors stories, strategies utilised and the lessons learnt along the journey….

Thanks for this....as a new user it has been interesting to read these stories and inspiring as well.

Can anyone tell me how to start a new thread?

I am not seeing a New Thread icon.....and would like to post something.


You have to go to the sub fourm eg PROPERTY INVESTMENT -OTHER / COFFEE LOUNGE

Then you will see a button to start a new thread/topic.

Another 2003 post from the SS vaults, this one from Margaret Lomas

Re: Me


Margaret Lomas has just purchased her ninth property (eleventh actually but two have been sold) which is a commercial property at a cost of $500,000. I know this as I am Margaret Lomas.

My properties are in:

NSW (4 titles for 7 actual individual properties), with the commerical property yet to settle)
Perth (1)
Cairns (1)

I also have a share portfolio of international shares valued at approximately $50,000 and recent investment into the expansion of my own business of $200,000, which essentially was a cash investment.

This will save anyone having to undertake searches, and I am more than happy to answer any questions emailed to me at margaret.lomas@edestiny.com.au.

I am really enjoying the postings here and the lively discussion and encourage everyone to continue to be enquiring and to ask as many questions as they can. I agree that we should teach a man to fish and we at Destiny embrace this mission with our clients every day.

Good luck to all.
Well anymore kerb crawling in this forum is likely to get me sacked (lucky I have a great boss) - as I am not getting much work done here at all. But let's see how I can help you with an answer.

Firstly, can I please make one thing clear - the positive cash flow property register available through my site is a SEPARATE business to my business Destiny Financial Solutions. I have an interest in it, since it was my idea, but it is a joint venture. The idea was that, since so many people asked the same questions you asked, we would hire some people to find PCP wherever they existed and put it on a free listing which anyone could access. You don't have to be a Destiny client to access this listing - anyone can. Since I couldn't afford at the time to pay wages to two people to do this, and we needed a real estate license, I approached two of my long time clients and they agreed to the venture. They then worked about 12 months before the register started to earn any money!

The register lists properties and charges the vendor standard real estate commissions. Where they must also do some marketing, they may add a small marketing levy (vendor paid) to cover costs. So investors take delivery of properties at market value just as they would going to a real estate agent. When we first started the register we had hoped that lots of standard properties from real estate agents would be listed. But real estate agents don't like to share commissions (the register would have taken half of the standard commission) so it has been hard to get them on board so far. We are still trying.

Destiny Financial Solutions (my company) does not sell property. In fact, probably less than 5% of our clients will ever even buy off the register. We teach our clients how to find the properties for themselves and put together a strategy which we then support them to implement. This strategy comprises an entire personal financial management system. We of course charge a professional fee to do this.

Now to business. How do you find positive cash flow properties? Well firstly you have to know how to recognise it. The free software with my books does enable you to do the calculations, but first you have to have a starting point so you can find the potential properties and run them through the calculator.

I use a number of ways. I prowl real estate websites, newspapers, and I always check out new areas when I travel. I ask alot of questions. I use some basic theories (such as the fact that regional centres close to overpriced capital cities are usually fertile ground for future population and property value growth and usually have a low purchase prices in relation to rent return). I look up and down the coasts in all states and try to pick areas with populations exceeding 50,000 people which are not necessarily dependent on their tourism industry to survive (although this would not preclude them). I know from reading this forum that someone stated that my own portfolio was based on managed apartments etc - in fact this is not true - I have two holiday let properties (not managed though) and 6 standard residential! Interestingly all of my brothers and sisters chose to buy managed apartments however - their choice, not necessarily my influence (I mean would you listen to your sister?)!

I then start to get a feel for an area and then I do the basic research first - ask council about future developments and about future infrastructure - the sign of an expected thriving economy, and we do need some capital growth somewhere in our portfolio if we are going to continue to leverage (although we can accept some low growth high cash flow properties, as long as they are not all like this)

I then start to narrow down actual suburbs - In Perth I did this by checking out vacancies - I simply called local property managers to see what they had on their books - not much available may have meant demand not being met and this would be good for me as an owner.

Then I do the calcs. I have to use some rule of thumb mostly as few standard properties will come to me with a depreciation schedule. In my last book, How to Maximise Your Property Portfolio I included a ready reckoner with some rule of thumb depreciation amounts - now I haven't said this to get you to buy the book (see how paranoid I have now become!), because you can always photocopy this from the library, or get one of the brochures from BMT and associates which is where I got the table from.

By the time I have done all of this I am ready to start getting serious about my due diligence and I have built up a good feel for the area and its ability to give me the returns I need.

As for your second question, I presume you mean can you keep buying until you are sick of it? Well, no, because you still have to satisfy bank lending criteria. Of course you have to also have the equity- I recommend always keeping 20% for yourself (this is where I feel safe) although some people may be happy to go down as low as 10% or even 5%. Only you can know your comfort zone. The point is that you can usually get the money from somewhere (unless you really have tried to get too much too quickly) and I have found that each time my equity has allowed another purchase, I have aslo satisfied the lending criteria. Each new purchase adds income and so raises your borrowing capacity. If you fail the income test for one bank you may pass it with another - of course you should never accept a dud loan just to secure a property but these days there are many viable alternatives who tend to have less strict criteria.

I suggest you pick your safety level and then begin to work at it from there. Nothing can replace good due diligence. For me, so far every tme I have been ready to buy (as in equity position), the bank has also lent to me. I probably would have another 4 or 5 properties but I recently did reinvest some of my own funds back into my business, but I know the bank would have lent more to me if I wanted it.

I really hope this is of some help. I am here another hour so post again if I haven't covered something

The new book How to Maximise Your Proeprty Portfolio does clarify this a little more and it addresses the question of running out of tax deductions and becoming positively geared as does Income for Life (page 202).

Bazza my strategy is not to use a P&I loan and I guess this is what happens when people bandy about information on a forum - a little like chinese whispers and things get a little skewed.

I use interst only loans on all properties including my own home. I then choose to pay principle and interest where I need it most - starting with non tax deductble debt and then starting on deductible debt. I treat all investment debt as one debt and simply chip away at it - it is not about getting equity in one property and then leveraging against it - it is about getting equity in the portfolio, and then you leverage as soon as the 20% is gained in the portfolio as a whole.

Debt minimisation is important as what else would you be doing with the cash flow? Spending it? Might as well put it into debt. So you lose tax deductions? Truth is you should aim to own everything one day and debt minisation is the way to go. Both Income for Life and the new book address these very things and show why it is better to take this pathway, even at the risk of 'losing tax deductions'. Remember that tax deductions are simply a benefit which can help you leverage in the beginning - as your properties become positively geared then this means you must be owning more. The more tax you pay the more you are earning? This is not to say you should not legally try to minimise your tax liability - it just means that you should be aware of what they truly mean and what their true benefit to you is.

So, Bazza, you are partly right on both counts - get an interest only loan, but pay it off when you have no personal debt left and revalue your entire portfolio for leveraging as soon as equity appears.

Hope this is clearer than it sounded when I wrote it!

Another great story from 2009 that has it's own thread and ongoing updates; this one is from MichaelW

My little Mona Vale development update - Phase 3

Hi Guys,

Thought I'd start another little thread for those interested in following my Mona Vale MUH development through to completion. For those who want the whole sordid background here's the first three threads I ran on this development:

June 2006: Site purchase

June 2006: Initial Feasibility Analysis and Design Concepts

Febuary 2007: Architectural Design and DA Process

Which brings us to where we are today...

Well I just got off the phone from my personal banker at WBC who's given me finance pre-approval to do the construction!

So now I'm going to kick off the next phase of the project which will be engaging a third party to do the Construction Certificate drawings and tender documentation then tender and select a builder, lock in a fixed price contract with prime costs explicitly stated and get ready to commence.

That process will probably take the next three-four months and should make for some interesting discussions. From there I might start another thread to cover the physical construction in the following 9 months or so.

So for those who are bored stupid with seeing "Mona Vale development" in thread headings, this is the one for you to put on ignore.

We're off. I've seen enough of this doom and gloom to know where the market is headed and am more than comfortable with our projected end state. For the record, I'm working on a combined Gross Realisation of $2.5M with total costs of around $2M being $800K in site costs and $1.2M in construction costs. Our rental assessment came back at $850-900pw each for total rental income of $135K odd against a total mortgage interest cost at completion of $100K at current interest rates. i.e. CF+ by $35-40K at completion and a $500K margin.

If BIS can be believed in their media today then Sydney median's are set to rise 19% by June 2012. At that stage these would be worth $1M each for a $3M GR and a $1M margin. That was always my game plan on this site, and the servicability above suggests holding until then should be achievable.

On to the next stage then...


And from a 2006 post with regards to living within your means to achieve your goals

My 2c,

For what its worth, I reckon the thrust of that story should be delayed gratification. Basically, live within your means and understand what the limit of those means are. Pay yourself first etc etc.

I posted here some time ago how I got to be in the situation I am now at 35, and it was all around living within my means and using my spare cash to invest rather than on doodads. I rented a dump in Mosman for years and started out small with my first IP being a $75K unit in Carramar. I diversified into a good managed fund and rode some growth there too, getting out just before the tech wreck.

I only bought my PPOR when I could effectively put about 70% down as a deposit. And even now, I continue to try and pay that bad debt down as quickly as possible. But to do this, I continue to invest. I've pulled the equity from my PPOR and leveraged it into the ASX. So far, over the past 5 months, that fund has returned me $56K gross, and $40K net of interest costs. Even though I'll be paying tax on that net profit, it will still be additional dollars going to reduce my bad debt. Next step is to set up an HDT to reduce my tax bill, and diversify my funds a bit to further reduce my risk profile.

I aim to have my $800K PPOR paid off in the next 18 months, which will mean drinks on me at the Glebe Point Hotel at the subsequent SIG!

Most people can achieve what I have if they get the fundamentals of delayed gratification and living within their means correct. Then its just the magic of compounding growth and investing in assets and not liabilities. The outcome then, is just a matter of time.

Michele b

From 2002, Michele b's epic story and pointers

Michele's B grade epic

At age 35, I was technically bankrupt and living on rice and chickpeas. So my tale might reassure those who worry that they’ve come to investing too late.

I worked 3 jobs to put myself through uni where at 19, I met my lifelong partner Nick - it was cool back then to wear army surplus but not yet cool to want to be a graphic designer which is where we were both headed. As soon as we started working, we drew a big house (the design thing runs deep) made of 100 x $100 bricks which we fixed to the back of the kitchen door in our rented maisonette (half house) and started colouring in bricks - this was our house deposit. Then our landlord asked us if we’d like to buy our house – both sides!! Yay!! We became landlords. This was wonderful for precisely 3 weeks, and then our tenant was jailed for social security fraud. I had to learn quickly about property management.

Life rolled on for us, consummate yuppies that we were, till I became pregnant. Then Nick was retrenched just as our firstborn arrived, which prompted a highly educational trip to Centrelink – you had to laugh. Soon we were both back at work and we bought a modest 3BR house on acres in the Adelaide Hills. It was wonderful of course, but why oh why didn’t we buy instead in Norwood or St Peters…doh. Or in Sydney or Melbourne….double doh. We sold our pair of maisonettes because it never occurred to me then that we could have kept both properties (Lesson: don’t blindly follow assumptions, always check out ALL your options). The bank manager assured me interest rates would stay at 12%, then they promptly soared past 17%. (Lesson: don’t rely on advice from those unqualified to give it)

Nick bought into the business he worked for, I worked part-time and we had two more babies. Disaster then struck when the business was embezzled just as two large clients went into liquidation owing the company huge sums of money. We looked certain to lose our house but managed to take over the company, placate all creditors and eventually trade our way out of debt. (Lesson: never sign directors’ guarantees and protect your assets with the right structures). Childcare costs negated my salary (I had 3 babies under 4 years of age!) so I had to work from home. To make ends meet I looked after other people’s children along with my own during the day and lectured at uni at night. Hence the rice and chickpea rations mentioned at the start.

Things got better. I joined the business full-time, we both worked hard and were well rewarded financially. This is when I learnt a very valuable lesson: BUSINESS is where you make money. And as I started to understand leveraging, I saw that there are no upper income limits in business.

Where to put the cash? Well I like old houses so we bought and renovated some properties in inner Adelaide just as the boom got underway. We had renovated our maisonettes and painfully learned what not to do. (Lesson: a coat of paint and basic cosmetic reno is usually all that’s necessary). We watched our properties appreciate quickly and began to understand that it’s capital growth that makes you wealthy (even in Adelaide!) and business that provides the cashflow. And if you define business as any profit-making enterprise then positively geared IP also qualifies. I’m something of a contrarian and I’m not known as a team player. So I often tend to look where others don’t. Unhappily, as in fishing, if you arrogantly ignore the tides and deliberately use the wrong bait and tackle just to be different, you’ll usually go home empty-handed. (Lesson: ask questions, learn from others, then go replicate what they are successfully doing but add your own spin – the wheel works just fine - why re-invent it?).

I became a bit frustrated with IPs - our ability to expand was determined entirely by capital growth, a cyclic phenomenon over which we had no control. My properties were worth only what the market said they were worth and the banks lent me whatever they felt like, if in fact they decided to talk to me at all. The potential for business as a way to accelerate our wealth creation plan slowly dawned on me. With business there are no such limits – outcomes are entirely within your hands. And I have seen this firsthand.

Working on the assumption that if one is good, then lots must be even better (Lesson: this doesn’t apply to everything) we are now working on other business opportunities. We want to replace ourselves in our design consultancy and in any case, Nick needs a very long rest as he has worked diligently for many years to support and make happen my various manias – and there have been many!

Re property, at the moment we are just treading water. I’m involved in a land division which threatens to become my life’s major work – it’s in its seventh year. I’ve just completed my first building project which was an architect designed beach house (this for the 4 people on this forum who haven’t yet heard this saga) and I’m about to start a major back end addition on an 1880s villa which I will attempt to do brilliantly but cheaply from the lessons I learned with the beach house - we shall see! It will be our home. I guess I should mention that for the past six years we have lived with our turtle in an upstairs 2BR apartment of closet proportions – this was us paying lip service to delayed gratification – no gain without pain, right?

Getting back to what I said at the beginning about starting late, don’t despair if this is you. Sure, it helps when there are two of you and yes, we’ve enjoyed a property boom, but remember I’ve been investing in Adelaide and not a lot has happened here compared with Melbourne or Sydney. Even so, it’s been possible for us to accumulate $2M in assets within 6 years after starting $150K+ in the red. Your own business is the key – read everything you can on this, then go do it.

I see that Sim has ended with some relevant pointers. These would be mine:

  • there is nothing more important than being healthy. Granny was right. Without health, there is no energy and therefore no passion. Even if you are only 20, nurture your health every day – it will pay you huge dividends later, if only to insulate you from the unavoidable effects of stress. And if you smoke, consider my dad who is undergoing cancer treatment – his cancers are directly related to smoking which he gave up 28 years ago. Smoking has a long footprint.
  • nurture your relationships – what else is there really? Sharing your good fortune makes its acquisition meaningful.

Can I add my thanks, along with previous posters, to the Somers who so kindly host this forum and who have launched so many of us into the world of IP. On this forum I’ve met some of the most special people I’ve ever known. My love and thanks to you all!



Another story from 2002, this one from JamesD

Rasputin, hope this is what you wanted to hear.

Mine is not a success story as far as you are concerned but from where i have come from it is to me. I am 28 years old married with 3 kids(2 girls 1 boy 8,7,5).I was married young (19) and we had the 3 kids early and close together as you can see.

Because i was an apprentice and had kids the banks would not even let me in the front door let alone talk about money so we were forced to get personal loans and a car through finance companies. Bloody rip off but that's all we could do.We got into some strife and eventually got listed on the CRA....twice. So that was it for five years nothing but paying back high finance loans and getting into more debt.

After a while studying real estate my wife sent me off to some seminars and bought me some books because after all my dealings it wasn't easy motivating myself. I eventually woke up one day and said this is it am I going to remain poor and give this lifestyle to my kids or am i going to get up and do something, we had nothing to lose but our lack of money.

That decision was made 2.5 years ago and after studying property, agents, valuers, finance companies we finally made our first deal this year. Now being built in clayton 2 bed apptment, Frankston 2 bed unit, Frankston central 3 bed house with 820sq land for future development. Including our own house in Skye which we are getting renovated.

Are we still poor (YES) do we still have no money to spend after all the bills are payed (YES) but the difference is now we have $574 000 worth of property.

We achieved our fist goal of 3 properties in our first year. If you had of said this is what i am going to do 5 years ago I would of told you to #$%^ off.

My story has just started. hope this can help you re-evaluate your goals.

Smith Stevens

The Doc - Smith Stevens 2002 story is posted below

Dear Rasputin,

this is my first foray into this forum. I have been property investing for about 10 years now. 5 years ago I got to the point where I was able to retire from my lucrative surgical practice in Sydney, and live off passive income from my property portfolio. How you ask ?

  1. Educate yourself - become an expert in property. Know more than the estate agents, the financiers and the developers. Read everything, do lots of courses (within financial reason), talk to as many successful investors as you can. Go to auctions, inspections etc.
  2. Set goals ie: 1yr,2yr,5yrs; how many properties, what value. When will you retire.
  3. Never let anything stand in your way. If you get knocked back eg:a bank loan, see someone else. There are hundreds of financiers.

It is possible-my portfolio is worth about $9.5 million, without about $5.5 million in equity.

How? Buy multiples, off the plan in high growth areas, close to amenities and services. All my properties are cash flow positive within one year.

You can do it


Dear Michael,

thank you for the welcome. This is a wonderful forum for both novice and experienced investor.

I agree, retirement can equate to death.

When I said retire, I should have said moved on to a new chapter in my life, namely professional property investor. These last 5 years, have been fantastic, as I have had more time with my family, whilst also having lots of cash to enjoy our life. This is a lifestyle that is possible for anyone.

A few points:

  1. Although I had a high disposable income from my practice, I also had very high outgoings. eg: practice costs, indemnity insurance, laser leases etc, so on paper my net position wasnt that great. I approached over 40 lenders in the early days, until I got the deal.
  2. No strategy will work forever.

The property market like shares evolves and regreses. A smart investor always is abreast of the market and adapts strategy as needed.

At the moment I am buying in outer sydney areas (high growth) and select inner west off the plan and established properties. The established I reno to as new with minimum cost. I never buy unless I Know similar properties in the area have been valued higher. This gives me a reference for the valuer and always gives me an instant capital gain. I value add for renters, and I do the inspections myself, thereby achieving far greater rentals than any agent.

I only have 2 to 3 properties on my rental roll, they have hundreds. As I said in my last post, become an expert, because you will do a better job than anyone else. In the last 2 years, all my properties have been cashflow positive from day one.

But they are in the right areas- you have to know your areas capital growth, past and predicted (eg: residex), vacancy rates, and rental yields.


Blacky's journey 2010

My Journey

Well I was either lucky or stupid?

When I was 20, and straight out of Uni I had to move towns for a new job. I was destined for Geraldton WA on my stately salary of $32,000pa, huge amounts in those days, esspecially coming off a Uni students *ahem* salary.

I put all of my money into my first IP (at age 20). I did no research, however new the area pretty well, as it was where I had grown up. I didnt even view the house before purchasing, trusting my sister and Dad to do that for me. I borrowed 95% (from memory).

To be honest I couldnt actually afford the repayments, so had to take another job.
I then rented a 3 bedroom unit - which also had a study and moved into the study, then rented the other 3 rooms out to students and nurses. Meaning I lived rent free (talk about cramped)...

After a year or so my IP became neutral and things got easier, but harder also. As things get easier, you want more. Me - I wanted a real bedroom - so found another place to live, meaning I lived a better life, but had less money (paying rent).

I have kept going and have built a portfolio valued at a couple of mil and have the debt to show for it , however, nowdays I do earn a salary far above Kevs "average Australian" (I work overseas).
My most resent puchase is what is to be my first development. Things admittedly arent going to plan right now, however, they will (hopefully soon).

3 years ago I drew up my 10 year plan. This should see me retire at 35. However, already, I am behind due to banks playing silly buggers. But hey, I figure even if Im behind by 5 years, retirement at 40 aint too bad.

If I could have my time again I probably wouldn't change too much. However I would say the following.

a) avoid I/O loans. I am yet to meet anyone who ACTUALLY uses the money in better areas. (I know there will be plenty of people on here who will argue with that, it is just my point of view).

b) The long term is the dream, but you need to survive the short term. Cash flow IS important (I bought a vacant block of land for the long term, and wont do it ever again).

c) Investing in real estate is NOT easy. Learn as much as you can from others. Dont listen to people who tell you that you can't - listen to the people who will help you with the how.
d) You WILL need to make sacrafices.

e) Dont bank on what MIGHT happen (esspecially all you optimists out there).

f) Dont rely on others to do it for you.

And lastly - probably most importantly - have fun doing it.​

Glad to meet you all, hopefully I can provide you with some information you find helpful, and hopefully others can do the same for me.

Kind regards
Black Dog

I did say it was an ecletcic mix and its been interesting reading the posts from various years and contributors

Here's another great forum story, this one from stumunro in 2008

I bought my first IP when I was 18. I'm now 21.

2005 - Macquarie Park, NSW Unit
325k now 415k

2006 - 2x Morayfield, QLD Duplex (one title)
355k now 430k

2008 - Ormiston, Qld Townhouse

I try and buy when I can afford it, these days have to wait for equity buffers to rely on purchasing again.

I have battered down about 90k in LOCS for the next few years, have been tempted to purchase more but will sit on my hands and be patient

I played a high level of sport going through high school, missed a quarter of year 10 at an Australian camp up at QLD which naturally left school last on my list of priorities. It was not suprising that a year later I found myself dropping out a few months into year 11, on the condition that I could only leave having organised a full time job (thanks mum & dad)
Part of the deal also was that I either paid my parents $100 bucks a week in rent, or setup a direct debit each week of $100 into a savings account. Being the selfish genY that I am the latter was a much better option and at the age of 16 I was inadvertently (although I think my parents planned it) saving for a deposit on my first IP. As the ball gathered momentum, and I could start to see the merit in the savings I started to put more away each week. My mum told me that if I were to make withdrawals from this special account the bank wouldn't give me a loan, so I didn't! (thanks again mum) 2 and a half years later, at the tender age of 18, I was ready to purchase my first IP. My mates had just finished school and thought I was a nutcase, do you know what sort of car I could buy for 35k ? *grin*

In summary some things really helped me

good parents;
- guidance about money & investing and subliminal messages of them playing kiyosaki tapes at a young age
- compulsary savings, not giving me a choice of whether I sacrifice money or not, rather whether I sacrificed it to myself or to them

- Putting away 70% of your wages at such an early age was even harder than it sounds (especially working 5 days a week in a physical job)
- Not ever being able to buy my own car. Even though I could afford one today, I am blessed with a work vehicle which is a godsend.

- i think not ever making it in a sport I dedicated so much time to left me with a new outlook on life. I had been training every single day for 3-4 years straight and this discipline and determination didn't go away, I think it's just changed focus.

All in all, im proud of my achievements. Proud of the fact I've never needed to borrow money (except the shitloads from the bank :p), I've been financially independent since I left school. I have lots of friends that always tell me they are going to invest, but it never happens. For me I'm glad my parents gave me the guidance but gladder that I had the determination.

A 2008 post from murtagh, a short but positive story :D

Like many of these earlier stories I wonder where people are at nowadays. AlmostBobs update was a great read

I'll kick in my story ..

I'm 29 (just), was whingeing to a mate at work last year about how much I wanted to buy a property, but it seemed "a million years away", etc etc. Came away from a chat with him thinking about it more and more .. borrowed Jan's book from my mate .. found the forums .. spent every waking minute devouring info...

I had spent 1999 through 2003 being brainwashed by my parents about how great property investing is. I could never afford to get started (was studying), and due to a bunch of reasons they never moved forward on it either. So I knew "the basics" but had never actually done any of it.

Ended up buying PPOR in Sept last year, just watching the bank balance stack up before we buy IP #1.

It turns out "a million years" is actually 3 months.

And also from 2008, an update from farmilor

born 1981, so gen Y i guess.

  1. 2003. Woy Woy, 3 bed house in good location ...... $296K, sold this year $398K
  2. 2004. Current 2 bed unit in Hornsby ......... $284K, currently worth $335K (probably sell soon)
  3. 2007. 3 bed house in Hornsby with DA for 3 townhouses ........ $480K, sold last month after holding for 12 months for $585K
  4. 2008. 3 bed house in Castle Hill ........ $475K will be moving from the unit to this house in September

Had to sell the properties above due to having a baby and going down to one income.

Will move into the Castle Hill house and renovate it, pushing price up to $580K - $600K and use this equity to purchase another 1 or 2 early next year closer to Sydney CBD.

Here's a 2010 post from Rixter on his capital growth averaging (CGA) strategy

Nat7878, this is a post that describes my chosen Investment Strategy that involves Villas & Townhouses.

The capital growth averaging (CGA) strategy I employ utilises a regular purchasing cycle similar to what Dollar Cost Averaging is to the share market. The major underlying principle to its success is it relies on your "time in" the market, NOT "timing" the market, and never never sell. So in other words it does not matter whether you buy at the top of a boom or at the bottom, just so long as you purchase good quality, well located property in high density areas ( metro area capital cities), at or below fair market value, on a regular basis as fast and as quickly as you can reasonably afford.

I've basically been purchasing an IP per year. Currently we're into year 9 of this 10 year plan and to date we've built a multi $million property portfolio spread across Australia.

We've been purchasing new or near new property over older style property for several reasons, the main ones being (in no particular order) -

1/ To maximise my Non-Cash Depreciative deductions
2/ To minimise my maintenance & repair costs
3/ More modern & Attractive to tenants - thereby minimising potential vacancy rates
4/ Ask a higher rent - thereby Maximising yields

Without getting into the "which is better debate, houses or Units??", I prefer to purchase Townhouses & Villas with a 30% or greater land component thereby eliminating multi story units or high rise apartments, for several reasons. The mains ones being (in no particular order) -

1/ lower maintenance & upkeep for the tenant
2/ lower purchase or entry level into a Higher capital growth suburb area
3/ rapidly growing marketplace (starting both now & into the future) wanting these type properties. This is due the largest group of people to ever be born (being the Baby boomers and Empty nesters) starting to come into their retirement years. They will be wanting to downsize for the following main reasons - lifestyle & economic.
4/ greater tax advantages & effectiveness thus maximises cash flow.
5/ able to hold more individual properties spread across your portfolio - thereby minimising area over exposure risks by not holding all your eggs in only a few baskets, so to speak

I look to buy in areas with a historic Cap growth of 7%pa and/or are under gentrification. I look to where the Govt, Commercial, Retail, private sectors are injecting money. This ultimately beautifies and uplifts the area. People like the appearance / feel so move in creating demand.

I have found this lends very well if you are looking for short to medium term capital growth so as to leverage against to build your portfolio faster.

Getting back to CGA, as the name suggests it averages out the capital growth achieved on individual properties with in your portfolio throughout an entire property cycle, taking into account that property doubles in value every 7 - 10 years. Thats 7%pa compounding.

The easiest way to explain what Im meaning by this is to provide a basic example taking into account that all your portfolio cash flow will be serviced via Wages in the acquisition stage, Rental income, the Tax man, an LOC and/or Cashbond structure, and any other forms of income you have available.

For ease of calculation lets say we buy a property for $250k, so in 10 years its now worth $500k. Now lets say we do that each year for the next 7-10 years. Now you can quit the rat race.

So in year 11 ( 10 years since your 1st Ip) you have 250K equity in IP1 you can draw out (up to 80%) Tax free to fund your lifestyle or invest with. In year 12 you do exactly the same but instead of drawing it from IP1 you draw it from IP2. In year 13 you do the same to IP3, in year 14 to IP4, etc etc etc. You systematically go right through your portfolio year by year until you have redrawn from each property up to year 20.

So what do you do after you get year 20 I hear you say ?? hmmm..well thats where it all falls into a deep hole - You have to go get a JOB - nope only joking!

You simply go back to that first IP you purchased as its been 10 years since you drew upon it first time around and its now doubled in value ($1M) yet again - so you complete the entire cycle once again. Infact chances are you never drew each property up 80% lvr max , so not only have you got entire property cycle of growth to spend you still have what you left in it first time round that compounded big time. Now you wealth is compounding faster than you can spend it! What a problem to have.

Getting back to what I said in my opening paragraph about it does not matter where you buy within a property cycle just so long as you do buy, This is because you will not be wanting to draw upon it until 10 years later after its achieved a complete cycle of growth.

Well that’s the Basic Big Picture of CGA. Once set up & structured correctly it’s a self perpetuating source of tax free income indexed for life!

If you require any clarifications just ask.

With an update later that year

Following on from THIS thread.......

Well its taken a few months since my maiden Sydney IP shopping trip, however this afternoon I received a phone call from my solicitor to tell me settlement has now been effected.

It's a modern air conditioned 2 Bedroom Brick & Tile Villa with Remote entry Garage, in a complex of 10 other Townhouses/Villas located in South Wentworthville. Purchase price $353k.

Close to all the usual amenities people look to be near, such as Major shopping facilities (4 minutes to Westfields Parramatta), Public Transport, Arterial roads in and out of the area, high employment, education, recreational & medical facilities.

Its located in area where the Govt, Commercial, Retail and private sectors are injecting money, in a pocket under gentrification with old houses on big blocks being bowled over and either new 2 story houses being built or a small complex of villas and townhouses.

Things were delayed due to the vendor being OS on holidays and their REA lost the deposit cheque I sent them but overall things eventually worked out in the wash. Just had to focus on the big picture and not let frustration take hold.

Also secured a single lady in her mid/late 50's on a 12 month lease who has been there with her 2 cats for the past 8 years..She had found another place to rent because she didnt want to be left to try and find a place at the last minute if the new owner wanted to shift in themselves. I told her she is welcome to stay on however she will have to pay market rent as I will not be subsidising her rent like her previous land lord.

Market rent was approx $370-$380 per week however she's been paying $310 for a few years as she was a friend of the owner. She initially wanted a 5 year lease at $370 for the duration, however she didnt want to sign a lease with a 12 monthly rent review clause. I suggested she sign a 12 month lease which gave her the option to move or stay on and gave me option to still review rents.

Anyway, time for a celebratory drinks.

Here's an upbeat 2009 post from schmick in 2009

Our Success - Property No. 2

Hey Guys,

Well it's been a few weeks now since we signed the contract on property number two, so I thought I'd share with you all how and where we ended up.

For those that have seen my posts, my GF and I have been wanting to purchase a property in inner Melbourne. As we currently live in Collingwood, our preference was to purchase in the same area: Collingwood, Fitzroy, Fitzroy North, etc.

We looked at a number of deals, mainly in Fitzroy/Collingwood, however, missed out on a few early opportunities and thankfully so. It was interesting to see how quickly the dynamic at auctions had changed during the period Aug-Nov. Literally we saw prices jump 10's of thousands in such a short period of time. Because of this we were feeling down and depressed as we were effectively getting priced out of our desired market. We didn't think we'd end up buying anything and even considered going to the opposite extreme and moving to Epping!

In the end we ended up purchasing a 2 Bed / 2 Bath apartment/townhouse in North Melbourne.

How the deal came about was quite interesting. We had seen the property previously but figured that it would be well above what we were willing to pay. I was extremely suprised to see that the property was 'passed in' at auction. Y-Man and I were actually talking about buying after a property had been passed in at the last MIG and I told him there would be no chance of that in inner Melbourne in the current climate!

Anyhow, we called the agent the following Wednesday to see what exactly went down. We were in fact just about to offer on another property in the Unit Block we currently live in (also 2 Bed/2Bath) and I made sure that the agent was aware we were putting this particular deal on hold in order to talk to him!

The feedback we got from the agent on the auction was that buyer interest was there but nobody put up their hand . We decided to go and inspect the property the next day (few other parties in attendance) and following our inspection, I was at the Agents office the next morning (Friday) ready to sign a contract and give them our deposit cheque. Before going to the office I did query the Agent on the Vendor's expectations as the price on the ad post auction was above what we were willing to offer just to ensure we weren't wasting each others time!

So, offer and cheque signed in the Agent's office on Friday morning, offer accepted Friday afternoon. Negotiation went quite smoothly as the Vendor was keen to sell. He required the funds to purchase a partner's share in their business as his partner was relocating interstate. Our initial offer was rejected, however, we only had to counter once with an additional $6K. My strategy here was that the extra $1K between the half-way point looked on paper a little closer to the Vendor's counter but not entirely there. Agent told us that they were 'umming' and 'arghing' about it, but eventually decided it was close enough! Maybe we could have played hardball but if $6K was the difference between getting the contract counter signed or not, it really wasn't much in the longer term.

With some guidance from some forum members, I think we paid about market value or thereabouts.

So that's really it. The other property we were looking at in Collingwood eventually sold weeks later for around the same price. I'm thinking property we ended up purchasing will do a little better in the longer term. The bedrooms are a little bigger, the living and dining zones are separate, the courtyard is more useable and best of all the apartment is in a heritage listed building so it has that uniqueness factor. Together with being close to all the amenities that North Melbourne has to offer! The property is actually in the same block that DavidMc recently purchased which is a little weird! Hopefully he knows something I don't! Haha..

I've learnt a great deal from this particular purchase. I really enjoyed researching and attending local auctions. We experienced some lows when we were struggling to find a place and we enjoyed the highs when a place that met our requirements came to fruition! I learnt that leverage is a vehicle to build wealth and that property really interests me.

It will be interesting to see how our two properties actually perform over the next few years as we now have an inner and outer property albeit in Melbourne and the latter in Brisbane. Our strategy will be to hold this property (most likely it will become an IP at some stage) and rinse and repeat this cycle (equity release/purchase/hold).

Any future purchases however will be CF+ or as close to neutral as possible as this purchase is likely to prevent us purchasing again until 2011. We're OK with that as we now have exposure to the inner city. In the interim, this gives us time to increase our cash buffer, educate ourselves more and to also allow us to develop a solid strategy to move forward to the next property and beyond. On first thought, I'm already thinking a property in an outer area where the deposit and purchase/holding costs are less and most probably in Sydney or Adelaide. Inner purchases generally eat too much of your available capital and are initially heavily CF-

To finish, I'd just like to thank a everybody on the forum for all their input and guidance. It's refreshing to be around like minded people who have walked the walk! The depth of knowledge and experience here is amazing. We're lucky enough to now be able to put plans into action and I look forward to continuing my journey with you all into the future.

A special thanks though to buzzlightyear, JamesGG, DavidMc, Rob Williams and most importantly PT_Bear my mortgage broker! Thanks for structuring our finance to allow us to actually purchase this property!

Merry Xmas!

And a great update from bianca in 2005

Just realized I am a millionaire/ now what?

Hello all,

Thanks for taking the time to read my post. I am new to the forum, although I have looked in here occasionally year after year. I have read all of Jan’s books during the year, but have been to busy too implement the ideas to realy be able to say that I know what I am doing! But the time has come to set up some infrastructure and make my money work for me! It has all been trial and error and gut feeling up to now, and it has paid of pretty good. To make it as brief as possible, I will give some detail.

My husband and I have run a very successful business for the past 25 years, in the building and construction area. We are young 47 years olds.We want to take a year of to finish some projects, but also want to start our real estate portfolio in earnest, as a hobby, and also as a retirement strategy. The business will recommence after a year ( guaranteed) so cash flow after the “holiday” period will be taken care of. During this year, I want to be able to invest in some more property, to grab opportunity as it presents itself, and also to make the path for our changing lifestyle. We envision ourselves spending time in North Qld, Brisbane and the Gold Coast, at monthly intervals—our business will allow us to do this.

We have various loans for IP at present, with a lot of equity, but I guess over the years, I have not thought about how to structure these for maximum benefit. Our accountant is great at doing our tax, but is very conservative when it comes to property. Our bank manager loves us, and obtaining loans is no problem. However I have had to make up the game plan as I went along. We paid of our mortgage by the time we were 30 and all our IP’s have been built and held by us, over the years.

Our strategy has been to build upmarket houses for ourselves, hold for 5-7 years and sell, and build medium range IP’s and hold. We have also built our own factory, from which we run our business, and which is currently also receiving rent from outside parties.

Current picture is as follows:’

PPOR- $490000.00 / mortgage free

IP1- $1000000.00 / owner built property ( built over 5 years
IO loan- $ 203000.00 / available excess loc of $116000.00 which has sat in the account ready for use for the past 3 years

IP2- $320000.0
PI loan $142223.00- / Repayments $730 P/fortnight
Rented at $260 p/w to family member ( should be $310)

IP3- $280000.00
IO loan- $130000.00 / Repayments at $770.00
Rented at $260.00 p/w self managed

IP4- $510000.00 / Repayments at $1076.00
IO loan $189525.00 Rented at $420.00 p/w Managed by rental firm

IP5- $420000.00
PI loan $108450.00 Commercial/ Repayments at $1900.00 p/m
Rented at $350 p/w as well as owner oc

IP6- $200000.00 vacant land/ Repayments $600.00 p/m
IO loan $74000.00

IP7 $500000.00 vacant land/ Future upmarket home to be built in 3 years/ Ocean frontage/ loan free

IP8 $150000.00- Marina Berth/ loan free
Rented at $100.00

IP9 $750000.00 Of the Plan Unit/ current resale value
IO loan $470000.00 loan not yet drawn/ expected late 2006

IP10- $500000.00 New purchase/ Unit at Gold Coast
IO loan $450000.00 used $45000.00 cash deposit, but do not know if this was the correct strategy. Contract being signed this week

Apart from this I have a share portfolio of about $80000.00 and super etc is all in place.

Last valuations were done 1 year ago. I keep reading about the importance of valuations and refinancing etc.

Should I be looking at doing this- getting yearly valuations?

Is it better to combine some of the loans, and if so, why?

Should I be able to use my equity to finance some more property, without having to worry about the shortfalls?- (we need to ensure a years holiday with limited cashflow . Even if we build a house and sell it in this year, the week to week cashflow incliding the shortfalls, is not going to let us eat) I feel that there are definitely some opportunities out there at present and do not want to wait until after the year break to start. Our business is run through a company,all of the IP’s are run through our partnership, but I have a trust in place which remains unused, as I don’t have a clue on how to use it for my investment portfolio!

I was going to sell our PPOR to pay out the commercial property and the IP1 loan of $203000.00, to free up some cash. This will then become our PPOR for 5 years. Is this a good idea?

I was also going to sell IP4 to free up cash to enable us to buy more property, but I don't realy want to this as the rent is great, and the loan is small in comparison to its value. Do I need to sell this or is there an other way?

Can anyone make some suggestions??
( and by the way-- all our properties are in Mackay/ some have doubled in value over the past 2 years. The growth here has been enormous!)