Investing on your own...it can be done

Simon shows how enthusiasm and hard work pays off to secure a great property portfolio that gives you options in life....

This month our case study is of a 30 year single bloke, who now owns a property portfolio consisting of 7 properties for a street value of a tad under 3 million.

Simon met Todd approx 4.5 years ago with two properties in hand, located in Brisbane… Simon’s home town.  Todd refinanced his current mortgages and increased the loan so that Simon could again purchase another property, again in Brisbane.

Brisbane at the time was undergoing a mini BOOM and soon enough, Simon was again asking Todd for finance to fund a fourth property and Yes again in Brisbane. On each occasion Todd was telling Simon wHat he did for a living and that WA at the time was the place to be buying. Ah letting him go, he was doing pretty well to own 4 properties by age 26.

This was all possible as the property portfolio owned by Simon was almost neutral, the rents all but paid for the interest on the loans.

Finally after missing returns of 38% - 46% two years running, Simon decided to come on board with wHere Property and invest. At this stage, Todd restructured Simon’s loan to better suit his investment property game plan and purchased him a property in Aldinga Beach SA. During this time Simon also sold a property in Brisbane which was his Principle Place of Residence (PPR) before moving to Sydney and renting. Because of this reason, there was no Capital Gains Tax (CGT) payable.

This freed up some funds for Simon to again invest with the wHere group in Macarthur in Sydney at Ambarvale. We purchased a rundown 4 bedroom house that required Simon to spend approx $8000 on renovations. The renovations coupled with a high demand location, increased the rent on the house by over $40 per week, making it cash flow positive for him.

One of the downsides to the Rent and Invest strategy is that at times you get booted out of your property as the owner must sell during these hard times and this happened a few times to Simon. So the decision was made to buy a home with his girlfriend. They have taken advantage of a depressed Sydney market and purchased the worst house in the best street as this house will make the most capital growth in the area in the next 5 years.

After many long discussions with Todd, Simon will now place all of his beloved Brisbane properties onto the market as each lease expires. Once each property sells, he will put the profits directly onto his home loan, almost eliminating it. They have taken on some short term pain for long term gain.

During this process we will be working with Simon on getting his Self Managed Superannuation Fund (SMSF) up and going and buying a property in his super fund.

We will let him take 5 out until he sells a property or two then we will be back out there buying many more properties for Simon to then create a passive income for him for life.

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