How Did You Go From One Property To Many?
How did you go from one investment property to many? Did you have to wait for growth or how were you able to expand your portfolio?
Ryan: The next question I’ve got is please tell us your story about how you went from one property to many. Did you have to wait for a growth period to buy the next property? Maybe just a short summary because otherwise well be here all day.
Ben: Yeah. Long story short I was lucky enough to finish university at the time when the last major recession was ending. And I was lucky enough to also be in Sydney.
So I bought my first property in a suburb called Miranda in the south side of Sydney when I was 24. And then later that year I used that residential port to buy a suburb on the Central Coast called San Remo. Scum Remo as I like to refer to it.
Ryan: How did you get from Miranda to Scum Remo, San Remo, sorry? Did you have to wait for Miranda to grow or did you like resave the deposit and go again?
Ben: The cool thing about that time in the marketplace was there was a massive first home buyers grant where you got free stamp duty plus a big government concession for existing properties, and unfortunately that doesn’t exist anymore.
That was the government artificially stimulating the economy and keeping us out of the recession. So I used the government’s money for the first time, and then my mom and dad actually lent me $10,000 for the first property, which I didn’t need because of the government grant. So I used that 10 grand to go put down a 5% deposit on a $213,000 house in San Remo. And that was how I did it.
At the time I was earning under 50 grand a year, as a graduate for IBM and was lucky enough that 10 grand was all I needed to get into the market at that time. I saved that money over the course of 6 months or whatever and made it happen.
Ryan: What about jumping to property number three? Did you wait for any properties to grow or did you save again or get a gift from your parents again or something?
Ben: No, that was the only lucky hand that I ever had, which I’m so grateful for. So I had to wait 18 months after that. I’ve actually never used equity once to buy a property. I know most people use equity. I’ve always just focused on saving and probably doing it the way hard way.
Ryan: I like never knew this about you and didn’t know [crosstalk 00:02:20].
Ben: I’ve never used equity once, cause I’m completely scared of risking cross-collateralization, so I just save my deposit. If I can’t pay for a deposit out of cash, I just don’t buy.
Ben: Which has probably stopped me buying about 10 properties, but that’s what I’ve done.
Ryan: But you’ve been pretty successful, so you know, and it’s worked.
Ben: Getting to property three, again at the time I was lucky cause you could put down 5% deposits on a property, so I saved for that 18 months. At that time, my third property was with my now wife, and just saved our asses off.
Like literally had nothing left. Like this was a time in my life where I didn’t understand risk properly and, you know, as soon as I had a deposit I would buy.
So we just put everything on the line including like a $2,000 credit card for the solicitor’s fees and just jumped into the marketplace and then did a renovation on that property and flipped it within about nine months.
And that deposit gave us two deposits for another two properties, and that was really the start of a much quicker progression because we learned how to make chunks of money rather than just saving it so we could move forward a lot faster.
Ryan: Cool. Hey guys. I hope that you enjoyed the answer to this question which came from our live Q&A episode with Ben on YouTube. We will be doing more of these in the future.
If you want to check out Ben, then he is offering free strategy sessions to On Property listeners. To find out more about that, go to onproperty.com.au/session, and you can see all the details over there. That’s it for today, and until next time, stay positive.