|00:03||Make money in real estate without making big Financial Mistakes.|
|00:07||Effortlessly target the most profitable property deals and nail them.|
|00:09||The Real Deal to getting out of the rat race and retiring sooner.|
|00:12||Avoid the big mistakes that cause most people to quit before they really get started .|
|00:17||How Chris and Jason went from $600k in the red to 8 properties in under 3 years. Find out how they did it.|
At the time, all I wanted to do was get off the hamster wheel that I was stuck in.
The thing is I was a shopaholic… I had the best shoe and handbag collection but it all went on credit and I struggled to get it under control.
I felt terrible because I was never taught money management skills from my family, it’s not taught at school and I just struggled to make ends meet at the time. To make things worse, my now husband Ed, at the time was going through a messy divorce so together we were a financial basket case.
What was so frustrating was we were working in the corporate world earning a great income but together we had nothing to show for it. We knew something had to give…
At the time, camping holidays were all we could afford, so on the Queen’s birthday long weekend, we backed up the dogs and headed to the Victorian boarder along the Murray river. It was a misty night as the fog rolled in and we were sitting around the campfire, sipping on a glass of red to stay warm.
While on this trip, I took all the paperwork for our superannuation as I wanted to calculate what our superannuation would look like in retirement.
To our absolute horror, we realised that together, we would be retiring on an income of $28,000 per day at 65 years of age.
We knew it would not be enough to sustain the lifestyle we wanted.
Then, something amazing happened…
We realised that if we did nothing, we would most certainly be guaranteed a porper retirement so the fear of doing nothing became greater than the fear of doing something.
This was our line-in-the-sand moment.
That’s when we brainstormed ideas for creating wealth for ourselves. We looked at getting into share trading, (we both didn’t like that idea), then we thought about starting a business (we both thought it would be too risky to give up our secure corporate jobs), yet the idea of buying property really resonated with us.
This led to us reading books and magazines about property investing and how to do it. We attend many seminars, talked to people and immersed ourselves as much as possible to explore how we could leverage our incomes and get onto the property ladder.
It became crystal clear that property was the way to go and how throughout history, the wealthiest people in the world invest in real estate and made money.
So we also wanted to be able to make money in real estate but without making any huge Financial Mistakes.
Returning from our camping trip with such enthusiasm and vigor, we started to do a budget to clear all our debts and create a savings account that we used for our property investing.
We realised that with little effort, it wouldn’t long before we were back on our feet and in control of our money.
However, we also learned that reading a few books and magazines wasn’t going to get us to where we wanted to be and that we needed to find experts who could help us fast track our journey to retirement.
As a result, we found a mentor who would teach us all the steps to building a property portfolio and within months we had purchased our first property.
Six months later we bought our 2nd property and while on our honeymoon, we purchased our 3rd.
Suddenly, we were finding deals easily and building momentum.
That’s when we realised that the secret to building a property portfolio and get out of the rat race was to have a strategic, disciplined and low risk approach to investing.
Our plan was to continue saving for deposits and use our equity to buy more investments.
We were on a roll…
When we got our tax returns, we would save it along with our bonuses, and savings to create more deposits. Before we knew it, we had several properties under our belt and feeling good about our strategy.
We were living off my income while Ed’s income covered the shortfall on the mortgages (negative gearing) and saving the balance. So all in all… we were flying.
But there was still a problem…
With our next deposit in hand ready to strike again and purchase our next property, we decided to go to the bank to find out how much more we could borrow and to our absolute horror, the bank said ‘no, we will not lend you any more money’.
I didn’t understand why…
We had saved our deposit, we were paying all our mortgages and bills on time, we were still saving and our corporate jobs were safe… so what was the problem?
The bank manager told us we were ‘too rent reliant!’
Who would have thought… ‘too rent reliant!’
According to the bank, it meant that if one of us lost our job, we would be in a world of financial pain.
Despite our attempts to explain we had a buffer for such a thing happening, the bank was not prepared to take the risk with us.
This is where we had made the mistake of being too negatively geared.
Most investors would have quit at this point but I didn’t.
So after six properties our property investing momentum came to a sudden grinding halt. Out of nowhere the banks just stopped lending money to us. We had hit the proverbial “financial brick wall”, because in the eyes of our lenders we had too many loans and as such posed too high a risk for them. Even though we could afford to make the repayments on more loans, they simply weren’t willing to extend any further funds our way.
Not to be deterred, we started to learn more about risk and how the banks really operate. The result was that we fine-tuned our approach.
We began researching joint ventures and positive cash flow properties, and before too long, we found a cashflow property. I went back to the bank to see if they would lend us money for a cashflow deal. The answer was ‘yes’. In fact the bank asked if ‘another million to tie us over’…go figure.
As a result, we’d added six more positively cash flowed properties to our portfolio in the space of six weeks. This pacified lenders who became suddenly happier to sign off on the loans and continue doing business with us. We realised our investing strategy needed to be a balance between positive cashflow and high growth properties.
We continued to navigate our way forward and adjust our strategy until we had over 20 properties. It was at this point that I retired from the corporate job – forever!
We learnt a very valuable lesson, and realised that each time there was a roadblock, that we’d discover some extra piece of the puzzle each time things got tough with our investing. We ended up getting so frustrated that we decided to create a course that taught everything we learned about how to build a property portfolio, no matter what the market conditions.
We chose to call it the “Property Portfolio Formula” and it’s the Real Deal to getting out of the rat race and retiring sooner.
We thought if we could create a system that made it possible to build a property portfolio without all the hassles we experienced, then we’d be really happy.
After using all our investing experience, tweaking and testing every single aspect of what it takes to build a balanced property portfolio fast, we created the Property Portfolio Formula.
I can now buy high performance properties, no matter what the interest rates, location or market conditions, easier and faster than hiring a buyer’s agent and paying their outrageous commissions.
We then started to let other property investors use our Property Portfolio Formula.
As a result of all this we were able to achieve the following:
At the age of 37, I was able to retire with a portfolio worth millions, paying me an income and the most exciting part about it was that I never had to walk back into the corporate office… ever again!
And I want this for you! To be able to get out of your rat race and have the freedom to chose what you want and when.
You see, most people, experience roadblocks because of some simple mistakes and quit before they really get started. In fact, my best-selling book is all about the biggest mistakes property investors make and I give you the solutions on how to avoid them.
One of the mistakes is: how waiting for the market to change could cost you big time.
I hear this all the time: especially at the moment, people wanting to wait for the market to change before they start investing. I don’t understand it. What are they waiting for exactly?
If they are waiting for the market to ‘bottom out’ so they can pay the lowest possible price, how are they expecting to know when the market has hit its floor?
More often than not, we don’t know the absolute bottom of the market until we’re looking back retrospectively.
Whether you are a new investor or you have a couple of properties under your belt, sometimes it is best to get into the market or keep momentum than to fuss over waiting for the market to bottom out. I would rather you purchase a property (at market value) growing at 8 per cent over the coming years, than to pour your savings into a bank account earning you 2 per cent per annum.
Another mistake includes: thinking that a high credit card limit is good, but the truth is shocking.
I often talk to investors about credit cards because just like eating junk food daily is bad for your health, many people don’t realise just how toxic credit cards can be for your property investing success.
For example, I was chatting to an investor who told me that he had a platinum card with a $20,000 credit limit. He thought this was a proud achievement and as a result, he was quite unprepared for my reaction – as my advice to him was to cancel the card immediately.
To begin with, he didn’t need a $20,000 credit card limit in the first place so having access to that much money wasn’t necessary. But more importantly, he didn’t have an understanding of what his $20,000 credit card limit was doing to his borrowing potential.
At the time, he was struggling to get finance to fund an investment property purchase. He was shocked when I explained to him that for every $5,000, he had in credit card limits, he was actually limiting his borrowing power by up to $25,000.
My golden rule with credit cards is to reduce the limit to $5,000 – or less than that if you can, especially before applying for a loan.
And my favourite mistake, paying attention to the nay-sayers could have you quit before you really get started.
The most expensive advice you can get is from a poor person. Unless your friends and family have achieved the level of financial success you want to achieve, you’d be wise to seek your advice elsewhere. Friends and family only want to protect you, but sometimes their own fears and insecurities can prevent you from creating your wealth and financial security.
The biggest mistake of all that anyone can make is … never buying a property in the first place.
You see, this is why I created the Property Portfolio Formula so that I can help people like you to get onto the property ladder and get out of the rat race on your terms.
Now that I am retired from my ‘rat race’ job, I have the freedom to create or do anything I want. For me, the decision was easy… if I can help others to achieve similar results from property, then I could do it for the rest of my life. Hence the creation of Real Wealth Australia back in 2006.
By creating the Property Portfolio Formula, I am able to enjoy my own waterfront dream holiday home, send my child to private school, travel the world and spend quality time with friends and family, all while having a property portfolio that gives us a passive income.
And in the end, all of this means I’m now able to spend time relaxing and doing the things I really am passionate about, like spending time with my husband and daughter AND be able to give back.
After cyclone Pam hit the small island nation of Vanuatu in 2015, I became one of the founding members of SHaRM Foundation – a charity dedicated to rebuilding schools and supporting the local communities to prosper. If you want to know more about my work with SHaRM, go to www.SHaRMFoundation.com
There are so many examples of my students who have applied my system and achieved success over the years, (you can read all about it on my website) but let me share an example, Chris and Jason… they went from $800k in the red due to a bad financial decision to turning it all around and buying 6 properties in under 3 years.