Discover the 6 secrets to successfully owning 10 properties in 5 to 10 years…
PLUS 9 common mistakes which will set you back years and cost you hundreds of thousands of dollars!
It’s no secret. Australians have a love affair with property.
Over the years investing in property has been the predominant way we’ve grown wealth. With the property boom, it appears to be ridiculously easy to make money. Most investors could expect to double the value of their property within 10 years.
But times have changed. What was once a sure fire way to get wealthy and financially independent has proved to be elusive for many Australians who’ve actually lost significant money on their investments. Mining boom towns like Perth have gone backwards.
Sydney and Melbourne might be growing, but it’s getting harder to find pockets where you can still find properties which will return a decent growth return (both in yield and capital)
Did you know the vast majority of property investors lose money over the medium to long term!
The old “buy and hold” strategy simply doesn’t hold water in today’s market.
According to the ATO and Corelogic, 72% of property investors only own one property and 66% made a $10,000 loss per property!
So is it still possible to build wealth through a property portfolio in 2017 and beyond? The answer is a resounding yes! But only if you do it right.
Over the next few pages we’ll show you how you can successfully create wealth through investing in property. We’ll also cover some of the fundamental mistakes investors make… mistakes that set them back years, so they never reach their goals.
Secret 1: Your “Why” - Knowing the Big Picture
You’re investing for a reason. It may be to eventually retire in comfort, leave money to your kids or some other legacy. Whatever your reasons, you need to have some idea of how much money you’ll need because this will affect how you build your portfolio.
Capital appreciation happens over decades, so obviously the earlier you start, the better. Starting in your 20’s and 30’s would be ideal. Having said that, you could still start in your 50’s and even 60’s if you have the right strategy to enable rapid wealth building.
Secret 2: Treat this like a business:
Most Australians invest in only one property besides their own family home. It’s usually a buy and hold strategy where you’re looking for long term capital growth.
I’m in a position to retire…
Since 2011 I’ve purchased 10 properties utilising Paul Flynn’s guidance and advice. Paul taught me what to look for, how to do the due diligence and above all make sure I buy well, making money on the way in. Through Paul’s expert mentoring I’ve become a successful property portfolio owner in my own right.
Investors we work with buy up to 10 properties in 5 years, treat it like the business it is and build up significant wealth. Our clients benefit from our four decades experience personally buying over 1,000 properties. Having been through a number of economic cycles, we know when and where to purchase, how to maximise yield and when to sell.
Secret 3: Finance Structures & Borrowing Capability:
Buying your own home to live in is not the same as buying multiple investment properties.
This is a business and you must structure your property investments correctly to protect your assets while minimising your tax and maximising your returns. Having bought properties in various entities and structures we know from firsthand experience what works and what can get you into funding trouble down the track.
The structures you use will have an effect on how Banks will view your liquidity. Get it wrong and you won’t be able to borrow money to buy subsequent properties.
Investment structures also affect accounting costs!
Our clients benefit from our knowledge and experience. We know exactly how to present you to various banks so you maximise your ability to build your investment portfolio, while reducing your costs.
These are a few of the issues the unwary face:
Secret 4: Knowing what to buy and when:
The cardinal rule of investing is buy low and sell high. Put another way, the money is made on the way in.
Our job is to help you find undervalued investment properties in areas where there will be sustained population and economic growth, meaning capital values will consistently rise and you’ll never be short of tenants.
We accomplish this through our extensive understanding of local markets, growth areas, relationships with Real Estate Agents and our own thorough research.
We attend 30 to 50 auctions a month looking for undervalued properties which we then place an option on, offering them to our property investment clients.
They walk their talk…
The main reason I trust Paul and his team is that they walk their talk. I’m very happy with their level of customer service, and would recommend them to anyone who’s in the market to invest in property.
Secret 5: What to hold, what to sell:
Remember, investing in property is a business and should be treated as such. Therefore this is not a set and forget! Markets go in cycles and you need be flexible and not become emotionally attached to your properties. If capital growth and yield aren’t there, sell the property and invest in another one!
Secret 6: Diversify Your Portfolio:
All investments go up and down in value.
Rather than buying one expensive property which puts all your eggs into one basket, investing in 10 lower value properties ensures you balance your investments, lowering the risk should any one property under perform.
We accomplish this via our “Blueprint to Property Success” mentoring program which precisely lays out the steps you should take and select properties you should buy.
We actively and professionally manage your properties, maximising your yield and capital growth. Let’s move onto the expensive, common mistakes.
9 common mistakes which will set you back years and cost you hundreds of thousands of dollars!
Shockingly, over the decades we’ve seen 95% of investors make critical mistakes that have set them back years.
Some never recover! These are the most dangerous ones.
Mistake 1: Getting the wrong advice:
Real Estate Agents are NOT on your side. They represent vendors and only get paid when someone buys the property. Aka, you! They don’t care whether it’s a good investment or not. They don’t care about your finances, your goals and aspirations.
Mortgage Brokers and Conveyancers fall into the same camp. And don’t get me started on backyard BBQ conversations.
As highly experienced, completely impartial professional investment property Buyer’s Agents, we are exclusively on your side. We study the market in great detail, understand trends (both up and down) and only recommend properties which suit your specific requirements.
Trust is critical
Trust is one of the main factors I chose to become a client. Paul Flynn and Santosh Nune walk their talk by being prepared to invest in any property they recommend to their clients. This is a level of commitment and guarantee that is hard to beat.
I’m more than comfortable working with Paul and Santosh, and I’d recommend them to any of my family and friends who are interested in property investment.
Mistake 2: Setting and forgetting:
You’d maintain your own home to improve the value, wouldn’t you?
You need to do the same for your investment properties. Your cash flow/income comes from rent. Maintaining the property means attracting and keeping a better class of long term tenants which improves yield. It often doesn’t take much. New paint, carpets, cupboards etc. can go a long way.
Strategic improvement like remodelling or adding a bathroom can significantly improve the “bank value” before you try and refinance to buy your next property.
And when we do source a property, being on your side means we negotiate like hell to get you the best deal possible. Remember, money is always made on the way in!
Mistake 3: Relying on traditional Property Managers
When was the last time you had a property manager proactively give you advice on how to improve your yield? Probably never!
It’s just not part of their job description. They’re too busy running around like blue arsed flies with open houses, collecting rent etc.
At Paul Flynn Property Group we employ highly experienced Property Managers who work proactively on your behalf. We advise you on rent, maintenance, strategic improvement etc.
Mistake 4: Not leveraging your equity:
As the capital value of your investment properties rise, you need to strategically release the generated equity to borrow for the next property.
The operative word though is strategically or you risk creating a house of cards where one mistake can bring the whole lot crashing down like a house of cards.
With our ongoing Property Blueprint Mentoring system you’ll know when to release equity, how to present your case to the bank in the most favourable light and most of all, minimise your risk of things going wrong.
Mistake 5: Building a Granny Flat
Granny flats appear to be a great way to add value and leverage. But for most investors they’re not!
Over the last 10 to 15 years we’ve comprehensively proved that buying free standing property will give you a far better equity return, allowing you to borrow against it.
For example a property purchased for $250,000 will double in value over 10 years. Assuming you borrowed 80% or $200,000 you’ll have $300,000 available in equity. Using that you could purchase 2 additional properties and realise $500,000 in 10 years by selling them.
Contrast this with building a Granny Flat for $110,000. Over 10 years you’d receive $50,000 to $70,000 gross rental income or 3.5% to 4% return which is equivalent to interest earned in an offset account.
A Granny Flat is a defensive strategy which only works if you have the cash and can’t borrow funds. Optimally you should be over 55 when tax breaks apply as you transition to retirement or are retired.
Mistake 6: Buying off the plan:
Remember, money is made on the way in so your goal is to always negotiate the best buy price.
If buying a property off the plan, you’re paying for land, development and marketing costs. Each entity in the chain from original land seller, developer, marketer to final real estate agent needs to add their margin. So you may well pay up to $50,000 over the odds just to buy a new property.
Therefore you’re always better off buying an established property where you can negotiate with the vendor directly cutting out any middlemen whose self-interest revolves getting the best price for themselves (so you lose).
Paul and his team are really, really good for long term property investors who want to buy in South East Queensland as they know this area like the back of their hands.
Mistake 7: Pushing for Rent Increases:
Most often a bird in the hand is worth two in the bush! A tenanted property brings in income. Trying to push up rents could see you lose your tenants. And depending on the market at the time, you could find yourself with an empty property for extended periods.
Remember why you’re in the game. It’s for capital growth. Understand that the rental market is anti-cyclical to property prices!
Mistake 8: Forgetting that Cash flow is king!
You need consistent cash flow to service your debt. Which is why only relying on negative gearing strategies are inherently dangerous. Forking out more money than comes in from rental income means you’ll run out of cash to pay off the loans (even if they’re interest only).
Working with us ensures you will have the right mix of properties in your portfolio that provide high yields meaning you can leverage your investments.
Mistake 9: Relying on your portfolio to fund your retirement:
Yes, we all want to retire in comfort and believe building up a property portfolio will help achieve this. But realise that unless you’ve paid off all the loans and have unencumbered properties, you won’t have enough cash flow to fund your retirement.
At some stage you will need to strategically divest yourself of some properties to pay off the rest and provide income you can draw down on.
How the Paul Flynn Property Group can help you create wealth
At Paul Flynn Property Group we help our clients build portfolios with smart, low risk property investments that positively change their lives & that of their families.
Our goal is to help you invest in at least 10 high yield, solid capital growth properties in 5 years.
Exactly how we go about this is beyond the scope of this document. Suffice to say our strategy involves helping you buy solid investment properties in the “right areas”. We do this by heavily researching locations for high capital growth potential and future performance. Each property is put through a 35 step checklist to ensure it meets our stringent criteria!
The properties we recommend for you are all designed to return maximum capital growth over the shortest period of time. Capital growth is how you get wealthy long term.
Common Investment Questions
Who are we and why you should trust us?
Founder, Paul Flynn has been investing in property since the age of 18. Over the last 30 years he has purchased and settled over 1,000 properties for himself and his clients.
At any one time Paul is the registered owner of anywhere between 35 - 70 properties.
A strong believer of the fundamental premise “Property is one of the finest gateways to wealth creation”, Santosh began purchasing property in 2006.
An initial investment of a modest $30,000 deposit quickly went sour as Santosh neither had the required experience nor mentors. Having realized this mistake and shortfalls, Santosh invested time and efforts in identifying and building team of experts who could help him achieve his goals.
Working with Paul Flynn, he multiplied his portfolio through purchase of low risk but high return property investments and now manages a multi-million dollar property portfolio for himself and his family.
Santosh joined the group as a Partner in 2015
Bought for 25% under market value!
My first purchase through Paul Flynn Property Group turned out to be a really good deal. The property settled 25% under market value. This means that I am making money on the property right from the word go.
Given the above, I’m more than happy to pay Paul and Santosh their fee. It would have been a lot harder or maybe even impossible for me to get hold of this property at that price.
Your Next Steps…
We understand that investing in property is a big decision especially if you’re a first time investor. Therefore we’ve put together a Blueprint to Property Success road map to help you every step of the way.
Your first step is to schedule a free no obligation consultation where we’ll spend between 45 and 60 minutes together discussing your current position, goals and how we could help you achieve them.
We will create a comprehensive plan that lays out the steps you’ll need to take to achieve wealth.
The Blueprint is valued at $550, but it’s yours with our compliments. There’s no obligation for you to buy properties through us.
Remember, it’s never too late to start. No matter what your age or your current circumstances, make a decision to start investing. It’s your future at stake. So I’ll leave you with one last thought.
The biggest mistake that will stop you from reaching your financial goals is failure to implement.
Call us now on 0400 411 569 or 07 3208 3088 to get started with on your Property Success journey.