How a 26-Year-Old Turned His First Minimum Wage Into a $3 Million Property Portfolio
A 26-year-old man who was earning $60,000 a year has proven how its possible for anyone, including Gen Y, to get on the property ladder.
Daniel Walsh, from New South Wales, has an impressive portfolio of eight properties across Australia’s east coast, worth $3 million.
The train driver – who is renting in Picton, south-west of Sydney, with his fiance – has investments in NSW, Victoria, Queensland and South Australia.
Young property investor Daniel Walsh (pictured) has an impressive portfolio of eight properties across Australia’s east coast
But the property portfolio he built over six years didn’t come easy.
At the age of 16, he started working as an apprentice auto-electrician for his father in an effort to save for his first home.
‘I knew that if I saved my money while living at home, I would be able to get ahead of myself before I move out,’ Mr Walsh told Daily Mail Australia.
‘So I pretty much worked my butt off. I was on an extremely low wage, making about $254 a week. I was doing extra hours after work.
‘Dad used to say “if you want to earn extra money, you can rebuild the starter motors for $5 each”. And it used to take me two hours to build just one. I would spend an extra four hours every afternoon to get that extra $10.
‘I was also working six days a week. So I was working every Saturday and using the extra money to put fuel in my car for work.
‘I know it wasn’t much money at the time but it was money I didn’t have. And that’s pretty much how I started saving.’
By the time he was 19, Mr Walsh dug dip into his pockets to make a deposit of $34,000 for his first property.
‘I bought a $32,000 car in the early days but realised I was losing a lot of money fast so I sold it for $11,000 to go towards the deposit,’ he said.
‘I went from a nice car to driving a bomb that cost me $2,000. There were a lot of problems with it but I continued to repair it to keep it going… It blew up a year later but I rebuilt it so I could get through.
‘All of my savings went towards my first property. I had nothing after that.’
The young man built his first home in Thirlmere in a semi-rural town in the Macarthur Region of NSW for a total of $342,000.
‘I knew the only way I could get into the housing market was to buy a block of land and build my first home,’ he said.
‘I even sold my skydiving equipment so I could put a driveway on my property.
‘Every single dollar went towards my first home. I was only earning $700 a week and had just finished my four-year apprentice.’
Building his first property also meant he was able to avoid paying stamp duty.
Mr Walsh then rented out the four-bedroom property for $470 a week, which helped covered his mortgage. Today, the home is valued at an estimated $600,000.
‘The philosophy I had set for myself was: “if I could buy one house, why not buy a second one?”,’ he said.
‘And if I could rent out two properties, I could do that to 10. From there, I started to build my portfolio.’
First property: The young man built his property at the age of 19 – and he was able to avoid paying stamp duty. He even sold his skydiving equipment to pay for his driveway (pictured)
About a year later, he managed to scrape together another deposit to buy his second property for $303,000 in the same suburb.
He gave himself a budget of $5,000 for renovation before he was able to turn it into a rental property of $430 a week.
‘I was there renovating every night after work,’ he said.
‘When I was growing up, I helped my parents renovate their homes so I was able to do the same to my home.
‘The second home needed a renovation. All the walls were damaged. I patched up all the holes in the walls, put new carpets in and repainted the property.’
But when he went to the bank to take out another mortgage for his third property, Mr Walsh was told he couldn’t because one home was used as collateral for the other.
‘About a year and a half later, I went back to the bank to get another loan but they turned around and said “no you can’t do that”,’ he said.
‘I found out the first two properties were cross-collateralised but I didn’t know what that was at the time,’ he said.
‘So I went to see a mortgage broker, who I’m still seeing today. He has 19 properties himself and he was able to teach me how to uncross the loans.’
The $5,000 budget: Mr Walsh renovated his second Thirlmere property so he could rent it out
The property in NSW was fully renovated and has since been rented out for $430 a week
After months of planning and financing, he was finally able to take out a third mortgage.
And from there, he found a strategy for his investments by searching for low-priced suburbs with established properties in the highest yield rental postcodes.
‘At the time, I didn’t have much money so I was trying to find affordable houses that still have good yield prices before they go up,’ Mr Walsh said.
‘I was looking at areas with a bright future, finding out if infrastructure was coming to the suburb or whether there would be a demographic change.
‘I was researching every state and looking for the up-and-coming suburbs – and that’s how I was inspired to keep buying.
‘I pretty much plotted what I needed to achieve in 10 years and where I’ve got to hit my goals, and how I was going to do it.’
He went on to buy properties in Brisbane’s Crestmead and Deception Bay for $305,000 and $259,000 respectively in 2014.
And while juggling work as a train driver, Mr Walsh said he has been able to pocket around $25,000 a year from his rental properties.
Now the property investor, who earns $77,000 plus overtime a year, owns eight homes – and he’s not prepared to stop expanding his portfolio just yet.
‘I’m looking at properties that are still the same price as 2009,’ he said.
He purchased a four-bedroom house in Queensland Raceview for $310,000 in 2015
The property investor now owns eight properties, including this property in Picton, NSW
While his portfolio is worth $3 million, his next plan is to work towards $4 million by the end of next year before he reaches his $5 million target.
And now he wants to share his tips for those struggling to buy their first property, as he urges them to ‘start looking outside the state for potential growth’.
‘People need to start thinking differently,’ Mr Walsh said, as he revealed his new business – Your Property Your Wealth – where he hopes to educate others on how to build their own property portfolios.
‘If you’re looking in Sydney or inner city, you won’t be able to find anything affordable. Instead of looking for hotspots, I tried to be two steps ahead by looking elsewhere.
‘There are a lot of other states with very affordable homes with higher rental yields. There are affordable properties in Queensland under $400,000 with great yields.
‘And always have a plan of attack. People always say they will do things but they don’t do it. Take accountability and start as soon as you can.’
SOURCE: The Daily Mail
POSTED: March 2, 2017
AUTHOR: Cindy Tran for Daily Mail Australia
@Jurds Real Estate – Cessnock and Hunter Valley Wine Country Property Experts – the place to buy, sell and lease property in Cessnock and the Hunter Region.