Are you looking at another 20 or 30 years of work before you’re finally able to retire and do the things that you want to do?
That’s the situation that so many Australians find themselves in right now.
This article will tell you how one couple turned that all around so they could achieve the life they wanted in just a few short years.
Plus, you’ll get some tips on how you can do the same.
88% of people who turned 65 last year retired on the pension.
That’s the situation that Sanjeev and Illa wanted to avoid. Like so many Australians working in 9-to-5 jobs, they found themselves heading towards a precarious retirement.
They need to make a change.
That’s what led to Sanjeev attending an I Love Real Estate seminar in Sydney. Illa was six months pregnant at the time and the couple wanted to find a way to secure the future for their family.
Sanjeev came back from the seminar feeling inspired.
But the couple wasn’t in a flush position. They had their own home and they already had one investment property. However, they also had credit card debt, in addition to a few other loans, that stopped them from taking things further.
Specifically, they had $25,000 in credit card debt related to the investment property.
But the couple had more personal reasons for wanting to get out of the 9-to-5 rat race. Sanjeev wanted to leave full-time work so that he could spend time taking care of his parents as they got older.
The problem was that between the mortgages on the two properties and the credit card debt, they had negative cash flow.
Not the best starting position!
After attending the seminars, they decided that they needed to clear the credit card debt.
The couple accessed some of their equity in their home to do just that. This left them with about $20,000, which gave them serviceability of about $200,000.
This gave them enough to get into a joint venture deal on a small land subdivision.
That made them a little bit of money. But more importantly, it gave them an education on what they needed to do to make their investing journey successful.
They moved onto another deal for a four-bedroom house with one bathroom. They spent $50,000 on renovations and rented out each room individually.
That property now generates a positive cash flow of $11,000 per year.
Next came a house with a granny flat, which they built all under one roof in a dual occupancy setup.
That generates another positive cash flow of about $10,000!
Another subdivision followed. The couple converted a four-bedroom house with two living areas into a five-bedroom property.
Again, they rented it our room-by-room.
That one now has a positive annual cash flow of about $20,000.
As we speak, they’re working on another subdivision project. When it’s completed, they estimate it’ll offer another $22,000 in cash flow.
With the project they’re currently working on included, Sanjeev and Illa have a passive income of $63,000 per year.
Plus, they have $900,000 in equity built into the properties they own.
But it’s not just the property portfolio that’s the big difference for the couple. Sanjeev says that he’s cried more over the last couple of years than he has in his life.
These aren’t tears of fear.
They’re tears of gratefulness because he knows how much of a huge difference these investments make in his and Illa’s life.
The couple now has another goal:
Be out of full-time work within the next five years.
They’re well on their way to achieving that goal!
Now, let’s look at some of the lessons that you can learn from Sanjeev and Illa’s story.
Most people in the couple’s position would assume they can’t build a portfolio.
With $25,000 in credit card debt and two mortgages to pay, they weren’t in the greatest starting position.
After taking care of the credit card, they had something. Serviceability of $200,000 may not sound like a lot.
But it’s enough to get started.
A joint venture deal gave them a route in. But the key lesson here is that you can start small. As long as you have the right advice, there is a route into investing.
Speaking of advice…
As Sanjeev puts it:
“What happened is I was getting the best advice, which helped us to push forward quickly.”
The key to succeeding in property investment is to learn as much as you can. Before coming to the I Love Real Estate seminar, the couple had no idea that they could leverage subdivisions.
That simple change in strategy helped them to generate so much more income from their investments.
They also learned how important positive cash flow is. Plus, they learned who they’d have to deal with and how to do it to put their strategy in place.
Sanjeev says that he stopped listening to his friends and family when he started his journey.
He says:
“So we never listen to even our family. They say, oh, you’re a small kid, don’t take loans.”
Your family and friends may want to protect you with the advice that they give. But if you let naysayers get into your head, you’ll never move forward.
Have confidence in your strategy and education.
So many average Australians assume that property investing is out of their wheelhouse.
They think that they don’t have enough money to get started. And even if they did, they wouldn’t know where to start.
Sanjeev and Illa’s story shows us how valuable a great education is. It can lead you to strategies that you’re not going to find out about online.
But more importantly, it shows that even those with humble beginnings can achieve amazing things as investors.
DB
