It’s tough for the younger generation in today’s property market.
There are so many opportunities out there…
But those opportunities seem just out of reach for the younger people. It’s so hard to get that first foot onto the property ladder.
Every loan application brings with it some heartbreak as you just can’t get what you need. Eventually, you feel like giving up and renting is the best option. At least you’ll finally be able to move away from home and gain some freedom.
About 18 months ago, Emma found herself in this exact position…
Emma came to us while working full-time as a hairdresser. She says that she didn’t really know what she wanted to do with her life at that point. She’d just been through a breakup and she wanted to create a transformation.
For whatever reason, she found herself drawn to property.
But to start her journey, she’d need to buy a property of her own.
That’s when she hit her first stumbling block…
Emma learnt that she had so much to learn after attending her first I Love Real Estate seminar. She grasped the idea of renovating to build value, as that’s something her parents did. But when it came to concepts like subdivisions, she felt completely lost.
So, she put the work in and learned as much as she could. Finally, she felt ready to buy her first property…
Only the bank wouldn’t lend her enough money.
She could only get a loan for $300,000, which wasn’t enough for her needs.
Emma decided at that point that she needed to focus more intently on property. So…she quit her job as a hairdresser.
She started to subcontract for a lingerie company, which didn’t work out as she’d hoped. Finally, she decided to stick with what she knew and went back to hairdressing. Only now, she worked as a subcontractor rather than as a full-time employee.
This gave her the spare time she needed to really buckle down and learn everything she could about property investing.
Emma still wasn’t in a position to use her own money to start investing in property.
But with our help, she learned about joint ventures and how they could provide her with a route into investing.
Working with a joint venture partner, she managed to gain control of her first property.
Unfortunately, her first deal didn’t work out quite as she’d hoped. After she and her partner secured a property for $612,500, they got to work. However, they found that they’d need to sink $70,000 into extending a road to make their project work.
That ate up too much of the budget and they chose to pull out of the deal.
The second deal went much the same way. This one was a one-in-seven subdivision that she had to pull out of because of the expense.
By this point, she’d definitely learned her lesson about due diligence.
The third deal that came her way looked promising at first. A two-to-eight subdivision, it seemed like just the deal to get her moving. Unfortunately, development complications reared their ugly heads again. But this time, she caught them in due diligence and chose not to go ahead with no loss to herself.
Unfortunately, a fourth potential deal ended up being another false start. For a while, Emma found herself wondering whether property investment was the right choice for her.
The bad news is that Emma hasn’t yet secured her first property.
However, the four false starts she’s been through have taught her an enormous amount about the industry. Now, she knows what she needs in terms of borrowing capacity and strategy.
All that’s left is to find the right opportunity.
So, even though she’s still working as a hairdresser, she’s now just biding her time. Emma’s building her borrowing power and has all of the foundations in place.
When she lands that first big deal, she’s in the perfect position to take advantage of it.
Emma’s still very much a work in progress as an investor. But there’s still plenty that you can learn from her story.
Emma wouldn’t have the knowledge that she has now if she didn’t commit herself to property investing. She certainly wouldn’t have the plan of action that she now has in place.
Quitting a job to invest may not be the right choice for everyone. However, you still have to make time somewhere to learn about all of the strategies available to you. If you don’t, you’ll end up investing in something that doesn’t generate returns.
Due diligence is one of the most important aspects of the investment process. You have to know as much as possible about a property before you commit money towards it.
Emma’s early false starts came because of a few due diligence slip-ups. But now, she knows exactly what to look for when she’s ready to resume her journey.
In Emma’s case, it would be all too easy to get impatient and just start to move forward with a deal. Many in her position ignore the red flags because they’re so keen to get started on a project.
That’s how investors end up losing money!
You need a strong foundation of knowledge before you take on any investment or development project. And if your research says that something’s unlikely to work, it’s always best to walk away and look for another opportunity.
Emma’s struggled with many of the issues that younger investors have to deal with. Having less access to capital and financing makes it harder for her to move forward on deals.
But she now knows what she needs to do to succeed. And with a little patience, she’ll have her first property.
From there, the possibilities are endless!
Patience will lead to profit. The key is that you keep learning and don’t rush into any deals that throw up red flags.
DB
