November 20, 2019 by Dymphna

How Henry Escaped $70,000 of Credit Card Debt and Built $350,000 in Equity

So many Australians get caught in the downward spiral of debt. With a series of real estate deals, one man turned his life around. This is his story.

According to the Australian Securities and Investments Commission (ASIC), 18.5% of Australians feel overwhelmed by credit card debt. And collectively, we as a country owe $45 billion to credit card companies.

It’s a huge problem… And not one limited to those struggling to get by. 

Many people who’d be considered well-off have mountains of credit card debt to deal with.

Henry was one of those people – before he came to I Love Real Estate (ILRE).

The Mountain of Debt

To the outside world, Henry seemed like he had it all.

He had a corporate job that paid him a healthy $170,000 salary. He was a senior manager who got a bonus and a raise every year.

Surely money wouldn’t be a problem for him!

But behind his smile lay a secret… 

Henry had over $70,000 in credit card debt. And no matter what he did, he couldn’t seem to get rid of it. Over time, the interest kept piling up and the amount he owed kept on growing.

He felt like a slave to his credit card…

But he also felt like a slave to his job. In return for his high salary, Henry had to spend over 200 days of the year on the road. That meant he spent most of the year away from his wife and twin boys.

Finally, he got sick and tired of it. He wanted to spend more time at home, and he wanted to get out from underneath his mountain of debt.

This was the situation he was in when he discovered ILRE.

That was two years ago…

Henry’s Transformation

At first, Henry felt overwhelmed by the sheer wealth of information he received from ILRE.

He started to suffer from analysis paralysis. Henry just couldn’t make up his mind about which direction he wanted to go in.

Finally, he decided to put his focus where he’d always wanted it to be – his home.

Henry did a principal place of residence deal that allowed him to secure a block of land in Melbourne. To pay the deposit, he liquidated a negatively geared property he owned.

That meant he killed two birds with one stone!

Now, he had this block of land that he’d secured for below market value. The next step was to refinance it so he could get a construction loan.

In the end, that deal gave him about $140,000 in equity.

At this stage, he still has his credit card debt. But he was moving in the right direction.

From there, he rinsed and repeated… 

Working with the same developer, he bought another block of land in a different state. Again, he got it for below market value, which put him in a great position. 

He got to work, and soon that block was ready to sell for 10% more than he’d invested into it.

From there, he got a little more creative and started to look at overseas properties. Henry comes from the United States, which is where he decided to work next. He picked up a property in a vendor finance deal that now generates a $7,000 positive cash flow.

After that, he turned his sights back to Australia and started to look into how he could manufacture growth.

He decided to partner with a building company so he could switch his focus to chunk deals. After all, the end goal of his journey is to generate a passive cash flow that will allow him to quit his job.

At this stage, he still didn’t have enough cash to fully service his deals himself. That’s when he struck upon the idea of creating joint ventures with other members of the ILRE community.

Those relationships have opened the door for him to execute the chunk deals that will generate a passive income for him and his family.

Where He Stands Now

First, let’s tackle the most important issue.

That $70,000 of credit card debt has disappeared. Henry no longer has that particular noose hanging around his neck.

And with his joint ventures, he’s on his way to developing a passive income through investing and developing.

Right now, he has a positive cash flow of $13,500 dollars per year and equity of $350,000.

And he’s just getting started. Henry has now quit his corporate job so he can focus on his property career full-time.

Henry’s amazing story offers up plenty of lessons for anybody who’s thinking about investing.

Lesson #1 – Debt Can Strike Anyone

To the outside world, Henry seemed like he had it all.

But even with his high income, he found himself struggling with credit card debt. And the money he owed placed limitations on what he could do.

So, the first lesson here is that credit card debt doesn’t only affect those with low incomes. It can strike anybody. And it can be absolutely devastating.

Lesson #2 – Learn Every Day

Henry says that one of the keys to his success is learning every day.

He knows that he doesn’t have all of the answers when it comes to investing. That’s why he keeps coming to ILRE boot camps. He wants to stay engaged with the community so he can constantly leverage new knowledge to his own benefit.

Lesson #3 – Take Action

We’ll let Henry explain this one himself:

“Your life can change. Anyone’s life can change. You just need to take action.”

Sitting around and thinking about what you need to do won’t get you any results. You need to have the courage to take action if you want to create a positive change in your life.

Your Journey Starts With the First Step

Henry decided to make a change because he felt unfulfilled in his life.

It wasn’t just the mounting credit card debt that affected him. The fact that he spent hundreds of nights per year away from his family had a deep emotional impact.

His life changed when he decided to take his first step into property investing. And after just two years, he’s in a position to achieve exactly what he’s always dreamed about.