How to Buy 10 Properties Fast E-Book

Eddie Dilleen

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 275

Veröffentlichungsjahr: 2024

Beschreibung

Do you want financial independence and a secure retirement? Bestselling author Eddie Dilleen shows you how to build a successful property portfolio — even faster than you dreamed!

How to Buy 10 Properties Fast shares a powerful plan for property success. Through simple strategies and helpful tips, buyers agent Eddie Dilleen shows how you can become a successful property investor FAST. You’ll get step-by-step practical guidance for buying your first property, then your second — all the way to 10+ properties, building a reliable, sustainable portfolio. With this book, you’ll learn how to crush it when it comes to investing: find the right properties, maximise your equity, and boost your long-term wealth.

The Australian property market can be daunting, and it’s easy to feel that you’ve left it too late. But whether you want to set yourself up in 1 year, 3 years, or 7 years, time is still on your side. And there are still bargains to be snapped up! With How to Buy 10 Properties Fast, you’ll learn about property growth cycles, discover how to spot potential for high rental income, and get the fundamentals of property finance. Through detailed case studies and clear milestones, Eddie shares a roadmap for starting your own investment journey — and securing your financial future.

• Learn the 3 Golden Rules for the ultimate investment strategy
• Find up-to-date advice on property location and property growth
• Get tips for negotiating with agents, banks, and brokers
• Understand how to maximise your deposit and equity
• Manage your portfolio by finding a strong team and keeping great tenants

Eddie’s tried-and-true investing tactics helped him build a portfolio of over 80 properties by age 32. So what are you waiting for? Backed with clear and comprehensive examples, this book will show you how to make your next moves in the property market — and reach your financial goals faster.

Leseprobe

Table of Contents

Cover

Table of Contents

Title Page

Copyright

Dedication

INTRODUCTION

CHAPTER 1: My 3 golden rules for kick‐ass property investing

Golden rule 1: Buy below market value

Golden rule 2: Buy properties with a high rental yield

Golden rule 3: Buy in metro areas

Summing up

CHAPTER 2: Extra tips to help you crush investment decisions

Don't overanalyse the location

Understand property growth cycles

Avoid properties that will most appeal to owner‐occupiers

Evaluate under‐rented properties

Look hard and look often

Check out real estate websites

Be prepared to buy sight unseen

Summing up

CHAPTER 3: The fundamentals of buying property

Getting finance

Different types of loans

Your hustle phase: saving for a deposit

Summing up

CHAPTER 4: Negotiating a purchase

Working with real estate agents

Putting in an offer

Dealing with banks and mortgage brokers

Summing up

CHAPTER 5: Kate begins investing

How does Kate go about getting finance?

Kate starts looking for her first property

Kate needs to find a conveyancer

Time to assess the pest and building inspections

Kate decides to buy the property

How much did Kate's first property cost?

Summing up

CHAPTER 6: Kate buys 3 more properties

Kate starts thinking about property two

Buying property two

Getting equity out of Kate's first two properties

Looking for property three

Summing up

CHAPTER 7: Kate's buying spree

Using a self‐managed super fund to buy property

Time to tap into her equity again

Kate's sixth property

Properties seven and eight

Refinancing to lock in her final two properties

Properties nine and ten for Kate

Summing up

CHAPTER 8: Angela and David buy 10 properties in 1 year

Refinancing their mortgage

Buy, buy, buy

Summing up

CHAPTER 9: Anthony buys 10 properties in 7 years

Anthony buys his first property

Refinancing for property two

Looking for a bigger property

New opportunities in year three

Buying a property to live in

Buying properties seven and eight in year five

Changing focus in year six

Refinancing property one again

Summing up

CHAPTER 10: Property examples

Properties I've bought

Properties I've helped clients buy

Properties I've bought that don't meet the 3 golden rules

Summing up

CHAPTER 11: Managing your portfolio

Hire the team you need

Choose a rental price to keep good tenants

Different ways to refinance

Summing up

CONCLUSION

INDEX

End User License Agreement

List of Tables

Chapter 1

Table 1.1: cashflow for this property

Chapter 2

Table 2.1: median capital city house prices

Table 2.2: cashflow for this property

Table 2.3: cashflow for this property

Chapter 5

Table 5.1: cashflow for Kate's first property

Chapter 6

Table 6.1: cashflow for Kate's second property

Table 6.2: cashflow for Kate's first property after refinancing

Table 6.3: cashflow for Kate's second property after refinancing

Table 6.4: cashflow for Kate's duplex (third and fourth properties)

Chapter 7

Table 7.1: cashflow for Kate's SMSF‐financed property

Table 7.2: cashflow for Kate's duplex after refinancing

Table 7.3: cashflow for Kate's sixth property

Table 7.4: cashflow for this property

Table 7.5: cashflow for Kate's ninth property

Table 7.6: cashflow for Kate's tenth property

Chapter 10

Table 10.1: cashflow for this property

Table 10.2: cashflow for this property

Table 10.3: cashflow for this block of units

Table 10.4: cashflow for this property

Table 10.5: cashflow for this property

Table 10.6: cashflow for this property

Table 10.7: cashflow for this property

Table 10.8: cashflow for this property

Table 10.9: cashflow for this property

Table 10.10: cashflow for this property

List of Illustrations

Chapter 2

Figure 2.1: the property growth cycle

Chapter 9

Figure 9.1: a $3 million portfolio growing at 6% per year

Guide

Cover

Table of Contents

Title Page

Copyright

Dedication

INTRODUCTION

Begin Reading

CONCLUSION

INDEX

End User License Agreement

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First published in 2024 by John Wiley & Sons Australia, LtdLevel 4, 600 Bourke St, Melbourne Victoria 3000, Australia

Typeset in Adobe Caslon Pro 11 pt/15

© John Wiley & Sons Australia, Ltd 2024

The moral rights of the author have been asserted

ISBN: 978‐1‐394‐25595‐5

All rights reserved. Except as permitted under the Australian Copyright Act 1968 (for example, a fair dealing for the purposes of study, research, criticism or review), no part of this book may be reproduced, stored in a retrieval system, communicated or transmitted in any form or by any means without prior written permission. All inquiries should be made to the publisher at the address above.

Cover design by WileyCover images: © piai/Adobe Stock, LadadikArt/Adobe StockInternal house icon image: © SUE/Adobe Stock

DisclaimerThe material in this publication is of the nature of general comment only, and does not represent professional advice. It is not intended to provide specific guidance for particular circumstances and it should not be relied on as the basis for any decision to take action or not take action on any matter which it covers. Readers should obtain professional advice where appropriate, before making any such decision. To the maximum extent permitted by law, the author and publisher disclaim all responsibility and liability to any person, arising directly or indirectly from any person taking or not taking action based on the information in this publication.

This book is dedicated to my beautiful wife Francesca. You've always had my back from the beginning, encouraging me when I feel weak and enticing me to push further and keep going even when it seems impossible — thank you.

INTRODUCTION

If you read my first book 30 Properties Before 30, you will be familiar with my story and my strategy of buying high‐yield, metro properties below market value as aggressively as you can to achieve your financial goals. This book is all about the step‐by‐step practical details you need to know to go and buy your first property, then your second, hopefully your third and, best‐case scenario, I hope you continue on and buy at least 10. Property is a great way to get ahead financially, and I hope to help you on that journey.

For those who aren't familiar with my story, here is a bit about who I am and how I got here.

I grew up in unlikely conditions to become a property investor — with my single mum, we lived in commission houses in poor neighbourhoods, and no one in my family owned any property (they still don't). Money was always tight. I'm the youngest of three children; when I was born, my dad was 45 and my mum was 41. There was a lot of financial stress, and my parents were always fighting about money.

When I was eight, my parents split up. My father moved to Adelaide and my mum, sister and I moved to the United States because Mum's sister lived there. We went over with $300 and moved into an ugly two‐bedroom unit in the slums of Austin. When I was 12, we returned to Sydney; Mum had a few hundred dollars and no job, house or assets. She arranged with a local church to stay in a church‐owned house until she pulled enough money together to rent her own place. As a single mum in her mid‐fifties, finding work was tough and she supported us on a modest pension. After a long wait, we were finally approved for a housing commission house in Willmot, a suburb of Mount Druitt. For those unfamiliar with the area, Mount Druitt is a low socioeconomic area an hour's drive west of the Sydney CBD. It has long‐carried a reputation for crime, drugs and domestic violence.

I still remember seeing the house for the first time. I wasn't expecting a palace, but this place was truly awful. There was a scrawl of graffiti on the back wall, the carpets were old and worn, there was a distinct smell of mould, and it was in a sorry state of disrepair. The thought of living there filled me with despair. I remember begging Mum not to make us live there, but with private rentals in the area going for more than $250 per week we had no choice — my mum's weekly pension was only $180. At $65 per week, this subsidised place was all we could afford.

Willmot was rough. There were domestic disturbances every other night, with police cars regularly patrolling the streets and helicopters buzzing overhead. When I was 14, four houses near us were fire‐bombed within about six months. It was scary. They were commission houses; people would move in and out, or the houses would stand vacant. People in our neighbourhood were very low on the socioeconomic scale — almost everyone was on drugs, and they would go out, get petrol and just burn the places down.

Being constantly short of money caused a lot of stress for my mother, who was trying her best to provide for her family. We relied on government assistance and food stamps just to make sure we could eat. I might have been one of the rebels in school, but if somebody threw 20 cents on the ground, I picked it up.

My upbringing made me more aware of the importance of money than most kids. You need money to survive; you can't buy food without it. I didn't want to end up on the dole and just continue living like everyone around me. So how could I fix the situation?

I started asking questions about money and property at seven. On Sundays we would go to church, and then visit one of Mum's friends in Baulkham Hills, Castle Hill. It's a nice area in the hill district of Sydney. They had a big TV that blew me away. They had nice stuff, in a really nice house, and the drive home from their house to ours left a deep impression on me. I told myself that one day I would own one of those nice houses. Year after year I told myself that when I grew up, I would make enough money so that I wouldn't have to worry about it anymore.

When I was a teenager and started getting more interested in property, I realised that people who create wealth and live in nice areas usually own their property. Either that or they own investment properties — and at the very least they have jobs. No one in our family owned any property. Because my family and close friends never went to university, it wasn't on my radar; I just thought that going to university or college only happened in America.

At 16, my interest in owning property took off. I worked at McDonald's and a 19‐year‐old colleague happened to mention that he had just bought his first investment property with the help of his dad. I was blown away. How had this guy only three years older than me managed to buy a property when none of my family members, friends — or indeed anyone I knew — had managed to do it? My goal of owning a home suddenly started to look achievable. If he could do it, why couldn't I?

As a start, I made sure I saved as much as I could. I was saving at least $200 to $250 a week out of my part‐time wage of $340. It took a lot of discipline, and as much as I wanted to (and nearly did!) buy a nice car like my friends, instead I drove a bomb and by 18 had managed to save enough for a small deposit.

I spent hours trawling real estate listings, and I read and re‐read some old property investment books that Mum had picked up for me from the op shop (which I still have to this day). I also got a new job as an office junior at an automotive paint shop. In this role I did the daily banking, calculated the daily earnings, reconciled accounts, and dropped off the daily takings and receipts to the bank. Working with numbers every day was an excellent learning experience and gave me a valuable insight into the financial end of running a business.

I knew that getting finance for an investment property was going to be tough. I used every online mortgage calculator I came across to estimate what I could borrow. I tried 11 different lenders all up, but due to my woefully low salary of $26 000 I was either rejected outright or offered a measly $30 000 home loan. What could I buy with that? I took on a second job as a bartender at the local RSL, working long hours in the evenings and on weekends.

After months of setbacks and rejection, I was driving to the bank to drop off the daily takings for work when I decided it was time to speak to a lender in person. I nervously approached the counter and asked to speak with someone about getting a home loan. The teller raised her eyebrow and gave me a funny look. I looked young, but nonetheless she made an appointment for the following day with a mortgage lender named Kathy.

Kathy was awesome. Together, we went through my income, expenses and overall financial situation and I felt like someone was finally taking me seriously. We spoke about the sorts of properties I had been looking at and my expected price range. Finally, she told me what I had been waiting to hear. If the property I wanted to purchase had a rental income of over $200 per week, my borrowing capacity would be boosted to $140 000. I was ecstatic! I walked out of that meeting with conditional pre‐approval.

I returned to looking at real estate listings with vigour, and after a lot of searching for something in my price range, I came across one listed for $145 000. My eyes lit up as I read the description. It had two bedrooms, one bathroom, a balcony and a car‐parking space, and it was rented out at $200 per week. It seemed too good to be true! Comparable properties in the same area were selling for over $165 000. There had to be a catch. I arranged to see the property that weekend.

As I drove to it, it became clear why this place was cheap. The road was full of potholes, and the 12‐unit block was covered in graffiti. There was rubbish spilling out from the six commercial units on the ground floor. At the door of the unit there was a pile of junk and abandoned furniture, graciously left by the former tenant. The estate agent was a little embarrassed and assured me that the tenant had told him they would remove it, but they'd clearly done a runner. Despite the less‐than‐ideal first impression, I tried to keep an open mind.

We walked inside and my excitement returned. Inside was not half bad! It was clean and airy, with crisp white walls and older grey carpet that still presented well. The bedrooms both had built‐in wardrobes and shared a breezy balcony with views of the lake. The kitchen was an older‐style wood grain but perfectly fine, and there was even a second balcony off the dining area. The council rates and strata levies were very reasonable. The area was quiet and rentals were in high demand, and I knew the unit had only been vacant for a couple of days. It was close to schools, shops and the train station. It ticked all the boxes, though I was concerned about the state of the exterior and the seedy feel of the graffiti. But I knew the median price for units in the area was around $185 000, and comparable listings were at or over $165 000, meaning the unit was technically below market value at $145 000. And I could use the state of the exterior as leverage to negotiate the price down further still. I decided to go for it. I negotiated with the estate agent and managed to get the price down from $145 000 to $138 500. Half an hour later, I signed on the dotted line and engaged the same agent to manage the property and begin the search for a new tenant. I took a deep breath to let it sink in.

I had done it.

The proud owner of an investment property at 18 years old

The numbers stacked up for property #1

10% deposit

$13 850

Lenders' mortgage insurance (LMI)

$1200

Conveyancing

$1100

Stamp duty

$3500

Pest and building inspection

$500

Total deposit required by bank

$20 150

The total mortgage repayments each week were $190, covering both principal and interest. With the unit being rented out at $200 a week – it was basically paying for itself!

That's enough about me — time to dive into the good stuff! How can you become a property investor in the next few months? What are the critical rules you need to follow, and what is bad advice you can ignore? How do you go about buying 10 properties in 1, 3, or 7 years? How do you manage a property portfolio? Let's get started!

CHAPTER 1My 3 golden rules for kick‐ass property investing

Every time I buy a property, I follow my golden formula — my 3 golden rules. Whenever I have deviated from this formula, it's not worked out well financially (I share my mistakes in chapter 10). Sure, you can choose to use other criteria to invest in property, but nothing has come close to working as well for me, or my clients, as following these 3 golden rules:

Buy under market value.

Buy properties for a price that is less than what other comparable properties are selling for (it is possible, keep reading).

Buy properties with a high rental yield.

This means the amount of rent they make will often be on par or hopefully a bit more than your mortgage payments and all other expenses; you want properties with good cashflow.

Buy in metro areas.

I recommend not buying more than 50km as the crow flies from a major city, such as Brisbane, Perth, Adelaide, Melbourne, Sydney, Hobart.

All the other principles of property investing do not matter if you follow these three key rules. In fact, those other principles often get in the way of following the 3 golden rules, leading to subpar investments. I want your money to get you the most it possibly can, not for you to waste time on only buying ‘a proper house with at least 500 square metres of land’ — those properties have bad yields! Which means you'll be stuck after buying one, with not enough cashflow to buy any more properties. How is that a good idea?

These are the rules I don't follow:

It has to be a house, not a unit or townhouse.

It can't have any strata fees.

You have to be able to easily add value to the property.

It needs development potential.

It has to have at least ‘X’ square metres of land.

You should buy in mining towns (such terrible advice!).

It has to be walking distance to a train station.

So, let's dive into my 3 golden rules in more detail. Follow these three — always all three — and you'll be investing like a pro!

Golden rule 1: Buy below market value

The reasons why some properties sell for over the market value are fairly straightforward. The property might be in a hot location, whether it's a trendy suburb or near desirable places like the CBD or great beaches or top schools. The property might attract owner‐occupiers who are less concerned with getting the lowest price and more concerned with finding the right home for them. As investors, buying at the top of the market doesn't make any sense.

Buying a property that's below market value is my first golden rule. It means you literally make money as you buy the place; you can have the bank do a desktop valuation three months later where they value it for tens of thousands more than you paid for it, rather than waiting for who knows how long for the market to improve.

But why would anyone sell a property for less than it's worth? People are often sceptical about this part of my strategy, saying, ‘Why would someone sell their property for $300 000 when it's worth $350 000? Why would someone be willing to do that? It doesn't make sense.’ Well, it happens a lot more often than you'd think!

Through building my property portfolio, I have found that there are usually two reasons why a property might be priced under market value: time constraints, and property access issues (because a property is tenanted). I've noticed time and time again that if the sale of a property has a time constraint (the owners need to sell fast) or the property's tenanted (so there's less access), it's harder to do the open homes, so it sells for less.

Time is on your side

As investors, we don't have to worry as much about settlement lengths and how long it takes for a property to sell. But for some sellers, they are under the pump for various reasons. Time constraints is one of the main reasons why some sellers will be willing to sell under market value.

Ideally, sellers would want to have more time available to them so they can make updates to the property that could increase the sale price, and so they can allow enough time to drum up lots of interest so excited parties end up bidding against each other, which drives the price up to market value or beyond.

However, in plenty of instances, sellers need to make an urgent sale because of legal or financial reasons, a death in the family or a divorce. The seller may have secured a job interstate or overseas. They might be facing repossession or some other type of distress. Or they might have bought another property and now they have to sell up in order to finance the next purchase. They may not be able to wait three, six or nine months for a better price because they need the money from the sale now.

Though a rushed sale might not be great news for the seller, it can be a great opportunity for investors to make a smart purchase.

How to find out if the seller is under time pressure

Sometimes you can tell if a seller is looking to sell quickly by reading the information in the property listing. Maybe they have a set date to receive bids by or the auction date is very soon after the listing was placed. Or you can look at the property contract and see that the seller has listed a preference for a 30‐ or 60‐day settlement.

Talking to the real estate agent can reveal a lot as well. If they say something like, ‘Oh, look, they're holding out for the best price,’ it generally means that the seller is not motivated to sell in a hurry. But if the agent says something along the lines of, ‘The seller's actually committed elsewhere’ (meaning they've committed to buy another property), or they say something like, ‘The seller would prefer that the property's unconditional’ (meaning that the seller wants offers that don't have any conditions attached, which tend to lengthen settlement periods), or even, ‘They need to sell within the next two months,’ these are all cues that the seller is very motivated.

The agent could say those things in 10 different ways, but those are the key phrases that you're looking out for to find out if the seller is in a hurry to offload their property. And typically, time pressure for the seller tends to mean that they will be open to lower offers if it means that they can get that property sold.

Limited access to a property can be a win for investors

I've noticed tenanted properties can always be bought for less because they're harder to sell. People are already living there, and the end of a tenancy contract doesn't always line up with when the owner wants to sell. When there are tenants in a property, it can make it difficult for the seller and real estate agent to have as much access to the property as they might like.

If the seller is in a hurry to sell or wants to update the property to make it more attractive to buyers to hopefully get a higher sale price, it can be really difficult when there are tenants living in the property. And sellers don't always want to wait to refresh the property until tenants leave because it can mean losing months of rent and having to wait longer for the income from the sale.

It also makes it difficult for the real estate agent to access the property whenever they like to do open homes and private inspections. They have to run inspection times by the tenants every single time, and they usually have to give the tenants three days' notice legally before showing someone through.

It's not like selling a vacant property where if you ask a real estate agent to view the place all they have to worry about is their own schedule. They can show it to you right away, any day of the week, after hours, before hours, they've got unlimited access to it, making it really easy to take people through.

The other issue with tenanted dwellings is they normally aren't presented well. The tenant, for example, could have outdated or worn furniture. Or they might have children and the clutter that comes with them. Tenants don't care about the sale price, so they're unlikely to put in extra effort to tidy and clean and make the place feel nice. All of this makes a property much harder to sell.

Access is often linked with the issue of time too. As an example, an investor might need to sell one of their tenanted properties due to a finance issue, even though the tenants might have another six months on their rental contract, meaning the purchaser has to take over as landlord when the sale is made. This usually rules out owner‐occupiers from buying the property because they want to buy it to move into immediately, meaning the seller only has investors interested in purchasing the property, which eliminates a lot of potential buyers, plus investors typically don't pay as much for properties.

How to find out if a property is tenanted

I'm always actively buying properties for myself and my clients, and one of the first things I always look for is whether a property is tenanted and, if so, how long for. The quickest way to find this out is to call the real estate agent and ask directly. Photos can also be a big giveaway. If the photos show someone's furniture it can mean the property is occupied by the owner, or if the furniture is old or worn or there's a clear lack of care taken in preparing each room for photos, it often means it's a rental. If there is no furniture, or staged ‘perfect’ furniture, the property is probably vacant (meaning they probably want to sell as quickly as possible).

Not always, but often, if tenants are living in the property the listing will say that it is tenanted and until when. If that info is not there, the easiest thing to do is call the agent and find out.

PROPERTY STUDY: MOSMAN PARK

In June 2023, I picked up a tenanted property for a client in Mosman Park, only 20 minutes from Perth, for $305 000. I had been keeping a close eye on the listing, and when I saw the asking price drop I instantly called the agent to find out more.

It actually had an offer on it for $370 000, but the seller couldn't accept it because the offer was from someone who wanted to buy the property and move into it within 30 days — and the property was tenanted on a fixed lease into 2024. As often happens, the people that pay the most for property are the people who fall in love with the property emotionally. They're likely a couple, they might have young kids, and they're shopping for a family home. They tend to want to be able to move in right away, within a month or two. As much as the seller wanted to accept the higher offer, they couldn't because of their tenants. They even tried to get the tenants out early — perhaps they offered them money to help them find another place so they'd move out quickly — but the tenants didn't want to move. So, the seller couldn't accept the offer of $370 000, and instead accepted $65 000 less. It was a win for my client, who scored that property well below market value, in a metro area with paying tenants already in place.

Golden rule 2: Buy properties with a high rental yield

‘Gross’ rental yield is a calculation used by investors to assess the annual return an investment makes in relation to its upfront cost. It is calculated by determining the annual rental income, divided by the purchase price, then times 100. So if a property makes $350 per week in rent, you times that by 52 to know the property's annual income ($18 200), divided by a purchase price of let's say $250 000 (0.0728), times 100 (giving you 7.28 per cent gross rental yield). When you are assessing investment opportunities, do this calculation to find out what the gross rental yield of the property would be. The goal is to buy properties with a 6 to 9+ per cent gross rental yield.

‘Net’ rental yield is the difference between the rent that you receive from your tenants, minus the costs of your investment property. Those costs include loan repayments, property management fees, maintenance costs, water rates, insurance, council rates and strata fees. (Properties that have common areas with neighbours, like units, townhouses and apartments, have strata fees