I want to tell you a success story about a young person who decided to get into property investment at age 19 and 9 years later he carries a portfolio with two million dollars of equity or 50% of its market worth. Daniel Walsh has enjoyed the journey so much that he wants to share his knowledge.
Transcripts:
Kevin:   You’ve probably heard the story about the chap who was so focused and so impressed with the product that he ended up buying the business. I think it was something to do with a shaver company. I’m not quite sure. I want to tell you a success story now about a young person who decided to get into property investment and decided he enjoyed it so much that he wanted to share the knowledge. Similar story, I guess. Daniel Walsh joins us. G’day Daniel, how are you doing?
Daniel:   I’m good, Kevin. How are you going?
Kevin:   Yeah, mate, fantastic, thank you. Now, Daniel has a company which has been operating for a couple of years, I guess, run pretty much by your partner or your wife. It’s called Your Property, Your Wealth, but you’ve now gotten into this full time as well, Daniel?
Daniel:   Yeah, we started the company around two years ago off the back of my personal investing journey. I’d built my property portfolio up and created a passive income that a lot of people started really sharing and resonating with. They started to say, “you know what, i want you to be able to help me achieve the same goals” That was when we started our own property buyers agency and we specialised in investing and building clients’ portfolios. We’ve been doing that for around two years now. I have recently quit my job and my property portfolio allowed me to do that. We used the passive income to support our lifestyle while we built our business up as well.
Kevin:   Yeah, for many people it’s a dream and you’ve done it at, I think your age’s what, 28, now, if you don’t mind me saying? Is that right?
Daniel:   Yeah, yeah, 28. It’s been a while. I started investing when I was just 19 years old and I started studying investing at the age of 16, so I’ve been in it quite a while but I just started very early.
Kevin:   Yeah, I mean, many people will tell you they’ve got a portfolio but your portfolio itself, you’ve got equity in that of a couple of million, I understand. Is that right?
Daniel:   Yeah, currently we’re sitting at around two million dollars worth of equity and a total portfolio of four million. My aim was to be able to make sure that we were doing a bit of debt recycling in the last couple of years while we were able to increase our cash flows. That was going to give us the necessary income for us to, I guess, retire from the corporate world under 30.
Kevin:   When you say debt recycling is that gearing? Is that what you’re talking about?
Daniel:   No, what we’re talking about is just really focusing on a few properties, and we were actually paying some of those down by our offsets. We’re putting a large cached buffers in offset and being able to pay down through offsets.
Kevin:   Where did you learn all these skills? Was it born in you from a young child? Did your parents have this sort of knowledge?
Daniel:   Yeah, when I was younger I did a lot of renovations in my life. My parents used to flip properties. I started off I guess with the knowledge from my parents of renovating and flipping properties. I remember my dad telling me, and this was only a few years ago when I was working for him. He said to me, you know if I just held three or four of these properties for the long term I wouldn’t be working today. And that was when I realised that I had to build a property portfolio but do that for the long term instead of just flipping properties. I knew that the wealth was built in making sure that we build these portfolios over a 15 to 20-year period.
Kevin:   Yeah, you’re very lucky that you learned that lesson at a young age because that is the secret. It is buy and hold. There are markets and times I guess in the market when you can actually flip and make a good profit but I don’t think that now is the time. That’s my view.
Daniel:   Yeah, definitely. I think it all comes down to your strategy if you want to create a passive income. For me it was about when the market was moving, especially in Sydney and Melbourne, I wanted to capitalise on that. Renovating and flipping properties, it just wasn’t going to get me to the outcome that I wanted. To me I wanted to be able to move a lot quicker. So to me I released equity and was able to buy in multiple markets throughout Australia and that was what allowed me to create that two million dollars worth of equity in such a short amount of time.
Kevin:   Your first property at age 19. Tell me about it. What was it?
Daniel:   The first property I bought it was actually land. I bought land that was subdivided. I built up the property myself. It wasn’t a house and land package as such. We did everything for cost price. That was back in the early days when I was an auto electrician. I was just coming out of my apprenticeship at that time so I had saved for around four years for this deposit to come for the house that I’d just purchased. I ended up building that property. I even had to sell down my skydiving gear and things like that to be able to purchase the property and be able to build driveways and fences and stuff like that. It was quite a tough period of time but I knew that it was going to serve me well in the future.
Kevin:   From there did you hold that property?
Daniel:   Yeah, I still have that today and that alone gives me around ten thousand dollars a year passive income. That property has also allowed me to leverage for other properties as well. It was a good stepping stone for my first property to be able to build my portfolio and start that off.
Kevin:   You built that house yourself or that property yourself. How involved were you in that, when you said you did it all for cost?
Daniel:   Yeah, well pretty involved with that in terms of a lot of the landscaping ourselves and fences and everything like that, layouts and how we wanted that. I just didn’t want to buy a house and land package and and have some sales agent obviously sell me some overpriced off the plan property. I wanted to buy something that was subdivided and we bought the land at cost price and were able to keep costs down. So the total bill, this is in southwest Sydney, and the total bill cost, with the land, was $324,000.00 at the time.
Kevin:   What’s that property worth now?
Daniel:   Roughly six fifty, it was valued last by the banks.
Kevin:   You said you were gearing against that. Do you still got gearing against that? Is it still borrowing?
Daniel:   Yeah, so we do have gearing against that in terms of we used that for other properties. What we have done since then was we paid a lot of money in cash back into the offsets to those splits. So effectively we’re paying zero interest on all the offsets from what we leveraged. That was able to get my debt down so that’s what we’ve been focusing on the last sort of year and a half to two years.
Kevin:   After that first one how long did it take you to get into the next one?
Daniel:   Yeah, so the next year we actually bought the second property. That was literally, I can still see, so when I bought it it was just one street over. I can see one roof to another. I bought the second house which is a mortgagee sale. We paid $303,000.00. That’s roughly worth around $600,000.00 now. That property there I leveraged from my very first one into the second one. Then from there I had actually a break from property investing for around two years in between.
Kevin:   Was there a reason for that? Did you lose your nerve or?
Daniel:   Yeah, so back then what actually happened was I was going to the banks for finance and when I had bought my second property they cross securatised my first property which is obviously something that you don’t want to do.
Kevin:   That’s right.
Daniel:   This was the early days of my investing and I had realised that I couldn’t move banks to be able to free up capital. So that was when I started to realise that having a team and a really good team on your side to be able to build a property portfolio. I ended up getting one of my brokers that I still have now on our team. He ended up coming on board with us. He has 21 houses himself so he knew what to do in terms of structuring portfolios. He was able to unsecuritise within that two years and from there we ended up continuing building that portfolio.
Kevin:   In your journey over the last nine years of buying property has there been one point in time apart from the one that you just described to us where it became difficult, where you had to overcome a number of obstacles you probably didn’t see?
Daniel:   I think being that I’ve come from being an apprentice and anyone that’s an apprentice in doing a trade it’s always tough to save money. So every property that I have put into my portfolio has been difficult and I don’t think it ever really gets easier. You’ve always got two different sides, you know? You’ve either got equity but the serviceability is tough or you’re just starting out and you need the equity to continue building. So it’s always difficult with property investing.
Daniel:   There’s always a hurdle to overcome. Finance for me had always been tough being that I was always on a lower wage. When I started off I was younger. I had to save from nothing so just to save my first $34,000.00 for my first deposit took me four years. So staying true to my 15-year plan was something that I knew I needed to do and have a really strong mindset to being able to build this large portfolio.
Kevin:   The 15-year plan, did that start when you were 19 or when you were 15?
Daniel:   No, that actually didn’t start until I was around 23, is when I started implementing that plan. It was-
Kevin:   So you’re five years into it now.
Daniel:   I was about five years into it at that stage, yeah. So what actually happened was when I had gotten stopped from my second property and then I was wanting to buy my third property I had realised at that time I needed to have a plan. What was going to be my exit and I need to work backwards from there because if you want to stay property investing a lot of people fall off the bandwagon half way through their journey because they don’t know the outcome that they’re trying to strive for.
Daniel:   So for me it was, “What outcome do I want and now can I keep this outcome and how long’s it going to take me?” That for me was all about mindset because I think when it comes to real estate and investing as a whole, it’s nice if you set a mindset game and it’s only 10% of investing. If you don’t have a strong mindset you will never be able to create a large portfolio because there’s a lot of things around. You know you’ve got debt. You’ve got a lot of hurdles to overcome and it’s never going to be easy no matter how large you build your portfolio.
Kevin:   Yeah, absolute gold. I really appreciate you giving us your time. All the best with your business, Your Property Your Wealth is the business. Daniel Walsh has been my guest. Daniel, I want to catch up with you again because there’s so many lessons I think we can learn from you. You’re an inspiration. Thank you very much for spending some time with us tody.
Daniel:   No worries, Kevin. Thanks for having me and it’d always be a pleasure to come back.