Stories of Success! How Gabriel hacked his investment property purchase

Hello everyone. It is Jane Slacksmith here and Clubbers, I have a very special treat for you. This is our second Capital Growth spotlight on a member of our community on the same day. Again, just incredibly generous community who want to share their stories with you, motivate you and hopefully you can take something out of this learning so that you can apply it to your own portfolio growth as well. And we have someone who some of you might have already seen Gabriel share his story before, but Gabriel's very kindly suggested that he could come on and share his story again. Hi Gabrielle, how are you going?

Good. How are you going, Jane?

I'm good, I'm good. Thank you so much for joining us on Friday. Of course, it's March, it's Capital Growth Month. And I think your story is just so wonderful because you kind of took the whole trident strategy and 10x it and use some of your project management skills and everything to really find a property renovated and then in a good growth area. So I'm going to hand it over. You tell us a bit about the property you purchased, how you bought it and what's happened since.

Yep. So we bought the property for 420,000 is in the Wollongong area. So that was in August 2016. So at that particular point in time, we look for the three factors within the Trident strategy, like buying under market value, capital growth statistics, ability to renovate, and that's more from a risk kind of perspective for us too, just to minimize our risk. So we took a bit of effort trying to find the properties. We did all the top mapping, looked at the back of the API magazines when they were still about, and a lot of Excel spreadsheets to locate the area. And we worked out the area.

This is way before the suburb selector software came into play and did it all for you.

Yes, that's exactly right. So we found that there was quite a good lot of growth factors in the area. So a lot of people who currently live in Sydney don't mind kind of traveling out and living away from Sydney and just commute work. So Wollongong is quite, I guess, good for that. But there was also some local kind of infrastructure things that were happening in the area. So the Dapto Bypass is one of the biggest infrastructure projects in the area, so it created a lot more employment in the area. And Shell Cove, which is a nearby suburb, they were opening up a marina. So there are a lot of kind of growth kind of factors which is one of the things that drew us to that suburb.

Now we, and I think you did all of that initial work of selecting your suburb, and then you got down as, I guess, in the process of the ultimate guide of renovation, got down into that pocket's potential. But you were. I know you're on our monthly calls quite often and sharing your experience during that time, but you actually took it to a next level and how. You got to know the agents as well, didn't you?

Yeah. So I think one of the things people don't realize is. Oh, no, they do realize. But you some. There's a lot of preconceptions about agents. I love them personally, but they often.

Make them your best friend, right?

Yes, that's right. They're often viewed as screwed. You can't trust what they say. They try to avoid your questions. But if you kind of know how they're paid and remunerated and that they're real people with real families and they're trying to support each other, themselves and their family, then it becomes a lot more personal. So by the end, there was a bit of convincing for them to know who I am. So, for instance, when you go to an open home, if it's a very popular suburb, you might have 10 or 20 or a lot of people there, but how does that agent kind of remember you? Out of all the people that they see, how do you get them to know exactly what you're looking for? And once they find it, you'll be the first person for them to call. So that's one of the things I tried to portray. And we had kind of the document that showed exactly our buying criteria. So there was no gray kind of areas, a lot of chocolates. I saw them during the week as well and called them quite, quite a lot. So I worked out, I guess, how the office structure worked in the area. For instance, some agents, they're within a group, say LJ Hooker or Elders, but there's quite a few kind of selling agents. So you work out when they meet. Say if it's on a Tuesday morning, then you know, that Tuesday afternoon you could give them a call, and then you get a lot more kind of information about what's happening in the area.

Great tip.

So I think that contributed to finding the right property.

And, you know, just your. You were obviously looking for something to renovate as well, and you had access through the group to RP data professional. Just tell me just a little bit about how you use that to work out where to buy.

Yeah, so with the RP data, we had the valuation component so you could generate those valuation reports. So for each property that we viewed, there was a bit of a process, but one of them was RP data, seeing what's. If it's rated kind of much worse, slightly worse, average, slightly better, better. So we kind of had those different kind of levels within the properties that we see, because obviously RP data has a lot of information, but it doesn't have all the information or the updated photos. So they don't know exactly necessarily where the property's at, especially if it hasn't been listed. So with that kind of, I guess, knowledge, we were prepared for what the property would cost, but also gave opportunities to know that something could be renovated and we could access quick equity or gain quick equity after the renovation.

You know what? I might just. I might just. Just so people understand what you're saying, I might just do a quick little demonstration of exactly what you've just mentioned there with RP data, because it does actually allow people to do a quick valuation. So just as a heads up, guys, this is just chosen. I've got alerts set up for lots of suburbs, for some of the reports that we've been doing over the years. This is just a property that's here. You can actually go over here and what Gabrielle's saying is generate for yourself a valuation report. And this is what he did. And I think the really interesting thing here is you can actually go through and talk about that level of construction. So you can actually see what if you could do the valuation as it is now in an average state, and then maybe at a better state, post renovation, the valuation that you actually generate will actually come back and show you what that differential could be. So it gives you some estimate of what a pre and post renovation might actually look like. So it gives you some opportunities to understand exactly what is happening in the market. So, great tip. Thank you so much for sharing that one. But I just thought I'd jump in and show you exactly what that was.

No problem. So, yeah, that was very helpful. So we knew when we were going to purchase a property how much we were going to offer them and tell.

Me, so you purchased a property, you did the renovation, and what's happened? What was the kind of numbers around that?

Yeah, so I guess one of the exciting things was I finally put together a spreadsheet of how much we spent, because I kind of knew it as a proximate, but not in concrete. So we looked through the bank accounts and checked how much we spent. So we bought it for 419,000, so approximately $420,000. Now we spent on the renovation, 48,000. So that kind of brought. See, that brought it up. And I'm just looking at the screens for the calculation. So that kind of brought it to 480,000 that we spent on the renovation. Plus the purchasing costs.

Yep. Stamp duty and legal fees. Yep.

Fees, everything. I also included an amount because we spent about $5,000 trying to get information about the suburb, generate reports, buy chocolates for real estate agents. Some of them we bought deli meats, depending on their preferences from Sydney.

It's expensive deli meats.

But I guess from the onset, like the property, when we looked at the RP data report at a much worse kind of category, so being very conservative, it was worth 450, $80,000. So we actually didn't lose out.

So you bought below the market. And after the renovation and all the costs of buying costs, you're actually at that market value of what that property was probably worth if it was sold at its true market value originally.

That's exactly right.

And then post renovation, what kind of valuation were you looking at?

So we ended up. So in, at the end of August, we purchased, took about three to four months in terms of renovation. So on the 20th of January, so three or four months later, we did a revaluation and it was at $650,000. So that's an equity gain of about 150 or so thousand dollars just because the. And I guess how it broke down was about 50. About 60,000 was because of good buying and the extra was because of the renovation. So if you kind of use the mass, it's about $1 spent on the renovation to 2.2 kind of dollars equity gain.

Fabulous.

And that.

And that didn't have any growth in that period of time or very small amount of growth that could have added to that.

No, not significantly. It did, yeah.

It started to grow after that though, didn't it?

It did. So about, I guess the kind of freshest News is about two weeks ago we got the property revalued again and $725,000. So within a year and a half it grew. What is it? $225,000.

Gabrielle, that is such a sensational result.

And the course had such a big impact in learning how to do it. So I'm more than happy to be on the call.

You know what amazes me? We've spoken to a few people over the last couple of weeks about their growth journey and some of them might have read my book and taken some of those tips in the Tried strategy and applied it themselves. Some, like yourself and Russell, shortcutted it with the Ultimate Guide to Renovation. And Lou and kind of like kind of 10x it. And you look at the investment of a course and this is what. When I started investing was really hard for me, that I go to all these free seminars and I borrow books in the library and I have books and I read them and go, I'm not going to spend money on a course. Whereas fast forward, you kind of like, oh, my gosh, if I can shortcut this, this is amazing. If you spend what, $3,000 on and you're making $200,000 in a couple of years, it's not a 10x or 10 times. It's like an 80, 90, 100 times kind of value. And it keeps going up. And that's the thing that really excites me about the leverage of this kind of knowledge, is that you can apply it and do it right the first time, it keeps going up, but then you can do it again.

No, that's exactly right. It's kind of scalable. I think that's a great thing. I must admit, and I've admitted it in previous kind of conversations after purchasing the course, it took me a year and a half or two years to actually do the course. So I, for a while before I actually acted on it.

It's interesting, isn't it? I think that I was talking to someone about this yesterday in how I like to consume knowledge. And I'll watch a video series or I'll watch a webina and I think, oh, my gosh, I need that. And I buy it. And it's like I put it in my pocket and go, okay, that's sorted now. I've got that under control. I'm like, oh, I have to open it up and actually do it.

That's exactly right.

So, yeah, I do that. I buy an online course on average once a month, once every two months. And so I'm always doing a course or watching a webinar or trying to learn something because I'm just having insatiable curiosity to be better and create more and do more, and whether it's quantum physics or meditation or how to present better or how to write better or something. But every now and then I get so caught up in the. I want that knowledge. You have to put the effort in, don't you?

Yeah. And I think investing in yourself, especially if you're thinking of purchasing property, you do want to invest in yourself. And so you gain that knowledge and learn from Other people's mistakes, but also the successes. And I love that it's a lifetime access because it helps people like myself who like to drill down deeply. But it might not be straight away.

Well, the good thing is when you joined us in 2016, we were still saying, here's a spreadsheet, we'll grab you some of the information. And you had to kind of do a lot of that research yourself. Now that we've developed in the suburbs selector software, you have access to that, that's updated monthly. Who knows what will happen in 2019, Gabrielle, that you're have access to.

Yes, that's exactly right.

Now, one of the things that I did love about what you did as well was the. What was it you had? I remember having a conversation, I think back in 2016 when you were searching for the property and you asked a question around, you know, you found this great suburb and you knew what the typical property was and then you found this property and you're kind of trying to get the property to get into your criteria or what it should be, but it wasn't quite there as like a two bedroom where everyone wanted a three bedroom or something like that. Do you remember that conversation?

There's another kind of call about it. And then I think we looked through the property and what it looked like on the grounds up and there are a few things that needed to be fixed up. It was on a bit of a gradient which wasn't good for the older population who tended to like to live there. So it did quite fit and the price didn't quite fit too. So we got a builder engaged, a builder quite early on in the process, right after the building and pest report. And we got a quote from them to work out the amount of work that was required to fix it up. So we tried to use that as a bit of a leverage, I guess to. So this is how much it costs. We're not kind of lying here, but if you could kind of either meet us in the middle or kind of take off some of your costs, it would make it a property that we can purchase. They weren't unable to meet that. Otherwise. Unable to meet that. Which, yeah, I guess we lost that deal, but that's fine as well because I guess where something's lost, there's also other opportunity. And this is where.

And I think that having that laser focus that you had in knowing exactly what your buying criteria was, it makes it an easy assessment when a property does come available and then you start seeing them, it's like that you know, conscious bias of, you know, when you go to buy a red car, everyone's got a red car. It's like, you know. Exactly. You want a three bedroom property on 600 square meters in these streets and all of a sudden they start coming up.

And it makes it easier when you talk to kind of real estate agents too, just that you're really clear about what you did. So in the end, some of them are really, really nice and when they were less busy, they would actually walk the streets on the specific streets that I asked them to to look for property for me. And doorknock, which was very, very nice too.

Great. Well, you definitely have got the gold star of actually engaging agents and the tips that you've taken some of our chips and 10x them is just fantastic. And I really appreciate you sharing your fabulous story and congratulations on the recent valuation.

Great, thank you. Thanks, Jane.

Thanks, Gabrielle. Really appreciate you joining us today.

No problem everyone.

That was Gabrielle. Once again, it's March, it's Capital Growth Month. Oh my goodness. What amazing growth stories that we have heard from our community. If you would like to share your story, hey, send me a message. I'd love to hear your story as well and maybe we can get you on and interview you as well. Because I think just understanding some of the great successes that people have had with their growth stories and understanding how pinpointing where to buy and how to buy has just completely leveraged people into creating financial security for themselves in the future. Clubbers, I hope you have a great weekend. For those of you that are watching this on recording, please still put your comments below. We'll come back and answer them. And as always, here is to your property success.