How to build a 5 property portfolio with ONE deposit

So we were lucky…. My wife bought a unit in Sydney long before she met me. So that’s going back 15 years, and she just paid that off. Didn’t think anything of it. Basically bought it with a very low deposit and that equity that build up in that property over a number of years allowed us to have a deposit ready for our first purchase together. So that’s a good thing. That’s one lesson number one. You only have to save a deposit -ever- for the first property. After that the equity in your property should be the way to leverage yourself into the next property. So now we‘ve got two. We also decided at that point that we were going to hold on to the unit, we were going to rent it out as it just it was just about paying for itself. And we somehow, in the back of our mind, thought that it’s probably important to just hold on to it. So we did. Nothing special, just put a tenant in and hold onto it. And live in our next property, which was our own place to live in.

We lived there for five years and then we decided we wanted to move back to where she was from. So we had this property and where we were moving to was too expensive to buy at that point. So we decided to rent. But again, we held onto that property. Wasn’t any… Any difficult thought process, would you thought it’s probably a good idea to just hold on to that. So we did. And now we‘re renting and we‘ve got two properties rented out. And from there we‘re like, “This actually works quite well.”. So we started and we‘re building up equity in the property, so and… so we started to look at: “Okay, what else can we do?”. And we leveraged that into a next property and we‘re leveraging that into our next property.

Again, it wasn’t any rocket science. We didn’t have any major grand plans at that point. Now we‘re starting to think: “Okay, what else can we do? Where can we take this? How do we want to use this to build some financial security?”. Because along the way, being a mortgage broker, I guess we have learned, I have learned that a pension is probably not going to provide us to the lifestyle that we want and that’s if a pension is going to be around. Because the numbers just stack up. If you want to look into that whole different thing. But the numbers don’t stack up for the pension to be around for 10… 10-15 years time. Different story… We decided that we wanted to be self-sufficient.

So we‘re like: “Okay, we‘ve got two properties now. We‘re going on to our third. And where do we want to take this? How far can we take this? What do we want to do with it? Where do we want to end up?” So from that point we asked, “We have something here and we can grow it towards something. Where do we want to grow to? Where do we want to grow it to and how do we do that? Where do we want to end up?”. So that started a journey where we said: “Assets are great, but it’s income that matters at the end of the day.” You want $15 grand a month in income. You don’t care about 10 million in assets if it doesn’t produce income because then you end up as asset rich and cash poor.

So we need to have income at some point that replaces our salaries so we don’t have to work anywhere. We can choose to work, and that’s what we‘re working towards. What can we do to use these assets to build income streams that pay us so we don’t have to work. We can choose to work, and that’s the journey that we‘re on now. Again, it wasn’t a grand plan. We were lucky that we just bought and held on to what we had. And from that we did start thinking: “How can we do this better? How can we do this smarter? Where do we buy to achieve the results that we need to receive that we are looking for?”. And it just becomes a fun and exciting journey.