Multimillionaire Joseph Chou has come a long way from his humble Chinese migrant beginnings, and he owes it all to big dreams, hard work – and real estate.
When a 29 year old Joseph Chou and his wife Suzanne migrated to Australia in 1991 they had just $4,000 between them.
But with more than $25 million worth of real estate now to his name, not to mention a string of successful business ventures and plenty of fancy cars, Mr Chou is truly proof that where there is a will, there is a way.
Mr Chou’s story is not however your typical rags to riches tale; it was not a life of poverty which he left behind in Beijing, but a very successful career.
The real thrust of Mr Chou’s story is in fact bravery; the decision to throw everything he had away in order to gain something even better. And with his enviable sense of determination, it’s a gamble that’s well and truly paid off.
Before ever dreaming of moving to Australia, Mr Chou, a graduate from the prestigious Peking University, was working as a diplomat to the Chinese government. His wife also held a good job at what was then known as Radio Beijing.
“We both had, if you like, a lot of admirers for our jobs, we were supposed to be set for life,” Mr Chou tells.
But after several years in the job Mr Chou was not satisfied. While his parents thought he was crazy to give up such an esteemed life, Mr Chou wanted more. Financial freedom was high on the list, but so was personal freedom. Even though Mr Chou enjoyed his role as a diplomat he felt he had more to offer – and he was craving the freedom to explore this inner ambition.
Having spent a posting in Sydney between 1988 and 1990, Mr Chou and his wife had grown very fond of Australia. Moreover, despite Australia struggling against recession, Mr Chou still saw greater opportunities here than in China.
“Back in 1991, China was nowhere near where it is today, in terms of its economic situation,”
“Given what we knew about Australia, I knew over time we could become successful.”
Relocating permanently to Australia was a major change for the young couple to make and it took them some time to reach a decision.
“It took us month and months of discussions,” Mr Chou tells.
In the end however the couple decided they were willing to take the risk and off they set to start up a new life in Australia.
But their new life did not come easy. Mr Chou and his wife had very little funds between them. Moreover, their Chinese qualifications were suddenly of little value in their new home.
“I majored in English, so that degree had no bearing whatsoever in terms of finding a job here,” Mr Chou says.
But the couple were well-prepared for hardship.
“I just thought if I was prepared to work hard, over time, I knew it would be possible for us to re-establish ourselves and become successful again.”
Refusing to consider any form of government welfare, Mr Chou picked up a job delivering pizzas for Domino’s. He spent the bulk of their $4,000 on a 1977 Sigma, but after a crash, he soon had to call that career quits.
The crash was potentially a blessing in disguise, with Mr Chou moving on to secure a job as an insurance agent.
“I wanted a job where I could make as much money as I could, based on my performance.”
And, boy, did he perform – soon he was the number one salesman at his firm.
In pursuit of financial freedom
And so life went on for the Chou family. Mr Chou’s entrepreneurial streak was becoming more and more apparent as he started several of his own business ventures, including a translating business which saw him win major clients such as Qantas, Telstra and the Australian China Business Council.
“We worked hard and we started earning some good income,” Mr Chou says.
But around 1997, seven years into their Australian lives, Mr Chou started to rethink his approach to financial freedom.
“I was working really hard and I had no time to rest. I had no holidays, no weekends and I thought, somehow, that is not the way to go about this.”
He began doing some reading into wealth creation and started thinking about looking into an investment property.
“Prior to that some people had approached us and tried to sell us investment properties but we had always said no because we weren’t ready, or maybe it was that no one had really convinced us.”
The turning point for Mr Chou was a property investment seminar he and his wife attended in January of 1998.
The gentleman holding the seminar was an ex-colleague of Mr Chou’s, from back in the insurance broking days. In the years since Mr Chou had seen this man, William O’Dwyer, a lot had changed.
“We both had started from nothing, but after seven years he had bought quite a number of investment properties.” 20 properties to be precise.
Speaking with Mr O’Dwyer, Mr Chou realised he just might be able to do the same.
A first brush with property
Before that fateful seminar in the Sydney suburb of Parramatta, Mr Chou had actually purchased two properties – both principal places of residence.
His first purchase, a three bedroom house in Ermington in Sydney’s west, was made just 18 months after he first arrived in Sydney.
The purchase required the couple to take on a loan of $140,000.
Mr and Mrs Chou were yet to see property as an investment and were very wary of taking on debt.
“It was quite a big debt for us; we’d never borrowed money before.
“We paid it off as quickly as we could, because at that time most Chinese migrants, and I was certainly like them, didn’t want debt.”
In 1995, the couple decided to upgrade to a bigger home, selling the Ermington house in favour of a five bedroom house in Epping, in north west Sydney, for $252,000.
“And so, for those first seven years, our experience with property was just those two homes,” Mr Chou says.
Fortunately the Epping home proved to be a very good purchase, providing a great source of equity to lay the foundations of their property portfolio.
“My friend [from the seminar] looked at our situation and realised we had a lot of equity in our home. We were also on very good income with some savings in the bank.
“He said, let’s start with one property and if you feel comfortable with one, we can do more.”
By the end of 1998 Mr Chou had seven investment properties under his belt, including a waterfront apartment in Sydney’s Balmain worth $800,000.
“I bought one in the first half of 1998 but in the second half I bought six!”
Combining the value of his Epping home, Mr Chou had already amassed a portfolio worth close to $3 million.
The million dollar dream
Over the ensuing years Mr Chou continued to build his property portfolio with a strong focus on buying quality properties and a firm resolve to ‘buy and hold’.
“I’m still holding 95 per cent of the properties I have purchased; I have only sold very few.”
For Mr Chou, his goal had always remained financial freedom and a $1 million income was his ultimate dream.
“One day, I said to my property mentor, I want to earn $1 million without having to work and he said, well, you’ll need $20 million worth of investment properties and you’ll need to wait for that to double so that you have $20 million net.
“Even if you don’t sell anything and you get five per cent return on $20 million, that’s $1 million.”
So Mr Chou focused squarely on amassing the right value of properties, rather than a certain number, and within eight years he’d reached the $20 million mark.
“By 2006 I already had more than $20 million worth of property.”
While $20 million worth of property in less than a decade might sound like an aggressive strategy, Mr Chou describes his investment philosophy as “conservative”.
In addition to buying quality assets with a long-term view, Mr Chou prefers low maintenance properties, with 80 per cent of his portfolio consisting of apartments.
He also considers carefully a property’s ‘rentability’, and who will want to buy it in 10 years’ time.
Rather than getting caught up in cash flow, Mr Chou believes a quality property with a good ‘rentability’ factor and good growth potential will, over a period of time, see its cash flow improve.
“The way I look at it, if it’s a good property in a good area, usually after five years or so the rent will go up enough to cover the interest payments.”
If investors can get through the first three to five years, they’ll be laughing, he says.
Like any investor, finance has been an intrinsic part of Mr Chou’s property investment strategy. His philosophy? Get the money from wherever you can.
While in the early days Mr Chou used his home as security to get his investment portfolio off the ground, he has since separated his loans and his funding sources.
“I used to be loyal to one particular bank but then I realised, is the bank loyal to me?
“Now my theory is whichever bank gives me the money is the best bank as far as I’m concerned.”
When Mr Chou discovered the value of property investment he really wanted to show other migrants that they could do it too.
“I thought, if I could do this as a Chinese migrant starting with very little, maybe I could tell other Chinese people about it too. Don’t just work hard physically, invest.”
So in 1999 Mr Chou teamed up with his ex-colleague, concentrating on enlightening the Chinese migrant community about the benefits of property investment.
After initially starting out his own business with two Vietnamese gentlemen, Mr Chou eventually founded his own company in 2006, which provides property investment advice to migrant communities right across Australia and New Zealand.
Moving forward Mr Chou plans to continue to invest in residential property and his business, and he also aims to expand his commercial property portfolio, and eventually, move into shopping centre investment.
He also vows that he will continue to “spread the good news”.
“Regardless of all the challenges and bad news, property is still one of the only options for most people if they ever want to become financially free. And it’s so doable.
“No speculation, no get rich quick, it’s a very slow game. But people can become seriously wealthy through property if they play by the rules.”