Eric Brown admits that he is naturally attracted to taking risks and this trait had lead him to make mistakes throughout his investment journey. Had it not been for the good partnership established between him and his wife, he would not have survived long enough to continue growing in the business of creating wealth through property.
One of the biggest mistakes he has made was purchasing a property in a mining town in Bowen back in 2007. After a decade, the asset’s value is $100,000 less than what it was purchased for, and it currently costs Eric $12,000 a year to hold.
He also bought a “battle-ax block” in Shore Bay which did not show any growth over a period of time. Eric finally decided to sell the property for $2,500 more than he paid for after he faced persistent tenant issues.
His high appetite for risk has probably contributed to these “scars” in his property portfolio, according to Eric.
“I'm quite aggressive and I want to add value … I'm in[to] commercial building, so it's a little bit easier for me than the average Joe, I guess, because I've got access to trades and skilled people that can help me with this process. But [if you] let me go, I'd be … like a dog at a bone,” he said.
Fortunately for the property investor, his own wife sits on the other side of the risk profile in order to balance his fiery passion. Eric’s wife has helped him get back on the game after every mistake and also made him realise the lessons he needed to learn in order to move forward. Since 2015, they have moved to reinvest their money where they could see more growth.
The couple has purchased and renovated a property in Ainsworth Street, where their family now resides, as well as a commercial property in Lilyfield which they plan to develop into luxury apartments. They have also decided to continue holding the Bowen property in the hopes of regaining the $100,000 they have lost, and as well as to remind them to make better decisions because, after all, they are “not bulletproof”.
While the property investor still chooses risky and sophisticated investment strategies, his wife remains present to remind him to step back a bit and study his options well before making final financial decisions.
According to Eric: “My thing to make me a better investor is to try and minimise that [risk] a little bit and try and pull myself back.”
Smart Property Investment’s Phil Tarrant, who is an avid investor himself, agrees that it is important for property investors to have a trusted partner to help them evaluate their choices. He has personally invested in building a reliable financial team in order to help him navigate his way through his property investment journey.
“A lot of people invest in [a] partnership, whether it's husband and wife or mates ... Typically, you have two different ends of the spectrum—someone who's very risk-averse and someone who's quite happy with a certain element of risk—and you typically get a nice, neutral playing field where you get the benefits of both,” he said.
Phil concluded: “Sometimes, one can outweigh the other and that's when … people find themselves in a bit of trouble.”
Tune in to Eric Brown’s episode on The Smart Property Investment Show to know more about the power buying at the right price has had on his portfolio, the details about his newest venture of converting a warehouse into a family home, the issues he has to overcome and the challenges he expects to face in the future.