Finance advice

What this ex-banker learnt from dealing with owners of massive property portfolios

By Bianca Dabu
lessons in investment, investing, property portfolio, property investment

Jacqui Zielinski started investing in property at the age of 19, and years after she dropped out of college, she got a job at an accounting firm and became a lending officer at a bank.

It was surely a ‘rollercoaster ride’ for the property investor, but it did not come without reward. She currently holds an impressive 10-property portfolio with assets all spread across Australia, amounting to more than $3 million.

Find out the most important lessons she learnt from her journey, as well as her personal secret to property investment success:

Why did you start investing so young?

Jacqui Zielinski: I got into business at uni[versity] but within a few weeks of being there, I just realised it wasn't for me … so I dropped out at ... five weeks in. My parents said to me, "If you're going to drop out, you need to get a job" because they were just worried that I was just going to sit around the house and not do much.

I had no real skills at the time. I did an office administration course at school … [and then] I'm in office admin [earning] $17,000 per year, and it was okay … While I was there, I actually was lucky enough to be employed by quite a well-known business owner in Wagga. He had an accounting firm, an investment company, and he'd just set up this other tax firm and he had me in there … I worked with him for a few years [and] he opened my eyes a lot to what I could do, property-wise, because he was quite a savvy investor—he had residential, commercial properties.

I'd never seen any of that before … It was just ... eye-opening, thinking, "Wow, look what he's built. Maybe I can do the same … " I stayed with him for a few years and learned a lot, and then I ended up getting into banking … I saw clients coming in with these huge portfolios and I was just blown away ... I thought, "Oh, I want to do that myself."

What's the biggest portfolio you've seen?

Jacqui Zielinski: I've seen some huge ones, like 20, 30 plus properties, and that was in Wagga, too … So, a lot of their properties were all Wagga-based … That's kind of why I first started in that market as well because it's what I knew … It probably wasn't the best decision now, but it got me in, at least.

Was there a ‘pattern’ you noticed about good property investors?

Jacqui Zielinski: I saw how they were structuring their [portfolios] because, obviously, I was managing the finance side of things ... In the interview, I would probably ask more questions out of my own curiosity than what was really relevant for the application, but a lot of them were looking for yields at the time—very positive cash flow properties and also value-add potential. A lot of my clients were doing renovations and things like that.

I didn't actually come across a lot that were doing developments ... Mainly, a lot of value add, a lot of good cash flow. They would follow a very similar process to how I started investing.

When did you start building your portfolio?

Jacqui Zielinski: First property was when I was 19 … It’s probably one of the cheapest properties I could afford at the time because I was only on about $40,000 and I had about $6,000 deposit, plus the $7,000 first time owner's grant. Interest rates were pretty high at the time—they were about 8 per cent—so I pretty much put everything I could into it.

[The] first property was in Wagga Wagga, around the CBD area—a two-bedroom apartment [worth] $185,000.

Was it a good investment?

Jacqui Zielinski: It was an okay property. We made some money straight away … there was instant equity, which was good. But long-term wise, it wasn't really the best-performing property that we've had in our portfolio. Rents started off strong and then there became quite an oversupply in that area for [that] type of properties ... That was the one property we ended up selling, my first property.

How did your interactions with successful investors influence you?

Jacqui Zielinski: That was where I picked up a lot of it and it gave me the confidence because I saw other people doing it. Then, I started educating myself. I started reading, I started going to seminars, events, things like that … It was very inspiring.

What was the main reason behind your decision to start your own property investment journey?

Jacqui Zielinski: For me, the big thing was that I couldn't ever imagine myself working for 40 years in a job. You know, [with] all [due] credit to people that do it ... I just [personally] thought it would be … soul-destroying. So, I thought, this is one way ... I don't have a uni degree, I don't know exactly what I want to do yet, [but] this is one way that I can change my future, really.

Even though it's in some ways complicated ... once you understand the fundamentals and how to do it … once you get it right, you can then just repeat that process a lot.

Was it somehow limiting being a college dropout?

Jacqui Zielinski: No. For me, I look at it now and go, "Thank God I left" because if I didn't leave, I don't know what I would've done ... I might have ended in a role that was just not fulfilling. I'm really glad I left because the people I met when I left ... even though I had to work my way up, [they] made me hungrier ... I think [the experience] gave me that passion to do something bigger.

What’s your personal secret to property investment success?

Jacqui Zielinski: I did work hard at it ... Some people might say [I’m] obsessed with it. I went all-in. I would be in forums, I'd be learning, I'd be doing anything I could, [talking to people] ... [In] different events … that I go to, you would not know in the room who's a property investor, and then you start talking to them [and you realise] anyone can do it. It's just … they have to want it, too … You need to be pulled to do it, as opposed to [being pushed] to do it.

Phil Tarrant: It's really the mindset … Understand it, get educated, get confident and comfortable with it and start slowly … [You have to] actually want to take control of [your] financial future and have a good retirement or a good life after work.

Any final advice for budding property investors?

Phil Tarrant: I think the challenge is that, a lot of people's experience with property is not a good one. They buy the wrong sort of property ... so it really frames their opinion ... A lot of people get sucked into other people's misery and it shapes the way they think about properties … but there are good stories about property there.

Jacqui Zielinski: Like me, right? I had that one property that, it wasn't anything bad but it wasn't anything great [as well]. It didn't give me the kind of returns I wanted. But at the same time, if I had just stopped there, I would not have got the other ones that have been amazing deals.

Tune in to Jacqui Zielenski’s episode on The Smart Property Investment Show to know more about the impact of educating yourself, how to find a balance between business work and investment, and the simple but effective ways to improve your current portfolio.

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  string(144) "

Property investors are now able to identify and bid on auctions remotely using a new live-streaming functionality launched by Gavl.

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Called “Request an Auction”, the new functionality enables users to watch and bid on any Sydney or Melbourne auction remotely.

Through Gavl, prospective buyers are now able to register to bid on their preferred auction. The platform will obtain permission from the listing agent and confirm within 48 hours.

Vendors can also request to have their auctions broadcast to a larger buyer audience.

Co-founder Joel Smith said that auctions streamed on Gavl attract 47 per cent more viewers than traditional ones.

He said that Request an Auction will be valuable for remote buyers.

“Buyers are able to have Gavl attend any auction they nominate, so they will never have to miss out on an opportunity due to logistical complications in physically attending the auction.

“Vendors, too, have the opportunity to directly book an auction with us, so they can open up their event to buyers all around the world. With more potential buyers, they’re giving their property the chance to receive more bids and maximise their sales result.”

Mr Smith said that prior to the Request an Auction app, buyers were limited to what they could achieve through the Gavl technology.

Gavl is a live-streaming and bidding platform for real estate auctions.

Mr Smith said that it has streamed more than 6,000 auctions, which have achieved 3.5 million views from 50 countries.

Gavl’s Request an Auction function is currently being offered in Melbourne and Sydney only.

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Boost for investors as app sets up off-site bidding
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Having to split her time between Hong Kong and her original base of Sydney has not slowed Julia Tita’s goal of building a high-performance Australian property portfolio. Instead the resulting alterations to her strategy have positively impacted her investing success.

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Having recently purchased her 6th property, Julia joins host Tim Neary to discuss her journey, share her ups and downs over the years, and reveal her thoughts on why some properties are better than others.

Julia also explains why she no longer makes a move without the help of a buyer’s agent, why working with a strong team of specialists is extremely important and discloses her long-term property ambitions.

If you like this episode, show your support by rating us or leaving a review on iTunes (The Smart Property Investment Show) and by following Smart Property Investment on social media: FacebookTwitter and LinkedIn.

If you have any questions about what you heard today, any topics of interest you have in mind, or if you’d like to lend your voice to the show, email [email protected] for more insights!

RELATED AREAS OF INTEREST:

Why is Australian property so unaffordable?
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AREAS MENTIONED:

Eagleby
Charters Towers
Townsville
Brisbane
Paddington
Sydney
Orange
Melbourne 
Glen Iris
Bondi

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How a move to Hong Kong impacted Julia’s Australian property goals
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The practice of property investment firms sharing undisclosed kickbacks among the supply chain involved in development sales will be outlawed in NSW on 1 July this year under the Real Estate Reform being handed down by regulators in NSW.

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Property commentator and valuer, Suburbanite’s Anna Porter, said the reform will address conflicts of interest.

She said they arise when a mortgage broker, accountant or financial planner receives part of the commission from the property firm, who receive their fees from the developer or seller.

“This puts the broker into a position by which they are being paid on both sides of the fence,” she said.

“Until now this has been a grey area and there was nothing stopping this practice.” 

Ms Porter said this has been a common practice in the industry.

"Some well-known mortgage broking firms openly admit to receiving $5,000–$10,000 per referral in their pocket.”

She also said this process has been going on for decades.

"Property investment firms commonly pass some of their commission on to the mortgage broker, accountant or financial planner as a reward to them for passing on the referral. This means that many brokers or financial service providers are making significant amounts of money just to refer on to a property firm, often totalling hundreds of thousands of dollars a year," Anna Porter said.

Ms Porter said the Property, Stock and Business Agents Amendment (Property Industry Reform) Bill 2017 will be in force from July this year, and will prohibit this practice unless the broker or referring partner also holds a real estate industry license.

"Under the new laws, if the broker takes a referral fee from the property firm, they will have to be a licensed real estate agent and also hold a corporation’s license,” she said. 

“Subsequently, every transaction that they receive a referral fee from, they will be putting their license up against the transaction and taking full liability for the conduct, practices and outcome of that transaction, even if they have little to do with the transaction; they are a party to it financially and therefore take as much risk as everyone else in the transaction.”

Mr Porter said where a referrer holds a real estate license, and receives a part of the sale commission, they may find themselves in breach of the ethical requirements under the act.

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‘Common’ referrer practice of being paid on both sides of the fence coming to an end

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