Finance advice

Making the leap from the first property to the second one: How this investor did it

By Bianca Dabu
Making the leap, first property, investing, investment, property development

Jacqui Zielinski’s first investment property did not work out as well as she had expected, but that did not stop her from seeking a second investment and, eventually, building an impressive 10-property portfolio worth $3 million.

At the age of 19, she has bought a two-bedroom apartment worth $185,000 in the central business district of Wagga Wagga, a place she knew well. According to the property investor, there was instant equity from the property, but that was as far as the positive side of it went.

She shared: “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 the types of properties."

Jacqui knew for quite a while that it was not a very good investment because she was not getting as much cash flow as she expected and there was not a considerable growth in its value as well, even over a period of time. She held onto it for some time before finally admitting to herself that her money is better off once put for another investment opportunity.

“That was the one property we ended up selling, my first property … I just thought, ‘Let's pull out the money now. We can use that cash for either our own home down the track or for another investment property,’ I just preferred to get rid of [it]”, the property investor said.

Getting to the second property

An acquaintance once approached Jacqui and told her about a property that he would like to get rid of, and despite an unfortunate experience on her first investment venture, she saw this as an opportunity to continue her journey. She went to the property in Lake Albert—the suburb where her parents live—saw a half-renovated property, and bought it for $200,000.

Many property investors will advise against purchasing an “ugly duckling” property for obvious reasons, but Jacqui believed in the potential of the asset.

“He'd had an attempt on the bathroom, and the kitchen had somewhat been half-ripped out and it looked like he'd just given up and he just wanted out … [My parents] backed me and ... I quickly used their line of credit, did a renovation, finish it up, got it rented out, and then got it re-valued,” Jacqui shared.

The property was revalued at around $290,000 and she immediately used the equity to propel her onto her next properties.

Aside from learning that “the best gifts come badly wrapped”, Jacqui was also able to prove to herself that there’s no effective way towards success other than working hard and playing smart.

According to Smart Property Investment’s Phil Tarrant, a bad experience should not frame your opinion about the venture. Instead, use it as an inspiration to move forward and try harder.

He said: “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.”

“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,” Jacqui added.

Their final advice to budding property investors: Make sure to really want success in property investment and go all in.

Jacqui said: “Some people might say [I’m] obsessed with it [because] 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,” the property investor added.

“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,” Phil concluded.

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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  ["title"]=>
  string(51) "Boost for investors as app sets up off-site bidding"
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  string(55) "boost-for-investors-as-new-app-sets-up-off-site-bidding"
  ["introtext"]=>
  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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Going global
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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
object(stdClass)#1214 (52) {
  ["id"]=>
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  ["title"]=>
  string(88) "‘Common’ referrer practice of being paid on both sides of the fence coming to an end"
  ["alias"]=>
  string(82) "common-referrer-practice-of-being-paid-on-both-sides-of-the-fence-coming-to-an-end"
  ["introtext"]=>
  string(246) "

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.

" ["fulltext"]=> string(2238) "

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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