'How I bought nine properties on a modest income – all before 30'

A young property investor reveals how he’s going to smash through his goal of acquiring 10 properties before the age of 30.

Jeremy Iannuzzelli

Jeremy Iannuzzelli is an accountant on a modest income who started saving for his first property when he was earning less than $10 an hour. He talks to The Smart Property Investment Show about how he built his portfolio even though he wasn’t raking in the cash, how many risks he’s willing to take and where he hopes his portfolio ends up.

Jeremy also reveals whether the sacrifices were worth the effort. Does he feel like he’s missed out by putting away 50 per cent of his income? Is he disappointed he’s never backpacked around Europe? Has he had time to stop and have fun?

Jeremy reveals all this and more in his first instalment with The Smart Property Investment Show. Tune in in coming weeks to learn more about his strategy, what working as an accountant has taught him about property investment and some of the tenant disasters he’s encountered in his properties in Sydney’s west.

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Phil Tarrant: Hello and welcome to The Smart Property Investment Show.

In this episode we speak to Jeremy Iannuzzelli about how he's bough nine properties in less than five years, and guess what? He's only just turned 26 years old.

Good day everyone and welcome to The Smart Property Investment Show, I'm Phil Tarrant, I'm the editor of Smart Property Investment and I'm also a passionate property investor. Really excited about this one, we've got Jeremy Iannuzzelli in here for The Smart Property Investment podcast, I hope I pronounced that correctly, did I?

Jeremy Iannuzzelli: You did, mate, perfect.

Phil Tarrant: Say hello to everyone Jeremy.

Jeremy Iannuzzelli: Hello guys, how you going? I hope everyone's well and had a fantastic new year and I hope you've done your goals and your settings for the new year as well.

Phil Tarrant: Jeremy is one of the most driven young investors I think I've seen. He's only 26 years old and this guy has already got nine properties under his belt, and that's totally blown me away. I've known Jeremy for a while, a couple years now, but I didn't realise he was that far progressed in his property buying. I'm pretty impressed and I doubt there's many blokes at your age Jeremy who are sort of sitting there with nine properties under their belt.

A couple of things I want to chat to you about today, and we could chat all day about your experience buying property and how you're going with it all, but you're 26 years old, mate. You should be out spending your money on beer or backpacking around Europe or doing all the other stuff which means you haven't got a penny to your name. Mate, how did you get nine properties so young?

Jeremy Iannuzzelli: It's a bit of a long story but it stems through from an early age obviously. I loved saving money, I loved working, especially as a young kid I had a first job at a pizza shop as most young kids do, earning my $7.50 an hour and refereeing soccer games on the weekend for a little bit of cash money, so it all helped. It was just getting towards that age of 17 and 18 years of age and I saw my father, and him being an accountant as well similar to myself, it was stemmed through us that we need to invest, save your money, put your money into a property, a bit of a solid foundation at an early age. It was just part and parcel with work, what I was doing at the time of being an accountant. I saw successful people and what successful people were doing and that was putting their hard-earned savings into investment properties.

I was lucky enough to see the start of that boom in 2011, 2012, and I was lucky enough to be in that boom as well, and riding that wave with a lot of other people and seeing equity grow. It was a transition between a young adult into where it is today.

Phil Tarrant: How did your dad educate you about money? Obviously you're an accountant, so you understand there's a lot of disciplines and principles and doesn't matter whether you're an accountant in Australia or an accountant in America or an accountant in England, there's basic fundamentals which is essentially how money flows from X to Y and does all this, that and the other, and there's a whole bunch of tax implications associated with it. What did your father instil in you in terms of understanding what money was and how money worked?

Jeremy Iannuzzelli: That's a really good question and I tend to tell people a little bit about that as well, what my father taught me, so maybe they can teach their children who are growing up the same. Round table discussions, coming home and understanding what a dollar today is two dollars tomorrow, understanding the power of the compounding interest effect as well.

A bit of a funny story I like to tell people on my 13th birthday, other kids got Play Stations and push bikes, and my dad bought me a 1,000 Telstra shares. It was a fantastic present looking back when I was 21, when I was able to sell them at a good price, but back at 13 you think ‘What a waste of money a piece of paper is’. Those are the type of things he'd done for me as a young kid to really instil to me that saving is an integral part of growing up and a dollar today has resulted in many, many dollars after many years. Very fortunate to have that guidance and influence as well. He was a strong saver as well.

Phil Tarrant: What other education outside of those things have you done to prepare yourself to be initially a property investor, and then a multiple-property investor?

Jeremy Iannuzzelli: Very much started as a hands-on person, as all 19, 18 year old kids are. If you put a book in front of them, they more tend to just throw it aside and maybe get on the internet or Facebook. I was very hands on, I thought that’s was the way to force myself to really progress. I got out there and I looked at properties. I got out there with my father on weekends and I dragged him along, I had a partner at the time and I was dragging her along to open houses as well, and auctions, and getting a feel for the market, getting a feel for how it worked. As a 19 year old, 20 year old, it's pretty daunting going into an auction and trying to bid. So getting myself familiar with the process was huge. Getting myself familiar with how real estate agents work, that's another benefit as well. What makes them tick, how to work out whether or not you're getting the right deal or not.

I was hands on at the start, for the initial property, the first one I bought, and then it got more data oriented to really understand where the yields are, where the growth is, where the prospective growth is, what a council was doing, what a state government's doing. I'd like to say that hands on approach initially is good, it benefits you, it keeps you in the game, and then moving forward to get that next level investor you really need to focus on the data and what's the future in hold or in still for a particular area?

Phil Tarrant: Just keeping on talking about money before we get to goal setting, because it's connected. Nine properties, and I imagine you're okay chatting about this stuff, what is the total dollar value of – the value of the properties in your portfolio now?

Jeremy Iannuzzelli: It's about $2.5 million, give or take a little bit more or a little bit less, as a market value. Again so it's probably close to about $1.8 million maybe just under in terms of loan, so there's a good $700,000-plus equity.

Phil Tarrant: You're the maths guy – $700,000 on $2.5 million value.

Jeremy Iannuzzelli: Oh you're really putting me on the spot here, mate.

Phil Tarrant: It's good, it's not bad. It's a reasonable LVR then on a – you're not sort of drowning in debt.

Jeremy Iannuzzelli: No no. Look on average, speaking I like to float between 65 per cent to 7 per cent. I think that's a comfortable leverage because it leaves, I suppose enough leeway in the belt, so if you need to tighten you can and if you need to loosen you can as well. I think that having that type of leverage, it really helps you through both cycles, whether it's a down cycle or an up cycle. So you really need to maintain that little bit of buffer because the last thing you want to do is come to refinancing point of view after interest rate period's up and unfortunately maybe stuck with paying LMI again on the same property. Having that buffer helps.

Phil Tarrant: For our listeners, we're talking about the loan-to-value ratio, which is essentially the amount of debt that you're holding compared to the total value of the property or that the assets, whether it's individually or as a pool.

Jeremy likes to keep his around 60 per cent to 75 per cent, which is, for a lot of people they would think that was quite risky, for a lot of people, they would think that's extremely conservative. It's just really where your risk appetite lies and I'm not qualified to be able to talk about giving people financial advice, but for someone, generally someone in your age bracket at 26, that's probably an LVR which is reasonably comfortable.

Jeremy Iannuzzelli: Yeah it's comfortable. I get to see a lot of people's leverages as you would know in the profession that I'm in. Generally speaking I saw the average leverage go up as people really started to expand their portfolio. It's really the only way to do it. We want to aggressively buy. So I'm starting to see people's average leverage anywhere from about 80 all the way up to about 90 per cent. Now not necessarily am I comfortable with that but again as you said, all people are different and have different risk appetite as well.

It's about if you can manage it as well based on cash flow, what your income is, what your goals are – so all those things are a combination but 65 per cent to 75 per cent, in between that is where I'm comfortable.

Phil Tarrant: Over time you want to grow your property portfolio. Could you just explain to myself and also our listeners what's your goals in property investing? Why are you doing it? And what do you hope will happen as a result of it?

Jeremy Iannuzzelli: I started the journey at about 21, I'm 26 now, so I started the journey about five years ago and I really said to myself, "You know what, I gotta make a good go of it. I'm not going to take a half attempt and fail. I'd rather just go hard and really just put myself into it." ‘Neck deep’ as they say and just give myself all the opportunity in the world that I can. ‘Fortune favours the brave’, as they say.

I started at 21, I did all my research and I said to myself, "By 30, I would love to achieve 10 properties." And I thought that was a reasonable goal, I had nine years to do it, which meant 10 properties in nine years, and I said to myself, "It's reasonable." Still aggressive, not everyone can achieve that for different circumstances, but I made that my goal and I've been working every day towards that. I'm not too far away, only one more to go but nevertheless I'm not rushing to it. If it happens in the next year, or it happens in the next two or three years, as long as I hit my goal of 10 by 30, I'll be very happy.

Phil Tarrant: Where did that goal come from? Was that your goal or was that influenced by your wider network or property mentors or whatever you want to call them?

Jeremy Iannuzzelli: Yeah a little bit of both. I got to see people with two properties, I got to see people with 10, and I've got to meet people with 50, 60, 70, all the way up to 100 properties. So I've got to see a wide range of how different people invested and –

Phil Tarrant: That's being an accountant?

Jeremy Iannuzzelli: That's being an accountant, yeah. It comes back down to the old rule that it's the time in the property. It's not something that happens overnight, it's definitely not something that happens in one year or two years, it may take a little bit longer. Each people have different times to achieve that.

I said to myself that I'm going to give myself time and I think 10 was reasonable, and it was an internal goal as well as a little bit of an influence from other people saying, "You know what? You can achieve it, and 10 is not an outrage number."

Phil Tarrant: That's you're immediate – when you first set a sort of mid-term goal?

Jeremy Iannuzzelli: Yeah.

Phil Tarrant: Now it's a very short-term goal. One more property in four years, I don't think you're going to have a problem sorting that out, unless something goes wrong but I doubt it will.

Sort of bigger picture, why are you doing this? I imagine it's a wealth creation?

Jeremy Iannuzzelli: Yeah it started off as an, I'll be open and honest, I started off as I wanted to retire young. I wanted to get rich and I thought that's the whole goal in life is get rich, retire young and have a ball.

But I've started to realise that I love doing what I do, I love investing. I think it's fun, I love educating myself, I love talking and educating other people on it. Now it's changed in the sense that I want it to compliment what I do. I want to use my own portfolio to assist people to create their own and I like to think that I am a positive influence in the community. I do get out there and spend a lot of time and chat with people and not necessarily do I get paid for that time, it's more so just because I love doing what I do. As I've got to 26 and I'm sure as I get older, I love working as I mentioned and it's something that I'll probably see myself doing until the brain starts to really say ‘No more’.

The goal now in terms of what I want to do, is to continue to invest, to really push myself to the next level, but it's transformed in a way that I want to encourage people to really get on board and use myself as an example and say, "Look I didn't necessarily have the golden spoon or the silver spoon, it was through hard work and a lot of research and you can achieve it as well."

Phil Tarrant: Are you looking to replace your income at some point in time with property or is that just going to be a bit of a kicker?

Jeremy Iannuzzelli: Yeah that's a great question. I think that I would love to replace income with property because it gives you options and having more options in life is fantastic. It allows you to explore different things. That would be a great result. If it does, and I'm sure it will over the longer period of time, but essentially if I can continue growing that extra income will continue to fill the gap and the next property will come with it. It's all about testing the limits now. It's all about testing myself and how much I've got to give, and that's what I really enjoy the most.

Phil Tarrant: Mate, when I was 26 years old I was lucky to be able to have enough money to buy a couple schooners of beer, so I'm really impressed. But when I was 26 years old I'd done quite a lot up until that point and messed around and backpacked and all that sort of stuff. I think what you've done is absolutely commendable and I'm very, very impressed. Do you feel like you've missed out with anything by doing this?

Jeremy Iannuzzelli: Yeah it's a great question, Phil. I get asked that all the time. I asked that from family, I get asked that from friends, I get asked that from clients, because obviously they say that you need to sacrifice to get those things in life.

There's an element of truth to that question and the answer that I did go backpacking around Europe and backpacking around the States and spend numerous amounts of things on fast cars and fancy holidays and the finer things in life. I live to my budget. I gave myself a good budget and I did get to go on a couple holidays. I went on a couple cruises and I've done a Thailand trip with a close friend of mine and got to spend a bucks party in Vegas, which was fun – but all that happened towards the mid-way through my 20s.

My focus was getting through uni, completing my degree in accounting. Really cementing myself in the position that I was in and really setting that foundation strong.

When I'm 30 years old and 35, I can really start to open up my wings and enjoy the things maybe I should have done at that age, because I always say ‘Never too late to experience life’.

Phil Tarrant: Absolutely.

Jeremy Iannuzzelli: Is there any regrets? Probably not. I look back and I say I'm happy with what I've done, but would I want to go on the Europe trips and all that stuff? Well, they're in the pipeline.

Phil Tarrant: The thing is what you're doing right now, it's going to give you the capacity to do those things. A lot of people want to create wealth for a whole bunch of different reasons, some people just want to be rich for the sake of being rich. Some people like the opportunities that being financially comfortable provides. Whether or not you go backpacking when you're 20, or whether you can travel in style when you're 30, because you've got a nice property portfolio bubbling and boiling away in the background, it's pretty good.

Thanks for coming in.

Jeremy Iannuzzelli: I appreciate it, thank you.

Phil Tarrant: Make sure you stay in touch.

For all of our listeners we're going to have some more information on smartpropertyinvestment.com.au, so make sure you go check it out. Jeremy will be giving some more of these tips and tactics for how he's been able to build his property portfolio so quickly.

Remember also you can follow us on Facebook and Twitter if you want to keep up to date with what we're up to and what we're doing.

Jeremy, say goodbye to everyone.

Jeremy Iannuzzelli: Mate, thank you very much and take care everybody and have a fantastic 2016 year.

Phil Tarrant: Thank you everyone, see you later.

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