100 properties and $500,000 income: Why this property investor sticks to his ‘big goals’

“It's an interesting yardstick, [the word] 'well'. All these properties put about $80 to $110 in my pocket every week, after all [of the] costs including mortgages, maintenance and everything,” MJ said, “All of these have their own separate offset accounts, so mortgage comes out, rents go in—there's a sizable sum in there. So, yeah, I think I'm on the right track here,” he added.

He shares some of the highlights of his property investment journey, as well as his plans of action to ultimately achieve his big goals:

You’re doing quite well now, but what could you be doing better?

MJ Anthony: I wish I'd bought more, I wish I'd gone a bit harder, but there [are] reasons that people go at a certain pace… When you have that knowledge and foresight years later and all that information as well, it's like, ‘Oh cool, I know what I could have done five years ago—only put in 5 per cent deposit back when there were 95 per cent loans ... ’ and not done 20 per cent deposits, and stuff like that… [And] use your equity a bit harder, but still being cash flow positive.

How would you describe your strategy?

MJ Anthony: Cash flow positive property, buy below market value, below the median price, [at] regional towns. I bought a lot in Wellington in New South Wales. I've got no qualms purchasing in other regional towns provided the numbers stack up.

How do you choose a good investment in regional towns?

MJ Anthony: You can't have a regional town of 300 people in it because you have no supply and demand, it's too risky. So, [select] a large enough regional town with lots of people—how many schools? How many hospitals? Is there a Bunnings? Is there a McDonalds? [Are] there infrastructure going in?

Wellington's building wind turbines, that's their next project. They just expanded their jail, so that was another 200-odd jobs starting up … Good job growth [is important], and have a look at the census data as well. Is the town growing over time or is it shrinking? Are more people going into the town than leaving?

[Stay] away from the rivers … Almost every regional town is built on a river, so you've got to look for flood maps [and] make sure you don't buy in flood affected areas... Just reduce your risk.

Phil Tarrant: One of the key things will be diversified economic base—reliant on a number of different industries.

MJ Anthony: [If] there's a single industry doing 60 per cent, that's a bad [sign].

Will you keep buying in Wellington?

MJ Anthony: Oh absolutely, I wish I had 100 there.

A lot of people go "You're crazy," and I'm like, "Well, okay, have you done what I've done ... ?" You know, walk a mile in my shoes before you comment.

Do you recommend buying multiple properties in one town?

MJ Anthony: No, it doesn't have to be one town. I don't mind where, as long as the numbers make sense.

Phil Tarrant: Well, my argument would be: If you were happy to buy 100 in Wellington, what is it about Wellington? Can you replace Wellington into another place? How many other towns in Australia have the same basic fundamentals of what Wellington does, right? It must be plenty of them.

How do you find other good areas to invest in?

MJ Anthony: The challenge is [that] the price to buy in might be slightly higher, or might be slightly lower, depending on where you go… You could just use a similar strategy as long as it ticks all the boxes … [Make sure] you're buying below market value—that's really important, too.

What is your plan of action to reach your 100-property goal?

MJ Anthony: The plan is to generate enough cash flow, then using the cash flow from the properties as the deposit rather than going to rely on the banks to value, to extract equity, because it's really, really tricky now with lenders tightening up … So, the old strategies of just wait and let it grow and then revalue, take out the equity, and use that as a cash deposit are gone.

I can use the cash flow from these properties as deposit, [to] roughly buy one every six months. And the more you have, the more it percolates and the quicker the graph goes up.

What would be your advice for property investors reaching for big goals?

Phil Tarrant: If you're not willing to put the time in, you can't expect to get the benefits in the future—that applies to anything, whether it's property investment, or sport, or marathon running or whatever it is.

Know your numbers intimately … That's pretty important if you want to have the aggressive growth targets in terms of portfolio sizes you've had.

Tune in to MJ Anthony’s episode on The Smart Property Investment Show to know more the benefits of investing regionally, how buying cheaper-end properties helped quickly expand his portfolio, and how he’s pigeon-pairing property to balance his assets.