The basic principles that can become a 31-property portfolio

Key foundations

While most people start contemplating becoming a property investor in their late 30s, Mr Gordon had his eyes set on a clear goal at an early age, taking inspiration from wealthy people who made it big through property investment.

“I always wanted to build a big portfolio. When I first started, I set a goal of ‘10 by 30’. I thought 10 homes by 30 would be a fantastic small goal to be able to accomplish,” he said.

Mr Gordon considered his first investment in a unit a good deal then. In retrospect, he now concedes it was not a good deal for a first-time investor with his income level due to negative cash flow.

Despite this, the young investor was able to pull equity from that first investment, purchased land to build a house, pulled equity from that, and repeated the build-and-scale process until he found himself investing in two properties annually.

“I built pretty much the whole portfolio in about 11 or 12 years. There’s a lot of sacrifice in there in the middle of it, through the whole thing of it, really. But it’s that snowball effect that starts coming through,” Mr Gordon recalled.

31-property portfolio and mentorship

From focusing on growth and recycling equity as key foundations of his portfolio, Mr Gordon has shifted to cash flow and high-growth locations in Sydney, Brisbane, Adelaide, and Perth with a preference for apartments over units.

His portfolio’s value now sits at $15 million, with a 60 per cent loan-to-value ratio generating $300,000 in income every year.

With a big sum of annual cash flow from Mr Gordon’s portfolio, Mr Tarrant asked: “What do you do with 300 grand in your back pocket every year?”

“I just reinvest it,” he replied. “The cash flow and the equity has been really what’s allowed it [portfolio] to grow to the size it is.”

According to Mr Gordon, he has been passing on his strategy to young investors with ambitious goals but with a much smaller budget.

“You overestimate what you can do in a year, but massively underestimate what you can do in 10,” he claimed.

To help manage expectations and highlight just how important it is to set realistic goals, Mr Gordon reiterated that the key to investing is building the foundations.

“A lot of time, you’ve got to build the foundations in a lower price-pointed sort of area and in a more affordable bracket because it’s very hard to build a portfolio of 31 properties at a million bucks each. But building them around $400,000 or $500,000 each or something like that, you have much better cash flows,” he said.

Noting Mr Gordon’s impressive portfolio sitting on a huge amount of money, Mr Tarrant asked how he’s able to resonate with clients who are just starting in their investment journey and with a smaller budget.

“I still buy properties around that sort of money myself as well,” the director revealed.

Listen to the full conversation with Sam here.