Four years after Mitchell Burge started his investment journey, he built an impressive 12-property portfolio, and it’s all thanks to the way he handled the mortgage for his place of residence he bought almost a decade ago.
The tradie and property investor acquired his original place of residence back when he was 20, but he only got to start building his property portfolio at 29. However, his diligence in paying down the mortgage of that first property made up for the years that he somehow procrastinated into starting his business of creating wealth through property.
"I bought my original place of residence when I was 20 and didn't kick off the portfolio until I was 29. In that time, even though I paid too much for that house, I bought it at the peak of the market, and there was still equity there to pull down. I pulled down on that equity," Mitchell shared.
His friend Alex Whitlock — the one who convinced him to start building his portfolio after a particular fishing trip — added that Mitchell was dedicated enough to pay down the mortgage as fast as he could that, as a young man, he really put a lot of his salary to it.
Mitchell said: "That's why the portfolio grew so quickly. From the day I got the mortgage when I think I was 20, 21, I put everything into it. As I earned more money and things, I lived the same life that I've always lived and never splurged out and put everything into that mortgage so we could do [property investment]."
Right now, the property investor owns 13 properties, including his place of residence—all valued at about $4.3 million with 58 per cent loan-to-value ratio.
"It sounds pretty aggressive, 12 property purchases in 2.5 years since we first started, but it actually hasn't been and most people have the capability to do it," he shared.
I had $300,000 to draw down on the house. At the time, the median house price in Minto, three years ago, what we were looking to invest was $250,000 to $260,000. Then, since that market dried up and got out of control, we've moved to Brisbane, $250,000, $260,000.
"On average, I put down about $60,000. If you look at a $300,000 draw down, allow for reno[vations], you can comfortably do quite a few properties with that... [If] you're not leveraging and then if it's the right sale and it's neutral yield or slightly positive, it's not costing you a cent. You're making immediate equity on the way in and you're making money out of it each week or breaking even, so there's no limit. You can keep going."
Tune in to Mitchell Burge's episode in The Smart Property Investment Show to know more about his journey as a property investor and how he plans to acquire 10 properties in 10 years—or even more.