My first property investment was a train-wreck
My first foray into property investment was an all-out train wreck. Think disaster, sh*t-show and total nightmare, all wrapped up in a brick-built bow that happened to be falling down. Oh, and I lost $30,000.
Now you might ask yourself why you’re reading a blog about how to nail property investment written by a guy that picked such a gigantic loser on his first go. The fact is, mistakes are how we learn, how we grow and they help us realise what we’re made of.
Are we going to let it kill us, or make us stronger? I opted for the latter, but it wasn’t easy and I learned some interesting things along the way.
I honestly believe that if I hadn’t made such a catalogue of mistakes my first time out of the gate, I never would have brought the trophy home in the end. I never would have been part of the Positive Real Estate Group and gone on to be a managing partner at Australia’s oldest real estate agency, Richardson & Wrench.
I wouldn’t be where I am today. Let me share with you where I went wrong and how you can avoid falling into similar traps.
MISTAKE 1: I MADE ASSUMPTIONS BASED ON NOTHING
Residential real estate is Australia’s number one asset class, meaning we have more wealth in our homes and investment properties than anywhere else, including superannuation and other investments. What does that actually mean? People want to own property because it makes them money.
Rewind a few decades and making money wasn’t only something I wanted to do, it was something I needed to do.
After starting a few small businesses I’d learnt that the dream is certainly not the reality. You don’t get paid, you don’t have any money and you work longer hours than people with a normal job.
To put it simply, I was broke and sick of it. I’d seen friends and family get into real estate and they all made money from it. I thought it was as easy as grabbing the first property you could find and one or two years later – Bingo! – you were rich.
I decided – with absolutely no advice, training or knowledge – that the best piece of real estate I could lay my hands on was one that was close-by. So, I bought near to where I worked. While being able to see my not-so-shiny new investment made me feel certain and secure, in the real economic world the property market doesn’t work like that.
The fact was that I bought an old house, very late in the market cycle in that area, and I paid too much. Very soon I discovered that I was holding a debt bomb for what I was earning. I sold it and lost $30,000.
Sam 0 – Real estate – 1!
Lesson learned: Do your research, don’t make assumptions, get educated.
MISTAKE 2: I LISTENED TO THE WRONG PEOPLE
There’s an irony in real estate that you may not have noticed. When looking to make a purchase you’re usually taking advice from real estate agents, most of whom are not property investors and are not rich. (Sorry gang – that’s just a fact.)
Listening to, and acting on advice, given to me by people who had no real training or right to lecture, tortured me at night, and ultimately led to me making the wrong first property purchase, not to mention a significant financial loss.
Lesson learned: Talk to real experts who have invested and made money, and can give you tried and tested strategies to do the same
MISTAKE 3: I THOUGHT STARTING A BUSINESS WOULD MAKE ME RICH
I was running three businesses and making very little money when I met my business partner Jason Whitton 17 years ago. I knew straight away that he was one of those guys I needed in my life (see, I get it right sometimes!), and very soon he gave me a great piece of advice that I live by today.
You don’t get rich starting a business, you get rich by changing an industry.
It wasn’t long before I hung up my other two hats and joined forces with Jason in his new business, Positive Real Estate. At the time we were pioneers, in that we were Australia’s first buyer’s agent. Part of a small handful of people who were working for buyers and finding them deals, we were one of the first teams to cross state borders and find property in places like South Australia for a NSW buyer.
While we weren’t making pots of cash (and when I say not making pots of cash, I mean literally searching under the couch cushions for change and getting turned down at the ATM. Good times!), we were carving out a niche in the industry that would eventually change the way people approached property investment.
Lesson learned: You’re going to make mistakes. We all do. But we need to learn from them and move forward.
If you want to invest in property and don’t know where to start, talk to the team at Positive Real Estate. In fact, that’s a big reason why we exist – to show every-day people how they can create real wealth and sustainable financial security through smart real estate investing.
Jason and I, not to mention our kick-ass team, have a combined experience of more than 50 years, so yes, we’ve learned a thing or two. And we have the success to prove it.
It’s time to stop making mistakes and make a move. To learn more, register now for our free property investing seminar. You’ll learn the exact techniques and strategies that I have used to generate a profitable portfolio.
Co Founder Positive Real Estate