How to Buy 6+ Properties Faster!

Why do so many people get stuck at one or two properties, yet some go on to build a multi-million dollar portfolio?

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In this article, I want to share with you some solutions to the obstacles that you may be facing right now that are stopping you from getting to five-plus properties here in Australia.

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If you're interested in what my thoughts are, definitely keep reading.

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The Reality of Multiple Property Ownership in Australia

I would say that most of you reading my blogs are interested in retiring with real estate, so you're effectively thinking: I need multiple properties, but I just don't see how it's possible.

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So let's first address:

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Then we'll work backwards through four key obstacles stopping you from unlocking unlimited financial freedom.

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According to Core Logic and the ABS data:

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I can tell you now it's closer to 11 trillion.

If you did a simple LVR (loan-to-value ratio) calculation, you're probably looking at around 20%. So, if you're looking at Australia as a whole, our LVR position is closer to about 20%. Although most people who have purchased property in the recent 10 or 15 years, your LVR might be a lot higher, closer to about 70 or 80%.

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Now, 56.7% of Australian household wealth is held in housing. So when you think about Australia, and people from overseas think about the Australian market, they see that Australians are absolutely obsessed with Australian real estate.

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Why? Because a lot of our wealth is tied up in this one thing. This is important because when you think about the government, most likely, they've also got their wealth in real estate, and that's why there's an incentive to really prop up the housing market, even beyond our means.

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This is why we have one of the most unaffordable cities in the world, which is Sydney. 

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Additionally, it was also reported that:

We don't really have the updated data. Easily, I would say that number is much higher. However, with interest rates having gone up considerably over the last 18 to 24 months, that number is probably quite stable to where it is right now.

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Now, here’s how many properties investors held in Australia in the 2020-2021 financial year.

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If you add these two numbers:

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You will get:

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This means 89% of investors in Australia hold two investment properties. Yes, you can argue that:

• They might have them in multiple names; or
• They might have them under trust structures.

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However, the reality is that if you own two properties, you're probably not using a trust structure anyway and that is a big number. When you think that 89% of investors only ever get to two properties, it makes you scratch your head and think: Why can't we get more?

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If you go on, you see almost 6% own three properties and only 2% own four.

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This is where the number really declines:

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When you get to five properties, it's less than 1%, and it's less than 1% of investors or about 20,000 people that hold six or more investment properties.

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This is absolutely nuts, knowing how much we know and how some people have held some properties for so long.

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This is why it's a good time to just take a step back and realise where you are. Smell the flowers, my friend, because if you're someone that owns more than five properties, you're in the top 1% of Australian investors owning real estate.

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One thing is to have all these numerous properties, and then the other thing is the value of those properties and what they provide for you.

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You could go out there tomorrow and say: Well, I'm going to buy a unit block, which has four or five properties, and they're going to cost me about $50,000 each because it's in some mining town.

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Well then, yeah, of course, you got multiple properties—but is that going to get you to financial freedom? You compare that to someone who's owning one house in Mosman for like $6 million. They aren't the same thing.

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This is why:

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Sometimes, to execute that strategy, you need multiple properties; you need them in multiple locations.

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Other times, you may only need one or two properties to get to financial freedom.

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Overcoming the 4 Key Obstacles to Owning More Than 5 Properties

Now, let's think about the four key obstacles that hold us back from getting from one property all the way up to five or more.

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Clearly, the number suggests that it is quite difficult.

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So why is it difficult?

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1.  Borrowing capacities 

With interest rates where they're at, it's not the only thing the bank considers.

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What most banks will do is say: Okay, if the interest rate is 6%, I'm going to then add a buffer rate of 2% or 3%, and that is what I'm going to assess to determine whether you can afford this property or not.

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So you may sit there and say: Well, okay, my monthly savings is $2,000, and if I get an investment property, and now I'm losing, say $1,800, yeah, I could still service the loan. So I should get it.

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However, if you were just basing this on 6% interest rates, and not 8% or 9%, like the bank is actually going to consider, then unfortunately, you won't be able to service that loan.

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This is why you aren't able to get the loan as high as you think you could, and this is such a limiting factor in how people can grow their wealth, keeping a lot of people stuck.

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2.  Developing a Long-Term Investment Strategy

Most people, when they go out and invest in property, it's usually by accident.

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What most people will do is they buy their home that they're going to live in, and then suddenly:

• They outgrow the home; or
• They want to upgrade in life, so they go and purchase another property.

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However, they hold the initial property and say: Well, let's just get tenants in there. Now we've got an investment property.

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This is one of the worst ideas, because when you purchased that first property, it was emotional.

• You didn't look at the data
• You didn't look at the suburb
• You didn't think: "What is the long-term growth of this area, and is the yield even going to make sense for what my end goal is?"

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Instead of going: I'm going to become an investor by accident, why don't you be proactive and create the strategy upfront?

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The best way to do this would be to figure out what the end goal looks like. So, if the goal is: I want to generate $100,000 of passive income through real estate, well, you could either try and figure it out yourself or go ahead and book a free discovery call with my Search Property team to help you have the North Star—the vision of what the goal looks like, and then you can work backward.

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For instance:

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If you're someone that is:

• Age 20;
• You want to retire by the time you're 50; and
• You want to retire on $75,000 worth of passive income,

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You will know what the end date is, and then all you need to do is go backwards, and say: Okay, I would need to purchase X amount of properties at this price point, at this yield, and that will get me to my eventual goal.

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Most people aren't doing this, and I can promise you, I hear this a lot.

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When I talk to my sales team, I say: "Hey, what is the number one thing that people are unaware of?"

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They will say: "They have no strategy."

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This is why they go across to a buyer's agency like ours, which is a full-service buyer's agency. We're NOT just finding a property and saying: “Oh, Joe Smith came to us and said: ‘Hey, I want to buy a property for $500,000.’ Then we go: 'Here you go. See you later.'"

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It's a holistic approach. It's going: Okay, Joe Smith, you want to buy property, why do you want to buy it? What's your goal?

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Once we figure that out, we're saying: Well, here's the roadmap. This is how we're going to do it now. You can either go do this yourself, or you can execute at speed.

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I know that there's a couple of things guaranteed in life:

• Taxes
• Debt; and
• People are really confused with something like real estate and real estate investing in general.

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3. Gaining the Right Education

Now, this can be one of two ways:

• There's too much education.
• There's not enough education.

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I'm going to say that 15 years ago, there wasn't enough, and now, I feel like there's too much, because every single person is going to bring their own journey, and you need to align yourself with the people that resonate with your goals and lifestyle.

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For example:

If you're someone who's gone through your early 20s, or currently in your 20s, you're saying: Okay, I'm young. I have particular things that I want to spend money on. I don't want to be heavily negatively geared because I want to be able to enjoy my life and not have the restrictions posed on me, because my properties are draining my wallet due to being negatively geared.

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So you might go: Well, I'm okay to have negative cash flow by about 150 bucks a week. That's not going to break the bank, and I can do that for the first year or two, and then by then, the rents will go up, so I'm okay to hold a property like that, and it needs to be affordable.

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If you're someone like that and you're saying: Hey, I want to go and buy multiple properties. How do I do that?

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You would align yourself with someone like myself, and that's probably why you're reading this, because you're going: Hey, this guy just did that. He bought 13 properties by the time he was 28. He got financial freedom early in his 20s. (This was before I even started the buyer's agency.)

So if this is something that you're after, you've got to go and align yourself with someone who's done that.

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You don't want to go: Hey, this person seems like they know what they're doing. They've got two properties, but I have goals of buying 10 or 15.

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Well, they're probably not going to be the right match for you.

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This is what happens when you've got too much education because some people suggest there's only one strategy to get there while others will tell you a completely different strategy, and you've got to decipher what makes sense, so it can be really confusing.

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This is why I urge you to subscribe to my YouTube channel whether you use my service or not. You can see the different tactics and strategies people are using because:

• I speak to a lot of people;
• I've seen what the richest people are doing;
• I've seen what the people that are struggling are doing as well.

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When you don't have enough education, you might not value the certain things that are out there, so you might go: Well, okay, my uncle told me that I should go and buy a property, because he seems like he knows what he's doing. He talks about loan-to-value ratio (LVR) and Lenders' Mortgage Insurance (LMI), and I have no idea what that means. I'm following that dude.

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I can tell you, you shouldn't follow your uncle.

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In the case of not having enough education, you can go out there and make mistakes, and unfortunately with real estate, there are high dollars involved.

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It's probably the biggest purchase you'll ever make.

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It's the most debt you'll ever take. That's why you need to be very certain about the decision you make when you make it.

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If you don't have the confidence to do it yourself, or you've tried it yourself, you definitely need the right team around you to be able to execute, and this is the final point or the biggest obstacle which is:

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_{4. Taking Decisive Action}

I can read all I like about how to do a push-up, the right form, and the right structure.

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However, until I'm doing those push-ups, I'm not going to know how it feels, and I don't know what mistakes I'm going to make. So I urge you, if you are watching videos on my YouTube channel or you've been reading my blogs for a while, contact us…at least, you're starting to make some moves.

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Yes, reading or watching is one thing, but you need to start executing. You can go and put that practice to use.

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Now, if you're someone that's never heard of me, and you've come across this article or someone shared it with you, welcome! I hope you guys have enjoyed this, but more importantly, go and start making some moves, whether that's:

• Having a budget in place;
• Having the right strategy in place; or
• Actually going and buying property, because you've had that money sitting there, always reading the news, and thinking:

Oh my God, the world's collapsing. Everything is doomed. Six months later, property prices are higher than where they were. I could have made a ton of money. I shouldn't have listened, but no, there's a recession coming. I better not buy anything, and suddenly, you're 70 years old, you can't afford bread because it costs 250 bucks at Bakers Delight, and now you're like: "I should have just listened to Ravi on YouTube."

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I hope you guys have learned a lot from me in this article. I'll catch you guys in the next one.

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Thanks guys!