Property Market Investor recently had the opportunity to spend some time with young Western Sydney based investor Eddie Dilleen.
Eddie has built up a 16-property portfolio in less than 10 years. Eddie’s story is pretty unique and is off the back of some serious hard yards, including working multiple jobs to get those initial property purchases across the line.
Read Eddie’s inspirational story to hear his views on the Sydney and Brisbane property markets, his “three-pillar” investment strategy, and his advice for property investors.
Eddie didn’t let his underprivileged upbringing define who he was going to be. He grew up in a rough neighbourhood in Westen Sydney, living in housing commission with a single mother who was on a pension.
“It was very humble beginnings basically,” he remembers. “No one in my family was working at all. So even just for someone looking on the outside, just having a normal job was not a normal thing for me.”
He adds, “it was just really an atmosphere where there was a lot of struggle, there was a lot of pain, there was a lot of tension in the family and no money.”
Eddie made a conscious decision from an early age to forge a different path for himself. This was the driving force that drove him to succeed.
“At the time, when I was looking forward, I was like, when I’m 25, 35, 40, I don’t wanna be in the same situation. I don’t wanna have to be worried about money and struggling and have my kids in the same kind of environment,” he says.
With this desire fueling his financial ambitions and being only a teenager, Eddie started researching the Sydney property market and how to create wealth by investing in property.
Getting started in the Sydney property market
Eddie got his first job at McDonald’s when he was 14 and still a high school student. After working in the fast-food outlet for about 3 years, he decided to start saving money for a deposit to buy his first property.
“When I was about 16 years old, I realized that no one in my family owned property, and if I wanted to really generate and create wealth over time, I would have to get into property and get into property as soon as I could,” he explains.
From 16 to 18 Eddie was putting away as much as he could from his low-paying job to save for a deposit. At the same time, Eddie was educating himself on the real estate market, doing research, reading books, and looking at real estate portals.
Eddie’s sacrifice and commitment paid off, and he was able to buy his first property in the Central Coast, with a purchase price of $138,000.
With his borrowing capacity at $140,000 at the time, he went right to the top of his borrowing power while putting down a 10% cash deposit.
With his first property under his belt, Eddie started thinking about building a property portfolio. He tells us that his initial goal was having a conservative two or three properties. He didn’t envision he would be able to grow his portfolio to where he is today. “I didn’t think about getting to 16 properties at 27, that wasn’t really my goal at that stage. At first I had a more old-school mentality where I’d buy one or two or three properties, and just pay them off as soon as possible,” he says.
Eddie says he decided to change his strategy after crunching some numbers, “I remember writing down on books and on bits of piece of paper how long will it take me to pay these off. Pay one or two or three off. And then I was like, ‘What will that give me as an income when I’m 25?’ And then I realized that wasn’t gonna work. I’d have to leverage more to build something bigger.”
Growing his portfolio
With a clear goal in his mind, Eddie saved another 10% deposit and bought his second property. It was a three-bedroom house in the Salisbury area of Adelaide.
Eddie tells us that he doesn’t get put off by investing in lower social demographic suburbs. He believes these areas normally offer better yields and even development potential. “Everyone told me, ‘Don’t invest in Western Sydney, and your Penriths and your Blacktowns’ and all that kind of stuff. But they’ve gone up ridiculous amounts.”
“Got a lot of people that said, ‘Don’t buy it.’ Now I’m like, ‘You wish you bought there,’” he reflects.
Buying properties with a high rental yield was a strategy that worked well for Eddie, as he was earning a low income.
“At the time, especially on my second property, I was on a really low income. So I realized that I’d have the property take care of itself from an income expense point of view, because I didn’t have much money to put towards it,” he explains.
This is when Eddie started defining his strategy. His rule of thumb became to look for properties offering a high rental return in metro areas.
“If I buy something nowadays, if it’s negative geared after all expenses by 20, 30, $40 a week, it’s not the end of the world. Back then I thought it was. So, I’ve become a bit more relaxed with the cash flow, because I’ve realize you’ve gotta have a balance of cash flow and growth,” he says.
Buying investment property in Brisbane
When searching for his third property, Eddie decided to look for an investment property in Brisbane. He settled on a small unit that was about 25 minutes south of Brisbane and had a purchase price of $105,000.
Eddie tells us he chose this particular property as it was selling at about 30% below the Brisbane property market value. The owners were in a hurry to sell, which resulted in instant capital gain for Eddie.
“What I’ve learned over the years is that there’s different caliber of real estate agents, like sales agents. Some have the fancy photos. Some have the fancy marketing. Some are like the no name kind of ones. Some are out of area. That can have a massive impact on what they even list the property for,“ he says.
Taking his portfolio a step further
In his early 20s, Eddie was working two jobs; maintaining a full-time role during the day and working as a bartender at night.
During his free time, he was doing all he could to educate himself, staying up to date with Brisbane property market news, trends and the property cycle.
When looking back at this time, Eddie tells us that he was feeling like he had “five good years before the kids.”
“The older you get, the more obstacles you gotta overcome. So I was like, “I gotta do this now.” So that’s when I really just put the pedal to the metal. And started working a lot of hours,” he explains.
When looking for the next addition to his portfolio, Eddie decided to invest in the Brisbane property market once again. “I looked at the prices compared to Western Sydney or where I grew up. Here’s on the beach. This is a lot nicer. And it’s a lot cheaper. So I was like, it can’t hurt to diversify and get one here as well.”
His fourth property was in the Gold Coast, around the Surfers Paradise area. This apartment caught his eye as it was selling well below comparable sales.
“The last one in that building sold for like $205,000. And that one I got for $169,000. That was probably one of my favorite ones,” he says. On top of that the vendor had spent about $40,000 renovating the apartment.
Eddie’s intuition proved right, with a valuation for the apartment coming back 20-30% higher within 12 months of his purchase.
Eddie advises property investors to leave emotions at bay when searching for a property. “A lot of people get emotional with property, where it’s like if something’s not for the right price, I would just walk away. There’s zero emotion involved. But as soon as someone goes there, they fall in love with it, and they’re like, ah, put an extra dog bite for a little bit more and all that kind of stuff. Whereas I’m not like that nowadays.”
He also tells us that he is “not a fan of selling then flipping, unless it’s for a particular purpose.”
“The only reason why most people sell property is to either get the money out of it, or to be able to leverage into something else. But mainly if it’s to get the money out of it, I don’t see the point in this type of investment, ’cause I’d much rather leverage that money and release equity,” he explains.
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The three pillars of Eddie’s property investment strategy
At this stage Eddie had an investment property in Brisbane, as well as properties in the Central Coast and Adelaide.
Eddie tells us that while assessing where to buy his next asset he was considering both the Adelaide and Brisbane property markets. Both of his existing properties were performing well, but at the end of the day, it came down to opportunity. As a result, his next purchase was in Adelaide.
Eddie found an opportunity off-market through an agent to buy a property well below comparable sales. After this purchase, Eddie tells us that he started to put a lot more thought into market value and comparable sales before buying a property.
Eddie’s tells us there are three basic pillars to his successful real estate buying strategy: buying below market or comparable sales, choosing properties with high rental yield, and considering only those that are located within a metro area.
The present and beyond
At the moment, Eddie is sitting on a portfolio of 16 properties, but he tells us he is planning to take a short break from buying properties. “At the moment, it’s pretty hard to get finance, and plus I’m getting married soon. So it’s like I’ll probably be out of the game for maybe six months or so. But I want to get to 20. I’m four away. I’m like, surely I can get to 20 soon,” he explains.
Eddie says that property investing can get addictive, “once you get results and you see you can replicate it and keep going, you just want to grow and grow and grow. I’m pretty competitive by nature, so yeah, I definitely think I’m gonna just keep going. Might have a hundred properties or 200 or 300 or whatever it is so yeah.”
Eddie also runs his own business, working as a buyer’s agent. He helps property investors replicate the strategy he has successfully used over the past 9 years.
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