From a $15K deposit to $1 million Property Portfolio

In this installment we meet Julie Semple, mother of three, wife and property investor. Shortly after attending the recent Property to the Max Workshop in Brisbane, Julie took time out to share her investment journey with us and the secrets of her success. Enthusiastic and young, she is incredibly passionate about property but admits that this passion has come from experience, research and networking.

Julie’s History
Married to a grazier, Julie and her husband were first inspired by property after finding themselves in a situation which saw them as being asset rich and cash flow poor. With a cattle property as part of their portfolio, the couple decided to diversify which made them more money but also handed them a huge tax bill. As a result, they decided it would be better for them to pay interest and therefore branched out.

Julie began her investment journey by searching for properties in Central Queensland. “We bought our first property 6 years ago, looking at Mount Morgan, where houses were selling for about $50K. We then looked at Rockhampton before deciding on Yeppoon (the gate way to Great Keppel Island). We finally decided on Yeppoon because it was by the sea with relatively untapped potential and was also easily accessible for Central Queensland miners and graziers. We had no real set criteria, but wanted a WOW factor so went for sea view”.  

Julie’s Purchasers
“We bought a 2 bedroom, 2 bathroom unit in a block of 6 high above the town. The unit was upmarket with granite kitchen and bathrooms, spa bath, complex pool, fully air-conditioned with large veranda overlooking town, marina and a view out to Keppel. We wanted to use as little of our own money as possible and used a $15K deposit with mortgage insurance to buy the unit for $280K. Within 4 years the unit was worth $600K and during that time we used some of the equity to buy a block of land”.

“For the seller, it was the last of five he had so we felt that he would be a motivated seller (I always ask why they are selling to assess motivation). We offered $50K less and he took it without a counter offer. The block was bought for $230K and is now valued at $400K and has magnificent uninterrupted views out to the islands at Yeppoon. So from $15K we grew $1 million in property. As our equity has grown we have continued to buy more properties”.

Julie’s Criteria
Many investors have their own strategy when it comes to broadening their property portfolios. Julie is a perfect example of an investor who has been successful in purchasing properties which meet her criteria. “We like sticking to homes that are about 5 years old but then make improvements so that they rent easily, such as add air-conditioning and larger outdoor areas. We also look for homes with 4 bedrooms, ensuites and entertaining areas which are close to schools or with views and in the better areas of town. The towns where our houses are have a lot of people involved with the mining industry that are looking for better quality homes and are prepared to pay higher rents for them. Our unit that we bought for $280K, we rent fully furnished for $500/wk and haven’t lifted a finger”.

Julie also advises that she enjoys dabbling in renovations. “With our Rockhampton house I bought it because it had a ‘sleep-out’ off the main bedroom, which I converted into an ensuite and fourth bedroom. I put in a granite kitchen from ‘Cam Brown’ auctions ($7000 installed and with granite cut compared to a quote of $13000), and had the builder create a really ‘cute’ entrance veranda to add street appeal”.

Julie’s Strategy
Julie likes to follow advice from the Reno Kings and only spends 10% of the purchase price on adding value to her properties. “Unfortunately I am a perfectionist and did however overcapitalise with the Rockhampton house. But I learnt so much in the process of renovating.   We have a house in Biloela which was a total make over and we will make good money because we bought at the right time.

I used Bunnings a lot and feel that next time we need to buy within 500m of the store to save on trips. We have put in several IKEA kitchens. They are very good quality but they won’t organise transport so we have to travel 8hrs down with a trailer. The kitchen from Cam Brown came all made up which saved time and we should have arranged for the stone mason they use to cut the granite down in Brisbane, because the cutting worked out very expensive up here”.

Julie's Lessons
Like so many other property investors, Julie has learnt many lessons along the way. In our interview she shares her experience with us. “We have done very well out of our commercial property and Stuart manages that side himself. We have found newer homes in Yeppoon have done very well also. I use a fantastic Yeppoon property manager and I stay in very close contact with all of the managers. This is very important.  At Yeppoon I have all properties with one company and I negotiated that they don’t charge the first week’s rent with new tenants and also charge a lower management fee. I am too busy to worry about tenant hassles and there are many no matter how careful you are”.

Julie’s Advice:

• Just do it. It is costing you money while you are out of the market. Once you start you will take a keener interest in the market and be willing to learn at a faster rate.
• Believe in your goals and know that you are capable of achieving far more than you can ever imagine.
• Know the area intimately
• Always get the local real-estate guide
• Drive around weekly
• Talk to people in the area you have chosen
• And better still, become a real-estate agent.

Julie’s Education
Believing in educating herself is a means to increase her property wealth.  "I have attended ‘Property Women’, ‘Property to the Max’, ‘On the Buses’ and the second day that accompanied that weekend. I have also helped out since at ‘Property to the Max’ and am enrolled in the new ‘Developing for Profit’ workshop on 21st-22nd June 2008.  I have become totally absorbed,” she tells us. “We have properties in Biloela, Rockhampton, Yeppoon and Gladstone, which include houses, groups of commercial properties (shops), and land for development. I have now also obtained my real-estate licence and am embarking on a career as a real-estate agent in Yeppoon. Education is the key”.

If you are interested in pursuing your property journey and understand that education is the key, click here for more information on the Reno Kings workshops.