$10M Real Estate Portfolio: Return on Equity Investment Guide
Sam O’Connor started his property journey with his family as a part of trust back in New Zealand. After moving to Australia and starting a brand new portfolio, O’Connor now shares his tips in building a portfolio and creating an instant investment return on equity.
Tune in to learn about O’Connor’s background and early start to investing, the highs and lows of the journey so far, and his tips for growing a portfolio quickly.
O’Connor has been involved in property investing essentially his whole life.
I’m originally from New Zealand. Been working in property investment as a family trust for a number of years almost as young as I can remember. I got started getting heavily involved in my teenage years throughout university and was carried on through with property investment and my adult life.
Having lived and invested in New Zealand for so long, O’Connor only recently made the move to Australia and worked his way up to continue his investment journey.
Recently I’ve moved over from New Zealand to Australia. So my property investment journey has been based mainly based in New Zealand recently moved over to Sydney just over a year ago and just so into wanting to replicate the process just over a year of what we’ve done in New Zealand. And so the last year has actually been for the first time in a long time as working at it in a day to day job in the corporate scene. Now just for the purposes of meeting the banking requirements to get a loan in Australia and fortunately it’s taken a year and managed to get the property in Australia. Just last week.
He explains some of the reasons why he made the big move to Australia.
I’ve been in New Zealand most of my life since I moved to Australia just for a bit of a change and also to get into the property investment game over here.
So you know certainly is great. I mean I love the weather. I love people and lots of great opportunities.
And his assessment of Sydney in particular.
If you look at the metrics of Sydney in terms of weather, employment growth. You know just business opportunities and entertainment certainly meets a lot of high benchmarks compared to other cities and countries around the world.
O’Connor grew up in New Zealand and was exposed to business and investment from a very young age.
I was brought up just north of Auckland which is the main city of New Zealand or the largest city on the border. There is quite an entrepreneurial family. So most my family has mainly been business owners, entrepreneurs, in some sense and that certainly rubbed off on me from a young age. And when I was very young I was exposed to other grandparents and also the parents of property investment and business and from a young age, you know certainly understand business from about I think it was about 12 years old and I read the book Rich Dad Poor Dad by Robert Kiyosaki which was quite a famous book quite well known and it certainly struck a chord where you know there’s a lot of people that work nine to five their whole life until the 60s and then they retire. And Robert Kiyosaki has bought basically stated you know if you create investment or business opportunity you will have no financial freedom so you can decide how you spend your time rather than having to work to make ends meet.
He explains the type of entrepreneurial ventures that took place in his family.
The grandparents, for example, was one of the first introduce motel’s area.
Before then it was hotels and B&B type accommodations. And then also as a family, my parents they’ve started the property investment journey and I’ve been involved in that as part of the trust and help them grow that from when I was around 15 or 16 been involved quite actively and also when I went to university I did a Bachelor of Property degree so I managed to really supercharge the trust portfolio and certainly over the last few years really really grown it’s quite a substantial size.
While his grandparents were involved mainly in commercial real estate, O’Connor and his family stick to residential, with an interesting twist.
It was there was the grandpa was first to do that but in terms of the trust that I’m involved with, I know that purely mainly multi-unit residential. I mean from a bank’s perspective, unfortunately, once you get to a certain size up to around forty-six rental properties now they do start to classify you as a commercial especially multi-unit residential and so it could be classified as a commercial operation but the property use is as residential units.
O’Connor’s family would go up against other investors to purchase these multi-unit residential dwellings.
So all purchases have been already built. So it’s purely an investment and the reason for that is obviously development can create much higher yields. But then there’s always the risk of you know overcapitalized or budget blow out. So it’s always been a buy and holds Nexus and it started from when I was quite young at around 10 10 years old and then you know nets and I started involved at a point from then on the units you know we would multi-unit properties. The great thing about it is quite often there are less potential buyers in the market. You know if your you know if you’re trying to buy a two-bedroom or a three-bedroom house there’s a lot of potential buyers are owner-occupiers investors but if you purchased a block of units typically you’re only competing with other investors. So we’ve found buying blocks units differently means there are higher yields available. And also it’s quite because they’re often and this is owned by other investors quite often now run down so they can be a great value add ons by purchasing blocks units and doing them up getting.
After being surrounded by it all his life, O’Connor decided to study Property at University.
It was a four-year degree and I did a bachelor property and did so so the family trust operated quite well and the benefits I really I brought on board which helped a lot more after university was particularly the law side of things. Also the marketing these subs some accounting as well but also just the scope of thinking a lot larger. So the bachelor property degree I was what was worthwhile it included basically development finance marketing construction law. So by bringing the academic side too to the trust it certainly helps grow it more substantially.
While still studying, O’Connor took up work opportunities with development companies to expand his knowledge and skillset.
I decided to work for a couple of development companies and investment companies through university holidays. And the reason for that was just to get a little bit more exposure to other entities and how they work. So it was great in terms of understanding more of a corporate nature. So even though I’m not a big fan of corporate type work I think there’s no harm in working for some of these large and Dishman in development companies and picking out the best parts of it which you can match your own portfolio.
Even now, O’Connor often makes sure to keep himself educated on the market and legislation that affect him and his business.
I’m also a fan of you know doing yearly catch ups the solicitor and an accountant and even if there is nothing specifically to talk about it’s just a generic talk you know what. What new changes have happened in the market? What new legislation might be occurring or about to occur? I think unless you force yourself to expose yourself to other people’s opinions and advice then you may just stay stuck in your and your way of thinking.
He describes how his family were able to grow their portfolio and the ways in which they were able to add value to their properties.
The trust has been going since I was 10 years old and I became involved once of about 16 17. So it is gone from about 10 to about 40 40 states in that time. And that’s also true you know really supercharging equity and what we’ve found certainly in our last few decades is that the easiest way and the quickest way to grow equity we’ve found is by the creation of bedrooms. So quite often council consents or Bonington are not required but by the creation of bedrooms to a unit I can instantly create higher cash flow through rent and that obviously means you get high equity so we’re able to you know refinance use increase equity in deposits on your property. And I think it’s certainly something that a lot of people don’t take into consideration they view a property. And so quite often when we walk through a property now as well as looking the condition of the property structurally and all that type of thing. It’s also looking at well as that lounge you know big enough to be able to dot off another room. And it may sound quite trivial you know it may only add an extra 100 or 200 dollars a week and rent but at a 5 per cent return that’s anywhere from 50 to 80 thousand dollars an increase in equity. So if you can buy a property each time that creates one or two bedrooms you certainly creating that growth instantly rather than waiting for the market to grow.
Sometimes there may be barriers to accomplishing this, but it can work quite well for houses.
One of the issues is if you find an apartment and you’re not buying the whole block then sometimes there is strata approval was required.
But certainly for houses where you know you’ve got soul system power in the creation of bedroom certainly something that people should really focus on if they are looking to you know wanting to get cash like properties and some equity game.
O’Conner has always been drawn to studying and working in property, due to his keen interest in his family’s ventures since childhood.
I have always had a very strong interest so from a very young age it’s always been you know reading the property magazines property books and quite often when it’s you know even when I’m on holiday that is the type of information that excites me. And it’s never too healthy but sometimes you know it’s 1:00 a.m. in the morning I wake up I start trawling through listings online what’s available so I think I think you know naturally I’ve always had a passion and just so it so happened that you know the family business was also involved in that. But also you know I think a lot of people are usually quite interested in what their parents have done and quite often continue in their field and that’s certainly for me as happened to.
These days, himself and his father play key figures in their family trust and portfolio.
My father looks after natural quite a few of the repairs and maintenance and renovations and refurbishment still more as a project manager also sort of overseeing the people that come in and get things done. And my mother’s a little bit more hands-off she sort of hands-on more day to day type role and then my other sibling is not involved at all. So it’s some involvement but it’s certainly my father and myself being the one that they do most sort of work in most investigations in terms of purchasing a new search.
O’Connor shares a story about learning to invest with your head, rather than your heart.
In the earlier days, you know maybe having motion rather than you know given base you know a bit in it purely on figures and demographics so no one purchase was a beautiful spot which was on beachfront property and as a property. Very nice but surprisingly that’s always had a very good yield and no properties near the CBD even though they may not be as nice to look at. Have always performed a lot better. So certainly you know not looking at demographics and infrastructure projects in the area and closeness to the minute these including schools and Sydney CBD in the early days. And so certainly now it’s a lot more location-based rather than what looks nice or what’s beachfront or what the character of the home looks like. So there’s a lot more I suppose investment but it must focus rather than emotional.
He further explains how he learned this lesson.
So it was a two-bedroom home and you know a lot of coastal properties though because they are desirable for people to live in. Quite often the value compared to the yield as the yields are usually very very low and this was the case and it was also a property where there was no value creation. So it was so small that you know our usual criteria where we can add bedroom wasn’t possible without having to go through Messam consenting process and I mean the yield now is because over time you know over 15 years now it’s it has become to a point where you know it’s cash flow positive and it looks after itself but for quite some time you know there was very little growth in terms of yield and you know that certainly can hinder being able to purchase small properties quickly.
At the time, capital growth wasn’t as stable in this suburb, as perhaps it was closer to the CBD.
Over the long term it has had capital growth but of course when the market goes quiet so in the early days when the market was a bit quieter than it was in the boom time then you know that the property quietly dropped in value.
And so you know if we if we’d purchased more close to the CBD there wasn’t as much fluctuation and it’s a bit like bear sections you know quite often when the market does slow down or a bit of a downturn and quite often actions are one of the first properties to drop in value and quite often also coastal properties because if because that you know quite often coastal properties seem more of a luxury rather than a necessity.
O’Connor shares a positive moment that he feels changed his trajectory on his journey.
I think one of the best moments is that I can recall as you know really heavy and tense of talk with a solicitor and really structuring things in the best way possible to make things so they were as safe as possible for limiting risk as much as possible but also in a way where you know if we were getting more loans from banks that they weren’t getting as much equity or security over the properties as much as they’d like. So solicitor consistently well it’s also our case certainly helped us in terms of making sure we had the right ownership structures but also making sure that we knew exactly which mortgages being which mortgages the bank held over certain properties and we could move more mortgages around to release equity and other properties if we wanted to.
He emphasises how getting himself educated was really important to move forward.
I think you know quite often unless you seek information you won’t find it so there’s a lot lot of investors for example or buyers that buy property in their own name and quite often it might be a lot better to have it in a trust for tax reasons or to you know make your exit more secure from creditors. So you know I found I started listening to podcasts reading a lot more magazines as well. Quite often you know a lot of these magazines you know they do mention you know ways of making things more efficient.
So basically just through education forcing myself to learn more and more and taking action on what I’d read and learned.
O’Connor has very specific professionals that he turns to regularly for advice.
I was always of the belief that you know to regularly be in contact with both an accountant and also a solicitor. And the reason for that is even if everything is good now you may find six months time there’s better things that can change that can happen especially because the laws are changing all the time. There are different ways of doing things that may not have been possible six months or a year ago. And you know certainly spent a lot of lawyers look of it but in the long run, what we’ve paid them compared to what we’ve either saved or managed to create and value far exceeds that cost.
Yet these aren’t the only professionals O’Connor looks to for advice when it comes to purchasing.
I think you know for someone to you know to get approval to go buy a property I mean that’s a good achievement but it’s not. It’s not rocket science I think you know it’s finding the right property that’s going to make your long term goals that most people’s goals are you know you know increase in an income from the property and an increase in the value of the property so that due diligence is very important and you know for some people either a they don’t have the time to do that because they’re working so much in their day to day job or two they’re just not willing to do it because of the work involved or possibly the ability to do the research so you know the property I’ve just purchased last week in Sydney you know I used to buy agents for that property and even though it cost me about twelve thousand dollars U.S. spy agent that’s the spa agent you know they really knew the demographics of the areas they knew how many properties there and the eastern suburbs were renters versus owner-occupiers. They knew future infrastructure projects that were happening in the area in terms of transport.
They knew the demographics of the type of people that live there. So were they you know unemployed or were they, workers, what their incomes were were they are from and also past history of the suburb. So what has been the growth over the last 40 years for example per animal on average?
So those are the sort of things that I look at but I don’t know a certain area very well then you know I’m willing to pay for that advice to get someone that really does. So it’s about I suppose you know spending money to make money and not just going blind because it can be very easy to buy a property in some place k out from from the CBD or a city and you just don’t see any growth for 10 years or worse still you know someone that goes and buys in a mining town where they go to make the equity and in the place out. So I certainly think if you if you’re not willing to do the diligence yourself then you should pay someone that really knows this stuff.
A 10 Million Dollar Trust Portfolio with Sam O’Connor
O’Connor discusses how he was motivated to grow his portfolio, and implement his equity-building strategies.
As you know the first property is technically always the hardest and then at slightly get even easier as time goes on. One of the biggest hurdles of the last couple of years was in finance so.
It has grown on itself of certainly become a lot more ambitious mainly because I now know what’s possible and the more research and look at other people you know maybe five or six years ago I would have thought 100 properties were a lot. Now you know how you read about people that the founder of Marash on who holds around five-five thousand properties. You know you’ve got Nathan Birch who has about 200 to 250 properties is only about 32 years old. So it’s sort of the goals have sort of resonates as I’ve known you know what’s possible and I certainly think you know reading biographies and reading stories and other successful investors and business people can certainly make you more driven or make you know that you know you can really think quite big and that’s something that we’ve really started to do in the last few years and that certainly helps grow the portfolio.
O’Connor bought his first property entirely in his own name in Sydney just recently.
It’s a two-bedroom apartment about 13 K from the CBD and a suburb called Bexleyheath. So it had two garages to two bedrooms one bathroom and the market is obviously but softer in Sydney. So you know there’s a lot more availability. You know we saw this property looked at checked all the boxes in terms of you know just the same day transport school schooling and also the property itself that was you know a block of about 30 units.
The property was about 50 60 years old so it was proven that you know it wasn’t cracking or leaking and we got that for four hundred and ninety-nine thousand and it was purchased my own personal name and the reason for that is that the Australian banks and New Zealand banks don’t actually allow you to use equity in each other’s country relatively easy. There is some second-tier finance companies. I believe that they may do so but the main banks don’t. And that’s why I’ve had to teach that in my own personal bank rather than through the trust.
He plans to spend more time to invest and grow his portfolio here in Australia.
I’m going to spend a lot more time in Australia to grow the portfolio in Australia. So it’s only one in Australia, got about 46 in New Zealand. But I still spend a lot of time you know the good thing was you know having a bit of a team is you know is working from online. So as long as I’ve got an internet connection I can basically work from anywhere.
The lending issues across Australia and New Zealand can cause him a bit of a problem.
I mean one of the biggest issues for banks is at the moment in Australia, of course, is that they are wanting you to know regular income in New Zealand.
So at regular income in Australia no boating that you know that banking history in Australia because you Zelo because they don’t have any control over any control over anything. In New Zealand, it’s hard for them to you know be as happy to lend out as they are. So I’m just taking things as they come. I mean I’ve had the royal commission come out a couple of days ago. So it’s just saying what the financing landscape happens in the next few months.
O’Connor is enjoying that his investment journey can take him anywhere.
I’m a fan of travel I’m planning to go to Europe sometime and.
And so yeah like like I said I’m not focused on and address. I do love Sydney but you know one of the joys of property investment is that it does allow you know if you’ve got passive income to be able to travel and move around and not be locked into one place. Certainly, for myself, it is easier because I don’t have children or any massive commitments and that sense. And you know that’s one of the big reasons why I know a lot of my friends that I talked to as you know why push them towards property this because you know in the medium to long run if you invest wisely it will generate a passive income where you know you have freedom of choice of where you live and what you do.
O’Connor shares with us the details of his current investment portfolio
The portfolio New Zealand which is a family trust myself and the family that are involved. You know it’s grown now to around about 10 million in value that can be very hard to cycle the markets do go up and down. So it’s risen around the 10 million dollar mark but 46 properties in total generating around about 400000 a year and gross income.
Despite the gross income, the net income can fluctuate due to reinvestment.
What the great cry out when you get that sizeable portfolio is when you know when you do it a 10 or cent increase per year which doesn’t sound much all of a sudden it’s 20 thousand dollars a pop you know. So if you can do two or three those a year then it certainly helps you know really supercharge your income. So the total portfolio is probably around the 10 million dollar mark. I mean it’s hard to be certain because the market does change and also you’re getting valuations every six months or a year a be slightly off but that’s probably where it starts. And in terms of total cash flow, they bring in and around 400000 a year and gross income and I mean in terms of the net income that varies a lot.
And the reason for that is because we know we reinvest a lot of the profits back to the trust whether that’s creating more bedrooms might be subdivided not the section of land that’s not required. You know just last year we decided to do a whole lot of new moves even though they didn’t necessarily have to be done. You know they probably could. Some of them could have gone another five years and then we just started a whole lot of them.
Keep in mind you know the next 50 to 100 years you know when I may be touching again next.
He describes the difference between the markets in New Zealand versus Australia.
It’s certainly caught up to Australia and so there is a lot of homes with secondary Cameleon million. What was found is to get the yield to make and so basically the cash flow positive as to have to buy blocks units and hence why the value of each unit is only like you stated probably two to 400000 units. And for investors in Australia, they’re looking at is Yelland. It’s certainly not as good as it used to be.
There is still some good buying opportunity there but unless you’re buying blocks units or you’re creating bedrooms to existing single dwelling properties it is very very hard to get cash flow unless you are willing to take that risk of investing outside of the main cities.
Another difference between Australia and New Zealand investment is the required deposit size.
There’s a lot more management then you’ve got a lot more open is certainly the market between New Zealand and Australia as they are in terms of the actual investment cycle and the operations and the legislation the laws and property management and how the banks work very very similar. Australia is very lucky whereas an investor or home buyer you only need you to know in New Zealand by law you need a 40 per cent deposit.
So if you’re an investor you by law the government made a law you need a 40 per cent deposit. Well in Australia you know you might get away with 10 or 20 or maybe 30 per cent. So certainly to purchase a property in Australia and New Zealanders there’s a lot easier due to that needing a lot of deposit and the other big plus, of course, is that interest rates in Australia are a lot lower. So I mean obviously interest rates stay low forever but that certainly helps and know to be able to finance loans and mortgages. So you know I was quite baffled when I first came to Australia and I heard you could buy property on a 10 per cent deposit and you know you don’t I don’t think you have to be an extremely high-income earner to be able to save. You know we owe that one in Sydney last week for 499.
So if you’re able to save 10 cents 50000 I don’t think you know I think your average your average worker if you if saving well and you know not to buy new cars and eat now all the time then and that type of thing you say 50000 I think is achievable.
Jumping more into O’Connor’s mindset, he shares why he believes in property investment.
One one of my biggest why I believe in property investment as you know is an investment vehicle as leverage so you know you are quite often using the bank’s money and you know I read these stories in the media where they say all shares are up 20 per cent for the year and properties only up 10 per cent. But if you actually look at the amount of capital you put into the property and your equity return on capital quite often that return is a lot higher and you know you know if you want to invest in shares and different and different investments you quite often have to use your own money with property. You can leverage and it just supercharges your wealth in the medium to long term and at the end, the other thing is I think you know with the property it doesn’t go up and down overnight. I think your peace of mind for a lot of people was actually buying a two-bedroom apartment you know 15K from you know Melbourne or Sydney then you know I think I think most people know deep down in the medium to long term that it is going to be a good investment, Yeah and for some periods that it’s gonna drop in price but you know it’s only a loss a few seconds. So I think in the medium to long term it’s it’s almost guaranteed you know to increase in value if you remain patient.
With this in mind, he believes falling house prices shouldn’t be so scary to past purchasers.
I always say look.
Property prices and you know they do fall and one worry for people as you know property prices falling back a lot.
But you know as long. What. What I’ve you know worked out as long as you keep paying your mortgage on time. The banks know that if your properties with less than that then you’ve paid for it. First of all, it can be very hard to prove. But even if it was to be proven as long as you keep paying your mortgage usually banks are reasonably happy to see that through and it’s you know and property properties do go in cycles and it’s just you know the times when the market’s quiet when you know we naturally people are scared it is a great time to be born you.
In fact, it’s a great opportunity for many to purchase property.
I think you know the that the supply on the market property and a lot of the main cities in Australia as you know some of the highest it’s been in years is not as many people looking to buy you know you’ve got your first home buyer then you know you got your first home buyer stamp duty exemptions so get into the market right now and of course, interest rates are still very low. You know personally I think that’s a great time. And but you just need to be patient where you might not see any growth anywhere from one to seven years. It may for the next seven to 10 years may not increase in value at all.
And you know it’s very hard to determine what the value will be but I think if you’re in the long term game you’ll soon do well.
In a similar vein, O’Connor recognises how high prices can affect a purchaser.
I think knowledge is always the one. I think a lot of people think that to you know to buy it by an investment property or your own property is a massive massive commitment and it is a commitment. I mean you are in a legal contract with a lender but what you need to remember is you know you very common now is where you know you rent in a suburb you want to live and you’re buying a property that just purely for investment purposes so some people think oh I’m never going to buy it because I can’t afford you know a million-dollar property because in the suburbs they want to live that’s what it costs. Well you know I’ve always thought well you can still rent and buy an investment property in an area that you don’t want to live but that still shows a good long term growth.
In fact, renting in your desired suburb could be a better move, strategically, as it is cheaper than paying a mortgage in the area.
Quite often you know a lot of the desirable suburbs I’m looking out and Bondi Beach certainly wasn’t like sort of you know quite an expensive area and the issue is you know it’s you know if you do buy your own property Yeah but you decide to leave and rent it out. You know it’s very very unlikely that the rent you’re going to pay for the mortgage. So you know I think it’s becoming more popular for an investor to realise that you still live in a very nice area a very nice home but you don’t necessarily have to own it.
O’Connor shares some of the mentors he used to gain insight into successful investment, mainly looking towards other people who had succeeded before him.
I think you know a lot of the property investment magazines I mean for 120 dollars a year subscription or whatever it costs I think you only learn one or two things from there and you’ve got your money back.
So surprisingly a lot of the property in magazine ads you know if you know what I do every year so much now but every year. The rich list than I’d go through there and I’d look up every single person that was on the rich list due to property you know googled your name lookup you know interviews they’ve done and their background and a lot of them have very similar strategies you know which are you know to buy and hold rather than just buying them quickly flip it was buy and whole you know generate equity through renovations refurbishments or property that add a twist and having a good team. So whether slots are their property manager an accountant and that type of thing. And so you know I don’t think a person that was kind of just gone blind. They can look at other successful investors see what their strategies are. There might be some things they don’t agree with. But for whatever reason but you will find a lot of successful investors do have very similar goals and ways of managed to achieve financial freedom.
O’Connor would often even reach out to these individuals and take them out for coffee.
There has been too and there was I find you know typically the younger people probably because they can relate to you more. But you know I’ve met with people off the Rich List and property and it was more just I mean I end up being more motivational than anything I didn’t actually learn in any legal aspects or anything like that but it was motivation or not I certainly believe in you if you surround yourself with no driven people that rub off on you and that’s something that I make sure that I’m always hanging around people that have a pretty driven you know healthy you know like enjoy life.
Reaching out wasn’t as difficult as one might think.
Well, I’ve got to say I mean and the other thing is as quite often people are willing to help out or give some snippets some advice and you know it’s not like you have to go out there and try find these investors you know successful business people at their homes quite often they’re out there on LinkedIn and they might have a company website you can email them and you know I found when I am it’s something quite special. You know it might be something like you know an engineering thing it might be a new financial product that’s in the market as you know as just turn a blind email to an expert in that field and see if they willing to give that advice and a lot of the time they are.
O’Connor shares some specific resources that he used to educate himself on his property journey.
Obviously your own podcast of I’ve been listening to a majority of those that have come on and it’s really been some good information in there. I think you know a lot of the mainstream news media I think it doesn’t really go into much detail but look as you know I’m a little bit more academics are actually read through legislation that’s passed through parliament. There’s reports of a real estate property and property management and that’s not for everyone. So I’m not saying you know you should force yourself to read dals legislation the new test cases that have happened and the tax structures that have been found to be in bed by and by the courts. But I think it’s an I think it’s very good to read some of the you know maybe top 10 books in the library which I certainly did you know maybe a property management book maybe about accounting certainly some some some legal aspects engines ownership structures but also some motivational books I found. Richard Branson’s autobiography is quite interesting. You know is quite often used a lot of people’s other money to create valuable assets you know and hide right people was certainly something I learnt from them. So you know it’s good to know a little bit about everything but I don’t think you know you need to quit your job to really study it because as long as you got a generic overview and understanding of what’s going on you can always pay the experts to look through the sale and purchase agreement.
You know do you do your tax returns for the money.
Here is some of the best advice Sam O’Connor has ever received:
I think that probably two parts. I think number one as far as being ethical and honest you know the world’s very small place now. And I think in the long run being ethical and honest is always going to you know I don’t think it’s going to be any negatives from that. I think the second one is just re-evaluating what your goals are what you’re wanting to achieve.
You know obviously I’m a promoter of creating wealth and freedom of times I can generate passive income you can do what you want but you’re saying that you know of lots of trends or people that I’ve met over in places like Bali for example where you know they just love surfing or art and they spend their days and every day and they live on twenty dollars a day. They’re extremely happy and they’ll be able to do that forever probably. So I think it’s important to do what you’re passionate about and you know whatever that may be. But I certainly think prompting investment because it doesn’t take up a lot of time. If you outsource a lot of work to property management for example then you can still do what you’re passionate about. I also create wealth and passive income.
So true. I mean like the being they can surf and then you know have the property for her pay for their lifestyle as well.
Absolutely and I guess you properties I can probably fly around to different countries in the world to other places locally.
He shares the personal habits he believes contribute to his success.
I suppose it’s you know it’s keeping healthy. I mean it’s pretty hard to keep driven and excite about life if you’re not healthy. So certainly getting fat and eating well I think you know if you’re able to research and you’ve got a real interest in learning often found that helps me because without seeking more knowledge and learning it can be very hard to move forward.
If Sam O’Connor could meet himself 10 years ago, he’d have this to say:
I probably would have said possibly take more risks. I think there’s is any hold off a little bit in my early days in terms of investment the trust has always been relatively conservative. But I think you know to try to say oh the market’s going to drop the next three months let’s hold off and then you’ve missed an absolute killer deal because it sold and then the market dropped. So I think it’s not been so risk-averse.
I certainly think you know you’d get that guidance from solicitors well before you begin. So it’s a lot easier to you know have the right restrictions from the place from the start rather than buying a property and personal name and then having to transfer it to a trust.
Three years time because then it’s technically deemed a sale same duty in all sorts of different things.
And I suppose just you know remembering to enjoy the moment as well. So you know not working yourself to death and learning you know there’s there is more to life than just business and working.
In the next 5 years, O’Connor is looking forward to seeing how changing technologies will open up new opportunities in real estate and investment.
I surprisingly even I talk about the risk I am quite risk averse so you know the best investments for us as you know properties and good locations that have proven long term growth with good demographics in that area.
So I certainly see ah I certainly see potentially the desire for people to work in offices now with technology the way it’s going there a lot more people might be able to work from home or work through virtual reality or 3D or whatever it may be.
So I think there could be some potential where you know there’s been maybe a lot of the office conversions and residential apartments or a combination living. The other one I see as also boarding houses in shared accommodation.
I think you know a lot more people, especially foreigners, aren’t against the idea of you know having their own studio room but with a shared kitchen and shared bathroom which might be shared between 10 10 units or 10 studios for example.
And so I think I think there’s going to be a lot more of that type of development and investment. Yeah I mean there’s always the unknowns watches which is the legislation you know New Zealand, for example, they just ban foreign buyers last year from buying properties so there are unforeseen changes that I don’t know about. But you know I’m reasonably happy with what’s been proven over the last couple hundred years and that and it’s finding good locations with good demographics and good proven long term growth. That’s sort of what I’d like sat on and I think it is important to see what the trends are. But you know I think if you start spending too much time thinking about what’s going to be in the next hot thing you know it’s quite often unproven and it may and may do really well but it’s unproven and it may hurt you in the long run and I think you know the prime example was people you know the hot thing she years ago was was mining you know and then just in a mining towns and you know people always got any steel on the net and you know interesting thing with a lot of the mining towns is quite often I still got record output of production. It’s just the infrastructure is in place now so they don’t need all the people to employ all the people to live in the area. So I think if you could see was that the trends are maybe don’t put all the emphasis on what’s the next big thing.
O’Connor believes luck, skill and education helped him in his success.
I think I think lucky if you live in Australia and New Zealand was my apart could be born into a country where you know well you know you live in a reasonably good quality of life. I mean it’s quite easy to get access to schooling you know health care and the like.
So certainly where you’re born I think certainly in terms of my interests and property investment is a bit of both. You know I have studied it a lot and you know the university degrees and the likes but in saying that what I study for years realistically I probably set down three months to two months read a whole lot of books and podcast different things I’ll have picked it up and then another time.
So certainly there has been a little bit of academic but I’m not you know I’m not good with numbers for example or not good with don’t tax returns so I’m not very skilled in that regard but I’m quite good in regards to you know looking at areas which I know are going to be Zariba walking through property see what can be generated and value can be generated to that property through innovation. And look I think at the end of the day there always is some luck. I mean there’s people that brought maybe five or six years ago and they’ve seen the property got 50 to 100 per cent and it didn’t really matter where you bought around say Sydney or Melbourne five years ago it certainly increased. So there’s certainly some luck there myself. I mean I don’t believe this massive luck because my strategy has been pretty solid from the start and that’s that we buy properties and good locations that cash flow positive and long term buying holds.
If you’re interested in reaching out to Sam O’Connor for a coffee, here’s the best way to do so:
Best to look me upon them. So Sam O’Connor luckily there’s not too many people with the exact same name is 4 or 5. So on the best looking one on MTV if you just add me on there, I’m happy to help out some questioning.
You know and certainly able to answer my journey of what what we’ve done in New Zealand or what I’ve done in Australia and you know maybe put you in touch with some of the people I’ve worked within the past as well that you know by agents and solicitors and accountants.
This episode was produced by Ashlyne Ocampo with narrations and interviews conducted by Tyrone Shum.