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How to Start a Business at 15 and Buy a Property at 21 years old

Updated 14/03/2018

Chatting to property obsessed mortgage broker, Kirsty Dunphey, we will follow her journey from jumping a hurdle and starting her first business at 15 years old, to getting into buying a property - where she would discover her passion for property and go on to build a future for her family.

Discover how this mum of two overcame adversities her family faced during her childhood and how she used $90,000 from the bank and a $7,000 first home owners grant, to purchase her first piece of property at 21 years of age.

"They had a little portfolio, I helped my dad manage it when I was young, so I think my parents are partly to blame for the fact that I'm a little bit obsessed with property. "

-Kirsty Dunphey

My name’s Kirsty Dunphey, my title is I'm a mortgage broker, I'm a property investor, I'm a mum - mum being foremost in my mind this, as my four year old woke me up at 3 am this morning. I was trying to be all rested and relaxed for this but she had other ideas. And I guess I've been working in the real estate world since I was 15 years old, I had a number of real estate agents myself and then a couple of years ago I got into mortgage broking. All of that and other experiences I've had over my life watching my parents just fueled a love of property investment and I’ve got a big smile on my face that you want to talk about this, it’s one of my favourite topics. So yeah, I'm happy to get into it.

Awesome. And about the 4-year-old, I can totally relate. There's usually those nights and mornings where we get up at 3 and 4 am and just go, ‘Ohhh.‘

They’re so cute though! My four year old woke me up this morning and said, ‘Mum, don't you want to sleep with me?’ And I thought, ‘I would love to, but you know I would also like to sleep without a four-year old’s foot being shoved in my solar plexus!

In any given day, Dunphey’s role as a mother is split with managing clients.

My day at the moment it starts at 7 am, usually, I'm not one of those super early risers, but I get up at 7 am, I get my kids ready and we get off to school and then I generally start appointments at work from about 9:30 am and I work a school day most days; I work part-time in-office hours and then more than full time outside of office hours, so pretty much my day is back-to-back appointments. I see clients pretty much non-stop throughout the day in 15 minutes, half an hour or 45-minute increments, so I hardly ever even get time to eat lunch. So it's like back-to-back to back-to-back, because I'm busy - and I've got to see clients in work hours typically, so there's not as much time for me as it would be for someone who works a traditional workweek.

And then I usually go and pick up my kids about 2:45 pm, hang out with them for a couple of hours, dinner, bed, fun time story, piano practice, all the fun things that you do when you're a mum of a 4-year-old and a 6-year-old. And then it’s bedtime for them at about 7 pm and I try to never let it get past that and then I get back to work again. So I tend to do anywhere between two to four half an hour calls from 7:30 pm, so I’m usually wrapped up with that by about 9 pm. And then I get stuck into the actual email, admin, paperwork side of my job. So my day is not incredibly exciting, but my life I've sort of set up so that I can be with my kids and still work and be productive. I also travel a lot, so there are times where I'm not at work for a lot of time and that's so that I can get out there and see the world - I've been to 10 countries this year, that's one of my other not so secret passions. So yeah that's a typical day for me when I'm at work, but when I'm on holidays that day sort of starts and I just come on holidays until 7 pm, when the kids go to sleep and then I start working and it finishes when it finishes.

Born in Darwin, Dunphey’s upbringing was spent moving around a lot with her parents.

My dad was in the Navy to start off with, so up until my current half, I don't think I've ever lived in a house for longer than a year and a half. So I think that might be part of my condition, growing up and living in so many houses. My mum and dad were property investors back in a time where they experienced 17-18% interest rates, so a pretty tough time to be doing things. But I would spend my weekends quite often going to open homes and obviously I was a child, so I didn't understand the full intricacies of it, but it seemed like every couple of months we just got another house and we'd be moving, we'd be doing different things or we’d be getting investment property. And they had a little portfolio, I helped my dad manage it when I was young, so I think my parents are partly to blame for the fact that I'm a little bit obsessed with property.

Moving around Australia, her parents retired at quite a young age due to their property investments and the ownership of some small businesses. However, this was a premature move.

We sort of popped around in different places in Victoria and my parents loved the cold weather, so as I mentioned my Dad was in the Navy, my mum was a bookkeeper and they actually got to a stage with investment properties and with a couple of small businesses where they were able to retire in their 30s, which I thought was super cool - cool being probably the operative word because they kept going further and further south because neither of them liked the hot weather. I’m lucky I didn't end up growing up in Antarctica! When I was 10 years old and again we popped around a whole bunch of different houses down here and that was all fantastic, like mum and dad as I said had sort of retired down here, not on any massive financial backing but enough for them to chill out down here. And unfortunately, that didn’t last forever and over my mid-teen years when I was 14, 15, 16 my family underwent some really tough financial times. They left their businesses being run in Melbourne by someone that didn't do the right thing unfortunately and perhaps they didn't keep as close an eye on it as they would have liked to. Interest rates went through a very high phase so they didn't have their property portfolio and things got pretty dire for my family.

I was the only child who was sort of an age where they could chat to about that, my brother is 10 years younger than me and so my parents have always treated me like an adult, which may or may not have been the right thing I don't know, but I was pretty aware of what was going on. After a couple of years my parents actually they divorced, they both went individually bankrupt. The stuff that went on in our family, we had our house repossessed, our car repossessed, all those sorts of stuff. So that too was a really big motivator for me, just in terms of I guess where my drive came from. Some people have said to me, ‘What's it all about? When will it be enough? How much money, how many properties?’ all of that sort of stuff. And for me, over the years I've had certain figures that I've been wanting to be aiming for but it's really clear to me that to me it is about making sure that my family is never in danger of having that happen to them again and just making sure that I can look after the people that I love. That's where the drive for me has always come from - I don't ever want to see anyone I love to go through that again.

Although Dunphey has been able to settle down for some time with her family, she is now looking for a new home.

I’ve been in the same house now for 13 years, it’s so weird for me. In some ways it's great, but also I’ve had itchy feet for probably a decade just because I'm not used to it and so I can't find anything. When you move you have this big cathartic experience of being able to clean out, being able to find all your stuff and having kids who are tiny little hoarders, my whole house seems full. I probably wouldn't be that disappointed if half the things in my house just miraculously disappeared one day and I was suddenly a minimalist. But I think we’d have a better chance to do that when you move, so I probably actually will move for the first time in a long time next year.

Where are you planning to move to next year?

So we're renovating a little character cottage and building a little extension on the back. It will actually be the first time I've ever personally been involved with substantial renovation or building, you'll find out later on what we speak about the properties I'm fairly boring in what I do. I'm not a developer, I've never built a home from the ground up. I was chatting with a client this morning and sort of going through the pros and cons of it and just was like, ‘Oh yeah, that's why I've never done it,’ because I'm boring, I'm time poor and so typically I buy very boring houses and rent them out and forget that I've ever owned them. So the concept of doing this build and renovation is exciting for me, but it will be a first.

While at school, she undertook her first jobs and eventually was inspired to start her own jewellery business, sparking the beginning of an entrepreneurial streak.

My mum was actually working in a real estate agent when I got my first job at 15 and it was just an after school job, it was never going to be my passion in life. I was a bit of a maths nerd in school, so I kind of thought I would go and do something in computing or something with maths, or something along those lines and so this was just an after school job. I just wanted to earn money. I mean like I said, my parents bred a good work ethic into me, I'd always worked in their small businesses and so I wanted to work and to earn my money. I was saving up for a car actually, so I worked in a real estate agency and worked in an ice cream shop. I don't think I need to explain why I took the job in the ice cream shop, there are obvious benefits to that, but I wanted to save up money for a car and I ended up saving up my first $1,000 which was approximately what I needed to buy a secondhand Kombi at that stage which was my dream car. And somehow, just the turn of events, I was with my mum I was over visiting my grandmother in Caulfield in Victoria and I ended up walking past a jewellery shop. And I loved the jewellery, it was affordable, it was cool, there was nothing like it back at home and somehow my mum ended up having a massive pep talk with me and convinced me that even though everything had gone pear-shaped with my dad and my mum's businesses, that I'd actually been given an amazing gift by that. 

This was probably a huge turning point in my life. I mean I think all of us have bad things that happen to us over the years and I could have looked at the financial degradation of my family’s situation as something that made me scared for the rest of my life. But instead, at 15 I decided that no other 15 years old had seen what had worked and what had failed in small business as hands-on as me, or no one that I knew and so I could use that as my education. At 15 I actually started up my first small business with the $1,000 that I'd saved from my two jobs and I bought a whole bunch of jewellery and started selling it at markets, started selling it after school and did that right through high school. That was my first business and it got to the stage where I was brought from Thailand in $10,000 lots and I had a little bit of business going on at a young age. So that was the start of my entrepreneurial flair.

After high school, she had a brief stint at university before continuing on to start her real estate journey.

I was a real nerd in high school and thought, ‘No worries, I'll head off to uni and it'll be fine,’ and ended up choosing my two best subjects which were accounting and computing, started a double degree and promptly dropped out after the first year. Like just complete surprise to me, but I didn't choose well and they didn't really have such a thing as a gap year really in that time and I kind of wish that there was, because maybe I may have taken a year, maybe figured out a little bit about myself, about what would have suited me. But as it turned out I dropped out, I ended up working as a waitress and then managing a restaurant. I ended up working part-time at a real estate agency and then ended up coming back to Tassi and starting my whole real estate journey.

And that was probably, I say now I wish I'd taken a gap year, but actually I wish I could change anything because coming back and working in the real estate agency again at 19 led me to work in property management - working in property management was the best thing for me as far as developing a bit of an urge to be a property investor at a later stage. Because I would see these very ordinary-looking people come in - say like a schoolteacher and maybe just a guy that worked in a shop - and they'd come in and I'm like, ‘Oh my gosh, they’ve got three rental properties.’ Or a builder would come in with his shorts on and his scuffed-up boots and then I'd look at his files after he left and think, ‘Oh wow, he’s got 12 rental properties!’

So I’d see these people that just were everyday people, just like me, just like everyone else I knew, but had managed to achieve and accomplish amazing things and it made me want to be just like them basically. So dropping out of uni, moving back home with my tail between my legs, living at home for an excruciatingly painful I think nine months of moving back home at 19, it was the best thing for me.

Working in real estate for several more years, Dunphey was able to get out of her comfort zone through further experience. This led to another great opportunity which would propel her into her property journey.

At 21, I had the opportunity to go into partnership with my first real estate agency, set that up with two of the very successful sales consultants from our company. So yeah, 21 years old and a licensee and co-owner of a real estate agency and again, not really having much of a clue what I was doing which is kind of a blueprint for my life. I quite often end up in things like I should have figured this out on the fly, but we opened our real estate agency in 2001, we had no commercial zoning on our office we were just working out of an apartment. We had no website, no phones, no money, we funded the whole thing on two personal loans presumably for cars. It was a bit of a shambles, but it ended up being extremely successful and a big and exciting ride and led to a number of other real estate ventures and yeah, it was a big journey and adventure. 

The fundamentals of her business and property state of mind have seen her through - from refilling her tea with hot water to reusing paper clips!

I'm a big believer in bootstrapping to have cash flow though and I’m frugal - I had a tea with a client this morning downstairs and then my next client walked in and I was like, ‘Why does it matter? Hey, I'm just going to put some extra hot water in the cup.’ Like frugality and not having a budget is a nature that is in me and I don't seem to be able to shake it and I'm not sure I really want to. I'm the person who takes the paperclips off the pipeline and comes in the office and chucks them in a little pile then I use them again. That might seem so annoying and boring to some people, but I believe - especially when you're in startup mode - the more frugal you can be the more you have to spend on the important things. And then also, this perfectionism that people tend to be really proud of, or ‘I’m a perfectionist, I want to get everything 100% right.’ For me, you wouldn’t get anything done if you wanted it to be 100% right. I’d rather just get it 80% right and then just tweak it as I go. So I subscribe to that Japanese philosophy of Kiaza incremental improvement as you go - if you are waiting to get it perfect before you launch, you'll never launch. I've never launched anything that's been perfect, not even close to it. I've launched and I've fixed things up as we go and I've taken on feedback and I've tried to make it better, but it's that hassle and just getting started. Getting started is half the journey.

Beginning to invest in property at a young age, Dunphey’s first venture was a one-bedroom unit in Tasmania.

I just wanted to get started. And so the first property I bought - this is not a tale to replicate because I bought in Tassi a long time ago - I got pre-approved with the bank at about $90,000 for my first home and I can hear people rolling their eyes because what could $90,000 buy? In Tassi that could buy an awful lot at that stage and so I didn't spend my full pre-approval amount, which is something that I do say to clients quite frequently. I ended up spending $31,500 on a tiny, one-bedroom unit. I also got a $7,000 government first home owners grant, so basically the thing was nearly free. I still own it, actually, my brother lives in it at the moment and it's not the kind of property I would invest in now, but for that time in my life it was something small, it was something where I could readily afford the mortgage and it got me started basically. So that's where it all started. I think I was 21 when I did that one and I moved to it and I lived there for a while and that was kind of my M.O. for a while - I would just buy another property, move into it, buy the next one, move into it.  There was a long period of time where I didn't spend anything over $100,000 on a property, that was kind of like a mental barrier for me, I couldn't get myself past that. And then I think I bought a number of $40,000, or $90,000, $95,000, I think there was one that was $98,000 and then an opportunity came up to buy a big, very new property in a lovely area. I had existing tenants ready to go and it was $255,000, so that's kind of how I got over that small mental barrier. 

But then, I said to you earlier on my investment strategy is quite boring. I have a bunch of three and four-bedroom, predominantly brick houses; I was into weatherboard to start off with, but the maintenance was killing me so as cute as they are I switched over to most brick and I just forget about them. My property managers asked me a question about them and I'm like, ‘Well I've only been there twice, I have no idea, I need you to figure that out. I'm not detail-oriented in that respect, I don't micromanage my property managers - I choose good property managers and thankfully given my job I know good property managers and I just let them go for it.

Those which she purchased for under $100,000 were positive cash flow properties.

The rents on those ones probably would have been somewhere between $180 and $230 a week at that time. So that's why Tasmania’s market boomed in 2003 and we doubled in a space of about 12 months because a lot of investors caught onto the returns that we were having down here and things went gangbusters. I mean like everyone, if you wait long enough you'll hear everyone saying, ‘I wish I could have bought that property at that price, I would have bought the whole street!’ That’s how everyone feels down here because you could get a three-bedroom brick home for under $100,000, so easily rentable.

I mean that's the beauty of Tassi, is that our vacancy rates have always been very historically low if you buy good areas. Our capital growth is extremely unpredictable though, so what we tend to do is we tend to have a boom and then things might drop off a tiny bit, but then they plateau and they plateau for a very, very long time - like our last plateau lasted somewhere between 12 and 15.5 years. So nothing really happened and we've just come out of that now, the last year down here in Tassi has been very exciting and it’s a great time to be a property owner down here as it’s very hard for first home buyers to get into the market.

Although Dunphey hasn’t had any really horrible investing moments, she has come to be resilient and to live and learn when it comes to dealing with tenants.

I’ve had 10-15 situations where they've gone pear-shaped but the good thing about having numerous properties is that you have one tenant situation - I’ve had great tenants in a property for four years and then they got divorced and no one wants to pay the rent, the lawn has gone up over kneehigh. I’ve got another tenant moving out at the moment and the kids have drawn all over the blinds and things like that. But none of that is insurmountable. I've never had a situation where a tenant’s been atrocious and we didn't have appropriate insurance to cover it, I've never had a buy where I’ve looked at it and gone ‘Ugh’. I've had buyers who I didn’t go ahead with, I bought a property at an auction on a whim down in Hobart and I kind of got a bit cranky at the owners of it during settlement and went and got the under bidder to take it over for me - and that property has probably gone up about $400,000 in the last two years. So it might have been nice if I'd not gotten a bit cranky and held onto that, but it's not a regret, it didn't feel right so I got myself out of the situation.

So there's been things that haven't gone perfectly but there's nothing I look at and go, ‘That's an epic disaster.’ I mean, I wish when I sold my big real estate agency that I didn't get out of my Melbourne portfolio. What I did at that stage was I sold the two properties I had in Melbourne at that stage and completely offset my entire debt, because I sold my big real estate agency I didn't know what the next step was for me. And I'm actually quite a conservative person by nature so I thought, ‘OK if I’ve got all my debts offset then I've got time and freedom to be able to choose and how to hold on to those two properties,’ as probably maybe, I don't know another $700,000-$800,000 worth of gains I might have experienced there over that period of time - but it was the right move at the right time. So I kind of doesn’t believe in looking backwards. Everything I've done was right for me at the time and yes, there's been things I could have done smarter, like everyone I wish I had bought more when I could when I had the capacity, but it wasn't within my comfort level at that time so I wouldn't change anything.

So what wisdom has she drawn from the lessons she has learned from her tenant woes?

I just think careful tenant selection. I'd rather have a company sit vacant another week than put a tenant in that I'm not sure about. Good tenants, finding long term tenants, I mean that's the secret to my ease of not having to really be hands-on with my portfolio. I'd rather have a tenant in there who I'm really sure of and to have it sit vacantly. I’ve put tenants in before and I've had questions about them. But most of the time, you end up with… the tenant that's going bad at the moment, she's just moved out. I made them put a guarantor on the lease because I thought that she was probably a bit dodgy; she is a bit dodgy, the guarantor made sure that everything gets fixed, but it's probably something where I just sort of listen to my gut a little bit more and said, ‘No hold off, wait and find the right tenant.’ So that's probably the only real big life lesson I can draw out of that.

The a-ha moment for her came when she realised she could use the adversity she faced in the past as a stronghold for moving forward and evolving in the future.

Definitely realising that all the bad stuff that happened in my childhood could actually be seen as a real positive. That's good, I mean that's been a life lesson that I can use always for any time something goes wrong. And it's life, if things go wrong you know, I'm a mortgage broker so in any given day I might be working on 20 or 30 deals and some of them will be going pear-shaped, you've got to get in there and fix them, but it's about going, ‘OK, something's gone wrong.’

And we kind of use the technology of an autopsy - so in a medical situation when something goes really wrong and a patient dies, they will go back and do an autopsy and try and figure out exactly what happened, do a postmortem and try and figure out exactly what's happened and how they can avoid it. That's kind of the analogy that I would use. I do a lot of reflection at the time that something has gone wrong and I said, ‘OK, what better systems and processes could I put in place so that that doesn't happen again?’ And then we tweak it and then we move on. We try and make the best of any situation and that's in life, personal, work, all of that sort of stuff. So I guess just doing a reflection at a time, rather than sitting on a big regret and just thinking like, ‘Oh my gosh, it's the end of the world.’ All we can do is learn from it. 

How To Travel The World With A Passive Property Portfolio, like Kirsty Dunphey

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One of the things that initially held Dunphey back from investing in property was cash flow.

I would say, I am not a big fan for myself personally as well, so for me, it was just making sure I had the equity or cash to be able to avoid that. That's just my own personal comfort level. That was one thing that held me back, but also I'm busy at my work - and I hate that word because it's not a very useful word - but I’m productive and I work a lot and I work hard and I love my work, it’s a big part of my identity and I've always been like that. I’ve owned my own businesses since I was 15 so actually, probably the one thing that probably held me back from an emotional property investor perspective is that I think it very much time. I'll jump on opportunities if I see them, or if I feel like I'm in a position I want to do something I will devote a bit of time to it but I've never given it a huge amount of time, really. It's just kind of almost accidentally happened. Then working in the fields that I've worked in, it’s a good place to be to have it accidentally happen, but I feel like I probably could have skyrocketed in the journey a little bit more if I'd actually given it more time.

Time invested in research and education is something she feels, would have benefited her in the long term, which is something she makes an effort to do now.

I love podcasts, that's why I'm so excited whenever anyone asks me to be on a podcast because that is how I learn. So I deliberately walk 10 or 15 minutes into my office each day, I put my headphones in and I play a podcast and I learn. So I'm a pretty voracious reader, but the busier you get, the less time you take to sit down and read - so the fact that you can just have that education constantly coming into your ears on podcasts like this I think is brilliant. And I wish that this sort of technology had been around for a lot more years so that I could have kept doing that.

But for me to say that sitting down and going, ‘OK, I've got capacity to buy another property. Where do I want to look?’ and I don't invest so much in Tassie anymore because I'm pretty heavily weighed down here and my land tax bills are killing me because of it. So I look at estate and just to find the time to go, ‘OK, I want to buy something in my super in Victoria. How do I get that research done?’ I'm looking up in Queensland at the moment, but I've got it by sitting there and I requested a bunch of stuff for me and it's just all been put into the “later pile” at the moment. So it puts a bit more time in that respect.

Some of the resources she turns to and that she recommends to clients are podcasts such as Smart Investor and books by Jan Somers.

I’ll listen to anything that I get into and that I feel is real and is approachable. I like property casts, there's a Smart Investor one, there's a real estate podcast called Million Dollar Agent which I really love as well. And then whenever I speak to a client who is thinking about getting an investment property, I always send them back to who I think is the guru, I’m like, ‘Right, you need to go read everything that Jan Somers has ever written.’ I mean that's my number one resource. It’s probably not as riveting and exciting as say like Rich Dad Poor Dad, which many of us property investors read at the beginning of our journey. But as far as the Australian property market in getting the fundamentals of it down, I feel like she’s the guru so that's always where I send people, it's the best resource to start.

The best advice she has ever received has actually come from Somers as well, which is related to land.

Given that we're talking about Jan, I'm going to say the advice has come directly from her and it’s shaped my philosophy. So I started off and I bought one little unit in a six-unit complex, but since then I have really veered away from having any apartments. I have a block of four units that I own, but I own the whole block and that exact advice comes from Jan Somers basically talking about how ultimately, over time it's the land component that goes up in value and that appreciates. So that has really framed my investment strategy. I like my own land, I like a single dwelling on a block of land where possible, I'll go to an open house if I need to, which I did a couple of in Melbourne in the last couple of years but I like to have my own land and that is purely straight from Jan.

Delving into her strategy, Dunphey has maintained a good foundation to stick to, which has mostly been to set-and-forget.

I started off the portfolio just with the real mindset that I can’t spend more than $100,000. Those properties are probably worth somewhere between $250,000 and $300,000 now, the ones I've held onto. I’ve held onto most, I’ve sold a couple over the years; had one where a tenant bought one back from me, I had one where the owner that sold it to me bought it back from me, I had a few units in a hotel complex that we managed and I sold those when I stopped managing the hotel complex, I had an interest in a land subdivision, which I sold out of.

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So there's been a few things I've let go over the years but predominantly, my strategy is very, very basic - it is buying well and hold and buy readily tenantable. Where possible I want to find something that a family can move into. The aim, once I sort of wrapped my head around a strategy, like for a while I was just like, ‘Buy that because it’s cute, buy this,’ I mean I think we all have not great direction to start off with. So I've got a couple of weatherboard cottages in there which are extremely high maintenance, but the capital growth on those has probably been a bit higher than the brick properties, so hopefully, that’ll weigh out over time.

Mostly she looks for low maintenance properties with a high depreciation on the building, buying new wherever possible. However, she also likes to stretch the boundaries a little.

The last three purchases that I've done have all been in and around the Melbourne area, so not too far from the CBD I bought two new townhouses and an existing townhouse. The price point over there - for a little Tassie girl who is used to buying everything under $100,000 - is a little bit terrifying for me. Two of those were done in my self managed super fund, which is something that if I'm going to write self-managed, simple lines through work I wanted to experience it from my own personal perspective. So that's been great and frustrating, as self-managed super funds tend to be, but it’s fantastic for me to have those properties in there. I've tried to put high capital growth properties into there as opposed to high yielding ones, hoping for some good capital gain savings when I do eventually want to sell them in my wonder years to fund my retirement.

I mean the strategy has probably not been as laser-focused as I would have liked. I desperately wanted to get myself a block of units. I mentioned Robert Kiyosaki’s Rich Dad Poor Dad earlier on - I think so many of us read that book to start off with and then discovered that ‘Oh, we couldn't buy like a 15 unit development easily in our home area.’ But I did find a fourplex, as he would call it, and bought that but it's probably not the favourite property in my portfolio. I've got other very, very boring three or four bedroom brick houses which I love ten times more than that block of units because the type of unit that it is it's a two-bedroom unit pretty close to the Hobart CBD or they're all close to the CBD, which has higher tenant turnovers there than what I would typically love in my set-and-forget strategy.

So how many properties does she estimate are in her portfolio at this point in time?

I deliberately don't know - and the reason I don't know, I know I've got three in Melbourne and I've got four in Hobart, the four units in Hobart and then the rest are in Launceston. But fundamentally I also think that investors can get really skewed by this whole concept of, ‘I want to have 30 properties,’ ‘I want to have 100 properties,’ ‘I want to have 10 properties.’ It actually doesn't matter how many properties you have, it is about that cash flow that you have coming in. Ultimately, if you want to get to a position where you can retire and you want to have X amount of cash flow coming in, that to me is a better strategy. So from my perspective, that's always what I’ve looked at. I feel like maybe there’s 12 here in Launceston, but that's a guess.

I'm loving this because it really proves that you don't know how many are in your portfolio, it’s all set-and-forget!

I already forgot, we have a shack on the East Coast of Tassie, which is basically paradise, it's the most beautiful area ever. And so we Airbnb that, not ourselves. We have it managed, but we use it and then we have it rented out as well. But I think that people can just get so blinded by this mentality of, ‘I want to have 5, I want to have 10,’ and fundamentally I'd rather have two really good properties and than ten really ordinary properties ones that give you a whole heap of grief.

Although up until recently most of Dunphey’s debt has been offset, she is now taking on a joint venture project with one of her mentors which has altered her situation.

I think in February of this year, I did something which is completely outside my comfort zone, very much completely outside - so I have a real estate mentor in Melbourne. He was doing a development in the street that he lives in and he asked me to be a partner in that development. So I’m a one-third partner with him and with the builder and myself, and we’re knocking down this $2-$3 million houses and rebuilding another one. So most of my cash has gone into that to be part of that partnership - very much outside my comfort zone like I said I'm predominantly extremely boring. And who knows? That could end up being my biggest regret, hopefully not.

Before that, the positive cash flow coming out of the portfolio was around about $100,000 a year, but that's actually changed now that I'm paying significantly more interest. The portfolio is pretty neutral by the time the offset funds came back in, so there's not a huge amount of cash flow coming out of there at the moment.

The reasoning behind this venture into development was to take what she believes to be a once-in-a-lifetime opportunity with a close friend and personal mentor.

I thought to myself because I am so very dull with what I do, I thought, ‘When am I ever going to get to build a $6 million house?’ And so I did it for the opportunity of being involved with my mentor, who I trust and have known for a very, very long time. I did it because I thought, ‘I'm never going to be able to do this on my own.’ That's not the kind of project I would ever undertake on my own and so I did it for the experience. My worst-case scenario is that I break even and I come out of it and I've lost the interest that I would have offset in that time. My best-case scenario is maybe we make a couple of $100,000 each out of it, I don't know. It's not an area that I'm an expert in, it’s not as though I went and did huge research into it.

And it could pay off, it might not, I don't know. But I sort of thought to myself, ‘It might be a regret that I have later on down the track if I don't take the opportunity.’ And there's probably only one person on the planet that I would have done this with, so anybody else that came to me with an opportunity like this would have got a very sharp, ‘No.’ But because of the person that it is and because of how our relationship has developed over many, many years - well over a decade - I took a chance.

There are some powerful, positive habits which Dunphey has instilled into her everyday life, which in turn have contributed to the success she has shared with others.

I think probably if I could pick one word that I would want people to say about me in terms of any interaction that they have with me, it’s dependability. So if I say I'm going to get something done, I get it done and if I can't get it done on time, I'm updating and I'm communicating with them. And for me, that is probably a fundamental tenet of customer service in any industry, in terms of doing good relationships with people. Just like the simple premise of making sure when you say you’re going to do something and then if you can't make it on time, come back to the client before the deadline. So to that end, I have an empty inbox at the end of pretty much every day and that's seven days a week - might not be so great for my lifestyle, but it makes me comfortable and allows me to sleep well at night.

And just you know trying to cram as much as I can in, so like I said when I walk into work or if I go for a run, I've on a podcast in my ears. Not a big believer of multitasking, but if there’s something like that I can do that utilises some dead time - not like I have a lot of dead time, I don't watch a lot of television, I did when I was younger but I don't these days. I might watch 10 minutes a day to just kind of unwind my brain before bed. I just want to get the most out of my life. I have this general Latin phrase that I live by and I actually saw it written upon the house of an architect over in the United States, who did beautiful work of Frank Lloyd Wright. And there was this Latin phrase inscribed over a door and it said, ‘Memento Vivere,’ and I thought, ‘That’s beautiful, but I have no idea what it means.’ So I went home and I looked it up and it’s ‘Please remember to live’. And he inscribed it over this door in this house because so many people go through every day in their life just waiting for the weekend, waiting for this, waiting for that, but not actually remembering to just live and to experience every day. So I'm trying to cram as much as I can into every day possible. You know I love to travel, I love to hang out with my kids, I love my work - I’m so fortunate I love my work; so I'm just trying to actually make sure I remember to live rather than just existing.

She says that travelling has become a top priority for her this year, which has been made possible by shifting her mindset and through investing in property.

Actually I had a bit of a turning point in my life this year with travel, I’ve always travelled a lot and I've always probably travelled more than most and been absolutely fascinated by it. And I was in India in January with a girlfriend and we stayed at predominantly mid-range hotels you know, around $90 a night and now they were fabulous, it was no dramas, but she planned the whole trip - I love it when someone else plans a trip for me, it's magnificent. She actually booked us into two $1,200 a night places. We shared a room, but it was still significantly above the budget that I would usually feel comfortable spending and one of them was the most amazing customer service experience of my life. For those of you that haven't been, which is probably most people, there’s a place in India called Udaipur and there is a hotel called the Lake Palace. It's an actual palace, it's in the middle of a lake and it blew my mind.

When I was staying there, I actually ended up being contacted on Instagram by a Korean chap who loved to travel and has a decent-sized following on Instagram. He was asking me questions about it and it turned out he was actually almost following our journey through India - so it sounds a bit stalkerish, but I think he was fairly legit - he would stay at the same hotels after us and he was getting tips. And I ended up following him for a while longer and this guy was just travelling non-stop. He would appear to go home to Seoul in Korea where he lives and then he would be off again and he'd be staying at the Giraffe Manor in Africa, he'd be in Sydney, or in New Zealand, or in Hong Kong, or everywhere. I think I actually said to him, I sent him a private message and I said, ‘Look, how is this even possible? What is your job? Are you a prince, are you an international playboy? Where is this coming from?’ He told me that he was an architect and he said, ‘I don't earn a ridiculously high wage, I've just made travel a priority.’ And I was like, ‘Oh my gosh, all he's done is make travel a priority.’

And so I just said I'm making travel a priority and so this year so far I have been to ten different countries. Five of them are a repeat for me, but the other five have been new countries. I've always got my next trip booked now, it's a huge part of my life. It's actually a really good downtime for me as well because I can't see clients when I'm away - so it gives me time to destress. The thing is I haven't figured out how to not work when I travel, but my kids are getting an amazing exposure to the world. We just came back from Japan, South Korea and China on a cruise with them. In the kids’ club there were people from Romania, Ukraine, Montenegro and Guyana and my six years old now knows maybe about 50 different flags, they eat all sorts of different food, they speak the language everywhere we go - that's me forcing them to - but they say ‘please,’ ‘thank you’ and ‘hello’ and it's probably right up there with the three top priorities in my life. 

And what about your husband and the kids, like how did they find the travels? Like obviously to pull the child out to go on holidays and stuff like that. Actually how long were you going away for?

buy a business

We do a lot of it in the school holidays, so I travel with my girls on my own quite a lot. So we did Samoa in the first lot of school holidays, New Zealand in the second, we did Thailand in Summer last year and then this Japan, South Korea, China was right over their last school holidays and we only missed a week of school. And they’re little, so fundamentally if you're learning a foreign language, speaking with people from 30 different countries and you miss a week of school and prep, I'm OK with that. I feel like you're getting enough of an education that I'm compensating for that.

So our next trip in Dubai, which I haven’t been to. So we’re going to hit that up in January which will be amazing, just ten days there. But again, it's over their school holidays and me kind of figure if I have them for school holidays here, I'll have a combination of having time with them and stressing overwork, or I’ll have them in holiday care or I'll be relying on friends, family, that sort of thing. But if I take them away, they just get me. Every now and then I'll be taking some emails that I can do while I'm away while they're asleep - sorry, not while I'm asleep, I wish I could work while I’m asleep! But they get pretty much undivided me time and hopefully, we’re going to swim with dolphins, we’re going to see camels in the desert, they both love to fly which is great because I love that too. I’m that weird person who likes aeroplane food and you know, I was actually extremely excited to spend time in airports!

Sometimes we wish we could go back in time and give our past selves some useful advice to encourage them on their journey. So if Dunphey were to meet her past self from ten years ago, what would she say?

Anticipate that having kids will be a greater impact on your life than it will be. I can’t even explain to people who don't have kids out there in the sense that it's the best and the hardest thing you'll ever do. And it's hard because we all want to do our best as parents. But for me also I also want to lead a life that's exciting and inspiring for my kids, so that they can see that they can do anything that they want to do. So I feel like that's my job with them as well. It’s not only to be the best mum that I can be but also to be as much of a role model as I can be in terms of them achieving their goals, whatever they want to be. My six year old wants to be a pilot at the moment, my 4-year-old wants to be a zookeeper. So I do whatever I can to make sure that they feel like they can achieve those goals - so that would be number one. I would say I've definitely underestimated the impact of parenthood.

Maybe start drinking tea earlier? Like I'm completely and utterly obsessed with it, it's really nice for me because I don’t have that many hobbies. And maybe make travel a priority earlier, definitely, that should be it. I wish that I had done that before I had kids. The places I could have been to before I had kids, what was I thinking?

Her plan for the next five years is to continue to break out of her comfort zone and purchase a more diverse range of properties.

So for me, I've just had my tax done so I'm ready to go looking again. It's always exciting when my tax gets done earlier than May, that’s good for me so I can get back into doing something else with the income estimates. I'd love to buy something; I'd love to buy my first commercial property. So reverting back to me is very boring, I’ve had nothing commercial in my portfolio, I’m a full-on resi girl because I don't like vacancies. Down here in Tassie especially, if I've got two weeks’ vacancy, that's unheard of down here if you buy well. You know I'm used to a couple of days turnaround time and because I'm so risk-averse that works well for me.

So probably the next thing for me and the thing that we're looking out for right now is to buy commercial premises, hopefully, to do it in super and hopefully to get some multi-tenancy so that I can have just that sort of insurance system built-in, so that if I have one tenancy vacant then I've got others making up the slack. That's what I've got my eyes open for right now and I am actually doing research, I looked at two properties yesterday and I'm on Real Commercial all the time, scoping out something. We've just kind of outgrown our office space and we need something with good parking, so it will force me into that commercial world which will be a whole new adventure for me and maybe I’ll love it.

Although Dunphey can’t make any specific recommendations as to market trends on the podcast, there are certain characteristics she considers when looking for a property to invest in.

I think have to be extremely careful because I can't be making any recommendation to anyone because I’m still a licensed real estate agent and because of my role as a mortgage broker. I like to say go back to your fundamentals. I never invest in rural areas, remote areas, you'll never see my buying property in a mining town - that's my own personal preference, not advice. But I like to have a good population base. I like to be near good schools, I'm looking for families because being part of a family myself, the concept of uprooting and moving a family with kids and school every year is not exciting. And so, therefore, those tenants tend to stay longer, less wear and tear on the property, less letting fees is good for me as the property owner. So that's what I'm looking for as an investor. As far as the next hot spots, I mean I’m looking up in Queensland at the moment but whether I feel like that's something that's good for everyone I don't know, I just feel like I need a bit more diversity, I'm only in two states.

I would love to go and look in other countries but that's not on the cards for me. Again it's that whole Rich Dad Poor Dad mentality, but I’d like to go over to America but for me, it's just about making sure the land taxes aren't too excruciating, splitting my risk across multiple areas in Australia so that when one area is booming like Tassie is looming at the moment, I am going to love getting my properties revalued once things calm down a bit here - but that's not a reliable capital growth that happens. Our market down here doesn't double every seven years, we're not reliable as some of the other big major areas. So for me, I just want to spread my risk a little bit more. And I think if people look for areas that have consistent sources of income, good schools, then that's what I would look for as indicators.

If you would like to contact Dunphey and gain more advice from her as a mortgage broker or chat more about her strategy for property investing, you can do so via email.

Probably the best thing to do is if you just Google my name, Kirsty Dunphey, I'm sure it'll be written in the podcast notes - you'll find all the different ways to get in contact with me. But my email [email protected]. Don't try and spell it without Googling my name, because Dunphey is a bit of a minefield.

So maybe what I’d like to offer for your listeners is anyone that contacts me, if you just heard me on the podcast I'm more than happy to send you a digital version of my two books which you might enjoy reading. One of them is all about my property journey; it's a little bit old now so it doesn't have anything more recent, but your listeners might enjoy that. And the other one is more about the business lessons and mistakes that I've made, but I'd be more than happy to send them out as gifts.

And my day-to-day life is spent working as a mortgage broker, I predominantly work in the investment space, so if anyone would like a home loan health check I'd be more than happy to do that. Or just to say hi, just to connect with some other investors, I always like doing that and hearing other people's stories, definitely feel free to reach out shoot me an email.

This episode was produced by Alex Cooper with narrations and interviews conducted by Tyrone Shum.

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