How this Uber Driver Funds his Future Property Investments
So what does he actually do in any given day?
In any given day, getting to work at about 8:00, it could be anything from admin, cold calling, generating new business, looking after my existing counts, because my job is split up between delivering new business for my organization and also looking after existing accounts as well. And the day can generally last for about 11 hours, so getting in at 8, leave about 6:30, and that’s my day-to-day, Monday to Friday, and, yeah.
With a full-time job in sales, as well as a part-time job, how does he even have time to breathe, let alone build a massive investment portfolio?
I know we all live busy lives, that’s for sure. I guess it’s just trying to be really very smart with what I’m doing with my time. Aside from that as well, I also do Uber-ing on the side, just to generate a little bit of extra cash on the weekends as well. That takes up a little bit more of my time as well, about an extra 20 hours. But if everyone really breaks it down into how many hours there are in a week if you look at it, it’s about 168 hours in a week, and if you really break it down and say, look, I’m at my full-time job for about 50 hours, for me, anyway, and then I’m working with Uber for 20 hours, that’s 70 hours, let’s say I’m sleeping about 40 of those hours a week, that still leaves me with a good 50, 60 hours to do other things as well. So, that’s how I break it down, and just really look at where I’m really investing my time, and can I be more diligent with how I spend my time.
Despite all that he’s accomplished, Ekanayake is still only a relative beginner in property investment. With only a few years of experience under his belt, he makes sure that every step counts.
I’ve been investing in property for not too long, but I’ve had a pretty, I guess, accelerated journey over the past couple of years, in particular, investing interstate and doing a strategy around buy, reno, and hold onto the property and then pull the equity out to purchase the next one. For my day-to-day job, I don’t really do property as such, I’m not really in the property industry. I’m in sales, and I work for technology research and advisory firm. I’ve been in my current job for a year, and prior to that, I was in another technology-related sales job as well. That’s my day-to-day. Property is something that keeps me going on the side, something that I invest all my funds into as well to create that financial freedom.
Growing up in a regular middle-class Australian family, Ekanayake never had the helping hand that may have made his investment journey easy. From his parents, he learnt to get into a prospering area early and never let go.
Finished high school here in Sydney. After high school, I just worked at dead-end jobs for a couple of years. And then after, I enrolled in university, because I thought that was the right thing to do, just wanted to make my parents happy, I guess. Didn’t really know why I was going to uni, or what course I wanted to do, so I just did a general business degree, and it was probably just a wasted three years, and I don’t think I really saw any ROI on the back of it. But did it anyway, finished it now, and yeah, straight after I finished that, got into a sales gig for a logistics company.
Okay, that’s really good. And where did you grow up? Did you mention in Sydney?
Yep, in Sydney. I was born in Japan, so I’m half-Japanese. Born in Japan, moved here when I was three. And then grew up in Sydney, in the lower north shore. And, yeah, so pretty much did all my primary school, high school, and of course university in Sydney.
Oh, okay. Which school did you go to, by the way?
Primary school, I went to Cammeray, the Cammeray public school. For high school, I went to Mosman High.
You’ve lived in quite wealthy areas around there to actually know exactly what it’s like to live in those areas, right?
Yes, absolutely. I guess you could say they are quite affluent areas of Sydney. Certainly, I wouldn’t say I came from a privileged background whatsoever, I was just a regular middle-class family. Dad worked in the hotel industry, Mum was a teacher. But I guess they were able to buy a house in that area. They got in early, and they just worked really hard.
This mindset of working hard to achieve goals has been deeply impressed upon Ekanayake from his parents, working a full-time job as well as driving for Uber on Saturday nights – so no nights out!
Uber, it’s great, it’s not something that I would do full-time, but with that said, what I love about Uber is the flexibility that you get, because it allows you to still continue with things, investing in property when you need to take some time out from work, and invest your time into property when you’re actually in the market, so it gives you that flexibility to work when you want to work, and essentially I can do it around my schedule as well. And do it about anywhere between 15 and 25 hours a week.
That’s really good. Basically, that’s a supplementary income to be able to help you build up more cash so that way you can invest that into property. Is that correct to say?
Exactly right, yeah. And especially when you’re trying to save up for that next deposit, especially when you’re doing those renos and you need that extra bit of cash flow, when you go over budget and you weren’t expecting that, it certainly helps on a weekly basis.
Adversity has faced Ekanayake from the beginning. Without the funds to begin investing in Sydney, he was forced to look outside the state that he lived in.
When I first started investing, so when I bought my first property was in October 2014. That would have been a tick over two years ago, and that was actually in Brisbane, and that was just a regular buy and hold, didn’t really have a strategy going in. All I wanted to do, my goal at the time, was get into the property market. And hence, I looked into Brisbane, because I was priced out of Sydney.
So what makes a salesman from technology firm go into property investment? Is it the potential for wealth? The desire to own? Or the feeling of success? He reveals his inspiration for investing in property.
What inspired me to get into property? I was pretty much just, after university, I was working, I was also living at home, so I was just saving, saving, saving. But I didn’t really have a purpose as to why I was saving. I was pretty much just saving to save. Eventually, while I was in this whole concept around sales and understanding the game of sales, a lot of the resources that I was reading and watching, they talked about confidence, building conviction, things like that. Once you read a little bit more about confidence and conviction, then you start reading a lot about personal development, then personal development trickles off down into financial freedom, creating passive income through various means. And then I started to get really interested around that space, so I started to really immerse myself in that space, and as I was reading it, they said, you can create passive income generally through three ways, mainly.
That would be either creating business and building that business, and then living off the proceeds of that business, but at the time, I didn’t really know what I wanted to do in terms of creating my own business, so that was put to the side. And then there’s was shares or the stock market, investing in the stock market, and still to this day, I guess the stock market doesn’t really resonate with me, the whole intangible nature of it. I know it’s a myth, they say, but I feel as though it’s a little bit more volatile than property. And so, that was kind of put to the side.
And then there was real estate, and investing in property. Generally, if you look back over history in Australia, there are sayings like safe as houses, and if you’re buying in relatively good locations, close to the CBD, one of the major capitals, with good land content, over the long term, it’s going to go up in value, and it’s been proven time and time again. It’s just easy to understand for me, it’s bricks and mortar, you put someone in there, they pay you rent, you get a little bit of cash on a weekly basis, and the value of the asset increases in value over time. It was really easy for me to comprehend, and I thought I’d just get really immersed in this space, and really try to understand it.
Yeah, that’s really, really good. And it makes absolute sense as well. At what point did you say, for example, you’re immersing yourself, learning all about the property, did you actually take that action to start investing in your first one?
I’m just thinking back as to if there was a moment when I said yes, but what actually happened was I went over to Brisbane, so I committed to finding a place in Brisbane because I was priced out of the Sydney market as I mentioned earlier. I booked a trip, and the purpose of that whole trip was just to go visit some open homes, network with some agents, get a feel for the area, and just get my feet on the ground because I’d never been to Brisbane before that time.
Did a few open on that first trip, and on the last house of that trip, I walked through, it looked really good, and it just felt good, the house looked pretty nice, there wasn’t much work that needed to be doing on it. The rent was pretty strong on it as well. And then, yeah, the agent called me later that evening saying, they’re going to sell the property today, you’ve got to put in your best and final offer if you really want the property. And even though I wasn’t really prepared to, or expecting as such, to make an offer on that trip, I ended up putting in an offer, it was a blind auction, and I ended up getting the property. It wasn’t really strictly prepared, but, yeah, I just put in the offer and ended up getting it.
Fantastic. I love stories like that. You end up stumbling into it, and then the rest of the journey is history.
Absolutely. And the first thought I got, as soon as the agent called me back saying I got the property, I immediately regretted it. I was like, oh, no, did I just pay way too much for that property? I just got that sense of buyer’s remorse, I think, that a lot of people get when they make their first big investment as such. And then I just started stressing about it all that night. But then the next day, I woke up, and it was all good. I couldn’t get out of it anyway, so.
You’re bound into that for life.
Before making the initial commitment on a property, Ekanayake undertook months of research to ensure there were solid fundamentals in the area he was looking at.
Prior to me actually booking that Brisbane trip and going to view those properties physically, I had done about maybe anywhere between eight to ten months of really solid research around that region, or around that area. I pretty much knew what a good property looked like, what a good property was priced at in that area, and I knew the fundamentals were there for it to be a pretty sound investment or a sound area to invest in. And then, of course, like you mentioned, when I put in the offer, I had a clause in there to do my building repairs during the calling off period, so I did that. That came back pretty clean. But then during that calling off period, I managed to negotiate another two and a half or 3 Koff the initial offer.
This didn’t come about due to any particular issues with the property, but rather the things which the building inspector highlighted as a negative.
It wasn’t necessarily any issues with the property, but the great thing about building [and pass] inspections, which is they make it sound like a lot work than it actually is, because obviously, they need to cover themselves to some extent, so if they see something that could be a touch or a tad wrong with the property, they’ll emphasize it, and they’ll really bring it to your attention. I just pulled out those points and then drew up a list of everything that he said, or the building inspector said, that he saw as a bit of a negative to the property, and I just highlighted those and said, look, I wasn’t expecting this to come back this bad, and negotiated that two and a half K off.
That’s great, that’s where your sales skills came into play, right?
That’s exactly right, yeah. And because I already had the buyer’s remorse, it gave me even more motivation to try and negotiate a bit more money off as well.
Sometimes you can get lucky and simply fall into property investment like Ekanayake, but eventually, you’ll need a plan.
I didn’t have that strategy beforehand. When I bought my first property, my goal at the time was just getting into the property market, and it just bought the property, all I want to do is buy property. And that was my goal. In looking back and in hindsight, that probably was the wrong goal, because, at the end of the day, the property really is just a vehicle to get you to the financial destination or the lifestyle that it can create for you. I shouldn’t have had the property as such as the goal, but I should have been looking a little bit further ahead as to where I wanted the property to get me to. And so, once I bought that property, I had reached my goal of buying one property, and I didn’t have a plan moving forward. I was just back to the drawing board again, I didn’t know what to do. Rather than just save, save, save again, pick up Uber at the time, and then worked two jobs, and then just saved my ass off, essentially.
Through that period, it was 13 months until I bought that second property, and it was at this stage when I met my broker. And my broker, he’s also an investor himself, and he was saying, look, if you want to continue to keep purchasing property, you can’t keep saving yourself to the next deposit, or it’s just going to take you too long to continue to keep saving yourself to the next property. So, he gave me that idea of manufacturing equity myself, really look at undervalued properties, and then doing a bit of a cosmetic reno on them, and then using the equity within those after you revalue it to subsequently fund the next purchase.
He was also lucky to have a team of equally hard-working and savvy brokers, builders and buddies around to help him through his property investment journey. His broker Michael Xia has been a cornerstone of advice for him for some time.
What was the best advice he gave me? I speak to him so much, I pretty much speak to him on a daily basis. I’m probably the client from hell. I take up a lot of his time. He gives me a lot of advice, he’s certainly taken me under his wing, and I just kind of replicated exactly what he’s told me to do, and I’d say… what would be the best advice? It’s more around mindset, I think. It’s always just keeping, making me stay focused, on track, and continue to stick to my goals. Because really, if you think about property itself, property investing in itself, it’s a pretty simple game, and I think that’s the reason why it attracted me, because it was quite easy to understand and it was pretty simple, and if you got the fundamentals right, it’s just a checkbox exercise, where you just tick off the boxes, and then you’re good. So, it was more around the mindset, I think, which he helped me with, to continue to keep moving forward.
Ekanayake is not one to shy away from his goals, even as he makes them grow bigger and bigger each day. So what is his ‘why’?
I guess my why is, I just have this built-in me in that I’ve always really wanted to be successful, I never wanted to be broke, I never wanted to have to worry about money, and I always just wanted to be in a comfortable position, and not when I was too old. Essentially that’s what really drives me right now, I just really want to be in a comfortable position. Don’t want to be stuck in the rat race. Don’t want to be working for a big corporate for the rest of my life, and be living with that stress, and helping build someone else’s dream. I want to build my own dream.
Yeah, absolutely. How far off do you think you’ll be there?
That’s a good question, because every time I set myself short-term, long-term goals, and I keep moving those goals further and further away from me, so I feel as though, yeah, I’ve set myself a goal here, but then when I get a little bit closer to it, I keep extending it, so I think I’m quite a while off. I’ve set myself, at 36, I’m 28 now so that’s eight years, but I know I’ll continue to be working well into that, but hopefully building my own business, not working for someone else.
Although he makes it seem easy, in viewing the outcome of his journey so far, after saving up for his first property in Brisbane it took him another 13 months before he had saved up enough for a second property.
From there, I did the renovation. I bought in a place called Deception Bay, which is about 45 minutes north of the Brisbane CBD, in the region of Moreton Bay shire. I identified that area as being a bit of a growth corridor, there was a lot of infrastructure going on, a lot of government, public and private infrastructure going on in there, like the rail link, and then from the private aspect, there was the extension of the Westfields, Costco, Ikea, they’ve all moved into the area as well. A lot of things happening in the area. Good population growth. And it caught my interest.
Also, what I liked about the area was that I was able to find pretty solid rental returns in the area, where it was going to cover all my expenses and still give me a little bit of money on a weekly basis. Reduced risk from that aspect. That property got bought for 232. It was a very run-down property, you wouldn’t be able to live in it at the time. Or, you could, it just finished a lease and it was only leasing for I believe it was $270 a week at the time. Bought that property, I bought it sight-unseen myself, so I didn’t physically go to see it, but I had my property manager and also a builder that I met up there go view the property for me. And then we put in the offer pretty much as soon as they saw it. I took a bit of trust in the feedback that they gave me in some of the work that needed to be done on rough figures. Put in an offer, I initially put it in for 238, and then negotiated another six and a half K off the back of the calling off period. I mean, it was sight-unseen from my perspective, but yeah, I guess I really trusted in the people that were going to view it, and that helped me make my decision a lot easier as well.
Also, knowing that I was getting it for cheap at the time, I knew, I factored in a little bit of a buffer on the renovations that needed to be done, and it still stacked up as a good deal, so I went ahead with it. When it comes to the renos, yeah, what we had to do was do a little bit of work on the kitchen, same with the bathroom, put in a new carport, paint internal, external, completely sand polish the floors and do quite a bit of gardening work as well. There was a little bit of work that needed to be done, justified by the low price. One great thing about that property, though, was, so we looked at the floor plan, and the main bedroom was this – it was a really big bedroom, it was a six-by-three, and it had windows on either side, so we identified that we could perhaps turn this into, just by putting in a divider wall, putting an alcove with the door, and turn this into a four-bedder, so put in an extra bedroom, which would easily bump up the rent, which it did, to $340, so $70 more after the reno, to what it was renting for. It improved the value of the property as well when it came time for reevaluation. That was a really good foray into the whole renovating strategy.
Since then he has had that property revalued and has been able to pull out a substantial amount of equity in order to leapfrog onto the next purchase.
We’ve actually revalued it twice now since I’ve bought it. And the first one, the first revalue that I did on it was only four weeks after I settled on the property, so it was pretty close to settlement time and got revalued at 285. I knew that property was worth a lot more than that, but the value was being conservative, especially when it just settled only four weeks ago, these values, they find it harder to justify in their heads that a property’s increased in value, even after a reno, 60, 70, 80K. So, they’re pretty much on the conservative side, and they valued it at 285. I was still able to pull out about 50K to purchase the next one.
And what’s it worth now?
We just got it revalued again, I believe it was six weeks ago. No, actually it was probably about two months ago now and got revalued again for about 320.
Wow, that’s quite a substantial jump now. There’s a lot more money now for you to play with.
Yeah, I’m really happy with that one, because I pulled out equity on that one, and then used it towards another purchase. It’s been a little bit of a gold mine, that one.
The barrier of interstate property management was one that Ekanayake had little trouble overcoming. Through trust and communication with his team, he was able to renovate his second property remotely.
I really wasn’t hands-on at all, when it comes to me going to view the property during the renovation process. I only went up once, towards the back end of it, when it was finishing. I had my property manager, though, throughout that period, go check up on the renos and see how it was progressing. And from a project management perspective, what I generally tend to do while I’m going through a renovation period, which generally lasts for about two weeks, is I’m on the phone with my builder once in the morning, just to identify from him what works are going to be done today, what got done the night before as such, and then as I finish work, and as he’s finishing work, I give him another call as well, to just see if everything got done, what didn’t get done, and discuss what’s going to be happening tomorrow. Every few days, I’ll also get progress photos sent through to me as well from the builder.
That’s so good. It sounds like you’ve really managed it really well from afar, because a lot of people, I’ve heard stories where the whole project just completely went upside down. How did you manage to have a good process in place like that?
I always keep good lines of communications, so I guess that’s generally what I do, and I think maybe my job might have helped me with that, being in sales, I’m constantly speaking with new people all the time, and having to build relationships in a pretty short period of time. And I think this kind of really helped me as well, because I was able to build a pretty good relationship with my builder, always kept on top of him, but without being too pesters. And then also, of course, had the help of my property manager being on-site there every few days.
After purchasing in Deception Bay, he moved onto another in the Moreton Bay region.
After that one, I bought one in, it was Kallangur, and that one – was it Kallangur? Yeah, it was Kallangur. So, that’s also in the Moreton Bay region as well. It’s right next to North Lakes, it between North Lakes and Petrie, which is kind of a bit of a hub of the Moreton Bay region. The reason why I say it’s a bit of a hub for the Moreton Bay region is that North Lakes has the big Westfields way, and then also Petrie’s getting a new university currently getting built right now as well, so Kallangur’s kind of smack bang right there in the middle of things.
Great. And was there also reno for that particular property?
That was, that was another property, another sight-unseen, pretty similar to the first one. Yeah, I kind of when I’m in the zone, I don’t make rash decisions, because I’ve done my research on the area, but I make quick decisions. If I feel as though something’s good and the price is good, I’ll make pretty quick decisions. And this one was a little bit more risky, in a sense, I bought it for unconditionally. So, that means I didn’t have a formal building and pest inspection done, and I also didn’t have a finance approval clause in place as well.
He took this risk through the means of trust in his builder and it came through well, a testament to having a good team of professionals around you.
Yeah, so, the property, it came on the market, I believe it was on – no, it was like on a weekday, anyway, and it was on a Wednesday, on the market for offers over 265 at the time. And then, I was like, holy shit, that’s actually a really good price, even at that price at 265, it was – the property had been trashed by the previous tenants, and they had done a runner on the property. So, the vendor at the time was kind of stressing out, because he wasn’t getting any money from the property, he couldn’t get it rented out because the property was trashed, so it was just costing him money to hold, and he just wanted a really quick sale. Someone put in an offer on that day for 265, and then so I called the real estate agent, and I said, don’t accept that offer yet, let me have my builder go and look at it tomorrow morning, first thing tomorrow morning, and then if he gives me good feedback, I’m willing to put in an offer straightway as well.
He met my builder, the real estate agent met my builder the next morning, my builder went to go walk through it, he said, look, the property is probably going to need anywhere between 10 to 15Ks worth of work, a little bit less than the Deception Bay one. And from what he could see, from a structural point of view, and from a pest point of view, it was all pretty clear. So, I was like, alright, I’m just going to take his word for it. He did a good job on the Deception Bay one, I’ll just take a risk. Let’s do it. I put in an offer of 250, I believe it was. And then even though I knew his offer was 265, the other offer, I kind of sold my offer that it was a cash unconditional deal. This was a sure thing, this was – I wasn’t going to crash on this property, I wasn’t going to negotiate off the back of this, because it’s an unconditional sale, and I knew the vendor obviously just wanted to get out of this property and wanted to sell this property. I used that a little bit to my advantage, and ended up having to go up to 254, and got the deal the next day, he accepted the offer.
Despite the golden opportunity that the Kallangur property seemed to offer. A lack of patience would prove to almost be the undoing of Ekanayake.
There was actually a huge, probably one of my biggest mistakes I’ve made during my property investing journey, on this property, actually during the renovation process. It was a cash unconditional offer, so there was no way for me to get out of the purchase. And what I had written into the clause as well because it was un-tenanted at the time, it was just an empty property, I wanted to get the renos done immediately, as soon as I went unconditional on the property.
Essentially, if I was able to start renos straightaway, it would be ready to be listed on the market for tenants as soon as I settled on it. So, that’s what I did. We settled on it, I believe it was a Friday. My builder started work on Monday. And I like to move things pretty quickly, the builder starter works on it on Monday, but it was before the banks that I was getting lending from had valuers go walk through the property, to go view the property, to assess it as a security for the lending that I was getting.
Ah-hah, okay. This will be interesting.
So, by the time the valuers came to the property on Tuesday, everything had been ripped down from the property, and it was uninhabitable whatsoever. The valuers were like, look, there’s no way we can value this, it’s uninhabitable, we’re not going to value it at all, because there’s a liability on our side as well. So, they went to the banks and said, this property can’t be valued. The banks said, okay, look, we’ll still give you the loan, but rather than giving you an 88% loan, we’re only going to give you an 80% loan. And I was already stretched really thin at the time, in terms of my finances.
Essentially, I had to come up with an extra 20K, which I didn’t have whatsoever, in a 30-day period. I was stressing out. Yeah, it was a huge lesson learned, because it was kind of, I should have been a little bit more patient, I should have really understood the process before just going bang, bang, bang, and just trying to get things done so quickly. And what I had to do was, I reached out to my brother for a little bit of money, I reached out to my dad for a little bit of money, and I reached out to my mentor, who’s my broker, for a little bit of money. It was a painful process, having to ask them for money. But anyway, I got enough to get over that period, and then pay them back as well.
Despite the relatively happy ending, this experience taught him the value of patience.
That’s definitely one of them that I’ll always cringe over. Now that I’ve gone through the process, I can laugh back on it, because when I actually went through that process, I wasn’t laughing at all. I was stressed out, I was freaking out.
Ekanayake reflects that his motivation to be a property investor far outweighed the fear that this misstep gave him.
It was the light at the end of the tunnel. It just came back to my why, and why I was investing, and my broker, who’s also my mentor as well, and a lot of the content that I was reading, I listen to a lot of personal development stuff, I’m always on YouTube, I’m always reading books as well, and these are just some of the tests that people put in, or, let’s say, these forces put in your way, and you’ve just got to overcome it. That really helped me, and I just surround myself with very positive people as well, which helps you look at the brighter side of things, and help you look at, it is possible to get over these periods.
Although it can be challenging at times, Ekanayake knows the rewards will make all the hard work worth it.
There have certainly been a lot of, I guess, sacrifices that I make, that I’ve made in my short period, being just over two years of property investing. During those times, I’ve made sacrifices. You feel down, because you’re like, why am I even doing this? I’d rather be going out with friends, going out, going on holidays and whatnot, but I’m out here, Saturday night, driving Uber and such.
And it’s looking at the bigger picture, too, because it will pay off eventually.
Yeah, I know it’s going to pay off, I certainly know it’s going to pay off, I truly believe that. I wouldn’t be doing it if I really didn’t feel that as well, so knowing that, that’s what keeps me moving forward as well.
And throughout his journey, these rewards have been steadily coming through as he savours the brilliant a-ha moments when everything has just clicked.
There’s a lot of ah-ha moments, especially when I’m pulling out equity, that feels very good, an ah-ha moment. But the first time that ever happened, I was like, wow, this actually works. It was that first property that I bought, that one when I went to Brisbane on that first trip and put in that offer, so, I bought that property, and as I said, I was doing about ten months of research in that area prior to buying it, so I knew what a good property looked like, even though I didn’t have a strategy to move onto the next property, I knew what a good property looked like at the time in that area. Hence why I put in the offer and bought it.
Twelve months went by, and even though that area at the time only grew, and I was looking at the stats, only grew, that suburb, by 2% during that 12-month period, because I bought so well in terms of buying below market value, I was able to get a 60K equity release off the back of it, and that was from a bank valuation in the 12-month period. That translated into an 11% increase in the purchase price that I bought it. And then I was like, wow, this really works. I didn’t have to do any work on that property, because that wasn’t a reno strategy, that property. I just bought it, held onto it in a relatively good location, with good land content, with good amenities, and it just increased in value by 60K, and I was able to pull that out to do whatever I wanted to do with it.
Yeah, it really comes back down to location, location, location, doesn’t it?
How to Managed your Funds for your Future Investment with Taku Ekanayake
So initially was there anything holding him back from investing in property?
What was holding me back initially, aside from having enough of the small cash deposit to invest in property, it certainly was, I guess, the mindset aspect, or the fear of the unknown, as such, because obviously this is the first time you’re making an investment of this size, it’s the first time you’re going through this process, and I was going through it alone as well, and I was investing into as well an area that I’ve never been in, so there was a lot of things I didn’t know about it, didn’t know about the process, I thought the agents were going to play me, they were just going to see me as a rookie and I’d be played as such. There was a lot of fear going into it, and that’s what kind of prolonged my ability to go into the market and buy.
With a lot of trusts involved in developing a portfolio interstate, Ekanayake had to alter his mindset in order to evolve his strategy and progress.
Mindset to adapt for that, one thing that kind of forced me to adapt to it was, I didn’t see myself having too much of a choice, other than to do this strategy, because as my mentor said, I wasn’t able to keep continue to saving my way to a deposit if I had these aggressive goals as such. I had to become comfortable with it. I also had to develop a lot of trust within the people that I was working with, so that was my builders, that was my property managers, and everyone involved as well, and I had to trust the process, and really know that if I was able to do these things right, then hopefully, it would turn out okay.
I guess another thing as well was just to cut out all the negativity. You hear these horror stories on the media, you read it in the magazines as well, so one thing that I still do to this day, I have been doing for about two years, was I cut out any form of media. I don’t watch the TV, don’t listen to the radio, because I know there’s so much negative noise out there, there’s so many distractions. If you’re having a bad day, you could get drawn into one of these stories, and it could be over for you. It’s really important to cut out all that noise and distraction, and just really remain focused on what’s right and what works.
His mortgage broker, Michael Xia, was the person that he learnt from the most.
I actually read his story on one of the publications, one of the properties investing publications. Read his story, and I was just really intrigued by it. A lot of things resonated with me, and I really wanted to replicate exactly what he did, and he did it in a pretty short period of time. His name is Michael Xia, and he’s done this renovation strategy, bought in these blue-collar areas as well, and then just continued this process. So, I reached out to him on LinkedIn, said, look, can I just pick your brain, buy you a coffee, and catch up with you? Met up with him, spoke with him for an hour, an hour and a half, and I said, just show me the blueprint and I’ll do exactly what you tell me to do, and I’ll do it. And it just went from there, pretty much, and now I’m just pestering him every day.
Beyond Xia, Ekanayake has a team of people that he relies on to further his investment goals.
I guess it’s always an evolving process as well because I’m meeting new people every day, reaching out to new people every day as well, so my small network slowly starts to grow and grow as well, just in this period of time. But what I first did as well to build my network in Brisbane was I leveraged off the back of people such as Michael Xia, where he had a number of properties in the area as well, so I reached out to some of his property managers that he uses, and that they insist that he uses as well. But at the same time, I didn’t just take his advice as the gospel and just went straight with them. I still did my due diligence myself, and interviewed a couple of other property managers, if we’re talking about a property manager here. And then made my choice off the back of not only Michael’s advice but also my due diligence as well.
That’s really good. Might I ask who the property manager is as well?
I use Diligent Property Management and they service all my properties around Brisbane at the moment… It’s a husband-and-wife team.
What I like about them is really entrepreneurial, having these entrepreneurial people around me. Like Michael, he started his own mortgage broking business, building his business. These guys, Diligent Property Management, they’re building their own business as well. And I’m having good, direct access with the business owners, and the people that are making the decisions within this business as well. Yeah, that’s one of the things that kind of I look for as well, I guess.
Yeah, awesome. That’s inspirational as well, it definitely helps by surrounding yourself with people who have that entrepreneurial mindset and also can give you advice about business as well, as you mentioned you want to get into business down the track. It’s a good start there to have the right people in place. But if you’ve got your own property portfolio, you might not even need a business anymore.
That could be the business, yeah. Eventually, I’m going to get into my own business as well. Right now, I don’t really know what that is, but certainly surrounding yourself with these type of people, you’re just like, you really look at yourself, and you’re like, look, I could be doing the same thing as well.
The buy, reno, hold strategy is one adopted by many property investors. But Ekanayake pursues his goals with a tenacity that outstrips most others with the same idea, with a desire to pull out as much wealth as possible.
When it comes to the nuts and bolts of it, every property now that I’m looking for, I’m looking at it from a sense that, after the renovation am I going to be able to pull out 50k minimum, ideally at least 70K off the back of the revaluation? So, I’m always looking; I’m going into every property saying, how am I going to pull out 60K or 70K out of this purchase? With that in mind, I do that two ways. I’m below market value, so I’ve already got built-in equity there and then also manufacture equity by doing a value-add strategy like cosmetic renos. I don’t want to spend more than, definitely not more than 20K, but I try to keep it around that 10 to 15K. The reason for that is I’m buying properties around that 250 to 350 mark, 350K mark. For every purchase that I’m making, I need, if I’m putting a 10 to 15K reno in, and then also 12% deposit in, and with closing costs and sign up duties and all of that, I’m going to need about 60, 70, 80K. And hence why I don’t want to overcapitalise on the renos, and I’m always looking for, where am I going to find 60 to 70K of equity within those properties after I revalue it.
I don’t want to look at any big projects, don’t want to look at any structural renovations, because in the areas that I’m investing in, a structural renovation is just going to completely eat into my cash flow, and eat into my equity as well. I just look at things that are going to brighten up the place, maybe I can do a quick value add like put in that extra bedroom, which I just did on the Deception Bay one, which I’m about to do on my most recent one as well. Which aren’t very costly, but improves the value of the property pretty significantly.
Great. It’s really interesting, from what you’ve said, the figures all seem very reasonable, and especially in the market that we’re working in Brisbane, it’s definitely feasible. But you will need to obviously look very hard and look a lot to be able to find properties like that.
With a focus on finding properties under market value, Ekanayake sets aside as much time as possible for research outside his nine to five work.
When I’m actually in the market and when I’m really intently looking at buying something because I do have a full-time job as well, I can’t just be on it during the day all the time. In the mornings, I’m definitely on realestate.com, even on the commute to work, I catch a train in, so I’m on it. I always set all my Google alerts, my real estate alerts, so it’s coming into me, into my inbox, so I can filter through it quite easily at lunchtime, I’m looking through properties, and I’m also calling real estate agents at lunchtime. And then in the evenings, I’m just online, whether it be on realestate.com.au, or speaking to other investors that have invested in the area, trying to find good properties and under market properties. And then now that I’ve invested a few in Brisbane, I’ve made a few good real estate agent contacts in the area, so every now and then I’ll get deals sent to me that hasn’t hit the market yet, during that one-week grace period, which has been very helpful.
For instance, the most recent purchase that I bought in Scarborough, I wasn’t actually even looking in Brisbane at the time, I was actually looking in Adelaide, to buy another one in Adelaide, but a real estate agent called me, saying, we have a deceased estate, contract just crashed on it, we’re going to auction tomorrow. If you’re in a position to buy it tomorrow, if you have finance ready for tomorrow and bid on the auction conditions, you’ll get it for a really cheap price. And then, yeah, I ended up buying it, because I was able to get it for so cheap. And then that’s the beauty of having these connections built over time, they remembered exactly what I was looking for, these cheap, run-down properties, just building those good connections has certainly helped over time. I guess that’s one of the ways that’s helped me identify some pretty cheap properties as well.
Yeah, that’s amazing. It is so true. Even just having a connection to an agency is so important, but connections to mentors and to other people that will definitely be able to help you and to pass on.
Always get them on Facebook as well, I’m always trying to get the real estate agents on Facebook. I’ll try to get every form of communication, so your WhatsApp, Facebook, LinkedIn, and then of course texting and phone. The more avenues and open communications that you can have with these agents, the better it is because you build a better relationship with them as well over time.
So what does it take to be successful in property investing when you already have two other jobs? Ekanayake says it comes down to a very concrete motivation.
Aside from making a lot of quick decisions too quickly, and falling into trouble with some of my decisions? No, I’d say one of the things that I always like to do is write my goals down every day in the morning when I wake up and also in the evening before I go to sleep. A lot of people, a majority of people, they just write their goals down at the start of the year and then forget it; at the end of the year, they’re at the same place where they were at the end of the year as well. That’s something that I used to do, and I’m guilty of doing that. But then I was reading some content where this really successful businessman, Grant Cardone, he actually, he’d abide by this rule, and he does it day in and day out, and it’s great because you wake up with it, it gives you the motivation to get to work, and you know why you’re working, because you’re trying to achieve these goals, and then before you go to sleep, you’re writing these goals down, so it’s at the top of the mind as you go to sleep as well, so, I think it’s really important because it cements why you’re doing this.
On education, he recommends several books to sink your teeth into, such as The 10X Rule and the classic, Rich Dad Poor Dad.
I’ve been reading a few books lately. Actually, I’ll split this into two. If they’re still not sold on the concept of investing or investing first, but if they’re more looking towards maybe buying their own home first, I’d suggest maybe reading a book such as Rich Dad, Poor Dad, which kind of flips the switch around a little bit, and it looks at it a little bit more from a contrarian mindset. That was a really good book when I first started to get into property investing. And on the other end, if they’re already sold on property investing, and they’re investing themselves, then a book like the 10X Rule was a game-changer for me, as I’ve said, really expanded my thinking, really expanded, forced me to push a little bit harder.
If you want to connect with Ekanayake and find out more about his property investing strategy, or just have a chat with him, you can find him on social media.
Look, I’m always keen on meeting, networking, connecting with like-minded investors, whether have little experience or heaps of experience, I’d love to connect with you guys. So, find me in Instagram, Facebook, LinkedIn, Twitter. Just my name, Taku T-A-K-U, and then Ekanayake, which is E-K-A-N-A-Y-A-K-E. It’s a bit of a mouthful, but yeah, you’ll find me.