The 4 Stages of Property Investing

[arve url="https://www.youtube.com/watch?v=sAlPnMe9jO4" mode="lazyload" align="center" /] Going from nothing to financial freedom through property investing can be quite an overwhelming task. Breaking it down into the different stages of the property investment journey can be extremely helpful. Here are the 4 stages of property investing. Book a free property strategy session 0:00 - Introduction 1:00 - The 4 stages summary 1:37 - The 2 Properties to financial freedom strategy 3:18 - Stage 1: Buy Properties 5:32 - How to know when you've finished stage 1 7:20 - An example based on today's market 8:29 - Stage 2: Pay Off Debt 9:02 - 2a. FAST Strategy - How to pay off debt fast 11:15 - 2b. SLOW Strategy - Enjoy life while the properties pay themselves off 13:49 - Dave's success story 15:56 - Stage 3: Freedom 23:38 - Stage 4: Wealth Creation 27:01 - Summary 28:25 - This can really accelerate your financial freedom 30:01 - Get help implementing this strategy in the right market Learn more about the 2 properties to financial freedom strategy Ikigai: The Japanese secret to a long and happy life Recommended Videos: 2 Properties to Financial Freedom: Quickly Explained Transcription: if you're looking to achieve financial freedom by growing a property portfolio it can be quite a daunting and overwhelming task to go from nothing or just owning your own home to actually grow in your portfolio and achieving financial freedom and we find it much simpler and much less daunting if you actually break down the journey into the different stages of the property investment journey or the property investment cycle so today I'm joined by Ben Everingham who's a buyer's agent from pumped on property how's it going Ben hey man how you doing very good and we're gonna talk about the four stages of property investing so this is in line with our two properties to financial freedom strategy if you haven't checked that out go to onproperty.com.au/plus two properties and you can learn all about that over there but the goal here is that we're going to invest in what we call foundational properties that are going to then go on to deliver us financial freedom or deliver us a financial position where we can actually live off the rental income that those properties are generating so the four stages are property investing to outline them quickly is stage one which is buy properties which we're probably going to spend most of the time on stage two which is pay off debt which you can do to which you can choose to do quickly or slowly Stage three is freedom or financial freedom that's where you get to live off the rental income and gain choices in your life and then stage number four is wealth creation now that you're financially free you can focus on building your wealth becoming rich whatever it is that you decide to do so do you want to talk quickly about the two properties to financial freedom strategy Ben and then we'll get into stage one about buying the properties yeah so the concept of two properties to financial freedom I think you came up with that idea while you having served on the Sunshine Coast and you gave me a call after and I kind of wish I've known about it ten years before I got started because of all the ups and downs and mistakes that I've made as an investor on my journey and effectively the strategy is simple and it's about owning a couple of good quality low risk low maintenance homes completely outright in the future so that that passive income stream provides you with surplus income and allows you to have better quality choices in your life you know down the line whether that be ten fifteen thirty years from today yeah so we're talking about kind of a 15 to 20 year strategy towards achieving financial freedom but something that's really interesting with this strategy as opposed to the myriad of other property investment strategies out there is that the hard work is largely done in the beginning so we're investing in high-quality Metro markets that are going to have long term demands and we're working hard to save our deposits and to buy those properties in stage number one that might take us a couple of years to buy those properties and maybe build some granny flats on them but then we're in a positive cash flow position where those properties are paying themselves off over the next 10 15 20 years where we don't really have to do much we get to live our lives and enjoy our lives knowing that we're set up for financial freedom so that's what makes this strategy a little bit different is that it's very heavily weighted to the beginning just buying the right properties for long term success and then letting them do their things so yeah we're looking at high quality properties and long term demand that ideally would be in a cash flow neutral or cashflow positive position so let's talk about stage number one which I think should take anywhere from about two to five years for most people which is buying properties and acquiring what we call your foundational properties yeah so the thought of buying a couple of properties and building a few granny flats might feel really easy to some people listening to this and then it might feel really difficult to others but the reality is it's a staged approach which can take you know six months we've had clients do it in six months we've had other clients do it in you know just take their first action step in five years and really step one is about as Ryan said finding a really high-quality market understanding that marketplace and then going out and buying a really high-quality property but in the future you can actually build a granny flat on now some people like to go buy the home and build the granny flat straightaway to put it in more of a cash flow neutral to positive position depending on interest rates and your deposit other people prefer to get the purchasing over so they go buy two properties in X amount of years and then after they own the two properties come back and add granny flats - yeah and so they come back and add the granny flats to those properties and I think you know for me personally on my journey I preferred to go out and buy the right market at the right time and buy a property with potential for a granny flat and then it's only sort of now or in the last couple of years that I've really begun to think about cash flow primarily because I met Ryan and he sort of introduced me to this strategy so yeah so stage number one is quite difficult so obviously depending on what position you're in as you're listening to this will depend on what your next steps are if you don't own any properties at the moment then step number one for you is going to be actually buckling down saving that deposit and getting ready to buy that first investment property if you already own your own home or already own some investment properties you may be able to leverage against the equity in those in order to purchase properties but basically the idea here in this stage is yet you spend the time in the market you're researching areas you're buying at the right time of the market cycle you're buying in good areas you're saving deposits you're doing all of that hard work how does someone know when they've kind of finished stage one and they're ready to move on to stage two so I think stage one officially finishes you know for some people financial freedom might be one home one granny flat owned outright they might have a really low living cost for other people it could be two or three or four so stage one really finishes when you own as many houses as you need to achieve financial freedom based on the cash flow on those properties in fifteen years and you've actually completed it once you've got the granny flats on those properties as well so at that point you've kind of done everything you needed to do you bought you've built granny flats as many times as you needed to and therefore longer-term you'll have enough passive cash flow coming in to achieve your longer-term cashflow goal yeah so if you look at your current property portfolio and the rental incomes that are coming in imagine that you had paid off all of those properties you owned them outright would you be able to afford to live off the rental income after you pay the expenses of the property or not if the answer is yes you could afford to live off the rental income if they paid off then you could effectively move on to stage 2 which is to focus on actually paying off that debt or if you say you know what if all of these were paid off I wouldn't have quite enough money to get by then you might want to stay in stage number one look at purchasing another property building another granny flat or you can jump between these so you can move from stage one you might be ready to reach a lending limit and so then your focus becomes paying off debt and improving your cash flow position before you can go back to stage one again but yeah so once you've purchased enough foundational properties that if paid off you would effectively be financially free and could live off the rental income then you move on to the stage two and what are we doing stage two Ben Before we jump into that can I just give an example so that people can understand the numbers based on today's market and also an example of a client of ours that did this actually 15 to 20 years ago and the result of that today yeah so in stage 1 effectively today Brisbane is really the only high quality Metro marketplace that I am looking to implement this strategy in with my wife Lisa so that looks like going out and buying a home for a rounded outs of four hundred to four hundred twenty thousand dollar mark that rents for about three hundred and eighty dollars a week and then coming back and building a granny flat which costs about a hundred and twenty thousand dollars that rents for a further two hundred and eighty dollars a week so you look in the strategy that c...