Cate, Dave and Mikes First Property Purchase – Lessons, Insights and Reflections

_{1.40 – Mike shares his first home buyer adventure first.}

_{4.40 – Dave was a young 25/26 year old mortgage broker when he purchased his own home.}

_{8.40 – Cate talks about the overwhelming stress that some first time buyers feel when the gravity of their debt hits them.}

_{10.55 – Cate chose an off-the-plan property in Mordialloc and she critiques the decision, but shares some of the positives}

_{18.59 – Next week’s teaser: Georgia’s case study – managing investment properties and navigating tough decisions}

_{25.04 – How did they each borrow? Bank or broker?…}

_{34.04 – Gold Nuggets}

Today’s episode is a special one. The Trio have often reflected on their own past experiences as investors and home buyers. This time, they decided to share their nerves, excitement and rookie mistakes when they each tackled their own first purchases.

Mike had an exciting week when he bought a home, rolled his car and took of to Thailand on a trip. He paid $230,000 for a home in Waratah (Newcastle) and thought hard about all of the ways that he could generate some income out of his asset. Renting a room to his previous flatmate, drawing up a depreciation schedule, and contemplating a cleanup of an otherwise rugged property was the beginning of Mr Mortlock’s property success.

A $30,000 immediate uplift for a $12,000 investment was a great payoff.

Young Dave was a 25/26 year old mortgage broker, driving around in his EB Ford Falcon when he decided to get serious about mortgage broking. His red clinker brick, older style apartment caught his eye immediately, and for all of the right reasons. Dave paid $176,500 for his first home.

Cate touched on the fear of debt and the enormity of the pressure she felt once she took possession of her first home. This isn’t an uncommon feeling for some buyers.

“What if I lose my job?”

Cate’s first purchase was a townhouse that she bought off-the-plan in Mordialloc. She talks about the pros, cons, and the better alternatives she could have targeted. She contrasts the skills she had then vs now.

Dave was able to apply his mortgage broking skillset to his acquisition, but he maintains that he felt very nervous about the purchase itself. From contract signing to comparable sales data, Dave recalls that he was relatively green as a first home buyer. He recalls the ways that he monitored and researched loan products and interest rates.

How did buyers navigate the home buying process back in their day? Cate recalls her expensive phone bills, when agents had mobile phones and Telstra charged by thirty second blocks for landline calls to mobiles.

“Doing the legwork” was different for first home buyers prior to online property search engines being commonplace. From slicing out line advertisements in the paper to collecting magazines in the coffee shops, Dave and Cate reminisce.

What were their income to asset price ratios? Clearly, Dave and Mike were on better incomes than Cate.

Mike: 3.4%

Dave: 3.5%

Cate: 4.8%

How did the Trio members each borrow? What were their loan products? Did they go via a broker? And how did grants and initiatives spur on their decision to purchase?

And how have their first purchased properties performed over the years since reselling?

.…. and our gold nuggets!

Mike Mortlock’s gold nugget: “Don’t sell if you can avoid it!”

Dave Johnston’s gold nugget: Getting into the market and making a decision is important. Don’t overanalyse, get in the game.

Cate Bakos’s gold nugget: Surrounding yourself with knowledgeable people is important. Cate’s top two picks are; 1. a strategic mortgage broker, and 2. a great conveyancer.

Resources:

What I’d tell my younger self

If you’ve enjoyed this show, you may enjoy these episodes:

31        Get rich quick schemes – No.1 of the top 7 Critical Mistakes
32        Misunderstanding what makes a good property investment – No.2 of the top 7 Critical Mistakes
33        Starting without a plan and end goal – No.3 of the top 7 Critical Mistakes
34        No mortgage strategy – No.4 of the top 7 Critical Mistakes
35        Emotional decision making – No.5 of the top 7 Critical Mistakes
36        Buying the wrong property and/or the wrong location – No. 6 of the top 7 Critical Mistakes
37        Needing to sell property too soon – No. 7 of the top 7 Critical Mistakes
62        Dave, Cate and Pete’s biggest regrets on their property journey
68        Renovating – tips and mistakes to avoid