Helen Collier-Kogtevs is a successful multi-millionaire property investor, bestselling author and one of Australia’s leading property educators.
I come from a corporate background, having working in the commercial division of a major blue chip company for 7 years. I was your typical corporate, working 60 hours a week, being totally committed to the job. The rat race just wasn’t for me. Sure, there were parts of my job which I enjoyed, but it began to feel like Groundhog Day; waking up early each morning, getting into a suit, spending hours in the office only to come home, eat and then go to bed before getting up to do it all again.
To make it worse I was going through the daily grind to effectively pay off debt. Shopping was not only my hobby but also my outlet, I had the most impressive collection of shoes and handbags. However, it becomes a nasty cycle. Shopping to feel relief from work, to forget about it all. Only to get yourself into the position where you had to work to pay for the very debt you accrued by shopping. Working to shop, shopping to survive work. So, despite my husband and I earning very decent incomes, there was little left from each pay packet once the bills and repayments were paid.
My husband and I started to think about the future and what we wanted in our life together. As we didn’t have much money at the time we would go on camping trips rather than expensive trips overseas. It was on one of these trips that I had the epiphany that would change our lives. One particular trip we were in the Balmoral Forest in a caravan park, camped around an outdoor fire. I recall that it was a particularly cold and foggy night. Cuddled up around the fire we were talking about the kind of things that couples discuss, getting married, our honeymoon, where we were going to live etc. Our future together was something that I had been giving a lot of thought to recently. I had printed off our superannuation information to take on this trip with us so that we could really spend some time together looking at it.
Camped around the fire I worked on calculating what our future superannuation would be, based on the 8% we were both currently getting at our place of employment. To our shock, despite our decent incomes we came up with a measly figure of $28,000.00 a year to live on. I couldn’t imagine living on so little a year and it also dawned on me that if we were to have a family I would have to go straight back to work. I didn’t want to be one of those women who had a baby and then was back at work 3 to 6 months later to pay the bills, I wanted to be able to watch our children grow up. This was what I call our ‘aha’ moment, we realised the problem but the question was what were we going to do about it?
We considered our options; shares didn’t appeal to us; we didn’t want to leave our high paying jobs to take the risk of starting a business so we thought investing in property was something we were both comfortable with and passionate about. We were hesitant to dive straight in though, we wanted to make sure we knew what we were doing. Even when we bought our first property, a 1925 Californian bungalow in Preston, we didn’t know enough. We loved its original features, its cast iron claw bath and timber floors and we recognised that the property needed renovations. However, it was a settlement that we realised how little we knew. We had saved up the deposit only to receive a bill for settlement from our lawyer for a further $12,500.00 on top of the deposit. We had no idea about stamp duty or that we had to pay it. For a moment, it looked like it was all over before it had even begun but we were very fortunate that a family member was able to lend us the stamp duty. From the moment, we bought that first property there was no looking back.
The biggest lesson that I have learnt not only from that experience but along the journey itself, is the importance of getting an education in what you want to do, to learn not only how to invest but how to do it properly. I became addicted to learning, we would go to seminars, I subscribed to just about every property magazine and I would constantly be reading, my thirst for knowledge just couldn’t be quenched. At night, I would sit in bed reading a book, I would tell my Husband Ed to forget about the book he was reading and to listen to mine. I ended up reading the chapters out loud so that we could both learn at the same time, we would then discuss the content of the books, its ideas and its application to us.
A big part of our learning process also involved mentors. Those who could guide us through the process, who we could call with proposed investments and ask for their experienced opinions. Initially we were predominantly seeking mentors amongst our friends and family, mainly friends who we knew had investment properties themselves. However, we found that although they may have had multiple investment properties, they didn’t know as much as we were getting out of the courses that we were doing. They hadn’t done the research or the learning that we had.
I realised that I needed to move beyond friends and family members, that I needed to make sure that whoever was going to mentor us already had what we wanted. We wanted 20 properties, so we needed to find someone who had 20 proprieties. If we wanted 100 properties, we would have needed to find someone who had 100 properties. It was only these people who could teach me all the nuances of building a portfolio that size, whilst fundamentally the process is the same the complexity is very different. The more 0’s that you add, the more complex the area of finance and being able to obtain finance from lenders becomes. I needed people who have been there and done that, to stop us from making the same mistakes that they had.
We started using the seminars that we were attending to source these mentors, I would ask lots of questions. I was very specific about what I wanted, they had to have achieved a certain result over a period of time and needed to have good general knowledge of all types of deals that could be done, regardless of whether I ever used those types of deals I still wanted to understand them. The problem then became that they were then all trying to sell us their real estate which to me became a conflict of interest. They had a vested interest in mentoring us, they were effectively spruikers and sharks trying to selling us real estate. I had a gutful of it, I just wanted to learn and not be pressured into buying real estate which I had no interest in.
On 27 February 2006 I started real wealth Australia. I remember my last day in the corporate world, when I got into the office that morning it was cloudy and pouring down with rain. When I went to leave having finished my final day, the sun was shining. It felt good on that day and it has felt good ever since. It was almost like I had quit my corporate gig on the Monday and started Real Wealth on the Tuesday.
By leaving the corporate world I had effectively retired, our portfolio was generating enough revenue at this stage that I had replaced my income. I didn’t need to be a part of the rat race anymore. The question for me then became what am I going to do with the rest of my life now that I have effectively retired in my 30s? I asked myself, if I took money out of the equation, knowing that I didn’t need to worry about where the next dollar was coming from, what did I want to do with the rest of my life?’ This allowed me to follow my two passions, property and teaching. Our education system doesn’t teach us basic money management skills and I realised that this is what I could address, I could teach adults how to manage money and how to budget. Real Wealth Australia is purely educational, teaching people to invest in a strategical, disciplined and low risk way, rather than operating under the pretence of providing education only to sell real estate.
This is what makes me excited about what we do, it makes my heart skip a beat, when people have the epiphany that they can still travel, can still enjoy their lifestyles and can buy investment properties as well. I imagined what this skill could do for those around me, what it would be like if all my friends and family could retire as well, the goal is ultimately to have one less person reliant on the government upon their retirement.
Our Investment Strategy
When we began our journey, cash flow didn’t exist like it does today, even the concept was foreign to us, it was all about blue chip properties and blue chip properties are all about capital growth. The concept being that you buy for capital growth not for yield, meaning that you are funding the shortfall between the rent and the mortgage repayment, this is what negative gearing is. At the time, it was all about buying properties, knowing that the rental income generated was going to be significantly less than the mortgage repayments but with the aim that the property would grow in value. We bought 6 blue chip properties meaning that whilst we were using my income to pay the bills and rent, all of Ed’s income went to saving deposit money and to the short fall between the rent and the mortgages. We saved as much as we could, tax returns, bonuses and the like. Instead of doing overseas trips we stuck with the camping trips, we kept costs low and stayed within our budget.
It was all going smoothly until we went to the bank to borrow funds to purchase our seventh property, the bank looked at our portfolio and said that they couldn’t loan us any more money. That because we had become so rent reliant, if either of us lost our job we would be in a financial world of pain. I was devastated but I wasn’t deterred, instead of giving up I started the journey to find out how to get around this financial brick wall, I knew there had to be a secret, as otherwise how did other people have more than 6 properties? I had recently hired another mentor so I asked him what the solution was, he said what we needed was cash flow. He said that although it was harder, I did in fact exist it just required you to be more creative.
I started buying physical maps, remember this was a time before Google, and would sit down looking through all the suburbs, towns, regions around Queensland, New South Wales and Victoria, until I came across regional areas which had the elusive cash flow. I found a regional property selling for $96,000, we already had $40,000 for the deposit so we thought even if the bank didn’t lend us the full amount, we could still make it work with our deposit. We showed the bank the property, it was renting for $230 per week and to my shock the bank said yes. I said to Ed we better hurry up and sign for the deal before they changed their mind.
The bank ended up lending us 90% of the purchase price meaning we hadn’t needed to spend our deposit, so we went to the bank and asked how much they would lend us if we kept buying these types of properties. To our utter surprise they asked whether another $1m would tie us over, I couldn’t believe it, but I tried to act cool as if maybe that would be just enough. We realised that we were onto something.
As a result of that very conversation we ended up buying another 6 cash flow properties in a hectic 6 weeks, we didn’t muck around. Our lives became consumed by what was very literally paper warfare in trying to settle on six properties in this time frame. With the strict financial rules of today doing this would be too difficult and too messy, I’d recommend to people today that they settle one at a time. Purchase multiple properties in a short-time frame if that is your strategy but make sure to settle the first before you move onto the next.
Suddenly we had money. We were collecting the rents on all of our properties and found that the rent was not only covering the mortgage for those cash flow properties but was also enough to cover the 6 negatively geared mortgages as well. This portfolio was now paying for itself and now Ed’s income was all going to savings. With our new-found position, we decided to go back to the bank and ask how much can we could borrow now, with 12 properties already under our belt. This was the real curveball. They told us that if we kept borrowing the way that we were and kept being both balanced and strategic then our borrowing capacity was unlimited. We knew that keeping it balanced made it a lot easier for a lender to loan us money but we were still shocked. It reemphasised the need to take a strategic approach, one that is suited to your lifestyle taking into consideration factors such as age, goals, budget, income and savings. We considered all of these factors at that particular point in time every time we had to decide when it was appropriate to purchase a negative geared property as opposed to a cash flow property. The strategy needs to be tailored to the individual, to the individual at that point in their life as there is no one size fits all solution. It is then the strategy which dictates where and what you buy.
When I teach people the strategy so that they can then apply it for themselves for the rest of their lives, I always say to them if you want to pay it forward then teach it to your children. What they are learning is something that isn’t taught at school but if you can teach a child to manage their money, to save and how to invest, and they see their own parents doing this, then you are setting them up for a potentially bright future.
My most successful habit has been to take the whole concept of taking action and turning it into a habit itself. I have always been a very action orientated person, I always joke that I have ‘ants in my pants’, I always have to be working towards something. I have then built habits based on this approach to life. I break up my goals and dreams into small steps and focus on achieving one step at a time. Beginning with the end result in mind, I work backwards from that knowing that every day, every month and every year I am actively moving towards that goal. I write each step down, sometimes I will use vision boards but I am more of a checklist girl. Every day I carry a notebook and pen with me and make a ‘to do list’, usually of tasks to do for the week. This keeps me on task and helps me break goals and dreams into smaller chunks, that way you do not become overwhelmed by the bigger goal. This allows you to dream big without the dream scaring you.
One inspirational quote which I live my life by is ‘don’t put off for tomorrow what can be done today’. Living my life in this way helps to keep me in action, I am a strong believer that dreams don’t happen while sitting on the couch with the remote. That you must go out and do things, whether you make calls, research, speak to people etc. it is all about what you can do today to move that little bit closer to achieving your goals and dreams.
I have written a couple of best sellers myself which I would recommend to anyway considering entering the world of property investment. The first is titled The 59 biggest mistakes made by property investors and how to avoid them, it provides the reader with not only the most common mistakes that people make but also solutions as to how to avoid making those mistakes yourself.
Another book which I have written, which is ideal as a beginner’s guide for those thinking about investing but want to know more first, is How to start creating real wealth through real estate.
I have also written several reference books which serve different purposes; the green book is about getting started, the blue book focuses on due diligence, the black book is for those interested in advanced investing strategies and the red book which is basically a brake fast in case of emergency guide. These books are very practical in their structure and the way they are written. They even contain checklists which the reader can use to ensure that the have considered and actioned every step required in the different processes
One of my favourite books not specifically about property investment is a mindset book called The Richest Man in Babylon. It is only a small book but it’s very powerful. It provides financial advice and discusses fundamental financial concepts still relevant today, through a series of parables. The fundamentals are still the same today as they were then.
For those who are more into numbers, facts and figures, another book which shifted my mindset was the Millionaire Next Door. It is about two students who carried out a PhD study based on millionaires, what they discovered was that when they went to the suburbs that the millionaires supposedly lived in they realised that they were not truly wealthy. They may have lived in grand houses and driven expensive cars but to be financially free or wealthy is defined as the ability to quit your job and to still be able to earn an income, to be able pay your bills month to month. Research shows that most Australians would survive a month in this situation before they were in real financial stress. The book refocused my mind on the importance of family, friends, love and experiences rather than on what we buy when we have money, money is only the vehicle for these more important things.