Nathan Birch went from pouring beers to owning a property portfolio worth millions
- 3 months ago September 08, 2014
LOVE him or hate him, there’s no denying 29-year-old Nathan Birch’s powerhouse property credentials.
In a notoriously tough property market, he has accumulated 160 properties and “retired” five years ago. This year, he made $10 million in real estate deals.
Mr Birch’s $30 million property empire, mostly acquired over the last 18 months as Sydney house prices soared, has put him in an elite group of investors, but for the way he has achieved this feat he stands alone.
At 18, Mr Birch bought his first property while working as an assistant in a real estate office and bought other properties while working weekends at a pub.
Now the native from Parramatta in Sydney’s west earns just short of $2 million in annual rental income and is negotiating property deals few would believe.
Earlier this year he bought a block of 40 units in the Blue Mountains, which he believes will earn him $400,000 in annual income.
The building was a former motel valued at $4 million, but Mr Birch’s hard bargaining meant he nabbed it for just $1.66 million.
He also recently bought a property in Ipswich, near Brisbane, for $35,000 when comparable properties were selling for $150,000.
Those deals followed the same strategy he used to build most of his portfolio — purchasing undervalued properties in affordable neighbourhoods.
“I discovered early on what real estate agents look for in a deal and how to use that to my advantage,” he said. “I also studied sales in the areas I wanted to buy in.”
Mr Birch’s first property was a $248,000 house in Mt Druitt, in Sydney’s outer west bought with money he had saved as a teenager.
He negotiated a discount and made sure the rent covered most of his monthly mortgage payments. Having purchased below market value in an area where prices were rising, he soon had enough equity for deposits on more property.
Like his first, each new purchase quickly grew in value, allowing him to tap into an expanding equity pool to purchase more.
After five years of investing, his rental income was equivalent to the average Sydney salary, so he quit his job, and has continued to live off his rental income while still using equity and profits from other sales to continue expanding his portfolio.
He believes ordinary Aussies can replicate his success, but warns his path from teen to tycoon wasn’t easy.
“When I started I was earning little money, so I had to save hard. I did everything not to spend money. I never went out. My friends went travelling, went on schoolies. I missed that. I’ve loved property since I was 13.”
NATHAN’S TIPS ON SUCCESSFUL INVESTING
• Buy where rents are high. House prices are likely to go up and where there are opportunities to purchase homes for below what comparable properties sell for in the area. In Sydney he said the best opportunities were probably in the general areas of Penrith, Liverpool and Fairfield.
• Avoid trying to “time” the market. “I never consider if this is the right time to buy. I look at what I can make a profit from in the current market.”
• Learn negotiation skills. He admits the skills required to negotiate good deals aren’t obvious, but can be practised. “You have to form relationships with real estate agents. If they know you’re serious about buying properties they will come to you with deals before they hit the market.”
• Look at bulk buying opportunities. For buyers with more cash, Mr Birch suggests looking for bulk buying opportunities, like blocks of units in cheap regional markets. This is the most effective way he has used to nab bargains. In towns like Tamworth in north west NSW, many of these apartment blocks sell for less than $500,000.