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SHOW NOTES FOR EPISODE 155: AUZZIE COUPLE BUYS 324 UNITS IN 6 YEARS AND ARE NOT SLOWING DOWN!
Building a real estate portfolio can be a slow methodical process for most people – but not for the Dhillons. This couple from Australia has grown a dynamic cash flowing investment portfolio from scratch that has recently exploded exponentially! In this episode, Kevin and Daniella Dhillon share how they started out working and saving while living in their parents’ house in Australia and how they became financially independent in six years and are now kickin’ it in the U.S.! You won’t want to miss this podcast!
What You Will Learn
- The importance of buying “under market” price properties
- The leveraging value of saving for your first real estate investment property
- How writing down “a plan” helps you achieve more in less time
- Why avoiding “shiny object” syndrome and staying focused on your target asset type is better
- How outside investors and syndication can significantly accelerate your real estate portfolio growth plan
- The value of good mentorship and making your investing a “team sport”
- How “stumbling into” multifamily investments was one of the best decisions they have made
About Our Guests
Kevin and Daniella Dhillon
Kevin and Daniella Dhillon are an Australian husband and wife team who have been investing in real estate since 2006. While Kevin worked as a property manager and Daniella was in I.T, they began acquiring SFH, duplexes, and triplexes in Australia and relocated to the US in 2011 to extend their property portfolio. They have since acquired over 325 multifamily units, totaling over $20 million dollars across Florida, Tennessee, Texas, and Wisconsin. Their latest acquisition was a 152-unit multifamily apartment community in Waco, Texas which closed in May 2017. They are currently under contract for another 144-unit multifamily apartment community in Fort Worth, Texas. The Dhillons are passionate about wealth creation through real estate, which has enabled them to quit their jobs while still in their 20s and focus on investing full-time, for the past 7-8 years. They currently self-manage their three MFH communities in SE Florida, while still holding onto their Australian portfolio. They look forward to continuing growing and expanding their property portfolio in the US. They have had experience in a variety of real estate strategies including owner financing, developments, value-add projects, and syndication. Kevin and Daniella are currently based in Houston, Texas with their 2-year-old and newborn sons and enjoy spending their time with their family both locally and in Australia. For more information, please visit their website: www.DhillonPartners.com
More About the Dhillons
- 13-14 years ago they had been dating 2-3 years (1 year of that was while she was working in the UK)
- Was going to the University of Melbourne
- Invited Daniella and her parents to a restaurant in Melbourne with the intent to ask for her hand in marriage
- His father said “no” because he thought Keven needed to finish college, get a job and buy a house first
- A year later, did the same thing. This time he was finished with school, had a job and bought a house.
- The house was a 2-hour commute away from the job
- Ended up renting out the house
- Ended up making more from the rental income than his job’s annual salary
- That became their “lightbulb moment”
Their first real estate investment
- 3bed 1 bath
- Bought it for around $250,000
- Home needed a lot of work
- Worked on rehab every weekend
- Rented out
- Today is worth $500,000
Saving Money
- Lived at Daniella’s parents’ house while they saved both salaries
- Didn’t go out
- Lived very frugal
Second real estate investment
- Purchased a duplex in Melbourne
- Renovated the property
- Worth more by sub-dividing, establishing 2 separate titles
Developing a Plan
- Pastor friend encouraged them to write a plan
- They developed an 8-year plan
- Continued at her parent’s house rent-free, saving all the money they could
- He wanted to develop multiple streams of income to provide for their own kids, free Danielle up to care for the kids and for to care for their parents as they got older
- Plan: To purchase under-valued properties, force equity, re-fi, and pour cash into next deal
- First 3-4 years they felt it was going too slow
- Had acquired 2-3 houses, a duplex, and a triplex
- Wanted to push major appreciation on quicker way
Their First Real Estate Development
- Joined with two partners, bought old house on larger piece of land (1300 sq meters), tore down house, and built 4 townhouses
- Made money
- First and last development project
- Didn’t fit his risk profile
- When you buy cash flowing properties, you are regularly getting cash in as you do improvements. With development, you are paying money out, money out, money out and, at the end, hopefully, recoup your investment and get a lot more money
- Happened right before the global financial crisis in 2008
Moving to the U.S.
- Visited the U.S. (Orlando, Florida) for big family reunion
- Relatives came from Malaysia, UK and Australia
- Kevin’s father suggested he invest in the U.S. but Kevin dismissed it – “totally out of my risk profile”
- But, out of respect, he told his father that he would seriously think and pray about it from June to Dec 2010
- Five things happened that confirmed they should go
- Kevin was concerned that they had no competitive advantage – He later found-out he had a long lost uncle who lived in Boca Raton. Kevin called him and he found out uncle was a real estate broker. His uncle asked him to come to the US, stay with him and he would help them get started (the competitive advantage)
- Moved from Australia to the U.S. in 2011
- Living fully on income from rentals
- Started buying multifamily properties
First Large Purchases in the U.S.
- Initially, they were looking for a collection of single family houses
- In 2011, Kevin’s uncle in Boca Raton showed them a group of 6 fourplexes on an off-market short sale
- Then, they purchased an REO – 27-units
- Purchased all these by re-financing their Australia properties and the cash they received from the townhome development sales
- Self-managed
- Took some time for introspection
Becoming Syndicators
- Auzzie investors wanted to invest with them in the U.S.
- Peter Harris began mentoring them and helped them through the syndication process
- Found 51-units in Palm Beach
- Currently, they have $36 million under contract
Biggest Mistake
- 51-units in Palm Beach
- Not raising enough money to cover CAP-X expenses
- Investors didn’t get a dividend in the first year and a half because all the earnings were going back into the project
Biggest Success
- Sticking to their goals and objectives
Advice for Old Dawgs Looking to Real Estate Investing to assist in Their Retirement
- If you want to move forward quickly, faster and better in your real estate investing efforts, make it a team sport – get others involved
- If you don’t want to do all the support work required in real estate investing, become a passive investor and reap the rewards of interest and equity bonuses
What is in the Future for Their Business?
- It has brought their families together and they want to see that grow
- Wants to build a bridge for Australian and Asian investors to invest in the U.S. real estate market through their company
Rap-It-Up
- Favorite real estate book: Real Estate Riches by Dolf de Roos and Equity Happens by Robert Helms and Russell Gray
- Favorite business book: The Book of Proverbs from the Bible and It’s Not How Good You Are But How Good You Want to Be by Paul Harden
- Most valuable web site for success (other than your own): CoStar
- Favorite app: Weather and Facebook
- Favorite quote: “People Are Our Wealth” by Rabbi Daniel Lapin
- If you had to start all over, knowing what you know, and you only had $1,000, what would you do to launch your real estate investing business? Use the money to take people out to dinner – network!
How to Reach Kevin and Danielle
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