Positive Cash Flow Real Estate
How I Purchased 10 Properties in 8 Months Earning 20% Return per annum
My name is Trish Davies, the co-founder of Wealth Options Within. In 1997 I went through a separation with my husband and in 1999 received tragic news overnight, which left me a single parent almost immediately with a 4-year-old daughter!
My husband was tragically killed in a motorcycle accident at 29 years old… my daughter was 4 years old, and I was left a widow. Not the future I had envisioned for myself and definitely not for my daughter.
Not only did my daughter and I go through the negative experience of a separation but just two years later, we go through the tragic experience of his death.
We loved each other, but the biggest cause of our separation was money problems.
I made a decision after those tragic circumstances “to build a financial wall around my family that nothing or no-one could get through”. How was I going to do that? By replacing an income. If anyone has heard me present I am always encouraging people to “replace an income in their household. At least one income!”
At first I thought the only way to do that was with a formal education. So first came the Commerce degree that I accomplished in 2002. Something I was really proud of achieving, as I was never very good at school. Failed commerce and maths in Year 10 and left school at 15 years of age.
In the beginning, my goal was to replace my income so that I could provide a future for my daughter and as a bonus, to never go back to a job that I hated. I didn’t like being dictated to by managers and bosses and I didn’t like going to an office everyday 9-5 and usually longer.
I went from no job, no money, no college degree, no investments, no husband and no home to now creating a property portfolio in Australia and the USA.
How did I get there you might ask? Well… it took years of education, coaching, family support and eventually travel, to be taught by mentors and coaches that were doing all of it.
When travelling in 2005 I saw the opportunity for ordinary Australians to invest in the USA market. In 2005 I joined a wealth network in the USA and was coached by real estate entrepreneur. I also became a student of personal development and I continue on a daily basis to develop my mindset. 2006 became a momentous year with exponential growth beyond what I ever expected!
So you can probably understand that I am constantly looking for different opportunities. I know that with these opportunities comes an expanded knowledge and the ability to become financially free. Financial FREEDOM is one of my highest values so when I can see that an opportunity lines up with my highest value I will go and passionately pursue it.
I learned about the USA real estate markets that did not exist here in Australia. I discovered real estate transactions that you could purchase for $60,000 and they would cash flow at $200 per door. Cash flow was the rental return minus all of the expenses including interest payments. If you purchase enough of those houses you will be replacing income pretty fast!
I was exposed to pre and post foreclosure markets, short sales, tax liens; the investor can purchase the property for the total of unpaid rates. Quit Claim Deeds where you can purchase the existing mortgage along with the property. I set some goals and they were all about increasing my cash flow. I wanted to create the same income I was producing as a commercial accountant.
If I wanted cash flow positive real estate and wasn’t concerned about getting growth, then the USA market was perfect for me.
I had already created enough real estate here in Australia to give up my job as an accountant in February 2005. I had created enough equity to do so, my goal then was cash flow. So for the following five years I travelled back and forth from Australia to the USA learning, discovering and investigating real estate markets. I really couldn’t believe what I found.
I met my Field Partners in the USA who were looking to expand there business in real estate. I discovered that they had these fantastic real estate markets and they knew that their markets were quite exceptional also. The prices were so low and the rents high with 100% occupancy. This was the perfect market for Australians with the perfect team on the ground.
In September 2008 I purchased my very first USA cash-flow property. It cost $32,000 and the rent is $625 per month with a 14% net return. On my last visit in August 2010 the house next door was on the market for $59,900. In 2008 I purchased USD$ at 0.94 cents so then it cost me AUD$ 34,042 the difference was not a lot. Within 2 months the bottom dropped out of the AUD$ and it was back down to 0.61 cents. Great for me, but not so good for the others I had wanting to send money over to purchase.
This was a time for me to step back and watch all the moving parts work, and they did. The tenant was a single mother, registered nurse and she was and is a good tenant. The property manager did his job and collected the rent; the rent was paid into my business bank accounts. The expenses flowed through to me here in Australia, either online or via my property manager.
By December 2009 the AUD$ had recovered and it was time for me to revisit investing in America. So between January 2010 and August 2010 I had purchased 10 properties in total. There were people asking how to invest in the USA market and so I started to share my model with others so they could invest also. I started to run small workshops and presentations in the Hunter Valley, as that is where I come from and the interest was phenomenal.
During this time of purchasing houses for myself, my mum and dad wanted to become investors. They had never even visited USA, though they had enough trust in me and saw the numbers to move forward. Having an accounting background and an understanding of asset protection, I investigated how an Australian can invest in the USA market and came across some difficulties.
Overall, it was relatively easy to get started in the USA real estate market. Mixing with real estate entrepreneurs in my USA network made things so much easier for me to make that step. I understood, however, not everyone has done what I have done, including my mum and dad. There was a level of understanding required on my behalf, as they just did not have the mindset that I had developed over the years.
So I have invested lots of money in the USA real estate market and found that it’s been a consistent stream of cash flow for me. You will see by my numbers that you can very quickly replace a full-time income buying these houses. When I started this overseas journey and was sending money over to the USA 0.75 cents on the USD$ was a good exchange rate.
So you’re now thinking… “oh my goodness… it has taken her all those years to get to where she’s got to. How long is it going to take me?” It won’t take that long for you because I have already done it and know what works and what doesn’t. I have put all this training, experience and knowledge into a system… one that works! I have summarized it into 7 basic steps. These steps have formed a systematic approach to Buying USA Real Estate.