How a college student bought six houses when he started working at KFC

He bought his first property with a down payment saved from working at KFC, while another house was a bargain because the whole place smelled of cat pee.

A Sydney man who saved up for his first home by working at KFC for $6 an hour went on to amass a portfolio of six properties worth over $1million.

Marcus Horwood bought a one-bedroom flat in Sydney’s Neutral Bay in 2012 after starting work in the fast-food chain when he was just 14, adjusting to after-school hours and the weekend.

He had saved $100,000 from his time at KFC, plus a bit of a job as a community support worker and a few months at Ernst & Young after earning an accounting degree.

The 31-year-old bought his first home for $420,000 and its value has now risen to $700,000.

Mr Horwood said he had made “a fair amount of sacrifice” to make his dreams of ownership a reality.

“I always wanted to make sure I had a property under my belt and my parents are also quite avid investors,” he told news.com.au.

“They have their own business and I’ve seen how properties at times can support them when business isn’t good so it was a bit of a security move and call a place my own but I gave up. lots of fun like traveling around the world, unlike my friends.

He initially lived in the Neutral Bay unit for a year before renting it out after starting to study a Masters in Teaching at Strathfield and wanted to be closer to college.

But it took another four years for the client of loans.com.au to start buying again in 2016 after a major property boom allowed him to gain plenty of equity in his flat in Neutral Bay.

He saw him score three houses in the span of a year.

“I went against common advice in terms of buying in prime inner-city neighborhoods and looked for well-oriented properties that would just pay for themselves,” he said.

“I watched a lot of YouTube videos that discussed different strategies and I was about to do a full time PhD and found out that the scholarship wouldn’t have counted towards the income so I wouldn’t have been able to service mortgages with my $36,000 scholarship.

All his purchases were three bedroom homes but located across Australia.

The first was at Rangeway in Western Australia which he snagged for $150,000 just after the mining boom, which he says is now worth around $210,000. He was able to rent for $200 a week.

He said he used 100% equity and didn’t invest a dime for the place, but borrowed everything.

“I’ve never been there personally to view the property, so I’ve never seen it in the flesh,” he said.

“But it was the first one I bought on my own and at this point my borrowing capacity was quite minimal as my salary was low so I made sure it was geared positively.”

The second property was at Gagebrook in Tasmania, which he paid for $135,000 and originally rented for $230.

“The vacancy rate was 0% and still is, but it was a godsend and it was a blessing in disguise. The reason I was able to grab it so cheaply was because the whole property smelled of cat urine – the last tenant had over 10 cats,” he explained.

“So I spent $10,000 tearing up carpets and I had to sand the boards and polish them and there were marks all over the walls. But in terms of growth, he’s now worth around $400,000 and is rented for $365.That’s less than I could get for rent, but the tenants have been there for a long time and are amazing.

The next was in Coonamble in New South Wales, but he describes it as his “failed property” and one he recently sold even though he was “torn” about giving it up.

“It was a fantastic learning experience, but I bought it for $107,500 and it was rented at the time for around $230, so it performed really well,” he said.

“But it was in a high crime area and there were issues with the tenant and now the rent is $170 and it has come down over time. I just sold it for $110,000 so I’m getting my money back so I can free some cash.

He based the purchase of Coonamble on major infrastructure projects, but they never materialized. He therefore said that people should also make sure that these projects are concrete.

But he said he was glad he wasn’t caught without insurance, with a breakage causing damage worth $10,000, which was covered by his policy.

However, he struggled to get funding for his PhD as lenders refused to give him money because the scholarship had an end date.

So in 2018, he interrupted his studies to undertake project work, which saw him buy a three-bedroom house in Elizabeth Park in South Australia for $210,000, which is now worth between $300,000 and $350,000 and rents of $270 per week.

But by 2019, he and his assistant senior partner were tired of renting each other out and having to move out every one or two years or deal with issues the landlord wouldn’t fix.

“We realized that in Sydney it’s financially better to rentvest, especially where we want to live, but for security and permanency we saved a bunch of savings and at the end of 2019 we enough planes for a depot,” he said.

“We bought for $610,000…and until recently we lived there, but we tore it down to build a new house.”

The new place in Marayong will feature five bedrooms and three bathrooms and is expected to be valued at $2 million when completed, he added.

Mr Horwood’s most recent purchase was in 2020, a three-bedroom house in Heatley in Queensland for $177,000 and its value has already reached $300,000.

“My income was, until recently, pretty minimal or fluctuated a lot, so my ability to borrow wasn’t amazing, but going to different states and territories means there are different property tax thresholds. So if I bought in the same condition, I would pay thousands of euros in taxes,” he added.

His real estate portfolio is entirely for retirement, he added, allowing him to live in security without depending on active income.

“At the end of the day, I might stuff something or lose my job or my partner might lose his job, so I just wanted to diversify my income base,” he said.

“But I’m not the typical investor where there are people who have over 100 properties and millions, because I did a PhD and all these different things, so I’m doing it comparatively slower.

“I know a lot of negative gear properties that I could have bought, but that would have stopped me in my tracks and eaten up my borrowing capacity.”

But Mr Horwood said he had faced backlash over the number of properties he owned.

“I was actually kind of ridiculed and one of my former colleagues said you’re the reason we can’t afford a house, you’re the reason properties are so expensive – people rightfully upset,” he said.

“When people say that’s the reason we can’t afford to buy a house, I have to bite my tongue rather than say ‘How’s that world tour you just spent $50,000?”

However, he said he “feels sorry” for people new to the investment journey as it is difficult to find properties that will pay for themselves on a budget.

He recommends people do their research and not listen to others when it comes to building a real estate portfolio.

“People told me at first that I was making bad choices and buying shitty properties and people always have this perspective of buying from your backyard and never buying an invisible property,” a- he declared.

“But if you do the proper research and do your due diligence, you can accomplish something big enough.

“You can start with a small amount of money, say $105,000 for a property and there are lenders who give loans with a 10% deposit, so it’s $10,500 and a few thousand more for the stamp duty and closing.

“Once you have that, you have a property under your belt, it will pay for itself and add to your income and you can slowly grow. I certainly didn’t have a good salary until recently, but having a low income doesn’t affect your ability to buy, it might make things more difficult, but it’s totally doable.

Marie Mortimer, managing director of loans.com.au, said it was important to get your foot in the door of the property market as soon as possible so you can start building equity.

“Once you have the equity in your first property, you can use that equity as a deposit on your next property and repeat the process on each subsequent property,” she explained.

“Second, research is essential. If you’re a first-time homebuyer and just getting started, research government grants – it could save you tens of thousands of dollars and get you your first home faster.

“Remember that you are considering properties with an investor mindset, so look for areas with good capital growth so your capital will build faster as the property value hopefully increases. the, and your loan amount decreases.”

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