What this ex-banker learnt from dealing with owners of massive property portfolios

Why did you start investing so young?

Jacqui Zielinski: I got into business at uni[versity] but within a few weeks of being there, I just realised it wasn't for me … so I dropped out at ... five weeks in. My parents said to me, "If you're going to drop out, you need to get a job" because they were just worried that I was just going to sit around the house and not do much.

I had no real skills at the time. I did an office administration course at school … [and then] I'm in office admin [earning] $17,000 per year, and it was okay … While I was there, I actually was lucky enough to be employed by quite a well-known business owner in Wagga. He had an accounting firm, an investment company, and he'd just set up this other tax firm and he had me in there … I worked with him for a few years [and] he opened my eyes a lot to what I could do, property-wise, because he was quite a savvy investor—he had residential, commercial properties.

I'd never seen any of that before … It was just ... eye-opening, thinking, "Wow, look what he's built. Maybe I can do the same … " I stayed with him for a few years and learned a lot, and then I ended up getting into banking … I saw clients coming in with these huge portfolios and I was just blown away ... I thought, "Oh, I want to do that myself."

What's the biggest portfolio you've seen?

Jacqui Zielinski: I've seen some huge ones, like 20, 30 plus properties, and that was in Wagga, too … So, a lot of their properties were all Wagga-based … That's kind of why I first started in that market as well because it's what I knew … It probably wasn't the best decision now, but it got me in, at least.

Was there a ‘pattern’ you noticed about good property investors?

Jacqui Zielinski: I saw how they were structuring their [portfolios] because, obviously, I was managing the finance side of things ... In the interview, I would probably ask more questions out of my own curiosity than what was really relevant for the application, but a lot of them were looking for yields at the time—very positive cash flow properties and also value-add potential. A lot of my clients were doing renovations and things like that.

I didn't actually come across a lot that were doing developments ... Mainly, a lot of value add, a lot of good cash flow. They would follow a very similar process to how I started investing.

When did you start building your portfolio?

Jacqui Zielinski: First property was when I was 19 … It’s probably one of the cheapest properties I could afford at the time because I was only on about $40,000 and I had about $6,000 deposit, plus the $7,000 first time owner's grant. Interest rates were pretty high at the time—they were about 8 per cent—so I pretty much put everything I could into it.

[The] first property was in Wagga Wagga, around the CBD area—a two-bedroom apartment [worth] $185,000.

Was it a good investment?

Jacqui Zielinski: It was an okay property. We made some money straight away … there was instant equity, which was good. But long-term wise, it wasn't really the best-performing property that we've had in our portfolio. Rents started off strong and then there became quite an oversupply in that area for [that] type of properties ... That was the one property we ended up selling, my first property.

How did your interactions with successful investors influence you?

Jacqui Zielinski: That was where I picked up a lot of it and it gave me the confidence because I saw other people doing it. Then, I started educating myself. I started reading, I started going to seminars, events, things like that … It was very inspiring.

What was the main reason behind your decision to start your own property investment journey?

Jacqui Zielinski: For me, the big thing was that I couldn't ever imagine myself working for 40 years in a job. You know, [with] all [due] credit to people that do it ... I just [personally] thought it would be … soul-destroying. So, I thought, this is one way ... I don't have a uni degree, I don't know exactly what I want to do yet, [but] this is one way that I can change my future, really.

Even though it's in some ways complicated ... once you understand the fundamentals and how to do it … once you get it right, you can then just repeat that process a lot.

Was it somehow limiting being a college dropout?

Jacqui Zielinski: No. For me, I look at it now and go, "Thank God I left" because if I didn't leave, I don't know what I would've done ... I might have ended in a role that was just not fulfilling. I'm really glad I left because the people I met when I left ... even though I had to work my way up, [they] made me hungrier ... I think [the experience] gave me that passion to do something bigger.

What’s your personal secret to property investment success?

Jacqui Zielinski: I did work hard at it ... Some people might say [I’m] obsessed with it. I went all-in. I would be in forums, I'd be learning, I'd be doing anything I could, [talking to people] ... [In] different events … that I go to, you would not know in the room who's a property investor, and then you start talking to them [and you realise] anyone can do it. It's just … they have to want it, too … You need to be pulled to do it, as opposed to [being pushed] to do it.

Phil Tarrant: It's really the mindset … Understand it, get educated, get confident and comfortable with it and start slowly … [You have to] actually want to take control of [your] financial future and have a good retirement or a good life after work.

Any final advice for budding property investors?

Phil Tarrant: I think the challenge is that, a lot of people's experience with property is not a good one. They buy the wrong sort of property ... so it really frames their opinion ... A lot of people get sucked into other people's misery and it shapes the way they think about properties … but there are good stories about property there.

Jacqui Zielinski: Like me, right? I had that one property that, it wasn't anything bad but it wasn't anything great [as well]. It didn't give me the kind of returns I wanted. But at the same time, if I had just stopped there, I would not have got the other ones that have been amazing deals.

Tune in to Jacqui Zielenski’s episode on The Smart Property Investment Show to know more about the impact of educating yourself, how to find a balance between business work and investment, and the simple but effective ways to improve your current portfolio.

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