Back, Better And Wiser, Following GFC Devastation
Convinced she had the Midas touch, Dominique Grubisa thought she could do no wrong in property until the Global Financial Crisis hit in 2008 and shattered her dreams to pieces. Losing everything, Dominique and her husband Kevin found themselves millions of dollars in debt after their dream ride came to a crashing halt. Determined to dig their way out of the black hole - and keen to do so through property again - the couple knew a more strategic approach was required the second time around. Prioritising manufactured profits, they found they could build wealth independent of the market cycle and get their finances back on track by playing a bigger game.
Buying her first investment property as a young barrister, two decades later Dominique was married with three children when she got back to square one after the GFC.
“I didn’t have 20 years to start over,” she says.
Committed to rebuilding wealth, Dominique assessed property against shares and other asset classes but returned to bricks and mortar because of the ultimate power she had determining its final outcome.
“Having lost everything, I was all about control,” she says.
Knowing how critical it was to be more strategic and not rely solely on a rising market, Dominique and Kevin looked at how they could manufacture profit into their investments. They started to do more developments, exploring how they could leverage greater returns than what they ’d make purely through small-scale renovations.
“Every man and his dog had watched The Block,” Dominique says.
“We realised developing had bigger opportunities with bigger profits.”
Going into this other side of property investment took them away from residential lending - in which the onus is on the borrower to deliver payslips and proof of worth - into the commercial side, where a deal is assessed on its own merits. With a more hands-off approach, Dominique and Kevin then outsourced the actual building development side of things and were able to concentrate on simultaneous projects.
Putting the microscope on their previous successes, Dominique was further inspired by an experience in the early 2000s when they’d made a $400k+ profit through the purchase of an investment in Cairns. Zoned residential at the time, they’d bought the worst house in the best street in the suburb of Kewarra Beach, speculating on its future resale - an impulse purchase during the heady rush of their previous investment portfolio.
Unknown to them, the property they’d just bought for $1.3m had sat idle on the market for the past two years, priced at $750k. Accepting they’d had other massive wins elsewhere that would offset their loss, Dominique and Kevin decided to get out while they could.
When they went to back to the real estate agent to set the sale in motion, however, they were delighted to find a rezone since purchasing had significantly increased the property’s value. They soon sold to a developer for $1.72m, discovering later he’d immediately subdivided the block and onsold again within months, earning another $480k for his efforts.
“If I’d been more focused and strategic I could have made that too,” Dominique says.
Now with a cool head and unemotional with their purchases, the couple have come back from the brink stronger than ever before. They’ve rebuilt their portfolio with a series of investments, going as joint venture finance partners on some projects, developing or subdividing others. Drawing from Dominique’s legal background, they’ve also worked to acquire control of various developments and accordingly reaped rewards.
For someone who’s owned multi-million dollar Harbour View properties to losing the lot, Dominique has gained a more rational, seasoned approach to investing. As a result, she would advise those new to property to invest in themselves and their own knowledge - key to her ability now to play a bigger game. She says it’s also necessary to watch individual markets across Australia, going right down to suburb and street level.
“There’s no good or bad market, it just is,” she says.
It’s also essential to guard against confirmation bias, that is, seeking out information that reinforces your own beliefs. By looking at contrary reports, Dominique says, it’s easier to get a gauge on the true reality of a situation. She admits this new-found awareness would have helped leading up to the GFC, where she’d have been better placed to do something about her portfolio if only she’d acknowledged the market was changing.
Coming out the other side of their massive financial loss, it’s this kind of objective thinking that helps Dominique to frame their best investment moment as when everything fell apart.
“I would have plateaued and rested on my laurels otherwise,” she says.