Discipline and determination turning investor's dream to reality

With six properties worth $2.7 million in his portfolio by the age of 25, Investor in Focus Branden Sarafov is well on his way to achieving the elusive goal of total financial freedom.

Towards the end of his studies at university, aspiring investor Branden Sarafov came to a striking realisation.

“I didn’t really want to come out of uni and work for 40 or 50 years, however long it might be,” Mr Sarafov said.

“I look at my parents and family friends, and a lot of them have worked for 40 or 50 years, they still have a mortgage that they’re paying off and they’ll be relying on the government once they get to retirement age.

“I thought to myself that I didn’t want to be in that position, so I started as early as I could.”

To make his ambition a reality, Mr Sarafov set about exploring the investment options that would set him on the path towards financial freedom.

The now 25-year-old said he explored the potential of investing in the stock market, as well as cryptocurrencies, as he finished his university degree and started working as a physical education and science teacher.

But as he researched his options further, property investing appeared to stack up as his best option.

“I was a big fan of stocks, I was actually leaning towards that, but then ended up changing my mind after I came to the realisation that I could achieve more by leveraging the funds that we had to build a portfolio and work from there,” he said.

“I’m glad that I went down that avenue, because while I feel other asset classes have a lot of potential and many people have been extremely successful with those other asset classes, I just like the fact that I can understand real estate and I can see the desire and the need for it. 

“When you purchase a property, you can leverage a property, and if you pick up something that needs a bit of work, as I normally do, and spend a little bit of money, you can manufacture equity that way. 

“You don’t have to just wait for the market to move, there are other ways to see growth outside of that, which I didn't see had as much potential in other asset classes.”

It took around 12 to 18 months of research, preparation and disciplined saving to build a deposit for the first purchase, and Mr Sarafov’s property investment journey was launched towards the end of 2018.

And like many first-time purchasers around his age, Mr Sarafov started his investment journey as a rentvestor.

“The first property that we purchased was an investment, I didn’t own my home at the time,” he said.

“I came to the realisation that if I was to buy where we are living in north eastern Sydney. I would have to spend close to or more than $1 million. 

“I would rather allocate those funds towards two or three investments and build up a portfolio rather than spend that much money and have to constantly be repaying it over time.”

Since that first purchase in Brisbane, Mr Sarafov and his wife have steadily built their knowledge base around investing, as well as grown their portfolio.

“Around three weeks ago we picked up our sixth property, which is located in Adelaide,” he said. 

“When we first started we purchased in Brisbane, being Sydney-based even three or four years ago everything was extremely expensive. 

“We knew that if we were going to purchase something we wanted something that wasn’t going to cost us an arm and a leg to hold onto.

“That’s the philosophy that we’ve taken while building the portfolio over the last three and a half years.”

Mr Sarafov said his portfolio was now valued at around $2.7 million, comprising homes in Brisbane’s Strathpine, Woodridge, Bethania and Loganholme, as well as houses in Adelaide suburbs Christie Downs and Parafield Gardens.

He said the entire portfolio was also cash flow positive, creating passive income of between $15,000 and $20,000 per year.

“I was actually running the numbers recently, I am in the process of converting a couple of the loans to fixed rates and the plan is in the next 12 months to buy a couple more,” Mr Sarafov said.

“By the time I do that and lock in some lower interest rate loans, I think it will get close to around $50,000 in positive cash flow per year, which would be getting pretty close to being able to replace my income.”

Mr Sarafov said he didn’t plan on an early retirement just yet, however, as he has set about establishing a buyer’s agency to leverage his experience and expertise to help others recreate his investment journey.

He said his agency would focus on utilising the investment pillars that have helped him build a strong portfolio in just three years.

“Essentially the pillars that we focus on is that we look for established properties, all within half an hour from the CBD,” he said

“I look for properties with value-add potential because I want to be able to manufacture equity at some stage, and decent cash flow in terms of a yield. 

“The specific number isn’t important, but I aim to have something that I know is going to cover the majority of the expenses, and I think that we’ve been pretty successful in that.

“Probably our biggest goal is to see capital growth, so all of those other things combined with that gives us a pretty good mould of what we’re looking for.

“Additionally, another thing I like to find is a property that has what I call an x factor, something that differentiates it from other properties. 

“Whether that be it has got development potential, it might be a corner block or I might be able to subdivide it or things like that.

“All of those things together gives me a pretty good idea and helps me narrow down what I am looking at. 

“If you consider all of those things, the total pool of properties gets quite limited when you find an area that you’re interested in.”