Investor In Focus - Scott Kuru
Only a few years ago, Scott found himself as a single dad of four kids struggling to make ends meet, in debt and broke, and dealing with depression. Times were tough, to say the least.
But instead of giving up, Scott made the decision that the only way to change his situation was to take positive action and decided that property was the means by which he could change his life and that of his family.
Fast forward to today and the NZ-born father has accumulated 16 investment properties in only six years and he’s really only getting started.
“I was married at 19 and had four kids by 25. Money pressure was a big factor, and in 2008 and I was divorced and really lost actually. I had a pretty decent paying job, but I had care of my four kids and we all lived in a two-bedroom apartment. My daughter was in one room, my three sons in the other and I was sleeping in the living room. I’ve still got the couch I used to sleep on.”
“I was working really hard. I was trying to save as much money as I could. I was lucky if I could save $10,000 a year. And I’m like, “If I keep saving 10 grand a year working as hard as I am, how long can I work this hard? How long can I put up with this pressure and take care of the kids?”
“So I felt trapped. That was depressing. And I thought there’s got to be a better way.”
After doing extensive research into different options to help boost his income and set himself up financially, Scott kept coming back to property. In his eyes, there were so many examples of people changing their lives for the better, using property.
At that point, Scott started educating himself by reading books and attending seminars and his momentum quickly started to build.
“It was amazing because having that focus, once I’d made that decision to get into property, I became so immersed in it. It gave give me a focal point. It gave me the energy to get through to the end of the day at work. It gave me something to do on the weekend. It gave me a sense of feeling good about being a dad because I felt like I was on a mission.”
After about a year of research and education, Scott was fortunate enough to meet his now close friend, Lianna Pan. Lianna had a background as an actuary and was heavily involved in data science. They also had similar personal backgrounds and immediately clicked.
It was a natural fit so they started working together and Scott was able to learn much from Lianna who at that point owned 30 properties herself.
Scott began adopting Lianna’s strategy of identifying positively geared properties in areas that were set for high growth.
“It was a really boring strategy. It was simply, find an area that we felt was undervalued, try and find a property within that area that we can maybe get a discount on, that we believed was below market value and negotiate with the builder.”
Scott has always had a preference for buying properties directly from developers and builders. This allowed him to negotiate directly and cut out agent fees. Newer properties also have additional tax benefits and often command higher rental returns. Consequently, he was able to achieve positive cashflow from day one. A key component of Scott’s strategy.
For the most part, this is the strategy that Scott has implemented from the beginning, however, along the way, he did veer off in other directions, but ultimately he found that to be a big mistake. But one that taught him the value of sticking to your strategy.
“I’ve been involved in a few developments but that was the worst experience of my life because of the stress. It was so complex. It was hard to manage. It was sleepless nights and you put money in and you wait two years. You might get money out. I’m glad that I did that. I learned a lot. But I’ve sort of come back now, and all the properties I’ve been adding in the last few years, I’ve just been following that old recipe.”
When assessing properties there are a few key factors that he likes to use to make sure he is buying in an area that is poised to grow. Given that he likes to purchase new builds, he will always consider the supply coming online in the next few years. Data that is available through the local councils.
On top of that, he likes to see population growth with plenty of jobs being created in the area and low vacancy rates.
For newer investors, Scott believes that you should first get educated then take action.
“It’s the largest amount of money you’re ever going to spend in your life. Get to know it a bit. Read some books. Find out what’s happening. The second thing I would say is, definitely work with an expert. But find an expert that has proven results for themselves and has helped other people.”
“The third thing I would say is your mind is going to create excuses not to move forward because it’s scary.”
“If you don’t invest, not investing is a decision. And if you play that out, for the next ten years, where you end up is not going to be that great. And then even if you invest and the investment’s not even that amazing, it’s going to be better than doing nothing.”
“But if you invest and you get some good help and you get the right property, then it’ll be the best thing you ever did.”