Manufacturing growth from the 'ugly ducklings'
Manufacturing growth from the 'ugly ducklings'
Property investor Chris Doyle has built a $2.7 million portfolio well before turning 40, and now he’s formulating a strategy to help others emulate his success.
Embracing a challenge is something that comes naturally to Melbourne-based investor Chris Doyle.
Growing up as the son of Anglo-Indian immigrants in the south-east Melbourne suburb of Noble Park, Mr Doyle has embarked on a remarkable journey to property investment success.
Money was tight in those days, with his parents having moved to Australia from India with little more than the clothes on their back, but that didn’t stop Mr Doyle having lofty ambitions.
The 36-year-old told Australian Property Investor that his high school days were more memorable for what he didn’t have rather than what he had, and from an early age set out to flip that script.
He said he was around 15 when he decided to seek financial independence from his fiscally-conservative parents, with his early inspiration coming from Scott Pape’s popular guide, The Barefoot Investor.
Learning the ins and outs of investment became a natural passion for Mr Doyle, and by the age of 19, he’d saved up just enough cash to make his first acquisition, with the additional assistance of a $7,500 first home owner’s grant.
“I’ll never forget my parents - they were so against it,” Mr Doyle said.
“They said I was stupid and I was going to ruin my whole life if I went and borrowed money to buy a house.
“Basically their idea of life was you get into your mid-20s, you find a wife, get married, you buy one house and that’s where you live for the rest of your life, and you pay it down for the next 50 years until you retire.
“That was all they knew, but they were just trying to be protective and I know that now.”
Mr Doyle was undaunted by the doubt, and took a punt on a run-down property in his home suburb, feeling that his familiarity of Noble Park would reduce the risk of his first investment.
“The only reason why I was able to buy it was that it was the most disgusting dwelling you could ever imagine,” he said.
“I remember walking in and there were quite a few people that were there, and no one would actually walk into the actual unit, because there was dog poo and wee everywhere.
“But for me, I knew the structure of it was good, and I had a vision for what I could change it into - it was just the internal aesthetics that needed adjusting.
“I held my nose, walked around, had a look, everything looked fine and solid and I also had a friend of mine who did a quick building inspection, I put an offer in and ended up settling on that.”
That initial experience has helped shape Mr Doyle’s investment strategy - he’ll often explore opportunities that others are fearful of.
“For me, it was about buying the ugly duckling because it presented an entry point, but also an opportunity for what I now call manufacturing growth,” he said.
“The reason that I love the idea of manufacturing growth is it doesn’t matter about the cycle. It’s almost like a wildcard that you keep up your sleeve, so even when the market is in a downwards trend, you have always got that manufacturing card up your sleeve where you can either maintain value or grow it in a downwards market.
“Therefore it doesn’t affect your ability as much to refinance and acquire additional equity and borrowing power.”
Mr Doyle said the first thing he will look for in a potential fixer-upper is consistency in terms of capital growth and rental yields in the surrounding suburb.
Getting a balance of those two elements, he said, ensures holding the asset doesn’t impact cash flow, and within two to three years the property should move into a position of positive growth.
“From a property perspective, I try and buy as big as I can while focusing on that balance between yield and capital growth,” he said.
“There is what they call a yield curve where basically once the value of a property gets too high, the yield, or the rent that you get for that property, drops off dramatically.
“So for me, I don’t want to put myself in a position where I’m holding something that’s top heavy in terms of cash flow and is significantly negatively geared.”
In terms of the property itself, Mr Doyle said he invests in detached houses, townhouses or units, and does not consider apartments or vacant land.
For a renovation, he said the first steps are to do the basic things - painting, carpets, and perhaps a kitchen or a bathroom renovation.
But that doesn’t mean he’s wary of a property that needs some significant work.
“I’m not afraid to get my hands deep into projects that other people won’t touch,” Mr Doyle said.
“Maybe it’s got a significant issue with the levelling and the stumps need to be adjusted, or maybe there are some major leaks under the house, those sorts of things need to be significantly repaired.
“There are two things that I have on my side - one, I have plenty of equity and cash that I’ve built up over the years, but two, I also have a very strong team of trades that I have built up over the years that I can trust and rely on and I know how to fast-track things as well.
“I try and use that to my advantage by buying things that most people would be too scared of, to bargain on the price.
“You can almost build equity instantly, one person might look at an issue and say it’s going to cost $10,000 to fix, but I look at it and say ‘yeah, that’s going to cost $10,000 but it’s going to add $30,000 to the value of the property once it’s fixed’.
“There is quick equity that can be accessed if you are willing to put in a little bit of effort.
“When I think about some of the renovations that I’ve done, I’ve done anything and everything you could imagine to an established property, including a reno that I did this year, I literally ripped a house back to the studs and built the whole house back up.
“It’s not just about the money side and making money, I enjoy the challenge as well.”
Mr Doyle’s portfolio is currently valued at around $2.7 million across four properties, which he’s seeking to grow by two before the end of 2021.
But he’s not satisfied with having personal success, and instead wants to give back, having been inspired by entrepreneur and motivational speaker Jim Rohn.
Over the last three years, Mr Doyle has helped mentor more than 40 clients through the investment lifecycle, and introduced them to some of his key contacts.
He is currently working to establish an online guide to provide investment advice and training materials to accelerate the process of wealth generation through property.
“One of (Jim Rohn’s) rules for entrepreneurship is if you help enough people get what they want in life, you will get what you want in life,” Mr Doyle said.
“There is also a hidden rule of entrepreneurship of giving back. If you have been given an opportunity of wealth and knowledge, there is an obligation to give back to the community and help others do the same.
“So you bring everyone up together. For me, that’s been my primary focus, it’s never been about the money, it’s been about giving back.”