How dad used clever home buying strategy to get 16 properties and $426k a year income

An Aussie dad has revealed the surprising tactics he used to get 16 homes worth about $9.3m and an impressive income on the side – without huge debts.

Mahesh Kumar, with wife Uma, has a $9.3m property portfolio. Picture: Steve Pohlner

An Aussie dad has shared the surprising way he acquired a portfolio of 16 properties worth about $9.3m over just four years – without becoming buried in debt.

IT manager Mahesh Kumar, 42, has properties in multiple states and together they pocket him nearly $426,000 a year in gross rental income.

The high rents support his mortgage repayments and, coupled with huge equity gains on his purchases, mean he spends little of his income on servicing the $4.9m debt he holds against his properties.

Mr Kumar said the cornerstone of the approach that allowed him to achieve these investment milestones was focusing on properties “nobody else wants”.

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Mr Kumar bought this Mount Pritchard, NSW property for $585k. After a reno and market rises, it’s now worth about $1m.

“I always try to buy at the bottom of a market. I don’t put my money into hot markets,” he said.

“I also don’t buy flashy properties. I buy rundown properties. A lot of the time, no one wants them, but that’s where you can make money with a renovation.

“We do a very specific type of renovation that adds a lot of capital … it’s that value adding that makes the whole (portfolio) possible.”

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Mr Kumar said the idea of renovating was to boost the value of his properties soon after purchasing them.

This allowed him to “recycle” his money by drawing out some of the equity through refinancing deals to fund deposits and renovations for other properties.

The renovations also improved his lending capacity by boosting the cash flow he pocketed from rents while also allowing him to get a more favourable interest rate from lenders.

He bought this house in outer Brisbane suburb Walloon for $212,000. It’s now worth $590,000.

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He explained that he often relied on second or third tier lenders to get the initial mortgages on his properties because his borrowing capacity was already stretched due to his other loans.

But refinancing after a renovation meant he could move his loans to more established lenders offering better rates.

Making this strategy work required extensive research about the best markets to buy into and knowing which renovations added the most value for the least cost, Mr Kumar said.

“I don’t do big, structural renovations. That’s a money pit. I do painting, doors, new floors, new windows. If the structure is not good, I don’t buy it,” he said.

“Why it’s worked for me, I think, is because few other people want to deal with tradies so they don’t attempt these projects. I don’t see it like that. I don’t feel like it’s hard. It’s fun for me.”

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The couple recently bought this Brisbane home for $155,000 below the list price.

Mr Kumar, who is originally from India and settled in Sydney in 2015 before recently moving to Brisbane, said it took him a lot of trial and error to learn the right investing tactics.

He honed many of these ideas after an unsuccessful investment in Sydney suburb Liverpool, which dealt him some hard lessons, he said.

“We bought a Liverpool unit in 2016 because that’s all we could afford but it didn’t do much. It was our PPOR (residence) and we bought at the peak of the market.

“After that, I started to do a lot more research and learn about investing. I learned you have to strike at the right time.

“I started to invest properly in 2020. Covid had hit that year. Everyone was gloomy about the market and they thought the sky was going to fall in. That’s when I started accumulating.

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Mr Kumar said he is a big fan of the Townsville market right now. He bought this Kirwan house for $250k and after a reno and market rises it’s valued at $450k.

“I bought seven properties that year. Rather than wait to see what would happen, I kept investing. I knew that everyone needs a roof over their heads so I didn’t think there would be any kind of crash.”

Most of his properties were purchased in cheaper areas across regional Queensland. He claims his income was about $120,000 a year at the time and the bulk of the properties were positively geared. He also has four Sydney homes.

“Banks were happy to lend to me because the cash flow was good. The properties paid for themselves.”

Mr Kumar added that he benefited from a record boom in prices over 2021 which allowed him to make quick equity gains and snap up an additional eight properties that year.

Mr Kumar said his worst purchase was a unit in this Liverpool building. It motivated him to learn more about the market.

Kumar bought this Southport (Gold Coast) home for $217k. It’s worth $550k now.

He later bought in Perth, just before that city recorded its own housing boom, allowing him to get a rapid $200,000 equity gain on one of his properties.

Some of these investments have since been sold off, which Mr Kumar used to help pay down the debt on the homes he currently owns. His primary income from work has since risen to about $150,000 a year.

He recently added a commercial property to his portfolio and a $1m residence in Brisbane’s north.

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“I try to buy undermarket and if I don’t buy undermarket it’s not worth it,” Mr Kumar said.

“You have to find properties where they need to sell. I talk to a lot of agents. I say ‘do you have anything you want to sell quickly?’

“Sometimes the agents want an easy sale. They know I will buy quickly. I go for quick settlement every time.”

Originally published as How dad used clever home buying strategy to get 16 properties and $426k a year income