It all began with a magazine article.
Michelle Collins was flicking through her latest copy of Your Investment Property a couple of years ago, when she stumbled across an article about NMD Data, a website that exclusively lists mortgagee foreclosure, deceased estate and housing authority properties.
“I’ve always been very interested in real estate – it’s been my passion, and I’m one of these people that just loves reading about property investments,” Michelle explains.
“I joined after reading about it in your magazine, and after joining I was on the site every single day. Literally, every day, I’d log on and view the new properties that had just been listed.”
Every few days or so, Michelle would find a property that she was interested in. After three solid months of diligently logging on and viewing properties, Michelle found a block of land for sale in Wentworth Falls, a historical town located a few kilometres east of Katoomba in the Blue Mountains, NSW.
“I would find something that looked interesting, and we were cashed up to buy so we were ready to act, but nothing really stood out for me,” she says.
“But when I saw this one, I just knew it was the right one. I did the research and it all added up.”
Up for sale was a generously sized 878m2 portion of land, situated on a “beautiful street” in between large, established homes. The block had a view that overlooked the valley, and the asking price was just $30,000.
As a small business owner – she owns and operates Cheap Phone Deals from her home office in Frenchs Forest, Sydney – Michelle says paying attention to detail and seeking outs a bargain has become second nature. So it only took a small amount of investigating to discover that the land was being offered for sale through a Public Trustee.
“It had been owned by an elderly fellow who had passed away, and he gave the trustee his property to sell. I dealt directly with the trustee and not the real estate agency, which was much better because there was no sales pitch by the agent and no pressure to purchase,” she says.
“The Public Trustee is primarily interested in selling the assets and tying up the estate, so they’re not as fussy about price. When people see a property that is being offered up by the Public Trustee, they should act immediately!”
Acting on instinct
Michelle called and asked to inspect the parcel of land, and she was advised that another interested buyer was in the process of getting his finance organised.
“There was another fellow interested but he was mucking them around and taking his time. I told them we were cashed up and ready to buy, and I was able to negotiate the price down to $20,000,” Michelle explains.
“Then I said look, ‘I’d like to do a little more research just so I know exactly what we’re getting into.’ I contacted the council and walked around the block with a representative and discussed our plans for building.”
It was at this point that Michelle learnt the land was in an area considered as high risk of bush fire, which meant there were certain restrictions regarding what they could and could not build on it.
“I went right into the council and spoke to people there, and I got as much information as I could – I even spent $1,000 getting site evaluations and reports done,” Michelle says.
“It turns out that it’s fine and quite normal for the area, because there’s bush on either side, and there’s only one street in and one street out. So what we have to do is – when we build – to make sure that we’ve installed the correct sort of sprinkler system, and we will be building a bunker as well.”
Armed with this new information, Michelle went back to the Public Trustee and explained what she had learnt. She explained that she’d spent money on preliminary reports, and offered to pay $14,000 cash. They settled on a final figure of $15,000, and in January 2009 Michelle and her husband took ownership of their new block of land.
“We framed the title, because we actually own the block outright, so we framed it and it takes pride of place in our lounge room,” Michelle says.
“Now we go up and have cups of tea in the bushes as we make plans for the future. We’re designing an eco-friendly house for it, and eventually we plan to retire there.”
The path to retirement
If Michelle were to put her block of land on the market today, she would “easily” get $200,000, perhaps even $250,000, she estimates. It’s valued at more than 10 times the amount that she paid – and it turns out that this isn’t her first savvy real estate investment.
Around 15 years ago, Michelle and her husband bought a small waterfront house at Lake Macquarie.
“When I was younger, we used to water-ski up there, so I’d always loved the area,” she explains.
“We bought this house for $108,000, and we sold it a year later for $230,000.”
They took their profit and plunged it straight into their superannuation accounts – but not before they took out a small amount to use as a deposit on another property.
“I was very interested in a house that was located near the main street in Morriset – we paid $68,000 for it,” she says.
“We put a new kitchen in and rented it out, but within 12 months someone came knocking at the door saying they wanted to buy our house.”
Developers were planning to transform the area into a mini retail and commercial hub, including a small shopping centre with a large grocery store and specialty shops.
“I asked how much they were willing to pay and we were very pleased with their offer, so we sold it on the spot. We sunk that money into our super fund too. That’s how we were able to build our super up, but now we’ve reached a point where I’m actually looking at creating our own DIY super fund.”
Michelle and a girlfriend also recently decided to embark on a joint venture: a house in Strathalbyn, Adelaide, priced at $350,000 with a rental return of $330 per week. Michelle is currently looking at two more deals, with plans to buy at least one more property in the next 12 months.
“None of this would have happened if I hadn’t started reading your magazine and joined up to the website. The joining fee for NMD has been worth its weight in gold to have access to their properties,” Michelle says.
“I’m looking at a house in Condobolin at the moment, which is an exercise I’m doing with my 15-year-old son, and I’ve tried to include my daughter in all the research over the last few years too. She bought her first property when she was 20, so there’s another generation involved. I wanted to show them: if this old buzzard of 52 years can do it, anyone can!”