Stephen Courtney: Global Investor

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“Screw it, let’s do it.” Richard Branson’s oft-repeated quote sums up the attitude of a man who has built an empire out of risk and trail blazing ideas. The mantra is also the inspiration behind the actions of successful property investor Stephen Courtney, who today sits atop a pile of quality properties located in three different continents.

Stephen’s willingness to dive into the deep end while straight out of university in beautiful Cape Town, South Africa, saw him rewarded with lightning fast growth on his first property purchase, a two-bedroom, one bathroom unit.

The rise in values between 2000 and 2004 in his home country enabled Stephen to make the most of equity; setting up a snowball effect that has seen him purchase 16 properties in 11 years, 12 of which he continues to hold today.

He attributes his successes to an entrepreneurial spirit, which gave him the guts to take the plunge and the ability to learn from some pretty significant mistakes. He has made many deals happen, while friends and colleagues sat safely on the sidelines. Of course, a degree in business science and a following career as a consultant helped ensure that his risks were always carefully calculated.

Growth cape ability

When Stephen finished his business degree at university in Cape Town, back in 2001, the South African property market was at a very important stage. Previously out of range for much of the population, investment had recently become affordable.

“Interest rates in South Africa were very high in the late nineties, around 17.5%,” says Stephen. “These gradually decreased to around 13% in 2000, then later, to around 10% by 2005. That’s still exorbitantly high when compared to Australia, but to South Africans, that’s pretty good.”

Stephen says that as rates came down, the demand for property grew and as a result, values began to climb significantly.

“Property boomed from 2000 onwards, with the values doubling every two to three years,” he says. “No one at the time knew that was going to happen, so it was a stroke of luck that people bought when they did. I had friends who were looking to buy, but never ended up getting in.”


Stephen’s strategy was to get into the market through an affordable property, which he would initially live in.

“One to two bedroom units in townhouse complexes were going for between R300,000 and R400,000 (rand), while proper houses with gardens, garage and pool cost between R1.5 and 2.5 million,” Stephen says, noting that like today, one Australian dollar was worth around eight rand.

After going ahead and purchasing a two-bedroom unit, it was not long before Stephen was rewarded.

“Cape Town had more of a boom than the rest of the country,” he says. “I ended up getting a job in Johannesburg, so had to move soon after buying the unit. I bought it for R320,000 and sold it for R640,000 18 months later. The sudden equity enabled me to buy more and kick started my property investing.”  

Just before leaving Cape Town, Stephen lost the opportunity to buy an off the plan unit that he had paid a R40,000 deposit on six months earlier, when the developer decided to convert the bottom floor into parking. He picked up a new permanent place of residence (PPOR) in Johannesburg instead, paying R320,000 for a one-bedroom unit in the suburb of Sunninghill, which he lived in with his wife Ingrid.

The following two years saw Stephen pick up another nine properties in South Africa, seven of which he still owns. Two were sold during the boom to provide equity for his other purchases.

Arrested development

Stephen suffered a harsh setback with his final purchase in South Africa, which was two blocks of vacant land on a golf estate.

“In 2006, we purchased two plots for R515,000 each,” he says. “Our dream was to build and live there and sell the second property to hopefully help finance the first. This turned out to be a very bad investment. The developer, who was well renowned and had produced some very successful golf estates in South Africa, got hurt badly in 2008 during the GFC and went bankrupt. Development stopped, the plots are sitting idle and 120 plot owners are currently sitting on worthless pieces of ground valued at less than R25,000 each. That one really hurt.”

A slice of American pie

Most investors would know all about the housing bubble in the USA, which saw values plunge in the wake of the GFC. As a result, a market for overseas investors looking to get in on the cheap has sprung up and companies are offering to assist Australians buy property there at extremely low prices.

This was an option that only occurred to Stephen after he moved to Australia and, after a couple of years of focusing on his career, made an unsuccessful bid to buy a property in Queensland.

“We came to Australia in January 2009 and I was working for Deloitte. I had seven properties in South Africa at this stage, so decided to put investing on the backburner,” Stephen says. “So I saved for two years and then the bug bit in 2011. I had been keeping up to speed with the property market and eventually decided I’d love to buy one in Australia.”

After shopping around, Stephen found a three-bedroom unit at Woodridge, south of Brisbane. He made an offer of $225,000, subject to finance.


“When I applied for the loan, they conditionally approved, subject to clearance by the Foreign Investment Review Board (FIRB),” Stephen says. “When I saw that, my heart sank, because I didn’t realise at the time that I wasn’t allowed to buy an investment property.”

Yet to gain permanent resident status, Stephen was only eligible to buy property that he intended to live in.

“When I discovered this, I began looking elsewhere and that’s when I found out about US property,” Stephen says. “I didn’t know anyone who was investing in US property. You have to be very careful, make sure you know what you’re doing and do all the research. If you do, there are some very good deals out there.”

Stephen read all the literature he could get his hands on, including online articles and blogs, and investigated a number of potential agents.

“There was a lot of negative stuff online, but I knew they were referring to places like Detroit and other areas you wouldn’t touch because of the GFC,” Stephen says. “Then I saw an ad for 888 US Real Estate in Australia. They specialise in selling US property to Australians.”

Stephen was cautious and asked a lot of sceptical questions, but was impressed by the services the company offered and soon came around.

“I’ve now bought three properties through them and they’ve earned every cent of their commission,” Stephen says. “They’ve got very good contacts [on the ground] in the states, which I am quite impressed with. I would never buy the house without a very good property manager and I’ve got them on all three. They collect the rent, arrange repairs, issue eviction notices if necessary and so on. I don’t get any hassles on my side and they put the money into my US bank account.”

In the space of 12 months, Stephen purchased a three-bedroom house in Kansas City for $44,000 and then two more in Atlanta for $52,000 and $49,000 respectively. He enjoys rental yields of between 13.5% and 16% after expenses for each property.

- US investing checklist

It takes courage to invest in property on the other side of the world, where if something goes wrong, you may find yourself well out of your depth. Stephen offers the following pearls of wisdom for those following an American dream:

Google street view

Using Google street view means you can check out the condition of the street and suburb that you are considering investing in. The condition of the cars, gardens and buildings in the area, can give you a real indication of the quality of neighbourhood and tenants that you’re buying into. This way, you know you’re not being fooled by a photo-shopped brochure.

Special websites

Enter the address of the property you are researching at The website then gives you the estimated value of that property, as well as other properties in that suburb. It also gives you the years in which the property has been sold and for how much money.

Independent building inspection

Hire an independent professional to carry out a building inspection. This will set you back $350, but is worth every cent. An honest inspection might unearth structural damage or other shortfalls that the seller may have neglected to mention.

Establish a Limited Liability Company (LLC)

Once you decide to go ahead with the purchase, it is important to set up an LLC. Suing other people is a great American past time and this will protect you in case your tenant falls down the stairs or has another kind of accident at home. It means you won’t be exposed to anything more than just the value of the property.

Get a US bank account

You will need a US bank account to manage rent collection. To open one, you will need a representative on the ground in America; as such accounts have to be set up in person at a branch.


A golden deal down under

In September last year, Stephen was granted permanent residency, opening the door to a world of property investment in Australia. Stephen’s first purchase six months later was inspired by emotion, but powered by his acute business sensibility.

“The first one was a two-bedroom, two-bathroom unit, just south of the Gold Coast, in Casuarina,” says Stephen. “My family and I had been there on a weekend holiday and fell in love with the place.”

Stephen discovered that apartments in the area had decreased in value because of the GFC, from $330,000 and higher in 2008 to around $270,000.

“I put in a very aggressive offer of $200,000 and after some hard negotiation, I got it,” he says. “I knew there were motivated sellers around, it was just a case of finding them. I’m currently earning $300 a week rent on it.”

March was a busy month for Stephen. In addition to his Casuarina unit, he purchased an off the plan townhouse in Rockhampton, a town set to boom on the back of the resources industry. This came about after his job led him into the mining sector.

“I am currently working fly in, fly out, renting in Brisbane, but flying to central Queensland every week, where Rio Tinto operates a coal mine,” he says. “Absorbing the industry knowledge surrounding me, I started leaning towards Rockhampton, because I think it’s probably too late to buy in towns like Gladstone and Moranbah. Rockhampton is about an hour from Gladstone and the prices have been deflated for a couple of years so it hasn’t taken off yet.”

Stephen’s Rockhampton property is due for completion in 2013 and he expects it to be positive cash flow straight up, after fitting it with a complete furniture package.

Living the dream

Stephen now holds 12 properties in his portfolio and continues to look for new opportunities.

“My current goal is four properties in Australia and maybe one more in the US, which would mean four there too,” Stephen says. “What I have at the moment would be enough to retire on, but in order to achieve that [at age 45], I would need to pay off as much of the debt as possible to turn the rental income into profit.”

For the most part, Stephen has enjoyed his investment journey, even though he has suffered some pretty severe setbacks along the way.

“When it comes to investing, and being entrepreneurial, you get the good with the bad and don’t always make the right decision,” he says. “I once had a share ownership in a Blockbuster DVD store and then the guy that bought my share didn’t take over the surety from me, as he had agreed. He sneakily deregistered the business and re-registered a new one, without the debt. The bank therefore came after me and I was forced to pay R200,000. That really hurt. I learnt the hard way to never accept a verbal agreement and always get it in writing.”

Learning experiences like the DVD store and the failed golf estate development may have shaped Stephen’s character, but he is still the same man of action he always was.

“When I started out, I was only earning around R10,000 ($1,250) a month and I was still able to buy my first property with that,” he says. “I guess the message there is that people keep thinking they have to save more and keep waiting to see what the market’s doing, but until you actually get in, you’re just a spectator on the sideline…Get in, make it happen and don’t be that spectator.”

Entrepreneurial success

Stephen lists the factors that helped him get to where he is today

·         Beginning with debt on a modest salary and still managing to buy 16 properties and hold 12 over 11 years

·         Taking advantage of the booming property market in South Africa just after 2000 and in one case doubling a property’s value in 18 months

·         Partnering with a friend to start up a Blockbuster DVD store, which provided great experience in running my own business

·         Not being afraid to buy unsighted. To date I have still not seen six of the properties I hold

·         Trusting my own judgement and due diligence and buying three US properties when no one else I knew was doing it

·         Engaging the services of a great home loan agent in Australia named Joe Garcia, who has been instrumental in getting my loan applications approved

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  • Evan says on 02/07/2013 03:07:56 PM

    So basically at those prives, Atlanta, Kansas etc.....Stephen is a slum lord, pretty much, that is the only way to call it, buying a property for that amount, even foreclosure, with a rental yield of 13.5-16%, after expenses....what did the do paint the walls and change the locks. Haaaaa.

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