Timestamps:
01:13 | Go West
04:58 | Partnerships
07:10 | Spreadsheets and Equity
11:02 | Fantasyland
15:54 | Changing Mindsets
17:55 | Turning to YouTube
23:30 | Looking to the Future
27:19 | Average Aussies

Resources and Links:

[00:01:56] I actually bought this property on a tea break on a night shift, because [of the] Perth time difference. I was saying to the agent, 'I want the home open cancelled. We want this property. This offer only lasts for 12 hours'. And she's like, 'Okay, okay, I'm going to talk to the client and really try and get this deal done'.

This is Property Investory where we talk to successful property investors to find out more about their stories, mindset and strategies.

I’m Tyrone Shum and in this episode we’re back with Dawn Fouhy, the founder of Future Proof Property Advisory. Her caring and compassionate nature is complemented by her feisty and fiery side, not letting anything stand in her portfolio’s way. She shows us how, thanks to her strong convictions, her $3.5M portfolio is growing steadily by the day.

Tyrone Shum:   

Fouhy and her partner have purchased four investment properties so far, along with their principal place of residence. Their first investment property is in Port Kennedy in Western Australia, which they bought in early 2022. They were able to pick it up before the West coast market started its latest price rise, nabbing a deal at just $420,000.

Dawn Fouhy:   

[00:01:13] [It’s a] classic bricks and mortar, four by two and plenty of room to update it. Side axis. If we needed to ever put a granny flat out the back, it has so much opportunity, this property. And really close to the beach. A good part of Port Kennedy. 

  

[00:01:32] It rented out before settlement even happened, we had someone ready to move in, $500 a week. Last year, obviously the interest rates were 3%. So it was positively geared. And we were like, 'Wow, this is good'. And for our very first property. 

  

[00:01:54] I remember being on my tea break on a night shift. So I actually bought this property on a tea break on a night shift, because [of the] Perth time difference. I was saying to the agent, 'I want the home open cancelled. We want this property. This offer only lasts for 12 hours'. And she's like, 'Okay, okay, I'm going to talk to the client and really try and get this deal done'. 

  

[00:02:16] So if this was before everybody was trying to buy there. And got the deal across the line, at the time, it was under the median. You can call it beginner's luck, but you could also call it that I was just really ferocious and wanting to have success with this because I had seen the freedom that investing in property can give people and I was like, 'We need to really knock it out of the park with our first few properties to really keep building the portfolio'. 

  

[00:02:48] So why we went to Perth was for just the capital growth prospects in the short term and also the positively geared aspect. Now, when we told people we're investing in Perth, they were like, 'What are you doing? Isn't that all mines? What if something happens with the mines?' And I was like, 'Oh, that's old news'. Industry is far more diverse there. Healthcare actually is one of its number one industries.

Tyrone Shum:   

Being on the opposite side of the country to Port Kennedy, she relied on her batch of resources to help her make the decision.

Dawn Fouhy:   

[00:03:59] So it was really just watching lots of YouTube videos on different people who invest around Australia and then learning about data. 

  

[00:04:09] So when we first started, we didn't know what equity was. We didn't know the significance of days on market, of government investment in areas. And then we became almost, like, addicted to researching the data. And we're on the Australian Bureau of Statistics website, and I was like, 'Wow, there's so much information out there that can translate into finding a good bit of equity for yourself'. 

  

[00:04:36] Because even after we bought that property in 2022, and we went back to look at that only a few weeks ago, it's grown $100,000. And that was the first property. And I think... 

  

[00:04:51] Because that was only our first year of investing, it just gave us more confidence to keep trying to propel the portfolio.

Tyrone Shum:   

[00:04:58] And since purchasing that, what's been the next thing that you've done?

Dawn Fouhy:   

[00:05:02] So we got another one. And so this story is interesting insofar as talking about trying to navigate your investing journey with your partner and you both being on the same page, because... 

 

[00:05:17] Not only are you partners in a relationship, you're now partners in a business. Because investing is business. So how do you work on the same page of mindset? And so it took a lot of... not convincing. A lot of robust discussions to decide to go back to Perth again. 

  

[00:05:35] Melissa was keen to diversify. And I was very headstrong in being like, 'No, no, we need to go back to Perth again, this is just too good'. It's just learning to navigate those discussions as a partnership, and still having a partnership at the end of it. 

  

[00:05:52] But yeah, so we were back to Perth again, Secret Harbour, this was two months later, we paid $440,000. Again, built into the contract that the property could be viewed during the settlement period. So we had a tenant ready to go on settlement day. And that rented again for, I think, $520.

  

[00:06:16] And really, really good quality of tenants, offering a year's rent up front. Like, such high demand. And this is at the start of 2022. Really nice property, really new, so good bit of depreciation in that, and close to the primary school, really good suburb. We were really, really stoked with that one.

Tyrone Shum:   

She takes a step back to explain just how much of an Aussie she is and divulges a little more on her nursing career.

Dawn Fouhy:   

[00:07:10] I became an Australian citizen when we were living in that first property, that first villa. And when I came to Melbourne, after one year was when I stopped doing the agency work and got employment. That's my employment, I have been working in intensive care for over 10 years. And so had long term employment. And full time or part time, but nursing can give you really good serviceability, and even then, like, we had a lot of equity in our townhouse.

  

[00:07:51] Melissa was always good at encouraging us to save. So she's like a spreadsheet queen, she would just set us off, she's always forecasting, planning, finding ways to make our money work better for us. Whereas my phrase is always: Money comes, money goes. She really is the brains of the operation. Let me just say that.

  

[00:08:19] With our deposits we used half equity, half cash, some we used full equity. So then that enabled us to get good yields, and also enabled us to make our savings work for us. Sure they were sitting in the offset. But we want it to be able to leverage as much of the bank's money as possible to get ahead.

Tyrone Shum:   

With one in the relationship a saver and the other a spender, it can make for some interesting dynamics. However, they always come to the same conclusion in the end.

Dawn Fouhy:   

[00:09:11] One, two, skip a few, we end up in regional Queensland in Bargara. So this story actually is... people will hear this and be like, 'What are you doing? Why did you do this? You're so naive. Why would you do this?' 

  

[00:09:28] It sounds unbelievable. I was out for a walk. Melissa messaged me on a property and she was like, 'Oh, look at this property. It looks great'. I was like, 'Yeah, it looks great'. So [I] rang the agent. And he was presenting offers in an hour to the owner of the property. [They] had, like, 20 offers on the property. 

  

[00:09:51] And so [I] managed to figure out what the highest offer was, but they had a lot of contingencies on it. And I was like, 'Okay, we'll offer you that price but no contingencies'. So, you're like, 'What the hell? There's like alarm bells going off across Australia. No'. 

  

[00:10:16] So in retrospect, would I ever do that again? No. Was it luck that it paid off? Yes. Would I ever recommend it? No. 

  

[00:10:25] So we put an offer, no finance, contingency, no building and pest, for $480,000 for a property. But the property is like 700 metres to the beach, it's three by one. [A] huge property, 700 square metres in Bagara that has grown by $90,000 in eight months. And it rented out for $550. Like, straight away. 

  

[00:10:49] [The] quality of tenant in that property is unbelievable. But yes, would I ever make an offer with those conditions again? No. Was it stressful for our mortgage broker? Yes.

Tyrone Shum:   

[00:11:02] What was so attractive about this particular property that you had to get it? That's what I'm trying to also understand. What was the logic behind it?

Dawn Fouhy:   

[00:11:11] I think for us, it seems like somewhere that we would live, or somewhere that in the future— 15 [to] 20 years' time— we always had this fantasy of being in a caravan. We're not, like, caravan people, we're more like cabin type people. I don't know why we ever thought we would be  hitching a caravan and taking off. But I think most people assume that until they've actually been in a caravan.

  

[00:11:38] It just seemed like a property that was going to be kind of a generational property for us. And we couldn't believe the value of the property in the location. The Bundaberg area just appealed so much to us, but all of the government investment going in there, and it's just a beautiful spot in Queensland.

Tyrone Shum:   

With such an action-packed approach to their portfolio in 2022, you’d be forgiven for thinking it was time for a rest. Fouhy had other plans.

Dawn Fouhy:   

[00:12:31] So we're on this trajectory, and we're in our, like, mid 30s. We're like, 'We've missed so many years of growth'. In our heads, if we had to look at ourselves 10 years ago, would we have ever bought that villa? No, we would have stayed renting, and we would have bought properties around Australia. And we would be done by now, we would have had the passive income. But hindsight is a great thing. So we said, 'No, we're on this train now. Let's keep moving'. 

 

[00:13:07] So, the caveat to this is that we did have a cash buffer. So we did have savings that if the interest rates went up, which they did, and if we needed to replace an air conditioner, which we did, we had the funds to do that. 

  

[00:13:22] Would I recommend this strategy without a cash buffer? No. 

  

[00:13:30] We were tapped out with the big four banks. And we asked our broker, we were like, 'What about, like, the third tier lenders?' And he's like, 'Are you sure?' And we were like, 'Yeah', because we're looking at this long term. 

 

[00:13:40] So we took off to Townsville, like everybody else is doing now. And we bought in Kerwan. So we bought another four by two, 700 square metres. And yeah, again, that property was rented out again before settlement. We paid, we negotiated post the building and pest stuff of that one, we got it down to $425,000, and I've rented out for $520.

Tyrone Shum:   

[00:14:08] So pretty much neutral to positive cash flow from day one, which is great.

Dawn Fouhy:   

[00:14:14] Yeah, correct. 

 

[00:14:15] So that was the four properties in one year. So then we took our total portfolio value, including our PPOR, which we will turn into an investment, to over $3.5 million.

Tyrone Shum:   

[00:14:31] Wow, congratulations. That's a huge achievement in such a short period of time. So wow, and what kind of equity have you currently got sitting in there at the moment?

Dawn Fouhy:   

[00:14:40] So there's over $1 million sitting in that, and that's from our first year, and that includes PPOR. So again, what we were talking about, talking about that being together as a family is much more than about the bricks and mortar. So for us, we're like, 'Oh, we can rent, like, a sick house in Melbourne for cheaper than we can buy one. So you could spend $2.2 million to get the dream home. Or we can just go rent somewhere, rent out our townhouse, and then keep building the portfolio'.

Coming up after the break, she explains why interest rate rises aren’t all doom and gloom…

Dawn Fouhy:   

[00:15:54] Again, with the interest rates, we've had to work on our mindset a lot.

Reveals the numbers behind women in property investment…

Dawn Fouhy:   

[00:20:46] And I'm sure you're hearing this a lot nowadays. And maybe everybody is becoming a buyer's agent. But in the nursing space, it's not talked about.

She shares her biggest inspirations and drivers behind what she does.

Dawn Fouhy:   

[00:23:57] And so we just want to keep leveraging, keep educating, keep growing and help people in different ways.

And that’s next. I’m Tyrone Shum and you’re listening to Property Investory.

**END ADVERTISEMENT** 

Tyrone Shum:   

While many people are hesitant to jump in, Fouhy is proof that it’s still possible to purchase properties to build a portfolio in this market— even if you have to make a mental adjustment. 

Dawn Fouhy:   

[00:15:54] Again, with the interest rates, we've had to work on our mindset a lot. So this mindset shift did not happen overnight. So we were before, I think like a lot of people would have [a] fixed mindset of, 'This is going to go bad, and I don't want to pay tax on property' and whatever preconceived notions people have in their head about investing in property. 

  

[00:16:18] So we have to fully change our mindset into a growth mindset of thinking, like, 'No, this can happen. We're educated, we've gotten the right advice, we trust in the process, and we trust that people will always need shelter, and there's not much supply coming on at the moment'. 

  

[00:16:34] So insofar as how do we get onto property number six? So at the moment we're going to look at using self managed super. So we're going to use that as a vehicle to really, again, try and get in some growth areas, hold one property in the super for whatever, five to seven years, sell it, recycle that again, and buy two, whatever. So keep recycling properties through the super until we come to retirement, if we're lucky enough to see that. And then use some of those funds to pay down the portfolio would be the ends plan.

  

[00:17:22] We're not stopping. We're just gonna go for it.

Tyrone Shum:   

Online resources like YouTube have always been among her mentors, but it’s not all screens, all the time.

Dawn Fouhy:   

[00:17:55] So as far as mindset, I think it's just training yourself to think that something bad is not always going to happen, and surround yourself with people who have achieved what you want to achieve. 

  

[00:18:13] So for us at the stage in our portfolio we're at, we're looking for mentors that have, like, eight properties or 10 properties and how they got there. And it's trying to find those people who have done what you want to do. And I wouldn't take advice from somebody who hasn't invested. So we really just try and surround ourselves now with people who think like us and that are on the same path as us.

Tyrone Shum:   

[00:19:23] If you took yourself, say, 10 years ago, looking back at 10 years ago, what do you think you would have said to her?

Dawn Fouhy:   

[00:19:31] Oh, that's a really good question. 

  

[00:19:34] I would have said a lot of things. Things that I can say on this podcast. I would have said, 'Just trust your gut'. And, 'You don't have to follow everybody else'. So just because everybody else is doing something doesn't mean that you have to do it. And I would tell her to buy a lot of property in Brisbane.

 

[00:20:09] Hold on to it. And in Melbourne. That's a really interesting question. I don't think knowing what I know, now I wouldn't change anything that's happened to my life, in my life, because I think it's all led me to this point. And we just love the hustle. We love to try and achieve as much as we can. And I think that was a big reason behind [it]. 

  

[00:20:46] And I'm sure you're hearing this a lot nowadays. And maybe everybody is becoming a buyer's agent. But in the nursing space, it's not talked about. So in regards to talking about your finances, and especially as a woman as well. So only 27% of investors are women. It's a very male dominated industry. And it can be quite intimidating for a lot of women. And even talking about super, men at the end of retirement have so much more money in their super than women. So still, nowadays, women are at a disadvantage when it just comes down to knowledge. So knowledge is power. 

  

[00:21:26] And for us, we just want to be able to help people now in a different way, and help other nurses realise that their pathway to retirement isn't slaving away when they're 65. It can happen in 15 years' time, if they just choose the right properties in the right locations.

Tyrone Shum:   

She has advice aplenty, and not just for nurses. For people who tie emotions to properties, she has a way to approach making needed changes.

Dawn Fouhy:   

[00:22:26] And I think the big thing that I want to convey as well is that rent vesting is not a bad word. So a lot of people tie memories to a PPOR but those memories are with the people that are within that house, not the house itself. 

  

[00:22:43] And those memories are going to be diluted now, if you've maxed out your borrowing, and you're sitting in a $1.8 million house, which the interest rates where they are. So what's the payoff? So you're 25 and you're thinking, 'I can't afford to live in Richmond, I have to move out a lot further'. But again, you don't know what you want or need until you have children or until you do get that space. 

 

[00:23:12] So just give yourself time and consider investing in property and renting where you want to live. You can still achieve great things, but have your flexibility of lifestyle and not have to sacrifice that.

Tyrone Shum:   

[00:23:30] What do you envision yourself to be wanting to do and most excited about in your journey in the next five years?

Dawn Fouhy:   

[00:23:41] I'm just excited to keep leveraging, like, leverage is our favorite word in this house. Because I think when we realise that we could put, whatever, $50,000 into shares, but that's $50,000, right? Or we can take our $50,000 to the bank and get $500,000 for that. 

  

[00:23:57] And so we just want to keep leveraging, keep educating, keep growing and help people in different ways. But I think the biggest driver for me is my son. So my son obviously has two mums, and we want to show him that there can be powerful women in business and we just want to be able to inspire him that life is not all about university and getting the big house and punching out a few kids, that you can design your own life. That you can design your own life, whatever that is, you can make it happen for you. 

  

[00:24:36] And just don't worry about what other people think. I read something recently that I was like, 'Oh, I just wanna live by this'. You can stop other people from sucking the life out of you if you don't give them the straw.

Tyrone Shum:   

Fouhy surrounds herself with positive people with the right mindset not just when it comes to property, but in her personal life as well.

Dawn Fouhy:   

[00:25:17] And life is short.

  

[00:25:23] My mother, who I was telling you about, is a real inspiration to me. So she's only 57. So she's very young. This is just unfortunately one of those stories where she's very fit, very healthy, very active woman, never smoked, but she has terminal cancer. And she's not going to see retirement. 

  

[00:25:45] So you can wait all you want for your retirement and your super, or you can get busy living now. And just do what you want to do now, like, don't be a slave to your mortgage. Make money work for you, and start investing your money, not letting it sit in the bank for inflation to take it away. And just think about how you can get yourself and your family ahead in a sustainable way, because nothing is promised. 

  

[00:26:14] So not only have I seen that in nursing, now unfortunately, I'm seeing that with my own mum. But she is just... even since her diagnosis, like, she's so inspirational. She's just living life to the max. She's actually off in Rome at the moment. And she's still travelling around. And her biggest lesson to us is be kind. So that's something that she's always just taught us, is to be kind. And that's just something that we always try and be. 

Tyrone Shum:   

[00:27:19] How much of your success do you think has been due to intelligence, skill and hard work? And how much of it do you think has been due to your luck?

Dawn Fouhy:   

[00:27:30] That's a hard question.

  

[00:27:32] If we had bought in 2020, I would have said luck. But we bought in 2022. It took a lot of research to be able to confirm what we thought about the areas we were buying in. And because even before Melissa had sent me the Bagara property, we had discussed that area a lot and looked at all the data. So even though yes, we bought it off a whim, we had researched that area heavily. 

  

[00:27:59] And intelligence can be measured in so many different ways. I think what's really helped is my ability to form relationships with agents or property managers. Even with our different conveyancers. And I think that's really helped us to succeed, as well. 

  

[00:28:19] And I think just that not giving up and not thinking in my head or buying four properties in a year is ridiculous. When we're both just average Australians on average wages, we're not on, like, $300,000 plus. I'm not in coding or IT. I'm a nurse. So you can achieve that as well. You just have to educate yourself. 

  

[00:28:45] So we would dedicate time every evening, we would spend hours together, learning about property, everything about property, because we're really passionate about it.

  

[00:29:22] The interest rates don't bother me because we haven't gone with that big PPOR. Like, sure we're paying more interest now with third tier lender on one of our properties, but that's short term. We'll be able to refinance in a few years and we're always looking long term. We're always looking a few properties ahead or a few years ahead. And I'm sure you saw the Westpac article like everybody else did. And I'm sure there'll be some big changes coming in 2024, and if you're holding an asset in 2023, I think you'll be pretty happy moving into the next few years, especially in Perth or regional Queensland.

Thank you to Dawn Fouhy, our guest on this episode of Property Investory.