Using skills and experiences from his time as an investment banker, Gupta developed data methods which assist him to safely invest in properties. He and his wife now own nine residential and two commercial properties. Today, he is using these data methods to help others achieve their property investment goals.

 

In this episode, we hear about Gupta’s upbringing and why he wanted a high paying career, why he invested in his first property and the investment property that taught him a valuable lesson.

Timestamps:
2.00 | A Big Move to New Zealand
4.00 | University
6.31 | Seeking Stability
8.07 | Start of Investment Banking Career
12.43 | First Investment Property
15.51 | Investing Challenges

Resources and Links:

18:53 My whole high school and university, I had this sort of laser precision focus on becoming an investment banker because of the pay and everything like that. Um and it was exciting work but almost like six months into it, I realized, you know, this was like a massive mistake.

 

 

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 speaking with the Managing Director of Consulting by PK, Pulkit Gupta or PK. After establishing a promising career in investment banking, he courageously decided to follow his passion for property. We’ll explore how he went from purchasing his first property, to launching his own property investment company!

 

**End intro music**

With a background in economics, statistics and finance, Gupta developed data methods which allowed him to confidently invest in properties. He is using those data methods to help others.

 

0.24 What I do is I help people build passive income um through buying residential property here in Australia, without using a buyer's agent.

 

To maintain a good work life balance, Gupta uses his mornings for personal development and in the afternoon, his work day begins.

2.17 From about twelve to six, that's where I help my clients. So, um I provide a course and mentorship service. So I'm, I'm there answering their questions, there helping them choose the right suburbs, developing the right strategies, negotiating, I'm all in the background, they're doing it themselves but I'm sort of just there as a sounding board, making sure they're doing the right thing.

 

Originally from India, Gupta’s family made a big move to New Zealand when he was only four years old.

 

4.47 I grew up basically in North Island all the way through to the last year of high school. You know, like anyone in New Zealand, played rugby and all that kind of thing. And yeah, I mean, we weren't terribly well off, I guess you could say. Um first generation immigrants, my parents did all the hard work, all the hard yards, kind of setting up the foundation and everything like that. Uh my dad was an engineer and my mom was a machinist. Um you know, that’s just what she had to do to kind of, you know, for us to get by.

6.04 I can remember um that, you know, where we moved to in the North Island, the population of that town, it's called Napier, it's in Hawke's Bay, the population was literally 50,000 people. And I think, first generation immigrants we were, I was probably the only non Kiwi you could say, or non New Zealander, in that school or maybe there was one other sort of, you know, I think it was Chinese person or something like that. So, I think my earliest memories were to be honest, really just trying to fit in, trying to be normal.

 

To ensure that Gupta had a good education, his parents worked hard and saved to send him to a good school.

 

7.44 I just remember high school being almost like the best time, times of my life. You know, play sports. I was quite studious or academic, you know, like growing up in an Indian household you either become an accountant or engineer or doctor or a failure, as I say. Not to kind of put too much negativity on my parents. Yeah, they, you know, there are some expectations there um but I think my parents are really good as well because they wanted me to be all round. So I play rugby, I play soccer, I played tennis, I play cricket, um all these things and so yeah, it was life was just jam packed. I remember my mom used to take me to to sports like trainings or events every single day. And then school in the middle and then you know, all you know, learning piano all these sorts of things on the side. So it was just like, just life like like life is today, like go go go but like full of fun, which is good.

 

When his high school education was coming to an end, his family moved to Australia for better opportunities. 

5.16 And then when it came for me to finish um high school, we decided to come over to Australia, because my dad thought, you know, there's better education, so to speak in um, in Australia. So that's when we moved over here and I and I did my um university at UQ in Brisbane.

 

14.36 So, in the first year of um university, I was working at a fruit shop just trying to, you know, make some money and have enough sort of extra money just to do things I wanted. But this the second year is where things really um got more serious. I was doing summer internships. I did one at Queensland Treasury Corporation. I did one at Macquarie Bank down in Sydney, spent the month month or the summer months in Sydney, um between the second and third year of university. So that was really, I guess, the training ground um to sort of build those relationships with future employers, you know, show that I was keen, you know, it kind of seems a little bit tryhard to some extent, but that's kind of what you need to do and I was super passionate about it at the time, actually. Um and I think yeah, I was just really grateful to get those placements and, and show that, you know, it's not all about the grades.

 

15:28 In fact, I'll share with you a story, Tyrone. In the last subject that I did at university, this was the last subject that I just needed to pass and I already had grad roles, you know, lined up with JP Morgan from the internship the year before. And I thought I actually failed the last subject of university and I was like, literally, almost crying. And I was like, I just had this amazing role at JP Morgan, there was like, 1000 applicants, they took two people. And now I failed my subject, and I'm not going to get it, I'm not going to get the degree. And so I remember I called up the human resources people at JP Morgan saying, my voice was quivering. I was like, you know, I know you've already sent me the contract, we've exchanged contracts, I'm starting in February, but like, I've just failed my last, my last exam. 

And, you know what they said was like, even if you failed, we'll take you because it's actually not about the grades at all for us. It's about your experience, it's about who you are and you've demonstrated that through internships and things. So that was kind of like a relief. But the bigger relief was when they figured out that almost everyone failed the exam. So they bell curved it and they basically they passed everyone. Um so that was like a massive relief. I didn't deserve to pass that exam. But everyone passed anyway.

Influenced by his upbringing, Gupta was driven to have a high paying career from a young age.

 

9:10 Initially, I wanted to become a doctor. Um you know, it's kind of a bit cheesy to say, but you know, kind of like to help people in a way but I remember, I think I was 12 or 13 and we had our first we migrated from like, just general science subjects to actual chemistry and biology and things and we had to cut up a rat or hamster, I can't remember what it was or just like, the smell and the texture it was just all too much for me and I was just like, this is not working out. Um so then I was like, okay, I need to go into like more, like commerce and mathematics and that kind of thing.

 And I, because we weren't super well off, I remember actually in in sort of lunchtime at recess, recess, sometimes I would use a school computer to just google, can't remember if it was Google or Yahoo or whatever back then, but I would be searching highest paid salaries, because I wanted to like kind of fashion my my subjects that I chose in high school to be the right ones. The most, I don't think most kids are doing that, they were just having fun. And then this, it consistently what would come up is this career choice called investment banking. And I don't really know what it was, but you know, there was movies like Wall Street, Wall Street number one, like that was released in the 80s that, you know, I'd seen and I was like, this sounds okay. I mean, as long as it pays really good. So yeah, that was kind of my career choice all the way from age 13. And so I just really worked really hard and put the right subjects and everything to kind of do that.

After continuing to work hard, Gupta graduated from the University of Queensland. From there, he kicked off his career at JP Morgan.

 

18: 39 This was my grad role. So this was a full time permanent role, which I started in 2011. They had three new graduates start and I was there for I think, just over 12 months.

 

19:10 I was working 90 hours a week, I couldn't see my, my girlfriend um at all really, like including weekends. And just the kind of I mean, I'm very grateful for the opportunities given for the context. I mean, I was talking to CEOs of ASX listed companies at like, you know, 21 years of of age, but there's just so much pressure. And sometimes pressure can make diamonds, but I think that kind of pressure just really turned me off and I was like, yeah, I'm making 100k but I think really, this is a McDonald's wage if you consider how much I'm working, how hard I'm working. And I realized that my boss and their boss and their boss were actually working even harder than I was, of course they were making loads of money for you know, at some point, money doesn't actually matter. You actually just need your life. So, you know, six months into it, I was like, I don't think this is sustainable. Um and that's when I started thinking about other career choices and I finally left after about a year.

At the time he left JP Morgan, Gupta did not have a big property portfolio and needed to work. This led him back to Brisbane.

 

23:24 I decided to join management consulting field, which is a bit like investment banking in the sense that you work for big companies, you solve their problems, but it's different where you're actually solving real problems, not just financial problems. So, how do we improve productivity? How do we you know, create a new purpose or or vision for this company? etc etc. So, not only were the hours more manageable, more like you know, 60 70 hours a week, the pay wasn't a huge pay cut, which you know, was tolerable. And that way I could actually then focus on, you know by that time Tyrone, I'd sort of realize that I can't or I don't really want to work a nine to nine for the rest of my life or even for the next 20 years. So, that's when I was sort of thinking I need a job which will still stimulate me, which will still help me understand strategy, understand numbers, it will still give me all that exposure to climb the ladder so to speak, but I can still have enough time to do what I really want to do on the side.

 

After roughly five years in this position, Gupta shifted his career to an in-house role.

24:55 So doing the same thing, you know, strategy consulting, but then I worked for Virgin Australia as the, as the manager or Head of Strategy. So similar thing but just focusing on one client, which is where you worked. And I was there all the way till a few years ago, actually, which is when I decided to kind of do more property full time.

 

Coming up after the break, we will dive into when Gupta started investing in property…

 

24:34 I'd already like even at JP I bought my first property and we were buying properties, I wouldn't say regularly but you know, semi regularly by that time.

 

The development of the data methods that Gupta uses today…

 

27:54 Hardly anyone is looking at sophisticated data in the property market.

 

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

 

**Read Advertisement**

 

Now, to answer the question that we all want to know, why did Gupta start investing into property?

 

25:48 I was starting to understand more and more about the stock market and you know, my background was econometrics, statistics, finance. There was so much that goes into picking the right stock; analyzing, valuing, seeing what the future cash flows will be for a stock. And I realized that I didn't actually have the confidence to put my own money, like, let's say, $100,000, not that I had 100,000, by then, but $100,000 into a few stocks. I didn't have the confidence to do it for myself. I was advising superannuation funds and all these people, but you know, that's someone else's money at the end of the day and if it comes to my money, it's like, I don't really know. So I just don't like the volatility of the market, especially back then when you know, Europe was still a little bit uneasy post GFC. And I decided, well, there was no crypto at that time, I got to do something else and property was really the only other option. And it's not that I loved property or anything like that, it was just oh, here's a way I can actually get ahead and hopefully not work for the rest of my life. So, that was really the, the genesis of it all.

 

After making the decision to invest in property, Gupta found no help in the usual resources of magazines and online. This is when he began to develop his own data methods.

 

27:26 I was my girlfriend at the time, now wife, we were researching for a long time. There was no, there was no Property Investory back then unfortunately, or any podcast really. So mostly just real estate and magazines and stuff. And there was just so much information and like we went to some seminars and you know, hotel rooms and stuff, and it just didn't vibe with us. So, I sort of thought I know data. I know data in the stock market. Hardly anyone is looking at sophisticated data in the property market and so I just sort of compiled a lot of the data that I could cost a lot of money, it was a bit of an investment um and ran you know, statistical models, multivariate regressions and really see what actually matters what actually doesn't matter, because I was sort of of the opinion that if all you do is follow what Google says, which is buy close to a train station, close to a CBD, good amenities, infrastructure. If that was all there was to it, then like why isn't everyone just driving around Ferrari's and stuff, right? So I didn't buy that. And so I just use my own sort of data methods. I wasn't fully confident in it yet, but we'd back tested it and calibrated it. And I bought in East Gosford. So, East Gosford is about an hour north of Sydney, it was a little bit longer back then, because there's no tunnel and things um but we chose that it was, what was the purchase price like 320 or 315, something like that. And I mean, it was something we could afford, you know, we couldn’t buy half a million dollar properties. Rent was about 400. So it pays, paid for itself. So that was really the first property Tyrone..

 

Gupta and his wife now own nine residential and two commercial properties however, this does not mean they have not faced challenges on their path to success.

 

30:43 I think the, my biggest mistake you could say was in 2015. This was I think, our fifth property, fourth or fifth property at the time, we bought in Cairns. And you know, for once, what I did was, I sort of ignored the local government area data, I ignored the suburb data and I just said, look, Cairns hasn't moved for ten years, the prices are the same as what they were pre GFC, tourism is booming, the Australian dollar is low. At that time, there was some tycoon from Hong Kong, Hong Kong, who was going to build a huge casino in the esplanade in Cairns and I was like, no, how can you go wrong, like let me just ignore the data and just follow these macro economic trends. Because that's kind of what you hear in news and stuff like that. And, like, literally, that property was bought for about, I think 400,000 and right now, like six years later, it's worth about 450. 

So I mean, it wasn't like a huge mistake, where I lost my money and I had to kind of, you know, build everything back up. But I mean, the opportunity cost is 100s of 1000s of dollars. And that just sort of taught me the lesson that don't just go by what the media is saying, don't just go by, you know, there's a big infrastructure thing planned because a lot of times these infrastructure projects they fall over. They don't get funding, they don't get development approval, there's so many stages that they have to go through. And don't just follow and invest in the market because of macro economic trends. You have to be very scientific and actually really know using data, the suburb, the local government area where you should invest.

 

Although this investment wasn’t a huge mistake, it still taught Gupta some valuable lessons.

32:44 I'm still scratching my head right? Like it doesn't make any sense. But then, when you actually understand it's like, around the suburb where I bought they've literally building, have built 1000 new homes. So supply demand, didn't see it coming, didn't understand that at that time. You know, you live and learn.

 

We’ll continue to explore PK Gupta’s journey in a future episode of Property Investory. We’ll talk about his strategy…

 

29.18 To be honest with you, we were open to buying anywhere across Australia.

 

The daily habits which helped him achieve success…

1:59 I normally get up very early. I actually spend my entire mornings either meditation and meditation, or working out, having a nice breakfast with with my family.

 

And that’s next time in a future episode of property Investory.