In this episode, you’ll hear about Kimberly’s childhood in the lower Blue Mountains, and her first entrepreneurial experience purchasing and expanding a $500 business on a local golf course. From here she dabbled in modelling and teaching before drawing on inspiration from her father— and a coffee date with a friend— and entering the property world. After buying her first property in Penrith for $121,000, she reveals the strategy that has allowed her a return of just under $1 million a year in income.

Timestamps:
00:44 | 5 Kids, 42 Properties, and 2 Businesses
04:06 | Easy Job, or Fulfilling Life?
06:10 | Hold On a Minute...
08:29 | From Model to Mogul
12:17 | One Coffee With a Side of Lightbulb, Please
15:07 | We Got Wowed, and Learnt a Lesson
20:44 | Location, Location, Location (And Diversify)
24:40 | Levelling Up
26:29 | Brokering Beginnings

Resources and Links:

[00:13:38] From that night when I went back to share that story with my husband, we called our broker the very next day. So I was not a broker at this stage. And within the next 12 months, we had sourced and settled seven properties in the New South Wales market.

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 mortgage broker and real estate agent Kimberly Linder. She and her husband bought 9 properties in their first year of investing, which kickstarted their mortgage brokering business. Now they own just under 50 properties and share their strategies with clients in their one-stop investment business. 

 

 

Linder started her investing journey as a teenager, without even knowing at the time that was what she was doing. These days she has a much clearer idea! 

Kimberly Linder:   

[00:00:44] We've been investing now for 14 years. And I would say we probably have done quite a bit.

She shares what she gets up to on a typical day, both on the work and home fronts.

Kimberly Linder:   

[00:01:01] Work! I work very hard. So I own a finance business. And we also own a real estate, which I'm not the licensee. So that's pretty much covered for me, but I'm also a mum of five children. So our life is very, very busy.

To get to know Linder better, she describes more of her home life and introduces us to her children, some of whom are adults already.

Kimberly Linder:   

[00:01:25] My oldest is 25. And my youngest is 10.

[00:01:37] My oldest one is a mum herself with one little baby and another one on the way. Yes, they are very good. And they all help look after each other. It's a beautiful dynamic.

[00:01:52] Four girls, one boy. And no, we did not keep going until we got the boy! He's number three.

With kids varying at different ages, plus running the business, there are a lot of juggling of priorities.

Kimberly Linder:   

[00:02:11] I have an amazing husband who helps out a lot at home, which allows me to be the full time worker, and Jason also works within our company. So we're just very good at being organised. 

Taking a step back, Linder delves into her childhood and describes where she grew up. 

Kimberly Linder:   

[00:02:37] I grew up in Emu Plains. So the lower Blue Mountains in New South Wales.

 

[00:02:49] Local primary school, local, public school. Lovely childhood, one of two [children]. I guess the very basic normal childhood!

Tyrone Shum:  

With Emu Plains being on the lower part of the Blue Mountains, we find out if she ventured out this area during her childhood.

Kimberly Linder:   

[00:03:16] I would say we stayed really within our local area, I guess going to Sydney was a treat for us. We really stayed around that Emu Plains and Penrith area. 

 

[00:03:40] I went to uni to be a PE teacher— I did two years at uni and got offered a job in the modelling industry. So I actually ditched uni with the plans to go back. And that's the path that I pursued for a few years.

P.E. to real estate is an interesting path— Linder explains how and why she began studying physical education, and why leaving that route was the best decision she could have made.

Kimberly Linder:   

[00:04:06] I think I saw it actually as quite an easy job. But honestly, I look back now and I think that was the very best decision that I ever made, not continuing on that journey, because I would never have had the amount of children I do today. And I would never have done what I've done in the finance world, in the property world.

Tyrone Shum:

If Linder’s story wasn’t interesting enough, she shares about her modelling career and how that came about for her.

Kimberly Linder:  

[00:04:39] I got my hair cut once. And they basically said, 'Hey, would you come and do a show for us?', then got head hunted and that was it. So it's not something that I discuss very often with many people, but I guess that was the time of my life when I was very young.

[00:05:13] That went on probably for three or four years of my life. And in that industry, you really don't have to work very hard. Apologies to anybody that is in that industry! And you can make a lot of money. So I was very young, and I was earning a lot of money. I was renting with a couple of my girlfriends at the time, and I was thinking, 'Man, I'm earning all of the money, I should be buying the property and have my girlfriends renting from me'. I guess starting to earn that kind of money made me start to think about what I could potentially do with that money. And I hated paying rent. And I hated thinking that I was paying somebody else's mortgage.

With that the wheels turned, and Linder began her journey into the property market, starting close to home.

Kimberly Linder:   

[00:06:10] I bought my very first property in Penrith for $121,000. And I started charging my girlfriends rent, and the rent that they were paying me was completely paying for my mortgage. So essentially, I was owning the asset, and somebody else was paying for it.

[00:06:34] And I was about maybe 18, or 19, maybe almost 19 when I first bought my first property. 

Linder clearly began working hard at a young age, choosing to invest at a time when her peers were renting. She shares the inspiration and motivation behind this.

Kimberly Linder:   

[00:06:57] I always listened to my father, and my dad is the hero in my life. But I always say my success in property is because of my dad. My dad would tell me so many stories about, for example, 'Your mum and I, we nearly bought a property in Foster, the unit was $70,000. And I think I think, oh, aren't they $400,000 now?' But he didn't do it. 'Oh, Kim, we nearly bought this property in x suburb and now it's worth this. We nearly bought the property across the road'. So I remember from a really, really young age thinking, well, if I get an opportunity to buy, I'm just gonna do it. Because if my dad had have done it, our family would have been rich by now. So I guess I kind of went the other way.

[00:08:05] And I know that there's always two people in every relationship making the decisions, and I just thought, 'I'm gonna make that decision'. And did, multiple times.

We find out what happened after her modelling career and how that led her into investing...

Kimberly Linder:  

[00:08:29] I had lots of babies, so obviously that career was out the door! I had my first baby quite young, at 22 years old. And so then I was a stay at home mum for up to four children. It wasn't until we were probably close to 30 that we started to invest. So I was basically just looking after my kids, I had a little part time retail business that I only worked a couple of days in, I was instructing aerobics at that time, nothing to do with property. And my husband was a full time income earner. So we sort of had a break for about 10 years while we were raising a pretty large family.

[00:09:57] We've always been self employed and my husband was a landscaper by trade but also in the building, bricklaying industry.

An entrepreneur at an early age, Linder’s first foray into business was an unusual purchase, in an unusual location. 

Kimberly Linder:   

[00:10:18] I had a little halfway house on a golf course, which I had been running since I was about 14 years old. I first started sitting under a tree, serving sausages to the golfers, and then that actually became an actual shop. So we were involved with that little business probably for about 21 years. It was only a three day business, but it was an awesome business to have part time and also be able to focus on our kids.

 

[00:11:00] So we set up with a barbecue and some Eskies under a tree. And this is one of the things I'm most proud of actually in my life. I actually bought the business for $500 off some other kids that started it, at 14. So we would just go every Saturday and Sunday morning, my dad would drive us, we'd set up our barbie, set up our Eskies and we would just sell drinks and sausage sandwiches to the golfers. 

 

[00:11:27] And then maybe five or six years later, the actual golf course built a little shop for us. And then they put us into that. So that became my life for a lot of years which fit in really well with having to... my main focus was my children.

 

Coming up after the break we dive into Linder’s foray into real estate and what got her started in the industry...

 

[00:12:57] So it was that moment for me that I went, 'Wow, this is my way in'. We weren't earning massive money. But I went home very excited, spoke with my husband, told him what our friends were doing. 

 

She shares her experience and advice on buying entirely within one area...

 

[00:18:03] In property it's about timing. And I think it's about you can't buy anywhere that's just basically running on one or two industries, you need to know that it's a vast economy itself. 

 

She discusses her motivation and drive behind why she does what she does...

 

[00:26:29] The broking is a really good story! I just fell in love with buying property. And I wanted to continue to buy more, because I saw that as a vehicle to get us to where we wanted to be, which was a comfortable life for ourselves and our children.

 

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

 

 

With those early exploits under her belt, Linder shares how she stumbled across finance broking and how it ignited her entrepreneurial flame.

Kimberly Linder:   

[00:12:17] Well, this is an interesting story. So I guess I evolved as a broker. My big moment, when I decided to get into property was when I spoke with a girlfriend, having coffee with a school mum. And she talked to me about an investment that she had bought in Penrith. And she told me that she was getting a return of just over $500 a week. And that was for a three bedroom house and a two bedroom granny flat. I almost fell off the lounge and I'm thinking, 'What?! How could you possibly get a return like that?' 

[00:12:57] So it was that moment for me that I went, 'Wow, this is my way in'. We weren't earning massive money. But I went home very excited, spoke with my husband, told him what our friends were doing. And realised— get all of the numbers, because from a very early age, I was always a numbers girl— did the numbers and realised 'Wow, even on 7% rates back then, I worked out that if we bought property like this, somebody else would pay for it'. So we weren't then limited to how much we could own if we could make somebody else pay. So that was my light bulb moment. From that night when I went back to share that story with my husband, we called our broker the very next day. So I was not a broker at this stage. And within the next 12 months, we had sourced and settled seven properties in the New South Wales market.

[00:14:03] We were like, 'Wow, this works, why would we just not do as many as we possibly could?'. And just as an example, we were buying properties in the Penrith market back then at anywhere between $230,000 to $300,000. Every single one of those properties that we still hold would be worth anywhere between $600,000 and $900,000 today, and that's in 12 years.

Tyrone Shum:  

Next, we jump into her progression in real estate and how she got into brokering.

Kimberly Linder:   

[00:26:29] The broking is a really good story! I just fell in love with buying property. And I wanted to continue to buy more, because I saw that as a vehicle to get us to where we wanted to be, which was a comfortable life for ourselves and our children. So obviously, we hit the wall in terms of capacity to borrow. I was using a broker, but I was using one single broker from a single lender. And I thought, 'Oh, we have enough transactions now. I'll become the broker and I'll get my own money'. So I simply became a broker so that I could finance our own property. So if they said no, I said, 'Well, let's let's find a way we can get them to say yes'.

[00:27:16] That's 13 years ago now, which feels like you know, two. And I learnt so much, which so many people don't realise. They say 'It's easy, let's just stick with St. George or Westpac because I like all of my lending in one space'. The one thing I learnt when I became a broker was so many banks have so many different policies. And what you can lend with St. George is not necessarily what you can lend with NAB. So structure. When you are a property owner, if you want to keep building your portfolio, the most important thing is you need to be able to structure so that you're not hitting the wall. And nobody's saying no.

Linder goes on to explain why structures are so important, and how it works.

Kimberly Linder:   

[00:28:13] Let's say for example, you've got five properties, and you're with one bank only. Their capacity, so their servicing calculator might tell you 'Sorry, you cannot borrow any more, you're at your max capacity'. So if you're using a broker too, as opposed to just a normal bank, a broker should be able to get you a solution as opposed to a lender. 

[00:28:36] So say what NAB or St. George or Westpac could lend you, you may be better off with a solution based lender that is taking your actual repayments into the capacity, as opposed to most lenders are taking into account your principal and interest plus a margin, sometimes of up to three plus percent on what your interest rate is paying. I have one client that I've just done servicing for and I'm like 'It's not about the rate. If you want to keep going, it's about who's going to give you the money'. So for this particular client, they're at a negative $4,000 per month with a major bank. They're at a positive $104,000 per annum with a second tier lender. So about $10,000 a month capacity. So who you surround yourself with in order to continue to grow your portfolio is absolutely everything.

Tyrone Shum:  

It seems like a no brainer— to get the deal, you go with the one who can give you the money. Linder shares her thoughts on whether half a percent matters at the end of the day.

Kimberly Linder:   

[00:29:51] And if you've got to pay half a percent more, you're still getting the money. Over 10 years, it really fades into insignificance.

 

[00:30:21] When it comes to investment, really the rate should be the last... it's always good to get the best rate, but if you can't, you don't say no. 

Tyrone Shum:  

After such an incredible beginning, Linder shares how many properties she currently has in her portfolio.

Kimberly Linder:   

[00:14:44] I think we're [at] 42 at the moment.

Investing can’t always be sunshine and roses, and Linder is no exception. She shares a challenging time she and her husband faced in a town dominated by a particular industry.

Kimberly Linder:   

[00:15:07] It was in 2012, and it was our first purchase out of state. So we went to an investment seminar and were really wowed by the speaker. And I guess we went in quite blindly. That was in an area that was predominantly a mining based industry. So we made a lot of money very quickly in rent return in the first 12 months. And then we made a lot of money in terms of capital very quickly after that. So that's probably one of my worst— well, the only bad investment that we've made. 

[00:15:51] But with every bad investment, I think you learn a lot of lessons as well. And I guess the lesson that we learnt from that was you need to do your own due diligence. Don't be wowed— because somebody tells you something is the way that it is, it's not necessarily actually the truth. And if you're prepared to invest solely in an area that's driven by one industry, you need to understand what's going to happen to a property market if that industry goes away.

Tyrone Shum:  

With the first 12 months of their investment having gone so well, we discover what happened next...

Kimberly Linder:   

[00:16:35] The values dropped. So that property is now— still today, we still hold that property— that's probably worth maybe a little bit more than half of what we paid for it. But we're lucky because we have one poor investment, whereas all of our others, they hold, obviously, the shortfall in the rent now for that property, and we've got the time and the income stream from the other properties. So we'll just continue to hold it and enjoy the tax deductions. But I would hate to be somebody that's bought solely and wholly just in one area, but it teaches you that diversification is everything.

Tyrone Shum:   

[00:17:16] Do you think that industry will ever come back at all?

Kimberly Linder:   

[00:17:22] I don't know, I'm not confident. But at the moment it's one of those strategies where we'll sell with a capital and sell with a loss and one will write off the other. So we're in a good position where the effect overall for us is not is not huge. 

 

[00:18:03] In property it's about timing. And I think it's about you can't buy anywhere that's just basically running on one or two industries, you need to know that it's a vast economy itself. Anywhere you invest. 

Moving onto a more positive note, Linder shares the additional lightbulb moments she had that set her on this path.

Kimberly Linder:   

[00:18:46] The main 'aha' moments is when there's an opportunity, do your numbers, and if the numbers stack up, you proceed. Because you can't grow if you don't move. Another 'aha' moment is don't not proceed on something if somebody wants another $5,000. So that's probably one of our biggest lessons with properties— the amount of times we've missed [out] because we wouldn't go that extra $5,000. That's probably cost us $500,000. But I would say my main 'aha' moment was when I did speak to that person and I realised the strategy to go forward. And then as you keep investing, you grow, so you start to learn so much more about tax lessons and depreciation and how everything can affect your situation as a whole.

With 42 properties in their portfolio now, the Linders have a specific strategy behind picking both their properties and their locations. 

Kimberly Linder:  

[00:20:44] We've worked really hard in the New South Wales market to start with. And I think that was really good that we did that, because that was our local market. It's what we knew. So that was the first part of the strategy. And really, the first part of the strategy was just, 'if it doesn't have a second income, we don't buy it', because our income levels were not huge. We had a lot to lose if people didn't pay their rent. So our starting point when we started investment was a lot different 12 years ago, than what it was now. 

[00:21:21] And then we looked at— once we had the seven— we need to diversify, mainly because we had a land tax problem. So then we started to look out of state. And because we had a lot of positively geared properties, which meant at that point we had a lot of passive income coming through, we had the luxury of buying properties then that didn't have those two income streams. 

[00:21:50] So then we sort of diversified into the Queensland market. We got into the Queensland market when it was at a low point, which is one of my main strategies— I'm never buying when other people are buying, I'm buying when everybody's terrified to buy. So we hit the Gold Coast market when nobody was buying, did a lot of due diligence and realised that waterfront property— which everybody knows, is always going to grow— waterfront property that was selling back in 2008, was selling for less in 2013, several hundreds of thousand dollars less. 

[00:22:25] So, most people realise that whatever it was selling at, you're going to make up that value. And then it should keep going. So we got in in the Hope Island, Sanctuary Cove markets, and went really hard in those areas when pricing was really, really low, which is probably one of our best decisions that we've ever made, ever, in property. And then we had a land tax problem, then between Queensland and New South Wales. And then we sort of diversified a little bit into the Victoria market. 

[00:22:59] We picked those markets really, really well. And we did really very well in a very fast amount of time. And so they're really the three states we're most heavily invested in. Our strategy now is we don't need any more property. We buy predominantly new because we started to have a tax problem. And obviously, the depreciation schedules are now helping to reduce our taxable income. We're at a point where my husband's now about banning me from property. He wants me buying shoes instead.

Tyrone Shum:   

[00:23:36] It's a great problem to have.

Kimberly Linder:   

[00:23:39] Yeah! So what we do a lot together now is we're doing a lot of... obviously, we've sold a few investments, cash is king when it comes to development. So now we have a development company, where we basically buy and subdivide, and we sell, so we're just in a different phase of our journey.

Many investors move into development next, as it’s often seen as the ‘next level’ up. Linder shares more on the development side of their projects, including their recent subdivisions.

Kimberly Linder:   

[00:24:40] We're just doing some like little mini developments. So we've been land banking, quite a bit of land for a lot of years now, with the understanding— and obviously this is the broker in me talking— where any development obviously if you have more cash, means more profit in the bank later on, so we've banked a lot of land, which will start to develop. We're doing things like topping up 60 acres at the moment. And then we've done a small mini development up in Queensland, which was just one big block, which we've subdivided into four. So we're just basically making the money that we've made now make money from the money that we've made.

60 acres is phenomenal— Linder shares how they came across this opportunity and how they knew their plan was possible to achieve.

Kimberly Linder:   

[00:25:40] That's my husband, he's gone and sourced that and negotiated that. And that's very close to where we live. So it's an area we know well, we own a real estate business as well. So it means obviously the sales can run through our own business. So that's mainly my husband that does that. Not so much me. You can have him on next time. 

 

Kimberly Linder’s story continues in the next episode of Property Investory. Join us for part two where she shares her thoughts on banks versus brokers...

 

[00:02:08] You need to look for a solution. And the solution is using a broker. Anybody that's using a bank to build their portfolio— nothing against banks, but they're not trained to create a solution. 

 

How staying rooted in one spot physically and metaphorically may not be the best strategy...

 

[00:06:18] The one thing you've got to remember is as your portfolio is evolving, and your life, and your income, you have to revolve your strategies as well, so that you're getting the maximum results in different phases of your life.

She delves into the hot topic of young people getting into the property market...

[00:12:44] The major reason they're not jumping is because the parents are saying, 'Oh, no, it's too unaffordable, you simply can't'. We are also in a rate environment that we have never seen historically, money's cheap, affordability is high. So me buying property or when you probably bought your first property, it was a lot harder than it is now. 

 

And that’s next time on Property Investory.