Join us in this episode of Property Investory to hear how Kulkarni recovered from a huge loss in the joint venture of a million dollar development. You’ll learn how she got involved in investing over 20 years ago, the harsh lessons she has learnt since and much more!

Timestamps:
2.27 | Lightbulb moment in the face of tragedy
7.38 | Growing up in the UK
10.24 | The work never stops
14.49 | Blast from the past
16.36 | Learning about other cultures
20.15 | Starting businesses
22.34 | How her property journey began
25.06 | Taking the reins
27.56 | Boom period
32.24 | Recovering from a big loss
36.24 | Stuck in the rat race
38.42 | Expand your cash flow through alternate strategies
41.47 | Commercial properties
45.26 | Controlling, not owning
49.15 | Opening yourself up to more returns
51.32 | Not relying on the markets
53.54 | Replacing your job with investment returns
57.48 | Spend less than you earn and invest!
1.01.43 | Having a confident mindset
1.05.42 | Opportunity meets preparation

Resources and Links:

(33.12): People need to focus on their relationship with money and their capacity to digest past pain and loss. Everybody loses money from time to time. If you don't, you're not really trying hard enough. 

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 active investor and property strategist, Salena Kulkarni. She shares the ups and downs of her illustrious career in the corporate world, leaving senior roles for family life and, what happens when a multimillion dollar subdivision turns into a disastrous joint venture, where the other party took all and fled.

With a wealth of knowledge to share, acquired over an illustrious career that saw her working all over the world, Kulkarni is passionate about helping business owners achieve financial freedom early on in their property journey. 

Salena Kulkarni:  

(00:23): I [present clients with] alternative strategies, by giving them access to highly curated, non traditional property investment opportunities. I divide my time between supporting clients and spending time finding the best deal makers and advisors out there.

Tyrone Shum:  

One rule that Kulkarni lives by, which has obviously made her very successful in the industry, is to walk her talk. She is adamant that in order to be effective and share her wisdom, she must have laser-like focus when she is working.

(01:11): I generally don't start work before 10 in the morning and I'm usually gone by three. I also don't work Fridays. I love just talking to people one on one about where they're at and where they're stuck. I've spent a lot of time, doing a lot of different things and as a result I've got a great capacity to diagnose where people are experiencing friction. On top of that, I think my superpower is probably making friends with people. So the thing I'm probably most proud of is that I've got a fantastic network of really A grade people who support me in the program and the work that I do.

Kulkarni considers the professional path that she took, which has ultimately got her to where she is today, to be very meandering.

(02:27): I was actually born in the UK and we migrated to Australia when I was nine. My ethnic origin is Indian, but I never really grew up there. We moved to a small town called Lithgow, which I'm sure many of you know and then eventually settled in Canberra. I had originally wanted to become a vet, but realised I just didn't have the stomach for blood and guts and decided to study accounting as a bit of a stopgap until I figured out what I really wanted to do.

(03:12): It was probably when I was 10 and being confronted with my father's illness that was the subconscious driver to understand how to build a great relationship with money. This is because I saw the impact that his illness had on him. I don't think accounting was ever the right fit for me, so I jokingly call myself a reformed accountant now, even though I'm still a chartered accountant. 

(03:45): I'm curious to learn more about the change or the migration from the UK to Australia because you were there for nine years after growing up there. What was your childhood like over in the UK before you moved?

Salena Kulkarni:  

(03:59): I would say my childhood in the UK was idyllic. We lived in a small country town and I'm guessing there would have been maybe 300 people in this town. There was one fish and chip shop, one tiny supermarket and that was all. The move to Australia came about because during that period of time – I don't know if you know much about the thatcher years – it was a pretty grim time to be living in the UK. 

(04:28): Unemployment was very high and although my father was a double engineering degree holder, he had been unemployed for six months. I think he saw an opportunity to come to Australia and took it. He saw it as a fresh start, but we literally came here with a handful of suitcases and nothing else. We moved into a government house in Lithgow and I don't have any bad memories of it whatsoever, but I knew It would have been pretty rough by modern standards. We had a small kerosene heater [and I remember] it [being] freezing cold all the time.

(05:07): Still is though at this time of year.

Salena Kulkarni:  

(05:11): Still is, yeah. I have great memories of Lithgow but it was probably around that time, in transitioning to Australia, that my dad found out that he had a major illness and was told that he only had a few months left to live. He then took the opportunity to move us to Canberra and his primary concern was how we were going to survive after he passed. 

(05:38): Fortunately for him, some technology was created and he got told, 'You've got another three months', then it became another three months. I mean, ultimately, he went on to live another 30 years, which was the shocking part. But the technology that kept him alive, no one really knew much about so we didn't know, but it definitely flicked a switch in him. 

(06:04): My parents both really sheltered my sister and I from all of that, so we didn't know, but when he was diagnosed, we sort of saw the overnight change in him. He went from pretty happy-go-lucky to completely preoccupied with money and whether there would be enough.

(06:23): Wow, that is an inspiring story. I'm really also wondering, if he lived on for another 30 years, that must have made a huge impact on your family's situation and how everything must have changed. If he was told he only had three months, he must have been doing whatever he could to provide?

Salena Kulkarni:  

(06:39): Oh totally, you don't realise until you're staring death in the face, what matters. I think the lesson that I took from all of that was that I never wanted to be in a situation where I've got to worry about money. But I think it was probably more subconscious. At the time, I understood the fact that he might not be with us for a very long time. He got in the Guinness Book of World Records for surviving with this condition past a certain point. So although it was a difficult time, I never felt like I was missing out on anything or in need of anything.

Kulkarni recounts some of the cultural differences that she remembers from her time growing up in the UK. Some lighthearted and some more serious.

(07:38): Life was very innocent. One of the things that I love about the UK, which we don't seem to have here in Australia, is that they provide hot school lunches. It's almost as if that's the norm and only the posh kids got to bring a lunch box with a sandwich and [an] apple from home. So, you know, I remember begging my mum every now and then to let us take a lunchbox. 

(08:05): But even at the poorest of poor schools, they would provide a hot lunch every day. I guess depending on the school, it was either great or it was okay, but I have great memories of that. The only thing that I remember leaving a very strong impression on me was the liver that they used to serve with gravy. That was the only meal that we all used to baulk at. But otherwise, it was all really good food. 

(08:33): I think the only dark cloud that I remember from that time was that it was definitely a time of, I would say, ethnic intolerance. I do remember being teased quite a lot and even at times when I was young, experiencing racism. It's one of those things, I think [it’s in] my nature is to focus on remembering the good stuff, so I have a bit of a shocking memory for specific, bad experiences. But in general, I think it was a great experience.

Tyrone Shum:  

After moving to Australia, Kulkarni’s family spent some time living in Lithgow before moving to Canberra. Describing it as a simple life at that time, she still feels that Canberra is one of Australia’s best kept secrets, in terms of places to live.

(09:15): Look again, Canberra has come a long way since the early 80s. Perhaps I wouldn't have settled here if circumstances hadn't unfolded the way they did. But back then, it was just a nice place to live. It was very much a government town, with a very public service sort of mentality. There was a very, very small Indian community here where everybody knew everyone. It was life as usual. 

(09:54): We rented for a long time and then eventually, I think later on we bought. I had no ill feelings towards Canberra, but yeah, my memory of Canberra was that it was probably no different to many other towns.

Tyrone Shum:  

After graduating from high school, Kularni went on to study commerce economics at ANU and moved to Sydney. She would eventually get an exciting opportunity at an industry leading company.

Salena Kulkarni:  

(10:24): It was kind of like an unconscious career evolution [after i graduated from university]. I did accounting as a stopgap, couldn't figure out anything else that I wanted to do, so I thought, 'I'll finish this'. I ended up getting a job offer from Deloitte, at a time when jobs were pretty thin on the ground. We were in the midst of a recession. Even at that time, Deloitte had just had massive redundancies internally.

(10:59): So we were being brought on as the grads for slave labour. I definitely gave a pound of flesh for the first couple of years while I did my chartered accountancy designation and worked. It was really hard. It was so much fun but it was not uncommon to start work at eight in the morning, finish somewhere between 10pm and 2am, go home, study and then get up and do it all again. But I guess when you're young, you just do it. Everybody else did it, so you just do it.

(11:38): Yeah and when you think about it, when kids party hard all night long, It's kind of no different in that sense because we can last for that long. But for us now, I can't imagine doing that.

(11:49): Oh there's no way. I think I definitely chewed through a lot of fuel at that point.

(11:56): Yeah, absolutely. So I guess from that point onwards, how long were you actually working at Deloittes for?

(12:03): So I think I was there just over three years, got my chartered accountancy and it was sort of a trend at that time to go overseas and do a gap year. I had gone into the workforce when a lot of my friends had gone travelling. So when I finished that, I decided to go travelling the world. I kind of feel like I might have done it the right way around because back then, I had friends working in pubs and things like that for 3–5 pounds an hour. I went into the workforce as a chartered accountant and I was earning megabucks doing amazing roles.

(12:45): Going overseas really gave me an insight into how the world sees Australians, like we're definitely perceived as having a fantastic work ethic. So it was very easy to be kind of pulled out as a bit of a diamond in the rough amongst a whole lot of prospective employees. I worked in some super senior roles for my age that I would never have had that opportunity to do if I'd stayed in Australia. 

(13:14): So on a career level, the move overseas really catapulted my career in terms of money and work and still gave me that freedom to travel and do what I wanted to do. So that was a fabulous experience and I did that for another three and a half odd years before I kind of said, 'Okay, I'll come back to Australia'.

Tyrone Shum:  

(13:36): So which countries did you go to while you were travelling for those three years?

Salena Kulkarni:  

(13:40): I worked in London, I worked in New York and Hong Kong, parts of Europe. I also worked for some big multinationals. I always found that part of the challenge for me with accounting is that I can do the detail, I just really don't enjoy it. So the roles that I used to be attracted to were more where I was the liaison between the business and the accounting department or the business and the IT department. I think I've got a natural interest in problem solving and the elegance of solutions. So I found myself in lots of roles where I was sorting out problems.

Coming up after the break, we hear about what sparked Kulkarni’s decision to come back home after spending three years travelling overseas.

(16:52): My dad wasn't in the best of health and I kind of felt like I'd been away for over six years at that point. I just wanted to spend a little bit of time here and maybe relocate. 

We learn about how her first property purchase was a fluke and turned out to be a gem, tripling in value at the time when others were doubling.

(23:28): I had done a bit of investing in terms of other markets, shares and things like that, but that was the first property I bought. So I got a friend to come around and see a bunch of houses with me and it was at the beginning of the boom period.

How a disastrous joint venture taught Kulkarni and her husband some painful lessons. 

(31:55): John and I have worked through a lot to mentally digest that. But now when I look back, I think there's been so much gold from that experience because it just taught me a lot about things that might have been overlooked, precautions that could have been taken. 

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

Although they didn’t have any family around when growing up in London, Kulkarni still made the time to revisit her hometown while living in London as an adult. This was both a cathartic and melancholy experience.

Salena Kulkarni:  

(14:49): We didn't have any family in London and I always felt that that was part of the challenge my parents had, where it was just the four of us with no support. We've got quite a bit of extended family settled here in Canberra now, but my parents had no support and no help from anyone. So when I went back to the UK, I did go back to the town that I grew up in, which, sadly, had been extremely overdeveloped. 

(15:20): Lots of new housing estates, all the fields and trees and places that I spent time in as a kid were all gone. The primary school felt tiny, microscopic, I almost couldn't believe that there were so many of us that fit in that school. I really loved it as an experience, but it was also sad to see. I'm a very sentimental and nostalgic kind of girl, I definitely love my 70s music and I love things from the past to be the way they were.

(15:56): I'm very much similar in that way. I grew up in the 80s and every time my wife and I have a look at the things that we grew up with, like 90s music and stuff like that, we just think, 'Wow, it is just so different to how it is now'. I wish my kids could try and appreciate what we had, just a simple telephone. 

(16:16): You look at our mobiles nowadays, our children take them for granted because it's got everything on it. But back then we were not able to just pick up a phone and instantly call or message people, you actually had to dial a phone, especially with the internet when you think about it. All those dial up modem speeds, it took a while.

(16:34): Absolutely, couldn't agree with you more.

(16:36): A lot has changed, wow. So going back over to London and experiencing it for yourself as an adult, [as well as obviously] travelling [and working overseas] for about 3 years. Why did you decide to come back to Australia after that time?

Salena Kulkarni:  

(16:52): Look, it was probably family based. My dad wasn't in the best of health and I kind of felt like I'd been away for over six years at that point. I just wanted to spend a little bit of time here and maybe relocate. The plan had been to move to Sydney or Melbourne but as it turned out, I just found some interesting work here and one thing led to another and then I just found myself staying here.

(17:21): Then my now husband moved here to be with me and set up his business here, so then we sort of got stuck. But life is long, there's plenty of opportunities and you know, we're definitely entering another phase where we might see ourselves moving elsewhere. Who knows?

During her travels, Kulkarni learnt many new things and was exposed to many different cultures. She found that it was a time of real personal growth.

(18:04): [In terms of relationship building], especially in cities like London which is such a melting pot of different cultures and different people, [it was a phenomenal experience]. It's a very transient population. So I think one of the big takeaways that I had from that experience is the capacity to cope with change, to roll with the punches and to understand that the one thing that's guaranteed is change. 

(18:45): From a personal resilience point of view, I think I grew up a lot in that time. I think up until that point, to some degree, I was and I still am a little bit of an innocent. Back then, people might have called it naivety. So I'm less naive now, I'm still innocent, but less naive. But I definitely think that experience of being out of home, having to figure out life as a grown up is really when you decide who you're going to be and what matters to you and what your values are.

(19:23): You're in an environment where you're being invited into different people's worldview and I think part of the challenge of young people in general is figuring out whether they align with that worldview, or whether they feel differently. I think when I was younger I was very impressionable, but fortunately, I had enough of a moral compass to keep me on an even keel. It was definitely a great period for personal growth and evolution.

Kulkarni had very clear goals of starting some businesses upon her return to Australia. With an entrepreneurial streak and already a tonne of valuable experience, she found there was no time like the present.

(20:15): Part of the reason accounting never felt like a good fit was that it lacks creativity. It's very black and white and very linear. I had a couple of businesses that I started and then moved on from. I started a day spa, which I looked into franchising and then [ended up selling]. So I did a bunch of things that [helped me really explore] what being an entrepreneur meant. In hindsight I picked a lot of stupid businesses, like the day spa experience, which seriously shaved five years off my life.

Tyrone Shum:  

(21:07): Wow. Why, what happened there?

Salena Kulkarni:  

(21:11): Oh my God. Well, that was meant to be an experience of being the silent investor. Just to give you context, we'd done this beautiful fit out and got this premise and all this equipment. Then two weeks before we were due to open, the girl that I was supposed to be partnering with said, 'I've changed my mind. I'm going overseas'. We had appointment books filled and it was a very, very steep learning curve. I got to the point where, by the end of that business, I learned a lot. But I also learned about staying in my lane, because that was not my lane.

Tyrone Shum:  

(21:47): I totally understand. I mean, could that have happened? Did they invest any money into the business before they ran off? 

Salena Kulkarni:  

(21:57): No, I was the money, they were the skills. It felt like an equitable arrangement at the time, but I realised that if you don't have skin in the game, it's a difficult partnership to have work.

(22:13): Yeah, I understand that. I've been in those situations before, so I can feel for you. It's tough.

Salena Kulkarni:  

(22:18): It was tough, yeah. 

Tyrone Shum:  

Kulkarni shares how she snagged her first property, with the help of a very sympathetic real estate agent. With her only real experience of investing being in other markets and shares, this was a win.

(22:34): When I got back to Australia, I actually moved back in with my parents just because that was my motivation for coming back to Canberra. In an Indian family especially, the expectation is that you live with your parents. If they had their way, I'd live with them forever. They built this house with the fantasy that my sister and I would move in with them along with our husbands eventually. 

(22:59): As much as I love my parents, at that time it was like having a straight jacket on because my gorgeous mum would say to me at night, 'What time you're going to be home? Are you in for dinner?' When you're used to just coming and going as you please, it wasn't so much a restriction, but it definitely cramped my style. So I think I lasted about a year. Then they went away for a weekend and I went 'I'm going to start looking for a house'. 

(23:28): At that time, which was in 2000, the cost to own a house, versus the cost of renting was about the same. So at that time, I just went, 'Oh, well if it's about the same, I'll just buy'. So I got a friend to come around and see a bunch of houses with me and it was at the beginning of the boom period.

(24:01): I walked into the very first house on the very first day that I started looking and went, 'Oh, this house has a lovely energy'. The real estate agent had been a single woman and had been taken advantage of and she felt very empathetic towards me. So she whispered in my ear, 'Selena, this is what I think this place is worth. Why don't you put in an offer?' I didn't even have finance organised or anything and I put the offer in.

(24:28): I don’t even think that real estate agent took higher offers to the owner to try and support me, but I got this house and it turned out to be an absolute gem. In the time that most properties doubled, this one trebled in value, so that was a fluke first purchase. But after that, I think my now husband came to Canberra in 2001 and he was very clear that property was the pathway to growing wealth. I was just like, 'Whatever'. 

(25:06): When he started buying a couple of properties, he eventually hit his limit and because I was working in management consulting at the time, earning a pretty good income, he needed me to be part of the journey, otherwise he couldn't do it. He would put paperwork in front of me and I would blindly sign it. I literally had no interest. The most important thing for me was that I didn't want to risk the house. So I don't know what we signed.

(25:34): I had no interest until about 2004, at which point I went, 'Crumbs, what have we done? What are we doing?' I was pregnant with my first child and I thought that I'd better have a look at this now. Once I started to look at what he was doing, I realised what was happening. That was the sliding door moment of, 'Okay, I need to give this more attention'. 

(26:06): I educated myself in every way possible. I bought courses, I met people, I looked everywhere and found mentors, which is probably the biggest influencer for my success. I kind of said to my husband, 'Step aside, I'll take it from here'. He was more than happy for me to do that and that was the start of the journey.

Tyrone Shum:  

(26:35): Gosh, that is amazing to hear. I'd love to hear that from my wife too. Wow, that's phenomenal. What was your husband doing at that point in time?

Salena Kulkarni:  

(26:45): John is a chiropractor and he runs a really great business, he's very successful in what he does. But he's got a different energy to me, he's very grounded, he doesn't like to stretch himself or stress himself out. Whereas I've got the high energy, high excitement personality. So he was more than happy for me to just take the reins and it kind of became a bit of role reversal. 

(27:14): It was me putting things in front of him to sign and just saying, 'Just sign here, please'. It's kind of been that way ever since. He just trusts that I've got the energy and the experience now to just run with stuff.

Having purchased her first investment property over 20 years ago, Kulkarni’s portfolio has gone up and down since then. Using those alternative methods that she teaches to her clients, she is currently more focused on simplifying her portfolio, rather than its volume.

Salena Kulkarni:  

(27:56): To be frank, back in the year 2000, you could almost throw a dart at the map of Australia and do okay. So there's a lot of people who made a lot of money during that boom time and attribute it to high skill, but really for a lot of people it was the right place, right time.

Her property journey was not always smooth sailing, as she recalls a painful experience back in 2008, that probably caused the biggest fracture in their wealth creation to date.

Salena Kulkarni:  

(29:04): We had started to dabble in some small scale developments and I got introduced to a fellow who claimed lots of things at the time, but we basically embarked on a joint venture with him, developing a parcel of land on the Central Coast.

(29.37: It was huge and it would have been very lucrative. But even with all the due diligence I did and all the legal documents I put in place, I couldn't have anticipated that he would basically scam us. At that time, we had just paid off our house and we had quite a good portfolio of properties. We were in this great position, so what we ended up doing was refinancing to do this development. 

(30.07): It was a stretch for us. It was a multimillion dollar subdivision and he basically fleeced us and took the lot. That was a very, very painful lesson to recover from, both financially and mentally.

(30:28): Wow. So learning from that lesson there and if you wouldn't mind sharing more details behind it, how was this person able to fleece you and get away with all that? You sound like you would do a lot of due diligence to make sure you were covered. But how was that possible?

Salena Kulkarni:  

(30:48): He was very, very clever. So it didn't happen overnight obviously, he spent quite a lot of time getting to know us, he got to know my family and he adopted an almost fatherly demeanour with me. He just talked a big game and took me around to see deals which he claimed were his. I would probably say it was that experience which ended the naive period of my life. 

(31.24): I'm pretty vigilant, like I did a lot of due diligence. The deal itself stacked up, but in the end, it basically came down to the fact that he had access to the funds and just drained them. Even after that happened, we tried to go around and communicate and get the funds back, we got lawyers involved and went to ASIC. We did all this stuff, but at the end of the day ASIC [basically] said, ‘Small fry, we’re not dealing with it’. 

(31.55): The lawyers said [that we] could chase this for a very long time through the courts and spend 10s of thousands of dollars and still not get the result. So we let it go. John and I have worked through a lot to mentally digest that. But now when I look back, I think there's been so much gold from that experience because it just taught me a lot about things that might have been overlooked, precautions that could have been taken. 

(32.24): Certainly after that point, the journey was about, ‘How do I recover from this?’ Luckily, we had a bunch of other things happen that kind of helped us mend that damage. But when you think back to that point in time, several hundred thousand dollars was a lot of money. For anyone! Even now that's a lot of money, but back then it really hurt us. 

(32.49): We effectively lost our house. So that was a big one to recover from, but that's why I'm now such a huge advocate for people making sure that they digest the pain around any kind of financial loss. I've supported hundreds of investors whose relationships have broken down over insignificant sums of money because they just weren't able to digest the loss. 

(33.12): People need to focus on their relationship with money and their capacity to digest past pain and loss. Everybody loses money from time to time. If you don't, you're not really trying hard enough. There were a lot of lessons around both the due diligence side of things, the precaution side of things and also just learning to pick yourself up, dust yourself off and move on.

Tyrone Shum:  

(33:40): Just curious, what would you consider to be a precautionary lesson that you could have done differently or a lesson to learn from that?

(33:55): I think there were just nuances in the actual contract that could have been better dealt with. If I'd really wanted to, I could have gone back and really had a go at the lawyer that we used. So one thing that I do differently now is I don't quibble with people on fees for anything, I just pay the fee because I want the absolute best protection. 

(34.22): Whereas when you start out you're often looking to save money, cut corners and you look for cheapest property managers, the cheapest conveyances and the cheapest legal support. I just think you get what you pay for. So I've learned through that experience, that vetting deals and doing good due diligence is the cornerstone of getting the right results.

Tyrone Shum:  

(34:48): I feel the same. I've been burnt a few times by going for a cheaper option and it comes back to bite you in the end. You think you’re saving a few bucks here and there, but in the end it costs you a lot more than a few dollars.

Selena Kulkarni:  

(35:00): 100%, yeah.

(35:02): I think you have to go through that lesson to really learn.

Selena Kulkarni:  

(35:05): Exactly.

So inspired by Salena Kulkarni’s journey, we will keep the conversation going in a future episode of Property Investory. We will discuss what Kulkarni has been doing for the past 15 years since she left the corporate world.

I was an avid share trader, I did lots of things. As the property side of things started to give the best returns, I just let go of everything else and focused on that.

We’ll hear about some of the alternative strategies that her clients use to maximise their net worth in three steps.

I think what happens is people hang their hat on this idea that they have to be at a certain net worth for the game to be over for them. What I’m doing right now is showing people that they don't actually need as much of a net worth as they think.

What exciting plans she’s got for the next 5–10 years...

I love the idea that I've got a plan A, plan B and plan C. Plan A is just continuing to build cash flow through these alternative strategies.

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