29yo shares tip that got him 37 homes in 3 years

A 29-year-old failed cricketer and amateur model has attained 37 properties worth $13m in just three years after claiming to have “cracked the code” of the Australian housing market.

Sanjay Parasher was a promising fast bowler in his teens, playing cricket at state level, and was bound for a professional career in the sport before an ankle injury ruined his hopes.

He later dabbled in modelling and a social media business before training as a podiatrist, launching a foot and ankle care business at age 24.

He’s since built a property portfolio of 37 homes spread around NSW, with one block of units alone earning him $2500 a week in net cash flow after his mortgage and other holding costs are paid.

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Mr Parasher is now eyeing further property purchases, but he claims anyone who thinks he is buying too many at a time when many people his age struggle to buy even one should “look at themselves”.

“It’s a mindset,” he said. “You could actually do it too. Learn about the market. Ask yourself: ‘do you know enough?’ ”

Mr Parasher attributed part of his success to buying properties through a company he set up as a special purpose vehicle for real estate investments. This improved his borrowing capacity.

He added that the true light bulb moment that allowed him to purchase so many properties was realising he could get commercial loans for certain types of residential properties.

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Getting approval for these commercial loans was predicated on the cash flow that could be generated from the properties through the rents – not solely on his personal income.

This meant that he could continue to get loans from the bank provided he purchased properties with high rents relative to the mortgage repayments.

The types of properties where these loans were an option were blocks of multiple units.

“A block of five or more units is considered commercial property so they are valued purely on the income they get, not on surrounding sales,” Mr Parasher said.

“Buying them together you get each unit for cheaper and there’s multiple sources of income.”

There was a catch with this approach, he said. To get commercial property loans, banks demanded higher deposits in the realm of about 30-35 per cent.

“Most people don’t have that in cash or even in equity and getting a commercial loan is a hard process. The (upside) is that I am usually not competing against many other buyers.”

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Mr Parasher said he could afford these deposits because of his business acumen and extreme rises in the value of some of his first investments.

The latter allowed him to draw out equity through refinancing deals with banks to use as deposits on new investments.

“My second property went up in value by about $1m in 10 months and the rental income even after mortgage costs was $100,000 a year,” he said.

Mr Parasher said he understood he was not an ordinary borrower. “I am probably the highest paid podiatrist in the country,” he said, noting he took home $1m in pre-tax income one year.

“I finished (my degree) at 24 and applied everywhere but I couldn’t even get an interview so I started my own business and networked with all the GPs. I now have a premium service with many staff working with surgeons on complex cases.”

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He said he poured most of his income into deposits for his blocks of units, starting in 2020. Many of his properties are rented out on short-term letting sites like Airbnb to boost the rental income. He said none of the properties are negatively geared.

Some observers said Mr Parasher’s approach showed how cashed up investors were contributing to some of the country’s housing affordability challenges.

Michael Fotheringham, director of the Australian Housing and Urban Research Institute, said investors with multiple properties that have been turned into holiday rentals were depleting rental supply.

“Everyone has a right to wealth and investors are an important part of the system, but equally, if those properties had families in them, including key workers, it would be a far better outcome,” he said.

Mr Parasher’s first property was a dual occupancy house in Wollongong purchased for $665,000 in November 2020.

He followed this up in 2021 with two blocks of five units on the south coast, one bought for $1.8m and the other for $1.64m.

Subsequent purchases included a block of six units on the south coast, a house in Wollongong for $822,000 and a block of 10 units bought with a joint venture partner and, this year, a block of eight units. He said about 60 per cent of the value of his portfolio is debt.

Mr Parasher said he didn’t think his approach could only be used by those with a high income.

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“My advice would be to find out how you can produce more earned income and then learn the best type of asset to put that into, especially an asset that pays. If you can’t earn more, find someone to partner with.

“It will be daunting but you have to back yourself. Have a strategy and then do it.”

 

SANJAY’S FORMULA

> Use a company specially set up for property purchases, rather than buying in your name, to get tax and lender benefits.

> Buy properties with multiple sources of revenue and look for ways to improve them.

> No negative gearing: rents from each property should be higher than the mortgage costs.

> Get commercial property loans, which are assessed more on the cash flow than your serviceability.

> Tap into equity gains through refinancing deals to purchase more properties.