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High school dropout, 31, turns real estate agent and now owns 26 properties - here's how he did it 

A young man who bought his first flat at 19 and now owns more than 20 properties worth $9.5millon has revealed his winning strategy.

Sam Gordon, 31, from the Southern Highlands of NSW, used money earned working as a labourer on his family's farm to purchase a Wollongong flat valued at $275,000 unit at age 19.

Mr Gordon dropped out of school at 16 to begin work, earning about $30,000 a year until he'd managed to save the deposit of $27,500 for the flat.

He then developed an investment strategy that has seen his portfolio grow to 26 properties worth $9.5million, with Mr Gordon holding equity of $4million.

Mr Gordon left school at 16 to begin working on his family's farm for $30,000 a year

His property strategy is based on buying under value properties which he can renovate to improve their value, then refinance the loan to use as a deposit on another property

Mr Gordon advises buying places where rents are higher to provide income from the property, rather than only being able to service mortgage costs

Mr Gordon's portfolio now numbers more than 20 properties valued at $9.5million, generating rental income of more than half a million dollars a year

The rental income from the properties of more than half a million dollars a year provides him with income of around $200,000 a year.

After renovating the Wollongong flat and improving its value while doing 'lots of reading', Mr Gordon realised how to expand his property interests. 

'The strategy was to buy under market value and have the chance to manufacture equity or cash flow,' he told realestate.com.au

This involved leveraging the equity in his property to refinance his loan for the deposit on his next property, which he purchased in the Southern Highlands for $135,000. 

Mr Gordon's trick was to find properties in need of some renovation which were priced below similar properties in the area. 

By purchasing 'under value' he was able to enter the deal with equity in the property. 

He also concentrated on places where rents were high compared with the purchase price so that he was not just meeting mortgage repayments but also earning some income. 

The key is do your research,' Mr Gordon said. 'You need to learn the market really well and ascertain the value of what you want to buy' 

Mr Gordon offers his experience and expertise through Australian Property Scout, allowing other Australians to adopt his real estate strategies

The other part of Mr Gordon's strategy was to look interstate to cities where properties were undervalued, such as Adelaide.   

'The key is do your research,' he said. 'You need to learn the market really well and ascertain the value of what you want to buy.'

Mr Gordon had since started his own real estate company, Australian Property Scout, to help other Australians replicate his strategy by identifying properties which fit with his approach.

'The average investor comes up against two challenges: funding multiple deposits and/or they run out of loan capacity,' he writes on the company's site. 'We secure below market value deals in high growth, cashflow positive areas meaning you can use this instant equity to reinvest in your next deal.' 

Mr Gordon urged buyers to negotiate with real estate agents with open eyes about the value of a property, particularly when the agent suggests multiple offers have been made on it.

'You have to stick to your guns,' he counselled. 'If you put the offer in writing then the agent, under law, has to submit it. That’s often forgotten.' 

SAM GORDON'S STRATEGY

* Look for 'under value' properties in areas with strong rents so that you can meet mortgage costs but also earn income

* Properties that require some renovation can be improved to increase the value of your equity

* Leverage the equity in a property to refinance your loan to cover the deposit on the next property 

* Consider interstate markets where some properties may be undervalued

* Don't take real estate agents at their word that their are other offers on the property

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