One of Lianna Pan’s earliest memories is running around a home so rickety it would shake as she bounced about excitedly as a toddler.
Her parents had nowhere to live after getting married in Fujian, on China’s east coast, so an extra room was built atop her grandparents’ house — and that’s where she called home before moving to Australia aged 14.
Now, about 20 years after first arriving in Sydney, she owns about 25 properties worth about $16 million — and is repaying her parents for the opportunities their sacrifices afforded her by funding their comfortable retirement: her number one goal and motivation.
“We come from a very, very humble background,” she told the Herald Sun.
“My grandparents’ house was this rickety wooden structure and my uncles and my dad built a room on top of the existing structure — there was no permit, nothing like that.”
Another early memory is seeing her mother cry reading letters from her dad, who they didn’t see for seven years after they borrowed money from family and friends to send him to Australia to work as a boiler maker with a mission to save enough to eventually get Ms Pan and her mum out too.
“Out of having that hardship kind of background, my parents really wanted me to have a better future.
“The sacrifice they made for financial future and security was drummed into me; money was very difficult to make and you have to sacrifice a lot for it.
“It also drummed in the idea of being smart and diligent with money, and then save your money and invest your money.”
Her parents wanted her to study hard, get a good degree and secure job — and she built on that by putting aside as much as she could and beginning to invest “straight away”.
She worked three part-time jobs while at university and was “doing 60-70-hour weeks” for the duration of her tertiary education — about four and a half years — and saved almost $60,000.
Her first property was a unit in Dulwich Hill, Sydney and she didn’t have any help from her parents; she paid $400,000, taking out a 90 per cent loan and using the first-home buyer grant.
A year later it was worth $100,000 more — and now it’s valued at a whopping $940,000.
The way she managed to get such a good deal on the apartment was buying wholesale off the developer with a group of about 50 people; they got him out of bankruptcy on the back end of the global financial crisis, but he walked away with basically no profit.
This tactic of group buying is at the core of Ms Pan’s business, Freedom Property Investors, which she founded with fellow from-zero-to-millions success story Scott Kuru.
They negotiate with developers to try and get the best discount with a group of buyers, which can help the developer get a project underway rather than incur costs waiting for higher-priced sales to come through; they also approach them on the other end, when they’re keen to move on and reinvest: “We target them when they’re most vulnerable”.
Ms Pan used the equity from that first property, which allowed her to withdraw $90,000, to invest in two more properties that she also “wholesale discount purchased”; they were brand new, had “very high cash flow” and she “maximised the tax deductions” as well.
Negative cash flow would halt a burgeoning portfolio very quickly, and a perception that you had to sacrifice capital growth for cash flow was untrue, she said.
Positive cash flow allowed you to keep borrowing; since 2011-12 Ms Pan has had “a more active strategy” including renovations, subdivisions, small developments and now medium developments of up to 12 townhouses.
She owns houses, townhouses and apartments across New South Wales, Queensland and Victoria and has previously owned in Western Australia.
As for targeting specific areas, Ms Pan’s background after university was as an actuary working for big insurance companies and banks on economic forecasts and projections.
“My job was analysing lots of data, trying to understand patterns in the data and basing projections off that. I took the principal from that and applied it to property.”
Her model for targeting areas takes into account population growth and area demographics.
She advised investors to stay away from high-rise, high-density apartments but said other types of apartments such as boutique low rises in other areas could be good buys.
But she didn’t gain her approach just from her own work life and university studies; after finishing uni she forked out about $10,000 to get an education in property investing — she said wannabe investors should “definitely” get themselves a coach or mentor.
“It seems like a shitload of money when you’ve worked so hard to save up that money, but in my first property transaction I made $100,000 in just 12 months.
“There’s no way I would have been exposed to those kinds of opportunities if I didn’t pay for that education.”
Any mentor should have a demonstrated track record for themselves and the people they have helped, had success with the method they’re telling you to use, and “a really in-depth level of research to back up the strategy they are recommending”.
People should also have a clear financial goal. Not having a very specific one was like “going shopping without a shopping list, you’re constantly distracted and go off track”.
Ms Pan said while lending criteria was “a little more relaxed” when she started, interest rates were now much lower and “you can’t get the best of both worlds”.
Her mum and dad now do a lot of travelling, with her mum enjoying traditional dance, doing that in different places around the world and has been invited to perform at festivals.
“I am an only child because of the one child policy, so they bestowed all their hopes and dreams on me just like every other Asian child I guess.
“All the sacrifices they made, I really wanted to provide them a really comfortable retirement, not when I’m 50-60, but when they are 50-60, I wanted them to be comfortable, retire and not worry about money. That was my biggest motivation. This was the way I could see I could repay them, so that was a big driver for me . so it’s been very rewarding to do that.”