It is the secret of how a former Sydney sales and customer relations manager turned $55,000 in savings into a $9 million property empire.
And Grant Foley's ascent to the top of the real estate market is all the more remarkable because initially he couldn't even move into his first home because he couldn't afford the mortgage repayments.
Now 46, he has become an unlikely real estate tycoon with a portfolio of 18 properties — and this is how he did it.
Foley purchased his first unit in North Bondi in 2001 after years of scrimping and saving a 10 per cent deposit. But he had to rent the property out while living in a share house, only moving in years later.
But it was this property that he credits for making much of his current property portfolio possible — the unit purchased for $415,000 is now valued at more than $1 million.
The property, combined with a Carlingford unit his wife also purchased in 2001 and now valued at about $600,000, gave him a treasure trove of equity he used to finance new loans on homes in Sydney, Brisbane, Melbourne and regional NSW.
This allowed him to purchase four investment properties a year in 2013, 2014 and 2015 — precisely when much of the country was going through an unprecedented boom in prices.
In fact, price were rising so fast that some of his investments were worth about $100,000 more than he paid for them after just a year of ownership, giving him even more equity to leverage into other properties.
"I am not a high-income earner, I just bought well," Foley said. "The key to making it work was holding for the long-term and waiting for property growth cycles.
"By the time I started buying again in 2013 I had so much equity in my earlier purchases it could fund all my new deposits.
"I also made sure the properties could get good rents that could cover my mortgage costs."
He also benefited from a more relaxed lending climate, where banks were more willing to lend money for investment purposes — especially interest-only loans.
The interest-only period on some of his loans will soon expire, he said, but this will not impact his ability to meet his repayments because rents have risen in many of the areas where he bought.
The rents have already paid off just over half the mortgage debt on his $9 million portfolio, he said.
"I haven't had to sacrifice my lifestyle too much to purchase these properties. I live well," Foley said.
The real hard work was investing the time and resources into researching his purchases to ensure he bought in areas where prices were due to rise soon, Foley said.
"I talk and network with agents. A lot. The best deals are usually off market," he said. "The owners are getting divorced or were walked off their job and they don't necessarily put their sales in the public domain."
Foley's properties include units in Bradbury, southwest Sydney, and Kingswood, near Penrith. Both were bought for about $200,000 and are now worth more than $300,000 each.
He also purchased eight properties in Brisbane — a mix of townhouses, duplexes and houses mostly on the southern fringe of the city — along with a unit on the Gold Coast.
Three properties in Victoria include two houses in Werribee, west of Melbourne, and another in the city's southeast.
His most valuable property is his current residence in a Harbourside pocket of Sydney's inner west, which he moved into after vacating his Bondi home in 2007, renting it out again.
"I think it's important for any serious investor to have properties in our three biggest cities, especially Sydney and Melbourne, so that you can benefit from multiple growth cycles.
"The growth cycles aren't over. If I was an investor starting today I wouldn't do too much different. You need to be borderless and willing to look in a different city.
"There are still opportunities in Sydney and Melbourne to get cheap units in blue chip suburbs if you can find a vendor who really needs to sell."
His next step will be to eventually sell some of his poorer performing properties to pay down his remaining debt. He has also started his own buyer's agency to help others get into property investing.
"I don't think I'll buy any more properties — 18 is enough," he said.