Perseverance is key in scaling your real estate business no matter where you are in the world. For Monick Halm’s guest, Daniella Dhillon, learning from experience and from the right people can get you to where you want to be. Daniella, a real estate investor from the Land Down Under, has figured out how to crush it in Australian and US real estate markets. She tells us exactly how she was able to conquer both world’s real estate market. Working with her husband Kevin, they established Dhillon Partners to enable other like-minded investors to join in their investment opportunities, as they look to continually grow and expand their property portfolio in the US. She shares some the challenges she had in syndication and property development. Be inspired with this Australian real estate investor’s story and start building your own empire now!
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Interview With Australian Real Estate Investor Daniella Dhillon
This is the show where we share stories of super inspiring women in real estate. I call them the Real Estate Investor Goddesses. They are women who are doing incredible things in real estate investment. Our guest is certainly no exception to that. She is a real estate investor originally from Australia, who figured out how to crush it in both Australian and US real estate markets. She began investing with her husband, Kevin, in 2006. At that point, she was working as an IT professional and Kevin was a property manager. They began acquiring single-family homes, duplexes and triplexes in Australia. One of the things that’s cool is they were super young when they started. They did well there and they relocated to the US in 2011 to extend their property portfolio.
Our guest, Daniella is passionate about wealth creation through real estate. This enabled her and her husband to quit their jobs while they were still in their twenties. They’ve been focusing on real estate full-time ever since. They self-managed three multifamily communities in Southeast Florida. They own up over 325 units. They still have places in Australia that they are managing. They established Dhillon Partners to enable other like-minded investors to join investment opportunities as they look to continually grow and expand their property portfolio in the US. They’ve done a bunch of different real estate strategies, including owner financing, development, value add projects and syndication. They live in Houston with their son, John, and a baby. They enjoy spending time with their family, both here in the US and Australia. I’m excited to have Daniella with us. Welcome, Daniella.
Thanks, Monick. Thanks for the awesome introduction.
I’m going to add one other thing about Daniella who’s from Australia. She and my husband, who’s also an Aussie, are part of this group of Australian real estate investors. They call themselves the Aussie Real Estate Mafia, although they only do good. They’re a group of Australians who have discovered what a great market the US is in and are all working here. I’m excited to have you here.
We use the power of good.
I always like to start at the beginning because I’d like to know you. You started back in 2006, but how did you get started? What made you start in real estate?
To be honest, it started in an interesting way. Firstly, my business partner is Kevin Dhillon, my husband. Kevin had already been educating himself about real estate. He had the knowledge and this was back in early 2000. He’s reading books like Robert Kiyosaki’s Rich Dad Poor Dad and that sort of stuff. The point of taking action like doing something was motivated by my father, believe it or not. At the time, Kevin and I were dating for a couple of years. We wanted to take our relationship to the next level talking about marriage. Kevin went ahead and approached my dad for his blessing, at which my dad said no. It was shocking because we weren’t expecting that at all.
The reason why he said no was that Kevin didn’t have a job at the time. He was still a college student. We didn’t have a house, so where are we going to live? The third thing my dad said was, “You’re young. Maybe you should get some few hard knocks in life.” That’s my dad. Within about 6 to 8 months, these are prerequisites, so Kevin and I knocked each down. Kevin graduated from university. We went ahead and bought a single-family house together, which was far from the city because it was all that we could afford. At the time, I was already started working. I’ve probably been working for about 1.5 years, so I had some savings. It was enough for a small deposit. We bought a three-bedroom house in Melbourne, Australia, where we’re from. There is a good ending to the story. Kevin did ask my dad again and he said, “Yes. Go ahead. You have my blessing.”
Subsequently, it forced us to get into real estate. For the first five years, because it was so far away, it doesn’t make sense to live that far from the city. We opted to stay with in-laws and we pushed all our fair savings into real estate investment. That was a lesson for us. We started young-ish and we’ve never owned our own principal place of residence even to this day. We use the fruits of the cashflow from our investment to support our lifestyle. We would rather put that into more investments than buy our own house, which is a Kiyosaki thing to do. Treating your house is a responsibility and a luxury.
I do want to highlight that because a lot of people when they go, “I want to invest in real estate. I want to buy a house to live in,” and not understanding that the house you live in takes money out of your pocket. When we’re talking about real estate investing, we’re talking about places that put money into your pocket.
Everyone knows real estate because we all live somewhere. You get so emotional when it’s your own place and you’re looking at the colors, the flowers or the walls and stuff. You’re not looking at it as a purely financial decision. If you separate it, it makes it a lot harder.Real estate is about you and your network and you as your own biggest asset. Click To Tweet
You’re in Australia, you’re living with your in-laws, but you’re starting to acquire these single-families, duplexes and triplexes that you’re renting out. What made you move to the US?
It all started with a family vacation in Orlando, Florida. Kevin has quite a large family that’s based all over the world. We decided to host the family reunion in Orlando, Florida. It was my aunt from DC that hosted it. At the time, this was back in 2010, so we came here for a week of Mickey Mouse, crazy ride and stuff. Since Kevin and I were doing this real estate stuff in Australia, out of curiosity, we were like, “We’ll check out the real estate here.” It was something that my father-in-law had encouraged Kevin in particular.
At the time, we’re like, “This is crazy. It’s a completely different country.” We wouldn’t know much about real estate here, but we heard some news. We heard the GFC had rolled through and things are going for dirt cheap. We thought, “Let’s investigate it.” Sure enough, there were many deals, particularly in Florida. We settled in Miami because Kevin has an uncle who’s based in Boca Raton, who’s a realtor as well. At the time, we were young. We had a bit of equity behind us. We thought that if we’re going to do something as crazy as relocate to pick up and go and live in a different country, it is the time to do it because we were young. If it’s a mistake, we can always go back. We made the leap.
In 2011, we were still in the thick of the recession and the prices were ridiculously cheap. In Australia, not so much from what I know. What was the difference in pricing between Australian real estate and US real estate at that point?
I know that the median house price in Melbourne, which is the city we’re from, is about $850,000 for a three-bedroom, one-bathroom, single-family house. In Sydney, which is another large city in Australia, it’s $1.1 million for an average house, not the best of the best.
That’s for a standard starter house.
We find it hard to get in. The government does give grants out, but if you can see affordability as an issue, more people are opting to either rent, get parental support or maybe even house share. Prices are cheaper here in the US. In particular, what attracted us to real estate here in the US is the multifamily asset class. That’s something that we don’t see much often in Australia. When you say multifamily in Australia, you’re talking about maybe a duplex or two units on one title. If you talk about larger-scale multifamily, I would describe it as more a condo conversion. It started subdivided already. Each unit has its own structure, so it’s not like you can buy the whole community. You can maybe own one unit amongst the larger community.
My husband has some properties like that. They’re condos in a building. You started investing in multifamilies. What are your investments?
We have three communities in Southeast Florida, based in Palm Beach, Broward and Miami-Dade County. We’ve also invested here in Texas. We also closed another deal in Memphis, Tennessee. It’s scattered.
You still have your properties in Australia. Are you still self-managing your Florida properties? How are you doing the management for all of these properties all over the world?
In Southeast Florida, we have our own staff. We have our own property management company. Our staff worked exclusively for us. We have a property manager. We have a maintenance team there. It was a natural progression. We started while we were based there, so we were driving in the office and a lot more hands-on approach to management. When we decided to relocate to Houston, Texas, we continued that relationship. I have online meetings with my staff and everything’s working well. That’s how we self-manage from a distance.
How about your Memphis and Texas properties? Are you self-managing everything or do you have outside property managers?
For our other deals, we outsource it to a third party property management company, the local ones.
Do you have any preference for what’s better?
We found that we were getting bogged down with the day-to-day operations of being in property management. Our focus is much on growing our business and portfolio. Third-party management allows us to do that. Certainly, at this stage in our business, that’s something that we want to aspire to. That’s the decision of why we pivoted away from self-managing and into third party management. We’re also in a new market. We might not have the experience and expertise as these property management firms that have been there locally, know what the tenant wants, and these intricacies of landlording in those particular communities.
What has been your biggest challenge so far?
In terms of real estate, there are two sides of the coin, the deal flow and raising capital. From what we’ve experienced, deal flow is more challenging than raising capital for us, which surprised me because I wouldn’t be the other way around. If you had a good deal, strong numbers and strong fundamentals, we found that the deal sells itself. The biggest challenge would be looking through the deal. About the abundance mindset, there are plenty of deals out there for everyone. It’s a matter of figuring out which one is best suited for us and our investors.
I have the same issue. Surprisingly, when I started syndicating, which for those of you who are reading and are not sure, it’s when you bring a group of investors together to purchase a property. I remember when I first started in syndication, I thought, “The hard part will be to find people who want to put in money.” It’s easy to find a deal but it’s hard to find the money and it’s been the opposite. Daniella, you’re right. When there’s a good deal, the money is there. People are hungry to put money in. If you don’t have the deal, that’s the problem. What have been your biggest mistakes so far and what did you learn from it?
I would say our mistake was spending CapEx dollars out of cashflow. After the syndication project we did, we only raised enough to purchase the property. What we did was out of the cashflow of the property, we then reinvested the money into what we call add value project. It’s upgrading the exterior or the interior of the property. In the end, we managed to turn the property around in terms of completion and upgrading everything, but it took us a lot longer as you can imagine unto the cashflow.
For us and our investors, with that time aspect, we had to wait a lot longer. If we had raised the CapEx dollars from the start, we could have completed the project a lot quicker, raised the rents a lot sooner and increased our income. There were many things that we could have done better if we had that CapEx from the start. Since then, we’ve learned from that. Now, we budget for the raise, the down payment, the CapEx, working capital and closing costs. We weren’t considering the time aspect. Overall, we didn’t lose money, but it pushed out the timeline. It took longer than it needed to.
For those who don’t get that lingo, if you’re new to CapEx or Capital Expenditures, that is the money that you would set aside if you have maybe some deferred maintenance, you have to fix the roof, fix some foundation or get new swamp coolers, which is something I need to do for one of our buildings. Maybe to repaint the outside, upgrade the units or any rehabilitation of your building, you’re going to need CapEx money for. It is a good practice to factor that into your budget and make sure you have the money to start at the beginning. That will help. That’s a good lesson learned. What are you most proud of?
I’ll give you a bit of context, Monick. We had a property that we purchased unfortunately with some drug dealers and prostitutes living at the time, like the B class. I got annoyed at how blatant these people were about what they were doing. There’s no shame. If you call the sheriff’s office, they’ll come by the property an hour later or if not a lot longer and everyone’s gone and everything’s happening too late. I got so fed up in the middle of a drug deal in the car park of this apartment complex, I’m thinking, “If you guys are going to be blatant about it, I’m going to be blatant about it as well.” Two can play the same game. I walked straight up to the car, took photos of their license plates and the faces of the drivers on my iPhone. It’s huge courage. I was like, “I’m going to knock on the door of this guy that I knew was a pimp.” I was like, “We’re here for inspection. I need to take some photos of your apartment.” I walked straight in and started taking photos of everyone in that apartment. There were people in the bedrooms at the time.
For those who don’t know, Daniella is not a big woman. She’s not a huge lady. She’s a tiny Asian woman.
It turned around so dramatically since then. It’s amazing what good management can do. Part of that, I love the ability to add value to our tenants, employees, investors and our community. In turning around a community like that, it is good work that we do. I genuinely believe this is the best that I can do on this planet. It’s changing up these communities and it’s the feedback we get from our neighbors as well. It’s like, “That’s great. Those drug dealers and prostitutes are gone.”Deal flow is more challenging than raising capital. Click To Tweet
That feels good. In one of our buildings, we had similar issues. We only had prostitutes, but we don’t have drug dealers. We cleaned it up. It’s nice when you’re walking the property and a tenant stops you and says, “I’m happy here now. Finally, the kids can come out to play. I’m not afraid to go outside. I don’t need to hide in my apartment anymore.” You guys have done a lot early. You were young. To what do you attribute your success? You guys have had a lot of success.
We have to attribute our success to a lot of multiple factors. The first one is we started young. We bought our first investment at the age of 23. I’m a Christian and a believer, and I do think the Lord has blessed us. There’s something supernatural about the work that we do and a lot of things that are beyond my control. I know that I’m conditioned well. I don’t control which family I’m born into, which background or country I came from, and the opportunity that then affords. Another factor would be my business partner, Kevin Dhillon. My husband and I get along well. We’re able to sit down and set goals. With success, it’s how you get from point A to point B unless you plan it out. You might not reach that point at the time that you want, but at least you’ve got a plan. It’s not like you were meandering through life. Another factor that worked in our favor was entering particularly the US real estate market after the GFC. We got in at a good time. No one controls the market. We took that leap of faith and relocated over to this different country. We did it at a good time because we were picking up a good deal at the time. All in all, our investment philosophy has been much of slow and steady wins the race, so we’ve been fiscally conservative.
This is a bit of a follow-up question to this. Some of it was when you talked about your success. You talked about your blessings, having some divine help, a great business/life partner and good timing. What advice would you give to a woman who’s starting out? What would you tell her?
There’s no reason to start small. Real estate is all about people. It is about you and your network. You are your own biggest asset. It’s hard when you’re starting out because you might not have that confidence and there’s no belief. Believe in yourself. You can do it. I’m an ordinary person. There are many women out there that are like you who have been kicking lots of goals because they went out and did it. The best time to enter real estate is now. Don’t delay. You learn as you go, so do it.
One factor I would recommend is get good mentors. Listen to the right advice. Investments are accelerated by good counselors and teachers. We pay a lot of money for real estate and financial education. Get with people who are real as well, not from these speakers that talk about things that haven’t done anything in personal lives. People that walked the road before you in front of you. The last comment I would make is I’ve heard this quote a lot in these conferences we go to, “Insanity is doing the same thing and expecting different results.” If you want to end up like everyone else, keep doing what everyone else does. If you want something different, do something different.
That’s great advice. It’s good, Daniella. We have this enough time to go into your trinity, which is your brag, gratitude and your desire. Before we do that, if people want to find out more about what you do and want to connect with you, what’s the best way to do that?
Thank you for being generous. Let’s hear your trinity. What’s one thing that you’re celebrating?
I’ve pre-prepared these answers so everyone knows. One thing I’m celebrating is life. I’m pregnant, so I’m always thinking about new life. I can feel the baby kicking inside of me. It’s something that I am celebrating and not just for him, but also for me. Good health with family, time with family, friends and celebrating this privilege of experiencing life and being blessed.
What’s one thing you’re grateful for?
I’m grateful for the opportunity to work and the opportunity to be specifically here in the US. You have an amazing country. We celebrated the Fourth of July and it’s these values of freedom and liberty. I understand the privilege of being here. I’m grateful because I know a lot of people would like to be here in the US and they can’t for whatever reason. I’m grateful that I am here.
What is your desire?
I desire to be the best wife, best mother, best daughter and the best business partner that I can be. It’s reflecting on, “How I can be better? How can I grow in all these different roles and aspects?” That’s my desire.
So shall your desires be or better than you can imagine.
Thank you, Monick.
You’re welcome. Thank you for being here. This is great. For those of you reading, you can connect with Daniella at DhillonPartners.com. You can connect with me at RealEstateInvestorGoddesses.com. I’m having a book launch for my book, The Real Estate Investor Goddess Handbook: Everything You Need to Know to Invest in Real Estate Like a Goddess. Get ready to get your book and all the freebies that come with it. Thank you, Daniella and everybody. Meet us next time for another inspiring interview. Bye.
- Kevin Dhillon – LinkedIn
- Dhillon Partners
- Rich Dad Poor Dad
- LinkedIn – Daniella Dhillon
- Facebook – Daniella Dhillon
- The Real Estate Investor Goddess Handbook: Everything You Need to Know to Invest in Real Estate Like a Goddess
About Daniella Dhillon
Daniella co-founded Dhillon Partners with her husband and business partner, Kevin Dhillon. Prior to investments, she worked as an IT professional. She is passionate about financial education and wealth creation and has an abundance mindset. She enjoys spending quality time with Kevin and their two sons also.