The 32-year-old real estate investor revealed how he turned modest savings of $40,000 earned working retail as a teenager into a $2 million retirement fund.
Eddie Dilleen started buying property 14 years ago while working at McDonald's and has since built a real estate empire of more than 100 properties worth nearly $65 million.
Most of these properties were bought with capital that had ballooned in value from previous purchases, a technique known in the banking industry as leverage.
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He also bought most of his homes in areas where rents were high compared to the cost of the mortgage.
This meant he spent very little of his own money on properties and could continue to get loan approvals for new purchases.
Ms Direen, who grew up in the residential broking business in Sydney's west and now works as a home buying agent, revealed she made her fortune by exploiting a bizarre arrangement in the superannuation system.
![Real estate billionaire Eddie Dilleen](data:image/svg+xml,%3Csvg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 1280 720"%3E%3C/svg%3E)
Property investor Eddie Dilleen made his fortune using super. Photo: Sam Lattin
This has allowed him to increase his super balance to $2 million.
He said he was inspired to take action several years ago when he realized he had only $40,000 left in his Superfund account.
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“The way I see it, property, if you buy in the right area, will appreciate in value a lot faster than any pension fund would. There's no point leaving your money there,” he said.
He decided the solution was to set up a self-managed super fund, or SMSF, which he could use as another vehicle to facilitate new investments, setting up a trust into which he could buy.
“It cost about $3,500 to set it up and that came from my super and was all done by my accountant,” Dilleen said.
Dilene is 32 years old and has $2 million in savings.
“You won't have to pay capital gains on your SMSF property once you're retired, so it's also a good way to reduce the tax you pay.”
He said the process of increasing his super balance from $40,000 to $2 million was fairly easy at first.
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In 2018, he used most of his start-up savings in super to cover the down payment and stamp duty on a property in Woodridge, in Brisbane's Logan suburb, which cost $153,000.
The original Woodridge property was later sold for $260,000, with the profits used towards the new purchase.
This property in Woodridge was the first property Eddie Dilleen bought with his SMSF.
This included a property in the Brisbane suburb of Beenleigh that was listed for $135,000 – but then sold for $395,000 as house prices across the area surged.
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This process of capitalising on the rapid capital appreciation of his properties was repeated when purchasing subsequent properties through his SMSF.
His Beenleigh property was purchased for $135,000 and sold for $395,000.
His other great investment was a property he bought for $150,000 and sold for $275,000.
“At the time of the sale, we only had $80,000 left on the mortgage, so we cashed out $180,000 and used it to buy three more properties.
“Essentially what I do is deleverage by taking real estate that has multiplied in value and then spreading that cash out into new properties to split my liquidity and grow my balance.
“Right now I have seven properties in my super that if I sold them all would be worth over $2 million.”
Another of his SMSF properties is this house in Mount Warren Park, Queensland.
Dilleen acknowledged that the strategy was very risky, but added that he thought it was better than the alternatives.
“If I had stayed the course in super, I would have only had $100,000 left there. This strategy helped me turn that $100,000 into $2 million.”
“More real estate investors should be interested in this. What I did is 20 times better.”
“Obviously, this isn't for everyone. The first few times I made purchases, I was really scared. But after two or three purchases, I started to feel more confident. And I realised I'd be stupid not to do this more.”
“I know this all sounds arrogant, but it helps that I have a great eye for finding undervalued real estate, and that’s what makes this whole approach work.”
Many of his recent purchases are in Perth, where prices are soaring.
He added that he has benefited from the incredible rise in property prices since the COVID-19 pandemic hit in 2020 and feels that taking a bold approach has paid off.
“The average investor cites the ongoing accounting fees, which are around $2,500 a year, as a downside to an SMSF. Most investors avoid this to save money, but I'm in this to make money,” he said.
“There are limitations to what you can do. You can't buy a property to live in. You have to rent it out to regular tenants, not friends, and you have to rent it out at market price.”
“Otherwise, if they can repay the loan, they will lend it to me. To me, that's full proof. I've figured out how to mitigate the risk, so nothing goes wrong.”
He also does a lot of bulk buying.
One mortgage broker approached for this story advised investors wanting to pursue a similar strategy to approach SMSFs with caution.
“Buying property in a super market can be a really smart way to make money if you're an experienced buyer and know what to do, but it can also be a bit foolish in some circumstances,” the broker said.
“Some people have their heads up and know which markets are the best to buy right now, but most people don't, so this is not something a beginner should do.”
Dilleen added that he sees no problem with investors snapping up multiple properties, even if many first-time home buyers are unable to get on the property buying ladder.
“There's a way to look at it positively and a way to look at it negatively,” he said.
“I grew up poor and penniless. Some people think I'm taking away opportunities from others, but at the end of the day, investors are providing rental housing. The government needs this.”
“I've known since I was a child that there isn't enough social housing. We've waited 10 years for social housing. If there are no investors, where will those who can't get bank loans live?”
“An economy needs investors… I was nay at first too. I thought it was all this bullshit about the rich getting richer and the poor getting poorer. But I've learned not to hate the players or the game. Learn the game. Learn the rules. Figure out how to play and win.”
