Scott O’Neill shares his investing secrets: Young Rich Lister shares how he went from humble engineer to owner of an $81 million real estate empire in just 14 years

Scott O’Neill flipped burgers at McDonald’s, washed cars for dealerships, served drinks as a bartender and worked as an apprentice engineer before deciding to invest in real estate.

In 2009, the then 23-year-old university student bought his first home, a four-bedroom fixer-upper in Sydney’s Sutherland Shire, using a deposit he had painstakingly squirreled away from years of low-level jobs.

Fast forward to 2023 and Scott, along with his wife Mina, has earned a spot on the country’s Young Rich List with an $81 million empire that includes more than 20 properties, a buyer agency called Rethink Investing, and a vacation home in Greece where the young family spends half their year.

Mr O’Neill said that during the early stages of his property investment journey, generating equity was one of the first things he did to grow his initial $60,000 investment.

Equity is the difference between how much a borrower owes on a property and what it is worth, or, in other words, how much profit he would make if it were sold.

“I did this by renovating homes, often with my own hands,” Mr O’Neill told Daily Mail Australia.

Mortgage holders can use the equity in their home as collateral with the banks to borrow more, which can be used to finance renovations or expand to another investment property.

Mr O’Neill said that although ‘saving that initial deposit took a lot of time and effort’, once he was in the market he was able to see consistent growth by doing his research and choosing the right properties to to buy.

‘My first job was at McDonald’s at 14, then I washed cars at dealerships, was a surveyor and then worked in the hospitality industry for four years, maintaining poker machines, doing bar work and event management.

“I also worked as an engineer for about nine months.”

He said his wealth ballooned relatively quickly in his first decade of real estate investing by taking advantage of the bullish real estate market, which shows little sign of slowing down in 2024 despite a series of rate hikes.

“We have invested as much as we can over that 10-year period in high-growth properties with positive impacts and great cash flow… that has been instrumental in sustaining our success.”

Scott’s advice for people looking to invest in real estate

Mr O’Neill said that while housing had opened up access to investing, there were two “pivotal moments” that “changed the game”.

“We have put together titled unit blocks, which is a process of acquiring assets on one title and then subdividing the property into multiple titles.”

“This effectively increases square footage rates from a valuation and sales perspective.”

But the biggest, he said, was the addition of commercial real estate to their portfolio.

‘The positive side (expected price increase) and cash flow from this asset class far exceeded the returns we achieved in the housing sector.

“For example, we could make six-figure profits by signing a new lease.”

The couple, both in their mid-30s, went from an all-residential portfolio in 2017 to about 50 percent commercial real estate, and then to about 95 percent this year.

The types of projects they focus on include smaller neighborhood developments such as shopping strips, dental and medical clinics and childcare centers in smaller capital cities such as Adelaide, Brisbane, Perth and regional cities such as Townsville.

What 2024 looks like for the industry

Mr O’Neill said recent interest rate rises have had a “brutal impact” on the housing market, leading to falling returns and mortgage stress for many homeowners.

Official figures show around 1.5 million Australians will be under mortgage stress by 2024, defined as spending a third of disposable income on loan repayments.

Mr O’Neill said that for investors in the current climate ‘cash flow is king’ and both experienced and novice investors should consider often overlooked commercial real estate.

“There is a shortage of housing that is pushing up prices, but there is a similar shortage in certain categories of commercial assets.

‘In Australia, for example, the vacancy rate for industrial properties stands at 0.8 percent, which is the tightest among developed countries.

‘This shortage drives up rental prices, which is a favorable development for investors’

Investors became book publishers

In addition to founding and serving as director of the Rethink Group of Companies, Mr. O’Neill has also written a best-selling book on commercial real estate investing.

‘The second edition of the book was written in early 2023 because Mina and I were busy with our daily work at Rethink, so we had to do page by page in the evening.

“It was a slow process and a challenge to differentiate between what was in the book and what we were emailing our clients throughout the day. It all blurred into one.”

What’s a point of difference for many financial gurus is that the concepts in Mr. O’Neill’s book are backed by actual experience with Rethink since 2015 for more than 3,500 clients with more than $3 billion in commercial real estate.

“Our goal in releasing the second edition of this book was to include additional statistics and share our insights into the commercial market, reflecting our increased maturity as investors since the first edition.

“Notably, we have helped our clients acquire a significant additional amount, totaling several billion dollars in commercial real estate since the initial release. That purchasing volume brings with it great lessons.’

Mr O’Neill describes the book as a ‘how-to guide’ with a focus on those looking to make the transition from residential living.

“The book unravels commercial real estate and takes the reader step-by-step through real estate transactions, including the deals my wife and I purchased for our personal portfolio.”

The second addition also includes new chapters on the shift to a remote work culture and investment syndicates.