Custodian Millionaire Case Study: David & Dada Bailey


  • Occupations:
    • David: Consultant Civil Engineer
    • Dada: Retired
  • Age: 61 & 57
  • Family: Three adult sons between them
  • Began investing in residential property (year): 2002
  • Property portfolio value (including principal place of residence): Approx $5.08 million
  • Number of houses you own (including principal place of residence): 11

David and Dada Bailey have been together for eight years and between them they have acquired ten investment properties. They have recently restructured their finances and plan to move to their ‘dream home’ to enjoy their retirement.


For about ten years, David had been looking for a secure way to create wealth and manage his tax in order to provide a secure retirement. He had a good income, worked long hours and was paying off his mortgage but he realised it was not enough – he needed something more to create wealth, and he hated paying so much tax! He spoke to numerous financial advisors, accountant, and tax agents before he attended one of John Fitzgerald’s seminars in 2001. He immediately saw a straight forward way of passively building wealth through property investment.

When David and Dada met, David had two investment properties and the investment structure in place, and Dada had her own home. They both wanted a secure retirement and a lifestyle that would allow them to spend quality time together so they continued with what David had started by acquiring another eight properties.

Like so many people, the only investments the Baileys had before investing in property were their family homes and their superannuation.

The Bailey’s first investment property was financed through the equity in the family home. Since then, as the equity has grown they have refinanced the house and used the equity in their investment properties to duplicate.

Three years after the Bailey’s bought their first two investment properties, they were able to use the equity that had built up to purchase their third property. They kept going from there, buying another property whenever they could.

David and Dada have enjoyed their wealth building journey and consider their portfolio as a business. “It’s been really exciting to build our property portfolio and watch our wealth grow as we meet new friends along the way,” explains Dada. The security it provides has allowed them to ride out some very challenging times such as redundancy, setting up David’s own business and ill health, with a positive outlook.

David enjoys the flexibility of working for himself. He can spend time looking after the properties and spend quality time with Dada.

The Baileys consider the best decision they made was to get into property investment and to follow John’s advice to duplicate whenever they could.

They have pushed themselves hard and purchased whenever possible as they learnt that delaying a purchase impacts on the opportunity to duplicate later on.

While David and Dada have a significant property portfolio, they live what Dada describes as a great life in a modest three-bedroom home in outer Melbourne and drive inexpensive cars.

She says, “We’re patient people. We save and we’re responsible with our money.” This mindset has allowed the Baileys to grow their portfolio while still enjoying annual holidays in Australia and overseas.

Investing in property works for the Baileys. David says, “We weren’t comfortable with shares. We didn’t know enough about them to do a good job. Most banks and advisors push shares and super because they get something out of it but you don’t have control over your investment.” “Property is not just bricks and mortar. It’s recognised as a solidly performing investment option. It gives us a continuous growth with proven increases in capital value over many years and good rental return. The banks allow us to regularly review the property value and access the increase in equity to buy additional properties. It’s not a vehicle for instant wealth, but by following John’s duplication philosophy, we’ve found that the compound growth benefits over the longer term are unbelievable,” David enthuses.


The Bailey’s financial goals were to build an investment portfolio of six properties to provide them with a strong financial retirement and to show their children what can be achieved through strong commitment.

They reached their initial goal of six properties after four and a half years and thought they had completed their journey – until John Fitzgerald convinced them to push harder.

Dada laughs, “When we thought we had completed our journey, we emailed John to find out what we needed to do to start preparing for our retirement, which we planned for April 2010. John had other ideas.

He told us owning six houses was a great achievement but suggested that we should push harder and purchase some additional properties.” John challenged them to use the equity in their six investment properties to buy another four houses in a block with the idea that in time, with decreasing block sizes, the Baileys could redevelop the site and put seven to eight dwellings on it. It was an audacious goal. David says, “How often do you borrow $1.2 million in one go for an investment?” Fortunately, the timing was right and with the low interest rates, the Baileys were able to invest without selling any of their existing properties.

David and Dada have recently subdivided their home and restructured their finances so that they can access some of the equity for their ‘dream home’. Their plan is to hang onto the properties as long as they can and gradually sell the investment properties to fund their retirement. They plan to keep some properties as an inheritance for each of their three children. In the next twelve months they plan to move to their ‘dream home’ to enjoy their retirement, buy a new car and book some of the overseas holidays that are on their ‘bucket list’.


Cash flow is critical to the Bailey’s investment business and David is a self-confessed ‘spreadsheet fanatic’.

They have spreadsheets for their personal finances, business, and properties which David regularly reviews. David proactively manages their portfolio by doing a bank reconciliation every day to make sure the rents are in and to keep an eye on their expenditure. He says, “Rents are the lifeblood of this business. You have to monitor them closely.” The Baileys believe it is essential to regularly review rents and carefully manage the way real estate agents handle rent arrears and maintenance issues. David explains, “I’m in close contact with the real estate agents.

Fortunately we haven’t had too many problems with tenants but sometimes they do fall behind in the rent due to job loss or ill health. By keeping a close eye on things, we can help resolve issues quickly.” Managing interest payments and interest rates is also critical to thesuccess of their business. “You need to be proactive in reviewing the market to keep interest costs down.

Insurance is essential to minimise unforeseen costs, but always allow a little extra as there will always be unexpected costs” explains David.

When it comes to investment advice, the Baileys say: set your goals high, stay positive, regularly review and reward your achievements, always seek advice from professionals, and do not deviate from your successful strategies.

David knows firsthand what that can be like. When he first told his family and friends he intended to invest in property, he had a mixed response. Some thought it wasn’t a good idea to invest so heavily in property even though they were not qualified to offer advice. In fact, when David started, he signed up for two Custodian investment properties at Warner in Queensland.

His friends expressed concerns about John’s wealth building principles and convinced him to be more conservative, buying one Custodian property and one independently.

He doesn’t regret buying the independent one but he does regret not buying the second Custodian property as it is now worth more than twice the purchase price.

David also makes the point, “You need to be prepared to take on debt and understand the difference between good and bad debt – and know that good debt is working for you.” Furthermore, it is important to understand that investing in property is not instant wealth. In the Bailey’s experience, they had a good income but they needed ten years to go through a full property cycle to truly benefit from the gains.


David and Dada believe it is essential to keep seeking advice and learning from successful people. They regularly attend John’s presentations and Custodian seminars, finding that they learn something new every time. They keep in touch with John via Email, meet with their bankers, financiers, property agents and accountant and carefully consider how they can use the advice to improve their position.

It is also important to stay positive and healthy and keep sight of the big picture. They regularly revisit their goals and by identifying and rewarding themselves for their successes, they keep themselves motivated.

Building a secure future has allowed the Baileys to have a comfortable living, enjoy their holidays, and spend valuable time with family and friends.

They are able to contribute to the quality of life of their children and donate regularly to people in need.

The Baileys consider the best decision they made was to get into property investment and to follow John’s advice to duplicate whenever possible as they learnt that delaying a purchase impacts on the opportunity to duplicate later on.

Custodian Reviews – Read more success stories from average individuals who rose above the average!

*extract from Custodian Millionaire Case Studies magazine printed in 2012.

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