Case Study: Comparing property results against Bluebirders

Co-founder Mark McEwen had a successful residential property portfolio and we wondered how it would compare to our approach. What results would have been achieved if Mark had invested that money in the Bluebirders system?

If Mark had only one investment property, the sample size would be too small to warrant a comparison. Thankfully Mark has bought and sold eight residential properties. According to the Australian Taxation Office only 0.16% (16 people in ten thousand) of the Australian population has six or more properties[1]. Mark’s eight properties allow the comparison to reveal some interesting points.

Let’s walk it through with some diagrams, starting with Mark’s portfolio.

Diagram 1 - Number of years held

Diagram 1 shows the time held for each of the properties from the first that was held for 9 years 8 months through to the eighth, which was held for just 2 years 1 month.

Diagram 2 - Return on Investment (ROI)

Diagram 2 shows the ROI that Mark achieved for each of his properties. Mark produced great results in his portfolio, except for the first and last properties.  Notice that property B produced a 225% ROI, which means that if he put $100,000 in, he would have received his capital plus $225,000 (a total of $325,000 and a wonderful result). Properties C through to F either doubled his money or came close to doing so.  By the way, the results of his portfolio helped Mark retire young.

We began our comparison thinking Bluebirders would need to perform well to beat Mark’s portfolio and with the results he produced, Bluebirders has a strong challenger.

Using Mark’s data, we modelled two scenarios. Firstly, how many years it would take to achieve the same results with the Bluebirders system[2]; and secondly, what ROI would be achieved in the Bluebirders system using the same timeframe as each of Mark’s properties.

How many years are needed to achieve the same result?

If you can shorten the time needed to achieve your goal, knowing how long different strategies might take is a useful piece of knowledge. The information helps you determine which investment strategies are worth exploring and understanding in more depth.

Diagram 3 shows the Bluebirders system performs well, even against a winning residential property portfolio. An equivalent result for Property A would be achieved 8 and a half years earlier and due to the loss made on the last property, a better result would have been achieved by keeping his money in the bank.  Properties B to F are especially interesting. The great result Mark delivered in property B (225%) would be delivered with 9 months to spare through the Bluebirders system. Properties C, D and E would have been achieved in much less time – nearly 2, 4 and 3 less years respectively.  That is a significant time benefit when time is an important aspect of your investing strategy. 

Property F delivered Mark 90% ROI in just 3 years 5 months. The Bluebirders system could only match this property’s result, not beat it. Excellent job Mark.

Diagram 3 Number of years to achieve the same result

What ROI could be achieved in the same timeframe?

The time available to reach your goal may not be a key driver but having your money work more productively for you is valuable for all investors.

Diagram 4 shows the Bluebirders system delivered benefit above and beyond the great results Mark achieved with his property portfolio.  Property F shows its strength, while the Bluebirders system consistently overachieved the rest of the portfolio over the same investment durations.

Diagram 4 - ROI achieved in the same timeframe

In a nutshell

The Bluebirders system consistently delivered the same result in a shorter timeframe and delivered greater results over the same period.

What about you?

If you have a great property portfolio (residential or commercial) or even a great portfolio with a different investment type and want to compare it against the Bluebirders system, we’d love to run it through our model and give you a comparison report of your own. Simply contact us here at Bluebirders to arrange it.

[1] https://www.yourinvestmentpropertymag.com.au/news/how-many-propertys-do-investors-own-258529.aspx by Michael Yardney 12 Dec 2018

[2] The performance is NET of all fees and based on the median IRR across the ten-year history of the strategy. Investors should be aware that past performance is not indicative of future performance and the comparison is based on modelling. The results achieved by investors in the strategy was actually higher than in the modelling. The addition of the Bluebirders governance model reduced the median IRR while reducing risk and since its introduction we only invest our own funds with that governance in place. All amounts are in US dollars.