The story of how Veerle van den Berg (MD) at 28 is starting on her path to financial freedom through real estate.
25) If you cant buy one property, buy two with Veerle Van den Berg
Transcription done by: Arianne Elnar
Unknown Speaker: [00:00:00] Welcome to Financially Free Podcast with your host, Ney Torres. One of the reasons Ney could retire when he was 25 years old is because he was coached by the best. And now through this podcast so can you.[00:00:20] Ney Torres: [00:00:20] Welcome come to the show today. I’m talking to Veerle Van den Berg in an episode of we are going to title, If you can not buy one property, try buying two. Welcome to show, Veerle. Can you tell us a little bit about your path to financial freedom? [00:00:32] Veerle Van den Berg: [00:00:32] Thank you for having me. I’ll give you a little introduction. I am Veerle. I’m 28 years old and from the Netherlands. I studied medicine and I started working at the age of 26. I was making 60 hour work weeks and started making some money. Then I decided that, well, I wanted to invest that money into something that would make sense for me. And right around that time I met you and then I realized that real estate was really a way to go, especially because I didn’t have my own house yet. I was renting up till then. I told you, I’d seen a garage and this is very funny because I’ll put this one is the deal that I never got or a house that I never got. It’s a motivational deal for me. I saw a garage in the city center of (inaudible) and it had possibilities of making a permanent out of it. So it was very cheaply priced because it was currently a garage and I released it when redesigning it, renovating, it would be worth way more. And I told you to deal with it. I thought it’s really a good deal. And since then I was like, okay, so this is actually something that. I can do. Yeah. And from that period on, I started looking for houses that made sense for me to live in and I preferred to have a house where I can live myself, but also have someone renting it inside and have either a room or another apartment within the same property that I could rent out. [00:01:57] Ney Torres: [00:01:57] So what you found is that you bought your apartment and it’s divided into two spaces, two floors. [00:02:03] Veerle Van den Berg: [00:02:03] Yeah. It’s basically upper house, which is quite common in Europe that you enter the front door, you go up the stairs and then you have two floors and so both floors hold their own apartment. Has their own kitchen, bathroom living bedroom, balcony. Yep. [00:02:19] Ney Torres: [00:02:19] You made it work in such a way that are renting the Apartment number one, and that’s how you can afford the mortgage and you’re technically living free today. [00:02:26]Veerle Van den Berg: [00:02:26] I’m technically living free. [00:02:27]Ney Torres: [00:02:27] And if you wanted, you could rent the second apartment and just go and leave in South American country. Very well. [00:02:34] Veerle Van den Berg: [00:02:34] I could live wherever I wanted and live of the rent that I have. [00:02:37] Ney Torres: [00:02:37] Was that the path for you? [00:02:39] Veerle Van den Berg: [00:02:39] Could you rephrase that? [00:02:40] Ney Torres: [00:02:40] Sure. Sure. What was the difficulties you had to go through to get to the apartment? Beause you made it sound like it was easy and it was definitely like six to eight months over. [00:02:52] Veerle Van den Berg: [00:02:52] It was a very hard time because next to working 60 hour work week, sometimes 70 hour work weeks, a lot has happened in, in my life that year. I’m I lost a dear friendship. I got a boyfriend who was living on the other side of the world. I learned that my dad was diagnosed with ALS. Those were kind of things that were also very influential almost all my life right in that period of time. [00:03:19] Ney Torres: [00:03:19] So what happened then? [00:03:20] Veerle Van den Berg: [00:03:20] I decided that because all these things were happening, I didn’t have a lot of time processing it. I didn’t have a lot of spare time. I decided that working as a doctor was not going to work for me personally. I had to find another way of making money so that I can make up more free time by working less, but still having enough income. [00:03:43] Ney Torres: [00:03:43] And one of the things I learned with you is that being a doctor is super difficult. It’s super difficult because the way I see it is very competitive. It’s not very well paid, even though you guys have a very good salary, your taxes are super high. So say if you make 5,000 euros, you will actually be, can call them half. [00:04:01] Veerle Van den Berg: [00:04:01] Yeah. Half of it goes either to tax or social security. Yeah. [00:04:05] Ney Torres: [00:04:05] Rents are high here. You don’t get paid for a lot of extra hours. Which is probably 30% more than a normal person. [00:04:12] Veerle Van den Berg: [00:04:12] Yeah. What a lot of people don’t realize is that besides working the amount of 38 hours, which is in your contract, you’re actually making more like 50, 60 or 70 hours a week and sometimes you get those hours back in free time. But in my experience, a lot of the time it was the way it was and you were not going to get much of those hours back. As a doctor just starting out, you’re in a very dependent position because you’re still looking for a training to get in training to do something. So you’re, depending on those doctors as specialists. So you cannot really complain or say too much about it because, yeah. You still have a training on the line. [00:04:56] Ney Torres: [00:04:56] Okay. So they justify the extra hours that 30 hours extra per week not pay it. Not even though you already graduated as education, right? [00:05:05]Veerle Van den Berg: [00:05:05] Yeah. [00:05:05]Ney Torres: [00:05:05] Because what happens in medicine is that you are a doctor after eight years or I don’t know how many. [00:05:10] Veerle Van den Berg: [00:05:10] Eight years. [00:05:11] Ney Torres: [00:05:11] Eight years. But you don’t really make that much money until you get into the specialization probably, right? [00:05:17] Veerle Van den Berg: [00:05:17] Depending. Most are actually around five or six years here in the Netherlands. So here it’s super competitive. There are so many as how we call them basic doctors when you graduate you’re you have a basic degree. And so, because there’s so much competition, people have to do a lot of extracurricular things. You are not going to get there with one year of clinical experience. No, you have to have clinical experience. You have to have a PhD, a lot of extracurricular stuff before you even get into training and that’s not even a guarantee. You’re not even guaranteed to get into training. If you’ve done all of those things. [00:05:51] Ney Torres: [00:05:51] The way I see it, you get exploited for 12 years. If you think about it, you can probably be a plumber and make a better living in the first 20 years of your career. [00:06:01] Veerle Van den Berg: [00:06:01] Maybe that’s true, maybe that’s true. [00:06:05] Ney Torres: [00:06:05] But then you took this smart decision to start investing and you start investing when you don’t have money. Does this say that does the first one? First rule? What’s the first step? [00:06:16]Veerle Van den Berg: [00:06:16] So in real estate, you have to figure out, okay, I have this income, how much of a loan can I get from the bank? [00:06:23] Ney Torres: [00:06:23] First, you got to figure out how much you can afford, right? [00:06:25]Veerle Van den Berg: [00:06:25] Exactly. [00:06:26] Ney Torres: [00:06:26] So there’s two ways, you can get it yourself or you’ve had to raise money. It’s that easy. That other people money can be the seller or the people money can be somebody does not use their credit. Other’s people money can be different things. Bridge financing, Harmony Lending as they call it. What did you do ? [00:06:42] Veerle Van den Berg: [00:06:42] In my case, because I had a job as a doctor, I was able to get a loan at the bank. So I went to the bank and just to get an idea of how much a loan I could get from them. And then once I knew that amount, I started looking around for properties that fit my criteria that made sense in — [00:06:59] Ney Torres: [00:06:59] What was the criteria? [00:07:00] Veerle Van den Berg: [00:07:00] The criteria was preferably in a city, not too far out of the city center, but most of all, I wanted it to be where I could have my space and have an area that I could rent out. [00:07:12] Ney Torres: [00:07:12] Perfect. So that’s why we’re calling this episode. If you cannot afford one property, try buying two. [00:07:17] Veerle Van den Berg: [00:07:17] Try buying two. Yeah, that’s what I did. [00:07:19] Ney Torres: [00:07:19] Because you obviously call up for something twice as big as this, but you divided it in two, so you can rent one part. And you’re living rent free, basically. [00:07:29] Veerle Van den Berg: [00:07:29] Yeah. Yeah. I was very lucky because this property used to belong to the partner of a friend of mine and they were selling it because they bought a different house. After months of searching and not finding what I was looking for, or someone overbid me or other bumps in the road, I came across this house and I knew that they were going to sell it. And I was like, “Hey, wait a second. This is exactly what I’m searching.” We started talking and I said, I want to buy this house. What is the prize? And that was a little bit of a problem because the price they had in mind was higher than the mortgage I was initially able to get at the bank then I had to figure out where am I going to get that 20,000 prostituted money from because I didn’t have that much savings. I had to get it from somewhere. I asked friends, family, I couldn’t get any money there. Then I looked into bridge financing, which is a short term loan but the interest rate is quite high and I usually only do it in investment properties. As this was a house that I was going to live in myself too, that was not an option. In the end, I realized that I was almost going to make a promotion in terms of making a little bit more money at my job. I started talking to my boss and he said, “Hey, this is what I’m struggling with. I need this a little bit of extra.” And I did a calculation prior that if I got that raise a little bit earlier, that I was able to afford this house so that’s what I did. I asked my boss, can you give me a raise one, two months earlier so I can afford this property. And we made an agreement for me to pay it back in a different way, but that made me able to buy this property. Yep. [00:09:07] Ney Torres: [00:09:07] Congratulations. Very good. [00:09:09] Veerle Van den Berg: [00:09:09] Thank you. [00:09:10] Ney Torres: [00:09:10] Okay. And what’s the next step for you? [00:09:12] Veerle Van den Berg: [00:09:12] Next step for me is finding a new property which is going to be an investment property. And from there, go on. [00:09:19] Ney Torres: [00:09:19] That’s very good. What do you think is important to start working on this when you don’t have all the money in the world in bank and when you are actually just starting out with no credit, no money. Why? What happened in your life that made you think that? [00:09:33] Veerle Van den Berg: [00:09:33] Yeah, so what I mentioned previously is that I had a rough year in which I basically didn’t have time to spend with friends and family. I was only working and when I came home, I was quite tired and not in the mood to meet a lot of friends anymore. My social life really was getting a big hit in that. And then I decided I actually want to spend more time with friends and family especially that my dad is diagnosed with ALS and we didn’t know how much time he had left. So for me, it was very important to free up space, I mean time so that I could spend that time with friends and family, which is basically what life is all about to enjoy life. Not only work and get the money to live, but also enjoy life. [00:10:17] Ney Torres: [00:10:17] Then I remember you wonder bosses in the hospital. And you mentioned all these problems, you had more time and they initially said yes, but then what happened? [00:10:26] Veerle Van den Berg: [00:10:26] Yeah. So I wasn’t enjoying my job as much anymore because of all the problems I have in my private life or all the problems, challenges, let’s call it challenges. And so I wanted to free up a little bit more space and I asked, can I have one day a week off? Because this way I cannot function in the best way that I want to. Initially, I said, yes and then after two weeks they had apparently a meeting in their group and they decided to let me go. Even though I had all these things happening in my private life. [00:10:58] Ney Torres: [00:10:58] You got excellent reviews too. [00:10:59] Veerle Van den Berg: [00:10:59] Yeah. They gave me a lot of great feedback. They even said to colleagues, you can take an example of her. It came out of nowhere for me. Yeah. [00:11:08] Ney Torres: [00:11:08] And I can tell you worker. You will wake up at 6:30 and ride your bike in the dark in Netherlands for half an hour to get to the hospital and come back, I guess at 7:00 at night. [00:11:19] Veerle Van den Berg: [00:11:19] Yeah. [00:11:20] Ney Torres: [00:11:20] Yeah. So life is hard. [00:11:21] Veerle Van den Berg: [00:11:21] Life is hard. Yeah. Sometimes it just kicks you down. [00:11:24] Ney Torres: [00:11:24] Count your blessings but you have to take care of your own financials because nobody else is gonna do it. [00:11:28] Veerle Van den Berg: [00:11:28] Exactly. Nobody’s gonna do it for you and in that way, I’m so happy that I have this property, which is split into two because now I live cheaper than I used to want to have had a rental. And before I shared a home, so I was living with two other girls. And it was paying more rent than I’m now paying on my mortgage because I have someone else renting the upper apartment and that is paying more. [00:11:54] Ney Torres: [00:11:54] Especially because right now. The rates are so low. [00:11:56] Veerle Van den Berg: [00:11:56] Super low. [00:11:57] Ney Torres: [00:11:57] And decades to pay it. So for example, if I wanted to do this in Ecuador, you will in cash. [00:12:03] Veerle Van den Berg: [00:12:03] Exactly. [00:12:04] Ney Torres: [00:12:04] It doesn’t always cashflow by the way. You are living, we are living in very interesting times. We’re pretty much everything cashflows. So take advantage of that, right? [00:12:13] Veerle Van den Berg: [00:12:13] It’s amazing. Yeah. And for me, it’s perfect because at the moment I don’t have a job. So for me, having someone covering those expenditures, it helps so much in making my life more relaxed, not having to worry about my financials a little bit. [00:12:29] Ney Torres: [00:12:29] Now you have that peace of mind, you need to get your stuff together. Socializing and all that. Coronavirus happen. So yeah. [00:12:38] Veerle Van den Berg: [00:12:38] That happened. Yeah. So I had a lot of time at my new apartment, relaxing, working on some things that were put on hold for a long time. So that’s really relieving. [00:12:49] Ney Torres: [00:12:49] Yeah. Congratulations. I just want to take this end of the episode to explain a little bit more.And we have talked about this before. The reason you want an asset in your life is because financially you start existing. What happens with Coronavirus, for example, that the governments start printing money as they call it very, very fast but what people doesn’t realize it. Inflation, which is a political problems, not really an economic problem. It’s a political problem is transferring the wealth from the middle class to the government so they can redistribute it. And the way they do that is they just bring more dollars or euros and suddenly your euros in your pocket are not worth as much as they did before. When you have an asset, asstes float. Your prices go up, assets go up. So I’m gonna go faster than others but eventually in the long term that catches up. [00:13:37] Veerle Van den Berg: [00:13:37] Here in the Netherlands, you’re paying around 40% in tax and then also some social security. At the end of the paycheck, you see about half of the money that you’re supposed to earn, or actually you’re earning a specific, but half of it goes through to government, but in rent you’re paying way less tax. It is the perfect structure in which you can earn money and also pay less tax. The amount of your earning is actually really going into your bank account. Something that you can use to go to a restaurant, to bar, to do grocery shopping with it, to do anything with what you want. [00:14:09] Ney Torres: [00:14:09] Yeah. And just to penalize that thought. Financial life is a structure. Texas is not fair, but it is fair from the point of view that you have access to them. You have the same loss as big corporations do. So if you take the time to educate yourself, you can take advantage of — [00:14:26] Veerle Van den Berg: [00:14:26] The structures. [00:14:27] Ney Torres: [00:14:27] The structures. For example, a corporation pays 20% versus — [00:14:31] Veerle Van den Berg: [00:14:31] 40% for a regular person having a regular job. Yeah. [00:14:35] Ney Torres: [00:14:35] Yeah. Thank you for your time and and see on the next occasion. [00:14:39] Veerle Van den Berg: [00:14:39] Thank you. [00:14:40] Unknown Speaker: [00:14:40] Did you learn something today? How can you apply your insights? What’s next for you? The fastest way to make things happen is to just share this podcast episode with more people that may find it valuable too. Talk about it with them and surround yourself with likeminded people. Hope you found this valuable. Don’t forget to subscribe. See you next time. This podcast references opinions and is for information purposes only not intended to be investment advice, seek a duly licensed professional for investment advice.