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Speaker 4: or iHeartRadio. And now it's time for the One Roof
Speaker 4: Radio Show. Actually today today we've got two new guests.
Speaker 4: Also for the Parenting the Parent Squad and today for
Speaker 4: the One Roof Radio Show, we're joined by a new guest.
Speaker 4: So I'll introduced in just a moment, but just to
Speaker 4: give your heads up on what we're going to talk
Speaker 4: about and as it is, that question about renovating. And
Speaker 4: of course, if you are a home owner and you've
Speaker 4: got a house and you want to renovate it because
Speaker 4: you are going to be living in it's that one question.
Speaker 4: There'll still be questions you might ask yourself about whether
Speaker 4: you're overcapitalizing or not, or should we do that? But
Speaker 4: then again, we're going to limit it for the next
Speaker 4: thirty years. Who cares? But there is always the question
Speaker 4: about when you can I mean renovating. It's not cheap.
Speaker 4: Building is not cheap. Nothing to do with property is cheap,
Speaker 4: although maybe buying it's a little cheaper than it was
Speaker 4: a few couple of years ago. But can We're going
Speaker 4: to talk about renovating, and I want to know from
Speaker 4: you how have you budgeted for your renovation and the
Speaker 4: decisions you made and what was the key to keep
Speaker 4: it's something that you could live with basically, or someone
Speaker 4: else could live with in the event that you're doing
Speaker 4: up to sell it. So the simple question is, can
Speaker 4: you do a significant renovation for under half a million dollars?
Speaker 4: Oh gosh, a lot of money, isn't it? And how
Speaker 4: can you guarantee you'll improve your returns as a result,
Speaker 4: Because you might buy how often have you heard let's
Speaker 4: buy a door rapper, and you buy the door upper
Speaker 4: and you do it up, and you go and think,
Speaker 4: what's spent way too much on that. I never had
Speaker 4: any idea that I would have blown so much money.
Speaker 4: So we'd love to hear your have your stories as
Speaker 4: well on the Key to a Successful Renovation eight hundred
Speaker 4: and eighty ten eighty text nine two nine turn Joining
Speaker 4: my me. She is a new guest on the show,
Speaker 4: and she's a real estate investor. She's a property coach
Speaker 4: at Wolf Property and her name is Elsa Wolf, Elsa gooda.
Speaker 5: How you going, Hi, Jim, Thank you so much. I'm
Speaker 5: very excited to be here.
Speaker 4: Well good, Hey, how long have you been in the
Speaker 4: property investment game?
Speaker 5: So that's a great question, so I thought i'd do
Speaker 5: a quick culch before I came here. Actually, so for
Speaker 5: the best part of twenty years, I've been investing basically
Speaker 5: when I was a toddler.
Speaker 4: Can I no? Oh, yeah, of course I should have
Speaker 4: said that first. Yeah.
Speaker 6: No.
Speaker 5: So from when I was about twenty two to twenty three,
Speaker 5: I started vesting part time, and that was while I
Speaker 5: was working for a major bank, a main bank that
Speaker 5: was the light bulb for myself was that.
Speaker 4: Because also when you're working for a bank, you have
Speaker 4: a good access to a decent interest, right, I mean,
Speaker 4: if you do work for bank, you do get a
Speaker 4: discount rate.
Speaker 5: Yeah, I was smart, definitely, So staff discount fifty points,
Speaker 5: you know, so point five of a percent generally speaking, well,
Speaker 5: at least it was in two thousand and seven. Okay,
Speaker 5: So yeah, So about eighteen nineteen years ago started investing
Speaker 5: whilst a very helpful client showed me the way an
Speaker 5: accounting partner, so that was really enlightening. And then ten
Speaker 5: years ago I realized actually July twenty fifteen was my
Speaker 5: last salary paycheck. So I've been investing full time for
Speaker 5: ten years and coaching for nearly five.
Speaker 4: What was it like doing your first deal? And that's great,
Speaker 4: I mean it's good to have someone sort of holding
Speaker 4: your hand, isn't it. Who knows a bit, But what
Speaker 4: was it like for you actually biting the bullet and
Speaker 4: doing that first deal?
Speaker 5: Oh goodness. Apart from that first conversation where I saw
Speaker 5: the profit and lost by this accounting expert, it was
Speaker 5: really feel my way as I went. I lived in
Speaker 5: Hamilton for the corporate team of a main bank at
Speaker 5: the time, so I did that classic Hey, I should
Speaker 5: buy in my neighborhood. So fortunately, long term wise, that
Speaker 5: worked out. Unfortunately at the time, it was about eight
Speaker 5: months before the GFC hit in two thousand and eight,
Speaker 5: so I learned that very abruptly. I think my ignorance
Speaker 5: at the time is probably what saved me, to be honest,
Speaker 5: because I actually went into an immediate situation of negative
Speaker 5: equity and negative cash flow. So what that means is
Speaker 5: the loan I had, which was ninety five percent that
Speaker 5: was the standard at the time. Would you believe that
Speaker 5: has never been repeated for obvious reasons. And negative cash flow,
Speaker 5: So the cost of my.
Speaker 4: More if you were subsidizing the whatever rent you were
Speaker 4: getting out of it, you were topping that up exactly.
Speaker 4: And the property price had gone down as well. And
Speaker 4: see you're thinking, I've dug myself a hole, and I'm
Speaker 4: just gonna I guess you just have to keep going
Speaker 4: until sort of get above ground again, do well.
Speaker 5: I was on my oe, so I sort of removed
Speaker 5: myself a little while very briefly after. It was an
Speaker 5: investment property. The first four I bought were investment properties,
Speaker 5: so I guess I was a rent vestor, which is
Speaker 5: a popular word now, there was no name to it
Speaker 5: back then, but basically lived in a family house whilst
Speaker 5: starting to invest, took off with my boyfriend at the
Speaker 5: time to have and the UK and just kept sending
Speaker 5: pounds back to top it up. I didn't understand the
Speaker 5: gravity of it, but there were some scary lessons along
Speaker 5: the way, So.
Speaker 4: I reckon, that's the kay I reckon. A lot of
Speaker 4: people I speak to who have got into the high
Speaker 4: stakes games of whether it be well and sometimes in
Speaker 4: the case of other business adventures, a lot of people
Speaker 4: point to the fact that they'd glad they didn't actually
Speaker 4: know the lessons that they subsequently learned, because I might
Speaker 4: not have got out of bed in the morning sort
Speaker 4: of thing. Do you look back and go, gosh, it
Speaker 4: was so good that I knew so.
Speaker 5: Little exactly and learned the stripes. Earned my stripes the
Speaker 5: hard way, basically, and early on, early on, there was
Speaker 5: definitely a version too, in a different way that was
Speaker 5: not cash flow. Actually, that's part of the journey of
Speaker 5: learning I've been on to lead to the methods that
Speaker 5: I exclusively deploy for myself but also teach my client.
Speaker 5: So that's the type of person I attract as a
Speaker 5: property investor. They know I'm tunnel focused on manufacturing, you know,
Speaker 5: creating high gross returns through adding value through renovations, because
Speaker 5: negative equity basically, when your loan to the bank and
Speaker 5: your costs well, sorry, the loan to the bank is
Speaker 5: higher than the value of the asset, basically you have
Speaker 5: no asset.
Speaker 4: Yeah, So is that sort of is that sort of
Speaker 4: instinct wanting to renovate? Does that come from the fact
Speaker 4: that that's one thing you can do? Okay? The property
Speaker 4: for instance, I mean, how many people bought properties back
Speaker 4: in twenty twenty twenty one, and we know the tragic
Speaker 4: tale of how tough times are high interest rates. I
Speaker 4: mean there's still you know, they've recovered a bit, which
Speaker 4: is probably a relief for a lot of people. But
Speaker 4: is that really why is that your main strategy actually
Speaker 4: to buy properties that need a bit of need a
Speaker 4: bit of work or could yeah, we'll carry on.
Speaker 5: Yeah, So I have it's actually a trademarked process I have.
Speaker 5: It's called cash flow hacking, and it's basically the culmination
Speaker 5: of I guess these eighteen years of some wins, some
Speaker 5: horrific mistakes and lessons that have got me to where
Speaker 5: I am. So I believe in achieving, forcing appreciation the
Speaker 5: value of a property as soon as I purchase it
Speaker 5: or my client.
Speaker 4: So you're all about making an improvement to it, all
Speaker 4: about it, all about it exclusively. They're not somebody who
Speaker 4: just buys. So the last thing you're doing is flecking
Speaker 4: a property which people will be pleased to please to hear,
Speaker 4: because that tends to trigger people a bit.
Speaker 5: Oh no, I'm all about holding. So it's called the BURR.
Speaker 5: It's sort of an overlay to the BurrH method by renovate, rent,
Speaker 5: reff finance, repeat. So if you think about all of
Speaker 5: the benefits of investing in real estate or property, the
Speaker 5: expectations if you want all of the above, right, we're
Speaker 5: talking cash flow, ultimately getting the rent or the income
Speaker 5: to exceed all of those expenses to create ultimately a
Speaker 5: passive income for retirement or whatever you want. Capital growth
Speaker 5: which equals wealth over time, leverage which is to be
Speaker 5: able to add value to the property to then purchase
Speaker 5: something else or invest in something else, and you can
Speaker 5: only do that through property. And then the other one
Speaker 5: is land, so you have new Belds townhouses lots of
Speaker 5: great benefits to warranties, that sort of stuff, low maintenance,
Speaker 5: but without the land portion, which is exclusive to existing builds,
Speaker 5: those are all of their benefits. So without the land,
Speaker 5: remember land is the finite thing we have here, right,
Speaker 5: so if you have land, you get the future benefit
Speaker 5: of intensification.
Speaker 4: Do you think that the do you think that the
Speaker 4: idea of renov is going to become because it does feel.
Speaker 4: I mean, I've I don't have any investment properties, but
Speaker 4: I've hosted a property out for I don't know, three
Speaker 4: or four years now, and you do get a sense
Speaker 4: that there was a time when people were right into renovating,
Speaker 4: and then it became the no one would bother because
Speaker 4: you simply buy it, hang onto it for a year
Speaker 4: or two, and then you could sell it because the
Speaker 4: property market was going crazy. Do you think where's the
Speaker 4: property market at? Do you think in terms of the
Speaker 4: number of investors who would buy with an intention to
Speaker 4: do something with it and then have that improved our
Speaker 4: set to sell.
Speaker 5: So depending on what your objective is or your outcome
Speaker 5: is will determine the strategy, and you have to pair
Speaker 5: that with your own risk profile. You know what kind
Speaker 5: of risk are you willing to take? But different It's
Speaker 5: called the property cycle or the property clock, if you
Speaker 5: think about it as a clock. There are growth stages
Speaker 5: and there are a decline of value stages. Where we
Speaker 5: are at the moment, we're sort of around that six
Speaker 5: thirty seven o'clock if we've bottomed out, we've gone through
Speaker 5: this period of decline, we're evening out, and we're sort
Speaker 5: of poised to grow. We're not in that rampant growth.
Speaker 5: So if you were to buy any property and think
Speaker 5: I'll do something and make some money, that's not going
Speaker 5: to fly just yet. You have to be calculated.
Speaker 4: So don't get your hopes up about quick growth at
Speaker 4: the moment, regardless of what you do with it.
Speaker 5: Interestingly, I mentioned to Cameron Bagriy economist on my way here,
Speaker 5: and he called me, called me back in on the
Speaker 5: of the full drive here and he sort of said, hey, look,
Speaker 5: it really is about five percent that seems to be
Speaker 5: the potential growth for this year. Five percent of value growth. Organically,
Speaker 5: we're not heading into a rampant growth stage.
Speaker 4: That's because our economy is a bit stuffed, really, isn't it?
Speaker 4: To put it frankly, isn't it.
Speaker 5: Yeah, I mean there have been many many changes. It's
Speaker 5: all looking brighter. You know, the OCIA came down by
Speaker 5: fifty points to three point seven five on Wednesday, and
Speaker 5: you know, we've had multiple decreases now, so you know,
Speaker 5: the perception of businesses in the public is more positive
Speaker 5: than it's been for a long time. But we've also
Speaker 5: had several i would say short, short term adjustments that
Speaker 5: need to be corrected. So the Residential Tenancies Act RTA
Speaker 5: thirtieth of January a lot of changes to notice periods,
Speaker 5: you know, if you want to give a tenant.
Speaker 4: Notice, so it's friendlier for investors.
Speaker 5: It is more friendly so you're not stuck with a
Speaker 5: lousy tenant. It's friendlier as a landlord. Costs are coming down,
Speaker 5: we're expecting them to come down, but we've also had
Speaker 5: a lot of costs ramped up in the recent years
Speaker 5: with healthy home standards, which definitely are a great step
Speaker 5: up for us. Our housing stock is incredibly old, so
Speaker 5: that therein lies a massive opportunity for value add or
Speaker 5: renovating based you know, might be investors or home buyers.
Speaker 4: Okay, tell us what was your first renovation then? What
Speaker 4: did you what were you looking for with the property,
Speaker 4: what did it look like, what did you intend to
Speaker 4: do with it, what did you end up doing with it?
Speaker 4: And did it work?
Speaker 5: Yeah?
Speaker 4: I mean ultimately it would have worked if you did
Speaker 4: it long enough time.
Speaker 3: Yeah.
Speaker 5: So with that first property, it was a standalone house
Speaker 5: and Hamilton and Glenn View, which I actually still love.
Speaker 5: That's a great it's a great suburb. And the scope
Speaker 5: for the renovation was forced upon me basically through the
Speaker 5: Global Financial crisis, so GFC if you haven't lived through
Speaker 5: that yet. And basically it was a standalone house. Again,
Speaker 5: as you said, I bought it, had no idea what
Speaker 5: I was doing, did not think too much about the
Speaker 5: extra costs and cash flow until they hit. I also
Speaker 5: then coupled.
Speaker 4: With what condition was the house in at the time.
Speaker 5: It was retro sort of had that asbestos seventies.
Speaker 4: Oh my god, Okay, asbestos not.
Speaker 5: Retro, but yeah, so the eighties vinyl that had the
Speaker 5: horrific diamonds and flowers patterns, but was also asbestos. It
Speaker 5: actually had a small thirty square meter house or building
Speaker 5: at the back.
Speaker 4: Did you buy it thinking you were going to renovate it?
Speaker 5: I knew it needed some work, but I had no plan.
Speaker 5: I didn't know what that really meant. It was actually
Speaker 5: my boyfriend at the time he sort of said, hey, look,
Speaker 5: my uncle's an electrician and let's do this to that.
Speaker 5: And I got my head into that space. It was
Speaker 5: a standalone house, three bed, one bath, but there was
Speaker 5: a little not a separate dwelling part like a sleepout
Speaker 5: sleep out at the back, and it was one dwelling.
Speaker 5: And as I suddenly realized after a few months, hey
Speaker 5: this cash you know, my revolving credits which I had
Speaker 5: initially was disappearing. We decided, hey, we need to talk
Speaker 5: to counsel. We ended up getting a building consent to
Speaker 5: separate those into two dwellings.
Speaker 4: So was it the old the traditional quarterer eco type
Speaker 4: of thing, which was.
Speaker 5: Exactly a nice flat section, so very tidy brick currogantius.
Speaker 4: How many of those going these days? Are they?
Speaker 2: I know?
Speaker 5: And it was really great because that was a method
Speaker 5: or a means to create cash flow that would alleviate
Speaker 5: some of that that chop up whoe. I mean, I was,
Speaker 5: you know, in my second job out of UNI. It
Speaker 5: wasn't a huge salary, and I was struggling so we
Speaker 5: were forced to come up with solutions, and I think
Speaker 5: that's always been part of my psyche since then. Every
Speaker 5: time I've gotten to trouble or stress, I've had to
Speaker 5: just sort of force myself to come up with a solution.
Speaker 5: Coupled to that was the issue sure that I was
Speaker 5: a young I was a young landlord, and the tenant
Speaker 5: initially had both the front house and back house, and
Speaker 5: I just decided to stop paying one day, and so
Speaker 5: I got into five thousand dollars of arrears because I
Speaker 5: was easily the one who could push to the bottom
Speaker 5: of that list.
Speaker 4: This was Hamilton project, wasn't it? And Hamilton Yeah, anyone
Speaker 4: who's listened to this show, just briefly is the running
Speaker 4: gag with my former co host Tim Rocksborough was years
Speaker 4: ago when the property market went nuts. As a lay
Speaker 4: person watching the property market, I remember looking at Hamilton going, oh, yeah,
Speaker 4: that Hamilton. I reckon it's going to go sometime. And
Speaker 4: I just sat passively and watched Hamilton go nuts. Because
Speaker 4: Hamilton did go.
Speaker 5: Twenty twenty, twenty twenty one. Every month that we're up
Speaker 5: ten twenty thirty thousand, do you know the same property, Yes,
Speaker 5: you're absolutely right.
Speaker 4: Yeah, Look, we want to take your calls as well
Speaker 4: your experiences on renovating, but also what is the first
Speaker 4: thing you renovate if you're if you're an owner and
Speaker 4: if you're a buyer, do you want to see something
Speaker 4: renovated or do you actually look and think, well, here
Speaker 4: are some key things. I really want to say there's
Speaker 4: some room room and me doing some work for them,
Speaker 4: because there are certain things we know expensive I think
Speaker 4: kitchens and bathrooms. But if you happen to want to
Speaker 4: reline and do a bit of plastering and painting, that's
Speaker 4: probably a sitter, isn't it. Anyway, we're going to take
Speaker 4: your cause as well if we'd love you to join
Speaker 4: the conversation. My guest is Else a Wolf. She's a
Speaker 4: real estate investor and coach at Wolf Property and we'll
Speaker 4: be back in just a moment. News talks. But you
Speaker 4: know the number eight hundred and eighty ten eighty text
Speaker 4: nine nine two, And I guess the key question is
Speaker 4: do you think that along the lines of what Else
Speaker 4: has been saying, that maybe the way to make money
Speaker 4: in the market right now, because it's not going to
Speaker 4: be going gang buses if you just buy it and
Speaker 4: don't do anything. Is that the secret to making money
Speaker 4: in the property market. It's twenty two past four News Talks, b.
Speaker 1: Song, Hell the Fleen, What for You Nothing.
Speaker 4: Cally's Welcome back to the One Roof Radio Show. I'm
Speaker 4: Tim Beveridge. My guest is Elsa Wolf. By the way,
Speaker 4: she is an expert at basically doing something with a property.
Speaker 4: You don't just bite sit on it, renovate it, add
Speaker 4: some value and then turn it into an asset that
Speaker 4: you'll be happy that basically you bought. So if you've
Speaker 4: got any questions, then Elsa is the perfect person to
Speaker 4: give a call, and you can do that right now
Speaker 4: in eight hundred and eighty ten eighty. And also if
Speaker 4: you've got the benefit of your own experience, because one
Speaker 4: of the simple questions I want to ask Elsa is
Speaker 4: where's the Okay, there's two ways to ask this. One
Speaker 4: is where's the best place to spend your money on
Speaker 4: a proper property? But I'm going to start with where's
Speaker 4: the easiest way to waste money on a renovation?
Speaker 5: That age old question, so it's it's I would say
Speaker 5: the most expensive risk is if it's an investment property,
Speaker 5: which is actually how I focus is basically projecting your
Speaker 5: own desires and wants, and usually those come in the
Speaker 5: area of kitchens, bathrooms, and fixtures. You know, So the
Speaker 5: fancy chandelier or the beautiful dining table light that was
Speaker 5: really unnecessary, high spec.
Speaker 4: Causing it, don't fall in love with it.
Speaker 5: Don't fall in love and project yourself into it. Yeah,
Speaker 5: when you renovate, it needs to be suitable for the
Speaker 5: place and who's most likely to live there.
Speaker 4: Did you find that when you started doing this? Did
Speaker 4: you was that an instinct you had to resist yourself,
Speaker 4: because it sends me that would be the most natural
Speaker 4: human instinct that you have to fight against. It's like,
Speaker 4: you're not living here, it's for someone else who's going
Speaker 4: to live as a tenant.
Speaker 5: I mean I started out fairly broke, so yeah, so you.
Speaker 4: Basically were like, we're not getting in the chandelier anyway,
Speaker 4: no chandlier in the bathroom.
Speaker 5: Right, But actually, yeah, the more you build, the more
Speaker 5: experiences and even knocks and bumps you have yourself. As
Speaker 5: an investor, well, you know, even with your own it
Speaker 5: comes down to if you're holding the property, if you're
Speaker 5: not flipping or trading that to someone else, durability should
Speaker 5: be at the foe.
Speaker 4: Okay, So durability would mean, for example, fix the holes.
Speaker 5: In the walls, for example, a sheet vinyl for any
Speaker 5: wet areas rather than any kind of panel that has
Speaker 5: many many different seams and adds risk to you know,
Speaker 5: it's an x number of joins as x number of
Speaker 5: extra risk. Water could come in and somehow create damage
Speaker 5: if someone were you know, not caring about your property.
Speaker 4: Okay, So does that mean okay, No, I'm gonna have
Speaker 4: lots of questions that will come out of just the
Speaker 4: one sentence, probably from you. So if I'm buying a property,
Speaker 4: but I want it to be appealing and it's a
Speaker 4: toss as a nice property rather than a utilitarian one,
Speaker 4: does that mean you're saying I mean, what you're saying
Speaker 4: is keep it basic. No tiling. Does that mean because
Speaker 4: that's expensive?
Speaker 5: I guess it depends where you use that. So you're
Speaker 5: sort of trying to balance the type rope of durability
Speaker 5: and keeping on trend and appeal. So there are many
Speaker 5: many products out there now, you know, we import from
Speaker 5: all over the place. So if you want that really
Speaker 5: high end oak timber flooring, there's a vinyl that looks
Speaker 5: like that. You know, you can have the same color
Speaker 5: as the high end woolen carpet and a solution dyed
Speaker 5: nylon for rental.
Speaker 4: Well, to be honest, I mean I think the solution
Speaker 4: dyed nylon people swear by that.
Speaker 5: Anyway, exactly, I mean fibers.
Speaker 4: If you've got the wool carpet, people will be down with,
Speaker 4: will be jumping out, so carry on. Sorry. A few
Speaker 4: other key things about where you should not waste money or.
Speaker 5: You know, one really basic one for a rental property is,
Speaker 5: you know, if you have a set you a stand
Speaker 5: up oven. Let's say you know, something is a tenant
Speaker 5: somehow breaks a stove top. You know, if you have
Speaker 5: a combined stovetop with oven. Okay, Well, the cost of
Speaker 5: getting any trade to cite these days is you know,
Speaker 5: one hundred dollars plus just plus their expertise and materials
Speaker 5: and travel and exactly.
Speaker 4: Yeah.
Speaker 5: So okay, so say you're fixing one element, the cost
Speaker 5: to do that could be three or four hundred dollars,
Speaker 5: when in fact you could get a brand new stovetop
Speaker 5: for less than that if you had the separate top.
Speaker 4: Okay, so separate applants is basically wall oven and.
Speaker 5: It's and a hob yes, as separate components. So if
Speaker 5: they're integrated into that kitchen design in built oven, separate
Speaker 5: to the stovetop inserted into the bench. If something breaks,
Speaker 5: you know, replacing either of those could be two fifty
Speaker 5: to three hundred and fifty dollars. If you're replacing that
Speaker 5: whole unit could be seven hundred plus. But it's still
Speaker 5: so you have to work out, Okay, what could happen
Speaker 5: and how do I hedge that or how do I
Speaker 5: come up with a plan that makes it cost effective
Speaker 5: if it happens?
Speaker 4: Are you always most of your investments are they aimed
Speaker 4: at providing a property for a tenant and income because
Speaker 4: there would be people who would be who'd be wanting
Speaker 4: to renovate because they want to sell that to someone
Speaker 4: who's going to live in it. As an owner, is
Speaker 4: that a big decision for you to make as well?
Speaker 4: Like am I selling? Am I buying this to tenant?
Speaker 4: Or am I buying it to do up for someone
Speaker 4: else's home? As an owner?
Speaker 5: Is that a big different, very different, very different. I
Speaker 5: think with the one roof example listening today, that's very
Speaker 5: much an owner occupy a type purchase, which we'll get to.
Speaker 5: So definitely it's about what's appropriate and what's the purpose.
Speaker 5: You know, if I move into a home, I do
Speaker 5: have different expectations. I want high end appliances. I know
Speaker 5: how I will treat those. You know, It's different from
Speaker 5: enlisting the help of a professional property manager, which is
Speaker 5: absolutely what I do. I'm therefore one relationship removed from
Speaker 5: who lived and lives in there. Ultimately, yes, we credit
Speaker 5: check them, et cetera, but I don't know them.
Speaker 4: Okay, we want your calls. Where do you want to
Speaker 4: where would you spend money on a renovation? And actually,
Speaker 4: if you're buying a if you are investing in property,
Speaker 4: because this is probably the journey I've got to go on.
Speaker 4: Is I always imagine buying a property with the mind
Speaker 4: to renovating it to sell to someone who's going to
Speaker 4: own it. And that might be a chink in my
Speaker 4: armor actually on that one. But anyway, let's take some
Speaker 4: calls on that. Where with Elsa Wolf, she is a
Speaker 4: real started investor and coach at Wolf Property.
Speaker 5: By the way, how do people get in touch with
Speaker 5: you through my is it through my Instagram? Which is
Speaker 5: Wolf Property Coaching? Or yeah, so Elsa, I l s E.
Speaker 5: Wolf with an otherwise Wolf property Coaching dot co Doin.
Speaker 4: Said, excellent, Right, let's take some calls Andy, get a, Yeah.
Speaker 7: Get a. What I found is getting someone that's really
Speaker 7: reliable and has a very good capacity to source materials
Speaker 7: cheaper than yourself.
Speaker 4: Are you talking about the trades people?
Speaker 7: The trades people, Yeah, well that and I think that's
Speaker 7: the key. That's the cornerstone of cheaper, cheaper renovations and
Speaker 7: and and a team that will tear it around, really
Speaker 7: fuss actually that and that's what they specialize in.
Speaker 4: That's a really great point. And the actually else because
Speaker 4: obviously someone who's got a few years experience at this
Speaker 4: would you must have a team of people you know
Speaker 4: are going to be doing the job for the right price, effectively,
Speaker 4: good quality, etc.
Speaker 5: And confidence. Right. So for my own portfolio and my investors,
Speaker 5: we invest from Fungaday right down to Dunedin, and I
Speaker 5: call them power teams. And for a very good reason.
Speaker 5: You need a power team that can be extremely efficient,
Speaker 5: that you can rely on, that you can trust. Especially
Speaker 5: most investors I know at least invest remotely. You know,
Speaker 5: they live in Auckland, they invest in christ Church for example.
Speaker 5: You can't be eyes and feet on the site every day.
Speaker 5: You need to know you have a pre vetted team
Speaker 5: who has your best interests at heart. And of course, yeah,
Speaker 5: absolutely you're right Andy, having materials and those great discounts,
Speaker 5: and same with us. We want we want our developers
Speaker 5: discounts at our kitchen manufacturers because it makes all the difference.
Speaker 4: And are you an investor? Or? What's your what's your mean?
Speaker 7: I was quite a quite a big investor back in
Speaker 7: the day that it was when you could self certify
Speaker 7: your mortgage in London. You didn't even you didn't even
Speaker 7: need to go have any checks on the bank. It
Speaker 7: was self certification. I no, I think I got up
Speaker 7: to one hundred and fifty properties over there, But everyone
Speaker 7: that I did was a do rapper, apart from one
Speaker 7: that I went in and got a major icee old discount.
Speaker 7: If I buy fat any of them flat, you're going
Speaker 7: to drop the GST.
Speaker 4: Actually, Andy, can I ask you how did you make
Speaker 4: how did you when did you start to make some
Speaker 4: serious money from as an investor? How did you start off?
Speaker 7: To be honest, you've got to be in it for
Speaker 7: the long term. It's not a it's not like you
Speaker 7: can flip them. But you know, I'm the ones that
Speaker 7: you do up. You know you're looking at you know,
Speaker 7: the rental needs to cover your more, you know, the
Speaker 7: mortgage on it. So as same as mortgage prices go up,
Speaker 7: it's a bit gets a bit weird when you get exposed.
Speaker 7: So yeah, I did, I did. I did slip a
Speaker 7: lot and just I found that, you know, doing them
Speaker 7: up and flipping them was a quick way to make
Speaker 7: some money.
Speaker 4: Did you ever do you get stressed about it? You
Speaker 4: sound like.
Speaker 7: I was. I was working for an investment banker at times,
Speaker 7: so a bit like you're on the radio. Yeah, yeah,
Speaker 7: So you know, I had a really good, amazing income.
Speaker 4: Worst ever renovation you ever.
Speaker 7: Did on my own house because I did exactly. I
Speaker 7: did exactly what she's telling you not to do. You know,
Speaker 7: It's what.
Speaker 4: I think, if it's your own house, you don't need
Speaker 4: to do Lino on your in your bathroom.
Speaker 7: Though, no, no, it wasn't it, you know, you know,
Speaker 7: in sorry and being quite a bit large property and
Speaker 7: I just went too far, you know.
Speaker 4: And yeah, mate, good to hear that voice of one
Speaker 4: hundred and fifty properties.
Speaker 5: It's a heck of a lot, A heck of I mean,
Speaker 5: the self certification is a world I've never lived in.
Speaker 5: I yeah, I'm blown away.
Speaker 4: Actually. I mean if if you there were times, there
Speaker 4: have always been better times to get and I know
Speaker 4: you're about to disagree with me, because most property there's
Speaker 4: never a bad time to get into property. But there
Speaker 4: have been times which have seen you know, exponential growth
Speaker 4: with the doubling of prices every eight years, and that
Speaker 4: model has probably changed a bit more male money's properties.
Speaker 4: Still it's still expensive, isn't it.
Speaker 5: Well, actually, this is something that Cameron and I were
Speaker 5: discussing earlier as well. It was just that, you know,
Speaker 5: will those historic growth rates, you know, the last thirty years.
Speaker 5: We know that history is not indicative of the future
Speaker 5: because there's so many different changes and impact, but you know,
Speaker 5: will that fundamentally change Since COVID people are more into
Speaker 5: remote living. You can still have the big corporate salary
Speaker 5: but not live in Auckland. Does that mean those growth
Speaker 5: patterns will contin you It's yet to be seen.
Speaker 4: Yeah, I mean I've discussed this with a few property
Speaker 4: people about that. When we've seen property growth back in
Speaker 4: the John Key days and there was always this heavy
Speaker 4: element of fomo. We had high immigration, and I asked
Speaker 4: one of our guests a while about about, you know,
Speaker 4: we had fomo back there on top of immigration. Now
Speaker 4: we've got still very high prices, but we had the cheap,
Speaker 4: cheap interest rates. And I worry generally that the property
Speaker 4: markets not really going to move a lot because our
Speaker 4: economy just isn't robust enough to support the value that's
Speaker 4: locked in on the market.
Speaker 5: It's exactly I totally agree with you. There's only so
Speaker 5: far the prices can increase before they pull too far
Speaker 5: above the increase of incomes.
Speaker 4: And I guess it just means how much slack is
Speaker 4: there in the market now and how long it plays out.
Speaker 4: Is that you're sort of feeling about.
Speaker 5: It generally, Yeah, it's more about adjusting the strategy to
Speaker 5: that cycle. Stage. Flipping is becoming extremely popular. I get
Speaker 5: approached every day by wholesalers, you know, basically someone trying
Speaker 5: to get a cheap cash price on a motivated vendor,
Speaker 5: someone who didn't sell aduction to try and flick it
Speaker 5: to myself for a margin, you know, to one of
Speaker 5: my clients if they can work out what that looks like.
Speaker 5: So there's a lot of that that what do you
Speaker 5: say to that. It depends on who they are. There's
Speaker 5: definitely that they definitely are a part of the fabric
Speaker 5: of the market and of the stage in the market.
Speaker 5: But there's you know, you have to be very careful.
Speaker 5: FOMO is one part of it, but you have to
Speaker 5: be calculated and it's very easy to lose money.
Speaker 4: Okay, I got a text here which I think is
Speaker 4: not part of your ballpart because if you build, you build,
Speaker 4: renovate for long term. But this person says, what about
Speaker 4: what are the tax implications when you renovate and then
Speaker 4: fleck a property on That is a.
Speaker 5: Yeah, so that's a little bit out of what I teach.
Speaker 5: But GST, so long term rentals, which is what I
Speaker 5: help clients purchasing, run GST exempt. So when you flap
Speaker 5: where you trade properties, you have a GEST registered event.
Speaker 5: So that's quite quite separate. The entity is very different.
Speaker 4: But I think the person's just saying, say I buy
Speaker 4: a property for eight hundred thousand, I spend four hundred
Speaker 4: thousand on it, and I sell it for I don't know,
Speaker 4: another couple hundred thousand. On top of that, you can
Speaker 4: deduct that expense. Obviously it's not that se profit now
Speaker 4: I think that's probably it's the basics one.
Speaker 5: It's that specific too, flapping, so that is a benefit. Yes,
Speaker 5: I do know of investors who purchase a property claim
Speaker 5: the GST to fund a renovation. That's a whole model
Speaker 5: in itself.
Speaker 4: Okay, we need to take another break. By the way,
Speaker 4: if you like to give Elsa a call and pick
Speaker 4: your brains on. Maybe you want to get into investing
Speaker 4: in a property and you're thinking about what sort of
Speaker 4: property am I going to buy? Do I need to
Speaker 4: look to renovate? I'm guessing the argument from else will
Speaker 4: be yes, you need to find a way of adding
Speaker 4: value because at the moment the markets it's not going
Speaker 4: to do it for you. You better do something yourself.
Speaker 4: That's my guest. But she can tell me after the
Speaker 4: boat whether I was wrong in that summary. It's twenty
Speaker 4: one minutes to five news talks. You'd be happy to bear.
Speaker 2: Should call you are invested in? Can you see you
Speaker 2: belong to move lis Mama?
Speaker 4: Imagine how the will people?
Speaker 2: It's so very fine, so happy to.
Speaker 4: Be Yes, Welcome back to the one Roufradio Show. My
Speaker 4: guest is Elsa Wolfer. She's a realistate investor and coach
Speaker 4: at Wolf Property. Also, let's let's get into it. You're
Speaker 4: looking to buy an investment property, so I am what's
Speaker 4: the best way to add value to a property? If
Speaker 4: that's the game these days?
Speaker 5: So on your motivation, you're on your motivation. My focus
Speaker 5: is to have your cake and eat it too. And
Speaker 5: I know that sounds a little bit greedy, but I
Speaker 5: think that's everyone.
Speaker 4: Let's be honest. People don't get into everyone. Look, everyone
Speaker 4: needs to have something to retire on exactly.
Speaker 5: And the way that I view it for my investors, right,
Speaker 5: they come to me to help me change their future
Speaker 5: or bring their future forward. So every day that they
Speaker 5: have a rental that's not on it's best cash flow
Speaker 5: giving them all the benefits is a day extra costs
Speaker 5: them to reach their goal. Right, So if you think
Speaker 5: about it that way for yourself, it's how do you
Speaker 5: for yourself, how do I buy a property to add
Speaker 5: value very quickly with a trusted power team, like Andy
Speaker 5: said before, massively leverage it and get a really good
Speaker 5: cash flow because the banks are all about servicing.
Speaker 4: Because I've got one of our questions which came from
Speaker 4: the things we might discuss. It says is five hundred
Speaker 4: thousand dollars figure for a full renovation, because I was
Speaker 4: thinking five hundred thousand dollars to spend on renovating is
Speaker 4: a lot. But you mean something a bit different than that, don't.
Speaker 5: You standalone existing build with land purchase and full cosmetic
Speaker 5: renovation and add an internal bedroom without needing to or
Speaker 5: consent for less than half a mel That spans the
Speaker 5: best way.
Speaker 4: You're talking about buying something and adding value and the
Speaker 4: total cost is half. We're not doing this in MROR,
Speaker 4: are we.
Speaker 5: This is not This is not the sexy. This is
Speaker 5: not the sexy stuff. The boring stuff works, especially when
Speaker 5: you're starting out. So we're talking, you know, a good
Speaker 5: way to illustrate because everyone can picture this. You know
Speaker 5: your typical one hundred square meter were the board house.
Speaker 5: You know wherever you live, you've seen them in the suburbs.
Speaker 5: You know this is your nineteen sixties nineteen seventies build.
Speaker 5: If you put it this way, it costs sixty to
Speaker 5: seventy thousand dollars for a full cosmetic reno, paint, flooring.
Speaker 5: You get cheap to me for a ninety square it's
Speaker 5: quite second. That's what I expect. Okay, you so put
Speaker 5: it this way. If you had two side by side houses,
Speaker 5: they're both three bedrooms to begin with. Let's say you
Speaker 5: spend that sixty thousand dollars on the one that you
Speaker 5: can keep as a three bedroom versus next door, you
Speaker 5: could otherwise buy this one it's three bedrooms, spend that
Speaker 5: same sixty thousand for maybe five thousand dollars more. With
Speaker 5: the right layout, you can turn it into a four
Speaker 5: bedroom by throwing up a couple of extra walls and
Speaker 5: a door. The difference is that the cash flow that
Speaker 5: covers your costs and give puts cash in your pocket
Speaker 5: is from the one that you add the bedroom to.
Speaker 5: And also it means that if you had to or
Speaker 5: when you decide to sell it, a real estate agent
Speaker 5: is going to come and appraise it as a four bedroom.
Speaker 5: So you've made you've made money on the on the
Speaker 5: value of the property.
Speaker 4: And so how does how does how do people go
Speaker 4: about finding that finding those sorts of properties obviously through you,
Speaker 4: but in terms of doing their own research, And that
Speaker 4: still feels like are those properties easy to come by everywhere?
Speaker 5: You have to create it?
Speaker 3: Right?
Speaker 5: So if you want to achieve a higher return than
Speaker 5: an average property, you have to go out and make
Speaker 5: it happen. It doesn't just jump into you know, it's
Speaker 5: not the first that jumps into the boat.
Speaker 4: So I think that See the reason I love what
Speaker 4: you're saying is that I think there is this The
Speaker 4: media cup bridge always makes it sound like, oh, such
Speaker 4: and sucht this property for this, and you'll always get
Speaker 4: the headlines about the most dramatic auction back in the
Speaker 4: times when things were crazy. But it seems to me
Speaker 4: to be a more honest way of looking at the market.
Speaker 4: It's like, you know what, it doesn't happen on its own.
Speaker 4: You've got to make something happen. Is that your sort
Speaker 4: of ethos?
Speaker 5: It is a couple of extra things on top of that.
Speaker 5: I love so regional centers. So you know, if you're
Speaker 5: most investors starting out don't have a million dollars, they
Speaker 5: have six or seven hundred thousand. So my job is
Speaker 5: to apply my method. They have a financial advisor, and
Speaker 5: then I help them spend the least amount but still
Speaker 5: getting them the best fundamentals. What's the strongest place they
Speaker 5: can buy? So for example, very recent example in New Plymouth.
Speaker 5: You know, if I were buying anywhere around.
Speaker 4: Time, great city, Yeah.
Speaker 5: You know you could. You could spend four hundred thousand
Speaker 5: dollars on a standalone house in Wanganui, or you could
Speaker 5: spend three ninety like my client recently did in New Plymouth. Well,
Speaker 5: the fundamentals of New Plymouth are so much stronger long
Speaker 5: term for the growth. But we could they purchase for
Speaker 5: three undred ninety thousand dollars. We will add an internal bedroom,
Speaker 5: full cosmetic renovation that is going to rent for seven
Speaker 5: hundred and seventy dollars per week. And we've employed a
Speaker 5: whole bunch of local businesses and we've converted this moldy
Speaker 5: discussing house that no one should be even living in
Speaker 5: into a healthy.
Speaker 4: Homes how much?
Speaker 5: Healthy home? How much for the reno for four hundred
Speaker 5: and ninety five thousand including a complete nine Yeah this
Speaker 5: in this case it was pretty rundown. So it's all
Speaker 5: the healthy homes upgrowth at external paint, that kind of thing.
Speaker 4: We've got everyone's calling in late, but so we're going
Speaker 4: to squeeze through this cause really quickly.
Speaker 3: Jonathan good A Hi also a bus comment saying that
Speaker 3: you know, if you get into a house and you
Speaker 3: want to do a renovation and put us on boards
Speaker 3: and the property agent would come and just value it,
Speaker 3: you know, at extra.
Speaker 4: Extra rules new bedroom.
Speaker 3: Yeah yeah, yeah, but I don't think it's that simple
Speaker 3: because we will have property agents saying, yeah, you value
Speaker 3: it at full bedroom, but with our concert's approval, we
Speaker 3: will not be able to keep you the price that
Speaker 3: you want.
Speaker 4: You've got a question around consent and council consent.
Speaker 5: Okay, so yeah, it's definitely not that simple. You're absolutely right.
Speaker 5: You have to find the right template, the right house
Speaker 5: that allows you. So if you a couple of key factors,
Speaker 5: so you know, definitely do your research, but a couple
Speaker 5: of key things. Let's say you have a really large
Speaker 5: you know, maybe there's a huge lounge. If you are
Speaker 5: adding walls, you know, that's already a habitable space. I'm
Speaker 5: not talking about converting the garage, you know, which is
Speaker 5: not first sleeping in.
Speaker 4: So so if it's under the existing roofline of your
Speaker 4: of the dwelling.
Speaker 5: It's a habitable space. And the council's eyes, if I'm
Speaker 5: adding walls, I'm enhancing the structure. If I were to think, oh,
Speaker 5: I'll find a way to force this bedroom in and
Speaker 5: I compromise the structure, if I compromise the structural integrity,
Speaker 5: anything to do with compromising your builder would lead on
Speaker 5: that because there's no way they should do it without
Speaker 5: following the code. But the council absolutely would have to
Speaker 5: consent that.
Speaker 4: Yes, okay, right, tell you what we're gonna have to
Speaker 4: come back with one properly of the week, Steve, stick around,
Speaker 4: what's trans easy before we wrap it up, we're with
Speaker 4: Elsa Wolf. She is a real estate investorment coach at
Speaker 4: Wolf Property. You can google her name. We'll go to Instagram.
Speaker 4: I think it's what Elsa Wolf Wolf Property Property coaching.
Speaker 4: All right, right, we'll be back in just a moment.
Speaker 4: It's coming out ten minutes to five news talks. He'd
Speaker 4: be this news talks, he'd be, I think we're doing
Speaker 4: the property the moment and just a moment. But firstly,
Speaker 4: let's go to with where we're with Elsa Wolf. By
Speaker 4: the way, and Steve Geta got a quick question for us.
Speaker 6: Yeah, look at about the conversion of the a three
Speaker 6: bedroom before bedroom. You've got to be a bit careful
Speaker 6: there because you can run the risk that you're not
Speaker 6: that you know, it's not going to go and obviously
Speaker 6: doesn't go through it doesn't go through council. It's not
Speaker 6: going to be on the property filed in the potential
Speaker 6: purchase and we'll see that it's not on it. And
Speaker 6: also look, I think you'll find you'll probably have to
Speaker 6: get building consent because there are a few things in
Speaker 6: the building codes that apply to that. You've got valilation
Speaker 6: and you got light and these rule factors in the
Speaker 6: as an arket, as an check myself, we have to
Speaker 6: take into account you an outlook and the plans. So
Speaker 6: I'm not sure if it's coming template it's going to.
Speaker 4: Lead you to do this, okay, any response to that.
Speaker 5: Also, there are so many, so many factors. I guess
Speaker 5: it's talking about the concept here, but you're absolutely right.
Speaker 5: You know, there's a lot of compliance that comes with it.
Speaker 5: It's constantly changing. It's really important that you always lean
Speaker 5: on your LBP or your lead builder. Ain't anyone else
Speaker 5: who is a professional involved, So electricians plumbers were required
Speaker 5: for sure. And you know the window with respect to
Speaker 5: the size of the floor, there's a lot of a
Speaker 5: lot of detail.
Speaker 4: We will cover more of this off next time. We
Speaker 4: have Elsra on the show. But thanks for your call, Steve.
Speaker 4: But we do need to get those calls happening a
Speaker 4: bit but earlier then we got more time to take them.
Speaker 4: It it's six minutes to five the one roof property
Speaker 4: of the week on the weekend collective. Now, as I say,
Speaker 4: with one roof property of the week, it's a bit
Speaker 4: like having a little holiday. You're going to have a
Speaker 4: nosy through someone's property, and this one is absolutely spectacular.
Speaker 4: Funny enough from the outside, I know this property. I've
Speaker 4: driven past it every time I go to work. It
Speaker 4: doesn't look as exciting as it does on the end side.
Speaker 4: It's got an RV of four and a half million.
Speaker 4: I think the expected prices around six million. It's a
Speaker 4: boutique luxury home on Iraqi domain and it's it's you know,
Speaker 4: architects have had their hands on this as well. It's
Speaker 4: got multiple living zones and office gym storage options, four
Speaker 4: large bedrooms plus three bathrooms. It is It does look
Speaker 4: quite nice. Doesn't else have you got to take on
Speaker 4: this property?
Speaker 5: It is stunning. It's the opposite of what we buy.
Speaker 4: It's not it's not a it's not a buy and
Speaker 4: do up for half a mil is it no.
Speaker 5: I did a little research on this, you know, so
Speaker 5: this is well over a six million dollar house. Absolutely
Speaker 5: stunning and it has some very unique features. Actually, do
Speaker 5: you know what. It illustrates all the things that you
Speaker 5: should not do when you're behaving like me. It's absolutely
Speaker 5: what you should buy when you're looking for something unique.
Speaker 5: It has these beautiful I think they're stainless steel. I
Speaker 5: think they're steel beams, but curved.
Speaker 4: The shape funny enough. The front of it, at the
Speaker 4: front of it is these like arch shape. From inside,
Speaker 4: I actually don't like the look of the outside, but
Speaker 4: the back of the house is really it doesn't look
Speaker 4: like the front of the house. You know, when you
Speaker 4: see the back view and you see the front view,
Speaker 4: you go those the same house.
Speaker 5: They're quite different totally from the inside. Looking out that
Speaker 5: the glass, I'm all about tons and tons of glass.
Speaker 5: And it has seaviews. It looks over a beautiful.
Speaker 4: Park, blackpool. It's got the pool of course. Oh well,
Speaker 4: I don't think they made the lawn either. It looks
Speaker 4: like it's they've laid the astro turf. But if you
Speaker 4: want to go and have a look at it, the
Speaker 4: address it's on the one Roof website one roof dot
Speaker 4: co dot nzet. It is one slash twenty seven Watani
Speaker 4: that's W A T, E and E crescent oraki And
Speaker 4: if you win the lotto tonight, you might still need
Speaker 4: a few extra dollars it right anyway, Hey, Elsa, time
Speaker 4: flies when you're having fun and people want to catch
Speaker 4: up with you. And what's your website?
Speaker 5: Wolf Property Coaching dot co dot inzet.
Speaker 4: Excellent's great to have you in the studio and we'll
Speaker 4: look forward to next time.
Speaker 5: Thanks fun.
Speaker 4: Thanks That wraps the One Roof show and we'll be
Speaker 4: back in just a moment. You can check the podcast
Speaker 4: out of course where every podcast. Look for the Weekend
Speaker 4: Collective on News Tour said be parent Squads.
Speaker 2: Next second, select the music pants He'd end.
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