Latest / Making Cents / How Ilse Wolfe Built A $20 Million Property Portfolio

Transcript

How Ilse Wolfe Built A $20 Million Property Portfolio · Making Cents

• 0:00
  When the headlines are shouting about how bad the property market is, how much should you panic?
• 0:05
  Because by some stats, we're at the worst property downturn in 30 years.
• 0:11
  Certainly everyone agrees it's a buyer's market, which is just code for prices are down and there are bargains to be had.
• 0:18
  Is there anything you can do to look after yourself in a downturn?
• 0:22
  Maybe even make something out of it?
• 0:25
  Ilsa Wolf reckons yes.
• 0:28
  She's a property investor and founder of Wolff Property Coaching, and she thinks the moment where everyone else is frozen playing possum can actually be a moment to move.
• 0:39
  If you're brave enough.
• 0:40
  There is an absolute abundance.
• 0:42
  There are so many properties to renovate.
• 0:45
  I'm always amazed by how low the standard of housing is.
• 0:49
  It is very disappointing.
• 0:50
  But that means we have a big job to do and there's a lot to do and that makes it really exciting, too.
• 0:55
  That's not to say she's out there thinking you should just buy a house, any house, while the market is down.
• 1:01
  It's careful strategy.
• 1:04
  Time to make sure you don't get burned.
• 1:06
  If I owned a new build identical to six others, 20 others, from a value and rental perspective, to me that.
• 1:16
  Is terrifying because who knows what could come next?
• 1:20
  It is an election year, after all.
• 1:22
  The market is not going to carry you into your future this side of the election.
• 1:26
  You have to force it.
• 1:27
  You need to create the value for yourself.
• 1:29
  So welcome to Making Sense.
• 1:30
  It's the podcast people who want financial freedom without giving up their coffee.
• 1:34
  I'm Frances Cook, financial journalist and fellow financial freedom seeker who makes money simple for you today.
• 1:41
  How bad is the property downturn really?
• 1:44
  And how does that change what you do next?
• 1:47
  This episode of Making Sense is supported by Odoo, the affordable way to get your business working smarter.
• 1:53
  Go to odoo.com that's o d double o.com for more.
• 1:57
  I want to help as many people as possible reach financial freedom by taking control of their money.
• 2:02
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• 2:06
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• 2:09
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• 2:13
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• 2:17
  Then the show grows and I can.
• 2:19
  Keep giving you the money info that.
• 2:21
  Makes a difference to your life.
• 2:23
  Ilsa, welcome.
• 2:25
  It is so nice to have you on the pod again.
• 2:27
  A rare double appearance.
• 2:29
  Thank you very much.
• 2:29
  First face to face girl date.
• 2:31
  I know.
• 2:31
  Not taking it lightly.
• 2:33
  I feel like we should have like bubbles or Something.
• 2:35
  It'd be quite fit.
• 2:37
  The vibe.
• 2:40
  Look, we've been chatting a wee bit about property market, right?
• 2:44
  Because of course, you are neck deep in it at all times, and there have been some grim, shall we say, headlines around.
• 2:51
  I think one of the longest, deepest property downturn in 30 years was a recent one.
• 2:57
  What do you think?
• 2:58
  What's the feeling in the property world at the moment?
• 3:00
  Is it really that bad out there?
• 3:02
  Genuinely, the opportunity is abundant.
• 3:05
  I know you had real estate on Co NZ here recently.
• 3:08
  The listings are higher than they've been.
• 3:11
  It is a buyer's market.
• 3:12
  There are opportunities everywhere.
• 3:14
  These headlines, they continue on and on.
• 3:16
  And we always say, don't believe the media, like, come up with your own assessments, but it still goes on and on.
• 3:21
  So I feel like the learning might be a little slow, but it comes down to what perspective you're coming at it from.
• 3:27
  And the very first question we ask of anyone that wants to come and chat with us is, what are your goals?
• 3:32
  You literally need to start with a framework, otherwise you have a set of pros and cons over here, A set of pros and cons over here.
• 3:39
  So an investment thinking, you know, should I go with real estate, should I go with forestry shares?
• 3:44
  You know, they all have great merits, they all have different risks, but how do you marry yourself up to the right set of pros and cons or risks?
• 3:52
  Yeah, well, interesting that you mentioned the real estate figures because, yeah, it was the biggest June for new listings since 2020, which is quite incredible.
• 4:05
  And as you say, buyer's market, right?
• 4:08
  So listings are flooding onto the market.
• 4:11
  There is heaps of choice.
• 4:12
  Prices have been down a bit.
• 4:14
  When you're looking at that as an investor, what are you sort of ticking along in terms of your mindset?
• 4:20
  So this is a bit of a strange analogy, but honestly, I call it Sunday.
• 4:24
  And what happens on a Sunday, you have people who are hungover and you also have the people that are going beyond the 9 to 5.
• 4:31
  So what we're seeing right now is the third hangover of the market since I've been investing, which is 20 years now.
• 4:40
  And the first was a GFC.
• 4:42
  The next one for Aucklanders was 2016.
• 4:45
  This is sort of like a third era, if you think about it.
• 4:49
  On Saturday night, that first time you tried that raspberry Volcker Cruiser and your mum said, you have not done this before.
• 4:55
  Watch out or you're going to feel terrible tomorrow.
• 4:57
  Take it easy, then.
• 4:58
  You don't.
• 4:59
  You've never done it before.
• 5:01
  You probably do something on your friend's parents carpet.
• 5:04
  Turn it pink.
• 5:06
  Were you invited back Ilse?
• 5:09
  No.
• 5:09
  But did you learn a lesson?
• 5:11
  Oh yeah.
• 5:13
  And you never do it again.
• 5:16
  So I guess in the market what we see are there's the hangover of previous governments said let's give the biggest, highest amount of debt, the highest lvr to our first home buyers to people who have never done this
• 5:29
  before and let's give them the most expensive cost of funds we've had since 2016.
• 5:34
  17.
• 5:35
  And I'm sure it'll work out right.
• 5:38
  So all of these poor people out there, you know, not just first home buyers, but new builds were the golden child.
• 5:44
  You were incentivized around the country to buy them.
• 5:48
  Amazing.
• 5:48
  Full supply.
• 5:49
  Totally agree.
• 5:50
  But did you do the numbers and work out whether you could afford that townhouse, that new build, what did the cash flow look like?
• 5:59
  So the last three years, that adjustment hangover period where everyone is trying to work their way out of a negative cash flow or a negative equity or both.
• 6:09
  Negative hole.
• 6:10
  So it's a really complex time.
• 6:12
  I believe there's a bunch of investors who have either managed to dig their way out of those negative holes and held and now they're coming to a position where they're starting to buy.
• 6:22
  The view I have seen firsthand and my team sees is those who have either cut their loss and sold that and they're reinvesting what might have been a four bedroom townhouse in Auckland for a million.
• 6:35
  We're turning that into a block of units or three or four properties down country.
• 6:39
  Positive value, positive cash flow and they're moving on.
• 6:42
  Yeah.
• 6:44
  So I think as far as where the market's at, there's a mix of people still coming out of that post Covid hype and that hangover is still somewhat alleviating.
• 6:56
  But the ones who are working beyond the 9 to 5, the investors that are out there doing it, there is an absolute abundance.
• 7:04
  Interesting as well that you mentioned the new builds because you put something up the other day that I thought was super interesting.
• 7:11
  You do not love a new build, to put it mildly.
• 7:16
  So this is where it's.
• 7:17
  I'm at that point.
• 7:18
  I think you're seasoned enough to be like, stop trying to please everyone, have an opinion and we do you and we love it.
• 7:25
  That was put out on a tile on social media for myself personally.
• 7:29
  Really ambitious, very impatient, need to be in control, all those great things.
• 7:36
  If we hear there's this falling knife in the market, the values are coming down, should we grab it or Will they drop further again, what are your goals if it's a property that you cannot control, manipulate, enhance, differentiate.
• 7:51
  To me, that is terrifying.
• 7:53
  If I owned a new build identical to 6 others, 20 others, 70 others in the same compound that come through online from a value and rental perspective, actually.
• 8:06
  Therefore, I believe as an investor, relinquished my control to people I have no influence over.
• 8:13
  So if the owners along this identical block are in a lesser financial situation and they have to sell and drop the pants on the price, that is one data point.
• 8:22
  But the more people who do that, that actually has reset my balance sheet.
• 8:26
  And same with the rent.
• 8:28
  So, okay, I have this brand new house, I can't even landscape it.
• 8:32
  I can't even add to the garden shed, I can't add mulch to it.
• 8:36
  Everything to the nth degree has been done already.
• 8:39
  The developer got all that right.
• 8:41
  How can I assert value if I want to sell it, but not for 150k less like my identical neighbor did.
• 8:49
  How can you do that?
• 8:50
  You can't renovate a brand new property and then you're over capitalizing on this thing, that's worth less.
• 8:56
  A lot of inquiry we have is with investors who have had to wait out a bit of time so that evaluation has cleared and that their neighbors that did that did sell are no longer on record for them
• 9:08
  to just to try and assert a stronger price to move on.
• 9:12
  Well, as an investor I prefer and the clients who come to us for the same reason is to copy paste.
• 9:17
  If I can make it look different, I can make it look like a new build.
• 9:20
  But I've paid for a secondhand property.
• 9:23
  Anything secondhand is cheaper, then it's unique and I have more control over the outcomes.
• 9:29
  That's not to say there's not risk, but if we can be in and out risk really fast, then there's less chance of either the rental or the value market changing during that renovation.
• 9:39
  So you are someone who likes to look for properties where you can take control of that and increase the value yourself.
• 9:46
  Exactly.
• 9:47
  If I take an existing build and I also don't renovate, to me it's not quite the same thing because there is still opportunity to refresh, differentiate, modernize.
• 9:59
  And there's freehold land.
• 10:00
  We only look at freehold.
• 10:02
  How can I develop or how can I sell it in future with a premium, because I know someone will develop because all the neighbors are.
• 10:08
  That still has second, third, fourth rounds of opportunity.
• 10:11
  The best in class from my perspective, and I'm yet to be swayed through trial and error to Try anything else again is adding value.
• 10:20
  So I want to increase the equity and my net wealth position and I want positive cash flow tipping into my pocket.
• 10:28
  And the more times I do that with a four week reno or a block of units or where I have different tenants on different payment cycles within that asset, A, it reduces my risk per tenancy to the banks
• 10:42
  and B, every single additional rental income or passive income, I can tick off something else from my wish list.
• 10:49
  That's so smart.
• 10:50
  And when you are hunting around, are there any things that can be an instant red or green flag for you for a property?
• 11:00
  Is there anything that makes it a good Renault or improvement opportunity?
• 11:05
  For sure.
• 11:06
  So it's not as though you go and choose the worst possible property.
• 11:10
  We have a client this morning who, you know, this is why we run due diligence.
• 11:14
  Right.
• 11:14
  So it's a double income property in the Manoa.
• 11:18
  Two options on face value.
• 11:20
  Looks exactly like the brief.
• 11:21
  Right.
• 11:22
  She went and hunted out the right thing.
• 11:24
  Then we send now teams immediately.
• 11:27
  Our builder went and had a look and found issues that visually you can't see until you have that expert eye.
• 11:32
  Our builder went straight to the piles are definitely not okay.
• 11:36
  And this is not compartmentalized to the laundry.
• 11:38
  This is pervasive.
• 11:40
  This is an issue throughout the house.
• 11:41
  The roof is shot.
• 11:42
  It's a full replacement situation.
• 11:45
  It is also not painted or sealed and interestingly was not part of the photographs.
• 11:52
  And so the key areas of Red Flag are roof replacement and structure, cladding and foundations.
• 11:58
  All three big fat red flag.
• 12:02
  So, okay, let's never close the door.
• 12:04
  Really good to take action.
• 12:05
  Show the agent that you are serious a look how much resource you've already thrown at the property.
• 12:11
  So you've evidenced action number two, put the offer in with justification for why your offer is less than asking, but that you're still in the game for the right price.
• 12:20
  Every risk has a price and a timeline and a reward.
• 12:24
  It's just a matter of getting the balance of those right for you to make it work.
• 12:28
  Hmm.
• 12:30
  What do you think in terms of.
• 12:31
  Because I think a lot of people, especially first home buyers will sometimes think,.
• 12:36
  Oh, I can put in some sweat.
• 12:37
  Equity, I can do it up, I can reno, I can get in cheaper and then boost it up to something that I want to live in.
• 12:46
  And then of course property investors get in cheap, boost up the value and then rent it out for more.
• 12:51
  And that's a great way to change the numbers.
• 12:53
  But what's the difference between an opportunity and something that can be Done up, whether it's by yourself or someone else and potentially a very expensive, expensive liability and making sure you don't fall into that.
• 13:08
  Yeah.
• 13:09
  So just looping back to that example before on the villa is just because, you know, three red flags.
• 13:15
  All of those key items, there's a price tag with all of those.
• 13:19
  And then if you have the wrong purchase price tag along with that, then you are massively overspending.
• 13:24
  Right.
• 13:25
  So there's a sense of relativity, there's a sense of context, and what is the right thing to do.
• 13:31
  The interesting one is, and I think this is a lesson for most, Kiwi number eight, why mentalities actually is most of our clients who are builders come in thinking that they will down tools on their 9 to 5
• 13:43
  building job or their business to pick up on their cashflow hack.
• 13:48
  I've only ever had one builder actually do it because when push comes to shove and we run the numbers, they are more than happy to get, you know, the excellent pricing.
• 13:58
  With our power teams who are out there, it's far more productive for our builder clients to keep being paid at what they do and duplicate that with the power team not to down tools over here, only to pick
• 14:10
  them up over here.
• 14:11
  Replacing one thing for another is not getting you ahead unless you work it out to a way where you.
• 14:16
  Well, actually the builder who did literally got all of their supplies, threw them in the trailer, got down there and smashed out a duplex in two weeks.
• 14:23
  So that definitely worked out.
• 14:24
  Wow.
• 14:24
  Every.
• 14:26
  Every other builder has, has done the math when it comes to DUP diligence on the project.
• 14:30
  They said, you know what, actually I have a family, I'm doing really well over here.
• 14:34
  I'm progressing on my work front.
• 14:35
  I'm now doubling my progress for my family.
• 14:39
  And that was smarter, not harder, way.
• 14:40
  To go for sure.
• 14:42
  What do you think as well, in terms of.
• 14:43
  You were talking earlier about the idea of catching a falling knife.
• 14:47
  You know, and this gets talked about a bit in various different investments that you can, you know, something's falling, you can try and catch it, it might be a falling knife and that could be really great.
• 14:59
  You know, how did that work out last time?
• 15:01
  Yeah, yeah, you get careful.
• 15:03
  It is tricky that, because they talk about, you know, buyer's market and it's, it's not a crisis, it's an opportunity.
• 15:08
  But all of our crystal balls are wonky.
• 15:11
  So how do you, as someone who is making a lot of investing decisions yourself, you know, you've got skin in the game when you're looking at this and saying crisis or opportunity, how do you weigh that up?
• 15:23
  And also how do you build in some buffer and some safeguards just in case?
• 15:28
  Let's say the market could be flat or decline.
• 15:31
  It could be that falling knife or it could just be in a plateau.
• 15:34
  Both of these stages are excellent.
• 15:36
  As long as you're going to be taking a property that you can improve, because one, you're going to add value, two, you're going to add cash flow to it.
• 15:43
  At the core of our process, which is trademarked, is to add an internal bedroom to the current house in a very particular way.
• 15:50
  So it's the fastest and highest return on that renovation.
• 15:53
  The part of that renovation to add a room, add value, add cash flow.
• 15:56
  I call that either the sunscreen or the beanie effect, depending when you're listening.
• 16:00
  And effectively, let's say you have a standalone house, it's a three bedroom house, we help you convert that in four weeks to a four bedroom house.
• 16:08
  So you've added an internal bedroom.
• 16:11
  The rent, as it were, when you bought it, it was probably pretty subpar, so it could be 450, 500 a week.
• 16:18
  We cosmetically renovate it, we add a bedroom, it's now 750 a week.
• 16:22
  The value because of that bedroom has massively increased the property along with the rest of what you did.
• 16:28
  So let's say that property has improved by 20% in value.
• 16:32
  If the market comes back and you lose 10%, you've lost 10% out of the 20 that you gained in value.
• 16:40
  It's not the capital, it's not the deposit that you have been working three, four years to put together.
• 16:47
  However, if you buy a property and it does come back 10%, you have lost your capital.
• 16:52
  So that's the difference.
• 16:53
  The Ebony effect is adding value so that there is buffer.
• 16:56
  There's a risk.
• 16:57
  The banker, the previous banker in me is like, where's my contingency for risk, right?
• 17:02
  What I want to know is I can add value because if it comes back, that doesn't eat at my core in the same way as if I worked for a year to save 50 grand and now that's evaporated
• 17:13
  over the night.
• 17:14
  And safest houses, it's about finding the houses in the locations and turning them into what's in rental demand and value demand.
• 17:23
  Unlike a business, you know, shares could evaporate if a business can disappear overnight.
• 17:28
  So we do need properties, but you still have to choose the ones that are coveted, the ones that people want to live in, and the Ones that are going to stand the test of time and especially in this
• 17:38
  weather.
• 17:40
  Yes, exactly.
• 17:42
  What about then?
• 17:43
  Are there any renos that could be a big waste of money because you can spend a lot and if it doesn't move the needle, that would be not great expectations.
• 17:51
  Having the right expectations is something that we have to help calibrate or recalibrate.
• 17:58
  And there's this huge aggression.
• 18:01
  I think by the time someone decides to invest, like, I want it all, and that's cool, so do I.
• 18:05
  Cash flow, value add and leverage.
• 18:08
  So if that's the case, then run your checks and balances, get the registered valuations, get anything that's legally binding for you to keep moving forward.
• 18:15
  So we definitely would want to encourage that.
• 18:17
  But you can't have it all for nothing, right?
• 18:20
  So you can't have the hugest value gain if you want the absolutely paired back cheapest reno.
• 18:28
  Oh, I won't go.
• 18:29
  The brand new kitchen.
• 18:30
  Fine.
• 18:31
  What's a cost effective way to make it look fresh to a tenant?
• 18:35
  Absolutely fine.
• 18:36
  But you can't keep cutting back, back, back, back, back to save a dollar and think that you're going to get the strongest value add.
• 18:43
  In that case.
• 18:44
  Okay, do what you can.
• 18:45
  If there's a budget constraint, let time do some more of it.
• 18:50
  We do have clients who will do a single project.
• 18:52
  Their advisor has said, you can do a single project.
• 18:55
  I need you to then let your income catch up for a bit longer.
• 18:58
  Or I need you to allow X amount of equity growth before you can achieve your next goal.
• 19:04
  So having the right expectations is so critical.
• 19:08
  You control what you can.
• 19:10
  This strategy is about, okay, how can I add value?
• 19:12
  How can I do this?
• 19:13
  And in a way where it's actually elevating the platform, you're creating an extra margin from the outset.
• 19:19
  And that also is a beanie effect.
• 19:21
  So if the operating cost.
• 19:22
  Well, not if, when insurance and the council decide to increase your costs, if you are cash flowing, at least your cash flow can withstand that.
• 19:31
  And that's on your property and on the income of it.
• 19:34
  If you've added value and five years down the track, that roof, which you did catch in due diligence, is going to be due at some point from the value you've added.
• 19:41
  You can draw down the bank's money and pay for it that way.
• 19:45
  Again, that hasn't hurt the pocket that you're feeding your family with.
• 19:48
  So it's being intentional about the decisions and being realistic about your next acquisition, what needs to be achieved with it, and almost compartmentalizing it to move on to the next.
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• 21:18
  All right, back to it.
• 21:20
  Interesting, all of this happening in a tricky environment.
• 21:24
  Right.
• 21:24
  And I think you're very much one of those people that you said the internal locus of control.
• 21:28
  You're like, right, what can I control?
• 21:30
  What can I do?
• 21:31
  Let's look at the things you can't.
• 21:35
  You're not uncomfortable?
• 21:36
  Yeah, yeah.
• 21:37
  Because there's a lot.
• 21:39
  And I think you're spot on that when you're thinking about your own money, you need to think about, what can I control?
• 21:43
  How do I turn this situation for whatever my own situation is.
• 21:48
  And that's the tricky thing with money.
• 21:49
  We're all in such different situations.
• 21:51
  Different things work at different phases.
• 21:53
  When we look at the wider picture though, right?
• 21:55
  And I've had so many people say to me, they think the property market isn't going to move, probably isn't going to get better until at least after the election, because everyone kind of plays possum and is like, what's
• 22:05
  going to happen?
• 22:05
  I was like, she's going to say election, she's going to say election.
• 22:08
  We're going politics.
• 22:11
  So what do you think?
• 22:12
  Do you think as well that everyone's just kind of in freeze mode for a little bit until post election?
• 22:16
  Until the 7th of November.
• 22:19
  My thinking is that the market will stay where it is.
• 22:21
  I think there will be more vendors who continue to list properties, hoping they can clear them out before, which is more opportunity.
• 22:27
  And if those listing numbers keep lifting, then that's only more exciting for people like us.
• 22:31
  What happens after will come down to which coalition or which party's in.
• 22:37
  But it is interesting, every third year, just that certainty or that known of where it lands politically seems to boost activity at least.
• 22:50
  I personally don't understand it because if you want to advance yourself, I think being on standby for a third of your life or every third year of your life is a massive disservice to yourself and your family because
• 23:05
  you can't control it single handedly.
• 23:07
  Have a vote, definitely vote for what you believe in.
• 23:11
  But the pond for opportunity is literally already there and I view it almost the opposite of its closing.
• 23:20
  So it's pre election fantastic for opportunities as far as buying because of the volume of opportunity out there.
• 23:27
  There are so many properties to renovate.
• 23:30
  I'm always amazed by how low the standard of housing is.
• 23:34
  It is very disappointing.
• 23:36
  But that means we have a big job to do and there's a lot to do and that makes it really exciting too.
• 23:41
  Yeah, well, on that point, I mean, I'm sure you're aware there are some people who really don't like property investors.
• 23:48
  And especially there's the idea of the flipping houses as well.
• 23:52
  Some people can get very upset about that idea.
• 23:54
  And yet to your point that you just made, where we have housing that is not always great in this country and I mean, are charities gonna come around and fix it up for everyone?
• 24:05
  Probably not.
• 24:07
  I know, I know right now they can't get the support because of cost of living.
• 24:10
  There are so many factors to this.
• 24:12
  I think circling back to what you asked about for value.
• 24:14
  So pre election, I think there will be very little buoyancy of value add.
• 24:18
  You have to force it, you have to renovate, you have to create in the buildings or the land.
• 24:23
  You need to create the value for yourself.
• 24:25
  The market is not going to carry you into your future this side of the election.
• 24:29
  But for that reason, and I know everyone, I was thinking, I'm always talking property, so pro property.
• 24:34
  But I'm also a realist and know that there are some great opportunities elsewhere and you can use that as an education opportunity with your kids if you're a parent.
• 24:42
  At the moment we're saying to our kids, okay, they have the coolest job ever, they feed our neighbours bunnies for a crazy premium.
• 24:49
  That's what I won't go into.
• 24:50
  When you have neighbours in Takapuna you get paid well, amazing.
• 24:53
  So we said okay, well that's really great.
• 24:55
  You're getting cash from our neighbourhood.
• 24:58
  We are going to go buy some shares.
• 25:00
  Okay.
• 25:00
  So some will go kiwisaver, some will go shares and to help them along you can choose.
• 25:05
  So that's Disney, Tesla, you know all those cool things, fun stuff.
• 25:09
  So good.
• 25:10
  So it's to diversify that has challenged me to look more broadly too because I am not expecting natural wealth creation the side of the election in terms of value growth.
• 25:22
  Our funds, shares and actually our forestry is kind of mentally where we're just expecting some natural growth.
• 25:31
  We also are not playing a hand.
• 25:32
  I can't make the tree grow any faster than the sun will, but I'm chalking that up to being I'll let that do its thing.
• 25:40
  My camp that I control and determine outcomes and how I choose for us to invest as in property.
• 25:46
  So that's an active forced hand.
• 25:48
  So I think it's working out.
• 25:50
  Also if property is something you're not sure of the side of the election, you know, maybe it's not the season for property for you.
• 25:57
  Yeah, yeah.
• 25:57
  Season's for everything, right?
• 25:59
  So if you're looking at this and you're thinking okay, you're not big on waiting for other people and we've got the election coming up really soon, next six months.
• 26:08
  What are your plans looking like?
• 26:11
  Definitely in acquisition mode because this is the season for buying bulk bargains.
• 26:17
  I'm very, very into multi tenancy mixed use, some commercial and challenging myself on a few trying different things right now because although I like to take calculated risk, it feels though the market is ripe for a lower price,
• 26:34
  a lower level of risk than perhaps after the election to lean on my power teams and trust in their expertise to help pull me into some of the areas.
• 26:45
  So it could be rejigging an office to warehouse composition, value add.
• 26:51
  It could be looking at a retail with some resi up top basically looking to try a few things to get me excited.
• 26:58
  So that's kind of what we're focusing on.
• 27:00
  Plus the other the different assets that I mentioned before.
• 27:03
  It's basically a progression of a lifetime like the buy box or the criteria that you have or that I have.
• 27:09
  Now 20 years after starting pre global financial crisis, my criteria and my expectations of a project are completely different.
• 27:17
  So I'm in this constant churn of sell off the lowest performing properties.
• 27:22
  So that's an ongoing process.
• 27:24
  This is not static.
• 27:25
  It's a constant process of refinement to increase the average.
• 27:29
  Okay, so if someone is looking at this situation as well and thinking, okay, I'm not really sure what's next, I'd like to do something, what do you think people should keep in mind to figure out their own situation
• 27:40
  and does it change if you're property investor versus someone like a first home buyer?
• 27:45
  The first thing is to get clear on your lending situation is to have a look around at different properties, gather the information, run it by your advisor, see if you're adding value.
• 27:58
  What does that look like compared to other deals that their clients, you know, does it mirror deals that their clients are doing?
• 28:03
  And can you garner some insight on what percentage value gain or percentage increase in income?
• 28:09
  If it's your own home, what do those repayments look like on interest only principal and interest?
• 28:13
  You know, how is it actually going to impact your life if it's a home that's all coming out of your salary or income.
• 28:20
  If it's a rental property, do you want it to tip cash into your hand or is it going to be in Hern Bay where you're certainly tipping cash in even no matter how hard you reno?
• 28:32
  So, so take the advice from your advisor to work out where you're at.
• 28:36
  And you need to understand from the day that you settle that property how it can impact you positively or negatively and what are the risks.
• 28:43
  So that's their role.
• 28:44
  I think it's really important to kind of look at the affordability.
• 28:48
  I think that's the hangover that the market is in now.
• 28:51
  A lot of the market has worked out what they can and cannot afford.
• 28:53
  You can't consciously go forward and invest without gathering the right people, the knowledge and the time or leverage.
• 29:00
  Whatever you're missing, you need to go find the right people and plug those gaps to do it.
• 29:03
  Well, there's no single answer for everyone.
• 29:06
  Just like we can have one single property deal, two of our clients will look at it completely differently and that will be the same for everyone listening.
• 29:13
  So basically if you're trying to get ahead, it's not, and you see this a lot these days, that the sort.
• 29:19
  Of the easy wins from property are.
• 29:21
  Over and sort of pick your poison.
• 29:24
  Do you have time to invest in it?
• 29:25
  Do you have money to invest in it?
• 29:27
  Are you able to make a smart move with some knowledge strategy, but you are going to basically have to choose something to put into it in order to make that move ahead these days?
• 29:39
  Absolutely.
• 29:39
  So if you think about that as the framework.
• 29:42
  You know which of the framework are your strengths, where do you have experience or who do you have in your corner to leverage?
• 29:50
  Do you have the time?
• 29:51
  Can you be hands on or is this a hands free sort of investment?
• 29:55
  And do you have the time to afford yourself to sit back and let it do its thing over time or do you feel that you're running out of time, in which case you might need a more active strategy.
• 30:06
  But if you don't have experience in it, then you need the right person and you need an advisor.
• 30:11
  So find the right framework.
• 30:13
  Know what, stick to your lane and then hire the others.
• 30:18
  Okay, at a time like this, when the market has been really flat, slash falling in some places, depending on where you are in the country, what do you think is one thing to do, one thing not to do?
• 30:31
  That would be the do plug the gaps in your framework and team of expertise.
• 30:37
  To not do is to not run your return on investment calculator.
• 30:42
  To not have the right power, team and due diligence.
• 30:46
  You might think you want to win.
• 30:48
  In the context of property, you might think you want to aggressively win that deadline.
• 30:52
  Multi offer.
• 30:53
  Never put yourself outside of a place you can't get out of.
• 30:57
  That's what a conditional offer is for.
• 30:58
  Do not expose yourself beyond your limits.
• 31:02
  That's where you land in the wrong place.
• 31:05
  And so if that means stress testing, don't look at the sunny side of the deal to convince yourself it's going to be okay.
• 31:12
  Stress test the numbers.
• 31:13
  If you don't know how to run those numbers, you absolutely need a financial advisor.
• 31:17
  Lean on your mortgage broker and get them to earn the commission you're giving them.
• 31:23
  It's up to you to be informed, but it's also up to them to make sure you understand what you're getting yourself into.
• 31:30
  Yeah, very good advice, very sage.
• 31:33
  All right.
• 31:33
  If people want to catch up with you, get more from you, whether it's the great social media drip feeds or even working with you, where can they find you?
• 31:41
  So head along to WolffProperty Co NZ, jump on the contact page and jump in for a call with Tatie or myself.
• 31:49
  You know, non obligation.
• 31:51
  Talk us through your scenario.
• 31:52
  We work with amazing, you know, financial advisors.
• 31:56
  We can point you to accountants, to lawyers, to financial advisors to pull that team together and ready yourself.
• 32:02
  If you want to have a chat, just to gather more info, then we're happy to do that.
• 32:06
  Follow us on Instagram, LinkedIn, Facebook.
• 32:08
  So Wolff property coaching.
• 32:10
  Thank you, Elsa.
• 32:11
  Lovely to have you in, as always.
• 32:12
  Now, if this episode was helpful, you share it with a friend.
• 32:15
  We can all level up our money together.
• 32:16
  Until next time, have a great day.
• 32:20
  This podcast can only give you general information about how things work in most situations.
• 32:25
  It's not individual financial advice.
• 32:27
  If you're after that, a financial advisor is always the best bet.