Latest / The Curve / A Property Story Gone Wrong.

Transcript

A Property Story Gone Wrong. · The Curve

• 0:00
  This episode, firstly, I'll produce the Emily is in the studio
• 0:04
  because she's actually listened to this episode.
• 0:06
  I got this message from Emily last week
• 0:07
  once she'd listened to her and she was like,
• 0:08
  oh my God, the Gabby episode is wild.
• 0:14
  I can't believe this happened to her.
• 0:15
  So basically, she got in touch with us.
• 0:18
  Do you remember Emily?
• 0:19
  This would have been maybe like a year ago.
• 0:21
  We put a blog out.
• 0:22
  It was anonymous.
• 0:23
  She didn't want to be named at the time.
• 0:26
  I think the title was, I'm in $700,000 worth of debt.
• 0:30
  This is the same person.
• 0:31
  Yes.
• 0:32
  No way.
• 0:33
  So this is the same person.
• 0:34
  So basically, I guess the comms between her and who this was with
• 0:40
  at the time maybe weren't, it wasn't appropriate
• 0:42
  to share who she was or who.
• 0:44
  Right.
• 0:44
  They were.
• 0:45
  But now it's all fine
• 0:47
  and she was comfortable sharing her story more openly.
• 0:51
  But basically, this is a story about buying property
• 0:55
  and one thing after another going wrong.
• 0:58
  It's relentless.
• 0:59
  It's been a higher time.
• 1:00
  There's another thing and another thing and another thing.
• 1:03
  And you're just like, this poor girl.
• 1:05
  I know you're like, surely not.
• 1:06
  No, no, that didn't happen.
• 1:08
  And then this happens.
• 1:08
  And then this happens.
• 1:09
  It was, we actually recorded for an hour and a half.
• 1:11
  I'm sure by the time it's edited, we missed in there.
• 1:13
  But the poor thing had a really rough time.
• 1:15
  And I think it's just a great reminder
• 1:18
  that buying, probably like for most of us,
• 1:21
  it's the biggest investment we've ever made.
• 1:23
  It's the most expensive purchase ever.
• 1:26
  And understanding what worst case scenario is,
• 1:29
  having done the numbers to the point where it's like,
• 1:32
  you've done almost worst worst case scenario.
• 1:35
  It's really important.
• 1:36
  I mean, there was so many learnings in this episode.
• 1:39
  I just thought, I feel so bad for you
• 1:41
  that we're learning this because of your misfortune.
• 1:44
  Yeah.
• 1:45
  But very grateful that she came in and shared her story.
• 1:49
  We will include the original blog in the show notes
• 1:52
  if you want to have a read of that.
• 1:53
  Great idea, very good idea.
• 1:54
  You get halfway through and you just want to know what happened
• 1:56
  at the end.
• 1:57
  Feel free to skip through the blog.
• 1:58
  Yeah, have a read, don't worry.
• 2:00
  In this episode, we talk a lot about Gabby's experience
• 2:04
  with property and home ownership
• 2:06
  that just like absolutely did not go to plan.
• 2:08
  And we just wanted to share a message from our partners
• 2:10
  being shared who know that home ownership is not a straight line.
• 2:13
  Sometimes life just does through your curveballs
• 2:16
  and there's actually nothing you can do about it.
• 2:18
  You just have to remember that they're all about supporting
• 2:20
  you through the hard stuff, not just the highlights.
• 2:23
  So if you are in a position where you're having a total meltdown
• 2:26
  or something's not on to plan,
• 2:28
  just remember that the sooner that you talk to the bank,
• 2:30
  the more options that you will have.
• 2:32
  And it is never too late, no matter how dire things feel
• 2:34
  to reach out, they are always there to help and not judge.
• 2:37
  So whether you're at the start of your journey
• 2:39
  or you're rebuilding whatever has gone wrong,
• 2:42
  remember that BNZ has got the tools and the people
• 2:44
  and they're ready to help you find a way.
• 2:46
  Okay, here is the episode with Gabby Hyde.
• 2:48
  Gabby, thank you so much for coming into the studio.
• 2:51
  This is so fun having like a fellow Kiwi living in London.
• 2:54
  How long have you been over here?
• 2:56
  So I've been here just over three years now.
• 2:58
  Yeah.
• 2:59
  It feels like a lifetime ago that I actually did come over.
• 3:02
  I think what's probably quite crazy
• 3:04
  is I haven't been home in three years all the same time.
• 3:06
  Wow.
• 3:07
  I know.
• 3:08
  That's a long time.
• 3:09
  But yes, I'll be back in February next year for two weddings.
• 3:13
  So I would love to start at the very beginning.
• 3:16
  When do you several years ago met your now ex?
• 3:20
  What was the situation, like what was the context
• 3:22
  that you met each other?
• 3:24
  How did the relationship actually start in the beginning?
• 3:26
  So this was quite a few years ago now,
• 3:29
  but both in Auckland at the time,
• 3:32
  we actually have mutual friends, a lot of mutual friends.
• 3:35
  Oh, that sounds very easy.
• 3:37
  Yeah, I know, ran into each other on a night out.
• 3:40
  Yeah, and things moved really quickly.
• 3:43
  I think it was probably, I want to say,
• 3:45
  potentially less than six months in
• 3:48
  and we're spending significant amounts of time with each other.
• 3:51
  And we're always very like open take turns
• 3:55
  in terms of buying this, doing that.
• 3:57
  And then it was actually a friend of ours
• 4:01
  that said, had you heard of the Air New Zealand
• 4:04
  American Express card?
• 4:06
  It's a credit card.
• 4:09
  But you've got 500 worth of Air New Zealand points
• 4:13
  if you signed up within the next few months.
• 4:16
  We have family kind of across New Zealand,
• 4:18
  so it made sense to do those kind of domestic flights.
• 4:21
  And we were like, this is a really, really good idea.
• 4:24
  We could have a joint card.
• 4:26
  We could kind of split everything we'd have a card each.
• 4:29
  And so instead of taking turns,
• 4:31
  we could just put everything on those.
• 4:33
  And then when it came at the end of the month,
• 4:34
  we just split it 50, 50 down the middle.
• 4:37
  And was there, were you living together at the time?
• 4:39
  Yes, I think we'd just started living together
• 4:42
  when we kind of looked into that.
• 4:45
  And was this during COVID?
• 4:46
  Or am I getting myself confused?
• 4:48
  It is slightly pre-covid.
• 4:50
  OK, right.
• 4:50
  But we're getting into that time.
• 4:52
  Got it. So we moved in together.
• 4:54
  We, me, a part of your relationship, so we all moved in.
• 4:57
  And then so this card came up.
• 4:59
  And when you say you were splitting everything,
• 5:01
  was this rent?
• 5:02
  Was this groceries?
• 5:03
  Was this phone bills?
• 5:04
  Was literally your whole life going on there?
• 5:06
  Or was it just some things?
• 5:07
  It was just probably the day-to-day expenses.
• 5:11
  So groceries, dinners out, petrol, kind of those expenses
• 5:19
  that just come about.
• 5:20
  And you're like, oh, just truck it on my car.
• 5:22
  Rent and other things, we definitely
• 5:24
  had a conversation about because at the time
• 5:25
  we were living with other people.
• 5:27
  So it was what was fair, considering
• 5:29
  that we had moved in with each other with others as well.
• 5:31
  But yeah, I think we were both very open and transparent.
• 5:36
  And said this makes sense.
• 5:38
  We're pretty fair and reasonable, logical.
• 5:41
  And we can get some points at the same time.
• 5:43
  Me being super.
• 5:45
  Rugal's probably not the right word,
• 5:47
  but at the time I was always looking for the best deal.
• 5:50
  OK, so then we move on into co-expenses
• 5:54
  when it comes to groceries.
• 5:57
  Very different to co-owning property,
• 6:00
  which is where we're heading in this conversation, spoiler.
• 6:03
  Yeah.
• 6:03
  How did you get from where you were in a sharehouse
• 6:10
  kind of integrating your finances
• 6:12
  to then deciding it was a good idea to buy a house?
• 6:14
  And also, how far through the relationship was this,
• 6:18
  what was going on, and can you paint the picture?
• 6:20
  Again, quite soon and I would say,
• 6:23
  I think I remember the conversation coming up,
• 6:26
  and this was potentially Hazy,
• 6:29
  is that at the time I was playing around with Sharesys,
• 6:33
  and this was slightly pre-COVID or around about that time.
• 6:37
  And I was putting money in, and we were talking about like,
• 6:39
  investing, and then I guess the conversation came up,
• 6:43
  and it was like, oh, do you have a disposable income
• 6:48
  are you putting away money regularly
• 6:50
  for the likes of Sharesys or anything else?
• 6:53
  So this was your first investing combo.
• 6:55
  And I think we both kind of had the conversation
• 6:59
  as that within the next few years
• 7:01
  would be really nice to invest in property.
• 7:04
  And I think there's an element of socialisation
• 7:06
  that comes with that definitely being in New Zealander.
• 7:08
  It's like, I know we're absolutely obsessed
• 7:12
  that it's the smart decision to go save up
• 7:15
  and go by property, and it will increase in value,
• 7:18
  and that's your little fund, that's your investment,
• 7:22
  and that's what you should do with your money.
• 7:24
  And this is also probably at the time
• 7:26
  where interest rates were very, very low,
• 7:28
  and going through COVID, people started being like,
• 7:32
  oh, maybe I should buy a property now is the time,
• 7:36
  and then the market started to pick up,
• 7:39
  and it felt that everyone was buying a house.
• 7:42
  And then so...
• 7:43
  So was this,
• 7:44
  because I can't even remember
• 7:46
  what was happening with price of houses in COVID.
• 7:49
  Were they still quite high?
• 7:51
  So I think things dropped for a little bit,
• 7:54
  and then things started creeping up.
• 7:55
  I think this was probably mid-2020,
• 7:58
  and I remember that we started going to,
• 8:03
  it wasn't open at homes.
• 8:04
  I think it was starting to look on trade, me,
• 8:06
  and maybe it was over COVID
• 8:08
  where they weren't doing open homes yet,
• 8:10
  but they were still trying to sell properties.
• 8:12
  And yeah, we'd seen other people post about
• 8:16
  how they just purchased a property,
• 8:17
  and they didn't even view it, and that type of thing,
• 8:19
  we said, we were turning around being like,
• 8:22
  surely if they can do it, why can't we do it?
• 8:25
  And then also, should we give him like a pseudone aim,
• 8:28
  like just so that we can refer to him throughout
• 8:31
  without it being like the guy?
• 8:33
  Ted?
• 8:34
  Ted?
• 8:35
  Yeah, let's go with Ted.
• 8:36
  I don't know where that came from, but kind of cute.
• 8:38
  Yeah, yeah.
• 8:39
  We like Ted, yeah, yeah.
• 8:40
  Okay, so you and your beloved Ted.
• 8:43
  Yes, at the time, decide, right, here we go.
• 8:46
  We're gonna buy some property.
• 8:47
  You go through the process of getting a mortgage.
• 8:49
  What was that like, and what we approved for?
• 8:52
  Yeah, talk us through what that was like.
• 8:54
  So we went and spoke to a mortgage advisor,
• 8:57
  just looked at our financial situation,
• 9:00
  to see what we could really afford,
• 9:04
  and were pleasantly surprised about how much we could borrow,
• 9:08
  and then made the conscious decision
• 9:11
  that we were going to borrow that amount,
• 9:13
  that we would borrow the maximum that we could
• 9:16
  with income that we're working with.
• 9:18
  I think because at that price point,
• 9:21
  we were thinking, okay, we want at least a two-bedroom,
• 9:24
  and that will enable us to get a decent sized two-bedroom,
• 9:28
  rather than taking less from the bank,
• 9:30
  maybe only getting a one-bedroom place,
• 9:33
  it kind of made more sense.
• 9:34
  And you were also going to rent out the other room, so.
• 9:37
  Yeah, exactly top supplement, the mortgage.
• 9:39
  Yeah, we knew that we wanted to Auckland,
• 9:42
  and we've always wanted central location,
• 9:46
  I think everyone does, but we definitely were
• 9:48
  a little bit more strategic about it,
• 9:50
  meaning we looked at the areas
• 9:53
  which potentially would have maintained their value
• 9:56
  over time in terms of property value.
• 9:58
  So we looked at good school areas,
• 10:01
  where there were parks,
• 10:02
  where there was good public infrastructure,
• 10:05
  whether that was access to buses or trains,
• 10:08
  which made, I guess, give us confidence
• 10:12
  that at a point that we might sell this property,
• 10:15
  someone else would want to live there as well.
• 10:18
  So we were more location-based over
• 10:21
  what the property actually looks like.
• 10:23
  And it was all happily ever after and everything was so well.
• 10:26
  Yeah, so, so well.
• 10:29
  Yeah.
• 10:30
  But I think at the time, it was really interesting
• 10:33
  because, like, in New Zealand,
• 10:35
  which is slightly different from here,
• 10:37
  is that a lot of property sales are, like, auction-lit,
• 10:41
  and that was quite, like, nerve-wracking.
• 10:43
  So, you know, we've spoken to the mortgage advisor,
• 10:45
  we can get, we're allowed to borrow this amount of money
• 10:48
  from the bank, we go through their approval process,
• 10:51
  and they basically go, okay, you can,
• 10:54
  go sign a sale and purchase agreement now if you want.
• 10:57
  Okay, so sale and purchase agreement for anyone
• 10:59
  that does not know is essentially saying,
• 11:02
  this is the house we want to buy,
• 11:03
  and we're committing to it, right?
• 11:04
  Yeah, exactly.
• 11:06
  It's a legally binding contract
• 11:08
  that essentially says, this is the house we want to buy,
• 11:10
  and this is the amount we're willing to spend on it.
• 11:12
  Yeah, exactly.
• 11:14
  And prior to that point, I mean, scrolling trade me,
• 11:17
  we went to, like, quite a few viewings,
• 11:19
  but it was also at that time that you go to view a property,
• 11:22
  and I think we viewed one, and it was like a tow bedroom,
• 11:25
  it had a lot of land around it, and we turned up,
• 11:28
  and there was, like,
• 11:29
  I was to 20 other people coming to the view of the property.
• 11:31
  It's so stressful.
• 11:33
  Yeah, what do you meant to do to stand out?
• 11:34
  Exactly.
• 11:35
  Going for even a rental property
• 11:37
  that you've got that many people just terrifying,
• 11:39
  let alone the biggest purchase of your life.
• 11:41
  Exactly, and we, I say we, I should say eyes,
• 11:45
  so we actually went to that auction,
• 11:48
  and they give you the little...
• 11:49
  The pedal. Stop.
• 11:51
  The pedal.
• 11:51
  Were you nervous?
• 11:52
  Oh, so nervous, because I was like,
• 11:55
  am I responsible at an adult?
• 11:57
  Like, am I allowed to do this?
• 11:59
  But also, I think at that auction as well,
• 12:02
  someone was like a phone bidder,
• 12:03
  but there's so much going on,
• 12:05
  and I think there was probably like six or seven different parties
• 12:07
  that were bidding as my recollection of it.
• 12:10
  Was it just this big blower you almost feel
• 12:12
  like you were drunk and you kind of can't remember
• 12:13
  what was going on?
• 12:14
  I remembered the room.
• 12:16
  I remembered the auctionaire.
• 12:18
  I remembered nothing else.
• 12:20
  Was this your first auction?
• 12:23
  Like, I'd been to auctions before,
• 12:24
  but not to purchase myself.
• 12:26
  Like, I'd seen the auction process,
• 12:28
  and we did get sucked in as they say.
• 12:32
  So, meaning you go in and prior,
• 12:36
  you should say, what's my limit?
• 12:37
  And we had said, I actually can't even remember.
• 12:39
  Let's go. It was like 850.
• 12:41
  We were like, we're tapping out there.
• 12:43
  We don't think the properties were that much more,
• 12:45
  even if we could borrow more.
• 12:47
  And did you make that decision with any one else's input
• 12:52
  who looked at the house and said,
• 12:54
  yeah, don't pay more than 850?
• 12:55
  Yeah, I mean, we had our parents that also came
• 12:59
  and provided their two cents,
• 13:01
  but they were very like hands off.
• 13:04
  I mean, if they, we would ask them for advice
• 13:07
  and they'd definitely help and provide,
• 13:09
  but they were like, you guys are adults.
• 13:12
  You guys can make your decision.
• 13:14
  Oh, God, no. I'm like, no.
• 13:16
  Please give me all your input for that one as well.
• 13:19
  So we went and viewed it
• 13:21
  and there was no building report done on that.
• 13:24
  So if anyone that hasn't bought a house before,
• 13:26
  a building report is kind of like,
• 13:27
  if you're going to buy a car
• 13:29
  and you've had a mechanic look over it
• 13:31
  and say, it's missing a radiator or something
• 13:34
  or the brakes totally not gonna work.
• 13:37
  So you're gonna have to replace this.
• 13:38
  So not having a building report
• 13:40
  is kind of buying blind in a way, isn't it?
• 13:42
  Yeah. And so actually what we did
• 13:44
  because we're quite interested in that house
• 13:46
  at the time is that we got our own building report done
• 13:50
  because they had said on like the listing
• 13:53
  that it was insulated in the roof floor and ceilings
• 13:56
  and we were like, that's quite important.
• 13:58
  It's like a weatherboard property.
• 14:01
  And then our builder went over
• 14:02
  and he said, there's no insulation in the roof.
• 14:06
  But we wanted to tell everyone else
• 14:09
  at the auction that so that we could keep our price low.
• 14:13
  Oh, so you wanted to get up at this phone?
• 14:14
  Like, hi, everyone.
• 14:15
  We have done that building report
• 14:17
  and we just want to let you all know.
• 14:19
  Yeah. And at the time, it's actually really a good point
• 14:22
  because it's bidding on something
• 14:24
  and you don't know all the details.
• 14:25
  You're going to bid higher if you think it's a good way.
• 14:27
  And other people could have done their own building reports as well
• 14:30
  but we knew this information and so we were like,
• 14:33
  we still like the property, we'd still be interested
• 14:36
  but we know it's probably not worth exactly what they're wanting.
• 14:40
  And yeah, I mean, that I think the builder
• 14:43
  maybe cost us maybe like four hundred New Zealand dollars
• 14:46
  to go have a look.
• 14:47
  And that for a lot of people, depending on the circumstance,
• 14:50
  that might be a lot of money to not buy the property.
• 14:52
  Oh, yeah. A lot of people do that three times
• 14:55
  and then they're like, oh, well, we can't actually go
• 14:57
  for any more properties because we've used our budget.
• 14:59
  Yeah, exactly.
• 15:00
  Okay, so you were at auction.
• 15:02
  You had your pedals.
• 15:03
  The bidding started.
• 15:04
  Yeah. And did you feel like, okay,
• 15:06
  we've got our plan.
• 15:07
  Our plan is 850, blah, blah, blah.
• 15:10
  Like did you have you had you, what other tips, tricks,
• 15:12
  things had you thought about going into it?
• 15:14
  We had always been told, like,
• 15:16
  remain calm and stick to your pants.
• 15:18
  So much easier than done.
• 15:21
  I actually don't even think it was 850,
• 15:23
  but it was something like that and it came around.
• 15:26
  And I think we just like looked at each other
• 15:28
  and we were like, should we go a little bit higher?
• 15:33
  I mean, long story short, we did go higher
• 15:36
  but we didn't win the auction.
• 15:38
  So other people significantly, I think,
• 15:42
  someone paid like 60,000 more than what we were willing to pay.
• 15:46
  So actually went well beyond.
• 15:48
  And it was actually probably hindsight quite a good decision
• 15:51
  that we didn't go any higher and that we didn't purchase it
• 15:55
  because what we did end up buying was actually a new build
• 15:57
  property, which has been like an absolute savior
• 16:01
  in terms of maintenance costs and things like that.
• 16:05
  With the new build came like a master home builder's guarantee,
• 16:08
  basically meaning for the next 10 years,
• 16:10
  if anything goes wrong with the property,
• 16:13
  they are obligated to fix it.
• 16:15
  But a lot of the beautiful, kind of,
• 16:17
  weatherboard properties that we really liked and really wanted,
• 16:20
  you know, they've been standing there for 50,
• 16:22
  100 years, however long.
• 16:24
  And so probably actually require a lot of maintenance,
• 16:27
  some roof, et cetera.
• 16:29
  So our investment that we made has been relatively low cost
• 16:35
  from maintenance point of view.
• 16:37
  So you ended up buying a new build?
• 16:39
  Yes.
• 16:40
  Where did you find it?
• 16:41
  How much did you pay for it?
• 16:42
  Run us through the purchase.
• 16:44
  So we came across a showroom and it was looking very glamorous,
• 16:49
  all shiny.
• 16:50
  There was magazines.
• 16:51
  There was kind of like a little model in the showroom.
• 16:54
  And we were walking through, yeah, the city we canned.
• 16:59
  And we were like, oh, we'll go have a look.
• 17:01
  And it was the first day the showroom had opened.
• 17:04
  And there was kind of a real estate agent standing there
• 17:06
  saying there is a block of 16 kind of townhouses
• 17:10
  that are being built in a central kind of area.
• 17:15
  Do you want to take a look at kind of the imagery,
• 17:17
  the size of the bedrooms?
• 17:18
  And we were like, yeah, we'll sit down, have a conversation.
• 17:21
  And we looked at all the 16 and there was kind of various sizes.
• 17:24
  There was two bedrooms, there was three bedrooms.
• 17:27
  But we noticed that all the prices were staggered.
• 17:29
  And some of the layouts were exactly the same.
• 17:32
  However, there was about like 10, 20, 30K difference
• 17:35
  between the exact same property.
• 17:37
  We were like, that's strange.
• 17:39
  The one that costs the least.
• 17:41
  How is that different from the one that's 50,000 more?
• 17:45
  And they said, it's actually not,
• 17:47
  but it's incentive for people to act and buy straight away
• 17:51
  because they know everyone's going to choose the cheapest
• 17:54
  first of exactly the same as the one that's 50K more expensive.
• 17:57
  So I would have been like, I've snuffed out some truffles,
• 18:00
  you know, like here we go, the best thing I've ever found.
• 18:03
  Exactly.
• 18:04
  Yeah, that's exactly what we did.
• 18:06
  We were like, okay, that's too bedroom.
• 18:09
  That's the cheapest of the 16.
• 18:10
  Where do I sign?
• 18:12
  We got given more of the details in terms of like
• 18:15
  when the plant build was, who the kind of developer was.
• 18:19
  So we also were able to go look around at another development
• 18:23
  not far away to see like comparable properties,
• 18:26
  kind of what the finishings were.
• 18:28
  We had a couple of options because it was new build
• 18:31
  to be able to choose colors and things like that,
• 18:34
  very limited.
• 18:35
  It's kind of interesting.
• 18:36
  The whole new build versus existing building.
• 18:40
  I don't know why.
• 18:42
  I have this real thing where I'm like,
• 18:44
  and I don't know, again, if it's just absorbing
• 18:46
  what people have said over the years,
• 18:48
  but I feel like I've heard new build isn't as good
• 18:52
  of an investment and I don't know why.
• 18:54
  What did you do your research around pros and cons?
• 18:56
  Well, we thought more from a maintenance point of view,
• 19:01
  that again, I go back to the Master Home Builder's guarantee.
• 19:04
  It was like over the next 10 years from a maintenance point of view,
• 19:08
  there should be very little costs associated with that.
• 19:12
  And at the time, we were thinking,
• 19:14
  oh, well, we might do some travel.
• 19:16
  We might go somewhere else.
• 19:17
  We don't know how long term we might be in this place.
• 19:20
  So this makes sense that if we did want to rent it out,
• 19:24
  it would probably be a smarter investment decision
• 19:27
  than purchase something that might be slightly older,
• 19:30
  to have more character.
• 19:31
  In my eyes, being more beautiful,
• 19:32
  that we might need some extra cash.
• 19:34
  Right, and you just basically didn't want to have to outlay
• 19:37
  on a new roof or something like that.
• 19:39
  Another thing that played into it is because the development
• 19:43
  was supposed to be in a year's time,
• 19:45
  it also gave us a little bit more time
• 19:47
  to save some more money,
• 19:50
  meaning that we could borrow less from the bank,
• 19:52
  which ideally worked for us.
• 19:54
  We weren't in a rush to find anywhere,
• 19:56
  but it was nice to know that something was coming.
• 19:59
  So you decided on this house,
• 20:01
  signed, sealed, then what?
• 20:03
  We waited.
• 20:04
  But at this time, it was probably,
• 20:07
  when we purchased, probably it was close to peak of the market.
• 20:10
  And I know everyone talks about that in 2022 into 2021-ish.
• 20:15
  And all the 16 units were purchased, which was great,
• 20:19
  because that gave us a little bit of confidence.
• 20:20
  We got the cheapest one of the 16,
• 20:22
  surely if other people were paying a lot more
• 20:25
  for the same thing, we didn't pay too much
• 20:28
  for the property.
• 20:29
  You were thinking, bargain, we got it.
• 20:30
  We got it.
• 20:31
  Well, good on us.
• 20:32
  We went first, we took a punt, but it's paid off.
• 20:35
  Yeah, yeah.
• 20:35
  Because also some new builds cannot happen,
• 20:37
  if not everyone's, if they're not all bought, right?
• 20:40
  Because they don't have the money to do it.
• 20:41
  Yeah.
• 20:42
  Because so when you sign, it's kind of conditional
• 20:43
  on the fact that they're able to get other buyers.
• 20:46
  Yeah, yeah, totally.
• 20:48
  And I guess what was key at the time
• 20:50
  is that when we kind of got our mortgage pre-approval,
• 20:53
  what we did is that we actually looked at kind of
• 20:55
  interest rate fluctuations to say,
• 20:58
  is there been a little bit of chatter about, okay,
• 21:00
  interest rates going to go up,
• 21:01
  would we still be able to afford the mortgage
• 21:04
  at a higher interest rate?
• 21:05
  So we'd had done a bit of those calculations and said,
• 21:08
  even in a year's time, we still think
• 21:11
  if interest rates increased by two, three, four percent,
• 21:15
  we should be fine to be able to do this.
• 21:17
  Sounds like you really did your research.
• 21:19
  I mean, you were really prepared.
• 21:21
  I mean, a lot of people go into it
• 21:23
  and just think best case scenario, not worst case.
• 21:26
  It sounds like you had really thought about it.
• 21:28
  I don't know your numbers.
• 21:29
  And you were approaching it in a really mature, measured way.
• 21:32
  I mean, we're probably both relatively risk-averse,
• 21:36
  but we definitely had an Excel spreadsheet
• 21:37
  with all the numbers on it.
• 21:40
  But I guess we're wasting, we're saving,
• 21:43
  we're doing these things.
• 21:44
  And a lot of talk in the media about, okay,
• 21:47
  property prices are at all time high.
• 21:48
  Have people paid too much?
• 21:50
  They really worth as much interest rates to go up.
• 21:55
  And property prices start to plummet.
• 21:58
  Should.
• 21:59
  And we're thinking, oh, this is making us a bit nervous.
• 22:04
  At this time, we are coming up to when the property
• 22:08
  was supposed to be fully finalized built.
• 22:11
  So we're thinking, okay, when early there,
• 22:14
  hopefully interest rates don't increase a little bit more,
• 22:17
  we can lock something in, we should be okay.
• 22:21
  But we then get a notice from the developer,
• 22:25
  oh, we're still another six to nine months out.
• 22:29
  And why so delayed?
• 22:31
  Yeah, well, building materials.
• 22:34
  And I don't know whether people remember that kind of conversation,
• 22:37
  but there'd been a shortage on building materials
• 22:40
  because there'd been a lot of new builds,
• 22:42
  especially over that kind of COVID period.
• 22:45
  And so the properties just couldn't be built.
• 22:48
  We actually went past to look at what had been done
• 22:50
  and they'd like laid the foundations,
• 22:52
  but there was no walls or anything.
• 22:54
  Can that genuinely terrifying?
• 22:55
  And so you would need to be at kind of almost builds at this point.
• 22:59
  100%.
• 23:00
  And we said, okay, we know the terms of our contract.
• 23:05
  And there is a sunset clause.
• 23:06
  We're basically, it's like, once you reach a certain point,
• 23:09
  you can't pull out.
• 23:10
  You can't pull out.
• 23:11
  But if the developer doesn't pull through and build by a certain point,
• 23:15
  you can, there is an out for everyone.
• 23:19
  But we hadn't reached that sunset clause yet.
• 23:21
  So at the same time, we're still in,
• 23:24
  we at this point, we paid the 10% deposit.
• 23:27
  So we were locked and loaded.
• 23:29
  We said, well, we've just, we've just got to wait.
• 23:32
  So stressful.
• 23:34
  So, so stressful.
• 23:35
  Is this in the middle of COVID?
• 23:36
  Is this lockdown sort of time?
• 23:38
  This is coming out of COVID.
• 23:40
  So after the lockdown.
• 23:41
  Oh my god, you'd been in lockdown.
• 23:44
  Yeah, wait together, waiting, saving,
• 23:46
  stressed about what you can see happening in the media.
• 23:49
  Huge toll on a relationship.
• 23:52
  Even just one of those things, being in lockdown
• 23:54
  and itself is enough to be incredibly relationship testing.
• 23:58
  Yeah, and we were getting a bit nervous
• 24:01
  because we also knew that once it came around to settlement,
• 24:06
  that everything was contingent on the bank
• 24:09
  doing evaluation of the property to make sure
• 24:13
  that when the banker about to lend you money,
• 24:15
  that it's actually worth what you've paid for it.
• 24:18
  I don't understand how, so sorry, just to clarify.
• 24:20
  So you sign up, you sign on the dotted line,
• 24:23
  you've done your sale and purchase agreement.
• 24:26
  You wait for a certain period of time
• 24:28
  until they've sold all the rest of them.
• 24:30
  Then there's a time in which you have to pay your deposit.
• 24:34
  At all of these points, can you pull out?
• 24:37
  No.
• 24:38
  So this is your fully committed, as soon as you've signed
• 24:40
  and sell and purchase agreement.
• 24:41
  Yeah, we're committed.
• 24:42
  We transferred the 10% as like, that's your deposit.
• 24:47
  That's your holding money.
• 24:48
  Knowing that once the property is built for a new build,
• 24:51
  that's when you submit your additional 10%
• 24:54
  to make up the 20% that we owe for the property.
• 24:57
  However, because it's a new build,
• 25:00
  the bank is looking at the value of the property
• 25:02
  and they're basically trying to assess
• 25:04
  like the level of risk that they're about to go lend you
• 25:08
  800,000 let's say.
• 25:10
  So they want to know that the property actually is that.
• 25:13
  So if we default on our mortgage,
• 25:15
  then they can go sell the property
• 25:17
  and they're still covering themselves,
• 25:20
  if that makes sense.
• 25:21
  Yeah.
• 25:22
  So they can't though do the property valuation
• 25:24
  until the property's built.
• 25:26
  Of course.
• 25:27
  However, in our clause in our sale and purchase agreement,
• 25:31
  it basically says that like you have two weeks
• 25:35
  or 10 working days, something along those lines,
• 25:38
  from when that the developer notifies the property's ready
• 25:42
  for you to settle,
• 25:43
  the bank needs to be able to basically commit
• 25:46
  to the mortgage they need to do the property valuation
• 25:48
  and we also need to hand over that other 10%.
• 25:51
  So we get noticed that the property's ready for us
• 25:55
  and this is the date that we can move them.
• 25:58
  So kind of those 10 days come around and we're like,
• 26:01
  okay, bank need to do the valuation
• 26:04
  and confirm that they're still going to lend us
• 26:06
  the same amount of money that they said that they was.
• 26:09
  It is so stressful to almost be two years later.
• 26:12
  Yeah.
• 26:13
  When a market can change so much,
• 26:16
  that is not talked about enough in terms of how much
• 26:20
  that can change the whole deal.
• 26:22
  Yeah.
• 26:23
  Did anyone tell you that?
• 26:25
  Yes and no, meaning it was in our contract.
• 26:29
  We spoke about it.
• 26:30
  We knew about the sunset clause as well,
• 26:33
  but we really didn't think we would be here two years later
• 26:38
  and so we didn't really foresee that scenario.
• 26:41
  And you also don't think about the market changing that rapidly either
• 26:46
  because especially for New Zealand,
• 26:49
  the property market has been so consistent
• 26:51
  for such a long period of time.
• 26:52
  COVID is a complete spanner globally for every industry.
• 26:56
  Yeah.
• 26:57
  So it's a pretty bizarre and unique scenario.
• 27:01
  Sure.
• 27:01
  And so when the bank told us they're doing their valuation,
• 27:05
  we were thinking,
• 27:07
  oh, they're still going to lend us what they said.
• 27:10
  They would because we still need that money.
• 27:13
  We have been saving,
• 27:14
  but we still need the full amount that they said
• 27:17
  they were going to lend us.
• 27:19
  And everyone thought,
• 27:20
  we'll be fine. We'll be fine.
• 27:22
  Again, I go back to the point that there were 16 different units there
• 27:24
  and we paid the lowest for other two bedroom units
• 27:28
  that were exactly the same.
• 27:29
  And so we thought,
• 27:30
  rather people had done this,
• 27:31
  they're also going to find themselves in a tricky situation
• 27:35
  if the bank isn't going to lend them the amount of money.
• 27:38
  And just to explain that situation is that if the bank says,
• 27:43
  no, we can't lend you as much as we originally intended,
• 27:48
  you as the person that signed the sale purchase agreement
• 27:51
  has to come up with the additional cash.
• 27:54
  Oh my God.
• 27:55
  Yeah.
• 27:56
  And then what happens if you can't?
• 27:57
  Your 10% deposit is gone.
• 28:00
  Yep, goes to the developer.
• 28:01
  But then what?
• 28:02
  Can you still, if that's worse,
• 28:04
  I mean, that's still a terrible situation,
• 28:06
  but let's just say that happens
• 28:08
  and you can't come up with the rest of it,
• 28:10
  is that you can default on the sale and purchase.
• 28:13
  It just means you don't get your deposit back.
• 28:14
  It's kind of exactly.
• 28:16
  So it's the holding to make sure that you follow through.
• 28:19
  Over 100 grand.
• 28:20
  Yeah, basically 100 grand.
• 28:22
  Yeah, exactly.
• 28:23
  So a lot of money.
• 28:23
  Yeah, a huge amount of money.
• 28:26
  So we're wasting for the property evaluation.
• 28:29
  Then we get sent through this five 10 page report,
• 28:34
  which basically looks at like comparable sales,
• 28:37
  what the property is built from, who built it and the area.
• 28:42
  And it comes through $40,000 New Zealand dollars less
• 28:47
  than what we said that we were going to pay for it
• 28:49
  on the sale and purchase agreement.
• 28:51
  OK, so that basically means what the developer had
• 28:54
  evaluated it, and so it would be worth it.
• 28:56
  It was $45,000 less.
• 28:58
  $40,000 less.
• 28:59
  $40,000 less.
• 29:00
  So you had to essentially find $40,000 within.
• 29:04
  Not quite $40,000.
• 29:05
  The reason being is that the bank said
• 29:07
  that they would lend us 80% of what the property was valued at.
• 29:12
  So that means that we were $32,000 short,
• 29:18
  which $32,000 is a significant amount of money to have.
• 29:25
  And literally, I remember opening up the report.
• 29:29
  And I was like, did, come here.
• 29:31
  Tiddy.
• 29:33
  We haven't it.
• 29:34
  We haven't it.
• 29:35
  We haven't it.
• 29:36
  We haven't it, sure.
• 29:37
  And again, I spoke to my mom.
• 29:40
  She was like, you'll be fine.
• 29:41
  Your mom just always does a board of work.
• 29:43
  On the phone to my mom, it's not fine.
• 29:46
  I'm forwarding you this report right now.
• 29:48
  Is your mom like a property lawyer?
• 29:49
  Why not?
• 29:50
  She works in real estate.
• 29:51
  OK, stunning.
• 29:52
  So she's reasonably smart.
• 29:53
  Yeah, exactly.
• 29:54
  So she's, she's property, same property valuations before.
• 29:57
  Perfect.
• 29:58
  Very handy.
• 29:59
  Very handy.
• 30:00
  Super handy.
• 30:01
  I would have just gone into full panic mode.
• 30:03
  I wouldn't have been a gang.
• 30:05
  Let me see if this, what is going on with this report.
• 30:07
  I would have just thought how the actual phone, I'm going to come up with $32,000.
• 30:12
  Exactly.
• 30:13
  And then I think we had the conversation.
• 30:14
  OK.
• 30:15
  I'm getting on the phone with mom.
• 30:16
  This report, how much money can we actually come up with?
• 30:20
  Meaning, if we need to find $32,000 within, I think this maybe would have been like day
• 30:28
  nine, day eight, like eight working days, where can we possibly find this money?
• 30:35
  Oh my God.
• 30:37
  And you can't just, well, you can drain your entire bank account.
• 30:43
  I didn't have 30,000 in my bank account.
• 30:45
  Absolutely.
• 30:46
  Not.
• 30:47
  It shouldn't be in there anyway.
• 30:48
  Thank you.
• 30:49
  Very good.
• 30:50
  Nice.
• 30:51
  And I think he went off to do that.
• 30:54
  I got on the phone with mom and we went through it literally line by line, looking at what
• 31:00
  other properties were valued at and whether there was any flaws with that.
• 31:04
  So they'd like benchmark our new development against another one in a different suburb,
• 31:09
  but a similar build.
• 31:11
  And I then we kind of made like a little bit of an asterisk against that and said, OK,
• 31:15
  a less desirable suburb, because of X, Y, Z reason for this particular suburb properties
• 31:20
  actually worth significantly less, therefore we should be valued higher.
• 31:24
  I go back to the weatherboard conversation there was like properties in there, which were
• 31:28
  made from brick, but weatherboard is more desirable, more expensive material, etc. like that.
• 31:34
  So we went through and said, what possibly in this report, could we go back and contest
• 31:40
  and say, actually, we disagree with your findings.
• 31:43
  Can you please value our property?
• 31:46
  Can you get a second opinion?
• 31:48
  Like, can you get someone else through?
• 31:50
  So so with yes, you can get a second opinion, but because we had got pre approval with
• 31:56
  our bank, we didn't have time to do anything.
• 31:58
  We had selected our bank, which we'd got pre approval from.
• 32:01
  So we had to use that banks valuation.
• 32:04
  We couldn't take another one.
• 32:05
  OK, right.
• 32:06
  So there's no OK.
• 32:07
  So then what happened?
• 32:09
  So going through the report and within a couple of hours, we'd like come up with
• 32:16
  everything possibly under the sun and sent it back to the people that had sent it to
• 32:21
  us.
• 32:22
  Number one, to say, is there any room for negotiation on this?
• 32:27
  We were really trying there because the majority of property valuations, you know, people
• 32:32
  do this for their job.
• 32:33
  Then it's backed by evidence.
• 32:36
  That was going to be really, really difficult to get across the line.
• 32:39
  Then what else did we do?
• 32:41
  We went actually to our developer next and we sent an email to the agents that had sold
• 32:47
  us the property as well as the developer saying, this is what's happened.
• 32:51
  Our valuation has come unless then what we've said, we're pay for it.
• 32:55
  We can't be the only ones in this boat.
• 32:58
  We know we paid the least for these properties.
• 33:01
  Others will probably be exactly the same.
• 33:03
  The developer came back to us and sent to the agent and said, you're right.
• 33:07
  The people are in the exact same boat that have purchased in this exact same location
• 33:12
  and same townhouses, however developer doesn't care because they kind of like get it.
• 33:21
  That's also what do they mean to do as we valued it this kind of exactly.
• 33:25
  I mean, it's brutal, but it is not their problem.
• 33:28
  Absolutely not.
• 33:29
  Also, it's really not in their best interest for every single person to devolve.
• 33:33
  A hundred percent.
• 33:34
  Or they get as the deposit and then no one else owns the property.
• 33:36
  And so we said, well, if you took to this property to the market now with this current valuation,
• 33:42
  you wouldn't be able to sell it at that price anyway.
• 33:45
  So we went back to the developer and said, would you give us a loan?
• 33:51
  IE, we pay less for the property now and we will pay back longer term.
• 33:56
  Is there any kind of, is there any other kind of negotiation that we could do on this?
• 34:03
  That was a no.
• 34:04
  Oh, really coming to the party.
• 34:06
  Then we went out to our family essentially, actually, sorry, before we went out to our family,
• 34:13
  we looked at realistically what we could pull together.
• 34:16
  We were looking at draining everything at this point and said if we could do the short term
• 34:21
  to save ourselves close to the 100,000 that we're about to lose.
• 34:25
  If we have to default, we will stretch ourselves as thin as possible.
• 34:29
  But how?
• 34:30
  But also, even if you were splitting that down the middle, 15 grand age,
• 34:34
  when you've already stretched to go in, it's like, where would you get that from?
• 34:37
  Were you thinking selling all your shares, selling everything you own?
• 34:40
  Like, what would you say, stretch yourself? What was that looking like?
• 34:43
  Literally, I think I was like, I could come up with 5,000 in my bank count.
• 34:50
  I think I had about 7,000 in shares that I could do.
• 34:54
  But that would be negligent as well.
• 34:57
  And also, everything to your name.
• 34:58
  Everything to my name.
• 34:59
  The Shares East did end up going to take a little bit of my own money
• 35:03
  and then also was able to get a loan from a family member.
• 35:07
  We didn't have family that just had thousands of dollars sitting in cash ready to be used.
• 35:15
  And there was also an element of where adults were chosen to make this decision.
• 35:20
  You know, we looked at this nearly two years ago and we said that we could afford it.
• 35:27
  Maybe we should have looked at the reality and that could have been a possible scenario.
• 35:32
  And maybe we shouldn't have gone and signed for a property that was stretching us too much.
• 35:37
  So you basically got to the point where you were
• 35:39
  is self-legulating the word I'm looking for where you were just thinking?
• 35:42
  This is your own fault.
• 35:44
  Get yourself out of it.
• 35:45
  It's not anyone else's responsibility to pull you out of this mess.
• 35:47
  It was sort of one of those.
• 35:48
  Yeah, it was one of those.
• 35:50
  There were so many tears, so many tears, so many sleepless nights.
• 35:56
  The other thing that we did consider as well was like a second tear lender
• 36:01
  so borrowing the money off another private organization at a higher interest rate
• 36:07
  so that we could then use that money.
• 36:10
  There's just like, I think the thing that makes this the worst is that
• 36:14
  it's the time frame.
• 36:15
  So you've got to make these massive decisions in a really short space of time
• 36:20
  with huge repercussions if you can't come up with it,
• 36:25
  you know, like such a pressure cooker.
• 36:27
  Yeah, 100%.
• 36:28
  And not a great place to be making sensible decisions.
• 36:31
  No, and even things.
• 36:33
  I remember being like, okay, my next paycheck is coming in two weeks.
• 36:39
  So if I literally go to like 500 in my bank account,
• 36:44
  could they get me through the next two weeks?
• 36:46
  Like that is ridiculous and no one should do that.
• 36:50
  But when you're playing without a amount of money that you're potentially going to lose,
• 36:53
  these crazy things kind of cross your mind and you're like, I've got to do everything.
• 36:57
  It's really like a fight or flight.
• 36:58
  Was there a point where you thought actually we're just going to have to default on this?
• 37:03
  Or we should default on this?
• 37:04
  I really thought we were going to default on that to be completely honest.
• 37:08
  And I think that's where the tears came from because I was like,
• 37:11
  we have saved for so long put in all of our like hard earned money aside
• 37:18
  but close to 100K to just pour it down the drain.
• 37:21
  Disappear for nothing.
• 37:22
  I guess throughout that kind of time, definitely,
• 37:27
  I tend trans.
• 37:28
  The other silly mistake that I ended up making is that I had put my additional
• 37:39
  5% because we decided to 50-50 on the house and we still had that remaining 10% deposit.
• 37:44
  My 5% that I was saving.
• 37:47
  I put that in a term deposit.
• 37:49
  Oh gosh.
• 37:49
  We need to give notice if you want to withdraw.
• 37:54
  So I had forgotten to give my notice.
• 37:58
  This is honestly so something that I would do like I just feel for you.
• 38:05
  And I realized this would have been like eight days before.
• 38:08
  Oh my god, just add to the pressure.
• 38:11
  And it was like a 30-day notice type situation.
• 38:16
  And I remember just like running into the room and being like,
• 38:21
  I haven't, I haven't like all my money is tied up.
• 38:26
  I have no money.
• 38:29
  Ended up speaking to the most lovely lady who basically I said,
• 38:34
  this is my situation.
• 38:37
  I know this is the terms of like my term deposit.
• 38:40
  Is there any exception to rule?
• 38:43
  Can I, can I pay an additional fee to like get the money out?
• 38:47
  And she was like, okay, I'm going to have to escalate this as a critical kind of urgent
• 38:52
  procedure. She then went and that was your term deposit with the same bank that you were getting
• 38:57
  the mortgage from.
• 38:58
  So they knew that no stunning stunning because the kind of past the bank where we had the
• 39:06
  mortgage, their term deposit rates weren't as good as this other bank.
• 39:10
  So naturally, I went with the one that I've got you.
• 39:13
  The thing is, I did too much research.
• 39:14
  I was going to say, you really will want to shut yourself in the foot.
• 39:17
  I know, I'm so organized.
• 39:18
  I know.
• 39:20
  I know that was really silly.
• 39:22
  So we expedited it.
• 39:23
  Did we get the money out?
• 39:24
  Yeah, we got the money out.
• 39:25
  They basically came back.
• 39:26
  And I remember because they were like, we're going to need like another day.
• 39:30
  And I was thinking I don't think I actually said that night.
• 39:33
  I was like, I have no money.
• 39:36
  I call it a day.
• 39:37
  I'm the end of me.
• 39:39
  I am a broken human being.
• 39:40
  I don't want to be an adult anymore.
• 39:44
  I want to be a child.
• 39:45
  And I don't want to do that.
• 39:46
  And I move on.
• 39:48
  What am I doing?
• 39:49
  Can I go like just go?
• 39:51
  I'm just done.
• 39:52
  Exactly.
• 39:53
  So anyway, ended up being able to get that out, put that into the bank account as the starting point,
• 40:00
  combined that with kind of the lift over my savings, shares,
• 40:06
  do you sell all your stocks?
• 40:07
  Yeah.
• 40:08
  And a loan from a family member.
• 40:10
  And yeah, 48 hours out before everything was
• 40:15
  to we managed to get the money together.
• 40:17
  Wow.
• 40:17
  I have no words to even describe how stressful that scenario was.
• 40:22
  I've never been that stressed in my entire life.
• 40:25
  Right.
• 40:25
  So let's just talk about the relationship for a second.
• 40:28
  So you go through what is arguably one of the most,
• 40:31
  if not the most stressful time in your life.
• 40:33
  Yeah.
• 40:34
  How was the dynamic at this point?
• 40:39
  We were okay, but mentally drained, because at that point,
• 40:42
  all you're talking about is money.
• 40:44
  Yeah, it is.
• 40:44
  It's not how your day is.
• 40:45
  It's, have you spoken to your mom?
• 40:47
  Have you spoken to the bank?
• 40:48
  Have you figured out this?
• 40:49
  Have you transferred the money?
• 40:50
  Have you spoken to the lawyer yet?
• 40:52
  Is it in their account?
• 40:53
  Have you robbed the bank?
• 40:54
  What are we doing?
• 40:55
  Like, like, yeah,
• 40:57
  it's only that, because that's all that's top at mind.
• 41:00
  So it's like, you go from being in a romantic relationship
• 41:04
  to being business partners that are,
• 41:05
  has an instant trip.
• 41:07
  A hundred percent.
• 41:08
  And then when it all went through and settled.
• 41:12
  Which has meant to be really exciting.
• 41:14
  So uplifting and powering,
• 41:17
  you know, we did it moment.
• 41:18
  I imagine we didn't feel like that.
• 41:20
  No, and they were like, here's some champagne in the case
• 41:25
  of the property.
• 41:26
  And you're just like, I don't even want to drink the champagne.
• 41:28
  Like, I just feel exhausted, mentally drained.
• 41:32
  And I'm also still nervous, because I've now got
• 41:35
  a very little safety net.
• 41:37
  But if anything does go wrong with this property,
• 41:39
  I lose my job tomorrow.
• 41:41
  Again, it probably brings up the conversation
• 41:43
  of income protection insurance and things like that,
• 41:46
  which didn't have.
• 41:48
  You know, I'm still in a very, very risky position.
• 41:51
  So I need like months to kind of like build myself up again.
• 41:56
  And feel like financially secure, both of us do.
• 41:59
  So we get to that point.
• 42:02
  And probably within,
• 42:04
  well, I want to say like another six months,
• 42:06
  it's too much.
• 42:08
  We're just not on the same page.
• 42:11
  And we kind of mutually decide that like,
• 42:14
  it's just not working with each other anymore.
• 42:16
  Right. So the relationship fully broke down.
• 42:19
  Yeah. And I mean,
• 42:20
  there is an element of stress with the house that came with that.
• 42:23
  There's obviously a lot of other things that happened at that time.
• 42:27
  But I do think it's kind of those extreme, stressful life events,
• 42:31
  which can kind of make or break people.
• 42:34
  And I would, I would absolutely say is that like,
• 42:36
  we were both very supportive each other throughout the entire process.
• 42:41
  And we're kind and lovely, but it's draining and it really took a toll.
• 42:46
  After the breakup,
• 42:48
  was one of the first things that you had to speak about was like,
• 42:50
  how are we going to deal with this house?
• 42:52
  What is the plan we're two from here?
• 42:54
  Because you, even though you don't have children,
• 42:56
  yeah, or a little dog,
• 42:58
  you have a baby in a sense that you have a house together.
• 43:01
  Yeah.
• 43:01
  Then it is the conversation of what,
• 43:05
  what do we do with us now?
• 43:06
  Join asset that we have.
• 43:08
  And another learning is that we hadn't formalized any sort of contract.
• 43:14
  No, I just want to do like the Homer Simpson,
• 43:17
  like in the Hedge moment.
• 43:19
  And I actually think everyone will be like,
• 43:22
  that is crazy.
• 43:24
  That is genuinely crazy.
• 43:25
  Oh my God.
• 43:26
  And for me, I even think about that.
• 43:28
  And I'm like, why did we not do that?
• 43:29
  Because that is usually something that I would do.
• 43:31
  I'm very like,
• 43:32
  no, this has to make sense.
• 43:34
  Since we need a contract, we need to formalize it.
• 43:36
  We had like emails back and forth from each other
• 43:39
  where it was like agreement and also the silent purchase agreement
• 43:42
  that everything was 50-50.
• 43:43
  So it was kind of like very clear as day,
• 43:45
  what was happening there.
• 43:47
  But in terms of like an out for whatever point that was,
• 43:52
  we didn't have very clear like terms of,
• 43:54
  okay, what if one person wants to sell this
• 43:56
  their 50% share of the property and another person does,
• 43:59
  which is so important.
• 44:00
  Yeah, like we had nothing in writing.
• 44:03
  So we then backtracked.
• 44:07
  Because I think the benefit of like ending on good terms
• 44:11
  is that there was no kind of bad blood there
• 44:15
  that we were like, okay,
• 44:16
  let's be reasonable and logical about this.
• 44:18
  So we put together a contract based on what we wanted.
• 44:22
  We then got that kind of verified by people
• 44:25
  in kind of more relationship property space
• 44:28
  and established kind of like our three different like
• 44:31
  out clauses, but at the time we said,
• 44:35
  we haven't gone through all of this
• 44:38
  to just turn around and sell the property again.
• 44:40
  Because you made it as a financial decision too.
• 44:43
  It wasn't just to live in it.
• 44:44
  It was a really great financial decision,
• 44:46
  which obviously turned out to be the most stressful thing
• 44:48
  in the entire world.
• 44:49
  However, at this point the property hadn't,
• 44:51
  I'm assuming gained any value.
• 44:54
  So it would have all been for nothing.
• 44:55
  If you turned around and said,
• 44:56
  we've broken out let's sell it.
• 44:57
  Oh, absolutely.
• 44:59
  The valuation stirred the Auckland Council valuation,
• 45:02
  which was done separately,
• 45:03
  sorry, the Council valuation that had been done separately as well
• 45:07
  also said it was worth less than what we had paid for it.
• 45:10
  So we said, okay, we will keep it,
• 45:13
  but we need to turn it to it because we've got
• 45:16
  both going to go into our separate living situations.
• 45:21
  And that was interesting.
• 45:23
  Again, the hype around, okay,
• 45:26
  the property market and property prices
• 45:28
  and the rental market as well,
• 45:30
  where really been led to believe that
• 45:33
  in a good location and new build,
• 45:36
  many people want to rent your property.
• 45:38
  Why would they not?
• 45:39
  Why would they not?
• 45:40
  Oh my God.
• 45:41
  So we went out to kind of a property management agency.
• 45:44
  We said, can you put up the listing, et cetera.
• 45:47
  They did.
• 45:49
  Initially, we had maybe like four or five people interested
• 45:53
  wanting to come through viewings,
• 45:55
  which was positive or various different backgrounds.
• 45:58
  We're like, okay, we have some interest.
• 46:00
  Five is like surely a one or five or four drop out,
• 46:03
  at least to someone.
• 46:05
  And we had our preference of who we wanted to select
• 46:08
  and we started kind of the due diligence
• 46:09
  the background checks on them.
• 46:12
  And then Ted told others we're going to go with someone else.
• 46:16
  So they and then kind of like took the listing down.
• 46:19
  Once we continued the due diligence for these people,
• 46:22
  they then turned around and said,
• 46:23
  halfway through the process, actually,
• 46:26
  we found another property.
• 46:28
  We're not going to take yours.
• 46:29
  Oh my God.
• 46:30
  So we went back to the other people that have viewed and said,
• 46:34
  are you interested again?
• 46:37
  And everyone said, no, I found something else now.
• 46:38
  Oh my God.
• 46:39
  Something else.
• 46:40
  So that listed again.
• 46:42
  And time is ticking.
• 46:45
  Are you paying for the property to get it at this point?
• 46:47
  So you're just paying the mortgage.
• 46:48
  We're paying the mortgage.
• 46:49
  Which was like, well, how much each they do?
• 46:53
  About what is the mortgage every fortnight?
• 46:56
  It's sitting around kind of like the 2000 New Zealand dollar mark.
• 46:59
  So quite a lot of money.
• 47:01
  And this is on top of the rent in your new places,
• 47:02
  that you're now living in.
• 47:04
  Oh my God.
• 47:06
  And we're already fully stretched ourselves.
• 47:10
  So this is all happening.
• 47:11
  We go back, list the property.
• 47:13
  No interest.
• 47:14
  No interest for another two weeks.
• 47:18
  No.
• 47:19
  We're now coming into the winter time frame
• 47:21
  where there's less demand for property.
• 47:23
  Oh my God.
• 47:24
  But you're like, I'm going to have to move in with my ex.
• 47:26
  We're free.
• 47:26
  I'm like, we're going to have to move back into that.
• 47:28
  Yeah, exactly.
• 47:28
  Because the thing is, that is actually
• 47:31
  for an extended period of time to pay even two double rent,
• 47:35
  let alone a mortgage.
• 47:37
  It's like rent is just like unfathomable.
• 47:39
  Yeah, completely.
• 47:41
  And then saving grace, we find an interest to party.
• 47:46
  But I messed up that we actually ended up lowering the rent price
• 47:50
  to try and attract more people,
• 47:51
  which did attract this one particular tenant.
• 47:54
  We do the background checks on him,
• 47:57
  all looks good.
• 47:58
  I mean, they're not done by us.
• 48:00
  They're done by the property management company
• 48:01
  that they've all managed it.
• 48:05
  Get him in and we're like, oh, we can breathe.
• 48:07
  There's someone in there covering the mortgage.
• 48:10
  I mean, we're still topping it up
• 48:12
  because the rent doesn't cover the mortgage fully.
• 48:15
  We're probably all three, four months in.
• 48:18
  We'd sign this tenant for 12-month fixed-term tenants,
• 48:22
  while we still evaluate what we want to do.
• 48:25
  And then we just don't get rent put into our count one week.
• 48:30
  And we get a strange email from the tenant directly to say,
• 48:35
  I can't afford the rent anymore.
• 48:39
  I'm leaving the city.
• 48:40
  I'm moving out of your property.
• 48:43
  And thank you for your time.
• 48:47
  No, isn't the whole point of a fixed contract
• 48:49
  that you have to pay a break clause?
• 48:51
  Yes, exactly.
• 48:52
  And we're, I was, well, you can't do that.
• 48:57
  Well, technically you can.
• 48:59
  You can do that.
• 49:00
  You can stop putting rent in the account
• 49:03
  and you can start to move out of the account, out of the house.
• 49:07
  So we responded straight away, being like,
• 49:10
  we understand financial circumstance change.
• 49:12
  Can you help explain this?
• 49:13
  You are under a fixed-term tenancy.
• 49:15
  You're obligated for 12 months, et cetera, et cetera.
• 49:19
  If you're having a difficult time in terms of being able to pay your rent,
• 49:24
  let's have a conversation maybe about a rent reduction.
• 49:27
  We'd really like to continue to make this work.
• 49:29
  There is also kind of the back of mind of
• 49:32
  this person's being a little bit cheeky
• 49:34
  because we did do the background checks.
• 49:37
  We were able to see how much money he had in his bank account.
• 49:41
  And so we were confirmed that he could afford this
• 49:45
  for the 12th month period as well.
• 49:48
  Anyway, that didn't work.
• 49:50
  He said,
• 49:51
  My circumstances have changed.
• 49:53
  I am leaving.
• 49:54
  I am moving out.
• 49:55
  I will be gone by this time.
• 49:56
  Oh my God.
• 49:58
  He disappears, essentially.
• 50:00
  We try speaking to him on the phone.
• 50:01
  Emiles, we try everything to negotiate with the sky.
• 50:06
  Our one saving grace is that he has paid like
• 50:10
  a holding deposit that's gone to the tenancy services.
• 50:14
  So there is some money held for these exact scenarios.
• 50:19
  So we basically speak to each other,
• 50:23
  Ted and I and we go, well,
• 50:25
  do we try and fight this in like the tenancy tribunal?
• 50:29
  Or do we just invest more of our energy and time?
• 50:32
  Is it more worthwhile to just go back to the property manager
• 50:35
  yet it listed as soon as we can and just get someone to try and take over
• 50:38
  as soon as possible?
• 50:40
  And we thought we just need to invest our time
• 50:43
  in getting this tenanted again.
• 50:45
  Let's just put this man to the side.
• 50:47
  We'll deal with that later.
• 50:49
  Let's just get it someone in there.
• 50:51
  So we went back out to the market and managed to quickly turn around
• 50:56
  new tenants to get into the property as soon as possible.
• 51:01
  We then weren't able to claim any compensation back from the tenancy services
• 51:07
  for the sky not following thrown as 12 month contract,
• 51:10
  but we were able to get back kind of his holding deposit.
• 51:14
  So you still own a house with your ex?
• 51:16
  Yes.
• 51:17
  You still earn like 700,000 dollars worth of debt with him?
• 51:20
  Yes.
• 51:21
  I mean, your purchasing of a house process has gone literally the complete opposite to
• 51:26
  I imagine what you think the plan would be.
• 51:28
  What have been your biggest learnings, takeaways, things that people can,
• 51:32
  I mean, obviously, we've already touched on heaps,
• 51:34
  but just to reiterate some of those main points to help people to either
• 51:39
  avoid ending up in a situation that is less than ideal or if they do and they have to navigate it
• 51:44
  with someone that no longer in a relationship or friendship with other things.
• 51:47
  Yeah, yeah.
• 51:48
  Done it with someone else.
• 51:50
  What would some of those main learnings be?
• 51:53
  I think definitely plan for like the worst case scenario, i.e.
• 51:58
  spoke of interest rates.
• 52:00
  What if interest rates do increase and your mortgage does increase as well?
• 52:04
  Are you able to cover yourself in that specific scenario?
• 52:09
  What is the worst case if someone loses their job tomorrow?
• 52:13
  Is there some sort of income protection insurance as well that you know
• 52:19
  if you can't cover the mortgage, what it is kind of your backup plan?
• 52:23
  And again, I would go back to especially the property valuation and a new build scenario.
• 52:28
  It sounds ideal getting a new build property, but you know, if the valuation is not going to
• 52:34
  come in until 10 days before you're due to settle and that subject to change,
• 52:39
  I would have loved someone to tell me saying, oh, you should have had an extra 55,
• 52:43
  or 50,000 up your sleeve just in case, you know, it's looking at all those scenarios
• 52:49
  and saying what possibly could go wrong here and you don't want to focus too much on the
• 52:53
  negative because you want it to be a super exciting experience, but just planning those out
• 52:58
  those possible scenarios would be like my absolute number one, like what could happen?
• 53:04
  Another one is probably maybe if you do get approved for a million dollars,
• 53:09
  whatever that is, you don't have to go and buy a million dollars even though you might say,
• 53:15
  I can, that doesn't mean that you have to do that.
• 53:18
  Okay, and then also getting a contracting out agreement.
• 53:21
  Yes, 100%.
• 53:23
  Like what is your out, when are you selling and if you have to sell, what are you doing?
• 53:27
  If you break up or you're no longer friends, what's the process, like get a lawyer involved?
• 53:32
  And 100%.
• 53:33
  And I definitely think the unconventional way of doing it, whether it's with the ex-partner
• 53:38
  or even with a friend, there is multiple different ways in which you can purchase property.
• 53:44
  And I must say that actually going through the experience with someone else,
• 53:48
  it's less isolating and you feel like there is support there.
• 53:52
  So it's not something that I would not recommend.
• 53:55
  I actually would recommend it to others as long as you're clear on that worst case scenario,
• 54:01
  you have your clear terms if things don't go according to plan and it's clearly documented.
• 54:07
  It's kind of what I'd say.
• 54:08
  In hindsight, thank you about the idea of the ultimate investment with property.
• 54:13
  Are you still glad you did it?
• 54:15
  I've definitely thought about this a lot.
• 54:18
  Sometimes I'm like, that aged me 10 years, for sure.
• 54:23
  But at the same time, very proud that kind of got through that and managed to make it work,
• 54:31
  and now I'm really happy with kind of the scenario.
• 54:34
  I mean, I do think it's a huge achievement for anyone to purchase a property to say that
• 54:39
  was able to do that, still maintain my job and an income, invest.
• 54:45
  I mean, it's pretty amazing that you've built your emergency fund back up.
• 54:48
  You're able to invest.
• 54:49
  You're not like, that's amazing.
• 54:51
  I mean, it definitely took time and what people may or may not have seen,
• 54:56
  especially close friends, is that there was absolute times where
• 55:00
  I was saying no to things because I was like, no, I need to.
• 55:03
  My priority is this to get my financial security back.
• 55:07
  And then I can go on the overseas trips and do that.
• 55:10
  So I definitely went without a few things for a while.
• 55:13
  But I mean, my context is always sacrifices to be made.
• 55:17
  And so now looking at it, I would say, yeah, it was a roller coaster,
• 55:22
  but definitely like a worthwhile experience.
• 55:24
  And I'm so glad that I can sit here today and be proud of everything.
• 55:29
  That we kind of went through.
• 55:30
  And do you check in with Ted?
• 55:32
  Do you have like your chickens in terms of where's the property at?
• 55:35
  Like, do you need any, is there any maintenance that needs to be done, blah, blah, blah?
• 55:38
  And also, what do you think your plan is around selling?
• 55:41
  Like, where did you land on?
• 55:42
  Yeah, those app causes.
• 55:44
  So we basically have the discussion every year that comes round as to what we'd like to do.
• 55:51
  We put everything kind of email cons.
• 55:54
  We have our regular council bills that come in once a quarter.
• 55:57
  We have our body corporate fees that come through.
• 56:00
  It's organised this structure in terms of any like plans to sell or what we want to do.
• 56:05
  It's still like a very open conversation.
• 56:08
  We want to continue renting it for now.
• 56:10
  And we'll see what happens.
• 56:11
  I mean, six months things could be very different in two years.
• 56:15
  They could be exactly the same, don't know.
• 56:17
  But do you have a agreement where you won't sell unless it gets to this valuation
• 56:22
  or you're going to hold on to it?
• 56:24
  Like, is there like a minimum amount of time you've agreed to keep the asset?
• 56:27
  Or is it totally open?
• 56:29
  It's totally open.
• 56:30
  Is that dangerous though?
• 56:31
  In terms of like, what if tomorrow he said he wants to sell and you really don't?
• 56:35
  I mean, we do have a clause that kind of says that if we need to go through a mediation,
• 56:40
  but also what we can appreciate is that each other's financial situations might change significantly.
• 56:46
  If I was to lose my job tomorrow, I wouldn't want to be held to having to hold on to a property
• 56:52
  to continue to pay the mortgage.
• 56:54
  If I couldn't find a new job within a very short amount of time and wanted to keep that door open.
• 57:00
  So I think we're both kind of open-minded about what could happen in the future.
• 57:05
  And so...
• 57:05
  That's pretty brave and like open.
• 57:07
  Yeah.
• 57:08
  Because if that did happen and you had to sell,
• 57:10
  and it was even less than when you bought it, that would be so average.
• 57:17
  It would be, but then also we want it to be mutually beneficial.
• 57:20
  I mean, we both wouldn't want to sell if we think we could get less for it.
• 57:25
  So we're quite on the same page.
• 57:27
  And I do think still today we're very like logical in terms of our approach and what we see
• 57:32
  that future.
• 57:33
  And I think that is holding it on for a bit longer, seeing what happens with property prices.
• 57:38
  What happens if one of you gets a new partner?
• 57:40
  Have you got like any protection around like that partner not getting access to the asset?
• 57:45
  Yes, so in our contract we do have like what would happen in the future, not only if
• 57:52
  this is so morbid, but like if one of us was to pass away and who would be entitled to that 50%
• 57:58
  share and things like that.
• 57:59
  So yes, we do have that in our contract, but relationship property is so complex.
• 58:05
  And so what I'd also say is definitely get an advisor.
• 58:09
  I'm not an expert in the space.
• 58:10
  When you have a relationship end, generally you can kind of be like out of sight out of mind.
• 58:16
  And you don't have to, I mean eventually you'll see on Instagram, they've got a new girlfriend,
• 58:20
  a boyfriend or whatever.
• 58:21
  Yeah, but to be in a position we're almost immediately.
• 58:25
  You would have to find out because...
• 58:26
  Oh yeah, yeah, 100%.
• 58:27
  You know, it's not ideal, is it?
• 58:29
  It's not ideal, but also like life happens and you just got to kind of roll with it or at least
• 58:35
  that's my approach.
• 58:36
  God, you've got such a good attitude towards it.
• 58:38
  I hope so.
• 58:39
  It sounds like you've learnt a lot and grown up a lot.
• 58:42
  Yeah, really good that it didn't turn sour and you had to sell it or you know it.
• 58:47
  Yeah.
• 58:48
  Yeah, many, many listens and that's worries.
• 58:50
  Many many listens, but many sad memories, but also many, many happy memories.
• 58:55
  And to come out the other side, I think we're both super proud of kind of where we've got to.
• 59:00
  And we'll take it as an accomplishment and a fun story.
• 59:04
  Thank you so much, Gabby.
• 59:05
  No worries.
• 59:06
  And keep in touch, I would love to know if, you know, if and when you sell it and how that
• 59:12
  works and if it, you know, you made money on it.
• 59:14
  Yeah, yeah, absolutely.
• 59:16
  Absolutely.
• 59:16
  Maybe we do a part two when it comes to the negotiation of sale.
• 59:20
  Yeah, that could be interesting, that how.
• 59:22
  Another thing.
• 59:24
  Okay, well thank you so much and I'm imagining it probably means, you know, you end up in a new
• 59:29
  relationship, you won't be jumping into financial.
• 59:32
  Yeah, gosh, we'll cross that bridge when we get there.
• 59:36
  Oh, okay.
• 59:38
  Well, thank you so much.
• 59:39
  Did you love the service?
• 59:42
  Yes.
• 59:43
  Have you got property, front and center in your mind?
• 59:46
  Yes.
• 59:48
  So I was like, you're a five-year-old.
• 59:50
  Now could be the time to take the first step towards what it is that you're wanting to buy.
• 59:55
  Whether that's your first home, whether that's a new flat, whether it's, I don't know,
• 59:59
  buying another investment property.
• 1:00:01
  And thankfully, BNZ has the expertise and tools to help you get started,
• 1:00:06
  and their home loan partners are ready whenever you are.
• 1:00:09
  You can book an appointment, you can ask millions of questions.
• 1:00:13
  Trust me, that is totally fine.
• 1:00:15
  And you can start turning the property dream that you have into a plan and hopefully soon
• 1:00:20
  into a reality.
• 1:00:21
  I know from experience that this can feel quite overwhelming, but when you're working with experts
• 1:00:25
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• 1:00:30
  Know that you've got the advice and the tools that you need to actually make it happen.
• 1:00:34
  We know how hard it can feel and like overwhelming and just, you know, so like a fish out of water
• 1:00:41
  when it comes to buying properties.
• 1:00:42
  So we're so thankful to BNZ to be helping us create and empower this podcast so that people can
• 1:00:50
  learn and we just want you all to succeed.
• 1:00:53
  We want you all to succeed.
• 1:00:55
  We're all in your corner and this is going to be such a game-changing property podcast series.
• 1:01:00
  Yes, and for anyone that is going through the process of either buying a house or a flat or
• 1:01:05
  whatever it is that you're trying to do, please let us know because we would love to be
• 1:01:08
  sharing you on from the sidelines, but thank you so much again to BNZ for empowering this podcast.