People become property investors for many different reasons. Passive income, financial security, a retirement fund. Nick Gentle’s motivation was different:

“I needed control of my time.”

You will have seen Gentle’s name in Your Property Finder in the column section of New Zealand Property Investor magazine. As the co-owner and operations manager of property finding company iFindProperty, he’s a trusted expert in the field. But his journey has been unconventional (having lived in Japan for a number of years) and he’s learned many lessons the hard way.

As a child of two teachers in Te Puke, property investment wasn’t part of his early experience. His parents had a rental property for a short time, but had problems with tenants, and sold it.

"They would have made some capital gains, but they never bought another one,” he shares.

No longer chained to the desk all day, Gentle’s property success offers him time to spend on other things – like coaching his son’s football team.

He developed an early passion for the Japanese language, doing an exchange trip to Japan in his seventh form year. When he returned, he studied computer science and Japanese, before heading to the United States on a working holiday, and then back to Japan.

His first job was working as an English teacher in Yamanashi, living in a 20m2 box with a view of Mt Fuji. A series of fortunate events led to a job with Goldman Sachs in Tokyo.

“I met a guy in a bar and he said ‘I’ll get you a job’. It was actually for Goldman Sachs This was in 2005, I actually had no idea who they were.”

It sounded like a dream job for a young and ambitious Kiwi. But it turned out to be his version of hell. “I realised that I was the least suited person for a job in investment banking. I hated it: I was working in a trader support role, on rotating shifts, and I was at the bottom of the rung.”

After 12 months he resigned, moving into a new job at software firm FNX: another fortunate coincidence, he met the woman he’d go on to marry within a few days of starting.

Gentle’s first property ventures were undertaken while living in Japan.

He was mixing with other young and ambitious people, learning about business, and considering his options. It began to dawn on him that property investment could provide him with both wealth and autonomy.

Naturally frugal, Gentle had managed to save a fair whack in Japan. And (fortuitously) the Japanese yen “went through the roof” during and after the GFC. So in 2009 he started scouting online for opportunities.

He found these via Maree Tassell. Gentle now co-owns iFindProperty with Tassell, but back in 2011, she had just set up a small business (Koru Homes) helping pair investors with houses.

With her help, Gentle was able to locate and purchase his first investment property in Kawerau, a title with two flats in Rotorua, and a title with four flats in Edgecombe.

The Kawerau investment was Gentle’s “worst property mistake” and a good lesson in patience. Purchasing the property in 2008 for $250,000, he would sell it nine years later (in 2017) for $260,000. If he had waited a year longer, he believes he would have sold it for $400,000.

To make matters worse, he turned down a property in Auckland at the time (because he had read in a book to focus on yields) in favour of the Kawerau option. “The Auckland property doubled in value [between 2008 and 2017]. The Kawerau property went down.”

He chuckles when he remembers an email he received from his lawyer just before his first property spending spree.

“They said to me ‘Kawerau ... do you know what you’re doing’? I didn’t really, and I should have listened, but what saved me was the fact that all the rentals had 10% yields,” he says.

So Gentle had three properties and wasn’t really better off financially. Flipping was a natural progression.

“I found a business partner who would run the projects in New Zealand, while I provided money,” says Gentle.

The partnership would specialise in mortgagee sales, a risky but highly profitable strategy for investors with guts.

“You are buying them straight from the bank, and you own them from the moment the hammer goes down,” says Gentle.

It was a fast and furious time. Between 2011 and 2014 the business partnership bought, fixed up and sold over 30 properties. But the opportunities weren’t to last forever. Ebbs and flows are a natural process in the market, and in 2014 the market started heating up.

“The mortgagee sales started to disappear,” says Gentle. “We had been buying properties for around $200,000 and selling them for about $230,000 – I look back now and it makes me want to cry.”

More lessons from the ground: the inevitability of the property cycle, and the importance of balance.

“My strategy should have been more diverse,” says Gentle. “I should have been taking the money I was making from flipping and investing in more buy-and-holds.

“My business partner and I bought a property for $50,000 in Rotorua and sold it for $100,000; if we had kept hold of it, it would be worth $800,000 today.”

Gentle’s business partnership ended in 2014 when he was offered an opportunity with iFindProperty. “I set up the company’s IT and marketing systems. We have a pretty well integrated CRM, website and marketing, which I have developed over time to support a distributed team.”

Still based in Japan, Gentle was also looking for more “buy and hold” opportunities back home.

In 2015, one of the company’s “finders” (based in Wellington) mentioned she had purchased a student rental that was yielding 9% returns.

“She asked me if I wanted her to find me one. Within ten days she had found a deceased estate in Brooklyn, with four bedrooms upstairs and one-and-a-half bedrooms downstairs, and a terrible roof. I bought it for $670,000.”

It was the beginning of a new strategy for Gentle: the acquisition of run-down, large properties to be used as student accommodation. It’s become a mainstay of his portfolio, but back in 2017, he had no idea how to turn a tired property into an attractive rental option. He decided to call in the experts.

“Through a colleague, I met Peter Ambrose, who is an extremely experienced investor and property coach,” he says.

“I wanted more accountability on my own investing, so Pete took me on for some coaching and helped me to implement some really useful theories.”

implement some really useful theories.” Ambrose also introduced Gentle to a builder and architect, who helped conceptualise and then convert the home into a desirable student dwelling.

“We added an extra bedroom and bathroom upstairs, so it transformed into a five-bedroom, two-bathroom dwelling. Downstairs was a cosmetic renovation.”

The two separate legal dwellings cost around $110,000 to renovate. The value increased from $670,000 to $1.2 million.

Gentle has repeated this winning formula: he now has five multi-income rentals in Invercargill and Wellington, one other rental and he co-owns an Airbnb. He continues to renovate homes to sell, the “balanced approached” that he says he should have employed from the start.

Gentle had been dividing his time between New Zealand and Japan up until 2019, when he and his wife decided that they wanted their son to have some of his education in New Zealand.

The family planned to come to New Zealand for a year (basing themselves in Rotorua to be near iFindProperty HQ) … but then Covid happened.

He says that the financial impacts of Covid were pretty minor:

“I think we lost a few weeks rent from one tenant, but that was about it.”

Lockdown largely didn’t affect iFindProperty, but the most difficult aspect of 2020 was on the home front.

“My wife is an entrepreneur, and she went back to Japan to help support her team because things were getting pretty bad over there. Then the borders closed.”

Essentially a single dad for seven months, it was a challenging time. The family are now reunited.

Gentle wasn’t a naysayer who predicted a property plunge. But neither did he predict the boom that occurred between October 2020 and March 2021.

Demand for iFindProperty’s services has been unprecedented: at the height of buyer hype, phone bidders were outbidding each other without having seen a property or done their figures. The Government intervention has dampened down some of the frenetic buyer activity, however.

“The buyers who were prepared to pay anything to get a house have retreated,” he says. “But there is still a lot of interest out there. People need to invest somewhere.”

Gentle will be losing in the realm of $50,000 a year due to the interest deductibility removal. But he’s locked in his mortgages for five years, is moving to P and I repayments to get his debts down and is looking for new ways to recoup these losses.

Gentle has never been motivated by the trappings of wealth. His attitude to material things can be summarised by a conversation he overheard recently.

“One of our finders from Hamilton was chatting with some young people at an industry event. They were asking: ‘What does Nick drive?’ He leant over dramatically and answered: “A 2010 Mazda.”

Autonomy and control of his time have been the guiding forces in his property career.

“I am able to sit here talking to you about property at 11am on a Friday. I can go out mountain biking, coach my child’s football team in the afternoons. That’s my definition of success.”