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A Lesson In Investment Success

A Lesson In Investment Success

When Kirsty Stewart jumped from teaching to the property game it proved a flipping good idea, as Joanna Mathers discovers. Photography Kurt Langer

By: Joanna Mathers

1 October 2023

“I always put Thursday mornings aside for property education. I like to attend auctions: Harcourts and Baileys do two or three, and it gives me a great sense of what is happening in the market.”

Kirsty Stewart, property investor, is as committed to education as she is to property. She credits much of her property success to her career as a teacher – the focus on learning and communication giving her an excellent grounding in planning and preparation.

The self-proclaimed “careful spender” saved money early in life and purchased when she was young. This would go on to become the first property in her investment portfolio. Her strategies have diversified over the years, but she’s been successful in most of her ventures. And she’s not afraid to get her hands dirty and work with her team of tradies to get things done.

“Once, I went to a hardware store three times in one day to get supplies. It makes much more sense for me to do it than to pay a builder an hourly rate for such a simple thing.”

Granny Flat

Born and bred on a Canterbury farm, Stewart always wanted to be a teacher. She also had a heart for people and dabbled with the idea of social work. “But mum said I was too emotional for that.”

After leaving school, she trained to be a primary school teacher, before heading overseas in 2000. Working as a teacher in Thailand, Portugal and Spain, she scrimped and saved, and by the time she returned to New Zealand in 2006 she had enough for a small unit in the Christchurch suburb of Redcliffs.

“It was just a granny flat really,” she says. “With an awful 1970’s bathroom and kitchen.”

In 2010 she met Marty, the man who was to become her husband. The meeting was fortuitous in several ways; she met her life partner, and he shared her property goals.

“Marty had sold his family home [when he split from his former wife] and used the money to buy two units,” she says. “Six months later we bought another unit to share together, and I kept my small unit too.”

The couple decided to move to Australia in 2011, keeping all properties as rentals. “My mum looked after the property management side of things.”

Returning to Christchurch in 2015, after living in small units or apartments, they decided to change things up – moving to the leafy green of suburbia.

The trials of lockdown left Stewart looking for a break from teaching – she moved full-time into flipping.

Suburban Dream?

The large home they purchased in outer Burnside, with its 875m2 section and five-bedroom property, was as suburban as you can get. Weekends were spent tending their large garden; the upkeep of a house that size was significant.

The “suburban dream” it wasn’t. “I think we hated every minute of it!”

They were away from the city’s appeals (cafes, movies et al.) trapped in suburban ennui, and by 2018 they were ready to move. “We sold it for more than we spent on our next homes, which was a one-bedroom townhouse in the centre of Christchurch,” she says.

“WIth extra money, we were able to buy an apartment in Auckland, off the plan, for $525,000 at the start of 2019.”

The move to Christchurch central – a city reinvigorated post-earthquake – suited them. And it was during this time that a neighbour introduced them to the world of flipping.

He had renovated and sold a house – and Stewart, who had always been a very hands-on investor when it came to maintenance – felt confident she had the skills to do the same thing.

She was working part-time, as Covid took over the country. “My job wasn’t really working for me. So, I decided to take a leap of faith, become a full-time investor and start flipping.”

Using a revolving credit facility, she purchased a property with a friend, in the suburb of Linwood. The $260,000 three-bedroom property was liveable but needed a full cosmetic reno. The pair put an additional $20,000 each into the renovation and completed it in four weeks. It sold for $375,000, and they made $36,000 each in profit after expenses.

Stewart says she was very trusting in her dealings with her investment partner. “I put $130,000 into his bank account without any real agreement in place,” she recalls. But it worked. Her next venture, a contemporaneous deal, would be another leap of faith.

Ducks In A Row

Contemporaneous deals require excellent organisational skills, and a lot of guts, to pull off successfully. You need your ducks in a row and the ability to act quickly. But if it works, it’s a great way to raise capital fast.

This particular property was in a block of flats, with peeling wallpaper, mould and dirty carpet. It was a flipper’s dream come true. She purchased for $317,000 in early 2021.

Stewart made a provision in the sale and purchase agreement that she would be allowed access before settlement for the purpose of improvements. After a general tidy up (and the discovery of “lovely wooden floorboards under the carpet”) it sold for $445,000.

Even given the timing (the heart of the boom) this was still a massive win.

Her next venture was a larger renovation with two other investors she found via a Facebook group. Trusting her instinct again, she worked with them in a dual home/subdivision renovation.

The two houses were located on a large property in Riccarton. One was fine, the other tired and lacking a code of compliance. They purchased for $1.25 million, using second tier lending; the reno took place in August-December 2021.

As a hands-on investor, Stewart wanted to get involved, turning up at 7am on Saturdays and Sundays. “This was a great opportunity to reinforce relationships with the trades on site.”

Stewart believed the extra time she spent on site was valuable to enhance her project management skills. The renovation cost $350,000, and the houses sold for $1.1 million and $1.08 million, respectively. “We made just over $165,000 each for this project.”

Simultaneously, she’d negotiated another contemporaneous deal – a two bedder in Waltham. Ten days later, reno complete, she sold, making just over $100,000 in profits.

The year 2021 was heady and 2022 started out similarly. She was renovating full-time and completed seven further successful projects with a business partner, including two blocks of flats.

Stewart had been notable for her successes up until this point, but by late 2022 the property market had softened, and Stewart soon crashed back to earth.

She had set a goal of doing a further flip before Christmas and purchased in a hurry. She bought a property that looked good on paper for $490,000, then renovated and sold it for $560,000. The renovation included adding a third bedroom, fully tiled bathroom and kitchen. However, it was a loss-making venture in the end as the market had dived. “I ended up losing around $45,000 on that one. It was hard hitting, but a good lesson.”

Stewart and her husband also bought three properties for cashflow purposes that year – Tokoroa, Murupara, and Invercargill. The North Island properties were renovated by a team that she didn’t manage and took much longer than her usual renovations.

“So, I decided that I’d take a team down to Invercargill and manage the process myself,” she says.

She paid for flights and accommodation for her usual tradies and headed to the deep south. “Instead of three months, the Invercargill renovation took two weeks,” she shares.

The properties are now rented to social housing providers.

Stewart’s property lifestyle means she and her husband Marty can spend 10-12 weeks of the year travelling.

Quieter Time

This year has been quieter. She did a flip in January 2023 with another friend: they lost $2,000 each. “The place looked amazing inside, but people didn’t like the stucco outside. In January and February there was a lot of hesitancy in the market plus our lending rates were increasing rapidly.”

Building relationships has also aided her growth. She negotiated a deal privately in April (paying a $10,000 finder’s fee for it) and flipped it within 18 days. Paying $317,000 for the property, she sold for $470,000, after spending $46,000 on the renovation.

“I challenged myself and become a ‘real estate agent’. I swapped workwear for dressy clothes and make-up. In two days I had an offer above asking.”

The property lifestyle allows Stewart to spend time travelling with Marty. They have just returned from a long overseas trip (“we spend 10-12 weeks a year overseas” she shares).

In 2026, the year she will turn 50, she aims to have 10-12 long-term rentals. And she will continue to flip, sticking to the strategy that has served her so well.

“Keep it small, [for flips] keep within the first home buyers’ market. Keep to budget, work with the right people. And have fun, always have fun!”