Change Of Tack
A former policeman and yachtie has had great success with a six-week reno project, writes Joanna Mathers.
1 July 2019
Daniel Brown’s property education took place on the high seas. At the age of 21, he and his girlfriend set sail for New York (the young policeman took a year off working as a cop; a job he had been doing since he was 18). During the long hours he spent traversing the Pacific Ocean, he read everything he could about property.
“I always knew I wanted to buy a house, but I didn’t really know where to start. So I read and upskilled on the boat.”
Eight years on and Brown (who lives in Whangaparaoa) is now well and truly ensconced in the world of property.
He’s purchased and renovated a few properties around the upper North Island, but his most recent renovation marks his debut as a full-time investor.
Giving up a career in the police force wasn’t an easy decision. But after a couple of lucrative property deals (“They earned me more money than what I’d earn in years as a cop”) he realised that investing in property was the way to go.
“I was lucky, I got in ahead of the curve and was able to do well on the properties I bought. But it was hard giving up the fortnightly pay cheque,” he admits.
Nearly a year down the track, the result of a renovation he undertook in Manly, Whangaparaoa, has proven he made the right decision.
After leaving the police in early 2018, Brown spent months trawling Trade Me for the ideal renovation. The market was tough – houses this close to Auckland aren’t cheap. But finding a deal online didn’t work, so he decided instead to attend every open home he could in his search for a diamond in the rough.
And he found it in the form of a tired two-bedroom home, complete with sagging deck, overgrown gardens, and falling-down fence.
The 1980s Hardie board home wasn’t in great shape, granted, but Brown could see the potential. He’d added extra bedrooms to other homes he’d renovated (and thousands in value in the process) and saw that this home had space to spare.
“The back bedroom had originally been two bedrooms, and it was huge (6.4m x 3.3m). And the downstairs area was being used as a laundry, but I could see that it could be a nice extra bedroom or rumpus room.”
The house was on the market for over $600,000, but no one was biting:
“The tenant was pointing out all the flaws in the place to any prospective buyers. It turned out that he had it good and didn’t want to leave. But this pushed the price down.”
The overseas buyer was motivated to sell, the tenant was doing a good job of putting people off, and there was a low reading for meth. So Brown’s (well under value) $515,000 unconditional cash offer was accepted in February 2019, and his makeover project was underway.
Out With The Old
He ripped into the project with gusto. On the day he got the keys to the house, Brown and a mate completely gutted the kitchen and ripped up the vinyl. He subsequently took the house back to its bare bones – removing carpet and stripping paint both inside and out. He also took to the outside with a digger, getting rid of retaining walls and levelling the front yard so it would be suitable for outdoor entertaining.
Brown was lucky enough to have a posse of helpers willing and able to help him with a high-speed reno. “At some points there were eight people in the house working with me,” he shares.
All the walls were stripped back and repainted in a neutral cream colour palette and the old, tired flooring replaced with a durable dark grey carpet from KJT Flooring. A flatpack kitchen from Ex-Space Kitchens was installed, with appliances from Bunnings.
In the bathroom, the tiles (which had been tired and grubby) were re-grouted and given a good clean, an old curtain was removed and replaced with a glass sheet.
“We also put in a new mirror and towel rail,” says Brown. “The bathroom was very inexpensive – only $3,500 for the whole thing.”
The huge back bedroom was split in two by a new wall. The two new bedrooms measure 3.5m x 3m and 2.6m x 3.2m – both still a decent size and immediately transforming the home from two bedrooms to three.
One of the selling points for Brown was that the downstairs space used as a laundry already featured a consented shower and toilet, which meant it could be used as an extra living space. Brown relocated the laundry into a small room off the kitchen, the ground floor was carpeted and a ventilation system was added to make it less cold and damp.
This space was now suitable as a rental, or for short-term Airbnb accommodation at the popular Manly beach.
fter a frantic six weeks, Brown and his helpers had transformed a two-bedroom home into a three-bedroom house, with a separate living/sleeping area downstairs. In the process they had raised the value and desirability dramatically.
The Manly home was listed on Trade Me in May this year, and was under contract within ten days. By early June it sold for $710,000 – a gain of nearly $200,000 in less than two months.
The renovation cost worked out at $77,000 (Brown had budgeted $80,000); the net profit before tax and GST was $118,000.
Brown says that his friends often comment on the speed with which he’d earned so much money. But he says the six-week renovation isn’t a real reflection how long he spent on the project.
“There was ten months from the time I left my job to the time the Manly renovation was sold. That’s ten months without a pay cheque.”
Brown says people need to realise that leg work and preparation are vital to achieving a good return – it’s not an easy ride. But he’s now hooked on property: currently working on a subdivision and actively bidding on other properties on which he can work renovation magic.