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If I Could Do It All Over Again

Ilse Wolfe shares her memories of her early days as a DIY investor … and how she could have done better given the right education and advice.

By: Ilse Wolfe

1 February 2022

Property is indifferent to its investor’s gender, age or culture.

Rather, it performs its best when granted the right amount of time to do so. Time can heal all wounds, so to speak, if given the chance.

In this respect, investors who want to see results that move faster than the natural pace of the market, need a certain level of “above-average” proficiency to do so.

And a lack of education is enemy number one to renovation-based strategies.

Value-add strategies often appeal to those looking to break away from their existing financial state. Those who are stuck believing they aren’t capable of achieving anything beyond the standard nine-to-five pay cheque.

The self-limiting hurdle is what investors have to negotiate in order to create, for the first time, multi-generation wealth.

My story is really no different to the investors I meet on a daily basis.

The Credit Card Debt Wheel

As a tertiary student I had abysmal money management skills. This was sadly enabled by the raft of Orientation Week bank offers, which enticed students to jump ship for interest-free $500-limit credit cards.

I took the bait, and my despairing mother ended up clearing several credit-card overspends throughout those years to save face (Dad now knows too, if he’s reading this).

The transition from student to professional didn’t improve my habits. I continued to chase pay cheques to clear perpetual credit card debt like a soundtrack on repeat.

It wasn’t until I met an accounting partner in 2007 that I began to see the horizons beyond just exchanging time for money. Horizons possible through property investment.

My focus for wealth creation was born.The following month I pieced together a 5% deposit and bought a rental around the corner from home. And then another. Job done, I thought.

But then came August 2008– the Global Financial Crisis.

Of my 99 problems, three of them were negative cashflow, negative equity and questionable purchasing criteria. At this point living abroad, but I felt anything but free.

I was deeply in the red. Regular British pound transfers to hold the mortgages afloat were barely offsetting the ongoing tenant arrears back home.

No number of pay increases would meet the servicing increases required to move ahead. I couldn’t live on equity, even with it recovering at last.

I was forced to change my strategy: adapt, or sink.

Life Raft

My life-raft was what I would later term Cashflow Hacking™. In 2015, I created hacks that would intensify the rent and occupant capacity for every property I owned.

Each site is unique. Cashflow hacked results compounded my advancement as each solution was scoped then implemented.

Median long-term capital growth in New Zealand is 7.1% pa alongside rent growth of 4.9% pa, translating to hundreds of thousands of dollars in lifestyle-altering gains when exploited correctly.

‘Median long-term capital growth in New Zealand is 7.1% pa alongside rent growth of 4.9% pa, translating to hundredsof thousands of dollars’

Challenge Progress, Sooner
As a property investment coach, I see the same picture painted over and over.

Investors who have achieved acceptable results with time, but continue to overlook significant equity and cashflow opportunities. The lifeboat to a better destination still waits for many.

Here’s what I wish I could have told my younger self.

1. Take Action Sooner

What I hear almost weekly from aspiring investors is “I wish I had started sooner”.

Using Cashflow Hacking, I replaced my inefficient investments to create faster passive income and equity growth.

But I will never be able to get back the cashflow growth I lost over the eight years I did nothing. I have lost those eight years of opportunity for having not spotted the opportunities sooner.

The sooner a property portfolio is built, the lower each property’s average cost, and the more capital growth that is delivered to the investor.

A mentor of mine once said: “Don’t be handbraked by over-analysing the price. When it’s a $1m property you will not care whether you bought it for $495k or $510k.”

2. Hone Your Purchasing Criteria

Having criteria for a clear start immediately puts you ahead of 95% of investors. Because it will lead to an imminent purchase.

It’s a lack of clarity that holds many investors back.

“I’ve been looking for three years but never quite found the right property” is often the opening sentence of a new client. The words they have missed are “for me”.

A typical client will purchase within a month of working with Opes Accelerate. This is an illustration of how when investing time upfront into the strategy and leading with the goal, the “how” falls through as a natural process, without delay or distraction.

3. Pursue Ongoing Education

Education makes the difference of millions of dollars over a lifetime. Seek and absorb education that improves outcomes. If something is worth focusing on, it’s worth doing thoroughly. Don’t short-cut or cut yourself short of life-altering results.

If I knew then what I know now, I could have educated my parents to leverage rather than sell my childhood home, when it came time to upgrade. Noting today’s e-values for each property, holding the two would have doubled their retirement outcome. This is nothing short of significant.

Network like your retirement depends on it. Be the least knowledgeable in your circle. Find ways to add value to those crucial relationships to reciprocate the effort.

4. Enlist Professionals Earlier

New Zealander’s are great at giving things a go. But this closed view can lead to questionable decision-making and inefficient expenditure on renovations.

Before my Cashflow Hacking ™ method was established, multiple BRRRR projects fell far short of the results I now demand as baseline. This cost me hundreds of thousands of lost potential.

Naturally, successive projects improve upon the last’s results. But it does come from learning in practise. So, how can one evaluate whether progress advanced acceptably enough, or not?

Learn from those who have demonstrated the results you personally seek and head towards your desired destination, sooner.

Ilse Wolfe is Director of Opes Accelerate Coaching Program. To enquire about memberships and how you could accelerate your property investment pathway contact Ilse at [email protected]. For further information visit www.opespartners.co.nz/accelerate. Follow Ilse at @ilsewolfenz on Instagram.

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