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Life Changers

Life Changers

Seizing the day and investing in cash flow positive South Auckland properties opened up doors for Chris Moore and Dyane Parris – and that helped them rewrite their future, finds Miriam Bell. Photography: Stephanie Creagh

By: Miriam Bell

1 September 2018

Few would doubt that successful property investing has the potential to change lives. But for some people it takes hitting a low point to push them into braving the risks and embarking on the journey. Anyone looking for evidence of this need look no further than Chris Moore and Dyane Parris.

These days the couple have a portfolio of 22 properties with multiple income streams, which provides them with a generous passive income. They also recently started a property mentoring business, PropertyMaster.nz.

But life was not always so good. Back in 2007, Chris and Dyane sold off three of their under-performing rental properties and moved to Waihi for a fresh start. They started a family and planned to build a new home.

They thought they were set up but it all went wrong: Chris got very sick and ended up in hospital for a long time. The couple were left with an unfinished house, which they had no way to complete, and struggled to make ends meet.

“We desperately had to do something on the income front and we were thinking about how we could make money,” Chris says. “But nothing seemed quite right. Dyane was considering going back to university to study radiology. And then we thought of property – again.”

It was not the first time they had looked to property. In Palmerston North in the 1990s, they built their first home and then realised they could sell it for more than it cost to build it. After repeating the process several times, they were mortgage free and purchased four rental properties.

But they were inexperienced investors and made mistakes. Chris says they were on limited income and all their rentals were negatively geared so it didn’t work out well. “It ended up becoming an unsustainable drain on our personal income and so we sold up to buy in Waihi.”

The experience left the couple wary and also conscious that there was a lot they didn’t know – yet they still believed property was a vehicle to success. “We wanted to get into the Auckland market and we were not sure how. So we started looking for a way to achieve our goals.”

‘If you buy somewhere like Remuera, then you will pay three times as much as you would for a house in South Auckland, but the rent won’t be that much different’ CHRIS MOORE

Taking Decisive Action

At the urging of some close friends who had been attending property investment coaching seminars, Chris and Dyane went along to one with them. By the morning tea break they were converts. The clincher was when their soon-to-be mentor asked “do you want to keep being told when you can have lunch or do you want to change your life?”

Not only did the seminar show them what they had done wrong in their previous ventures, but it showed them a way forward, Chris says. “We could see the benefits of a mentor who knew what to do and how to get into the Auckland market. Along with that, we could also see the power of the group. So we joined up and hit the ground running.”

Their first buy was a four-bedroom house with a garage in Otara, which cost $215,000. Getting the finance was tougher than they had expected, so they decided to move into trading to increase their funds. After doing this for a while, they were able to start buying properties to hold.

Chris says they bought eleven properties in their first year – five were for trading, six were rentals to hold. “We have our own buying rules around yield and positive cash flow, which are critical. Back in 2010, we only had ‘hold’ properties with over 10% gross yield. You could do that then but not now.”

Despite this they bought themselves into a corner and were not well positioned when it came to servicing. That meant they had to get back into the trading game so they could continue buying rentals to hold. Trading was all about building their portfolio.

“These days we have 22 properties in our portfolio and 11 of them have minor dwellings on them so they are dual income properties,” he says. “Apart from our remaining Palmerston North rental and our Waihi property, all of our portfolio is in South Auckland.

“We like South Auckland because if you buy somewhere like Remuera, then you will pay three times as much as you would for a house in South Auckland, but the rent won’t be that much different. In South Auckland you could buy two properties for the same price as one in Remuera and get twice the rent.”

Thanks to strong capital growth in South Auckland, the couple’s portfolio is sound and doing well. For example, the first property they bought in Otara cost $215,000 and now it’s worth over $600,000.

Sticking To A Proven Recipe

Over the course of their second, successful foray into the property sector, Chris and Dyane have stuck squarely to all that their mentor told them to do.

Their investments are solely about the numbers and ensuring they work. They don’t believe in negative gearing, so only buy cashflow positive properties which they then add value to via sensible renovations. They take a long term view of investment: to them the journey is not meant to be a sprint, it is a marathon.

While they have not been burnt this time round, they have encountered some challenges and learnt some valuable lessons along the way.

They always buy for vacant possession these days, for example. This is due to a “trade” they bought which ended up as their most problematic buy. Chris says they planned to just tidy up the outside so they decided to keep the tenants in there while they did the work.

“But the husband turned out to be in a gang and went to jail, the wife lost control and the kids went wild. The property got damaged and no rent was being paid. But we weren’t able to do much. It was meant to be a short-term trade but it ended up taking over 18 months to get them out.”

They have also learnt to hand management of their properties over to a trusted professional. “We tried to do it ourselves in Palmerston North but once your tenants get to know you, they try all sorts of things. So with our Auckland properties we have always used a property manager. It frees up your time and allows you to be separate from the tenants.”

Overall though, it has been a relatively untroubled journey for Chris and Dyane – and that is something they put down to the coaching they received from their mentor. In their view, property investment coaching was invaluable and enabled them to achieve what they have.

A desire to share what they have learnt with aspiring investors means they have now moved into the mentoring side of property themselves. First, they helped their old mentor out when he got cancer. But then, following his death, they set up their own business, PropertyMaster.nz with the friends who took them along to that life-changing seminar all those years ago.

Chris says it’s about sharing information with their students and helping them work together. “Many of our students do joint ventures, as we did when we started out. But it’s also good to have like-minded people around you. It motivates you and keeps you on track with your own goals.”

‘It’s also good to have like-minded people around you. It motivates you and keeps you on track with your own goals’ CHRIS MOOR

Chris & Dyane's Top 10 Investing Tips

  1. Educate yourself. Talk to people who have done it before and have a decent track record in property investing. If necessary, pay for mentoring.
  2. Don’t forget – markets are cyclical. Always adapt your strategy so that it suits the stage of the cycle you are in.
  3. Forget negative gearing. Go for cashflow positive properties and fix your interest rates for three years or more and you won’t be surprised.
  4. Joint ventures can give you extra capacity and are a great way to move foward. You might share the profits but you also turn over properties more regularly.
  5. Change the way you think about money. It’s not just a token to pay for things, it is an opportunity. And it enables you to do things or have things which give quality of life.
  6. Build relationships with lenders and do what you need to do to get the loan. If servicing criteria changes, find out what that means and work with it.
  7. Manage renovation projects tightly and keep the timeframe short. Make your expectations of your tradies clear to them. And don’t muck around with payment for good work.
  8. Fix any niggly maintenance issues when renovating, but also when a property is tenanted fix maintenance problems right away. It saves money in the long run and it keeps your tenants happy.
  9. Make sure you have a great team around you. You can’t do it on your own. You need to have a good, reliable mortgage broker, accountant, lawyer, property manager, and tradies on board.
  10. Reward yourself for your hard work and successes. Take a holiday, have a lovely dinner out, treat yourself when things go well.

Paying It Forward

The last few years have involved some major changes for the couple. When they started to work for their mentor, they moved up to Auckland and bought a section in Maraetai to build a house on. The demands of self-employment mean that’s still a work in progress.

For the time being, they remain focused on their mentoring business and assisting their clients to do what they have done. They enjoy being able to teach people, to help them learn and to share their knowledge. But, going forward, they do want to keep adding to their portfolio.

The market may be quieter now but it’s still possible to buy cashflow positive properties, Chris says. “There will be capital gains too, especially if you buy in Auckland. Property tends to double in value every 10 years but in Auckland it is more like every six to seven years. And, in Auckland, there is high rental demand too.”

On top of that, they simply enjoy the whole process from buying to renovating. They work well as a team but have different roles. Chris, who is in a wheelchair, is not able to access properties easily anymore. So he deals with assessing and finding properties, while Dyane gets out there and does the renovation work.

“Friends often ask ‘when are you going to retire?’ because we are fairly wealthy now,” he says. “But why would we when we enjoy what we do? Why would we stop? We haven’t lost sight of where we came from and who we are. Our property journey has been challenging, but exciting.

“Also, the rewards have made it worth it. Our portfolio will pay for us for the rest of our life – and then for our daughter and then, if she looks after it, it will pay for her kids too. From our experience, property investing really can change your life and your future.”