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Made To Trade

A Hawke’s Bay trader and her family show how taking risks in property ultimately pays off, writes Joanna Jefferies. Photography by Simon Cartwright.

By: Joanna Jefferies

31 March 2020

Property trading can be a lucrative endeavour, but it comes with inherent risks, in any market. Perhaps that’s why Hawke’s Bay investor and trader Lauren Worsley was so attracted to it – after all, she’s always been a bit of a risk-taker. At 20 years old she bought a ticket to go on a two-year working holiday in the UK and left behind her homeland, South Africa. It proved an excellent decision, as she met her “tall, dark, handsome Kiwi man” Andy Worsley at a pub in London, and throwing caution to the wind, just eight months later the pair were married.

It was a great pairing in more ways than one. Andy’s friends were into investing in property in London, which piqued Lauren’s interest: “It seemed quite risky, but it appealed to me.” So, before coming to live in New Zealand with her new husband, she and Andy purchased a property sight unseen in Half Moon Bay, Auckland, for $350,000.

“Making that decision in 2003 was really what set us up for the rest of our property journey,” says Lauren.

The success of purchasing without a viewing gave the pair confidence, and after only six months working in New Zealand as a legal secretary, Lauren purchased sight unseen again, this time in Sydenham, Christchurch.

The property was just $230,000 and was rented for $380 per week – but in those days mortgage interest rates were up around 8-9%, which meant the deal wasn’t initially as lucrative as it appeared.

However, Lauren was not at all deterred and focused her attention on South Auckland for her next investment. She soon purchased a property in Otara, in what was known to be a “gang” street.

“Everyone said to me ‘Don’t!’ and my family were against it. It was $169,000, and it was 2004, it was a nearly 10% yield.”

So Lauren ignored the naysayers, purchased it and proved them all wrong. “We had one lovely tenant the whole time, no dramas, and we sold it in 2016 for about $450,000.” Following on from that purchase, the couple bought one property per year, as the market rose and afforded them the equity, until 2007.

Despite having limited knowledge about property investment, their steadyas- she-goes method was paying off. “I didn’t really know what I was doing, I was just trying to buy things that would pay for themselves. I didn’t understand flipping or adding value, I was just waiting to have the money to do the next one.”

Around 2007 Lauren hit a wall of stagnating house prices due to the global financial crisis, but fortunately it was the perfect time to take a break to have her two boys, Sean and James, who are now seven and ten.

It wasn’t until a few years later when she got back into the property game. She started by getting some tutoring and mentorship; and learned about trading, adding minor dwellings, and renovating to add value to her holds.

She returned to the market and bought a home and income in Manurewa, for just $345,000. It contained a three-bedroom and two-bedroom dwelling and the yield was close to 10%. A year after that, she bought another home and income in Papatoetoe. This was later sold in order to buy a higheryielding property in Mangere in 2016, where she added a minor dwelling.

“The Mangere house cost me $530,000 and the minor three-bedroom dwelling was $220,000, so it owed us $750,000. The current rental on it is around $1,000 per week, so it’s pretty good.”

Into Trading

Around this time, Lauren decided to start trading property – and she completed 16 transactions in her first two years in Auckland. She also sold off some of her initial portfolio to build up equity and focus on holding higher-yielding properties.

‘Everyone said to me “Don’t!” and my family were against it. It was $169,000, and it was 2004, it was a nearly 10% yield’

She moved to the Hawke’s Bay 18 months ago with her family, and she’s starting to gain traction in the market there, with two flips already under her belt.

Her trades are in the under-$400,000 bracket “because that’s the KiwiSaver cap” so it’s a smaller outlay in the Hawke’s Bay, but the margins are tighter, she says.

There’s many people looking in that low cost bracket, which meant when she spotted a cosmetic do-up property in Flaxmere for $281,000, she pounced on it.

“I spent about $35,000 on that property. I still made some good money when it sold for $380,000.” But she wasn’t entirely pleased with the amount of time (three months), the cost and effort it took for the basic renovation.

That’s why when she spotted another three-bedroom cosmetic do-up property in Flaxmere at the end of last year, she knew she was onto something good. “I got it at a good price because there was a strange lean-to on the outside.

The owner had pulled off the cladding on one side of the house and put some half rounds up to make it look like a ski chalet or something. Gorgeous! But obviously first home buyers get scared off by stuff like that.”

None of the banks would lend to first home buyers due to the unconsented work – yet it took Andy just half an hour to pull the whole lean-to down and chuck it on their trailer.

They paid $1,200 for weatherboards to re-clad one side of the house, which took Andy a week to do. Normally the pair don’t do any of the work themselves – Lauren laughs “I don’t believe in it!” but because she was still a little sore from the low profit margin on her first Hawke’s Bay trade, the pair got stuck in, just this once.


• Get a good team of people around you – a good lawyer and accountant who are property investors themselves. “Lawyers can kill deals if they don’t know what you’re trying to achieve and they’re too cautious. Get someone who can keep you safe, while still moving you forward.”

• Stop reading books and actually do something. “You will lose money, everyone loses money, especially if you do it for a long time.”

• Before you buy something, look at at least fifty properties in the same area – pick a small catchment area and a certain type of house, “say, three bedrooms with a garage. And then go and see as many of those as possible – then you’ll know what a deal looks like”.

• Do as much research as you can, ask as many people as you can and then pull the trigger and just do it. “I don’t consider myself an exceptionally sophisticated investor, with tricks up my sleeve, but I’m always action-orientated. I’m always doing something, or buying something. Some of them aren’t great – you only hear about the amazing ones. I’ve lost a little bit of money and I’ve made stupendous amounts of money, and everything in between.”

• Allow for worst case scenarios, and make sure you have an exit strategy.

• You’re not going to get rich off one trade, or one house, or one development. “If you’re serious, you’re going to have to do it over and over and over again, and you can’t be afraid to make mistakes.”

• Be careful who you trust. “I think property will bring the worst and best aspects of your personality to the forefront. So if you are a naturally trusting person, that’s going to come up quite often and bite you. Conversely, if you’re a mistrustful person that’s going to bite you too – because there are a lot of good people out there.”

They ended up spending $25,000 in total; and painted the roof, replaced carpet, painted inside and out, and had decks added. It was sold for $385,000 and settled at the start of March.

“The before tax profit on that was about $76,000 – it was a really good one,” says Lauren.

She’s now looking for another trade in the area, now that she has a dedicated team of tradies on board. Good trade deals are getting harder to find, but she says she will find deals – after all, her day job as a property finder for iFindProperty means she has her finger on the pulse of the Hawke’s Bay market.

But trading is not something she recommends lightly to her clients. “We’re all risk takers – we’re all a bit like property cowboys, us traders, and I don’t feel right about leading somebody else into that – telling them they’re going to make $50,000.”

A Fizzer

After all, not every trade has been a success.

“All the things you might struggle with in the rest of your life, you’re going to come up against a thousand times in property,” says Lauren, “for me I guess that was trusting the wrong people.”

She says she was “very naïve” early on in the trading game, and in 2015, when an agent assured her that a lower reserve price on her Mangere trade property would attract more interest, she agreed to lower her reserve on auction day to her “break-even” price.

It all happened very quickly and the property was sold at reserve. “I didn’t have a chance to do anything and I was really angry. I felt maneuvered into selling for a lot less than I wanted, then after that, a builder presented me with another $15,000 bill that he’d forgotten prior to the sale. So I was in arrears $15,000 for that one.”

‘All the things you might struggle with in the rest of your life, you’re going to come up against a thousand times in property’

Lauren says she learnt from that mistake, and says traders should manage their agent, not the other way around.

Subdivision Success

Currently Lauren is completing her first subdivision in Auckland – it’s taken about two years and she’s doing it through a joint venture partnership with a friend.

The 760m2 section in Papakura came with an old house that the pair renovated. The property was then subdivided and they sold that house for a good profit. The cash was then put into building a new dwelling on the back section.

“That will be sold shortly and clear profit will be $140,000 each. It’s not amazing for two years. But it was the first time doing a subdivision for both of us.”

Joint ventures are a new strategy for Lauren, but despite the time lag on the project, she’s thoroughly enjoyed the process.

She says it’s crucial to have everything drawn up at the start with some worst case scenarios and contingency plans to prevent any issues later on.

Looking Ahead

As soon as the Auckland property sells, Lauren will look for her next deal. Her goal is to get two trades going at once, and she’s considering subdivisions and relocatable houses as potential strategies.

“I want to keep my tradies busy – my aim is to do between six and eight trades a year, at a gross profit of $40,000 each as a minimum. That way I can keep myself out of the office, play with my kids, go to all the school things, do a bit of yoga, play my guitar and all that cool stuff!”

The couple currently hold four home and incomes in Auckland – that’s eight tenancies, and Lauren has plans to add a relocatable onto one of them this year. She projects it to cost around $100,000 and believes it will increase rent by $500 per week.

The end game is to trade enough properties to pay down the holds, so that in around ten years’ time her husband Andy can choose to stop working in his IT job, and the pair can live comfortably on the passive income.

Trading Rules

• Stick to your rules! Know your minimum profit. “My rule is a minimum $40,000 profit before tax on an easy flick.”

• Stick to your team and keep your circle small – if you look after your agent they’re far less likely to sell you a lemon.

• Lauren doesn’t like to own a basic trade for more than three months: “The reno needs to be $40,000 to me for every one month of reno time, so if it’s a straight-forward reno, one month is plenty.”

• Lauren sticks to cosmetic trade “but rules are made to be broken and I will try something else as these cosmetic ones get harder to find”.

• She doesn’t do anything that needs council approval, due to the time delays on her Auckland subdivision.

• Pick a niche and know it well. Lauren sticks to “bog-standard” three-bedroom Kiwi homes on freehold sections.


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