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New Investors Jump Into The Deep End

For sisters Julia Clark and Carmen Purvis, teaming up was the only way to get their foot in the door of the property market in 2013. But the risk-taking pair have embraced the strategy to quickly expand their portfolio, writes Amy Hamilton Chadwick.

By: Amy Hamilton Chadwick

19 April 2016

Sometimes it's not what you want that motivates you, but what you’re trying to avoid.

Julia Clark and Carmen Purvis watched their parents’ financial struggles and came to one inevitable conclusion: without property, their mum and dad would have had a miserable retirement.

For these 29-year-old twins, the lesson was simple – somehow, they needed to buy property in order to have choices in their senior years.

But how do you buy property when one works as an administrator and the other as a kindergarten teacher? Both based in Auckland in 2013, a cursory inspection of the property listings was enough to dampen any ideas of an Auckland house like their parents owned. Purvis, an early childhood educator, was particularly determined, and started looking at properties in Tokoroa.

Opposite Sides

“Capital gain wasn’t my number one criteria,” Purvis says, joining the conversation via Skype from a McDonald's in Canada. Purvis is taking her lunch break from her temporary job as a day labourer on building sites when we chat, and the twins insult each other amid laughter from opposite sides of the world as they discuss their investments.

“I needed positive cashflow because on a teacher’s salary it was all I could manage,” Purvis says. “I went to Tokoroa and looked around, and when I was on my way home Mum called and said she’d found a place for sale in Huntly. I looked at it on a Saturday and it went to mortgagee sale on the Wednesday – I had no clue, even though I’d been looking around for a while, it was very spur of the moment.

“When I went to that auction a lot of property investors came up and said they didn’t bid because they knew I was a first time buyer. People have a perception of property investors as money-hungry, so I was surprised by how nice they were and how happy they were for me to have the property.”

Reducing Costs

Clark was equally happy with the purchase: a 1980s three-bedroom one-bathroom property in West Huntly for $100,100 in late 2013. The sisters spent $2,500 on renovations, keeping costs down by doing a lot of their own work, including laying the new carpet (“never again!”).

If you want a house, get a house. Do you think it's ever been easy? It's never going to get any easier. Understand that you're making an excuse. Stop moaning about a market that's impenetrable, because that's not the case. Get a bit creative about it. - Julia Clark

Those friendly fellow investors and that excellent buy were just the start of the twins’ love affair with Huntly that continues three years later. While they were teased by more established Auckland investors for their passion for Huntly, they’ve been well rewarded for their enthusiasm.

They timed it just right; the town has seen massive capital growth over the past three years and that West Huntly house is now valued at $260,000 to $290,000 (according to QV’s e-valuer) and rents for $290 a week.

“We knew Huntly would go up, but we didn’t know it was going to be so soon and so sharp,” Clark says. “It’s an awesome little town and it’s just buzzing.” When they visit the twins take photos of themselves with the Huntly sign and post them on social media with the hashtag #newmayorsofhuntly.

A Property Mentor

With Purvis having put in $20,000 to buy that house, Clark decided to match it and work with her to buy more properties. Despite being twins (non-identical), the sisters didn’t spend a lot of time together before they began their joint investment project, (“We’re not those twins who know when the other one is hurt,” laughs Purvis.) But have discovered that their complementary skills – and joint incomes – helped them to achieve far more as a team than either could dream of doing alone.

The first property had shown them they needed, however, to learn more before they kept buying. After attending a Wealth Mentor seminar in Hamilton, Clark and Purvis signed up for a mentorship with Matt Thorburn.

“We knew we were going to do investing but we were scared we were going to screw up, so this was like our giant safety net. We signed up and then spent the whole drive home wondering what we’d done,” says Clark, laughing. “We had a huge amount of motivation to get the money back and prove it was worth doing.”

Demystified Process

One of their first exercises was to spend time getting familiar with sale and purchase agreements by putting in four offers on various properties. None of those offers was accepted but with the process demystified the sisters felt more confident about their next steps.

Then Purvis and Clark spotted an East Huntly property with an intriguing anomaly: 120m2 of floor space but only two bedrooms. They put in an offer on that house and a Frankton, Hamilton, property at the same time – both were accepted with settlements on the same day.

“I wouldn’t advise that, it’s quite stressful,” Clark says with a smile. “We didn’t have the money for both of them, but we had a nine-week settlement on [the Huntly] one. So during that time we converted it to a three-bed plus study, did a new floor, new kitchen, got rid of the junk, landscaped the big section, got a new valuation and bought the Hamilton house using the new equity. We were still painting when the valuer came through!”

That’s the property the twins rate as their best buy together, because despite the stress of the rapid renovation, the result was that they had tripled their portfolio in a matter of two months, with no additional cash spend. The East Huntly property cost $130,000 in March 2014 and Purvis and Clark spent $18,000 on renovations. Eight weeks after the settlement date they had the property revalued for $210,000 and its current e-valuation is $300,000
to $320,000. The rent has just gone up to
$300 a week.

The property they managed to buy using their quick-turnaround equity cost $210,000 and they spent $6,000 putting in new flooring throughout, a new oven, new curtains and tidying up the section. It was soon revalued at $245,000 and has since risen to a new e-value of $300,000 to $320,000; it rents for $335 a week.

A Change In Direction

This was the point at which their properties began to have a strong influence on the lives of both women. Clark discovered a passion for finance that has led her to change careers and strike out on her own as a mortgage broker, leaving her steady admin job to become her own boss. Purvis also wanted a new direction and decided to take some time out to travel. She planned a five-month trip to South America – but the sisters wanted to buy one more property before Purvis’s regular income evaporated.

So in January 2015 they found a threebedroom 1980s property in West Huntly for $115,000, which rents for $195 a week. The value on that, despite not yet having been renovated, has risen in the past 15 months to an estimated $180,000 to $200,000.

“Sometimes Julia texts me in the middle of the night: ‘If we sold now we’d get $400,000 from our portfolio’,” Purvis says. “But I remind her to think long term.”

“We each remind the other one to be realistic,” Clark agrees. “It’s really important for us to keep reminding ourselves of why we’re doing it.”

Learning Curves

It hasn’t all been completely plain sailing though, despite their fantastic timing in the Waikato market. Their one and only trade so far began as a lot of fun, but when a close relative became seriously unwell they both stopped renovating to provide support. It was certainly the right thing to do, but it blew out both their budgets (mainly due to holding costs) and their timelines, as well as leaving the twins feeling fed up with the project.

Purvis says the real estate agent and Inland Revenue made more money on the trade than the sisters, and Clark jokes that considering the time they put in they’d have been lucky to have made $5 an hour.

“We learnt so much – the biggest learning curve was who to pay for and who not to pay for [when renovating], and to get your estimates right, and it taught us about timeframes,” Purvis says. “That was the big picture. I also learned not to put the external paint sprayer gun on full power inside. The paint went on so thick, in waves of paint, that we had to strip it back and replaster it and repaint it by hand!”

Future Plans

Five months in South America turned out to be just the start of Purvis’s overseas adventures. With properties at home gaining value and no money required to keep them ticking over, she felt free to go to Canada and take up a job in construction.

It pays very little, but with no financial pressure she’s able to enjoy the work. She has just started a 12-month contract as a nanny and is also helping her sister out by working as a remote virtual PA in the mortgage brokerage (0800 FUND ME).

The long-term plan for Purvis is to remain in Canada for at least another year until the properties are bringing in more money and Clark’s mortgage brokerage is better established, then come back to New Zealand and work full-time on the twins’ investments.

Since Purvis left, Clark has been busy doing a little buying on the side. While her husband Fred was initially too riskaverse to participate in the twins’ scheme, their success has encouraged him to get involved, too.

“I’m younger and flippant and risk-taking and he’s older and sensible and steady,” laughs Clark. “I talked him into buying a place that is my best buy. Carmen was annoyed but I needed his income to do it.”

In August last year the couple purchased a fantastic investment property in Hamilton East, extremely close to the University of Waikato. Consisting of two four-bedroom town houses and two studio units, Clark and her husband paid $620,000, using the equity from their Auckland home as the deposit. They furnished the units and tidied up the gardens and rent the four dwellings for a total of $1,120 a week. The properties are currently estimated at $820,000 to $920,000 by the QV e-valuer.

It’s been an incredible three years for Purvis and Clark. A journey started by a fear of having nothing in retirement has become a transformative experience, taking them to new careers and new places. They’ve discovered how much stronger they can be by working together and the power of property to turn a small initial deposit into a sum they couldn’t possibly have saved from their modest incomes.

“It cracks us up when we hear people our age going, ‘It’s too hard’,” Clark says. “If you want a house, get a house. Do you think it’s ever been easy? It’s never going to get any easier. Understand that you’re making an excuse. Stop moaning about a market that’s impenetrable, because that’s not the case. Get a bit creative about it.”


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