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No Regrets - From day-job to this.....

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  • No Regrets - From day-job to this.....

    At the request of Fritz from this thread http://www.propertytalk.com/forum/sh...ad.php?t=10746,
    and seeing I have been lurking around here for a while I might as well let you know a bit more about me at the same time.

    I am currently 27, married and living the life that I choose to live with the intention of being financially free by the age of 30. This was a goal set at the age of 25, so will be a real challenge!

    This is no super "I made 1 million dollars in 2 years" story or anything, it is merely a summary of the last few years of my life and the defining events that have got me to where I am today...

    I followed what I guess some may call a standard path for people my age.....finished school (somewhat reluctantly) and then went off to Otago University, almost randomly picking a degree to do while not really knowing what I wanted to do with my life.

    In the final year of my degree I went through a few job interviews and landed a pretty good job for a big name firm in Wellington.

    My girlfriend and I put all of our belongings into a trailer and loaded up the car and drove up to our new life in the 'real world' in Wellington.

    Not knowing jack about Wellington when we got there was quite bewildering, and after looking at a few places for rent we fell in love with a 19th century cottage in Thorndon. This was awesome, I could walk to work, and when my GF got a job she would be able to as well.

    The rent was rather high at $350 per week, but the location was great, and my salary was a hang of a lot compared to being a poor student, so we went ahead with it.

    I have always been right into my cars, and now that I had this big career with a good salary I decided to buy the car that I had been eyeing up for years.

    I will digress a little here....

    anyone who knows me well will agree that I am a goals orientated person, and when I get an idea in my head I do not stop until I get the desired result...this is both good and bad...ask my wife

    ....but back to the point

    while at university I saw this car in a carpark and said to my father, when I finish uni I am going to get one of those! So I did.....it was $20k and I hadnt saved any money, so traded in my car for 1.5k and finaced the rest....."its only $540 per month, but that is ok, I have a career now, I will have plenty of money left over."

    We continued living in Thorndon for about a year, my girlfriend found a job and while we were not living the high life, we were comfortable.

    I have always been a hard worker and being somewhat a perfectionist helped me move up the
    ladder quickly, which brought in more $$$.

    To this day when I look back at the money I made I cannot figure for the life of me what happened to it, I certainly didnt save any of it.

    Then one day I picked up the property press and thought "I wonder what houses cost in wellington" had a squiz around central wellington - realised pretty fast that that was very expensive.

    So I started looking at the lower hutt section. A really nice house jumped out at me, and after a quick calculation I discovered that the mortgage payment was just a little less than the rent we were paying.

    With a big smile I came home and told Jane all about how we could afford our own house. I played around with some more figures and then went and had a look at the house. Needless to say we both really liked it, so ummed and ahhhed for a while and then put in an offer. Subject to finance of course.

    Boy did we learn a few lessons through this experience:

    1) Real Estate Agents can be very difficult to deal with, especially when they sense naivity....

    2) Banks have no logic whatsoever, and if you dont fit into their calculations, then that is that.

    I have just read Monid's story, and had exactly the same experience as them. We never missed a rent payment, had a good credit history, and a good income....but we didnt fit their calculators....even though our current rent was more than the repayment!!

    After being rejected (very quickly) by our current bank, I thought I would try a mortgage broker. We sat down and within a few minutes we were laughed out of his office with a come back in a few years statement made in between his laughs.

    This did the opposite of put me off, and using my trait described above I 'focused' on getting us into our first
    house.

    episode 2 will be tommorow!
    No Regrets

  • #2
    Fantastic!!!! looking forward to the next episode

    Originally posted by No Regrets
    I followed what I guess some may call a standard path for people my age.....finished school (somewhat reluctantly) and then went off to Otago University, almost randomly picking a degree to do while not really knowing what I wanted to do with my life.
    Speaking as a university lecturer, this is incredibly common. I almost think it is better to go out and work before you go to University.

    Originally posted by No Regrets
    To this day when I look back at the money I made I cannot figure for the life of me what happened to it, I certainly didnt save any of it.
    I know this feeling Its surprisingly easy to have money just disappear.

    Cheers
    David
    New to property investing? See: Best PropertyTalk Threads for New and Old Investors And/Or:Propertytalk Wiki

    Comment


    • #3
      Cheers Monid

      I almost think it is better to go out and work before you go to University.
      Couldnt agree more, it would save some people a lot of money and/or time...good old hindsight!

      Really enjoying your story too!
      No Regrets

      Comment


      • #4
        David/No Regrets,

        I worked for 4 years before I went to University.

        That was enough to make me decide that I would never work again, unless it was something that I really wanted to do. That is perhaps one of the most important lessons I have learnt to date: life is too short to spend doing things you don't like doing.

        No Regrets - a big thanks for choosing to share your story.

        Paul.

        Comment


        • #5
          No regrets.

          Your story is almost word-for-word mine. Except I am 22 years old have just started that "big" job in Wellington after 4 years of study. I want that "flash" car but have been holding off to buy a house instead.

          I do however track in a monthly spreadsheet where all my cash goes.
          James

          "Time is the great equalizer. It will either promote or expose you." -Jeff Olson

          Comment


          • #6
            Originally posted by No Regrets View Post
            After being rejected (very quickly) by our current bank, I thought I would try a mortgage broker. We sat down and within a few minutes we were laughed out of his office with a come back in a few years statement made in between his laughs.

            This did the opposite of put me off, and using my trait described above I 'focused' on getting us into our first
            house.

            episode 2 will be tommorow!
            Awesome, did you get advice, was there a mentor or did you just have an internal instinct to keep going, persistence is a great trait to have, well done No Regrets, looking forward to the next instalment.

            Comment


            • #7
              Originally posted by Volatile View Post
              I want that "flash" car but have been holding off to buy a house instead.
              Good on you Volitile, those sort of actions set you apart.

              Comment


              • #8
                Your story is almost word-for-word mine. Except I am 22 years old have just started that "big" job in Wellington after 4 years of study. I want that "flash" car but have been holding off to buy a house instead.
                Thanks Volatile, you are way ahead of where I was a few years back, if I can remember right from your previous posts you have managed to save a good sum of money.....

                Your post got me thinking....if I knew what I know now, would I still have bought the car?

                To be honest I think I would have. It was a goal of mine that I set out to achieve, and was in a way, a reward for a lot of hard work. It has definately slowed my progress, but there are days when I use the car as a reminder that what I set out to achieve can be done. I have looked after the car really well over the years and this shows now - I know how hard I worked for it, and treat it that way. I quite often get remarks about its condition - and the neighbours always get a laugh out of how often it gets washed!
                No Regrets

                Comment


                • #9
                  Awesome, did you get advice, was there a mentor or did you just have an internal instinct to keep going, persistence is a great trait to have, well done No Regrets, looking forward to the next instalment.


                  Thanks Josko, no advice or mentor, I guess I could put it down to as you say internal instinct, or perhaps attitude....dont know

                  Am about to meet with the bank for my next deal (fingers crossed)....will post episode 2 later on today
                  No Regrets

                  Comment


                  • #10
                    Paul,

                    I worked for 4 years before I went to University.

                    That was enough to make me decide that I would never work again, unless it was something that I really wanted to do. That is perhaps one of the most important lessons I have learnt to date: life is too short to spend doing things you don't like doing.
                    Know just how you felt, it was a similar realisation that got my a into g
                    No Regrets

                    Comment


                    • #11
                      Originally posted by No Regrets View Post
                      Thanks Volatile, you are way ahead of where I was a few years back, if I can remember right from your previous posts you have managed to save a good sum of money.....

                      Your post got me thinking....if I knew what I know now, would I still have bought the car?

                      To be honest I think I would have. It was a goal of mine that I set out to achieve, and was in a way, a reward for a lot of hard work. It has definately slowed my progress, but there are days when I use the car as a reminder that what I set out to achieve can be done. I have looked after the car really well over the years and this shows now - I know how hard I worked for it, and treat it that way. I quite often get remarks about its condition - and the neighbours always get a laugh out of how often it gets washed!

                      I know what you mean, I always thought once i finished Uni I would buy my dream car and still want it very badly. I can buy it 4 or 5 times over. However I have made a rule that i must build a successful business or trade a property before i get that dream car.

                      I am getting close to that first deal though! Just got to get an offer accepted lol!
                      James

                      "Time is the great equalizer. It will either promote or expose you." -Jeff Olson

                      Comment


                      • #12
                        Episode Two

                        What we needed to get into our first house:

                        1)Savings history
                        2)Deposit

                        The mortgage broker also said that we would need to clear our debt….i.e. car loan and a couple of hps for fridges etc, but I disagreed with this as our cashflow was fine.

                        We sat down in our nice Thorndon cottage that night and formulated a plan….we had to save a lot of money as fast as possible….that was the WHAT, we had the WHY, now all we needed was the HOW.

                        We didn’t need to be living in a flash inner city house, so we proceeded to find a cheaper place to rent. We ended up out in Petone and were able to save $100 per week in rent….although our transport costs did go up a little.

                        I looked at how we were living, and found other areas where we could save money. The biggest one was our Friday/Saturday night socialising. Anyone who has been out on the town in Wellington will agree that it is not cheap…especially if you end up buying rounds!

                        I didn’t want to not spend time with friends, so made the decision to stop drinking, but to still go out. Pretty soon another $100 per week was going into our savings account. Our friends had great respect for what we were doing, and they never made it difficult. We were worried that we would stand out, and it would not work very well.

                        We tightened our belts as much as possible, and I started my first business on the side. This business pushed the limits of my comfort zone ten fold, and while in the end it didn’t take off, the experience that I gathered was priceless. The only material cost of the business was my time.

                        There was a period when I was getting it off the ground that I would arrive home from a 9 hour day at work, and then work another solid 7 hours.

                        Around this time I started getting unhappy in my job – there were a lot of reasons that I wont go into, but to cut a long story short I was getting sick of working for the man – especially working my arse off with most of the benefit lining someone else’s pocket. There were promises made to me that were never realised and after a number of other reasons to do with treatment of colleagues as well, I decided it was time to move on.

                        At the time of this decision, my skills were in demand, and I found another job very quickly. This was now for a small firm, and came with a good pay rise.

                        By this stage I was already thinking that I need to take control of my life and make sure that I was doing what I wanted to do…..I could look back and find regrets for things that I had done…..a whole lot of “if onlys…” I wanted to live my life going forward with No Regrets.....I had a WHY, but was missing a WHAT and a HOW.

                        During all this, my girlfriend was working in retail and we figured that she could get a different job that would pay more, which she did. This also boosted our savings by a couple of hundred per week.

                        With all of these changes, our savings account started to grow, so we then started the house hunt again.

                        In the few hours of spare time that I had, including the gained hangover free weekend time, I was learning all that I could about the Wellington property market – driving around different suburbs and areas and going to as many open homes as possible.

                        We knew that our first house wasn’t going to be our dream home and set our standards nice and low, but had the following criteria:

                        - 3 bedrooms (kids would come sometime, and would be easier to rent out if need be)
                        - Garage – my baby was sick of being out on the road, and every man must have a garage!
                        - Area that had strong growth potential, that we would be comfortable raising our kids in

                        The house 3 doors down came up for sale. They were asking for offers over 300k, and although it was 3br they were small and it had a tiny section. However we really liked the house, and were happy with the area, so made an offer for what we thought it was worth, i.e. 270k. The agent said that they would not even present that offer to the owner, it would be a complete waste of time, but we went to the bank anyway.

                        The bank once again said no…..unless we could get a guarantor in the form of a term deposit. My girlfriends parents offered, but I was not comfortable with this and went back to the drawing board. Our combined income was good, and our savings account was growing, but I still had that car loan, and hadn’t been saving for long enough to have the required history. As frustrating as it was, I decided you have to play with the hand that you have been dealt, no matter what it holds.

                        We started looking further out in Lower Hutt and included Wainuiamata (Tana Umanga's territory) friends thought we were crazy for looking at Wainui – it didn’t have the best reputation as a nice place to live, but we saw lots of potential there.

                        It has a great infrastructure, and we saw it having room for growth in the future as Wellington expanded. Houses were very affordable as well. I spent every Saturday driving around with agents and looking at houses, but never ended up making an offer for various reasons/excuses....

                        Episode Three tomorrow….please let me know if this is boring as hell and if you would like me to summarise a bit more in following updates
                        Last edited by No Regrets; 15-05-2007, 07:51 PM. Reason: formatting
                        No Regrets

                        Comment


                        • #13
                          Keep up the good work, definitely not boring.

                          What firm were you working for?
                          James

                          "Time is the great equalizer. It will either promote or expose you." -Jeff Olson

                          Comment


                          • #14
                            Speaking as a university lecturer, this is incredibly common. I almost think it is better to go out and work before you go to University.
                            There's still hope for you yet David

                            Comment


                            • #15
                              Number Three

                              We then spotted a house in Paraparam - 3 bedroom, character house for 150k. Thats not bad we thought, and went out to have a look.

                              It was on SH1 and close to railway lines which was reflected in the price, but we saw it as a good house to get into the market with....until we got the builders report back. Okay, so back to the drawing board.

                              I was really eager to bite the bullet now and buy a house, so the following day we drove out to Paraparam and had a look around. We spotted a really nice house, large corner section, garage, carport, 3 bedrooms, close to schools in a nice area, and they were asking around 200k.

                              The house was immaculate, but they hadnt presented it very well and the agent said that there had been little interest.

                              Time for an offer, so we went down to the Agents office and filled in the paper work. She walked out of the room, and came back with the news that another agent had someone that was also putting in an offer, and we really need to put forward our best offer to be successful.

                              So I said "...ummmmmmm well our best offer was going to be 170, but I guess we could go up to 180 if we had to.....but there is no way we will go higher than that."

                              The next day they accepted - finally we were onto
                              something. We used the same builder to check out this place, and he basically said that he wanted to buy it himself, it was a good solid house!

                              Yay, it was all go....we had our first house! The first week was awesome, we were doing stupid things like opening a door and saying "we just opened OUR door" but yeah it was all good.

                              I had really enjoyed playing the property game, and over the years had read a number of books and had a fair idea of the different strategies and approaches in property investing, and I certainly wasnt going to stop at just one house.

                              6 Months later I received a tidy bonus from work at around 7k - awesome I thought, this is a deposit for a house.

                              We are yet to decide if the next purchase was a mistake or not. We have learnt a hang of a lot through it, and havent lost any money yet, so I guess all in all it was not, but with hindsight we should have gone with option B.

                              We figured that we could use the 7.5k as a 10% deposit on a cheap house in a small town. We found a really nice place in Tokoroa that was returning 11.4%. How could we go wrong? Our first IP and it was going to make us money!

                              Nice! We drove up, checked out the house, liked the house and bought the house. Then learned some lessons!!!
                              1. Get to know an area well before you buy. We did this for our first house - but not the second! Oooops
                              2. Make sure that the place you are buying is rented out at market rent, and if not, then why
                              3. Tenants can appear to be the nicest people, but no matter how nice you are to them, they can and will still throw it in your face! Then rub it in your face, then throw it in your face again.
                              4. An 11.4% return, is only an 11.4% return when the house is rented out
                              5. PropertyTalk is the most valuable resource out there, and there are some really good people in this community!
                              6. Some property managers need to be managed more than tenants!!!
                              We are now getting $45 per week less than the first tenant, we had to spend 3 weekends in a row cleaning out the house after the tenant did a runner owing us a lot of money. One of those weekends I was so grateful for the help of family and friends who turned up to help. In a day, 7 of us got our hands dirty removing soiled nappies, maggot infested food from the oven/fridge and cleaning up a mess that would have made a third world hut look like a mansion.

                              This was followed by a period of 2months vacancy, with me going back on a regular basis to remove grafitti from both the fence, and the house itself!

                              We now have the property back on track, with the help of a very kind PT member (thanks heaps Muppet!!!!), and we seem to have some good tenants now, who although are paying below market rent....are actually paying it, and are looking after the place.

                              I wont go into the hassles with the property manager, but to cut a long story short, for the entire time it was vacant it was on their books. The tenant that we have today approached the property manager (as they had seen the house was vacant) who told them to find out the owners address from the council and contact them! Go figure!

                              So that was purchase number two - with hindsight, we should have saved a bit more and bought the house down the road from us in paraparam that went up for sale for a good price. That would have increased by at least 100k today and had a much better tenant pool....but the lessons from tokoroa have been invaluable, so there you have it.

                              We just recently got a valuation done on our Paraparam house (which is now rented out) and it came back at 270k.

                              Sorry this is quite a tangent from what Fritz actually asked for, and I am getting there, but I guess you are all getting to know us inside out through this
                              No Regrets

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