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No Regrets/Robsta's Story

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  • No Regrets/Robsta's Story

    Hi Guys

    I have taken a copy of Rob's story from his original thread without all the other comments and placed it here in the Library.

    Please no comments - just read and enjoy.
    This is the link to the originally thread: http://www.propertytalk.com/forum/sh...ad.php?t=10813

    Episode One

    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
    Last edited by muppet; 24-05-2007, 10:20 PM.
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

  • #2
    Episode Two
    What we needed to get into our first house:

    1)Savings history

    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 Wainuiomata (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....
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx


    • #3
      Number Three
      We then spotted a house in Paraparaumu - 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 Paraparaumu 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 hadn't 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 wasn't 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 learn't a hang of a lot through it, and haven't 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!!!

      Get to know an area well before you buy. We did this for our first house - but not the second! Oooops
      Make sure that the place you are buying is rented out at market rent, and if not, then why
      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.
      An 11.4% return, is only an 11.4% return when the house is rented out
      PropertyTalk is the most valuable resource out there, and there are some really good people in this community!
      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 graffiti 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 Paraparaumu 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 Paraparaumu 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.
      "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx


      • #4
        Episode Four

        Finally.....he gets close to what was asked for!

        Right, where was I - Okay, so at this stage we had purchased our first house, and an investment property, and the saving had already begun for the next one.

        However, at the same time I was really starting to question what I was doing with my life. I had set and achieved two major goals – the first one was to own the car, the second was to be in my own house by the age of 25. I didn’t hate my job, but I didn’t love it either.

        I hated the fact that everyday I got up at the same time, to get on the same train, to get in the same elevator to the same desk.

        I had to sit at this desk and work for the next 9 hours, whether I felt like it or not. As Volatile said above, I could work more hours, but got nothing for it, and there were people there that literally devoted their lives to their work.

        Now, I am not saying that this is necessarily wrong – each to their own. But I figured that if I could choose what to do with my time, then I would certainly not be going down the path that I was heading.

        Don’t get me wrong, I was not at all ungrateful – I had a great job, was working with great people….the pay was good and so were the career prospects – In a few years I could have climbed right up – but there was a problem. It was not what I wanted to do.

        It is a bit of a cliché I know, but the reality is, that it is true…..we could get run over by a bus tomorrow! we could get diagnosed with a terminal illness tomorrow….etc etc

        The way that I was going, I was only going to be able to reap the benefits of all my hard work much much later on in life – there are no guarantees that I will be around then. I contemplated long and hard about what I would do if I knew I was going to die in 1 years time.

        Sorry, this is sounding quite morbid now……but anyway, my girlfriend and I sat down and had a good discussion. What do we want to do with our lives? By the time you count getting to and from work we had 3 good hours in the day to give to ourselves. 3 out of 24. We figured that 13 was devoted to work, if we gave 8 to sleep, which was needed for work, that left us with 3 hours.

        If we loved what we did for those 13 hours, then that wouldn’t be a problem…..but we didn’t, we only tolerated it. So what could we do?

        I learned a long time ago that to get something achieved you have to have a What, a How, a Why and a When. In our situation we had a What, we had a Why and we decided on a When. I have found that if you have all of the W's sorted, the How will normally work itself out.

        At the age of 25, we set out on a very ambitious goal to be financially free by the age of 30. We also decided that this goal was not going to come at the expense of everything. Firstly we had to be happy……we had to be happy no matter what!

        So, we talked about what we would be happy doing with our time. Firstly, I had to be working for myself. This puts me in direct control of my destiny and on a lower level enables me to control my day. Jane wanted the same thing. We both had an interest in photography, and we had different skills that complemented each other, so we started tinkering around with what we could do in the photographic industry.

        Jane had already studied Freelance photography, so we had a top end digital camera (an asset) and we put our heads together as to how this could make us money, with the intention of quitting our jobs as soon as possible.

        It is all good thinking this kind of stuff, but doing it is a totally different ball game. We tried a number of different ideas, and all of them failed to take off, and then one day by chance we stumbled upon a niche market.

        I realised we were onto something good, and although it was incredibly risky, we threw in all of our savings and started our next business venture.

        This time it worked, and those 8 hours of sleep started getting sucked into the business!

        I had my laptop on the train, and when I wasn’t at work, I was working on our business. When we got home from work, we worked on our business – sometimes till 3 in the morning. My lunch breaks were spent, you guessed it – working on the business.

        Time started becoming a real problem and part of me wanted to throw in my job there and then….but then another part was saying “be careful….don’t be hasty and throw it all away, remember your other business ideas didn’t succeed”

        So I chose to compromise. This was very difficult. I set up a meeting with my boss and basically told him that I needed more time to focus on my own business. I was very surprised by the level of support that I got, and am very grateful for his level of understanding.

        As a result, I had reduced my working week to 3 days per week.

        This left we with 4 days in a row to build up the business. Colleagues at work were very jealous….I think they all thought I was playing golf on my days off! If only they knew!!!

        Three months later, my girlfriend, who was actually my fiancé by then, bit the bullet and resigned from her job. The business was growing nicely with her being able to dedicate herself to it fulltime, and we could start to see the need for more of my time as well. We got married a few months later, and we thought that seeing as we were starting a new chapter in our lives, it was time for me to resign. I wrote out my letter (again), I had done it earlier and chickened out, and nervously hopped on the train for what was to be a very different day at work!

        My boss was far from stupid, and knew that it was coming sooner or later, and wished me all the best and respected what I was doing – which was great!

        Things were looking really good! So we thought we would complicate them a little!
        "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx


        • #5
          Final installment!
          We were now in a position where we were both in our business full time and we wanted to

          a) buy another house and
          b) maximise the position that we were in with the business and
          c) be happy

          I had lived in the South Island for many years of my life, and the saying “that you can take the man out of the south, but you cant take the south out of the man” holds very true for me.

          I had finally managed to convince the wife that a shift down south would be a good move. We wanted to live with slower pace of life outside of the rat race, where we can hop in the car and in a few minutes enjoy the kind of scenery that NZ has such a good reputation for.

          We both love Central Otago, and the Queenstown area was my wife’s number one choice, but if anyone knows the market there – we simply could not afford it – yet!

          Knowing the area quite well from my time down south, I knew of this great little place that was only an hour or so away from Queenstown, as well as being an hour from Te-Anau, a couple of hours from Milford Sound…..you get my drift.

          We jumped onto Trademe and there was the choice of about 4 houses – not bad for a place with a population of under 500. They ranged from 70k – 140k, most of which were 3 bedrooms on a ¼ acre section. We firstly looked at one around the 70k mark. It needed a bit of work done, but we were not afraid of this, hey it even came with a free boat!!

          In the end, the one with the most appeal had an asking price of around 130k. We secured it for 110 and started getting ready for the big move.

          We learned a couple of lessons here:
          Once you have a track record with the bank, it gets very easy. Part of this is down to more confidence and experience, but also the bank soon realises that you know what you are doing and are a lot more comfortable with handing over money
          Property Managers can under rent a place to make it easy for them to rent out. We approached a property manager in Paraparaumu about renting out our house….we were told that the most we would get is $240. I thought this was too low, so advertised the place on trademe at $260. The phone ran red hot for the entire day, and within hours we had secured a great tenant. She looks after the place like it is her own, and is just brilliant! I am sure we could have actually got a bit more, say 280, but will leave it at 260 for now to hang onto our current tenant.
          DO NOT move down to the south island in the middle of winter!!
          I am the type of person that likes to do everything myself – I didn’t want to pay thousands to move all our stuff down south, so I began the hunt for a cheap truck that was big enough to fit everything, and in the meantime got the ball rolling on my HT license. This truck I would then sell down south, and hopefully move our stuff for free.

          We found an ex-rental for $3.5k which was perfect – except for one thing which relates to lesson #3 – it had no heater and the cab leaked a bit, so there was a good airflow coming in at all times, which is fine unless the air is -4 degrees!

          I did the move in 3 trips, firstly with our two vehicles individually, and then lastly with the truck.

          We did it in one day and it took us 23 hours. It was a real experience….especially losing control of the truck on black ice on the Kaikoura hills….I have never seen my wife go so white! Thank God for that defensive driving course when I was young!

          And upon arrival at our new house at 11.30pm we were greeted with a nasty surprise.

          I turned the power on, and was walking inside when I heard my wife scream….I had a look to see a water feature in our lounge! I was pretty sure that wasn’t advertised with the house!

          What had happened was because it was so frekken cold, the water in the pipes had frozen, and the pipes had burst above the lounge. Power went back off – as did the water – and we were welcomed into our new house! We curled up in a ball and shivered ourselves to sleep.

          So that was house number three. We have been here for a year now, and the business has been growing exponentially. We don’t have property managers for any of the other two houses, and to date have had no problems managing them ourselves from the other end of the country. It just adds to the challenge a bit.

          At this present point in time we are about to put in an offer for house #4 and another business. This is our biggest deal to date, but this is the deal that is going to hopefully secure the success of our goal!

          Thanks for taking the time to read our story….you have actually helped me achieve one of my goals by extending my comfort zone…I am normally a very private person, and this has not been an easy thing to do.

          It drives me crazy when I read about people saying “It is too hard to get into a first home” etc etc. Nothing is too hard if you think in ‘how cans’ rather than ‘cants’ We have worked damn hard to be in the position that we are in today, and still have a long way to go. We are living in a house, that some people might not consider to be good enough for their first home, but we know that it is a stepping stone to a future that we both know we will achieve.

          Is it hard not having a day job? Yes it is, it is a real challenge sometimes – especially when you have to involve banks etc, but I would not change a thing about what we have done – No Regrets right!
          "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx


          • #6
            Some of the challenges from leaving my job
            Pay Cut
            Leaving my job meant I had to take a pay cut - At the very start this is hard, because you essentially go from a regular $xxx every fortnight to nothing. This was never a problem though - as long as you have the discipline to live to your means while you build your income back up. There are so many ways to save money, by thinking a little outside the square. For example - dinner and movies will normally cost you 3 figures for two of you. A pizza and a DVD and a bottle of wine is under $20. etc etc.

            it can be unnerving at times not having the knowledge that your pay cheque is going to arrive on every second Thursday, but to be honest, this has never been a problem. This is one thing the banks don't like though!
            Don't be scared to let the bank know what you are doing - honesty is the best policy. In our situation we have always found it better approaching the banks directly ourselves rather than using a broker. This is because we have been outside the norm - and if the banks can meet you in person, and you can explain everything yourself, it can go a long long way to getting finance that you otherwise wouldn't normally get.

            Control and Time
            This is the #1 benefit of not being in a normal day job. You have direct control of your time....you can do the lawn on a Monday at 10-o'clock, and work at 10pm. You can take your laptop down to the beach and search for properties, etc etc.....It is awesome!!
            I hope that all of this has shown that with the right attitude and a strong will to succeed that you can!

            We consider ourselves to be normal people - we are not super smart - we started with nothing - and we will get to where we want to go with shear determination.

            Thanks for reading!

            "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx


            • #7
              Thanks Fritz - yes I agree totally with you, it does mean you are constantly living life on the edge - but the rewards for this growth are endless!

              What helped you overcome your comfort zone in

              1) writing this story
              2) your PI career
              What tips or tools would you give the forumites contemplating the move or making a change?

              I guess the answer to the first question comes from a couple of angles - when you asked me to post about leaving my job I thought it would be good to let everyone know a bit more about me, and this felt uncomfortable. I looked into why this felt uncomfortable, and decided to change that!

              Before I left my job I was comfortably treading the path set by so many before me. It was a set structure, with a set outcome - very secure and comfortable!

              From the day I left my job, I stepped out into a realm of unknowns. I am having to cut my own path through the jungle, dodging all kinds of danger on the way. Sometimes I am in thick dense bush and it feels as if my blade is getting blunt and I will be unable to cut through anymore. That is when I have to sit back, gather my thoughts and simply sharpen my blade!

              I guess it is the same kind of story to the movie 'Finding Nemo' - there are the types of goldfish that spend thier entire lives happily in the confines of the secure fish bowl. Their food is provided, there are no predators, little risk and they have a relatively happy life.

              But...they never get to experience the ocean, the beauty that it has to offer, the experiences that it has to offer.

              I have found a number of factors that help me to break my comfort zone on a regular basis:

              - Determination
              - Action
              - The right attitude - if you think you can, you can, if you think you cant you cant!
              - Vision for the future
              - Support of a great wife and family
              - Hard work!
              No Regrets
              "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx