Mike, 41, was an extremely hands-on investor for 16 years. He renovated and sold many homes during that time. But after two kids, life was different. He had less time, and more to lose.

Now he’s bought a new build, and he plans to “never ever” step foot in it. Here’s why Mike made the transition into a new phase of investing.

Twenty-three is young to start investing, but Mike says he’s always wanted to renovate houses because he spent his childhood watching his parents do it. As a boy he always found it exciting moving into a new house and seeing the process of renovating unfold.

He went 50/50 in his first home with his sister. They bought a property for $177,000, lived in it and renovated.

The Strategy

Mike went on to buy several more properties, always using the same strategy of living in the property while renovating, and then selling for a profit.

After buying his first property he teamed up with a new business partner for a few years. They bought a property for $260,000, which was a really quick sale. The duo heavily renovated while living in it for four years. They kitted it out with a new kitchen, bathroom, and deck outside – the works.

After the Christchurch earthquake house prices shot up, so they ended up selling the property for $420,000. That’s $160,000 in five years, or savings of $32,000 a year.

At that time in his life, Mike says neither he nor his business partner were earning much. So to save that kind of money was a huge boost. Many builders and plumbers who helped out on the house were paid in beer.

Soon after, Mike ventured out on his own.

Worst Mistake

Mike says his worst mistake was when he went to an auction and broke the cardinal rule – he started bidding with emotion.

He’d never been to an auction before. He was a total newbie. He was given an absolute figure of $400,000 from the bank but he went over, and over again. The final price was $403,500, and he thought he’d be fine with the extra $3,500. He wasn’t. His bank manager said he needed $7,000 upfront to make this happen, and he didn’t have it.

So, less than six months into a new relationship, he asked his partner for a $7,000 loan. She agreed, and he got the loan.

The couple are now engaged with two children (in case you wondered how it worked out).

New Builds

Mike says he’s always got the itch for a new investment property, but the dream for his family was always to live in Wanaka. He and his partner found land and chose to build a property there.

At the time, his family was expanding. The couple’s second baby was on the way and he’d started working for a new business. Life was getting pretty busy.

Mike admits he thought he knew everything about property investment. The mentality was: “Buy heaps of houses”. That was it. Happy days. Then one day his friend told him about Opes Partners and showed Mike his Wealth Plan. It was the first time Mike saw an investment plan geared towards a future goal.

At first Mike didn’t think that much of it, but he liked the idea of having a free chat about his investment portfolio. So he set up a meeting with Derry, a property partner in Auckland.

He was immediately onboard. The first property was a two-bedroomed townhouse in Spreydon. And after six years of hands-on renovating, he plans to “never ever” set foot in the property.

The Change

Mike says if he knew 16 years ago what he knows now, he would take a passive strategy in a heartbeat. But he reckons if you get an opportunity, take it and run with it.

He says he always thinks about the worst-case scenario. Maybe he doesn’t get tenants, or maybe the tenants wreck the place, but there’s always an asset that’s his, that he can sell. And investors often let these worst-case scenarios stop them from taking action.

But Mike says the best-case scenario is it’s the best decision you’ve ever made.

Next Steps

Mike’s experience might resonate with a lot of investors who want a change of pace. Maybe you’ve got a family or more responsibility at work, and you need to take a step back from your investment strategy. New builds could be the answer for you.

If you want the same service Mike received, your next step is to book a Portfolio Planning Session with Opes Partners.

Disclaimer: Just remember this is a column in a magazine, going out to thousands of people. It’s not personal financial advice. But, it is an example of what can be achieved with personalised financial advice. If you are wanting to book a consultation, email us through the website at https://www.opespartners.co.nz