From 1 Property To 5 – Here's How She Did It [Case Study]
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How did Sarah first discover the opportunity to develop her 2006 investment property?
Hello and welcome along to the Property Academy podcast by Obus Partners. I'm your host, Steve McKnight. And I'm Andrew Nichol. And this is the show that helps Kiwis go from zero to five investment properties so you could be financially free and stick around for the next 15 minutes because you're gonna learn how this investor turned one property into five, the challenges she faced when she turned herself into a property developer, and her biggest regret from investing in property. And to walk us through her story, we're joined all the way from Auckland by Sarah. Sarah, welcome along to the show.
Thank you for having me.
Look, I wanna I wanna skip to the good stuff, Sierra. Let's talk about this development you did. How did you manage to turn one house into five?
So there was the opportunity to develop our first investment property after the Auckland Unitary Plan was introduced in two thousand and thirteen. So it was something that we had been considering for a while.
And so how did you acquire this property, right? So did you buy it after the unitary plan was kind of announced and there were these additional opportunities floating around? Or like what year did you buy it and what year did you develop it?
So we bought this property in two thousand and six. It was our first investment property and we didn't buy it with the intention of developing it. It was a house in Mungrey East, which was a three bedroom nineteen fifties house, and there was a nineteen eighties minor dwelling on the back and large flat section of eight hundred and ten square meters.
Okay, so you've got this big piece of land, you figure out, okay, we can actually put five units on on this. How do you go about all pulling that all together?
The property was first purchase for three hundred and twenty thousand and We had sort of rented it until two thousand and twenty two, which that point was seven hundred and sixty-five dollars per week, but we had always intended that maybe it was a good idea to develop it further. And so we decided to start the project in two thousand and twenty one. But then we actually did face higher building costs and reduced property crisis. But at the time in two thousand and twenty one we had a registered valuation which came back at four point seven five million. But then That actually had dropped to four point three million by when we finished it in in two thousand and twenty four. And unfortunately our costs reduced to four from sixty-eight to thirty-one percent return on costs.
But we were looking at this with a buy and hold lens and and we didn't intend to sell the properties and we were going to rent them out so it it did make sense to continue with this project even though there were those changes.
So can I just get make sure I've got this right in my head.
What steps did she take to turn the single house in Mungre East into five townhouses?
So you buy your first investment and you think, right, Now that we're an investor, we're going to be a developer. So then you dive in with a five unit development and a right at quite a quite a challenging time in the market and your margins get squeezed, but you still manage to stay positive. How did you manage to do that?
At that point we had been investing for quite a while and we had had a a feasibility which also we had looked at the costs carefully and we were confident that the numbers would work. with the increased building costs and the issues at at the time with the higher interest rates and also the the lower rental amount, we were confident that the numbers would still work.
And when I think about what it is that people are trying to achieve out of property, some people are going for capital growth, some people are going for income now, some people are going for a combination. What was it that you were setting out to achieve? And when you say the numbers still work, what did the end numbers do for you?
We've always invested in terms of something that provides a good yield and we want good cash flow. So that is a priority over capital growth. We want to invest in areas where there is going to be capital growth, but we also want there to be a good yield as as well.
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Chapters
8 chapters
1
How did Sarah first discover the opportunity to develop her 2006 investment property?
0:08–3:10
2
What steps did she take to turn the single house in Mungre East into five townhouses?
3:10–6:53
3
How did she keep the project financially viable despite rising building costs and lower rents?
6:53–9:42
4
What financing strategy did Sarah use, and why did she switch to a non‑bank lender?
9:42–12:46
5
How did she convince her husband and maintain a partnership in property investing?
12:46–15:34
6
How did Sarah manage property purchases and renovations while living in the Philippines?
15:34–18:35
7
What does Sarah’s current seven‑property portfolio look like and what are her long‑term goals?
18:35–21:53
8
What is Sarah’s biggest regret in property investing and what advice does she give to new investors?
21:53–24:49
Speakers
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