Prolific investor says property isn't dead

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The Prosperity Project 31 min 2 speakers 4 chapters transcribed 2 months ago
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Nadine Higgins 0:00
Kia ora, I'm Nadine Higgins and welcome to The Prosperity Project.
Nadine Higgins 0:11
Most property investors are small time. They're mum and dad investors that own maybe one, at the most two, investment properties. Andrew Nicol, however, owns 43, having bought and sold more than 100 throughout his career. Through his business, OPEZ Partners, he advises others on how to invest in property. He records a daily report. podcast about property. He once even self-funded a reality TV show about property. So who better to talk through the current market and ask the question, is property investment really dead? Well, hi, Andrew. Thanks for coming into the Prosperity Project. I want to talk a little bit about the origins of your property journey, because we know the headline numbers now, you know, dozens of properties, but it all starts somewhere, doesn't it?
Nadine Higgins 1:02
So can you tell us about how you first got on the property ladder?
Andrew Nicol 1:05
Yeah, so I grew up in a very working class family in Christchurch and because we had no money, I was very aware of money from a young age and the pressures of not having any money.
Nadine Higgins 1:17
I can relate to that.
Andrew Nicol 1:19
And when I went to school, I was good at maths and I decided that I wanted to be a lawyer because back then it wasn't Suits, it was Boston Legal, and that was pretty cool. And so I'd enrolled to do that. And then during that process, I'd entered a competition at school, economics competition, and I was getting a whole bunch of info from the bank. And someone at the bank actually said to me, why don't you just come and work for a bank for a wee while? And so that'd be a great way of learning more about money. And that was Westpac. And at the time, I banked with Westpac, and their service was terrible. So I thought, I wouldn't mind working for a bank, but maybe not Westpac. So I sent a CV. The one and only time I've had a CV in my life, sent it to BNZ and to National Bank.
Andrew Nicol 2:00
And BNZ gave me a job as a teller, and I started learning about money. And then I worked my way up over a couple of years. And when I was dealing with clients, I suddenly realized, again, I was in quite a working class part of Christchurch for the branch. Lots of people that I was dealing with who were just on normal incomes were actually quite wealthy. They had a number of rental properties and They'd just kind of bought properties and done them up, bought properties and held onto them. And I thought, this is probably quite a good way of making money. So basically it was accidental. I started saving a deposit. I met who would later become a friend of mine, Tony Mounts, who's a mortgage broker. He got me an approval and I bought my first rental and then just carried on from there.
Nadine Higgins 2:41
So what were prices like at that point? How much did you have to put down? Because I imagine that the numbers are a little different to what you work with today.
Andrew Nicol 2:48
Yeah, so that was 22 years ago. So the first house I ever bought was about $220,000, and I had a 5% deposit, so roughly... What was that, $20,000? $10,000. $10,000. $12,500, I think, is what we put down, and that included my renovation money. Now, that sounds like a small number because it is, but I think my salary at the time might have been $30,000 a year. So I did that with a girlfriend at the time. We bought a five-bedroom house, and I was very yield-focused. I wanted to know I could get the maximum amount of rent from that property, and we renovated it very poorly. So we did everything ourself. like painted it and stripped wallpaper every night after work.

How did Andrew Nicol get started in property investing and what was his first deal like?

Andrew Nicol 3:29
And it was horrifically designed. We painted a feature wall in each of the rooms, different colour.
Nadine Higgins 3:37
Very of its era.
Andrew Nicol 3:38
Yeah. I remember one room was like a brown colour and one was like a maroon colour. And then once we got it finished, we got it revalued. And I think we'd like made 20 grand on paper. And I thought, this is easy. Yeah. Money for jam. And then I put tenants in. And because of the area of the property and because I was trying to get the maximum rent, it was a nightmare in terms of the people I had in there. And so we had people sleeping in the garage.

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