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Case Study: ‘We Struggled – Now We Own 12 Houses’

This young couple decided they wanted a better life for their family, so they invested in property and doubled their portfolio in the last six months, during a pandemic.

8 October 2021

Autumn 21

Ten years ago, Chad Evans and his wife Rachel struggled to see a way forward, with a new-born baby and surviving on one very modest youth worker income.

If things weren’t already tough enough, Chad’s contract was coming to an end and he couldn’t find work so, for a short time they had to rely on Work & Income to make ends meet.

Living week to week

“We were living from week to week and the debt was just getting deeper,” says Chad.

Says Rachel, now 36: “It’s been 10 years now and we’re starting to see the impact of that first decision we made to invest in property.”

They say they’re investing to create a secure future for their children, Amos, 11, Adele, 9, and Arana, 3.

It hasn’t been easy, and it’s been a journey of learning along the way, says Chad, now 35, a personal trainer and youth worker in South Auckland.

The inspirational couple are about to secure their 12th rental property.

Worst job ever!

After losing his job and six months of job-searching, Chad found work installing insulation, hot and itchy work – “the worst job ever!” – but then he got a role helping young people from disadvantaged backgrounds, which gave them stability.

The couple saved up to buy their first home off Chad’s parents, in an industrial area in Lower Hutt. It was a real do-up, damp and cramped, and it cost just NZ$260,000 – for a reason.

“It was in a terrible condition. It had been flooded, so the floors were rotten, and it had no heating or insulation.”

Over the next few years, they did up the house, stripping wallpaper, changing the carpet, skimming the walls, installing a fireplace, and painting inside and out.

Renovations added value

This was to improve their living conditions, but they found later it would add value to the house to allow them to invest in property.

“There were nights where we were sleeping in a hoodie and track pants because of the cold. The only heating was in the baby’s room, an oil heater, so that he was warm at night. We didn’t care though, because we owned our own home!”

Chad looked after the baby and renovated, while Rachel continued with her career at NZST, an institute for vocational training.

Book on investing

Then a friend gave Chad a few books on property investing to read.

“I was blown away at what could be achieved through investing. He had been investing in property for a while. I hijacked a meeting with his mortgage broker and real-estate agent while they were looking through properties.”

They spotted a three-bedroom home that was on the market for NZ$285,000 but valued at NZ$310,000.

“We’d been in our house for two years, so the broker said we should have some equity. I was still learning what equity was and how it worked!

“My friend said: ‘Look me in the eye and tell me you’re going to the bank tomorrow to put an offer on this house. It’s a good deal, and if you don’t take it, I will.

“So, I went to put an offer on the house the very next day.”

First rental

The offer was accepted and tenants living there wanted to stay. After a couple of months, with the rental going well, they realised because the house’s value was NZ$25,000 higher than they’d paid, they could buy another property.

The couple secured their third property, also buying it under its valuation.

The couple’s life became focused on servicing their debt and learning more about property investing.

Chad would run fitness bootcamps in the mornings, and when Rachel went to work, he’d look after the new baby and their toddler while he renovated. In the evenings, he worked in cargo at Air New Zealand, from 9pm until 2 or 3am.

“Then I’d be back up at five for bootcamps in a park in the city. That was my daily routine for a while, and my wife and I would be like ships passing in the morning and night.”

To get ahead, they moved in with Chad’s mother to turn their own home into a rental property, hoping to save enough to move to Auckland.

“Me, my wife and my two children were all in one bedroom.”

Staying with family

When they moved to Auckland, they stayed with family in Mangere and both worked fulltime while they learned as much as they could about investing.

With the rentals ticking over, finally they could buy a home in Onehunga, Auckland, and turned a garage into another bedroom they could rent out to international students.

That house later became a rental when they moved to a home they’d bought closer to Chad’s work, in Manurewa, Auckland.

Quite scary

Says Rachel: “We were still young and with young children, just like every other average Kiwi, both working and trying to get ahead.

“Deciding to buy an investment property and then another soon after was quite scary at times. But Chad and I have a really great relationship and I trusted that what he was doing for us was going to be good in the long term.”

They now have plans to demolish and develop their first Wellington investment property to build a three-bedroom, two-storey rental in front and two two-bedroom units at the back.

They’ll also turn the three-bedroom Manurewa house into a four-bedroom home with a two-bedroom self-contained unit at the rear as rental properties.

Realising that prices in the Auckland market are at a peak, they’ve turned to Christchurch, buying off the plans in a new development at Karamu, and buying an already tenanted home in North New Brighton.

Christchurch focus

They now have three Christchurch properties, after settling on a third at the end of the year.

Says Chad: “We’ve gone from five houses a few months ago to having 12 halfway through this year, in the middle of Covid and two Auckland lockdowns.

“Before we got into property, we didn’t have finances left over for Christmas presents for our baby. We were living off a credit card.”

When they bought in Auckland, the pair were both working fulltime, with Chad doing fitness training in the mornings, working with disengaged youth in South Auckland in the day, then working as a security guard most nights, plus working at events at weekends.

Throughout their journey, Rachel has progressed with her career, which has allowed the couple to further invest in property.

A real life change

Says Chad: “We look back and scratch our heads and think, wow, we would never have pictured ourselves being in this position – and to think that it’s still only the beginning is exciting.

“I grew up in Pomare, a low socio-economic area in Wellington. When you grow up there, you don’t picture yourself in a position like this or think it could possibly happen.”

Rachel grew up in Whangaparaoa, a rural area on the East Coast, with a solo mother.

“Now she’s flourishing in her work and doing amazing things,” says Chad. “She’s an inspirational leader. And now we’ve got this property portfolio that’s taken us to another place.”

Rachel says: “I’m happy that we made that decision all those years ago. At the time, we were struggling to get ahead. When you’ve got a child and one income coming in, you have to make some cuts and live on a budget at times, but I was thinking, ‘I don’t want to live like this forever. I want something more’.”

All three children are in JUNO KiwiSaver and have accounts with Liberty Trust, a church-based group that helps Kiwis by giving interest-free mortgages.

The couple also use their credit cards wisely, by using a Westpac credit card for large purchases to get Airpoints for international family holidays.

Diversified

They also have money in the Oyster Direct Property Fund and in Sharesies, reinvesting their returns.

“If you look at Auckland now, a property is a million dollars on average, so why don’t people look at other options or be a bit creative in the way they’re working? They could buy down the line and do it up, to get a deposit.

“I’m a firm believer that if you want to make it work, there’s always a way. You can be creative about it, like adding an extra bedroom, subdividing a large section, reconfiguring existing properties, or even a cosmetic renovation. These are all things we’ve done to continue to be able to further invest in the property market.”

Rachel says their main driver has been freedom – the freedom to do what they

like with their time and not be dictated to by cost.

“If we want to travel, we can, and if we want the option not to work, we can. We want to be able to make those choices for ourselves, rather than being bound by having to work or not being able to take leave.

“We want to retire early, but both Chad and I share a passion to see others succeed so that’s one of the other big contributing factors for us – we want to give back.”

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