The Land of the Long Silver Lined Cloud?

Woman in Focus – Robyn Marsters

We all dream of being given enough money to lead the lifestyle of our dreams. This rarely happens, so our Woman in Focus this month used a small gift from a friend to set her family on the path to financial freedom.

Hardback to Hard Cash

Back in the summer of 2003, New Zealand mother Robyn Marsters decided to settle down for a good read. Nothing unusual about that, yet it proved to be somewhat of an epiphany for Robyn. “I was given a book by a friend, ‘Money Secrets of the Rich’ by John Burley. I picked it up and started reading it one afternoon. I found myself excited and inspired to the point of not putting it down until I had finished it, which was 3 in the morning! I then woke up my husband, Derrick, and gave him a snapshot of what I believed we should do”.

Robyn, who only three months earlier had her fifth child, had been inspired to build her own property empire and quickly set about taking the actions needed to get her new plan moving. Even though she had no experience in the property field, a career which had encompassed such diversity as working in a pharmacy to sales to farming worms helped Robyn step out of her comfort zone and embrace the challenge ahead. By December of that year, she and Derrick had already purchased five properties. Following a set of basic principles and learning as she goes along, to date Robyn has successfully traded over 100 properties, has completed in excess of 60 renovations and currently has more than 50 properties spread over New Zealand.

All in the Planning

Robyn found her first investment property through a New Zealand website that includes private listings and to this day she believes that a majority of her profits are made from sourcing opportunities privately. “We love buying well” Robyn enthuses, “We use a number of marketing techniques to find deals privately including flyers, roadside advertising signs, newspaper adverts and cold calling. If we can focus on what the vendor wants and it fits within our rules then its win-win”.

Whilst New Zealand has provided countless opportunities to invest over the last ten years, people thinking of making a first time property investment can be put off by the thought of many hours hard labour with a sander or paintbrush in hand. Robyn keeps her focus in sharp perspective “Our time spent looking for a good deal is far more valuable than doing physical work such as painting. If we are too involved in the labour side, we will miss good deals because we simply won’t have time to find them”.

Robyn loves to buy properties for a variety of reasons including renovation, letting, subdivision but most importantly, profit. One of the key requirements in her decision to purchase will be that the property is cash-flow positive and this seems to have stood her in good stead as she has watched her property portfolio grow. Her next step is to have a clear idea on what she intends to do with the property then spend accordingly, “If we are going to buy it, add value and sell it, we will do whatever is cosmetically necessary to make the house look great”. Although Robyn is quick to remind that taking simple steps like using the same colour schemes and decor across the entire portfolio can help keep costs down make sure you don’t over capitalise.

Robyn gives an example of one her latest renovation projects to help illustrate some of her techniques. “When we look at a property that we are intending to renovate, we look at the market price when it is completed and work backwards. The renovated price upon completion was $230 – $240K (this we work out by talking to real estate agents and doing some of our own research mostly on the internet).  We then calculate the cost of renovation. I have a simple spreadsheet that I have adapted for this, remembering to include 3 months of holding costs such as interest, rates and insurance.  For this particular property we calculated it at $25K.  We use a real estate agent to sell our houses and we believe a good agent is well worth their commission.  So we add a selling commission to our expenses for this house it worked out approx $8K.  We then take the estimated sell price at $230K (the lower of the range), subtract $33K, which is the total expenses, which leaves us $197K.  The contract we had on the property was $145K, so the difference of $52K would be our profit.  After this quick analysis we decided the profit was definitely good enough to go ahead with.  It took 6 weeks to sell the house, it settled after another 3 weeks and our profit worked out to be $56K gross”.

Now that’s the kind of profit we are all looking to make, so what does Robyn suggest we look out for when making a property investment?

Robyn’s Top Tips for Property Success

• Buy Well – learn to pay a minimal deposit, get early access and negotiate well
• Identify what you plan to do with a property and what improvements you need to make in order to achieve it
• Don’t over capitalise – It’s amazing what a coat of paint, new vinyl/curtains or light fittings will do
• Use the same colour scheme, neutral but not too bland, on all your properties – including rentals
• Be sure to replace shabby bathroom vanities – even a new shower curtain can look great
• Make the garden neat, tidy and easy to care for – grasses, flaxes and wood chippings can be a good way to achieve this
• For renovation projects look at the anticipated market price when completed and work backwards, remembering to allow for all costs, fees and commissions, to calculate your bid price/potential profit
• For sales, a good real estate agent is well worth their commission

A Helping Hand

Since those days back in 2003, Robyn and her family’s lives have changed dramatically and now they live the kind of lifestyle that once seemed little more than a pipedream. Even the children can’t help but want to follow in the inspirational footsteps of their parents and whilst the elder ones are learning trades in building and accounting, even the younger members try to pitch in and help by answering the phone.

With a great deal of success under the belt Robyn, along with Derrick, dedicate some of their time to sharing knowledge to help others, “We believe in giving back and feel grateful for the advice others have openly shared with us”. They are happy to impart their valuable knowledge of the property markets with less experienced and first time investors and also are heavily involved with a charitable trust. ‘Helping People into Homes Charitable Trust’ aims to help people who haven’t got a deposit to buy a home by giving them the deposit they need to qualify for a home loan.

Details of the trust can be found at www.yourownhome.co.nz .

The Time is Now

With much talk in the media of the current economic climate, many people are becoming nervous of any form of investment. So what does Robyn make of the current investment climate? “It is a fantastic time to buy now. Prices are down, vendors are negotiable and there is amazing choice out there. For first time investors the difference between buying well and not is all melted with time. The biggest mistake we see people make is they neglect to take action”.

There is no doubt that her positive outlook and willingness to take action on her decisions has played a huge part in her success. The formula seems simple, one we can all follow and as Robyn says “It is amazing what a group of positive women can achieve”.

What Robyn says about Property Women

“Property Women is an amazing group, I have spent some time looking through the forum and reading some of the fascinating articles.  What I particularly like about your group is the positivity, there are so many skeptical people out there to have a positive like-minded group of women is a very powerful force.  I am delighted to contribute to your newsletter and feel certain that your group will continue to grow and prosper, well done”!!