A “roller-coaster ride” is an understatement when exploring the life of Aucklander Nichole Lewis. Her early life began with tragedy, and she’s made, lost, and remade a fortune in the property game. But in 2022 she’s still standing (thriving in fact) and has an inspiring story to tell anyone who is interested in how to make money out of property.

Hers is a story of resilience, determination, and an ability to see opportunity beyond her immediate situation: qualities that ensured her success as an investor.

When Nichole was just a few months old, her mother passed away.

Her Scottish dad and Kiwi mum had relocated to South Africa for work in the 1970s, but tragically her mother was killed in a car accident on her 26th birthday. Her father had also lost both his parents, leaving him alone in a new country without support.

“The decision was made to send me back to New Zealand, to live with my grandparents on my mother’s side,” she says.

Nichole loved her grandparents, calling them mum and dad, but she says that as she grew up it became obvious there was a generational gap.

“They had the attitude that you bought a house with a mortgage, worked hard in the same job all your life, and then enjoyed yourself when you retired at 65,” she says.

This didn’t gel with Nichole; the idea of wasting your youth working and only getting to enjoy life when you were old didn’t make sense.

“I guess I had a recessive gene,” she laughs. She wanted to be rich, and remembers reading the following in Forbes: “Real estate builds wealth more consistently than any other asset class.”

Insatiable Curiosity

As a teenager, Nichole poured over books around the creation of wealth: the likes of Think and Grow Rich, and Rich Dad, Poor Dad. She had an insatiable curiosity about how people gained wealth. “Rather than feeling jealous of people who were rich, I would go and ask them how they made their money. And most of the time they would say ‘property’.”

When she was in her late teens Nichole met a man who would later become her husband. They married at 18, living at their respective parents’ homes to save money.

By the age of 22, Nichole and her husband bought their first home. They’d saved enough to buy a $50,000 car, which they sold, using the money for a deposit. “This home was in Te Atatu Peninsula, and it cost $120,000,” she says.

The next step was purchasing her first investment property, leveraging equity on her family home to fund the deal. She didn’t have much money to play with, purchasing a rundown freestanding three-bedroom in Manurewa, down a driveway shared with five other houses.

“It was under $100,000. We used a real estate agent to find tenants, and then managed the property ourselves.”

As with most “firsts” she made mistakes. She wanted the house to be as nice as possible, buying expensive appliances, including a new oven, which she thought the tenants would treat as their own. She was relaxed about rent payments (which were often late) and attended instantly to maintenance issues.

“Eventually the tenants gave notice. When I went in for the final inspection I found they had stolen the stove. They were also $6,000 in arrears,” she says. “I learned not to tolerate late rent or unkempt houses.”

It also taught her that you don’t need to have the best of everything in a rental. (She now uses reconditioned, rather than new, in her long-term rentals).

Interest Reignited

Unfortunately, Nichole’s first husband had an affair and left her. When the couple split up, he got the rental, and she got the family home.

Nichole would go on to meet Kelvin, her current husband, in 2002. The pair bought a holiday home together on Waiheke Island, but Kelvin wasn’t interested in investment property per se. Her interest was rekindled when she and a friend set up a networking group for professional people in the early 2000s.

“It transpired that all of the members of the group had an interest in property,” she says. “We would spend a lot of time talking about property, and I started investing again in 2004.”

Home and incomes were her investment of choice, mostly located in West Auckland. And inspired by investor Sean Levy, she also began dabbling in contemporaneous deals: buying then selling on without money exchanging hands.

“Back-to-back agreements where you are the buyer in the first sales agreement and a seller (of the same house) in a second sales agreement. You increase your sell price by around $15K to $20K which is your profit,” she explains.

So confident in her ability to make money from property, she bought apartments on the Gold Coast when on holiday in Australia in the mid-2000s.

“I’d seen a building that was being constructed, went in and met the general manager. I ended up purchasing four apartments in the building and working for the developers,” she says.

It was the start of a high-flying, but fleeting career selling apartments around the world. This was the height of the market and she earned a commission on each apartment sold. But it was 2007, and the world’s financial bubble was about to burst.

The apartment developers went under during the global financial crisis of 2007-2008. Her pay stopped going through, and debts started to mount.

“My husband lost his job at the same time,” she says. “We lost almost everything.”

The couple, who now had a young family, had to sell all their properties, including the family home. For the first time in her life, Nichole had to rent. And the debt collectors were calling.

Credit Card Worries

“I had racked up $120,000 debt on a credit card as work expenses with the developers, and they couldn’t pay me back. The debt collectors would call me every month asking for money. I was incredibly stressed for two years.”

Kelvin would go on to get a new job, and the credit card was slowly paid off. Eventually, Nichole moved back into the property investment business, with a company called The Property Lifestyle.

“I knew property inside out, I knew what to do and what not to do,” Nichole explains. “When I met the director of The Property Lifestyle, I convinced him to hire me as his property finder in Auckland. I would find the properties for investors and complete contemporaneous deals for the company.

She was also able to restart her own property investments, although due to her bad credit rating she had to use non-bank lenders for finance.

This time a buy-reno-sell formula proved the key. She would buy houses with potential, renovate with a trusted team of tradies, and resell. The focus was to find properties under market value that needed cosmetic renovation, with the aim of making at least $100,000 profit on the eventual sale.

All the numbers would be factored into her buying decisions: sale price, renovation costs, holding costs, predicted sale price, sales commission and legal fees. The properties were carefully chosen, and it sometimes took months for her to find them. But they returned her patience with impressive profits.

She also started to purchase buy-and-hold investments: all home and incomes.

Rather than working on a yield basis, she created her own passive income formula – factoring in all the costs, and then working out what she came out with at the end.

"When I buy a property, I put down my deposit, then deduct the mortgage cost, rates, insurance, maintenance allowance and utilities. After those deductions I want to have cash left over, then I will buy the property. I like to have a minimum of $200 per week left over.”

Passive Income

When Kelvin retired recently, she decided she needed to replace his salary with passive income from rentals, so she searched the country for multi-unit deals that would yield $100k plus a year.

“I knew that I would need to buy one or two multi-unit properties to make this work,” she says. “So I searched long and hard. I eventually found two blocks of units which have replaced the income he was earning.”

‘The debt collectors would call me every month asking for money. I was incredibly stressed for two years’ Nicole Lewis

“The best buy I found was a block of three units on one title in the heart of Grey Lynn (Auckland CBD fringe). I was sure it would be around $2.5 million which made the deal too expensive for me. The rent was $1600 per week. The property did not meet Healthy Homes standards and was in need of a cosmetic renovation. At the auction there were two bidders, myself, and one other: neither of us bid. I decided to make an offer that evening of $1.7 million, which was accepted.

“I spent $10,000 on Healthy Homes and $7,000 on carpet and repairs. The house was then valued at $2.9 million by a bank-approved valuer. The market rent was $2050 per week, so we put the rent up to meet the market. After costs and expenses, the passive income is $1500 per week; that’s $78,000 per annum.”

Nichole is now CEO of The Property Lifestyle; a company that helps investors achieve their own financial freedom through property. She’s also written a book, Property Quadrants: The Passive Income Formula to Own Your Financial, that has achieved “international best-seller” status on Amazon and is now in print in New Zealand.

She is positive about the present state of the residential market in this country. “There are so many deals out there, and it is a great time to flip,” she says. “Houses are sitting on the market longer and people are more motivated to sell. It’s a brilliant time to add to a portfolio.”