Michelle Lewis works as a successful property investor and property investment coach, researching properties and liaising with property investors. Inspired by her parents to go into property investing, Lewis has completed and accumulated profit for the renovation of eight full housing properties, built up a portfolio all over Australia and also gone forward with joint ventures, her most successful property to date selling for a $242,000 profit.
In this episode of Property Investory, we'll learn about how she started off in a career in nursing only to go into full-time property investing, embarking on ventures such as turning neglected and rundown properties with 22 cats inside into a profitable source of income for her first renovation, and much, much more.
On any given day, Lewis does everything from researching properties to liaising with other property investors.
I'm looking at properties on the Internet. I'm doing feasibility studies. I'm liaising with my property buddies around town, and looking at and basically looking for the next deal. So that takes up most of my property time.
A lot of effort goes into her own portfolio, as well as bringing people together for joint ventures.
I have been asked many times to source properties for coaching clients but I am trying to focus on my own portfolio at the moment. However, having said that, a huge part of what I am doing lately is bringing people together for joint ventures including our own. So a huge part of what I do is also networking, especially with one of the groups I ran here in Adelaide, so bringing together someone who might have the money, might have the skills and time. And so that's a huge part of what I do as well. It's a mix.
She also gets involved herself in these joint ventures.
I have spent a lot of time I guess educating myself over the years, and now I feel I've reached a point in my knowledge, skill-base and confidence that I can go out and source deals and find parties to put them together. I can essentially help people make a profit, to make an income, a chunk of money; or if it suits them, to set up a situation where they've got perhaps a positive cash flow property, where they can have ongoing income over time and hold that property for the capital gain in the long term. So yeah, definitely getting in on the action myself as well.
It's all fun and games. We all need to be involved. You can see things from a different perspective because it's not yours and you're also giving back to and helping the community.
Absolutely. You know, a huge part of property is actually a people game, it's not a property game. It's liaising with other people, talking to people and working with others to find property deals. You have to talk to real estate agents, accountants, you know, there's a huge group of people that make up a chain. So it really is a people's business and having that connection with others and building long-lasting valuable connections is really important for people as a way to move forward, to grow the skills and knowledge and to be able to build a full portfolio, if that's what they're wanting to do.
Michelle Lewis Grown Story
Growing up in Adelaide, Lewis went to a school dominated by boys.
I grew up in Adelaide with my mum, dad, sister, and brother in the western suburbs of Adelaide. And yes, an interesting fact about my schooling in Year 11 and 12 is that I went to St Michael's College, which is down at Henley Beach, and at the time, there was a very small amount of girls in the school. It was 40 girls in Year 11 and 12, and there was a total of six hundred boys in the school, so it was a really, really interesting environment to be in. And you can't shy away from that environment, so I definitely helped to build some skills for life, being surrounded by so many young lads and just, you know, being able to fit into that environment.
I was going to say you had the pick of the crop.
Yeah, you might say that. Quality, not quantity.
Very true. Jokes aside, you must have been involved in quite a few activities at school.
Yeah, absolutely. So when I played tennis in year 11, for example, I was the only girl on the team, and I do recall one morning when I played against an all-boys team from another school, I'm quite sure the boy was actually crying afterward, which wasn't my intention at all. But it was a very interesting scenario where you're essentially in a boy's school as a female. So it was quite, quite unique.
Lewis actually started off her career in a couple of fields entirely different from property investment...
My first job was at Target. I think I started at about $7.53 an hour and I was doing after school work, so from 4 to 6, I would work for two hours. And I actually had quite a long-lasting career with Target, working sort of permanent part-time in the school holidays and even working as a speaker telling everyone to come down and get their specials, which is really interesting. So I loved that part of my life and the people I met in between studying and obviously getting some cash along the way. The other really interesting job that I had was working at a homeless shelter for women. So I used to sleep there on a Sunday night with the women. And those nights opened my eyes to many interesting and saddening stories, really. But it was also a place of hope for young girls. So that was a really, really wonderful part of working life as well.
And say after school then did you go out to complete and do maybe go to university or did you actually go into the workforce after that.
I went to university after I finished school. I did a Bachelor of Applied Science in Nursing and so went on to begin a long-lasting nursing career which I loved and which took me all around Australia, and was a fantastic career also to have with a family. So that's my background from a working perspective.
At the time, I guess for me the career fit in with my personality of helping people. I also loved the idea that nursing was very diverse, so you could work from anywhere on the wards to in theaters or in education, which was part of the journey that I took along the way, teaching others nursing. So it was just so many options, I thought I've got to be able to find something in there that can work for me.
Some of the knowledge she acquired throughout her other careers carried her well into property investment.
For example, when we have purchased properties and then begun to provide rental accommodation, you know that one that comes to mind is a single mum and her two children. So for me, having her in that property and providing a home for her is a double bonus where I can have an asset for ourselves as a family but also be able to give back and provide a safe home for a mum and her two children. You know, that flows on from that ethics for me, that there's a story behind the scenes, I hadn't really noticed that until you mentioned it now, it's so interesting.
Lewis was initially inspired by her parents to go into property investment.
I guess the thing I do remember is that mum and dad told me they paid thirteen and a half thousand dollars for their house when they bought it. And I remember thinking, wow, that's not much, and wow, look at what it's worth now. So that's probably the one thing that sticks in my mind, is that if you buy a house it tends to be an appreciating asset, unlike buying a car which depreciates over time. So that really did stick in my mind. My dad was also a handyman so I remember him painting rooms in our houses and definitely, you know, being a bit hands-on from that perspective, so I definitely grew up with a little bit of that in my pocket. But I guess the entrepreneurial side, perhaps my grandfather ran his own business, so perhaps that came from there but I seem to just have that sort of entrepreneurial spirit within and enjoyed a challenge; and you know my parents definitely encouraged me to. My dad used to say that you know you could do anything you wanted Michelle, and that has always stuck with me in a very powerful way and I really believe that inside and outside. They definitely encouraged me to be all I could be by myself and for others.
Her mother also did some property investment of her own.
Well, it's interesting because my mom in her 60's did her first property development. My father passed away some years ago and mum was at a point where she was looking to set herself up for her retirement, and so she came and asked what we thought. And to cut a long story short, she knocked down the family home, subdivided the property and built her retirement home on one side and sold the block on the other side. So that's her one and only development that she did and I was really happy to be able to support her, although really she did most of it herself. So they weren't definitely with property investors per se but yes she has done so even at age 60, it's never too late.
The Start of Michelle Lewis Property Investing Journey
So how did Lewis's property journey start?
My now-husband and I were engaged at the time and looking for our first place to buy, and we came across a mass net, we call it in Adelaide, which is a half a house with a shared wall that was going up for auction. And we went around and saw this property, and it was pretty awful. It had 22 cats in the property, there was cat hair everywhere. It was very neglected and rundown. And it really gave you an icky feeling but I was like great, if there's a lot of people that don't like it, fantastic, this could be an opportunity for us to purchase at a great price in accumulating profit from renovating the property. So I guess it was a bit of natural instinct in me to look for something that we could add value to. And I didn't really know what any of that meant at the time but I guess it made sense instinctively.
And that's what I actually love, the worst the better. I guess what you see when you see a property like that, is you see the bones, and really the cat hair and the peeled paint and the yucky floors, that's still just something that can be renovated cosmetically and it's not for the faint-hearted. And you know it does take some work and some thinking but it's definitely doable. So I guess in seeing this property, I could see that it was a beautiful old bungalow that a paint, a polish of the floorboards, a removing of the massive cat pen and cleaning out of all the fur, which I must admit at the time I remember my mum coming round and helping us to clean out all the stuff, would make much better. It was a real group effort, but being able to see those basic bones and also the value of the street and the area was part of this property purchase as well.
This was her first property.
We purchased that house in two thousand and three and that was our very first property, and we bought that at auction and we paid one hundred and forty-nine thousand six hundred dollars for that one-bedroom Masonite, but what we did to it over time – when I got pregnant and we had our first child – was that we actually did our first development, which was an extension on that property of a large rumpus room or family room with a bedroom and a new laundry.
Wow. So you said that it was a one-bedroom house. That was cool. That's very interesting. I don't hear very many of them much at all.
It was basically I guess what would be a three or four bedroom bungalow but it was set up and built with a shed. It had the two sides so I guess it was ideal for one person or a couple but beautiful large rooms, and so massive living spaces within that small property, and it's obviously opportunities to just turn those large areas into separate rooms which added more value. The rooms were definitely large. And as I say we did build on an extra room at the back and we built on a beautiful modern extension. And basically since we moved out of that property because we outgrew it, it's been rented ever since and it's been a source of income for our family.
She renovated this first property mostly herself, with the help of her family.
At the time we probably didn't have that much money, we were keen to get in and we didn't have children to sort of divert our attention. So we definitely got in, I remember we polish the floorboards ourselves with one of those heavy machines and we also laid the lacquer on the floor as well. I think maybe we might have got my brother in to help with some painting and paid him some money for that, and mom definitely helped out with the cleaning to get started. There were few jobs we had to pay people for such as taking down a tree that was too large for us to manage. But apart from that yeah we definitely did put a lot of blood sweat and tears into that property. But what I learned from that experience was that, wow, you know we've purchased this property for a certain amount, we've been able to spend our time and a small amount of money and we've uplifted the value of that property to become now an asset for us.
I don't have the exact numbers on the money we spent on it but I would say that it would probably be about 10 grand at the time, maybe not even that much. I think we were trying to move it along pretty quickly because we wanted somewhere to live and we were getting married soon. That would have been done over perhaps maybe six to eight weeks, I guess when we sort of have a project on our hands we like to get in and get it done and move along as fast as we can. Sort of another refrain of a bit of hard work. And I think you know for anyone out there that is willing to put in some time and effort, there's definitely rewards at the end of that. Once you know what you're looking for, it's achievable for anyone.
Since then, Lewis has completed many property transactions all over Australia, and created a portfolio of her own.
We've completed eight full house renovations, inside and out, with gardens and whatnot. So it would be in that vicinity, probably eight or nine properties that we've purchased all together. I guess we've purposely made a decision to downsize our portfolio at this point in order for us to have cash on hand to purchase moving forward. And the reason for that is going forward with joint ventures, we can be the cash partner in property transactions. And for those that don't know, when you come to bid on the property or put in an offer, a cash transaction is really attractive to a person trying to sell a property, so that's sort of the position we're in now.
And have all the properties that you've purchased or been in Adelaide or have you spread them across different states across Australia.
One of the things I would encourage other people to consider is to always spread your eggs and so we've purchased in four different states in Australia. We have moved around quite a bit, we went on a bit of an adventure, my husband and I and the children over the years. So we've purchased in Western Australia, in Queensland, New South Wales and South Australia, and I guess the moral to that story is that you can buy properties without physically viewing them yourself. Once you know the numbers game there's different ways that you can absolutely purchase property interstate.
However, Lewis's property journey has not been without its fair share of mistakes.
When I was busy being a young mom, we had a bit of a lull in our property journey and so our properties sort of just sat there. And looking back now I realised, particularly for one property that we have in a mining town, that there was an opportunity to sell that property at the peak of the boom, and we didn't sell that property at the peak of the boom. It has been a good property for us but if I had the knowledge that I had now back then I would have made a decision differently. So that's a fantastic learning curve. You know nothing's ever something I regret. It's always a learning curve and I definitely look back now and think yes, ideally we would have sold that property at the peak of the market and made a good profit on that. So I guess that over time you sort of look back and think, oh man, if only... that happens, you move forward and you learn from your experiences.
Could you just elaborate on that a little bit more? What was the reason why you purchased that particular property? What what was the initial reaction towards it?
So that property...we were actually living in Port Hedland, and at the time my husband was in mining and I was nursing. And initially, we went into some accommodation with his work and as we realised we were staying in town, we thought it was a fantastic opportunity to purchase the property. We did purchase at prepaying which was fantastic but then we did some tricky stuff within our portfolio and we sold that property into a trust at a higher level than we purchased, which I guess at the time I wasn't so involved in what we were doing. And I guess it was, you know, a mistake or an uneducated situation, I'm not sure how to explain it but it's something I probably wouldn't do again. So then we had a larger amount against that property, which would have been fine if we'd sold in the boom time zone but that didn't happen. So I guess we were purchasing the property to live in. And you know it was a great family home for us and it still brings us rental income now, it's self-sustaining, but it's worth a lot less than it was at the boom, at the peak of the boom in the market.
Then came the moment she realized she was really onto something when it came to property investment, proving sometimes it's better to come in and get out quickly when it comes to property.
In January this year, we settled on a property which was probably our most successful property transaction. It was a property again that we bought when we were living in New South Wales. We bought it in 2012 and it was an eleven hundred and eighty-nine square metre block with a very rundown home on it. We purchased that for one hundred and forty-five thousand dollars at auction. Yeah, it's really exciting, so we settled and sold that property in January this year for three hundred eighty-seven thousand dollars. When we purchased it at the time, it was with the idea that we would develop the property ourselves, but we moved away from the area. Life got busy with children. It was always a cash flow positive property that brought us income so it was a bit of a land banking strategy. And then with the rise in property prices in the Hunter region and New South Wales and Newcastle we thought, unlike the Port Hedland property, now's the time to sweep and cash in on that property and sell it. So we sold that to someone that is planning to develop that site perhaps with three or four units. So that was a really wonderful experience because I guess behind the scenes property can be a lonely journey. We're working on our own on strategies and sometimes with others, and it was just great to see that all the hard work and effort over the years had come to a point where now we could have had that situation where we have a chunk of cash. I guess now the real work begins in how we invest that moving forward to bring income to the family.
We did the numbers on the property on the deal and for us, it was better that we just sold it on to someone else that could make use of it for whatever reason they decided. And so that's what we did. I did a remote presale property renovation on that, working really closely with a fantastic real estate agent in the area in New South Wales. He helped me facilitate that and then he assisted us to sell the property. Yeah. Up there while I was still down here in Adelaide. So that was fantastic.
She then tells us about the value of educating yourself when it comes to property investment and gives some final advice.
For me, it's really about education, so the mistake I made with not selling the Port Hedland property at the right time or the lesson learned from that situation was because I didn't have the appropriate mentoring or education in place. I now have that in place, so whatever I'm doing, I can work through using my mental skills moving forward and make the best decision, and really making educated decisions. So for me, the “aha” moment is definitely about investing the time into your own knowledge and skills, and I think a big part of that also is your own self-belief. So I remember when I went and saw this property for the first time, it had a massive termite nest in it and 60 percent of the floors needed replacing. It was fantastic, it was right up my alley. It was awful. I could see that we could spend...I think we did a twenty thousand dollar renovation—that was the whole of the inside and outside of the home—and that provided, you know, a home that we rented out to someone for six years, and I think it's about just using some of that gut instinct if you've got it. It just made sense to me that we could buy this property. It was on a massive block, we could rent out the property, the mortgage would be covered, we'd get some income and we got so many options going forward, so just self-belief, believing in yourself if you've got some skills, believing yourself and go with your gut. And definitely the aha moment was, “Yes we did make the right decision buying that house, yes, some people would have thought we were crazy but it worked out great.”
Michelle Lewis Approach To Investment in Property Renovation
With over eight properties under her belt, Lewis talks about her strategy when it comes to renovating the properties she invests in...
It was definitely a bread and butter investing project, where I would buy a dump, renovate it and add value, and then either to hold onto that property as ideally a positive cash flow investment or to sell that property. We've done properties where we've bought them and renovated them on a budget, and then sold them and made a chunk of money, so definitely our strategy was renovation and in particular renovating on a budget. So one of my specialty skills is being able to provide a clean neat home, a safe home for people but I don't go over the top on spending on expensive light bulbs or expensive tapware. I guess the money you don't spend on the road investing is money that you can make a profit on, and I have seen a lot of people renovate and not make a profit or make a very small profit. And for me, in my head, it's quite a simple process, but it is something I've learned over the years and it's something I love sharing with other people now as well.
She also gives us some tips on how to deal and accumulate profits in renovating rundown properties.
What I have learned in many ways is that termites can be your best friend because if there's a property that has known termite damage or there is some evidence of termite damage, most people run a mile and so therefore that decreases your competition in the market. So one of the best things my mentor, one of my mentors, ever said to me when I after we bought this property at auction with no pre-approval off on it arranged because we like a little bit of excitement in our lives...my mentor said to me, he said, “Michelle, it's only wood and nails”. And I said, “Okay great. Okay. Right.” Because it can become overwhelming. But at the end of the day, if termites have eaten through a piece of wood, you just need to replace that wood and make sure the termites have gone, and treat the property, either a barrier treatment or other treatment, to ensure they don't come back.
Termites can be your best friend, and I guess it's about thinking outside the square and not being afraid of the worst-case scenario, but really having a solution for the worst-case scenario; because what can happen Tyrone, is you can buy what you think is a beautiful property, little do you know that underneath the surface there might be termites brewing, but it's just termites, it's a matter of treating, and then also replacing any damaged parts of the property. So I definitely think that for people wanting to get into the market and start, don't rule out renovators' delights but get some experience, get someone to help you go through it, and trial and error. You've got to sometimes go through and renovate the property yourself to learn as you go along. The other big tip, of course, is get amongst like-minded people, work with other people who have renovated before and who have been there and done that, and ask for their opinion, ask for their skills and learn from what they've done, get amongst other investors. It's the best way to go.
Lewis also has some advice on the initial buying of the property.
There's a couple of ways you can approach it. For example, if the vendor or the person selling has an asking price on the property, you can get quotes to have the damage or the repairs done and then add a little bit extra. And you can sort of say, look I'm happy to pay this much but what I've discovered is there's issue X Y and Z, I've costed that issue up, here's the quotes I've got for it, so I'm happy to still purchase this property but at a discounted price of X, Y and Z. So that's one way of doing it. Another way is just to go in really low and accept that you might not get the property. So in an ideal world, you're making offers on multiple properties at any given time and you just accept the fact that some of them you might miss out on, because someone might be prepared, for whatever reason—they want that a house to live in, it's next to their mum's house—to win that property over you. But when you are putting offers in on multiple properties, that increases your chance of being the successful bidder. And so you just offer low knowing that it's going to cover those expenses or those potential issues and you'll still be out to make a profit from it.
People oftentimes have issues with tradies and Lewis provides her strategy on working with them.
This is actually one of the processes that I have loved over this journey, so I have loved working with the tradespeople. My strategy for trades is getting them all in in a two hour period, for example, so I will call up three or four painters. When I find my tradies, wherever I find them, whether it be at the back of a newspaper, online, on Gumtree, I plug all their phone numbers into my phone, I send out messages to the group so they all get the same message. This is a massive time-saving strategy. I get them all to come along within an hour or two hour period. I have a piece of paper waiting for them with their name and what I require of them, what I want of them, for example, tile the bathroom floor, the dates that I want it done roughly. I want their builder's license, I want their insurance if necessary, etc. They come in the door, you say “Hi I'm Michelle. This is what I want. Go on, have a look. I can't wait to hear from you. Thanks so much for coming.” Maybe I might even have some biscuits there and maybe some chocolate spice. Make them happy and just show them that you are serious, be organized and always work with a minimum of three or four.
You might only get two of those tradies rocking up, so if you individually have them over at different times of the day, it's a nightmare and I just like for everyone to come in at one time. People have said to me, “ Oh, Michelle, they might not like it”...well if they want the job, they have to be able to work together, and they have to be able to work with me and work in group environments, so if that doesn't suit them, that's fair enough, but they're probably not the right trades-person for my project. So I found that works really well. I love having them all onsite at once, that you create a really great atmosphere of working together. The tradies seem to like it, so there's definitely some strategies I can share with people on that, and it really makes a difference in helping the project to move forward in a great fashion and in a quick manner or a reasonable manner, that you're getting the work done within a time period.
Yeah, I really liked that strategy. It's this is there's a lot of synergy thereby having them all there because when someone sees the other person's working they're not just gonna slacking off because they know that they will get the job done.
So that's exactly right.
I think we've had a maximum of 13 trades on site at once, which included about six painters, I guess painting externally at the time. But it wasn't a problem and as I said before they knew that we were serious. This was a business we were running, we were renovating this to make a profit. And you get a feeling for tradespeople as well and you get an intuitive feeling of those you can work with and those that are going to give you great value for money.
She then gives us some insight into the stages of renovating a property for profits.
You definitely need to ideally plan a project out. However things happen and things need to change so most tradies are fairly flexible in that, if you're not ready today, they might have another job they're working on that they're going to do, so it's a matter of trying to work it out. You generally leave your floors until last so that any damage from the trades that occurs doesn't matter, so that's normally something you do toward the end. The outside painting can sort of be done at any time, so you can fit that in with your best value painter when they can fit it in, but when we've done reno flips we've tried to do the whole house within six weeks, and then we have a couple of weeks to finish off and stage the property prior to selling it. And it's a pretty intense time I'll tell you.
It's pretty crazy. So at the time, one project I can think of, in particular, we're living in New South Wales in Newcastle and I had three young children. I think two of them were at school and I had one with me so we'd be up and we'd be onsite before school. I'd take the kids to school and I'd come back with my other little one making sure the tradies were okay, keeping an eye on things, bringing them food and coffees, and I'd pick the kids up from school, we'd go back to site, we'd eat dinner on-site and eventually we'd get home. So it really, it's a massive commitment for a short intense period of time but we loved it. It was exciting and it was a passion for us.
Renovating homes takes quite a bit of planning and know-how and Lewis tells us a bit about her process.
For me, it's a basic, safe, clean home. So the basics of that is clean painted walls and fresh floors, so whether that be fresh tiles on the bathroom floor, laminate in the kitchen or polished floor bullets throughout.
The other thing is carpets, of course. So my strategy there is to never pay retail and always try and buy wholesale. So I've got various strategies I use, such as purchasing carpets from at the back of the carpet place, so I might go somewhere but I'll say, “What have you got at the back? Well, what's not popular at the moment that's still a modern design that I can use?” And I've easily saved thousands of dollars on renovation budget by simply asking what have you got out the back. Finding things people don't want on Gumtree. A lot of things we've purchased...bought a perfectly beautiful two-year-old kitchen that someone didn't want anymore or they had bought, they hadn't put it into their property, so they are selling it on gumtree for fifteen hundred dollars. So we purchased that. We paid a carpenter to put it together and put it on the property and it looked amazing. So it's just about being a bit cluey, being a bit frugal I guess and searching for items that you need to renovate in places where they don't cost nearly as much as if you bought them off the shelf from a fancy kitchen place.
To really get a return from her investments, Lewis gets back to basics.
The way I see it, again, is that most people don't live in a perfect house, some people are wasting money to renovate to their standards or to their taste but that's not true. You need to provide a safe clean environment, a basic environment and most people are grateful to have that opportunity to either purchase that property or to live in it themselves. That's a really big mistake I think people make is well, “But we have to do all the cornices,” or “We have to do this”. No, you need to provide a safe clean environment. And then maybe a couple a little “wow” factors on top of that if you're going to sell the property. But if it's something you're going to rent out, you just need to provide the basics and people are really grateful for that.
And I think also one of my catch cries is “renovate like you have no money”. So if you need something, pop it on Gumtree, “wanted, unwanted plant”, you could potentially go around to someone's house that wants to get rid of some plants, and dig them up for them and put them in your renovator's delight. I've certainly gotten some free plants from Gumtree that people didn't want, I picked him up and planted them. I've seen so many things for free. Other people's trash is sometimes my treasure. And at the same time I've given away a lot of stuff that I haven't needed, so for me, the environmental aspect is really important as well—reuse, repurpose and sharing around. So that's definitely something I think that can be undervalued by people when they're renovating.
As with everything, there is a work/life balance when it comes to being a property investor.
As I was being a busy mom of three children, there was definitely periods where we had a lull. I know there was a period where we did four projects within a two year period. So that was quite an intense period, but exciting, and being a mom staying home with the children I actually loved having a project to work on. It was great for my mental health, it gave me something to do apart from the kids. As you know Tyrone kids can be pretty stressful and intense, and when you have something like property investing or renovating to take your mind off that, it's a really positive thing in your life. So I guess moving forward that number is unknown. But I would say if we could do a couple of those projects a year that would be fabulous moving forward.
That's why it was really interesting because I mean coming from that angle as well it allows you to have that flexibility to bear to look after your kids because you're not going to be on this every day 52 weeks of the year. It's you know big spurts as you mentioned falling in two years. That's to a year and what six weeks is roughly about one and a half to two months or so two months around. So four months of the year you'd be focusing intensely than the rest of time you spend with the family which is phenomenal.
It's not so simple as the time being that short because I guess it's the searching time prior to purchasing the property. It's the settlement time. It's all of the other stuff and setting up your portfolio in a way that will work for your family.
It's dealing with your accountant and all of the other people in your team. It's constantly educating yourself to move forward with different trends, for example, Airbnbs are huge at the moment and lots of people are learning about that. Another strategy that people are learning about these boarding houses or rent by the rooms. So it seems like it's a shortlist and it definitely is. But there's definitely other stuff that goes on around that. But having said that, that's the ideal. That's the ideal, is to have those couple of projects a year to bring that income in that would then replace the income from a regular job, and to have that freedom and have fun.
It's important to note that property investment requires consistent effort.
And it's the use of education and experience building up to this point. I think there are some things you can't learn from a book, and it's overtime you need to accumulate your knowledge on property investing and it's definitely a worthwhile journey if you can stick it out.
Michelle Lewis Mentality Towards the Property Investing
Lewis helps to explain what joint ventures are and what she does in her situation with her students and clients.
A joint venture is when you bring one or more parties together to complete a property project. So for example, as I mentioned before, somebody might have the cash, someone might have borrowing capacity.
Someone might have the skills and someone might have the time. So you could potentially bring four people together and potentially then purchase the property, go through that property deal, whether it be a renovation or development, and then split the profit four ways at the end of that project. For me personally, networking and working with other investors here in Adelaide, and also the group that I have a mentoring and education with is the place where I make most of my potential joint venture partners. What happens is most of us run out of borrowing capacity and so then we need to look for other ways to be able to purchase a property so that we can bring income. So for me now we would be a cash component of a joint venture but then I might need someone who has borrowing capacity. So we come together, we set up a joint venture agreement, so that can be something that is organised with a property lawyer and that can be quite a detailed but worthwhile part of the joint venture process for someone to have. I have heard quite a few horror stories of people that didn't have appropriate joint venture agreements in place. Things ended up in court and it sounded awful. So you definitely need to have some idea of who you're going into a joint venture with and some level of trust, but also a legal agreement so that if there is an issue that it can be worked out thoroughly and quickly and not end up in tears literally.
Lewis delves into why she has continued as a property investor.
My “Why” for me, it's been about having choices in life. So for me spending time with my husband and my children is really important.
If we can be in a situation where I'm not having to go to work every day to bring income to the family but can have a property strategy that then replaces that income, that means I've got the choice and I have always been able to go to the kids events at school, if they've got a special assembly, if there's a special mum's morning tea, I've really never missed out on any of that unless I wanted to. But generally speaking I've been able to be there for the kids, I've taken them to school most days of their lives, and picked them up most days and it's been fantastic. So for me, it's about the choice of how we use our time and who we spend it with.
She shares how she sorts out particular mentors and coaches to help her along her property journey and with her innovation strategies.
When my light bulb was switched on way back in 2012, I researched all of the property educating groups on the market at the time and there was two that I sort of came down to: one was Steve McKnight's group and the other one was Property Women, and I guess the property women really aligned with my values of being a woman in property and so I joined up with Property Women. I did a brilliant diamond program which was a year-long property course travelling all around Australia looking at different things, webinars, teleconferences and just a huge amount of information. The other thing I loved about Property Women at the time is that they are not trying to sell you any property, it's purely an education vehicle and that really did change my life, in meeting the women I met and seeing what those women were doing in the property was second to none. So that's been a huge highlight for me. Moving down the track in the last couple of years, I've joined up with the Results mentoring group. I was just really excited to be in a room of people investing and doing projects and being really active, and so I'm still part of that group and I may be for many years to come. It's a wonderful place to meet other J.V. Partners, to learn different strategies and to really put yourself in the best position moving forward. It's quite fun; we meet up four times a year in Sydney and Melbourne. We have a great time and it's a great group of people and they really are a great ethical group. It's not always about getting the best results but it's about getting a fair result for everyone and that definitely aligns with my personal values which is awesome.
Lewis then recommends a particular book that has helped her in her property investing journey.
Over the years I've read many books, probably one of the recent ones that was recommended that I read which I loved was “Eat That Frog” by Brian Tracy and that book is about basically getting stuff done.
For people motivation and organisation and prioritizing can be a huge issue and I think this book “Eat That Frog” really goes straight to the heart of it; and the concept is that first thing in the day, once you've done all the things you have to do or even before you have to do those things, is tackle the hard stuff. So get your list out, get your priorities out and tackle that hard stuff first, and then you can do the other stuff later. If you want to be a property investor, you have to take steps to do the investing. So it's taking those hard steps first, making lists being organised. So I loved that book.
She shares with us the best advice she has ever received and what she would tell herself ten years ago.
There's been a lot of things but for me, a huge part of my journey has been my mindset training. So when I joined Property Women, we did a whole two day weekend in Melbourne on mindset and that was fairly life-changing for me. And it has become a personal passion for me and I love sharing that with the coaching clients I have or the people I work with, is really working on their blocks because we're all conditioned and brought up in a certain way, and when you want to achieve and go down property investment path, it's not necessarily something that comes naturally. So you have to really work on your mindset and let go of all those self-limiting beliefs. So I would say working on mindset has definitely been some of the best advice I've got.
If I could speak to myself ten years ago, I would have said to her you really know what you're doing with renovating in particular, just believe in yourself more and go with that gut instinct and don't be afraid. Probably in the last couple of years I've really come into my own with self-belief, and just looking after myself as well and really just focusing on what I need rather than worrying about what everyone else needs, that's probably been a bit of a downfall for me. So I definitely would say more self-belief and celebrate along the way. Traditionally we hadn't been good at that. We were so focused and so driven but we definitely smell the roses a little more this day and we have a different focus in the house now with some self-care and positive mental health and all of those sorts of things are equally as important if not more so.
Lewis tells us what she is most looking forward to in her property journey in the next five years.
I'm really excited, where I feel that I'm at a point where I have the skills and knowledge to create joint venture partnerships. I have my network of people now and so now it's a matter of just joining all those dots together, and I think you reach a point where you've been searching for properties, and I think what will happen soon enough is these properties will start coming to me and agents will start calling me and bringing deals to me. And that's the position you want to be in, where people know that you're able to either do a deal yourself or hand it off to someone else and you can really work in that sort of advanced level of property investing, so that's really exciting for me.
She also lets us know whether she believes skill and intelligence played a part in her success or luck...
I think skill and intelligence is definitely a part of it. However, I don't think it's so much luck.
But I think it's actually educating myself and joining the dots together and persistence. I think really being focused on learning my craft and learning about how to purchase property and the different strategies that you can use is a huge part of it. So I don't know about luck. I think you make your own luck, and I think you put yourself in a position by believing in yourself and sharing with others what you can do. But along the way, those skills grow over time and that definitely appreciates to a point where you're really in a situation where you can bring a lot to the table for others and for yourself.
And this how you can reach out to Michelle Lewis
I do have a website. It's Michelle Lewis number two, as in the letter the number two, not t, w, o. Perhaps we can put the links in your show notes. The other way, of course, is through Facebook. You'll find Michelle Lewis in Adelaide on Facebook and you can reach out to me there. Probably the third way is through Property women. I run the Property Women group here in Adelaide. So if you sign up with property women that always point you toward me and I look forward to hearing everyone. Thanks so much for listening in today, I just want to encourage everyone out there to take time investing in yourself, believing in yourself and anything's possible.
Frequently Asked Questions
What does it mean to renovate a house?
Renovation is the method of improving a defective, broken, or old industrial buildings or property. It is typically either business or residential. Also, renovation can make something new or can give new life to your property.
Is it cheaper to remodel or build a new house?
Remodelling may not be as appealing as purchasing a new house, but it could be a more cost-effective move in the end. This is partly because moving itself is expensive — as is selling your current house
Are renovations worth it?
It is profitable, it can be a bread and butter investing project, where you renovate it and add value, and then either to hold onto that property as ideally a positive cash flow investment or to sell that property.
What increases property value?
Provide a clean, neat and efficient home, make it more attractive, improving the kitchen or bathroom can help build its value.
What brings down property value?
Factors that affect a house's value are the nature of the area, the market, nearby features and the area, appeal, age and condition of the property.
Is it better to renovate before selling?
Minor repairs may help you market your house, this could be an opportunity to accumulate profit for a higher value and sell your home faster.
This episode was produced by Annie Gao with narrations and interviews conducted by Tyrone Shum.