When the global financial crisis hit in 2008, Nichole Lewis lost her high-flying job in the property industry, her home and her rental properties. After a tough few years of living on baked beans and avoiding debt collectors, she fought her way back and now not only has a great lifestyle financed by property investments, but she helps other people to make money the same way. She shares her personal insights and extensive knowledge in her book, Property Quadrants.
Q: Did you always want to work in the property industry?
I went into banking straight from school, then into training and development. My grandmother, who raised me after my mother died when I was one, was upset when I left the bank because she thought you should stay in one job all your life, buy a house, pay it off, retire at 65 and then start living. I went against the grain.
I then had my own training and development company, coaching businesses on how to make money. We’d give them a guarantee they would increase their profitability or get their money back, and we had a 100% success rate, which I was stoked about.
Start your property search
Read more:
- The $1.4b hippy: NZ's busiest real estate agent spills his secrets
- John Hawkesby's multi-million-dollar Waiheke home for sale
- Tony Alexander: The good news buyers may have missed in home loan shake-up
Meanwhile, I had got into property flipping. I had no idea what I was doing but I realised I could make more money and have more flexibility by doing property. My son was a toddler and I was pregnant with my daughter when I did my first flip. All I managed to do was put rubbish in the bin – the tradespeople did everything else. I then decided to focus on property because I could set my own hours, which was good with the kids.
Q: Was flipping property successful?
I fumbled along to start with but got better with experience. My friend and I started a networking group of people who did property flipping and investing on the side. I sold between 100 and 200 houses and also got into investing. I had about 12 properties in New Zealand and 14 in Australia.
I ended up working for an Australian developer who was building a $1.6 billion development. I sold about $100 million worth of property to my network and got a contract as a kind of international franchise manager to open offices worldwide for him. I was in South Africa opening an office when the GFC hit. The company said everything was peachy but one day my bank rang and said my mortgage payments had bounced. I hadn’t been paid, and the developer’s office said they were only going to pay me if sales went through. Nothing was selling so I came home – thankfully I had a return ticket. I had been putting my work expenses on my credit card and I never got any of that money back from the developer, who went under. I was left with about $120,000 on my card.
My bank also went into liquidation and I ended up losing everything – my income, my family home, my investment properties. I’d thought I had been doing things right with my investments but I had a lot of bad debt and I’d over-leveraged to buy more properties, leaving me cash poor. At the same time, my husband Kelvin had been made redundant from his job and although he got another one, he had to take a massive pay cut. We went from flying high to being in the gutter.
Q: How did your life change?
It became incredibly stressful, to say the least. We had to rent, and got behind with that. I struggled to pay the bills. I would go to the ATM to see what my balance was and feel physically sick. I had calls once a month from a debt collector called Fred.
We ate baked beans for dinner several times a week. I couldn’t afford to go to a café for coffee. My grandmother, who lived with us, would take me out for coffee once a week and that was a treat. For my birthday, my husband bought me pre-paid coffee vouchers and that was the best present I’d ever had.
Lewis at her home in Coatesville. "I have a job I love, helping people to find financial freedom. We have a lovely home in the country and I have a horse." Photo / Fiona Goodall
It was important to me to keep my kids Jakob and Jessika, who were four and two when the GFC hit, as unaffected as possible. Our money went on paying for things like football and dancing and we spent a lot of time at the beach and playgrounds, activities that didn’t cost anything.
Before the GFC my husband and I used to take our dogs for a walk on the beach and I’d say, “Let’s talk about our hopes and dreams”, and he’d go, “Oh, not again.” After the GFC he’d say, “Should we be talking about our hopes and dreams?” and I’d say, “No. I haven’t got any.”
Thankfully our marriage survived the stress. My husband said he was happy with me whether we were in a mansion or a tin shed. The whole experience taught me about the importance of family values. It was very humbling.
Q: How did you turn your fortunes around?
Property ... eventually. Kelvin is very old school, he always thought the best way to make money was get a job. He applied for a couple of jobs for me. One was in telemarketing, which I didn’t get, and the other was with a bank doing training, which I did get. They were about to send me the contract when they did a credit check and found there was a default on my credit card because of the $120,000 I owed. I was slowly paying that off but that didn’t matter, I lost the job because they couldn’t hire me if I had a default.
I was gutted. I thought, ‘I’m unemployable, what am I going to do?’ The one thing I knew about was property, so I talked to The Property Lifestyle, a company that helps people with investing, into letting me be a property finder for their clients. It was very slow to start with. I had to start from scratch and learn all about the new market. When I got a $2000 commission for my first deal, I danced around my lounge with excitement.
The company made me their Auckland manager and I’m now the CEO. We’ve branched off into all sorts of things, including doing training and launching in Australia and the US, and I also do one-on-one coaching.
I invested in property again myself, but this time a lot more wisely so that I didn’t leave myself cash poor. I did ‘no money’ deals, which I explain in my book, and got enough cash for a private lender to give me the money for a property flip. From property flips I got enough to buy a rental. My first year back in property, I made about $20,000, which wasn’t very much. But after five years, I had gone from overdraft to $5m.
Q: Why did you write a book?
I did a training programme to help investors and someone said, “You should write a book.” Property Quadrants is a concept I came up with after reading a book by Robert Kiyosaki (the Rich Dad Poor Dad author) about cash flow quadrants. It looks at the four ways that real estate investing works. Quadrants one and two cost you money, three and four make you money. Quadrant one is your family home, two is a second property like a holiday home or a house for a family member, or the wrong type of investment property that makes you cash poor. Quadrant three is about making an active income from property, four is my formula for creating passive income.
I wanted to show people how you can make money from property even if you don’t have any money to start with. I know that can be done because I did it myself. I’ve also worked with lots of people who’ve done it and some of their stories appear in the book.
Lewis: "What I went through was a good experience because I learned from it. It was exceedingly stressful but it got me to where I am today." Photo / Fiona Goodall
I wrote Property Quadrants myself with coaching from a wonderful American ghost-writer – I could never have done it without her. I got it published by an American company, Best Seller Publishing, and through them, it got onto bestseller lists overseas, which really surprised me.
Q: What’s the most important thing people should know about property investing?
With property, anything is possible. You can have freedom of choice, financial security, a legacy for your children or the ability to help people in your community. You can’t go to your boss and say, “Can I please have a $50,000 bonus?” but you can end up with a $50,000 bonus from property, if you do it right.
People think investing in property is risky, but it is only risky if you don’t know what you are doing. With knowledge, property investing is something anyone can do.
You also need determination. When I set about making money again after losing everything I was in overdraft and had no income. I had no family money, no networks and bad credit. But I had knowledge, and I was very, very determined.
Q: How’s life now?
It’s great. I have a job I love, helping people to find financial freedom. We have a lovely home in the country and I have a horse. We have seven investment properties now. My husband was able to retire early and we get to travel. And I can afford to go to cafes and buy coffee!
In hindsight, what I went through was a good experience because I learned from it. It was exceedingly stressful but it got me to where I am today.
