Nobody built a new house. Nobody waited five years for the market. Here is how one Boardroom client created $650,000 of equity in a tired seven unit block in Palmerston North, and kept the tenants while doing it.
Most investors look at a block of six one bedroom units and a four bedroom house and see a headache. Old stock, multiple tenancies, an auction they assume they will lose.
Our client saw what the building would be worth once it was renovated for the tenants it was meant to serve. The return was planned before the auction, not hoped for after it.
Here is how it played out.
The deal at a glance
| What went in | What came out |
|---|---|
| Purchase price (at auction) | $1,350,000 |
| Renovation spend | $230,000 |
| Total investment | $1,580,000 |
| Rent before | $2,400 per week |
| Rent after | $3,270 per week |
| Post renovation value | $2,230,000 |
| Net equity uplift | $650,000 |
| Gross yield on total investment | 10.8% |
What the property looked like
Six one bedroom units and a standalone four bedroom house on one title. Original kitchens, original bathrooms, patterned carpet, and a rent roll of $2,400 a week across seven tenancies. Structurally sound, cosmetically tired, and exactly the kind of building most buyers talk themselves out of.
Won at auction with room to spare
The bidding limit was set by the post renovation numbers, not by the emotion in the room. We built a plan A and a plan B for the auction so our client had pricing flexibility to win without eating into the renovation scope. That meant they walked in knowing exactly where to stop, and still came out with margin.
This is the part most people get backwards. They buy first and then work out what the property might be worth. We work out what it will be worth once it is set up properly, and that number decides what we are prepared to pay.
Renovated unit by unit, with the tenants in place
The renovation was sequenced one unit at a time, so tenants stayed and rent kept coming in while the work went through. No empty building. No months of zero income. Quality tenants were retained, which matters when you are carrying $1.35 million of debt through a build.
Every dollar of the $230,000 went to what lifts rent and value for the ideal tenant in that area. New kitchens, new bathrooms, new flooring, fresh paint, and private fenced yards for each unit. Not a Pinterest makeover. A purpose built upgrade for the people who will actually live there.
What came out
Rent went from $2,400 a week to $3,270 a week, a 36% lift. That is an extra $870 a week, or just over $45,000 a year, on the same land and the same seven doors.
The registered valuation came back at $2,230,000. Against a total investment of $1,580,000, that is $650,000 of net equity created in one project, and a 10.8% gross yield on every dollar that went in.
Put another way, every renovation dollar returned roughly $3.80 of value. That is what Cashflow Hacking™ looks like when the numbers are done before the purchase, not after.
Good returns are planned before the auction, not hoped for after it
The $650,000 was not luck and it was not the market. Our client calculated what the block would be worth once it was set up properly, paid a price that left room for that, and executed the plan with a team who had done it before.
That is the whole method. Buy the right property, renovate for rent, refinance on the new value, and go again.
Want results like these?
If you want to find and run a deal like this one, the first step is a free discovery call. We will look at where you are now, what you are working with, and whether a multi-unit project like this is the right next move for you.