# 03 - All the rewards for zero risk?

 If it sounds too good to be true... it usually is. 

So why do people still search for all the rewards, thinking they can get them without any risk?

And why do some look to the property investing space for this? Property definitely has the rewards - but you need loads of work and a fair amount of risk to get there. Adding value to houses is the strategy I have learnt, mastered, implement on all my projects and help others with.

In my world of 'Value-Add Investing' there are 2 common end games, once you have added value to the property. You can rent out, refinance, recycle as much of you deposit as possible and hold for the long term.

Or... you sell straight away (property flip/trade) - take the one off profit (and pay the big tax bill, of course)

I like to combine these 2 options, put the short term flip profits into my longer term holds by reducing the mortgages and in turn, increasing overall cashflow.

And as I said earlier - 'If it sounds too good to be true..."

This is true with property flipping. Sounds simple right? Buy a house, give it a quick tidy up. Sell for a big profit. That sounds good.. too good perhaps?

Well yes, and no.

You can make money from flipping houses, good money, if you add a lot of value and learn the correct system.  But there are always people wanting the big rewards and are prepared to go outside the legal boundaries to obtain these.

A property flipping example that I want to highlight today is Rickhil.

I've met Rickhil, up in South Auckland. A really nice guy, and on the surface ran a successful real estate company, and was a very, very, profitable property flipper.

Or was he ?

It has emerged the was associated with a group of companies that would sell the flipped properties between themselves, and with associates,  and finally onto an end buyer. (2 examples below)

But I can't get my simple head around the sales numbers. They just don't make sense to me. Higher and lower purchase prices. 5 or 6 contemporaneous sales all in one day. Something seemed off.

Now it seems Rickhil wanted to game the system and on-sell these properties. And he did so in big numbers. 71 properties in 2021 & 2024. Bought for $54m and then on sold for nearly $60m.

But its the inter company buying/selling that I don't understand. Some profit some losses. But every transaction would have fees. 

And a lot of other people were involved - possibly with the promises of high reward and low risk ?

I guess Rickhil had a system and thought it was very clever. 

But what has finally emerged is millions in debt to the IRD and bankruptcy.

Property flipping, in its most simple form is simple.

Buy a run down property. Add value. Sell for a profit.

Yes, you can make good money ($30,000 - $60,000 or more, per flip) 

Yes, there is substantial risk involved

Yes, you need to pay your share of Tax to the IRD

Yes, you can still make more than the average NZ wage - even after paying your tax, with 2-3 flips per year

But.... you need to do it correctly.

And a great place to learn the correct way to start property flipping is my Start Flipping Course

For just $97, get the blueprint for successfully flipping property (for a profit) here in NZ.