New to Real Estate Investing & REIN. Help Appreciated

[troymichael]

Hello All,

My Name is Troy and I am new to this forum. I am in my early twenties and am looking to start investing in real estate using the ACRE system. I am working full time about an hour away from London ON and am making a fairly decent living. I have read almost all of Don Campbell's books and am confident to start putting my studies to action.
I am considering starting off investing in the London Ontario area. Preferably with student housing rentals, but am not opposed to family rentals as well. I've started doing my due dilligance and was wondering if any of you seasoned or novice investors had any advice for me or are able to point me in the direction of some good realtors and mortgage brokers. Any help is appreciated

Thank you,

Troy

 

[kfort]

If you haven't already, go to an ACRE event. Regardless of the books and forum, you'll learn enough that it's worth it. I've missed the last two (looks like a 3rd coming up) but will attend every year my work schedule permits.

Get a good team together. Realtor, lawyer, handyman, some good tradespeople, management, broker etc. even prior to having a property you can have much of this in place.

And be ready for the inevitable "oh no, what did I do." Moment that will inevitably come shortly after you make an offer, and then after moving conditions. The feeling will pass, and if you start off conservative you'll have a shirt to wear when you make the next deal.

Good luck!

 

[Matt Crowley]

Hey Troy,

Really well done on reading Don's books. They are an excellent place to start. I second Kristopher above, ACRE is definitely worth the investment.

Pretty much any large mortgage brokerage should be able to handle a simple purchase like this. Just explain all the details of the plan and they can point you towards the right product. Make sure you tell them it is an investment and you do not plan to live there personally.

A good Realtor really depends on narrowing down the product you want to buy. Their job is to sell you on a property and so even a good Realtor pointing you to bad product for your needs is not going to work for you. My advice here is to narrow down a bit more on the product you want to buy.

If you are talking student rentals, be prepared to be at the property every 2 weeks and maintain in 2 to 3 times more often than any other property. If you are an hour away you need to consider whether you are willing to make the trips out there yourself. You will probably spend a lot of the profit in gas money going back and forth. In that case, you need to look at a PM. They are going to ask for a premium fee with a student rental somewhere in the neighborhood of 15 - 20% gross rents, I would expect. On top of that you need to consider the amount that the banks will require as a down payment with a rental like this. Even if you plan is to rent it out room by room for say, $3,000 a month, the bank is only going to consider the house as one unit for, say, $1,500 a month. This can add some DCR constraints and will just require more equity invested.

A final point I would greatly stress is to pick a home that fits into your lifestyle and would a attract a clientele that you would want to work with. For me, I buy close to home because I like to be hands-on and be able to deal with any issues right away. When I have a vacancy and I need to show a house Saturday morning, it doesn't crash my whole day. I can go check out a couple houses after the appointment and fix up a bunch of small things in a nice loop. Having tenants that you like and get along with is one of the huge things I don't see talked about very often in the real estate books but it makes a huge difference. Real estate is such a relationship business. I'm not just talking about making money in the business but for providing the housing and background for a family to grow up with. It is an important responsibility and a privilege.

You are asking the right questions, keep at it!

 

[troymichael]

Hey Troy,

Really well done on reading Don's books. They are an excellent place to start. I second Kristopher above, ACRE is definitely worth the investment.

Pretty much any large mortgage brokerage should be able to handle a simple purchase like this. Just explain all the details of the plan and they can point you towards the right product. Make sure you tell them it is an investment and you do not plan to live there personally.

A good Realtor really depends on narrowing down the product you want to buy. Their job is to sell you on a property and so even a good Realtor pointing you to bad product for your needs is not going to work for you. My advice here is to narrow down a bit more on the product you want to buy.

If you are talking student rentals, be prepared to be at the property every 2 weeks and maintain in 2 to 3 times more often than any other property. If you are an hour away you need to consider whether you are willing to make the trips out there yourself. You will probably spend a lot of the profit in gas money going back and forth. In that case, you need to look at a PM. They are going to ask for a premium fee with a student rental somewhere in the neighborhood of 15 - 20% gross rents, I would expect. On top of that you need to consider the amount that the banks will require as a down payment with a rental like this. Even if you plan is to rent it out room by room for say, $3,000 a month, the bank is only going to consider the house as one unit for, say, $1,500 a month. This can add some DCR constraints and will just require more equity invested.

A final point I would greatly stress is to pick a home that fits into your lifestyle and would a attract a clientele that you would want to work with. For me, I buy close to home because I like to be hands-on and be able to deal with any issues right away. When I have a vacancy and I need to show a house Saturday morning, it doesn't crash my whole day. I can go check out a couple houses after the appointment and fix up a bunch of small things in a nice loop. Having tenants that you like and get along with is one of the huge things I don't see talked about very often in the real estate books but it makes a huge difference. Real estate is such a relationship business. I'm not just talking about making money in the business but for providing the housing and background for a family to grow up with. It is an important responsibility and a privilege.

You are asking the right questions, keep at it![/QUOT

Thanks a lot for the information I will take all of this into consideration!

 

[troymichael]

If you haven't already, go to an ACRE event. Regardless of the books and forum, you'll learn enough that it's worth it. I've missed the last two (looks like a 3rd coming up) but will attend every year my work schedule permits.

Get a good team together. Realtor, lawyer, handyman, some good tradespeople, management, broker etc. even prior to having a property you can have much of this in place.

And be ready for the inevitable "oh no, what did I do." Moment that will inevitably come shortly after you make an offer, and then after moving conditions. The feeling will pass, and if you start off conservative you'll have a shirt to wear when you make the next deal.

Good luck!

Hey man thanks a lot. I will definitely look into attending an ACRE event

 

[kfort]

Troy, I made a quick checklist for my realtor when we first started together. Fire me an email & I'll send it along in the next couple days if you like. Use, edit, discard as you see fit.

 

[DonCampbell]

Troy, I made a quick checklist for my realtor when we first started together. Fire me an email & I'll send it along in the next couple days if you like. Use, edit, discard as you see fit.

That might be a great checklist to post in this thread for all to see!

D

 

[kfort]

Some details specific to city obviously. My target was buy/rehab/ hold so editing will be needed in many circumstances. Might give someone a starting point.
Cheers
https://www.dropbox.com/s/khfh4ecu9ogx79i/property-potential-scorecard.pdf?dl=0

 

[DonCampbell]

Some details specific to city obviously. My target was buy/rehab/ hold so editing will be needed in many circumstances. Might give someone a starting point.
Cheers
https://www.dropbox.com/s/khfh4ecu9ogx79i/property-potential-scorecard.pdf?dl=0

Excellent Share!


D

 

[trevismcconaghy]

The information is so relevant for any guest or new member moving forward. ACRE made an incredible difference in my life (google me and read my story). Even though I am 7 hours from my closest ACRE in Edmonton, I continually go and have attended in every city where REIN puts on ACRE. Beyond the material in ACRE itself are the sessions and panels adjacent to the main room, but in my opinion, being able to share and listen to other attendees is the most valuable part. It is not only valuable from a mindset perspective; in continually rethinking and refocusing oneself, but also from a practical perspective in learning how to solve problems from members that have walked the same path. All the best in your journey. I look forward to seeing you get your bronze pin.