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Advice on Investing while Travelling

M

Mvarga

0
REIN Member
Joined
Apr 29, 2009
Messages
23
Hello everyone, I was hoping to get a few different perspectives on my upcoming plans. I am intending to travel through Austrailia and Asia for a little over a year starting this January. I am really looking to invest in real estate before I leave, however I am looking for something that requires little involvement on my part and also produces a solid cashflow to have my money work best for me while I`m gone, also to help fund my travels should i decide to extend them longer. This has lead me to look at rent to own deals. I was just wondering if anyone here as any experience in doing a rent to own while traveling or doing a rent to own in a different province from where they live. I was hoping to get some advice on the best way to arrange this and possible pitfalls to avoid. Or if this is even achievable. I have never done a rent to own or purchased a property yet. So this will be my first deal. I have read Thomas mentioning that rent to owns are not the best thing to do for your first investment, however i would be looking to have a rent to own company provide me a tenant and merely be the investor, so I`m not sure if this will be possible while traveling.

Any advice is greatly appreciated. Hope everyone has a great long weekend.
 
Hi Mvarga. Sounds like you have a great year planned - I`m jealous! I`ve always wanted to go live in Australia for a while.

Anyway, as to your questions...from the desire for cashflow, there is a good chance that RTOs will be the way to go. However, it also depends on the amount of money you have to invest. Investing in multiplexes can also give you greater cashflow than a single-family house or condo. Personally, I haven`t done either RTOs or multis, but I`ve just recently joined forces with my sister and her husband, as they`ve done both, and if things go according to plan, we should have 2 RTOs done together by the end of the year, one strictly within the family and one with an outside Joint Venture partner. If you have the money, and want a truly hands-off experience while you`re travelling, you will probably have to do a JV with someone, especially as you mentioned that you have little experience with this kind of investing. (That`s the way our partners tend to want it - they just provide the money, and are happy with the consistent returns they`re getting.)

That is a fairly common thing amongst REIN members, actually. One investor provides the money, and the other provides the time, the work, the effort, the expertise, and the knowledge. Anyway, chances are you`ve already gotten a few similar responses to your post (or you will in the days to come), but if you are at all interested in at least exploring the possibility of a true hands-off experience, feel free to contact me at jmscanlon at hotmail dot com and I`ll help in any way I can.

The other thing that you`ll want to do, if you haven`t already, is to pick up a copy of Mark Loeffler`s book, Investing in Rent-to-Own Property. He`s a Canadian investor who has done many RTOs, and he wrote this to lay out his system for other investors to use. It came out a couple months ago, is quite good, and is available at all the standard bookstores.

Have a good one!

JohnS
 
As John said "you have a great year ahead of you"

I will also reccommend Mark`s book. Here is the link to it. Rent To Own Book
Many have made RTO the core of their business and have been successful at it. There are companies that provide the deal and there are companies that provide the opportunity to become partners in a deal while they manage the property through to sale to the tenants.
Keep asking your questions here on the forum as there is a wealth of knowledge with RTO and Long term investing.

Good luck,
 
QUOTE (Mvarga @ May 20 2010, 12:13 PM)
Hello everyone, I was hoping to get a few different perspectives on my upcoming plans. I am intending to travel through Austrailia and Asia for a little over a year starting this January. I am really looking to invest in real estate before I leave, however I am looking for something that requires little involvement on my part and also produces a solid cashflow to have my money work best for me while I'm gone, also to help fund my travels should i decide to extend them longer. This has lead me to look at rent to own deals. ..




real estate investing, especially RTO, takes TIME (aka blue $s) and MONEY (aka green $s) .. unless done with partners that have an established SYSTEM ! [ now after 12 years in the real estate business I could probably leave for a year and the business would still run when I am back .. not as well as when I am here .. but probably slightly bigger and still ticking .. but it took a decade to set up !]



Invest in a PASSIVE real estate syndication with a track record or in a publicly traded real estate firm like Mainstreet, Killam, Brookfileld, .. or a REIT ..



forget a time intensive RTO when you're away for a year !



Enjoy traveling .. it broadens the mind and reminds oneself how good we have it in Canada !!



Keep some cash as you will come across some bargains .. maybe a Greek Island or a North Korean acreage or a Thai beach .. all distressed real estate with upside once the (local) crisis is over !
 
Thanks everyone for some great insight. I have read Marks book and found it to be a great starting point with a wealth of knowledge. I have also read all of don`s books as well as about 10 others which have helped broaden my understanding of real estate. However as most people will attest to, reading about things and actually doing them are two different things.

I was under the impression that RTO`s were less time intensive due to the more passive approach of the tenant being responsible for all maintenance and upkeep. If it`s a tenant first RTO where the deal is being provided by an RTO company, I thought the only real time would be spent on making sure you have your tenant working with a credit specialist to ensure that they are on track with there credit to make sure they will be eligable to exercise the option at the end of the term.

Is there much more involvement that I have over looked?

ALso from what I am gathering from what Gary said, some RTO companies will just provide you a deal and then you are responsible for everything and some will provide you the tenant and will also take care of monitoring the deal and will provide you with a regular update?

Thanks again this is helping to put things into perspective,
 
QUOTE (Mvarga @ May 21 2010, 10:57 AM) ALso from what I am gathering from what Gary said, some RTO companies will just provide you a deal and then you are responsible for everything and some will provide you the tenant and will also take care of monitoring the deal and will provide you with a regular update?

I`am able to speak from experience here. We have purchased deals from RTO companies, created our own deals and we also provide Joint Venture Opportunities where we provide the RTO deal and the opportunity to partner with us.

The ongoing work can be many things. In a perfect world you have a few tasks per month. Deposit your cheques, confirm your bills are paid and every month or two connect with the tenant. The reality is we are dealing with people and real estate. You never know what can happen where you are required to deal with something asap. Yes our tenants are responsible for many things and you if you do not have a team in place to make the ship run smoothly it can go sideways really fast.

Thomas makes some great points; if you really want to invest and have little involvement I would look at a REIT, Syndication or a Joint Venture.

At the end of the day the most important thing you will do is your due diligence on whatever it is you invest into.
 
QUOTE (Mvarga @ May 21 2010, 08:57 AM) ..

I was under the impression that RTO`s were less time intensive due to the more passive approach of the tenant being responsible for all maintenance and upkeep. ..
True .. until he stops paying the agreed upon amount every month ! Then what do you do when sitting in Thailand ?
 
QUOTE (Mvarga @ May 20 2010, 02:13 PM)
I have read Thomas mentioning that rent to owns are not the best thing to do for your first investment, however i would be looking to have a rent to own company provide me a tenant and merely be the investor, so I'm not sure if this will be possible while traveling.




I think you have the right intention but the language maybe confusing. Perhaps by segmenting the roles it will help clear things up. There are many ways to participate in real estate in strictly the investor role i.e. you provide the money and don't manage the tenant. Other posts have listed examples. When you say rent to own company provides the tenant, they are providing a turn-key RTO for you to manage. There are other RTO companies who will find and manage the tenant throughout but just look to you to provide the cash. You are then a joint venture partner rather than a customer of a firm that creates and sells RTO deals. Managing tenants directly will not be feasible while travelling abroad. The pure JV role will have its own challenges in terms of your diligence and oversight while abroad but vastly less effort overall.



Hope this helps. Good luck on your with your investments and your adventures.
 
I would do nothing and invest in RE when you have the time
Investing in syndicates might not be a good option since you have to put your money into such companies for 3-5 years (ex. with Carevest at ~ 8%/year dividend).
Landlording is totally out due to crazy tenants, especially a single house with one renter...and also property management is expensive and they might be crazy as well.

I guess the risk is too great! Having said that , I need to learn to delegate better as well....

Why not JV with other rein members looking for JV partners?


Kir.
 
QUOTE (kir @ May 22 2010, 07:53 AM)
Investing in syndicates might not be a good option since you have to put your money into such companies for 3-5 years ..


Any real estate based investing, be it a JV, a do it your self deal or with a syndicate (aka a JV on steroids), should have a 5+ year view .. if you're traveling or not !
 
QUOTE (Mvarga @ May 20 2010, 11:13 AM) Hello everyone, I was hoping to get a few different perspectives on my upcoming plans. I am intending to travel through Austrailia and Asia for a little over a year starting this January. I am really looking to invest in real estate before I leave, however I am looking for something that requires little involvement on my part and also produces a solid cashflow to have my money work best for me while I`m gone, also to help fund my travels should i decide to extend them longer. This has lead me to look at rent to own deals. I was just wondering if anyone here as any experience in doing a rent to own while traveling or doing a rent to own in a different province from where they live. I was hoping to get some advice on the best way to arrange this and possible pitfalls to avoid. Or if this is even achievable. I have never done a rent to own or purchased a property yet. So this will be my first deal. I have read Thomas mentioning that rent to owns are not the best thing to do for your first investment, however i would be looking to have a rent to own company provide me a tenant and merely be the investor, so I`m not sure if this will be possible while traveling.

Any advice is greatly appreciated. Hope everyone has a great long weekend.

I`d suggest investing your money with an experienced investor and have them be the managing partner/Real estate expert in the deal. Joint Ventures are great for this. You will have a lot more fun on your trip if you don`t have to worry about managing your investments from abroad while you are new and inexperienced.

Find out what is most important to you in an investment (i.e. cashflow, equity upside, etc), and partner with someone with a good track record achieving what you are looking for.
 
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