I Wish I Knew What I Know Now?

[GaryMcGowan]

Hi everyone,

I thought I would start a thread and make the statement that we always seem to hear in life.

I wish I knew what I know now?



For instance when we first starting buying properties I made my share of mistakes. I want to know what yours where. What did you do back then that you are NOT doing now?



For me, I was too excited to the deals done that I skipped over some very important details and asking the right questions. As an example we purchased a RTO property that had a GREAT return and I forgot to think of where the property was located and how well was the tenant screened. We bought in a very rural town in Ontario and of course within 4 months the RTO deal went side ways, took us months to evict and when we did we where faced with a 24k clean up job. ouch!



This could all been adverted if we took the time to slow down and ask the questions we are asking today.

We learned that in a RTO deal a good paying tenant is your best asset. We are no longer buying in communities smaller that 15k. and the criteria grows everyday.



What is your story? What are doing differently today? What would you like other investors to learn about your mistake(s)? What have you changed?

 

[Thomas Beyer]

Feel free to read a few of those lessons learned in my blog listed in my footer ... Or more in my book of the same title when I have it ready next year.

 

[Rickson9]

I used to look at properties that were priced too high.

 

[margaretcowan]

I sold some properties at the wrong time in the real estate cycle. I knew about cycles but should have taken a longer term approach and waited for the booms.

 

[Thomas Beyer]

[quote user=margaretcowan]waited for the booms. .. one is coming again in AB and SK.



We sold 50% of our AB based assets in 2007 .. into the then boom .. but we should have sold even more .. so 2013 or 1014 might be a great time to unload some again.



NOW is a good time to buy in AB or SK or very select ON or BC pockets (keyword: very !!) (last year actually, or 1982 or ...) for a 3-4 year play. Of course, sensibly levered, one could hold forever.

 

[TangoWhiskey]

I would link the financing with the hold period and/or how long it will take you to complete the value play. Now I'm stuck with a building with 300K in forced equity that I can't touch until 2015. Doh! Then I made the same mistake again! A 10 month turn around financed with 5 yr money. I was learning and it seemed like such a good idea.



If you are confident in what you're doing be sure you finance to the hold period. As well think hard about where the financing is coming from - mortgages that are being pooled and securitized are not going to be broken without you paying every penny of interest back to the bank.

 

[stevegwhite]

How far back are you talking?



My biggest regret is graduating college, taking a night job at a convenience store and pissing my money away because I was still living with mom and dad. I actually had a real estate investor come in delivering the Toronto Star every night and he told me about his properties along the lake and how he bought them and rented them out.



I was about 23 at the time and just assumed that sort of thing was way beyond anything I could do, despite MUCH easier qualifying conditions back then.



Oh how I wish he had of reached across the counter and smacked some sense into me. I could have made up for a lot of lost years and be into several plex units right now.



I actually think about this quite often. I still have a leather jacket I bought for $600 because a buddy had one and I'd just gotten paid and had nothing else to buy.

 

[JBagorio]

One of the biggest mistake earlier on in the game for me is partnerring with the wrong people and expected half half on everything including financialls and overall management of the projects. Ended up waiting around and arguing with these individuals to put in their share of time and money. To fix the problem, right away we desoved the partnership by disposing the properties or buying each other out.

Lots of headache, buy I am glad I did get out of it right away than later. Took the money recovered and reinvested on my own. Lesson learned? Never partner with your self! What that really means is that, never partner with someone that will not compliment your weaknesses.

 

[invst4profit]

My biggest mistake was not getting out of residential investments back in the mid-late 90s when the RTA turned against landlords in Ontario. The persistent attacks and outlandish support of tenant rights has made this business a mine field in Ontario. Not for the faint of heart or weak willed. The saying "no good deed goes unpunished" has never rung so true as it does today at LTB hearings.



I should have invested in commercial properties instead.

 

[MarcoChim]

My biggest regret is not invest in real estate earlier. I started working and saving since I was 19 years old, I worked really hard (3-4 jobs at once) to fill up a 16+ hour day schedule. So I could save quite fast and didn't have much chance to spend money.



My first $10,000 saving went to mutual fund in 2007 when I was 21, and its been going down since then,

I finally had to sell in after 3 years and got less than $3,000 back.

Then my next $20k or so went into the stock market in 2008, lost about 80% in one stocks and made about 10% on the others. Lesson learned "DON"T INVEST IN SOMETHING YOU DON"T KNOW ABOUT"



Early 2009 was the first time I heard about investing in real estate from a Richdad seminar, almost bought into their pitch to buy their course, but luckily I have done my due diligence on the internet and found out about REIN.



Joined REIN in 2009 and felt overwhelm, took me a long time to get comfortable with the idea and learn the fundamentals behind it. Finally bought my first townhouse early 2011 and stopped paying rent.

I will be closing on my first 2 rental properties in March. Thanks REIN!!

 

[GaryMcGowan]

NICE JOB! Marco.

If you didn't lose where you did you wouldn't realize how powerful Real Estate can be when you know the fundamentals.



All the best.

 

[GaryMcGowan]

Interesting comments Greg.

Commercial is an area I have not looked at. I know you mentioned in the past what commercial properties you have invested in. Perhaps you could share what they have been!?

 

[invst4profit]

I never did go commercial. I should have to avoid the Ontario RTA.



What I did do was sell all my residential buildings to avoid the majority of headaches associated with tenant complaints and tenant related maintenance issues.

I now only rent the land and the tenants own their own homes. No more toilets for me to repair or tenant abusive damage to my property. When a tenant leaves they find the replacement, that I still screen, and there is no work for me to do to prepare the property.

Mt responsibilities are generally limited to water, sewer and roads. Much like a small township/subdivision.



Having said that there are still tenant issues and I will admit in the past year I have been at LTB hearings on the average every two months. My next one is Jan 30th.. As expected though this only involves 10% of my tenants as with any landlord.

But I make significant profits and as with any business it's the money that makes the headaches/work worth the effort.