- Joined
- Mar 17, 2011
- Messages
- 133
I won`t pretend that I`m at the point of being a `Success
Story` but I`m taking steps in the right direction``..and would really like to
win some guest passes to ACRE Live in Edmonton
Here is my extremely long winded story. You
may want to grab a coffee or beer before starting.
I`m originally from a farm near Youngstown Alberta, so
naturally my first real estate investment was farmland. In 1998 when I was 19
years old I bought 550 acres of land. The main reason I bought it was because
it was right next to my dad`s farm and I could qualify for better interest
rates through the AFSC Beginning Farmer program. At the time I took out
a loan with a closed 20 year term, interest rates were 6.5% for the first 5 years then
7.5% for the remaining 15 years. Back then I had a full time job working as an
electrician apprentice and farming was just something that filled my evenings
and weekends. The first couple years it rained so I made a little bit of money
after expenses, but after that I was having to subsidize it with my wage and it
was eating up my free time. When I lived in the area I had a good job, no car
payments, and an affordable house that I paid $7000 for (yes seven thousand) so
it wasn`t a big deal to have to top up my land payments out of my wage. My fiancÃe
at the time was also bringing in a strong wage and paying off student loans
within a matter of months.
Fast forward to spring of 2006. I got a job in Northern
Alberta and we were moving 4 hours away from the farm. I sold my old shack for
$20000 but over 3 years any `profits` were used up on improvements. We moved to
Cold Lake and paid $235000 for a starter home. At age 27 I made my very first
mortgage payment``I also did the most important thing that all young Alberta guys
should do`.bought a brand new diesel truck. (That`s a joke of course! Don`t do
it.). Meanwhile commuting back to the farm to help with work was starting to
get old, and having to use money from my wage to make land payments, along with
house payments, and truck payments was getting really old. Then in the fall of
2006 something extremely LUCKY happened. A resource company came and drilled 7
gas wells on my farmland!
That was an extremely fortunate event for me and my family.
It doesn`t really have much to do with REIN principles, but the thought of `it
sure would be nice to have MORE gas wells` was always on my mind over the next
few years. The concept of passive income and having other people pay your debt
down was finally starting to click`.every year I would get a cheque that I
would use to pay the annual payment on the land.
It wasn`t until 2009 that I finally owned a residential rental
property, and it was more because I was stubborn as opposed to having a plan.
We decided we had enough of town life and bought a house outside of town on an
acreage. The house that we bought was brand new but in terms of size and finish
it wasn`t much nicer than the house we had in town. The price tag however was a
lot higher. We paid $400000 for the acreage and at the time we had a realtor
walk through our house in town and she recommended a listing price of $285000.
To me that was too low and I decided that we would rent it out rather than sell
it at a discount price. Cold Lake was still recovering from the 2008 crash and
so it seemed like a good idea to hold it.
Back then I had never read a book on real estate, financial
education, or anything inspirational that might give me some backing to support
having a rental property. I was stressed about having a huge amount of debt,
and wasn`t overly comfortable with being a landlord. `Winging it` would be the
best description for that first property.
After 10 months of being a landlord prices had recovered a
bit and I was looking to get some equity out of the house. We ended up listing
the house at $309000 and selling it for $298000 which was $13000 higher than
the realtor recommended listing it for less than a year before``combine that
with the fact that we made a very good rental rate which paid the mortgage down
and provided some monthly cash flow. Looking back you could make a strong
argument that just holding the house for an extra 10 months made us $30000
wealthier``WOW, hind-sight really is 20/20.
Funny part is, at the time I still thought `it can`t go any
higher` and it was a good thing I dumped that house!.........It sold again 3
years later for $362000, now it is likely worth over $400k and would bring very
strong rents. Lousy hind-sight!
2010 - Let the financial education begin!.....My wife had
bought me a book for Christmas, probably in about 2007 before the big crash. It
was `Rich Dad`s Prophecy` by Robert Kiyosaki. The main topic was why the big
stock market crash is on the way and it speaks a lot about pensions, mainly
defined benefit VS defined contribution. I have worked for big companies with `good
pensions` since 2003 but after reading this book it really opened my eyes to
the financial world and I was thirsty for more knowledge``of course I never
actually read the book until about 2010 after it sat on our bookshelf for 3
years because after all `It must be a scam`. Wish I would have picked it up a
little sooner.
After reading the first Kiyosaki book I was eager to learn
more. Concepts such as good debt vs bad debt were things that would have been
nice to know back when I was holding 2
houses. Rather than worry about the total debt amount, worry about being able
to pay it off`..hopefully with other peoples money! At that point in my life I
had probably read about 3 books since high school ended, aside from car
magazines it just wasn`t my thing`..but in the months following the first book
I read at least a dozen more with similar themes. Luckily for me I stumbled
across Don R Campbell`s book `Real Estate Investing in Canada`. This was great
because all of the stuff I had read up to that point were good, but mostly
American themed and not specific. Don`s book gave me a much more detailed
method, and it was Canadian!
In 2011 armed with more knowledge we bought our first
INTENTIONAL rental property. It was a brand new home in Cold Lake Alberta. As
soon as we bought it we rented out the upper suite and began completing the
basement suite. Cold Lake has seen a very strong boom over the past 2 years so
obviously this has been a solid investment for us. We pay down the mortgage
each month and even after all expenses the positive cash flow we receive is
actually MORE than I get from the 7 gas wells. Wow, who knew you could create
your own luck??
On a side note, my biggest pet peeves in life are people who
sit back and say `Must be nice`..` When
somebody sees someone doing well they think it is all luck that got them there,
or maybe they screwed someone over to get where they are. In some cases, people
are lucky, or they are sleazy`.but for the most part they are likely just
someone who took action. Don`t sit back and spite those people! Ask them how
the heck they did it, and learn something from it. Might not be something that
suits you, but maybe it does, or maybe you can learn something. If you choose
to do nothing, don`t complain!!....anyway, I`m off on a tangent.
When I read Don Campbell`s book there were often references
to REIN and networking and stuff like that. Going to meetings and interacting
with other people who are also in the real estate business. That all sounded
great to me while reading it, but me being a small town farm boy living way up
in Cold Lake I kind of took the attitude of `That`s for city people` and did nothing. Still
I continued to leverage knowledge from total strangers on the myreinspace
forums often, whether I had the courage to chime in or not was another story,
but I was learning lots.
While lurking on the forums about a year ago now I saw an ad
for ACRE live. I decided that after my first success I owed an in person thank
you to some of the people who have helped me out along the way without even
knowing it. As far as education goes I didn`t really know what to expect
considering I already read all those books. I didn`t think I would learn too
much``WRONG! Again`..I could ramble on for 3 more pages about my experience at
the ACRE weekend, but let me sum it up with one word. AWESOME!! I got to meet
several people and thank them in person. Just in the 2 minute conversations
with a couple of them I learned a lot about real estate, and a lot about myself`..strange
as that sounds. It is always great to talk to people that provide support when you share real estate experiences rather than call you a slumlord or say "Must be nice..." Anyway, long story short I made 30 pages of notes and would
recommend it to anyone. `Training doesn`t COST, it PAYS!`
After the ACRE event I was re-energized and knew that I had
to take action soon, within weeks or months, NOT years! Over the following
months we came up with a strategy, built a team, and began executing.
In January of 2014 we purchased a half duplex in Edmonton.
It doesn`t cash flow nearly as well as our suited property, but it is much
easier to manage and is in a more stable diverse market with a better tenant
profile.
In February 2014 I contributed to an RRSP, but instead of
buying a random stock because some guy on TV told me to, I invested it in
Alberta real estate. Big success in the making`.and the tax return paid for my race car. (Ok I admit I still have some bad habits, but no diesel trucks!)
We added another property in July 2014. It is a single
family home, brings in good rent and has excellent tenants. It was in tough
shape when we bought it so we learned some lessons on renovations from a
distance, but overall it has been great so far.
That is my life story when it comes to real estate``It isn`t
a major success, I`m not able to retire yet, but it works for us at this stage
in our life. We had our first child in August of 2010 and when it came time for
my wife to return to her high paying oil field job, she just gave them her
notice and quit. Thanks to real estate we still live quite comfortably, save
for our future, and our kids have a full time mom at home. To me that is the
biggest success so far.
This year she will be attending ACRE live`..so I guess stay
tuned for more updates
Thanks for reading and happy investing!!
Story` but I`m taking steps in the right direction``..and would really like to
win some guest passes to ACRE Live in Edmonton
Here is my extremely long winded story. Youmay want to grab a coffee or beer before starting.
I`m originally from a farm near Youngstown Alberta, so
naturally my first real estate investment was farmland. In 1998 when I was 19
years old I bought 550 acres of land. The main reason I bought it was because
it was right next to my dad`s farm and I could qualify for better interest
rates through the AFSC Beginning Farmer program. At the time I took out
a loan with a closed 20 year term, interest rates were 6.5% for the first 5 years then
7.5% for the remaining 15 years. Back then I had a full time job working as an
electrician apprentice and farming was just something that filled my evenings
and weekends. The first couple years it rained so I made a little bit of money
after expenses, but after that I was having to subsidize it with my wage and it
was eating up my free time. When I lived in the area I had a good job, no car
payments, and an affordable house that I paid $7000 for (yes seven thousand) so
it wasn`t a big deal to have to top up my land payments out of my wage. My fiancÃe
at the time was also bringing in a strong wage and paying off student loans
within a matter of months.
Fast forward to spring of 2006. I got a job in Northern
Alberta and we were moving 4 hours away from the farm. I sold my old shack for
$20000 but over 3 years any `profits` were used up on improvements. We moved to
Cold Lake and paid $235000 for a starter home. At age 27 I made my very first
mortgage payment``I also did the most important thing that all young Alberta guys
should do`.bought a brand new diesel truck. (That`s a joke of course! Don`t do
it.). Meanwhile commuting back to the farm to help with work was starting to
get old, and having to use money from my wage to make land payments, along with
house payments, and truck payments was getting really old. Then in the fall of
2006 something extremely LUCKY happened. A resource company came and drilled 7
gas wells on my farmland!
That was an extremely fortunate event for me and my family.
It doesn`t really have much to do with REIN principles, but the thought of `it
sure would be nice to have MORE gas wells` was always on my mind over the next
few years. The concept of passive income and having other people pay your debt
down was finally starting to click`.every year I would get a cheque that I
would use to pay the annual payment on the land.
It wasn`t until 2009 that I finally owned a residential rental
property, and it was more because I was stubborn as opposed to having a plan.
We decided we had enough of town life and bought a house outside of town on an
acreage. The house that we bought was brand new but in terms of size and finish
it wasn`t much nicer than the house we had in town. The price tag however was a
lot higher. We paid $400000 for the acreage and at the time we had a realtor
walk through our house in town and she recommended a listing price of $285000.
To me that was too low and I decided that we would rent it out rather than sell
it at a discount price. Cold Lake was still recovering from the 2008 crash and
so it seemed like a good idea to hold it.
Back then I had never read a book on real estate, financial
education, or anything inspirational that might give me some backing to support
having a rental property. I was stressed about having a huge amount of debt,
and wasn`t overly comfortable with being a landlord. `Winging it` would be the
best description for that first property.
After 10 months of being a landlord prices had recovered a
bit and I was looking to get some equity out of the house. We ended up listing
the house at $309000 and selling it for $298000 which was $13000 higher than
the realtor recommended listing it for less than a year before``combine that
with the fact that we made a very good rental rate which paid the mortgage down
and provided some monthly cash flow. Looking back you could make a strong
argument that just holding the house for an extra 10 months made us $30000
wealthier``WOW, hind-sight really is 20/20.
Funny part is, at the time I still thought `it can`t go any
higher` and it was a good thing I dumped that house!.........It sold again 3
years later for $362000, now it is likely worth over $400k and would bring very
strong rents. Lousy hind-sight!
2010 - Let the financial education begin!.....My wife had
bought me a book for Christmas, probably in about 2007 before the big crash. It
was `Rich Dad`s Prophecy` by Robert Kiyosaki. The main topic was why the big
stock market crash is on the way and it speaks a lot about pensions, mainly
defined benefit VS defined contribution. I have worked for big companies with `good
pensions` since 2003 but after reading this book it really opened my eyes to
the financial world and I was thirsty for more knowledge``of course I never
actually read the book until about 2010 after it sat on our bookshelf for 3
years because after all `It must be a scam`. Wish I would have picked it up a
little sooner.
After reading the first Kiyosaki book I was eager to learn
more. Concepts such as good debt vs bad debt were things that would have been
nice to know back when I was holding 2
houses. Rather than worry about the total debt amount, worry about being able
to pay it off`..hopefully with other peoples money! At that point in my life I
had probably read about 3 books since high school ended, aside from car
magazines it just wasn`t my thing`..but in the months following the first book
I read at least a dozen more with similar themes. Luckily for me I stumbled
across Don R Campbell`s book `Real Estate Investing in Canada`. This was great
because all of the stuff I had read up to that point were good, but mostly
American themed and not specific. Don`s book gave me a much more detailed
method, and it was Canadian!
In 2011 armed with more knowledge we bought our first
INTENTIONAL rental property. It was a brand new home in Cold Lake Alberta. As
soon as we bought it we rented out the upper suite and began completing the
basement suite. Cold Lake has seen a very strong boom over the past 2 years so
obviously this has been a solid investment for us. We pay down the mortgage
each month and even after all expenses the positive cash flow we receive is
actually MORE than I get from the 7 gas wells. Wow, who knew you could create
your own luck??
On a side note, my biggest pet peeves in life are people who
sit back and say `Must be nice`..` When
somebody sees someone doing well they think it is all luck that got them there,
or maybe they screwed someone over to get where they are. In some cases, people
are lucky, or they are sleazy`.but for the most part they are likely just
someone who took action. Don`t sit back and spite those people! Ask them how
the heck they did it, and learn something from it. Might not be something that
suits you, but maybe it does, or maybe you can learn something. If you choose
to do nothing, don`t complain!!....anyway, I`m off on a tangent.
When I read Don Campbell`s book there were often references
to REIN and networking and stuff like that. Going to meetings and interacting
with other people who are also in the real estate business. That all sounded
great to me while reading it, but me being a small town farm boy living way up
in Cold Lake I kind of took the attitude of `That`s for city people` and did nothing. Still
I continued to leverage knowledge from total strangers on the myreinspace
forums often, whether I had the courage to chime in or not was another story,
but I was learning lots.
While lurking on the forums about a year ago now I saw an ad
for ACRE live. I decided that after my first success I owed an in person thank
you to some of the people who have helped me out along the way without even
knowing it. As far as education goes I didn`t really know what to expect
considering I already read all those books. I didn`t think I would learn too
much``WRONG! Again`..I could ramble on for 3 more pages about my experience at
the ACRE weekend, but let me sum it up with one word. AWESOME!! I got to meet
several people and thank them in person. Just in the 2 minute conversations
with a couple of them I learned a lot about real estate, and a lot about myself`..strange
as that sounds. It is always great to talk to people that provide support when you share real estate experiences rather than call you a slumlord or say "Must be nice..." Anyway, long story short I made 30 pages of notes and would
recommend it to anyone. `Training doesn`t COST, it PAYS!`
After the ACRE event I was re-energized and knew that I had
to take action soon, within weeks or months, NOT years! Over the following
months we came up with a strategy, built a team, and began executing.
In January of 2014 we purchased a half duplex in Edmonton.
It doesn`t cash flow nearly as well as our suited property, but it is much
easier to manage and is in a more stable diverse market with a better tenant
profile.
In February 2014 I contributed to an RRSP, but instead of
buying a random stock because some guy on TV told me to, I invested it in
Alberta real estate. Big success in the making`.and the tax return paid for my race car. (Ok I admit I still have some bad habits, but no diesel trucks!)
We added another property in July 2014. It is a single
family home, brings in good rent and has excellent tenants. It was in tough
shape when we bought it so we learned some lessons on renovations from a
distance, but overall it has been great so far.
That is my life story when it comes to real estate``It isn`t
a major success, I`m not able to retire yet, but it works for us at this stage
in our life. We had our first child in August of 2010 and when it came time for
my wife to return to her high paying oil field job, she just gave them her
notice and quit. Thanks to real estate we still live quite comfortably, save
for our future, and our kids have a full time mom at home. To me that is the
biggest success so far.
This year she will be attending ACRE live`..so I guess stay
tuned for more updates
Thanks for reading and happy investing!!
