- Joined
- May 11, 2009
- Messages
- 172
I haven't been at the investing game very long, but since I started last Fall, I've been able to pick up two properties. One I have successfully filled with a great Rent To Own tenant and the other closes this April. The purchases of both were quite a bit of work for a newbie like me, but they were indeed great learning experiences. I knew this was the right path for me and I could see the potential in REI for building steady wealth over time.
This wealth generating power of real estate was not lost on my parents. Now having been retired for a few years, my parents have only modest pensions and are finding it difficult to stay afloat financially without having to pick up part time work here and there. It wasn't exactly the retirement they had wanted, and I didn't want it for them either. As they watched me fill (and later begin to profit from) my first RTO property, they were eager to become my first joint venture partners. I was a little nervous about bringing them on so early in the game, but after much discussion, we agreed that we could all live with the risk, and that the rewards were surely worth it.
So we set out a plan. Over the next year, my parents would fund the purchase of two RTO houses using their Home Equity Line of Credit. My Aunt would do the same, counting two for her, and again using her HELOC to finance them. My wife and I would also try and pick up our third RTO investment property somewhere along the way. I would do 100% of the legwork in finding, purchasing and managing these investments. Our goal was five properties over the next year, and I had every confidence that we could make it work, to everyone's benefit. My parents and Aunt would then have the extra passive income that could save them from having to work through their retirement, and all of us would be on the road to wealth.
But then February 16th happened. And with the announcement of 20% minimum down payments for all our future investments came the threat of shattered dreams and lost opportunities. Our plan depended on lower down payments, and without them, our investing power would be severely limited. After discussing our dire situation with my Mortgage Broker, he suggested that the only way we would be able to fulfill our year's goal would be to purchase whatever properties we could manage in the next few weeks. Next few weeks?!?! Buying one good house alone was a ton of work - how could I manage any more than that in such a condensed time line? I was starting to lose hope, and then I remembered the words of a very wise man: Change your actions to change your results!
Fueled by the thought of my family counting on me to do my best, I became vigorously proactive. I immediately contacted the members of my team and handed them our mission - to purchase 5 great houses in two weeks. How would we do this? No idea. But instead of sitting there paralyzed with fear and uncertainty, I had to trust myself and my team to jump into action, make the right decisions, and keep moving forward.
The next two weeks were a blur.
And in the end, we achieved what I would have thought impossible only two weeks earlier. Not only did we find and purchase five houses in two weeks, but we found five QUALITY houses that fit my Rent To Own system. I did not compromise on my criteria, and as a result I now feel very confident going into the tenant-locating phase of the system.
A few points worth mentioning:
- The MLS listings were barren of much that fit my system. In the end it was the For Sale By Owner (FSBO) market that saved the day, providing four out of the five homes we purchased.
- I was able to get each of the FSBO sellers to agree to a pre-April 19th closing date by offering them a win/win proposition: they would be allowed to remain in the property after closing (paying us a modest rental) for a pre-determined maximum time frame. This would allow them the freedom to move into their next home on their terms, without resorting to a halfway residence in between. This worked out very well for two separate sellers, who both had new homes being built and were nervous about completion dates. In the end, this became the winning condition that sealed the deal for at least three of the properties.
- I used a cover letter in all my offers to the FSBO sellers. I had many compliments in return, with one going as far as to say that it was my cover letter that let me win out over two other very strong offers. Do not underestimate the power of this strategy!!!
- My lawyer was in the middle of renovating a new office and was often absent at critical times during the process. As a result, I learned to write my own offers. To be safe, I would submit them through his office to make sure they were reviewed first. I was surprised how smoothly this process went!
- I was always up front and honest with the sellers, letting them know that I was an investor and that I was looking for high quality homes in order to attract high quality tenants. No one ever showed any objection to my intended use for their home.
Real Estate Investing is definitely a team sport, and I would be remiss if I didn't acknowledge the key people who made this all possible. It is their victory every bit as much as it is mine!
A big thank you to Don Campbell and the REIN team for helping me and so many others find their way through the real estate investing jungle. You are a goldmine of wisdom, inspiration and support, and we Canadian investors are fortunate to have you leading us all down the road to wealth, prosperity and fulfillment.
I want to thank my JV Partners (my Mom, Dad and my Aunt) for having faith in my abilities and for trusting me with spending their money! They've always had faith in me and have always encouraged me to step out of my comfort zone once in a while. As much as anything else, I'm doing this for them.
I would like to thank my business partner, advisor, and wife, Catherine, for her tireless cheerleading. She believed in me every step of the way, and it was her support that fueled me with a winning spirit and the will to do whatever it took to succeed.
I'd like to thank HouseMaster Home Inspections of Waterdown and their great team of friendly, but thorough inspectors for adapting their schedule to mine, even working weekends when needed. Much appreciated, guys!
Thanks goes out to my lawyer, Gerry Gatto, and his office for helping me understand all the various legal requirements and for being so patient and accommodating as I pushed much more than my fair share of paper through their fax machine!
I'd also like to thank a few of my friends at REIN, Tahani, Adam and Manoj, for helping me stay positive and providing me a chance to learn from their experience.
But most of all, I need to send out a BIG thank you to our star quarterback, Kevin Boughen of Dominion Lending Centres. One of the best Mortgage Brokers in the business, it was he who was able to secure high-ratio financing for every one of these properties in the face of overwhelming obstacles. Not only were the doors closing rapidly on 10% down mortgages, but he had many more of his customers demanding the same service from him at the same time I was. In the end, he got it done - and for that my family and I will always be grateful!
So, now that the dust has settled, I will use the next few weeks to catch my breath and celebrate this achievement. It's hard to believe, but this was the 'easy' part of the process. I now have to fill six homes in the coming months...
...and I couldn't be happier!
This wealth generating power of real estate was not lost on my parents. Now having been retired for a few years, my parents have only modest pensions and are finding it difficult to stay afloat financially without having to pick up part time work here and there. It wasn't exactly the retirement they had wanted, and I didn't want it for them either. As they watched me fill (and later begin to profit from) my first RTO property, they were eager to become my first joint venture partners. I was a little nervous about bringing them on so early in the game, but after much discussion, we agreed that we could all live with the risk, and that the rewards were surely worth it.
So we set out a plan. Over the next year, my parents would fund the purchase of two RTO houses using their Home Equity Line of Credit. My Aunt would do the same, counting two for her, and again using her HELOC to finance them. My wife and I would also try and pick up our third RTO investment property somewhere along the way. I would do 100% of the legwork in finding, purchasing and managing these investments. Our goal was five properties over the next year, and I had every confidence that we could make it work, to everyone's benefit. My parents and Aunt would then have the extra passive income that could save them from having to work through their retirement, and all of us would be on the road to wealth.
But then February 16th happened. And with the announcement of 20% minimum down payments for all our future investments came the threat of shattered dreams and lost opportunities. Our plan depended on lower down payments, and without them, our investing power would be severely limited. After discussing our dire situation with my Mortgage Broker, he suggested that the only way we would be able to fulfill our year's goal would be to purchase whatever properties we could manage in the next few weeks. Next few weeks?!?! Buying one good house alone was a ton of work - how could I manage any more than that in such a condensed time line? I was starting to lose hope, and then I remembered the words of a very wise man: Change your actions to change your results!
Fueled by the thought of my family counting on me to do my best, I became vigorously proactive. I immediately contacted the members of my team and handed them our mission - to purchase 5 great houses in two weeks. How would we do this? No idea. But instead of sitting there paralyzed with fear and uncertainty, I had to trust myself and my team to jump into action, make the right decisions, and keep moving forward.
The next two weeks were a blur.
And in the end, we achieved what I would have thought impossible only two weeks earlier. Not only did we find and purchase five houses in two weeks, but we found five QUALITY houses that fit my Rent To Own system. I did not compromise on my criteria, and as a result I now feel very confident going into the tenant-locating phase of the system.
A few points worth mentioning:
- The MLS listings were barren of much that fit my system. In the end it was the For Sale By Owner (FSBO) market that saved the day, providing four out of the five homes we purchased.
- I was able to get each of the FSBO sellers to agree to a pre-April 19th closing date by offering them a win/win proposition: they would be allowed to remain in the property after closing (paying us a modest rental) for a pre-determined maximum time frame. This would allow them the freedom to move into their next home on their terms, without resorting to a halfway residence in between. This worked out very well for two separate sellers, who both had new homes being built and were nervous about completion dates. In the end, this became the winning condition that sealed the deal for at least three of the properties.
- I used a cover letter in all my offers to the FSBO sellers. I had many compliments in return, with one going as far as to say that it was my cover letter that let me win out over two other very strong offers. Do not underestimate the power of this strategy!!!
- My lawyer was in the middle of renovating a new office and was often absent at critical times during the process. As a result, I learned to write my own offers. To be safe, I would submit them through his office to make sure they were reviewed first. I was surprised how smoothly this process went!
- I was always up front and honest with the sellers, letting them know that I was an investor and that I was looking for high quality homes in order to attract high quality tenants. No one ever showed any objection to my intended use for their home.
Real Estate Investing is definitely a team sport, and I would be remiss if I didn't acknowledge the key people who made this all possible. It is their victory every bit as much as it is mine!
A big thank you to Don Campbell and the REIN team for helping me and so many others find their way through the real estate investing jungle. You are a goldmine of wisdom, inspiration and support, and we Canadian investors are fortunate to have you leading us all down the road to wealth, prosperity and fulfillment.
I want to thank my JV Partners (my Mom, Dad and my Aunt) for having faith in my abilities and for trusting me with spending their money! They've always had faith in me and have always encouraged me to step out of my comfort zone once in a while. As much as anything else, I'm doing this for them.
I would like to thank my business partner, advisor, and wife, Catherine, for her tireless cheerleading. She believed in me every step of the way, and it was her support that fueled me with a winning spirit and the will to do whatever it took to succeed.
I'd like to thank HouseMaster Home Inspections of Waterdown and their great team of friendly, but thorough inspectors for adapting their schedule to mine, even working weekends when needed. Much appreciated, guys!
Thanks goes out to my lawyer, Gerry Gatto, and his office for helping me understand all the various legal requirements and for being so patient and accommodating as I pushed much more than my fair share of paper through their fax machine!
I'd also like to thank a few of my friends at REIN, Tahani, Adam and Manoj, for helping me stay positive and providing me a chance to learn from their experience.
But most of all, I need to send out a BIG thank you to our star quarterback, Kevin Boughen of Dominion Lending Centres. One of the best Mortgage Brokers in the business, it was he who was able to secure high-ratio financing for every one of these properties in the face of overwhelming obstacles. Not only were the doors closing rapidly on 10% down mortgages, but he had many more of his customers demanding the same service from him at the same time I was. In the end, he got it done - and for that my family and I will always be grateful!
So, now that the dust has settled, I will use the next few weeks to catch my breath and celebrate this achievement. It's hard to believe, but this was the 'easy' part of the process. I now have to fill six homes in the coming months...
...and I couldn't be happier!
