What`s 1 thing you SPECIFICALLY did that really helped you move forward in Real Estate investing?

[johnsu]

1 think I did that really helped me quick scan potential properties was I reversed engineered the minimum Characteristics for a rental property potential. so that I wouldn't waste my time looking at properties that definitely didn't fit the bill. This was based mostly on purchase price because the mortgage payment is the biggest bill every month.



So specifically I did was this



1. Determined what market rent is average for the townhouse $1200

2. Set a higher than average monthly tax payment $100

3. Set a higher than average condo fee amount $210 (Done by looking at different cf on different units

4. Added in other fees such as property management ect

5. I added up all monthly expenses

6. Market rent - Expenses = Max mortgage payment possible based on these numbers.

7. Max Mortgage payment, I would then reverse engineer to get the MORTAGE AMOUNT that the payment would be equivalent to so if $700 left after minus expenses then I'd pick a mortage interest rate, amort period and find out what the max mortgage amount would be.

8. Add 20% to that figure and now you got a MAX PURCHASE PRICE



This is ONLY A ROUGH FILTER because expenses vary with every situation but this system really saved me time NOT looking AT ALL TOWNHOUSES, especially when you're beginining and you don't know if something is over priced or not.

 

[Thomas Beyer]

It's like the 10% solution .. a coarse, but imperfect initial filter !



The issue is that often you don't know what the rent is or could be ! i.e. a very rough part of town with a shabby property commands 50% of the rent of a pristine property of similar size in a nice neighborhood !



I suggest you start with a neighborhood, become an expert there, then a type of asset, say townhouse or signel family with up/down suites, 5BR minimum .. and then go from there, using your above formula. More here on how to get started.



So, to answer your specific question: the ONE thing I realized after having bought 3 houses and 3 condos in the mid 90's is that a condo is a fractional building AND IT COSTS MORE PER UNIT than the whole building, although the rents are the same. A tenant often doesn't even know or care if the building is strata-titled (aka condo) or not. Therefore, I started buying whole buildings, roughly at 30-50% discount (per unit) to a condo. First small buildings (15 units in 2000, then 20 suiter in 2001, then a 24 in 2002) .. then larger ones later ! Our biggest today is 308 units in Dallas, TX and two 120 suiters, one in Edmonton and one in Calgary !



Bigger buildings are far more efficient to operate and often can be purchased at a higher CAP rate i.e. less competition !



And yes, more cash is needed for larger buildings.. hence the syndication route with others .. but it all started with this one insight !!

 

[Rickson9]

The 1 thing that helped me most was learning how to read and interpret financial statements. That's about it.



Best regards.

 

[Tony Miller]

First, I sold a condo that wasn't providing positive cash flow based on the advice that I received from Thomas!



The condo purchase was a mistake so I started educating myself by reading about real estate investing, taking a couple of courses and joining the local real estate investors group. I needed to take these steps to build confidence and knowledge before I could move forward as a real estate investor, and not repeat the mistakes that I made when I bought the condo.



That's about it....Tony

 

[JoeRagona]

I'll get into more detail at the Property Show April 30th in Toronto but in the past decade I made 3 radical changes that brought me to where I am today.



2003 - Quit the music industry after 20 years DJing/Radio/Remixer and Producer for world artists to take over family company.



2005 - Decided to sell my interest and look for an alternate income stream which lead me to study Real Estate for two solid years



2007 - Signed off the company, paid my house off, took a HELOC on the new appreciated value, put $200k to work in the market and 'learned' my way around Real Estate.



Here I am today telling my story to potential JVP's & how to 'step' into fear.

 

[2ndstory]

Committed myself to not paying too much for a property or charging too little for rent.



Nik

 

[Thomas Beyer]

[quote user=2ndstory]or charging too little for rent.


you have little control over rent level in the area .. you can only ride the area market up (or down) more or less ..



so if average houses rent for $1400 in your area.. and your house is "average" your rent cannot be substantially higher than $1400 !

 

[jonathanb]

But a lot of people do charge TOO little rent... so i would agree with that.

 

[RedlineBrett]

I learned to leave a little more on the table for the other side in a deal. Now I do more deals and bigger ones every year and I stress a lot less over them than I did early in my career.

 

[Thomas Beyer]

[quote user=jonathanb]do charge TOO little rent .. true .. so yes, one should know what the market bears given one's offering and the competitive landscape .. and the local rent control laws as adjusting rents upwards by $200 can be done once a year in Alberta or 2x/year in SK but might take a decade in ON or BC !

 

[kfort]

Because I'm fairly rookie and very much in the buying phase I had several.. I taught my Realtor that I have two basic tenant profiles and do not want to stray from them. This saved us both time viewing/screening etc. I also expanded my network via a REIN membership and have expanded my team by adding a second Realtor, contractor, better Insurance team (still working on this one), property inspector, mortgage broker with a long term view vs. short term, and a few friends through REIN.

 

[fdrover]

I had looked at Real Estate investing for several years but was unsure. I had just read a book called "Who moved my cheese". Believe it or not, that book convinced me to take the plunge. The numbers worked. FEAR was holding me back.



Fraser Drover

droverproperties.ca

 

[johnsu]

I'd still love to hear you DJ some time Joey. Possible to bust some beats?

 

[TodorYordanov]

The interviews with experts and veteran members that are posted on this site are invaluable help and wisdom for me!



One thing that stands out and I have to re-tell myself quite often comes from there. At this moment I can't remember the name of the person who said it, but Thank you for it.



"We get paid to solve problems."



Very simple and very powerful. It works every time for me.

 

[johnsu]

Hi Kris,



That's a great tip on training the Realtor! If you need an insurance guy to add to your team, let me know. Guy I'm using is very familiar with this kind of stuff and is super helpful and has made going above an beyond the standard.



I've actually got 2 people. Msg me and I can introduce you.

 

[johnsu]

HI Brett,



I totally agree on that, especially for rookies who are fixed on buying on "massive discounts" and putting in ridiculous offers. They may get lucky here and there but overall, they'll lose more great investments than they've bought.



Let's look at the profile of someone who's always looking to do that: Scarcity mindset, short term vision, small picture thinking.



Reverse the opposite of someone who just wants to put a deal together that is "Fair" for all parties. Profile is the exact opposite.



Now who would you want to partner with? I'd rather have a smaller chunk of an ENORMOUS PIE than A LARGE CHUNK OF A SMALLER PIE.



Great tip! See you at ACRE this weekend!

 

[johnsu]

What information from that book finally tipped you over into taking action? I think that'd be a great tip to help other people finally take the plunge!

 

[JoeRagona]

Yea, thanks John, I think I'll press record at the Property Show for a bit and post it up on FB or here if allowed.

 

[fdrover]

John,



I was very COMFORTABLE being a teacher, married to a teacher. I owned my own home and life was good. However, my pension was not assured. It had a huge unfounded liability here in NL at the time. I was worried that my CHEESE would run out and so I had better find an alternate source. I highly recommend this book!



Fraser Drover

droverproperties.ca

 

[housingrental]

I second Brett's post

Shot myself in the foot many times in when first starting out trying to get that extra few thousand less on purchase price....

[quote user=RedlineBrett]I learned to leave a little more on the table for the other side in a deal. Now I do more deals and bigger ones every year and I stress a lot less over them than I did early in my career.