Where to get started?

[luxeTO]

Hi everyone, this is my first post and I am nervous yet excited to start learning. I'm young in my (mid-20s), and I know that if I want to jump into this career path, it's better to do it now. I'm ambitious, a fast learner and a slight workaholic.

I'm looking into having investment property in Toronto and surrounding areas, but I have several hurdles/challenges.



1. I have no idea where to start, where to look for the right people (good investments, the right brokers etc), and where to find resources.



2. In light of some personal unforseen costs, what money I had saved needed to be used. I have little to no savings right now. I have started to save but it is minimal. I know that money makes money so I'm working hard to save up so that I can have some "cushion" when I plan to purchase property.



3. I have never purchased property in my life. My current annual income (combined with spouse) is just under $100k. We have two dependents so things are stretched thin. But I am ready to make this a priority.



I feel like I am ready to get out of the rat race but no idea which direction to go. I'm entirely aware that no one want to share secrets or tricks of the trade etc but it would be really helpful if anyone could spare some advice.



I am open to becoming a landlord (and I am realistic about the pros/cons of becoming one), purchasing property for resale or other ventures of similar nature. I'm not looking to flip houses or becoming an RE agent etc.

 

[Rickson9]

[quote user=luxeTO]I feel like I am ready to get out of the rat race but no idea which direction to go. I'm entirely aware that no one want to share secrets or tricks of the trade etc but it would be really helpful if anyone could spare some advice.


This isn't entirely true.



No offense, but...



The individuals who actually have useful information to share, if they shared it, it wouldn't make sense to you anyway. It would be a waste of time for both people involved.



The only analogy that I can think of is trying to explain what it's like to have a child to a person who has never raised a child. The explanation may sound like English, but understanding wouldn't follow. Sadly the person who has never raised a child may think that they understand what it is like to raise a child (because they understood the English), but they don't.



[quote user=luxeTO]I am open to becoming a landlord (and I am realistic about the pros/cons of becoming one), purchasing property for resale or other ventures of similar nature. I'm not looking to flip houses or becoming an RE agent etc.





The bolded comment is related to my first comments about re:understanding. Your post makes it clear to me that you are not realistic, but you don't even know it.



Keep reading/learning. All the best.

 

[Tootse]

Do you currently own or rent?

 

[Sherilynn]

Read everything you can get your hands on. Don R. Campbell's books are great, and there are many other great investing books. I am a huge fan of Kieran Trass, and he and Don recently did a Canadian edition of Trass's "Property Cycle" book. REIN also has several home study courses. (Joint Venture Secrets comes to mind.)



Also, join a local investing group where you can network with other investors and hear first-hand accounts of real world experiences. REIN is great, but there are also smaller groups that may meet more often or may better suit your needs.



Save your money for down payments (stop buying unnecessary consumer goods, etc.) and pay off any consumer debt (credit cards especially). But also become an expert in the field of real estate investment so that people will trust you with their money and then you can buy a property and split the ownership (in exchange for you doing all of the work).

 

[invst4profit]

The key at this point is to continue to work hard and save as much money as you can. How much you save will depend on how badly you want to succeed. Everyone wastes money, on themselves and on their dependants. Canadians generally live a overindulgent lifestyle that they generally explain away by saying life is expensive.

There are many things you can do without in life in order to save the money you need to get where you think you want to go. If in the end you do not get there it isn't because it was unachieveable it was because you did not want it bad enough to make the sacrifices necessary to achieve the goal.



Your point #3 is where you need to adjust your thinking. With an income close to $100K and ONLY two dependants you should have more than enough savings to move forward in only a few years. Cut out luxuries, don't waste money on expensive toys, move and live a conservative lifestyle, make saving your number one priority, make more money.



If you are willing to embrace the concept, as you say, of making this a priority then good luck, however very few people your age truly are prepared to follow this path to success. It's too difficult to give up our luxurious life style.

 

[ChristinaCatana]

Its often wise to start real estate investing by buying a home you'll live in. A home with a 2nd unit you will give extra income and maybe you can keep it as a long term rental when you move in the future.



It's easier to get the down payment for a home you live in...

- Maybe you can qualify for an RRSP loan and then use the RRSPs for the down payment.

- Some lenders will lend you the down payment.

- Earn & save your 5% down payment.



As Sherilynn said, attend local real estate investing groups.

What you do with your time and money is your choice. If you want to be a successful investor, then you'll need to decide what you'll do less, so you can do more investing.

Do start young. You'll be amazed at the dollars you have after 3, 5 or 10 years of owning good real estate.

 

[Thomas Beyer]

[quote user=luxeTO] I have little to no savings right now ..

Start to save 20% down as that is the minimum in Canada, say $30,000 for a modest condo or $60,000 for a modest house. Then join REIN when close and in the mean time educate yourself, i.e. read read read



To save, you have to spend less than you make. Therefore

a) make more money, and/or

b) cut expenses to the bone, and/or

c) eliminate un-essentials such as TV or Starbucks, and/or

d) drive used cars only, if any, and/or

e) eliminate "bad debt" such as car loans or "credit" card debt ASAP, starting with the highest interest rate cards first.



Do you own your own home ? If not, start there, perhaps with a basement suite to rent out, and later have the kids move there when bigger and noisier.



Some (free) reading, besides books, is here: http://myreinspace.com/public_forums/Real_Estate_Discussion/62-10689-Educational_REIN_Posts_by_Thomas_Beyer.html

 

[Thomas Beyer]

[quote user=invst4profit]The key at this point is to continue to work hard and save as much money as you can. How much you save will depend on how badly you want to succeed. Everyone wastes money, on themselves and on their dependants. Canadians generally live a overindulgent lifestyle that they generally explain away by saying life is expensive.

There are many things you can do without in life in order to save the money you need to get where you think you want to go. If in the end you do not get there it isn't because it was unachieveable it was because you did not want it bad enough to make the sacrifices necessary to achieve the goal.



Your point #3 is where you need to adjust your thinking. With an income close to $100K and ONLY two dependants you should have more than enough savings to move forward in only a few years. Cut out luxuries, don't waste money on expensive toys, move and live a conservative lifestyle, make saving your number one priority, make more money.



If you are willing to embrace the concept, as you say, of making this a priority then good luck, however very few people your age truly are prepared to follow this path to success. It's too difficult to give up our luxurious life style.


Wise words in here !



Easy to say, tough to follow. So simple, yet so true.

 

[MonicaPaslawski]

Hi



If I had had the courage and knowledge to purchase my first property the moment I could scrape together the downpayment (back in the 80s), live in it, then continue to do this through all my moves, etc in my youth . . . - and NEVER SOLD, I would be much further ahead financially than I am now. Eventually, after I married, we did employ this strategy and we have never regretted investing in property. My only regret is that I did not do it sooner. So, my advice is to purchase your first rental property to live in (this would be different from your dream home). Then as you continue to grow your wealth and savings, you can eventually move into another home and rent out your first one. REIN, books, and other sources all provide extremely valuable education and connections to invest in real estate wisely and with support.



Patience, frugal life-style, savings are always key to eventual financial success. You have the mindset and means to do very well.

 

[MFarmer]

Investing is like farming, it takes time and with the right preparation can provide good crops



My wife and I made the decision to become real estate investors late last year and have made a plan that includes spending this year educating ourselves and networking with like-minded people (i.e. REIN, local investing groups etc.) while we save for our first property investment down payment. You mentioned you are young (we are not) so while we would like to forge ahead now, the reality is you need to be smart about how you approach this. One of the things we have learned in a short 2 months is that no real investor does this business purely on their own, they utilize a team to accomplish their goals. Building that team takes time and thru it you will build that foundational knowledge you need.



Hope this helps and good luck!