Tag Archives: Real Estate Investing

3 Real Estate Investing Calculations You Must Know

by Dave Peniuk

As part of our 31 Real Estate Investing Videos series I put together this short little video on 3 real estate investing calculations you gotta know!! These are calculations I see plenty of realtors, real estate investors and media reporters getting wrong…  and yet, they are critical to know and understand.

In case you haven’t signed up for our series (WHY HAVEN’T YOU?!! – It’s 31 FREE videos jam packed with some of our best tips & resources!) … or you missed this video …  here it is:

What are some of the real e state investing calculations YOU use? Let us know in the comments below!

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Quick and Easy Property Valuation for British Columbian Real Estate Investors

by Julie Broad

In my post about Breaking Even Over Time I wrote about a few cool things we learned at the real estate investing conference we attended a couple of weekends ago. One of those cool things is the Property Valuator report from Landcor. This report was worth the entire day we spent in that conference because we had no idea it had launched this month and it’s already saving us a ton of time!

After sending out nearly 6,000 little yellow letters to home owners in Nanaimo, putting bus bench ads up, and slowly spreading our marketing message around the City of Nanaimo through plenty of mediums, we have been getting a lot of calls. And one of the big challenges we face is getting good property comparables fast. This report solves that problem in a big way!

In 60 seconds I can have this report sent to my email containing a computer generated property valuation, recent sale data for the area, assessment data and details on 3 comparable properties.

I created a 4 minute video introducing you to the Landcor report. Sorry about all the blurred out spots but the terms of use state that the report is not to be disseminated, sold or otherwise used for any purpose at all really … so I hope by covering up the majority of address data I’m mostly in compliance. Thank you for understanding and putting up with the blurred bits!!

Enjoy …

Want more awesome real estate investing videos?! We’ve created 31 of them … shorter than this one … and you can get them all at no cost! Sign up here:

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Plenty Of Opportunities to Breakeven Over Time

by Julie Broad

On the weekend Dave and I attended Ozzie Jurock’s Landrush conference in downtown Vancouver with 600 other eager real estate investors (and a few dozen realtors too).

The conference had a jam packed line up of speakers covering everything from the latest mortgage rule changes to Canadians buying real estate in the US to market specific presentations covering various areas in British Columbia.

On the surface it really covered a wide array of topics relevant to British Columbians. And Ozzie’s jokes were, as always, funny and pointed. And his message about real estate was positive and forward looking.

We definitely got a few gold nuggets from the day, and really that is all you can ask for from a low cost seminar like this, but I fear that some people walked away with some troubling advice. Essentially the message was to buy real estate because it always goes up in value. … that was the message of most of the speakers.

They all said it in different ways but that was pretty much the message. “Buy in my area because the future’s so bright you gotta wear shades.” “Buy the biggest and best house you can afford to live in today because it’s best investment you’ll ever make“. “Buy a house and hold onto it and you’re going to make money”.

I could talk about many reasons why the underlying message of “buy a house and you’ll get wealthy” bothered me but I will just focus on 3:

  1. If you’re new to real estate investing the worst thing you can do to yourself is just buy whatever property you CAN just because it will eventually go up in value. And I realize that is not specifically what was said but because none of the speakers got into what makes a good deal this is really the message that you walked away from that conference with. Yes … over 20 years the value is darn near guaranteed to more than double just because of inflation … but if those properties don’t have good solid positive cash flow they will eat you alive and you’ll likely not hold onto them for 2 years let alone 20. That means you’ll probably LOSE money not make money.You have to stick to the fundamentals of real estate and buy good solid properties in good or up and coming areas that generate positive cash flow.

    One speaker actually said to the audience that his market had “Plenty of opportunities to break-even over time.” We hope he meant have break-even cash flow … but even at that … what a lousy selling point!! I don’t want break even cash flow… I want money in my pocket every month!

  2. Careful what makes a good deal. One of the speakers showed us examples of properties on the market that he thought were a great deal right now.  This would have been really interesting except what made it a great deal to him was the difference between this year’s LIST PRICE and last year’s LIST PRICE (which the property didn’t sell for). He gave us one example of a home that was listed for $875,000 last year and didn’t sell. Now it’s on the market for $700,000 and he was telling the audience what a steal of a deal it was now.Sorry folks but if it never sold for $875,000 it was never worth that in the first place. So using a fake price to justify it as a bargain is a terrible way to spot a deal.
  3. Your home is not an investment so you shouldn’t treat it like one. Your home is a lifestyle choice and yes, if you hold it for a long time you will likely see some nice price appreciation that is capital gains tax free in Canada, but here’s the thing that always bothers me about this:YOU WILL NEVER ACHIEVE FINANCIAL FREEDOM IF YOUR HOUSE PAYMENTS ARE EATING YOU ALIVE!

    In other words, buying the biggest house you can afford just because the gains are tax free is lousy advice if you want to be rid of your job. Instead you should buy a place you can pay off quickly so you don’t have mortgage payments to worry about. And even better, you should find a way to have your payments paid for by one of your investment properties. To do that, you would be smart to have smaller payments not bigger payments.

    And if you want to challenge me about whether your home is an investment or not … let me ask you … if you lose your job … is your home going to feed you or is it going to starve you??

There were a lot of smart and experienced people standing on stage dishing out what I consider bad advice. Now, for the average Canadian that is happy to carry on going to work every weekday and just wants a comfortable retirement at age 60 or 65, it wasn’t bad advice. But if you don’t want to work for “the man” as Dave calls it, then you should pick and choose the advice you follow carefully. We picked up a couple of really good ideas and tips from the conference … but we also laughed at and discarded more than 80% of what we heard. That type of advice doesn’t fit the life we’ve created for ourselves.

We focus on buying positive cash flow properties in good areas because we want investments that take up as little of our time as possible while giving us the most amount of cash in our pockets today!! Of course, long term, because we’ve purchased in good areas with positive looking futures, we expect them to go up in value. But that isn’t what pays for our ski trips and dinners out today … it’s the positive cash flow that does that for us! And we didn’t do that by purchasing properties that breakeven over time. 🙂

As for the gold nuggets we learned … we’re going to check out one of the tools we found out about, and research a little further into a couple of the ideas we got, and we’ll get back to you on those!! If they pan out I think fellow BC real estate investors will be excited with what we learned…

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How to Find a Great Realtor as a Real Estate Investor

by Dave Peniuk

Not all realtors are created equally. In fact, most realtors just aren’t that good when it comes to working with real estate investors. As real estate investors we need a realtor who will:

  • Take the time to understand our parameters and WHY we have those parameters. Just because a property has a basement suite doesn’t make it an investment property.
  • Respond quickly – when we’re working on a deal we are usually moving quickly and when we need information or want to see a place we would like a call back/email returned within 24 hours. And in most cases I would prefer a realtor respond within a few hours.
  • Be willing to try different things when it comes to making offers. We rarely make a standard offer. We almost always ask for special terms like vendor financing and we ALWAYS ask for the ability to access the property several times before closing to show to tenants.
  • Be comfortable with the foreclosure process, making aggressive offers and sniffing out the real story behind the sale of a property.

So – how do you know what to look for in a good realtor and where can you find one that will work well with a real estate investor?? I created a couple of short videos as part of our 31 Real Estate Investing Video Tips. You can check those videos out right here:

And I’d love to hear from you … what makes a good realtor for you? Do you have an awesome realtor? How did you find him or her??

And if you want more awesome videos like this be sure to sign up for our Real Estate Investing Video Series. Julie and I created 31 short videos full of tips to help you be a more successful real estate investor. The videos are all 3 minutes or less and they are free!! It’s our gift to you!!! 🙂 Enjoy!!

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How to Rent Your Vacant Unit Fast

by Julie Broad

The question we get asked the most – over every other question – is how do I find great tenants for my property?

As a rental property owner, tenant turnover is the biggest expense you’ll face on a regular basis. And, unless you hire a property manager to deal with your property you will find yourself having to fill vacant units. To ensure successful rental of your property with minimal time and effort involved, I’ve created a quick little video to help you fill your vacant unit fast …. and then get back to doing the things in life that you really enjoy!

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If you like this video … you can get 30 other short real estate investing video tips. We’re giving them all away for free!!

Get all 31 real estate investing videos right now.


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A Broad Rant About Guru Real Estate Investing Courses

by Julie Broad

Last week Dave and I attended a real estate investing club meeting in Langley, BC. We went for many reasons… the biggest ones being that we like to meet like minded people, we wanted to meet the man behind the club, and we had a few questions about sandwich leases that we wanted to find answers for. Since we weren’t going to be far away from the meeting, we stopped in.

The feature presentation was from a local area mortgage broker. And he did an excellent job of explaining the important things you need to understand about mortgages as a real estate investor. It was a good refresher for us and an excellent talk for those new investors in the room. When we got to the part where we started discussing credit scores the mortgage broker mentioned a couple he just tried to find financing for that had a bad credit score because they had 16 credit cards.

"Get as many credit cards as you can" suggest many guru real estate courses

He went on to explain why having so many credit cards can be very damaging to your credit and how you should keep it to five max. He also gave some other great tips like to keep your credit card limit high but always keep the amount you owe low because your credit will be negatively impacted with balances that are close to your limit. For some other tips on how to effectively manage your credit, check out this article on how to check your credit.

At this point one of the new real estate investors in the room raised her hand. She said “I just took a real estate investing course that told us to go out and get as many credit cards as possible. They said that having all that credit was a good thing.

I actually felt Dave shudder beside me. That brought back memories of the real estate investing courses WE took early on as investors. And some of the advice that causes so much damage that it can take years to recover from (as it did with us). We knew instantly that it was one of a few get rich quick guru programs that had come through town recently … but the mortgage broker was horrified and said “Who taught you that?

Sure enough … she confirmed that a get rich quick guru course had struck again.

And the worst part is I think that this woman didn’t actually believe the mortgage broker when he explained why this was horrible advice. She tried to argue “well you’re not necessarily going to use the cards you’re just supposed to have them in case you need cash for a quick flip.

If it weren’t for the fact that we were trying to keep a low profile –  I would have stood up and suggested that there are many things that guru taught her that were high risk and very dangerous if she decided to act upon any of them without learning the fundamentals of real estate first.

There are also things that the guru taught just because they stand to make money off your fear!!

Here’s some of the horrendous things we were taught at a get rich quick guru program and the motive behind the lesson:

  • You must have a triple tiered corporation – you are stupid and foolish if you don’t have one. They actually used these words, explaining all the horrible risks and extra taxes we’d pay without one. Um… guess we’re beyond stupid because we bought a two tiered corporation and were not able to buy and finance a single property in that fancy pants $3,000 corporation the guru sold us – and for 3 years we tried!
  • Call your credit card company and demand a lower interest rate and higher balance on your credit card. Conveniently they get us to do this during your lunch break in the course. We did as we were told – and by gosh – we were successful. It’s a good thing too because thanks to that call we had $20,000 of available credit on our card that we could use to finance the big mentorship package they convinced us to buy at the end of the weekend. And, they reassured us, with one deal we’d pay it off so why not?! By the way, it actually took us over a year to pay it off and then 2 more years to fix all the problems we created for ourselves by buying several troublesome high leverage properties.
  • Wholesaling, assignments and sandwich leases are going to make you tons of juicy and gigantic cheques within weeks of learning the techniques. These were hot topics at the course we took because the cash looks so much juicier than a ‘boring old buy and hold’ that takes years to get super rich from. And yes, one good assignment or wholesaling deal CAN give you a nice juicy cheque but guess what, you aren’t going to find that deal a week or two after the course because there are still a lot of things you have to learn to do that first deal. But luckily before you leave the program they help you to realize that there are many more details you need to know before you can do those deals – AND they offer just the solution – specific courses on each subject for $3,000-$4,000 so you can go out and learn more.

Listen – we fell for everyone of those things so don’t feel bad if you did too. These folks are master marketers. If there is one thing the get rich quick gurus do know how to do it’s sell! And we were determined to be successful as real estate investors so we believed what they said and dove head first into everything they had to offer.

It’s a good thing we were determined or we never would have picked ourselves up and gone on to succeed after the early mistakes.

But now when I meet people who actually DO all these risky “techniques” that the latest guru has taught them I want to shake them to their senses and save them from the years of stories and pain we experienced.

People – you have to educate yourself in order to be successful as a real estate investor. And good quality real estate investing courses ARE a fantastic way to meet like minded people, get solid advice, and learn what you need to learn to move forward.

But look for the people who are genuinely trying to help. Look for someone that presents a realistic side to the story. I look for teachers who are upfront about risks, the time and the effort you have to invest. I also look for people who are teaching fundamental principles as well as their particular spin on investing. And most importantly, I want to know whatever else they are selling in advance, so if they are telling me I should invest in Florida I know whether they are saying that because they also happen to sell investment properties in Florida or because they just like the market fundamentals. It’s ok either way but I want to understand their bias. Just like if they say I need a 3 tiered corporation I want to know whether it’s because they are going to upsell me their package for  a 3 tiered corporation or whether it’s because it actually saved them from losing everything in a law suit.

As the next guru rolls into the city nearest you … I beg you to think carefully about what you NEED to learn. And if that course will give you what you need then go. But before you sign up for ANYTHING they are selling think about the bias that might be behind what they are teaching. And question what they are saying. Why in the world would anyone ever suggest you take on 15 different credit cards? Can you imagine what a mess your credit would be if you actually started to use them and something went wrong – and by the way some things will go wrong as you get rolling – so why put yourself in such a dangerous position? Just having so many credit cards does serious damage to your credit that takes time to repair without even using them. And as a real estate investor you should covet, love and care for your credit score.

And yes, I do have a real estate investing course to sell that is focused on the fundamentals, and yes I welcome you to purchase it, but no… that is not why I am ranting against guru real estate investing courses. I am ranting because I care about the moves you make as you become a real estate investor – and there are things you can do to make your life a whole lot easier as you start – and spending tons of money on guru programs isn’t one of them!

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Question of the Month: Upside Down – How Can I Buy More Properties?

Each month we select one of our Rev N You with Real Estate newsletter reader’s questions to feature as our QUESTION OF THE MONTH. We respond to everyone that sends in a question but the published question writer receives a Rev N You with Real Estate T-Shirt! Here’s December’s Question of the Month Winner!

This month’s question is from Colleen Bitterman:

I own 3 houses, 2 are rentals. I have learned a lot from your letters. My biggest challenge is to aquire more property to make this hobby profitable. I paid way too much for these houses & am upside down trying to survive.

Our response:

Dear Colleen,
First of all… 2 rental properties is a fabulous start! You should be proud of yourself for taking action and getting into the real estate market… many people never take the step. Have you considered trying to sell them through a rent to own program? This might be a way to get the cash flow positive while setting a sale price in the future that at least allows you to break even.

As for buying more properties…  first of all … spend a bit of time learning the fundamentals of real estate investing. Real estate investing is not a guaranteed path to wealth as you’ve discovered. You need to know what a good deal looks like!!

As for buying without money and making it profitable here’s some ideas (in blog posts and articles we’ve written):

Hope these help you a bit. If not, you know where to find me!

Best regards,
Julie Broad
Rev N You with Real Estate

http://www.revnyou.com
http://www.lifeasrealestateinvestors.com

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