There are a lot of people who make real estate investing look really easy. They post jolly comments on Facebook on the first of the month about all the rent they are collecting. They always talk about how fun it is to be an investor and how excited they are for the next deal.
It can really make you wonder if you are doing something wrong – especially if your first deal felt like a lot of work and had a lot of challenges. Or, if you’re really stuck trying to figure out how to make your next deal happen!
Being bogged down and frozen in place can happen for a lot of reasons. You may think there are no other good deals. Maybe you’re out of money, or possibly you think you need to change locations or strategies.
There could be a lot things you think are holding you back from doing your next deal.
Ultimately, it’s not actually that complicated though.
The only thing holding you back is YOU.
The single biggest character trait that is evident in successful real estate investors is simply the willingness to take action. In the face of fear, successful investors just take a step. After a big screw up, successful investors get up and keep moving. A successful deal doesn’t stop successful investors either; they keep making things happen. They learn from what works and what doesn’t.
“Success is elusive to those who sit on their ass.”
If you take action, reflect and improve on what you’ve done, and take more action, then you will succeed. Period.
But sometimes there is a good reason that you’re frozen in place. I am a massive supporter of action taking but make sure you’ve taken a good look at what is really holding you back.
The problem can lie with the source of your motivation.
Why do you actually want to do more deals?
We meet a lot of people who have decided they need a certain amount of income every month from real estate – usually the magic number is $10,000 per month net income. Other people want to buy 17 properties so they can earn a pin and recognition from their real estate club.
Those motivators may work but there are some big problems with those kind of incentives to do deals. First, a numerically driven goal is pretty hollow and not very motivating when faced with a choice of spend your evening with your kids or touring run down and smelly foreclosures. Second, numbers aren’t the most important consideration as a real estate investor – despite what most investors will tell you. What’s important is whether each deal you do moves you closer, or further away from the life you want to live.
If you’re clear on what is important and you know what you’re trying to create for you and your family, and why real estate is an important part of your financial future it will be a lot easier to do deals.
Your entire life as an investor gets easier when you take the time to figure out why you are investing in real estate. What do you want a typical day in your life to look like?
Most people want to wait until the perfect moment to take a leap – whether the big move is into real estate or some other venture. The problem is that there is never a perfect time, a perfect market or even a perfect deal. Every option has pros and cons.
At some point you have to open the door to the dark stairway and take a step. You might trip, but chances are you’ll put your foot out and find the first step and then the next. You just have to believe that either way you’re going to be okay. If you know you want to do it, and you’re not doing it, the only thing holding you back is YOU!
Image Credit: © Sukmaraga | Dreamstime.com
Well … it’s finally on newstands! My fifth and final piece in the series I wrote for Canadian Real Estate Wealth Magazine on Becoming a Full Time Real Estate Investor!
I wrapped it up with a bit of a confession: there are days where I think a job at Starbucks is the way to go.
The smell of freshly ground coffee all day long and minimal work stress to take home at the end of the day – it seems very appealing sometimes.
There are days when I am exhausted, stressed and annoyed with everything happening in our business. It seems like everything happens at once – from contractor issues, renovation surprises to tenant troubles. It doesn’t get spread out in nice manageable intervals – everything comes up in the same week.
Do not misunderstand what I’m saying: leaving my job was the best decision ever.
It was the single biggest leap of faith in myself that I have ever taken.
But here’s the piece that I think a lot of people do not quite get:
And that’s what I wanted to talk about today … we meet and coach a lot of investors that want to use real estate as a launching pad into something else in their lives. But usually the way folks try to approach it is not going to work. Dave and I teamed up to share our thoughts on what that first step is that you’re going to need to take to become a full time real estate investor. Check out the videos here:
So that’s our take on it! If you’re working towards becoming a full time investor, or if you’re already there, share your thoughts! What is the first step? Cheers!
Wow! What a year …
Besides making some key additions to our investment portfolio in 2012, we’ve also been improving our internal processes to make our lives easier. The key change for us has been the addition of someone in our office that not only handles our bookkeeping, booking quotes and trades for renovations but also the day to day tenant communications. That really reduces the amount of time we have to spend on tasks that we don’t add much value to and gives us more time to have fun!
We’ve also just completed the first full year of our VIP Mastermind Group and the graduates are ROCKING it. I feel so much pride and joy when I think of how far each of them came in one year. Two of them have decided to start or take over local real estate investing clubs. They are doing this to give back to their local investment areas AND to increase their authority and credibility to raise funds, find deals, and build their businesses. Every one in the group did deals in 2012 – really good deals that move them closer to the life they want to live. One of them tackled their first property flip – pocketing a nice juicy five figure pay day. One of them was working on a new deal every other month. One of our members said that what we taught him also helped him negotiate a $20,000 increase in the money he’s making on a contract job! It was wild, fun and incredibly rewarding for all of us involved with that group.
Hope you’re proud of what you accomplished in 2012. If you’re not, I REALLY hope you’ve taken some time over the holidays to plan out what you’re going to do differently in 2013. You will not get different results unless you take a radically different approach.
And one of the other things we put a lot of time into in 2012 was the creation of some GREAT real estate investing video tips. Here’s YOUR favourites from 2012 as voted on by your views.
#1 – The Problem with Passive Income (this one is an old video of ours but KILLED the others in views so I had to post it)
#2 – Simple Tenant Selection and Screening Strategy
#3 – 5 Things to Look For In a Property to Add a Legal Suite
#4 – Empowering Girls in Uganda
#5 – Raising Money for Your Real Estate Deals – Don’t Do This
And a Few of my Top Pictures as Chosen by Julie
And just for fun, I know how you love pictures so I thought I would share my own personal favourite photos from 2012. As you will see they aren’t necessarily photos that would win awards but they capture key memories in the year for me.
In May we went to Uganda for the opening of the Simple Wealth Academy. It was a trip we’ll never forget and this is just one moment of many from that amazing journey that bring a tear to my eye every time I think about it.
To make sure I found some time to get outdoors and have some fun every week, I blocked Wednesday mornings off to go Mountain Biking with our new dog Maya and my old dog Dave.
3 of our coaching clients were nominated for Investor Awards at the Vancouver Investor Forum. I loved seeing so much growth in our clients in 2012 and the awards were such a great opportunity to celebrate that growth together.
Dave raised the most money for the Nanaimo SPCA in their Paws for a Cause Walk this year and won a trip to Tofino. This was one of the magnificent sunsets we enjoyed while at the Black Rock Resort where we had our free stay.
It’s hard to capture so many amazing moments from the year in just a few pictures but hope you enjoy!
We wish you a fantastic New Years and look forward to connecting in 2013!
One of the biggest questions we receive from investors all over Canada is: DO I NEED A CORPORATION AS A REAL ESTATE INVESTOR?
The basic answer is that we’re not lawyers or accountants – and those are the folks that you really need to ask to get the right answer for you. Everybody has a different situationa and different objectives – and both of those things matter a lot when you’re figuring out whether a corporation is worth the expense and extra hassles.
That said, I can answer this question generally and from my own perspective. I hope this helps you guide your decisions and give you some things to chat about when you seek advice from your accountant and lawyer!
When the two girls walked in the door late for the family function with hair so greasy it looked like they shampooed with Vaseline, I was very curious. I asked the older girl what she had done to her hair.
She tried to make up a weird story – but it was so obviously a lie it only served to make me even more curious. What had she done to make her hair look so oily and WHY?!
It took me s bit of cajoling but eventually the two sisters pulled me into a room and shared the secret. They had lice. Their mom had spent all afternoon removing the little creatures from their hair and cleaning the house to get rid of them.
I asked why they were telling me stories instead of what had really happened. They said their Mom thought everyone would freak out if they knew the truth.
Would the 25 or so family members who were there for dinner have freaked out over lice? Would they have judged the kids and their family because they had the bugs? Maybe a few would have but I think most people realize lice are irritating but they aren’t life threatening. Most people also know that lice don’t play favourites. Having lice doesn’t mean you’re dirty. It doesn’t matter if you’re rich or poor, where you live, where you come from… And while some still feel embarrassment and fear over reactions most people are pretty cool about lice now. Bed bugs on the other hand … Bed bugs make people freak out.
Bed bugs still carry a very strong stigma. It’s also an unwarranted stigma as they don’t prey on dirty people, poor people or any other other kind of type of home or person. If your home is a disaster they will be harder to find and therefore could become a bigger problem before detected but even if you have a pristine home you are still a good candidate for a bed bug.
That means you – as a landlord – have to be proactive about bed bugs. As long as your tenants are living and breathing they could end up with bed bugs.
You can’t expect your tenants to tell you either. The stats of unreported cases are staggering, the costs to exterminate will blow your budget and early detection is about the best thing you can do to minimize the impact on your cash flow and your property’s reputation.
Not sure what a bed bug outbreak can do to your property’s reputation? Poke your web browser on over to bedbugregistry.com to find out. That website is tenant driven and not where you want your property listed. So what can you do and what do you need to know?
We learned all about bed bugs from a funny bug loving fellow named Kurtis Brown of victoriapestcontrol.com at a landlord conference put on by ROMS BC. Here’s a few key points I learned from Kurtis.
The bad news is there isn’t a way to prevent them. There also isn’t an easy solution. These little blood suckers are resilient. Pesticide only works if you hit them directly and it doesnt kill the eggs – only the ones that are out and about. That means that just because your place was sprayed doesn’t mean they are gone. Plus if the original source of the bed bugs is a place the tenant frequents and it hasn’t been treated the bugs will keep coming back!
The additional bad news is they can live for 10 months with no food – so leaving your property vacant for 2 months doesn’t solve the problem either.
The good news is that they don’t have mouths so if you contain them they won’t get out. Physical removal of them does offer a population reduction. That may not sound like that great of news right now but think about it … If they are behind a wall, seal the wall and they are stuck and will eventually die. If you vacuum them up and seal them into a bag to throw away – they can’t get out and will eventually die.
As a landlord, the absolute best thing you can do is inspect for the bugs.
71% of cases go unreported.
That’s bad news because early detection is about the only thing that you can do to make this easier on yourself. If the bugs have a lot of time to party it up in your property, the problem can become very big and very challenging to resolve. One female bug can lay 200-500 eggs in her lifetime. If you have 5 females with a food source for 90 days can leave you with 1,359 eggs.
So finding them before it gets too wild and crazy is pretty major – it can mean the difference between simple lower cost solutions of containment and pesticide to multiple visits from the pest control folks or more expensive thermal heat treatments.
When you do your property inspections you need to be looking around the beds for signs. They can hide in walls behind plugs or in cracks as well. They also hide in the seams of the mattresses or in the little corners on box springs. The signs are blood spots, eggs, little bugs 1mm in size to slightly larger ones.
You also should let tenants know when they move in that you want to know about any issues and what to look for. Cases go unreported because only 50% of people react to the bites so they don’t even know they have them. There’s also a stigma to them and some people are embarrassed to tell you. The bugs really do hide and if you’re not a neat freak the problem has to get bad before most would notice!
Steam, vacuum, traps and sealing them in are good ways to remove the ones you can see. Pesticides if applied right to the bug can work although many bugs have grown resistant. Remember DDT? It took bed bugs only 8 years to become resistant to that beauty of a chemical so you can imagine how easy it is for them to adapt to the pesticides we use today. You need a pro to take care of this for you but even with a pro you could be looking at 2-3 treatments to get rid of them.
The best way to treat them is heat. Heat has a very high success rate of getting rid of them all – including the eggs. They need to be heated up to 51 degrees Celsius to kill the eggs. But before you try this yourself you should know that if you get close to but not at their burning point you might as well be throwing fertilizer on them because hot but not hot enough causes them to mate at high speeds. So again, thermal heat treatments should be left to the professionals.
Kurtis says that a thermal heat treatment for a 2,100 square foot house will run you anywhere from $1800-$2600 depending on layout and other factors around sealing it up. Older homes with less energy efficiency will cost more. It will also take about 6-8 hours so your tenants need to be cooperative with this process. Pesticide treatments are much less however you are almost guaranteed to need multiple treatments so usually the math will work out that heat is best.
My hope is that you don’t have to deal with this. However, there’s a very high likelihood that you will at some point. In the room of 100 property managers and rental owners over half of the room admitted that they’ve dealt with bed bugs in their rentals so my thinking is that there is a good chance you will have to. We haven’t had any yet but my plan is to start inspecting for them and maybe set aside a little extra cash in case we find some.
Remember bed bugs don’t care if you have a low end apartment building or a luxury rental – if you have tenants that are alive in the property they can pick them up at movie theatres, hotels, sleepovers with friends, or just about anywhere and provide a lovely home back in your rental. It’s your job to spot them and remove them before it gets too expensive or damages your property’s reputation.
Good luck! Or should I say, sleep tight and don’t let the bed bugs bite!