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Goal Setting

How to Buy 20 Real Estate Investment Properties

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holding money with house in the distance

It was 8am on Boxing Day. Even after all the Christmas consumption, I’d managed to get myself up from my bed and out the door, and was now staring at Barbara. I was getting scared. She looked like she was really going to hurt me. “Maybe I should walk away from this one,” I thought as I looked around the room at the folks who were also going to take on Barbara. But, nobody was heading for the door – they were just getting ready for the battle.

If you’re into Crossfit, you’ve probably already figured out I am talking about a WOD (workout of the day) named Barbara. She’s 5 rounds of 20 pullups, 30 push ups, 40 weighted sit ups and 50 air squats. She is nasty.

How do you get through a workout like that?

You could look at it and think: “100 pullups, 150 push ups, 200 weighted sit ups and 250 air squats – I’ll never finish that!” You could defeat yourself before you even flex a muscle.

Or, you could look at the first 20 pull ups and think “Ok – let’s do 4 sets of 5”. Then, when that is done, you move on to push ups and do 3 sets of 10, and so on. With each section accomplished, you adjust your plans for the next round. Perhaps you do a few less or a few more reps before you rest. Maybe, you realize it’s just way more than you can do right now, so you find a way to scale your plans down (in my case as dropping to my knees for the pushups and adding some body weight support in the form of a band for the pullups was an immediate adjustment I made in the hopes of finishing).

No matter what, the best way to approach an enormous challenge is to break that big bad beast up into a series of smaller sets that are manageable so you have a shot at finishing – which is what I did.

It seems logical when you’re facing a workout, but why is it not what most people do when they are chasing their big goals in life? The majority of people we work with as real estate investment coaches arrive on our virtual doorstep with a daunting list of things they want to do. For example, they will say they want to own 20 properties. That alone is a big task – much like a Barbara WOD. But, that is rarely the ONLY thing people want to do. This same person may also want to start a rent to own business or a real estate club, raise a few million dollars and work on a development project. This is, of course, while they have a full time job and a family as well.

It’s not that these things aren’t possible over a period of time. It’s that all at once, it’s too much to take on. It’s overwhelming. It also creates a lot of stress.

Let’s say you do want to buy 20 properties – what do you do? Some will tell you that you need a plan to buy all 20 before you start. You might try to plan it out by thinking “ok that’s roughly $6,000,000 in real estate so I will need about $1,500,000 for down payments and renovations”. That is like looking at Barbara and telling yourself that you have 700 reps of exercise ahead of you and then trying to get motivated. GULP!

The Best Approach to Buy 20 Investment Properties

The best approach is to break it up and tackle one thing at a time, just like I had to do with Barbara. I didn’t look at it as 100 pullups. I looked at it one round at a time. In my case it was 4 sets of 5 pull ups. For the properties, take 20 properties and break it down. Maybe it’s 2 per year over 10 years. Maybe it’s 4 per year for 5 years.

Break it down.

That’s your overall plan, and it’s good to have in the back of your mind, but now I suggest you forget about it and just focus on getting one deal done. One deal is a lot to handle in itself. Do you know where you want to buy? Do you know what kind of property (commercial, duplex, four plex, single family home)? Do you know who you want to rent to & how you’ll attract them to the property? What resources do you have (financial, time, etc)? Who is on your team?

Get that first deal done. Assess what you liked and what you didn’t like. What needs to change to move forward with more ease? Can you handle the pace of 4 per year, or is it too much given the things that are important to you right now (family, health, career etc).

With that information, details that you can ONLY gather after you’ve made a huge step forward, you can make adjustments and then move forward.

Keep looking at that next most important thing you need to do to move forward. Know that you’re working towards 20 properties, but also realizing that you may not get there. You might not want to once you get to 10. That might be enough. You also might exceed it. You don’t know right now. What you do know is the next thing you need to do, so go and do it (and if you don’t know that next thing then get some support and help!).

I didn’t finish Barbara. The buzzer went off indicating the max time had been reached. I was on my fifth round but was at least another 4 or 5 minutes away from finishing. I’m ok with that. I have learned that it’s good to have an idea of where you’re going, but always look at the bigger picture of WHY you’re doing what you’re doing. For us, as real estate investors, we weren’t looking to create an empire. We wanted to create freedom and options. Once we reached that, we slowed our pace of acquisition down dramatically.

We hadn’t reached a magical number – we had reached our why.

In my workouts, I am doing it for health and to get stronger. I didn’t finish Barbara, but I can do a lot more pushups and pullups today than I ever have been able to in my life. Next time I meet Barbara I hope to conquer the challenge, but no matter what I will break it down and just keep focused on the next thing to do.

What Britney Spears Knows About Success

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Britney Spears When I was in Italy Britney Spears came out with a new song that makes a pretty hard hitting point:

You want a hot body? You want a Bugatti?
You want a Maserati? You better work b*tch

Like her, or not, the fact that she’s able to keep making hits and always stand up after falling down, is something to appreciate.

It’s way too easy to look at someone who has achieved a level of success and discount how they got to where they are. It’s much easier to criticize when you’re sitting on your couch just watching others do things. Not that it applies to Britney but the phrase “overnight success” is comical because almost every time you research the background of that “overnight” success you find out they actually were working for 10+ years becoming great at what they do before they were discovered.

Guess what? If there is something you want in your life – you’re going to have to go and get it. You’re going to get bruised along the way. You’re going to trip and maybe even fall, you might get lost, but you will only get where you want to go, if you keep going. I relearned this and some other important lessons when I was trekking in Italy with my Dad in September (Which I also talked about in When Your Real Estate Business is Stormy.

Here’s 3 Life Lessons Learned Trekking in Tuscany

1. Stop to appreciate how far you’ve come

P1080147Every morning we’d set out with a map, a backpack with water, snacks and our camera, and a destination. The daily treks from village to village ranged in distance from 12 – 18km most days (assuming you did not get lost or do any extra exploring, of course). With that much walking in the rolling hills of  Tuscany it would be easy to just stay focused on where you’re going, but that can also be overwhelming. Pausing to look back and see just how many steps you’ve already taken can give you a big boost. (This is a photo looking back on San Gimignano as I walked my way to Monteriggioni. I had so far to walk at this time that I couldn’t even see the castle walls of Monteriggioni yet. Dad didn’t walk with me that day as his foot needed a rest – so I was trekking solo that day.)

I see this a lot with our coaching clients. They have this big goal – maybe it’s to buy 3 rental properties in the year. Six months into working with us, they haven’t bought a property yet and they are frustrated. They are beating themselves up because they don’t think they’ve made progress. When we stop and look back at where they have come from though we always find enormous progress like: picking a market and a neighbourhood to focus on, becoming an area specialist, setting up a great team, getting financing in order and possibly even raising money. Bottom line is they are now ready to do 3 deals and now just have to find them. The reality is that they had a 20km journey to travel when they set out and they’ve actually done 12km of the trip. Just because they haven’t reached their final destination they think they haven’t done anything. That’s not the case.

It’s important to have your eye on your goal AND to always stop and appreciate the steps you have taken.

2. Sometimes You Get Lost – It’s Part of the Wonderful Adventure of it All

Monteriggioni in the BackgroundThe instructions and the maps weren’t always so helpful. In fact, at times, I think they intentionally made it confusing to challenge you, and I actually liked it that way. Other than when I encountered a snake in a forest – which I really did NOT like – I actually had fun getting lost. At one point, after spending 40 minutes walking on the wrong trail only to then set out, again on another wrong trail for 25 minutes, I sat down, ate a croissant and just stared at the olive groves and vineyards all around me.

I was a little nervous as this was one of my solo days and I wasn’t sure what I was going to do if I didn’t figure it out. I was also feeling so grateful for the quiet time. There were no cars, no people, no emails, and no interruptions. It was me, one of the most amazing croissants I’d ever eaten, the sunshine and Tuscany! (The picture to the left isn’t that moment but it was later that day when I was seated on a rock with Monteriggioni in the distance … finally!)

If every step had been easy I wouldn’t have appreciated the journey nearly as much. If I hadn’t have gotten lost, I wouldn’t have taken a breather. I would have kept trekking. I remember that moment sitting on the hillside looking at my map wondering where the heck I was supposed to go more vividly than most of the 5 days of trekking. And I remember it fondly as part of the adventure that I loved so much.

And after that rest I looked at the map, pulled out my compass and knew exactly what I had done wrong. It all became clear. I just needed a little rest. It’s like that in your business and life too. When you feel lost, the best thing you can do is take a rest and just appreciate that this moment is part of the adventure and really is what makes the journey exciting and interesting. After taking the rest, things become clear. If you try to push through – you’ll just feel more tired, probably stay lost and never really get to where you want to go.

3. Everything is Better When You’ve Worked for It!

Julie and RickDo you notice how water tastes better after a workout? It’s the same water you always drink, but you’ve worked hard and now it just seems that much more thirst quenching. Food – any food – tastes better when you’ve worked hard all day.  Getting my book to #1 on Amazon felt so much sweeter because I’d been told my book wouldn’t sell and that I didn’t have a strong enough marketing platform for the publisher. I had to work crazy hard to get the book out into the world, but I’m not sure I would have appreciated the book’s success without the struggles. The victories feel so much more significant when you have to work crazy hard to earn it.

I think you should WANT to work hard in your life … not just for the material things Britney Spears is singing about … but because life is just better when you’ve earned it.

It’s a bit like my suggestion that you need a bigger purpose in your real estate investing business besides making money. Money is nice but it’s not the actual reward to building your wealth and generating an income from real estate. Financial options in your future, security that you have something to live on in your retirement if there are no pensions, comfort that you can help your kids with their university costs, or the knowledge that a stronger financial position allows you to help more people and give back in greater ways – these are all really powerful reasons to push forward and will be the things that taste oh so sweet because you worked hard to create it in your life.

Happy Investing …

 

If You Liked This Article, You May Also Like:

>> In Pursuit of Passive Income?

>> Are You Chasing Someone Else’s Real Estate Investing Goals?

>> Real Estate Investing Costs You’ve Never Considered

>> Choosing Your Investment Market: Two Factors Nobody Talks About

>> 4 Mistakes to Avoid as a Real Estate Investor

 

 

 

 

 

The Secret to Time Management

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Total Recall BookArnold Schwarzenegger was on George Stromboulopolous last week talking about his new book, Total Recall: My Unbelievably True Life Story. The “Governator’s” life story is an impressive example of setting a goal, ignoring all the people who say you can’t do it, and working your butt off to make it happen. He used to work out four or five hours a day at home when he was dreaming of becoming Mr. Olympia. Do you dedicate four or five hours a day to making your dream a reality?

The one piece of the interview that stands out in my mind was the fact that Arnold said that everyone seems to think they don’t have enough time to do what they need to do. He said “I hear it all the time, and it’s a myth. There’s always enough time.”

He went on to share the story of meeting Pope John Paul II and how he was shocked to confirm that the Pope worked out every single day – waking up before the crack of dawn to do an extensive workout regime. He said each of the Presidents that he’s gotten to know works out every day and always makes the time. They are running the United States of America and they still find time to work out.

We all have the EXACT same amount of time in a day but it’s how we choose to use it that makes the difference.

So what is the secret? What is the secret to time management?

Time Management SecretPersonally, I don’t think you can manage time. I think the idea that you can manage time sells a lot of books (kind of like the idea that real estate will make you passive income sells a lot of training courses!).

My belief is that you can manage where you place your focus, and you can manage your energy. You can’t manage time. When you do an effective job of managing your focus and managing your energy, you will be able to fit a lot more in a day and still have some energy left to enjoy time with your family, friends and yourself!

A lot of our coaching clients who get to know me well ask “How do you get it all done?” I accomplish a lot in a day. I do outsource some tasks, I have a fabulous virtual assistant who handles a lot of day to day things for me, we have a great office manager for our real estate business who takes a lot off our plate, but in general, I get a lot done most days.

Could I do more? Absolutely? I am not perfect. Facebook distracts me sometimes. Every once in awhile I find the Yahoo! headline about some celebrity too catchy to ignore and sometimes I get angry and annoyed over silly things and that takes precious energy away from more important matters. But generally, I have found a lot of things that work to accomplish some pretty major things in a day and a week.

Here’s my 5 Best Tips to Get Important Things Done in a Day:

1. Turn off your phone and your email for at least 60 minutes a day. The more it’s off, the more you’ll get done.
Obvious? Maybe – but practically nobody does this. While I am writing this my office doors are closed, my phone is silenced and my email is off. If I don’t do that, an article will take all day to write instead of 60-90 minutes. Tony Schwartz, in his brilliant book called Be Excellent at Anything, busts the multi-tasking myth wide open. He also warns against the dangers of switching back and forth from task to task. “When we focus on more than one thing, ‘simultaneous data streams flatten content, making prioritization all the harder.’ Trying to do multiple activities at the same time effectively desensitizes us to differences and distinctions between them.” If you tend to feel frazzled and pulled in too many directions, the biggest culprit is probably email or your phone. Regardless, it is the fact that you’re not focusing on any one task for very long that is causing you to feel that way. Pick a task, turn off your phone and email, get it done. Then check your phone and your email deal with pressing issues. Then repeat.

2. Say ‘No’ More.
Are you wishing for a clone of yourself? If you are, it means you’re taking on too much stuff and you need to start using the word NO and find ways to unload your to-do list.

It’s not easy. I have a driving desire to please people. Making someone unhappy makes me feel like total crap. So, yes, I sometimes feel guilty when I say no to invitations or requests from friends or family when the only reason I am saying no is that I need to manage my energy or focus on something else at that time. I also have a hard time not responding to every Twitter, Facebook, LinkedIn and email question that comes my way – and some days there are dozens. I want to help everyone, but if I did I would end up accomplishing nothing significant, ever. If I said yes to everyone who offered to buy me coffee or lunch to “pick my brain” I would be fat and brainless … I HAVE to say no to many things. It’s not realistic.

It’s time to say NO and start outsourcing some of your tasks, which leads me to #3.

#3 Ditch tasks, Delegate Tasks or Just Get ‘Em Done!
If you are feeling like there isn’t enough time, write down a list of EVERYTHING you have to do today. What is on that list that you can ditch (for example, do you think you need to read a Time Management book to get more time? Ditch that task … there you’ve just freed up 4 or 5 hours!). I promise there are things on your list that you don’t need to do. You think you should do them but you don’t really have to. There are also things on your list that someone else in your family can do for you or that you can hire out for a lot less money than you think. Once you’ve gotten rid of those things there are probably a couple of things that YOU and only YOU can do. What do you do then? See tip #1 – turn everything else off and just get it done. It almost always takes less time than you think. My strategy is ALWAYS do the most important thing in my day FIRST. Then I move onto other things on my list.

#4 Take a Nap
When the moment hits where I am dragging … I’m staring at my computer clicking mindlessly from email to Facebook to websites and back to email I try to catch myself and figure out what’s wrong. Usually I feel dead tired … having dedicated myself to a string of tasks that too a lot of mental focus or dealing with something that was emotionally draining, and the only way to recharge and get the most out of the rest of the day is a nap. Not a long nap – just a 15 minute rest will do the trick. After that, I have a big glass of water and a small snack and I get back to it. I can usually get another 3 or 4 hours of productive time out of myself and have energy for family time afterwards when I do that. When I try to power through by drinking tea or coffee, I end up grumpy and annoyed.

Sneak out to your car if you need to … or if all else fails, just take a walk outside. It’s not quite as good as a nap for me, but it will revive you, clear your mind and help you refocus.

#5 Get Clear on What You Want to Do & Then Set Difficult Goals


First, you must get clear. It’s unreasonable to expect you’re going to manage your day to day responsibilities and learn a new language, advance your career and buy 10 properties this year. Pick the most important thing and focus on that. Which one is most important to you and the life you want to create for yourself.

Tackle one big project at a time. It’s much more effective – especially when our daily lives are so demanding. But make sure that the thing you decide to focus on is a goal that makes you nervous and excited at the same time. If it isn’t doing that for you – it’s not the right goal. You’ll get distracted easily and it will just pile on with all the other things you think you should do but never find time for.

When I decided to write my book, More Than Cashflow, I didn’t just decide to write and publish a book (which, in itself is a ton of work), I wanted to sell the heck out of it. Specifically the goal is to create a Canadian Best Seller. This is not a small task for any book, but it’s a HUGE task for a self-published book on a niche subject like real estate. I have a long way to go, and the road is totally uphill as I battle to get it on book store shelves and continue to spread the word about it (Thanks to my fabulous Rev N You readers and clients that job is SO MUCH EASIER – so thank YOU for your reviews, shares and continued promotion!!). I can’t tell you if I will get to Canadian Best Seller status … we’re off to a great start. I can tell you that setting an ambitious goal is HIGHLY motivating.

You can radically improve your financial position, run a marathon, get a promotion or learn a new language – except for rare cases – we all have the talent and the capacity for such things. Mark Murphy, author of Hard Goals, says “when people under-perform their potential, it’s usually more an issue of motivation than of innate talent.” He also says “attitude does matter more than aptitude.” But here’s something you might not hear very often, set difficult goals. They work better. A hard goal tells yourself and others that your work is important. Mark ends his book by saying “You should feel outside your comfort zone, not so far that you feel like you’re on a bed of nails, but not too comfortable either. You’ll know when you find your sweet spot, because you’ve been there before, and it’s that place where you achieve your absolute best.”

I haven’t even got into some of the brilliant studies by Tony Schwartz on managing your energy in the day …  rituals, focus, breaks and a focus on being healthy are all critical components as well … but we’ll save those for another day.

I’m with Arnold, we all have enough time, we just need to spend it more wisely and get revved up to achieve great things in our lives. Status Quo is comfortable but it’s probably not what you want or you wouldn’t be reading Rev N You! Let’s ditch the idea that we need to learn time management and focus on what you really want in your life, and manage your energy so you’re getting that done!

Woman with Clock Image Credit: © Ryan Jorgensen | Dreamstime.com

 

 

 

 

 

In Pursuit of Passive Income?

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Let me ask you:

Passive Income What makes you want to become a real estate investor?

Many investors say the answer is financial freedom. Others may say passive income. But these answers aren’t good enough to keep you going through the tough stuff that you will encounter.

If you got into real estate to make $5,000 a month in passive income or to buy 50 properties, you might get there but you’re probably not going to be happy (Read: The Real Estate Investing Costs You’ve Never Considered).

Real estate investing success is not about getting to some number. If that’s what you’re chasing, it’s going to be very hard work; and when you hit the really big obstacles, you’ll give up or make yourself miserable.

It’s not enough to pursue financial freedom or passive income. There needs to be a much bigger reason. There must be a clear vision. And that vision has to go beyond money.

When your tenant pulls a knife on her roommate, and then stops paying rent when the roommate moves out, and it takes you three months to evict the knife yielding tenant; money is not enough to keep going. When you discover that the roof you spent $10,000 repairing the year before is still leaking and requires another $7,000 to fix; and at the same time you discover a tree growing from the inside of the house out the window; giving up on real estate will be top of mind – right behind how the heck am I going to pay for all of this? (Yes – all those things happened to us.)

So you need to ask yourself: Why do I want to invest in real estate?

If the answer is for financial freedom or passive income, then the next question to ask yourself is:

Why do you want financial freedom / passive income?

Because I want to be able to leave my job and live my life the way I want.

Why?

Because I want to spend more time with my family and because I believe I have a bigger purpose in life than working for someone else all my life.

Why?

If you keep going down this path you’ll eventually end up in a place that lets you know that you are pursuing all of these things for the simple reason that you think they will make you feel happy and fulfilled.

We used to believe we were passionate about real estate.

Passionate About Real EstateWe like doing deals. Dave loves running the numbers. I like looking at properties and finding the deals. I like thinking strategically about the risks and how we can make money.

That’s not passion though. I think that’s excitement. I’m excited about what real estate offers. It offers financial comfort and security; and that comfort and security allows us to dedicate more time to helping other investors avoid mistakes and create a life they love, thanks to rental property.

Making money is exciting. I like it a lot. I like that real estate is a fantastic way to make money over time.

I’m not passionate about real estate though, and here’s how I know:

If I was told I could never do another real estate deal in my life, I wouldn’t be devastated. In some ways, if I’m honest with myself, I would feel a bit of relief. It’s so much work to continuously do deals, and being forced to take a break from it would be nice.

On the other hand, if you told me I wasn’t allowed to teach others anything for the rest of my life, I would be lost. I would have no purpose in my life.

You have to dig deep. If you want to be a real estate investor for money, it’s not going to be enough to get you through the low times.

A good friend of mine started down the road of becoming a real estate investor. He had the big goal of buying 50 properties. There’s nothing wrong with that. The problem was he was really seeking fulfillment in his life.

Today you would never know he’s the same guy that was chasing all those properties. He’s writing books, loving time with his family, and they’re choosing where they live and what they spend time on – and he didn’t get there through real estate. Real estate is not the only possible solution – it just might be the only one you’ve considered so far.

When you realize that, and when you understand that it’s not that quick, and it’s definitely not that easy, you may find that real estate is not at all the place to start.

Or you may find, as we have, that real estate is an effective vehicle to help you take a big step towards the big WHY’s in your life.

Don’t get me wrong … we all need money. But once your basic needs are taken care of, you need a lot more than money to feel happy. You need to figure out the WHY in your life.

Next time we’ll talk about who is setting your real estate investing goals…  After years of asking our clients what their goals are … I’ve come to some startling conclusions. Most people aren’t setting their own investing goals!

Image #1 Credit - Dave Peniuk (it's my dog Maya on the beach in Tofino living the life but not catching the ball!)
Image #2 Credit - © Andrey Kiselev | Dreamstime.com

 

More Than Cashflow BookLike this article? You’ll LOVE More Than Cashflow: The Real Risks & Rewards of Profitable Real Estate Investing. This is just a tiny excerpt from the Amazon #1 Best Selling Book.

“I have read many different Real Estate related books over the years from many different authors across Canada and the US, but this book was one of the best that I have read in a very long time. If there is one real estate book that you should read this year, it is this one!” ~ From qmanrei on Amazon.ca 

 

 

How to Think Like a Successful Real Estate Investor

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Success Focused You are what you think you areGo ahead and eat that new mini Blizzard at Dairy Queen or indulge in an extra piece of fish when you go out for fish and chips because you aren’t REALLY what you eat. What you eat will determine whether you have energy or not. And it will determine whether your pants fit or not. But you aren’t actually going to turn into a cookie dough Blizzard or a batter coated piece of halibut.

But if you THINK you are going to be a successful real estate investor and you focus your thoughts on that then you probably will become a successful real estate investor. If you THINK you are going to be the kind of boss that gives yourself Tuesday afternoons off to go to the Spa then you have a good chance of becoming that boss to yourself.

Now I am not about to say that all you have to do is think it. I hope you’ve been around the Rev N You scene to know that I believe the missing piece to your success is almost always ACTION. Think whatever the heck you want – if you just sit on the couch watching CSI reruns you aren’t going to be anything different than what you were when you sat down.

The only thing holding you back from being 20 times more successful than we’ve been is YOU. You are standing in your own way right now. All you have to do is get out of your way.

The life you are living today is thanks to the thoughts you have had so far in your life. If it’s not quite the life you want then it all begins with a change in thought and a change in focus.

Now, if you’re sitting there thinking, that’s great Julie how can I think I am a successful real estate investor when I don’t have any money to invest or how can I can think about being a successful real estate investor when I have no idea where to start? Or, I already am a real estate investor but the bank has stopped loaning me money so I can’t get any more properties.

If one of those thoughts are similar to the ones you’re having then here’s what I suggest:

  • Change your focus: Instead of thinking that you don’t have money or the banks won’t loan you any more money figure out how you can get money to do your deals. Stop thinking about all the things you can’t do and focus your attention on the things you CAN do. For example, you CAN find joint venture partners with down payment money and you CAN find private lenders to loan you the money you need for financing and you CAN find creative ways to buy property that require less money down or have seller financing or no financing requirements at all. We’re going to be rolling out a program in August to help you find, present and sign up joint venture partners which is our primary strategy for finding money for down payments and getting financing. Or, if you just want to learn how to get private money we highly recommend the program we used to become private money magnets- the Private Money Blueprint.
  • Take Action: You kind of do have to ‘fake it until you make it’ but it’s not so much that you have to be phony about it. Rather I’m suggesting you act like a successful real estate investor would act in a given situation. Successful real estate investors are typically great problem solvers who hustle until a deal is done. When confronted with an obstacle they see an opportunity. So until you feel confident and knowledgeable enough to be that way make yourself pretend to be that way. A little thing like lack of funds wouldn’t hold a successful real estate investor back so it won’t hold you back either – when you’ve made the bold and unwavering commitment to become one.

Comfort ZoneListen, this is uncomfortable. It sounds easy but it’s not. Your comfort zone is a powerful place and it tries to pull you back every chance it gets. You have to be conscious of the pull of the comfort zone and always fight it. Because the comfort zone is clever with the excuses that sound like real reasons to not do what needs to be done to become the person you want to be.

Your comfort zone fills you with fear and makes it seem like what has to be done is way harder than continuing to live the life that doesn’t satisfy you. But when you feel that pull simply go back, change your focus and take action. Bit by bit your old comfort zone will fade into a new comfort zone – one which is hopefully closer to the one in which your ideal life exists.

You are what you think you are – so start feeding your brain great thoughts!

 

Published July 28th, 2010

Image 2 Credit:Christopher Bernard Istock Photo

Scared of Real Estate Investing

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Real Estate Investing for the chickenFear is probably the biggest obstacle to getting started. We’ve heard that from so many friends, family members, readers and colleagues. We know people who’ve built extremely successful businesses that are afraid to put a penny into real estate outside of their own home. We know real estate lawyers who are scared to invest in real estate, yet they know the business better than most investors. We know people who’ve built large six figure stock portfolios that think real estate is too risky, yet think nothing of speculating on a new mining stock. What we’re trying to say is that fear is normal. But the easiest way to conquer fear is to educate yourself, make a plan and then take action!

If you are surrounded by people who are afraid for you then it might be better to not to speak with them about your goals. Find like-minded people who are doing what you want to do. Talk to them about your goals instead. Find a way to put aside whatever is holding you back…do not worry about what anyone will say when you tell them you are going to buy your first property.  You can do this – real estate investing is simple! It takes work – do not confuse simple with easy – but it’s something anyone can do!  And we’re going to help you!!

Be confident that all you have to do is take it step by step, make a plan, learn the basics and take action! And before you know it you will be putting your first rent  cheque in the bank and looking for your next property to purchase.

THE SIMPLE REV N YOU WITH REAL ESTATE
INVESTING PROCESS:

1. Set your goals: Where are you today? Where do you want to be in the future? Once you know that you can make a plan to move from today to tomorrow. Everyone has different goals and levels of risk tolerance. That’s o.k. As long as part of your goals is to make money and built your wealth with real estate (however large or small), and you’re new to real estate investing, then you are in the right place!

2.Research the markets: Look for places where you can find properties that meet your investment goals. This takes a bit of leg work but it’s critical to making good buying decisions. Sometimes you will be lucky enough to have great investments in your backyard, but if you are like us and live in one of the most expensive places in North America, you may find yourself looking outside of your own City.

3.Find a property: The trick with finding a property is to know what you’re looking for and what you are comparing it against. Then, you have to evaluate the property. This is where you have to get a calculator and a spreadsheet working…but simply stated you are looking for a property that will not cost you money each month. So when you add up all the expenses including the mortgage, taxes, insurance, maintenance and property management and you subtract that amount from the total rent you get each month, if that number is positive you have a green light to keep moving through the process. If it’s negative, you’ll want to look at it closely to see if you can make it positive. If not, look for a different property.

4.Buy it:You need financing, an inspection, a lawyer, and some final research to ensure this property really does meet your objectives. And, of course, knowing a few negotiation tactics won’t hurt either! But, basically you want to get control of the property, finalize your research and make sure the property is in the condition you expect! Then, buy it!

5.Make Money:If you’ve hired a property manager, there are things you’ll need to do to ensure that the property manager is working well for you. If you’ve decided to manage the property yourself, there is a lot to know about advertising your units, tenant selection and management, and general repairs. At this stage it’s all about maximizing your revenue while minimizing your expenses, the amount of time you spend and your stress!

Sounds simple enough doesn’t it? Remember the Seven Habits of Highly Effective Real Estate Investors that Julie wrote about a few months ago?

Knowing your goals is the first habit of an effective real estate investor, and it’s the first step in our process.

What better time to look at your goals then as a New Year rolls around!! So, please take a few moments before the New Year begins and plan your goals. Need some help… check out our older articles on goal setting for real estate…

And remember:

“If what you are doing is not moving you toward your goals, then it’s moving you away from your goals.”

– Brian Tracy


Published December 29th, 2008

7 Habits of Highly Effective Real Estate Investors

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Recently my friend Mike wrote me and said “I reread the 7 Habits of Highly Effective People over the weekend. It won’t be the last time I read that book this year”. It’s pretty rare he comments on a book so I pulled it out and gave it another viewing. My 1989 copy is so old the pages are yellowing and the text is faded. I guess you could say it was like buried treasure in my book shelf.

As I flipped through it and soaked in some of the long forgotten golden nuggets the book contains, I pondered what the seven habits of a highly effective real estate investor would be. It occurs to me that none of the habits of a real estate investor are particularly extraordinary. In other words – anyone could be a highly effective real estate investor if they wanted to be. Of course, this is only my opinion, and without scientific study. But check out my thoughts and feel free to send me yours.

Habit One: Know Your Goals
“If you do not change direction, you may end up where you are heading.” – Lao Tzu

Most of the real estate investors I know set out with a goal. One of my MBA alumni started off simply by selling his home to buy two lots side by side and built an 8 unit townhouse complex. He has turned that project into a company that sells and builds hundreds of homes in Toronto every year. Some goals are simple, but lead to big things. Other goals are big and have to be broken down into simpler shorter term goals.

Your goal does not have to be big (although I like to start with my five year goal and make smaller goals for each year to help me get to my five year goal). But I think that if you do not have any idea of what you want to achieve then your first step is going to be difficult to determine. And, you can’t just say I want to be rich. A goal by my definition has to be as specific as possible, measurable and with a time frame.

Habit Two: Make Your Money when you Buy
“Price is what you pay. Value is what you get.” – Warren Buffett

It’s very risky to pay over market value for a property in the hopes that the rent will go up, the area will improve, and/or the property’s value will increase. This is an entire article unto itself, but essentially you want to buy a desirable property below market value, in an area with a lot of potential for future growth. Really, it’s not unlike beginning with the end in mind. Envision yourself trying to sell that property and what, if any, problems you may encounter when you try to sell (e.g., is it such a unique property you’ll have a limited buyer pool or is it in a “challenged” location that may never improve, which will severely impact your ability to sell). If there is something that concerns you when you’re buying it, then unless you can easily fix that problem, it’s something that will likely concern the next purchaser.

Habit Three: Hire Help
Unless you want to buy yourself a job when you buy a property, hire a property manager. Unless you are an accountant, hire one to help you with taxes and bookkeeping for your properties. And, in most cases, we also recommend you hire a real estate agent. Just take some time to find one that will work with you to achieve your goals.

I always tell Dave that we should only be doing the things that are the highest and best use of our time or the things we really enjoy. We should hire someone else to do everything else. Of course, when I say this I am also advocating we hire someone to paint or clean our own house. These are both things that I loathe doing and feel someone else can do better and for less cost than my time is worth. Dave takes a different stance on things – why pay someone else to do what we can do for free. But, as we find ourselves with less and less time he is starting to realize he can’t do everything and there are professionals out there that can do the job better and faster than he can. So, even “do-it-myself” Dave is finally paying the experts to do what they do best so he can focus on what he does best!

Habit Four: Use Just the Right Amount of Leverage
“A bank is a place that will lend you money if you can prove that you don’t need it.” – Bob Hope

Every single money-making real estate investor that I have met has made money in real estate, in a big part, due to the ability to use leverage. Even the richest people will eventually run out of cash if they keep buying property. Leverage allows you to use a small portion of your own money to buy a property. The less money you put in the higher your potential return on investment. In really simple terms, if you put in $10,000 on a $100,000 property and earn $5,000 in a year your return on investment is 50%. If you had paid cash for that $100,000 property your return would only be 5%. Too much leverage equates to too much risk though, so find a balance. If you buy a $100,000 property and only put in $2,000 of your own money and the market value of that property drops to $90,000 you now owe more on that property than it’s worth.

Habit Five: Find Good Partners
“Keep away from people who try to belittle your ambitions. Small people always do that, but the really great make you feel that you, too, can become great.” – Mark Twain

I love the success stories where someone with nothing but big dreams and a lot of initiative ties up one or more properties with contracts. They had little to no money, so while they had the properties under contract, they went out and found people who did. I am not going to name names here, but maybe one day I will introduce our readers to at least one of the three guys I personally know of with a story like this. But the bottom line is that it’s tough to make your millions in real estate if you aren’t willing to partner with others. Your partner might be a family member, a friend, a colleague, a company or someone you haven’t met yet. Dave has partnered with friends, family, and myself to help us build a nice real estate portfolio in only a few short years.

Habit Six: Be persistent
“Genius is one percent inspiration and ninety-nine percent perspiration.” -Thomas Edison

The other characteristic of the three guys I’ve mentioned above, and every other investor I have ever met is being persistent. You will hear “no” a lot. Get ready to face the objections and find creative solutions. In our experience we’ve been turned down by:

  • Potential partners not wanting to get involved in a deal we’ve invited them into,
  • The banks – on just about every deal we had trouble getting financing and had to deal with multiple lending issues,
  • Family – sometimes we try the bank of parents and we almost always get rejected but we still try because the interest rates are so favourable,
  • Insurance companies – so few companies want to deal with out of province landlords and it seems like we’ve been turned down by nearly every company in Ontario where some of our properties are located (we’re in B.C.),
  • Property Managers – sometimes the company you want to work for you doesn’t want to manage the property you own.

And even though we have been turned down by all of the above at one time or another, we keep pushing ahead to reach our goals. Don’t let the “naysayers” stop you.

Habit Seven: Research – Always be learning
“I am always ready to learn although I do not always like being taught.” -Winston Churchill

The best investors are the ones that ask a lot of questions, keep their eyes open for new opportunities and do a lot of research. Many get right into the details of a city. They go to the municipal offices and pull the official plan. They get zoning details and applications. They talk to the city councilors about plans, they attend city council meetings and know everything that is happening in an area. Besides the above, many of the really successful investors will always be learning about:

  • Local transportation plans,
  • New economic forces that will impact their investment area,
  • Changes to political leaders that will impact the real estate values (if you don’t believe this is a critical one ask just about any investor in Toronto that owned land around the legislated Greenbelt),
  • House values,
  • Land values,
  • Listings to sales ratios for an area (shows sales pace and amount of supply in a market),
  • Latest demographic and economic trends for an area, and more.

Not every good investor I know possesses every one of these habits. And I know there are habits that many good investors have that I haven’t covered. But as I thought about the most effective and successful investors that I have met or read about, I realized that almost all of them did possess each of the above habits. And, that anyone could really do what they did if they set out to establish these habits and practices in their real estate investing.

 

If you’re like me, now you’re trying to remember Stephen Covey’s 7 Habits. Just in case you can’t remember Covey’s seven habits, here is a very brief summary to refresh your memory:

  1. Be Proactive: There are things we can control and things we cannot. Focus positively on the things you can control and worry less about the things you can’t.
  2. Begin with the End in Mind: Envision your funeral – what do you want people to say about you. Now, think about what you have to do to be that person. From there, develop a personal mission statement that encompasses your values and your vision of yourself.
  3. Put First Things First: Focus on the important tasks. Don’t spend time on not important and not urgent tasks; try to delegate urgent but not important tasks.
  4. Think win/win: It’s not your way or my way, it’s a better way. There is plenty out there for everybody – the abundance mentality versus the scarcity mentality.
  5. Seek first to understand, then to be understood: Seeking to understand takes consideration but seeking to be understood takes courage.
  6. Synergize : Finding that solution that is likely different than any other solution pursued because you’ve understood and been understood and you’ve sought out win/win scenarios. It’s the old saying of one plus one equals three.
  7. Sharpen the Saw: Practice in a balanced way. Covey talks about the four dimensions of renewal which are essentially physical well being, mental well being, emotional health, and spiritual strength. Maintaining balance in these areas keeps your saw sharp and ready to act and work on the other habits.

Published on June 18, 2008

The Truth About Goal Setting

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I’ve never been one for New Year’s resolutions. To me, they are like a fad. Something that is all the rage for a short period of time, and then gone so fast it’s like they never existed at all. How many times have you heard or even given the half hearted declaration to lose weight, quit smoking or change jobs? That’s not goal setting, that’s wishing.

I believe the best time to make changes is today, no matter what day of the year that is. I don’t wait for tomorrow to start if I have decided to do something. And I certainly wouldn’t wait for a new year to begin goal setting. Once I set my goals, I review the goals on a regular basis, adjust them, adjust the plan and then keep moving forward. Things don’t always work out according to plan (one of my goals for 2007 was to buy one more property – which didn’t happen for many reasons), but I don’t stop making goals; I just adjust and move forward.

I have been reading a great blog by an individual who sets his goals in writing on his blog and checks in regularly with his readers to talk about how he is doing. He’s made some great comments in the last few months on how to set goals, celebrate success and re-evaluate the goals you aren’t achieving. Check it out at How to be an original.

Maybe you’re convinced and you want to get started on your goals, but you just don’t know how to start. To get your goal setting rolling:

  • Start with a fresh page, and write “Life Time Goals” at the top of the page. 
  • Under “Life Time Goals” I write the most important one or two health goals, wealth goals and “ME” goals. For the “ME” goals, I have things like “Become fluent in Spanish”.
  • Underneath the lifetime goals, write “Five Year Goals: Achieve by the end of 2012”. I look at where I am going overall in my life, and figure out what I have to do in the next five years to get there.
  • Finally, on the back of that sheet of paper or on page 2 in my document, I write “Goals for 2008”, and I write in fine detail with dates and measurements, what I am going to do in 2008 that will move me towards achieving my five year goals.

To give you an example, let me expand on my personal development goal of becoming fluent in Spanish. Under my 5 Year Goals, I want to spend at least one month in a Spanish speaking country studying Spanish. To move towards that in 2008, you might think that I plan to take a Spanish class, but I have found that I don’t learn languages well in a class. The best way for me to learn is immerse myself in it. I remember it better and enjoy it more. So, in 2008, I am working on building passive streams of income so that in a few years I can take time off from work and focus on my Spanish language skills. My exact goal is actually split up into the areas that I will earn passive “revenue” from, and how much. As I prefer to keep the exact details private, I will just make up an example. In 2008, I will be earning a minimum of $100/month after tax and expenses from my real estate investments, $100/month off of my cookbook website and cookbook sales, and $100/month off of interest from my bank account. Under each of the above, I have the things I am going to try or I am going to do to achieve those results. It’s only a page long but it gives me direction and I know what I need to do next.

Get the picture? So, if you haven’t already, take a few minutes, sit down and figure out what you want from your life. Then figure out what you will need to do in the next five years to get there. And most importantly,write down what you are going to do in 2008. Be sure to make your goal(s) specific and measurable so you can track your progress!

Here’s some quotes to get you in the mind set for your goal setting:

  • “If what you are doing is not moving you toward your goals, then it’s moving you away from your goals.” Anonymous
  • “If you do not change direction, you may end up where you are heading.” Lao Tzu
  • “Have you noticed that even the busiest people are never too busy to take time to tell you how busy they are?” Bob Talbert
  • “Many a false step was made by standing still.” Fortune Cookie
  • “Have a bias toward action — let’s see something happen now. You can break that big plan into small steps and take the first step right away.” Indira Gandhi.

Here’s to a wonderful and prosperous 2008.

 Published on February 21, 2008

 

Real Estate Investing Goals

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Last edition we talked about whether investing in real estate is right for you. Assuming you’ve decided it is, then the next consideration is what are your real estate investing goals. When we bought our first two properties we were quitting our jobs to move to Toronto from BC. I was going to do my MBA and Dave was going to find a new job. My goal was to make my money work for me while I was in school.

Why is it so important to know what your real estate investing goals are? In order to figure out what type of property you are looking for you will need to know what exactly you want to get from real estate investing. Are you looking for monthly positive cashflow, longterm appreciation and equity building, or a combination? Are you interested in investing for the long term or the short term? How much time do you have and what is your risk tolerance?

Before you can determine your property type, it’s necessary to assess your current financial state and understand what you are trying to achieve and what is possible.

Your Five Year Plan – Goal Setting

This is a technique we use over and over. Sit down right now and write down:

  1. Where you want to be financially in five years (be specific, for example do you want to be earning $100,000/year in your job, own two properties that are giving you $500/month in positive income, and have $20,000 in RRSPs)?
  2. What can you do in the next 12 months to achieve each of the above items (once again, be specific and try and make the items measurable)?
  3. What can you do in the next six months to move towards your 12 month goals?
  4. What must you achieve this month to move towards your 6 and 12 month goals?
  5. Review these goals regularly. We used to do it monthly, but now we just do it quarterly. Find what works for you, and stick with it.

We will leave how to achieve your goals aside for now, and just focus on finding a property type to help you move forward in your real estate goals. Some initial considerations before you begin a property search:

  • Will you live in one of the rental units or will you be an absentee landlord?
  • Do you have any savings to use for the purchase (or can you use your RRSP’s as part of the first time Home Buyer’s Plan)?
  • What size of mortgage can you qualify for?
  • What is your risk tolerance?
  • How much spare time do you have to devote to the property?
  • Do you have any construction/renovation knowledge (or know somebody that does)?
  • Will you manage the property yourself, or will you hire a property manager?
  • Can you afford to supplement the property monthly if necessary?

Think carefully about your answers, as each one has an impact on your choice of property. For now, let’s focus on the very first decision: Living in the building with your rental unit or being an absentee landlord.

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