In this episode, RevNYou team member and host Doug Meyers interviews a fellow RevNYou Team Member and young-gun real estate investor: Karysa Brossoit.
At the youthful age of 25, Karysa has worked her way into an ownership position in a multi-million dollar portfolio based on Vancouver Island in Port Alberni, with a couple more properties outside of Edmonton as well.
From sports, to painting, to being outdoors, Karysa enjoys everything life has to offer. She credits the power of real estate investing for allowing her to live the lifestyle that she has created and continues to refine. To quote Karysa “The best thing about being a real estate investor is when the weather is beautiful I can head outside, chase the sun and enjoy it, even if it’s a Wednesday!”
Karysa knew right out of high school that she didn’t like the idea of picking a career, working a 9-5 job, with set hours to get paid a set amount of money for the rest of her life. After analyzing the lifestyle associated with a typical career, she realized she didn’t want to work her life away and not have time to do all the things she truly wanted to be doing.
She was observant enough to discover real estate investing through the action of friends and family close to her and decided to dive into it, becoming a skilled renovator, property manager, and investor herself.
It is with that background that we’re excited to interview her for this episode of the podcast, as we discuss:
Karysa’s real estate investing story and how she got started tips for what kinds of renovations are the best return-on-time and money for do-it-yourself renovation investors the importance of continually educating yourself the power of networking pushing through the inevitable ups-and-downs and trying times in real estate insights on developing the mindset of an investor resources for aspiring new real estate investors Sharing her story in the podcast platform was certainly a step way outside of Karysa’s comfort zone, which itself is a testament to her willingness to push herself to try new things even if they may be a little intimidating. This willingness to push the boundaries of the comfort zone is something we can all take note of and apply in our own lives.
Having created and now experiencing the results and lifestyle she has, we hope you enjoy and learn from this conversation with another successful real estate investor and RevNYou team member: Karysa Brossoit.
Thank you for listening and we look forward to welcoming you to the RevNYou With Real Estate Community!
Using Real Estate to Leave his Full-Time Job & Multi-family Investing
Michael Bugg is a full time Real Estate Investor based in Saskatoon, Saskatchewan. He began buying properties in 2010 while working full time as a Veterinarian. Over the years, as Michael expanded his buy and hold real estate portfolio, he continued to cut down on the amount of time he spent working as a Veterinarian. In July of 2018, he officially hung up his stethoscope to focus full time on real estate investing. One of Michael’s greatest passions is helping others take control of their financial future through real estate investing. He is currently launching several initiatives to help the Veterinary community lead more balanced and purposeful lives. He believes that real estate investing is really just the start of the journey; it’s more about the impact you can have on people’s lives.
In our conversation, Michael and I discuss:
How he got started in real estate investing The early days of building his portfolio while working full-time as veterinarian The day he realized he was DONE working as an employee! How he moved from being a full-time employee to a full-time real estate investor entrepreneur The importance of having a support team in making the jump Hiring and working with a coach, and why it was the right move for him Tactical real estate conversations around multi-family apartment investing What are the similarities, and difference, between multi-family investing and single-family investing Michael’s tips for any real estate investor who wants to grow their knowledge and portfolio Michaels’ risks & rewards that he believes every real estate investor should be aware of
Enjoy this educational, engaging conversation with the genuine founder of YXE Real Estate Group: Michael Bugg.
We believe in getting the right education to set up your real estate portfolio based on the life you want to live.
We have a Real Estate Investing school designed to educate students and graduate with knowledgeable skills and confidence. Go to our school now to find out more about our Real Estate Achievement Program.
The horror stories we could tell you from selecting the wrong people to occupy our investment properties. It can cause you too much time, headaches and way too much money! It is so important to learn how to pick the right tenants.
#1 – Buy the right property.
That means by buying the property for the type of tenant that you want to have. It’s no good buying a student house and then wanting to find a family to live in it. Likewise, you don’t want to buy just a single family home and then have students rent it out.
#2 – Buy in the right area.
Does the type of tenants that you are willing to deal with want to live in an area that you are going to buy houses in? Don’t just buy in an area because it’s cheap and it looks great. Ideally you want to be buying in the right area, but you want me buying a house that will add value in that area.
#3- Match the tenant to the property
Watch the video Grading your tenants A,B, and C for more depth detail to understand what that means. For the purpose of finding awesome tenants, you want to match the tenant to the property, which means if your looking for students, you want to make sure you’re looking for a student type house in the affordability that a student can afford. You don’t want to get the single family home that is a 20-30 40- 50 minute drive from home. Most likely they will want to live five minutes away. They might be choosing your property for the wrong location.
#4- Properly screen your tenants.
We can’t stress this enough. If you want to find awesome tenants, screen out the bad tenants. It’s as simple as that. It starts from the way you communicate with them, from your type of advert that you write, it starts with the property that you have, and the area that you’ve got. That’s where the screening process starts.
#5- Communication.
You really want to continue communicating with your tenants as you’re finding them.What is the communication like? You want to be firm but fair. If you want to find awesome tenants, that means they need to know that you know the rules and you will be a fair person, but you’re going to abide by those rules. If they’re aware that you know the rules and they’re going to try and bend the rules, they’ll be less likely to want to become your tenants. So you want to get rid of those bad tenants and make sure that you just ended up with all awesome tenants.
Brad Price is a Real Estate Investor specializing in Joint Venture Real Estate Acquisitions and Investment Management in the residential sector.
Brad has a number of real estate related businesses which he has either co-founded or founded, including Calgary based Commonwealth Home Ownership, a Canadian real estate investing education company that hosts networking events and provides tools and resources to help real estate investors build profitable portfolios. He is the President & CEO of REIBS Canada, a cloud-based bookkeeping company specifically designed to simplify and automate bookkeeping and accounting processes for real estate investors. Brad also manages BCP Coaching, a One-on-One coaching service for people looking to take that next step towards financial freedom. He highly values positive high-performance habits, a desire to breakdown the status quo, and an unwavering commitment to all of his clients.
In addition to Brad’s real estate related companies, Brad has extensive residential and commercial construction knowledge with over 17 years of experience in the industry. Brad’s most recent projects include two $100 Million commercial construction projects in Calgary and the development of $3.7 Million of residential investment properties in Edmonton. Brad’s next project is a $2.5 Million residential investment development in Calgary, commencing in the spring of 2020.
In our conversation Brad and I discuss:
The inspiration behind his start in real estate investing: “How much do you earn while you’re sleeping?” Educating yourself with the drinking from a fire-hose approach How to decide what real estate investing strategy is right for you Why he loves the joint-venture strategy for building a real estate investment portfolio Understanding what you are an expert in (as an investor) and communicating what your market has to offer Why it’s NOT all about market appreciation (in fact, why you should be hedging against downturns by holding strong cash-flowing assets) The basics of being a successful joint-venture working partner Advanced joint-venture working partner keys Highlighting the operational side of real estate that people often overlook, don’t know about, or just simply struggle with (bookkeeping, reporting, managing, systematizing) Finding joint-venture money partners – how to attract, communicate, and build relationships that lead to successful investments over time What Brad means by “people buy into you before they buy into a deal Telling, not selling, what you do The Joint-Venture Associate Program through Commonwealth Home Ownership Tips for investors looking to get started or take their investments to the next level
I hope you enjoy this comprehensive conversation with Brad Price!
Welcome to the first interview episode of The RevNYou With Real Estate Podcast! Thank you for tuning in!
In the show’s inaugural episode, Doug catches up with fellow RevNYou team member and award winning investor Gary Spencer-Smith.
Gary was born in the UK and started investing in his native country during his time in the Royal Navy, He emigrated to Canada after 11 years of service, which saw him travel all over the world before settling on Vancouver Island. Investing on the island for over ten years now, Gary has won awards from Canadian Real Estate Wealth Magazine and The Real Estate Investment Network for his strategies and success, and been nominated for countless others. Gary enjoys the lifestyle investing in real estate affords him and has a passion for helping others change their financial futures by using real estate as the catalyst. “When I see people finally realize they can totally change their lives, it’s like a light goes on, then they know what is truly possible for their lifestyle and the future of themselves and those around them. That’s why I teach!”
Joint-Venture Investing
After getting to know Gary and his background story, the conversation shifts towards providing listeners with a primer on joint-venture investing before getting into the tips, techniques, strategies, and ways of being that have made Gary such a successful joint-venture working partner in his many years as a real estate investor.
Gary shares his knowledge and experience on:
How to screen your joint-venture partners to work with the right type of people, creating win-win relationships
Identifying opportunities to match with the right joint-venture partners
Communicating with various personalities and different communication styles from your own
Developing, managing, and strengthening relationships with your joint-venture partners for long-lasting success
Investor Resources
As the conversation winds down Gary also shares some great resources for investors looking to get started or for those looking to take their investing journey to the next level!
Resources mentioned in the show:
Julie Broad – More Than Cashflow: Understanding The Real Risks & Rewards of Profitable Real Estate
Robert Kiyosaki – Rich Dad Poor Dad
Don R. Campbell – Secrets of The Canadian Real Estate Cycle
Did you enjoy the podcast? If so, please let us know by clicking the subscribe button on the podcast platform of your liking.
Want to become a part of the RevNYou Community? We’d love for you to join our following on YouTube, Facebook, and Instagram for real estate investing resources, and to stay up-to-date on what’s happening in the RevNYou With Real Estate World.
RevNYou With Real Estate – helping you understand the real risks and rewards of profitable real estate investing so you can lead a life you love! RevNYou With Real Estate is your partner on the path to success in real estate investing. Through hearing the stories of in-action real estate investors at different stages of their investing journeys, to practical conversations surrounding specific aspects of real estate investing, to personal development and improving your investor mindset, we look forward to having your ears tuned in to the show. Enjoy! – The RevNYou With Real Estate Team Connect with us!
Have you ever wanted to invest in real estate but you don’t have the funds to start? We are here to tell you its no excuse! There are many ways to get started in real estate without using your own money.
#1 – Use the equity in your own home.
If you’ve owned your home for a while and you’ve paid down your mortgage and perhaps the house price went up a little bit, you might have some equity sitting there. Use what you’ve got to get what you want. You already have it, so why not put that to use? Otherwise the equity is sitting there doing nothing for you. It might giving you peace of mind, but it’s not helping generate anything for your life. So use what you’ve got to get what you want.
#2 – Do you have RRSPs?
There are two ways of using RRSPs if you have your own. You can lend it out as a mortgage through a soft direct account. And the other one is if you’re an investor, you can use other people’s RRSPs. Now there are a few rules behind this. They can’t be a parent or sibling. There’s various rules and we’ve got a video that explains about RRSP mortgages on our YouTube Channel, but you can also use other people’s RRSPs and you can have that as a first or a second mortgage on your property. Typically we will do 8 to 10% on a RRSP for someone and that’s secured against an asset. This makes sure people are happy when they’re doing it and they’re happy to lend it. We usually do that for shorter term lender, not for long term lenders, but that’s what we use RRSPs for.
#3- Private Money.
This is sometimes called hard lending, but basically that’s somebody that has cash and they’re willing to lend it to you for a guaranteed rate of return. This can be high. I’ve done 50 to 60% of the deals that and we’re finding people that have money but they don’t necessarily have the time to put into a real estate deal. So we’ll use their money, we’ll put it in our time, and then together we will create a joint venture, then give them a return on their money. It’s secured against a solid asset. It’s in real estate. Most educated people don’t want to just put it in the bank, they don’t want to put it into a mutual fund. When the market crashed in 2007 2008 people saw the money just disappear. An example of who people may want to take it out and put it in a solid asset.
#4 – Be a Joint venture Partner.
If you might not be able to qualify for a mortgage, then we shall find my “friend Bob.” Thankfully, Bob has great credit and his ability to borrow to get the mortgage is possible. Now you and your “friend Bob” with create a joint venture agreement for a real estate deal! There are many ways of getting into a joint venture. A joint venture is you and at least one other person are going into a venture together to partner up to go purchase some real estate and it’s gotta be a win-win.
You want to make sure everybody’s happy and you want to make sure that everybody has different benefits that they’re bringing to the deal. Someone might be bringing the experience, someone might be bringing the money, someone else might be bringing the ability to borrow from a lender, are a few to name. If someone has money for example, which you may hear the terms; a private money lender or a hard money lender would be one person in the deal. Someone with no money may borrow this persons money because they’re self employed or cannot qualify. Its kind of like fitting the pieces into the puzzle or the different people into the same deal. Usually if your the one borrowing the money your skill will have to be putting in your knowledge and managing of the project. If you need investor training go to Rev N You School and see our real estate investing courses.
#5- Presenting a Good Deal.
And the final way, and this is probably one of the most important. One of my mentors said this to me very early on, they said, “Gary, if you find the right property and the right deal, the money will come to you.” Now I didn’t really understand what that meant. And then as I got further into the process of looking at properties, looking for deals, I then realized that you can’t say the wrong thing to the right person if your deal makes sense on paper and is simply a good deal! So what I mean by that is it, if you came up to me now and you were showing me the numbers on a piece of paper of this deal, and it’s a great investment. There’s lots of people I know, friends of mine, people in my narrow, they’ve all got great deals and when they show me on paper, I’m like, I would find the money for that.
For example, if I had a Porsche that was worth $150,000 you know it’s a really good one. And I said, Hey, you can have this push for $10,000 you might not have $10,000 in your pocket, but you’d find $10,000 pretty fast because you know that is worth $150,000. It didn’t matter if I was giving you the wrong information about the statistics of the brakes. It doesn’t matter how good the deal is, if it’s not the right person to invest and then not the right mindset, you could talk to them for three days. They will never invest. But if you have the right house and the right property, then the money will find you.
Finding Money Resources
BONUS TIP: Go to local real estate meetings and start to network and meet people! People are constantly connecting and finding joint venture partners by taking the extra time to go to events. It’s beneficial if you have a great deals ready to show people or talk about then follow up with them with more information.
Watch this video before you head to your next meeting.
Commercial Real Estate Investing vs Residential Real Estate Investing
A Video Series
You know the saying, the grass always looks greener on the other side, right?
As you deal with another tenant turnover, surprise repair request or increasing tax and insurance costs, it’s easy to think that a five year triple net lease* is a better way to invest in real estate.
But, there are some really significant costs and risks associated with doing commercial real estate deals.
As we just closed on the biggest deal we’ve done to date (a multi-million dollar medical services building), we thought we’d put together a video series to help you decide if commercial investing is right for you, and how to handle some of the common pitfalls if you do it.
If you’re staring longingly at that green grass on the other side of residential investing, we hope these videos help you decide what investment vehicle is right for you today.
*a triple net lease is basically where the tenant is responsible for most of the costs of operating and maintaining the property including taxes, insurance, maintenance, and property management
“It should be illegal to turn away someone because they have a pet”
It was the start of a hot headed debate in a local rental Facebook group I use for promotional purposes when we have a vacancy.
Landlords chimed in with horror stories of damage while tenants shared their tragic stories of having to give up their beloved four legged family member because there was nowhere to live that would accept the animal.
Personally I am not a fan of the government telling me what I can do in my rental business so I would MUCH prefer the choice. And, my advice to the tenants on the forum was to make themselves the best possible applicant for a property and they will find that there are more opportunities to live with your pet than you think there are. The problem isn’t always the pet – it’s the tenant’s application.
My experience is that a great tenant is a great tenant … if they have a pet it just means they will probably stay longer and pay me a little more rent.
But there is a lot to consider when you make this decision, including whether you are even allowed to say ‘No Pet’s’ in your state or province (sorry Ontario landlords – you can’t actually say no pets!).
Here are my thoughts on whether you should allow pets in your rentals (thanks for the great question Christine).
If you do decide to make your rental pet friendly, you’ll definitely want to write a great rental ad that sells that benefit. You’ll also want to focus on ensuring you screen your tenant and ask great questions to ensure get the best one.
It sounds more tasty than it is … a sandwich lease is a creative real estate investing strategy that you’ll usually hear about when someone talks about no money down and no bank required type deals.
The advantage is that you, the investor that puts the deal together, can earn a bit of upfront cash along with pocketing some monthly cashflow and profit when the final sale on the property occurs.
If you are able to pull it off, it really is a strategy where you can do real estate deals without going on title, without talking to a bank, and without having much money of your own.
Sounds pretty good … so what is it? And are they as tasty fun as they sound?
I had some fun shooting a video to give you an overview of what exactly is a Sandwich Lease and how does it work in Canada.
Bottom line – you can’t eat paper as I found out in the video – and Sandwich Leases are possible in Canada, but are they worth the work? You’ll have to decide for yourself. For us to create the life we wanted with real estate, we found that it was much better to focus on financing our deals with private money, joint ventures and vendor take backs. That allowed us to do deals where they fit our Properties with a Cause model, attracted great tenants and grow our portfolio with fewer hassles than we were finding with the creative strategies like Sandwich Leases.
If you liked this, you’ll probably enjoy the following articles and videos as well:
How to Set up Your Bank Accounts with a Growing Real Estate Portfolio
Business Systems
We answer a submission from Gary around banking and what we do with our bank accounts when our real estate portfolio is growing. When you have multiple properties and you have multiple joint venture partners, there’s lots of different things going on. In Gary’s case, he actually has what I deemed as a fairly complicated system of sub accounts of the sub accounts. And it got rather confusing for me. So this is for anybody out there that has more than one property and in most cases, if you have joint venture partners that you own the property with. We will be following the system that we use and that we generally recommend to most people.
A disclaimer, this does not include anybody that manages other people’s properties. They are only for properties that you own or you co-own with other people. I just want to make sure that you’re aware of that its not for property management.
What we do with our bank account systems:
It’s a main business checking account with a bank. It could be any kind of bank that you can do checks with, email, money transfers, that sort of thing.
Then we set up specific property accounts for each property. Example; property one, two, three, four, as many as you want. Each of those property specific accounts are just basic personal checking accounts.
I am personally on the account and his joint venture partner is on that account. We both have access. The key is making sure you explaining to your joint venture partner that they’re not to do anything with that account without checking with you first because you’re the managing partner, I assume you are in most cases. It’s not an account for you guys to play around with to transfer money whenever. You want to specifically only give them access to it so they can see what’s going in, what’s going out.
Any bills coming in and money going out. Each property specific account you put your rent check into, transfer the money in or however it works for that specific property. The mortgage comes out of that account, whether the mortgage is in your name, a business name or your joint venture partners name. The money comes out of that account.
To write a check for a tradesman or some somebody that doesn’t take a a visa card, we’ll write the check from our main account. We’ll track what the bill was for, right on the receipt, which property it’s for, and then we will transfer the funds from that property back to pay ourselves back. And we just track that with, QuickBooks, Excel spreadsheet, whatever you use to track your expenses. For instance, if there was some job that had to be done at this property, say some plumbing went and I had to pay a plumber with a check, I’d write the check from my main business account that go to him or her, the plumber, and then I would just transfer the funds from our property that we did the work on to pay myself back.
I have a business credit card and that business credit card basically acts like this as well. So the business credit card, I’ll pay for any number of these things and then I just pay directly online from the specific properties account to pay back that credit card.
That is how the flow of money works. The key thing to all of this is that these are just personal checking accounts and you set them up, you get your joint venture partner added on with you so they have access to it too. When it’s time to pay them out, your going to pay them cash flow from it, what I do, I don’t write them checks. I tell them how much money they can take out of the account and then it’s on them to take that money out. This is the system that works for us, we control everything, but our JV partners do have access to it.
In terms of banks, there’s no one bank that’s better than any others. We actually have several accounts with one bank. We have another several accounts with another bank. We have about four different banks that we deal with. There’s no one bank that’s better than any others, but that’s our system. That’s how we work. We found it works really, really well. It’s great for tracking purposes and I highly recommend you do something similar with your own system. I hope this gives some advice to a variety of other people that are looking for how do you do your banking when you have multiple properties and partners.
It feels like a lifetime ago that I had to be at work by 8am. I don’t even use an alarm most mornings unless I am going to an early morning class at Crossfit.
But it really feels like yesterday that I was begging for extra vacation time, sneaking off to handle real estate stuff mid-day, working all weekend on a deal or a renovation, or meeting with Dave for hours at Starbucks discussing what our next move was.
I don’t remember feeling there wasn’t enough time, but I do remember feeling exhausted a lot. I was working hard – putting in a lot of hours but many of my hours were wasted.
The crazy part is that since leaving my job I actually work more hours than I did as a full time employee. There is no such thing as paid vacation time, so turning off completely is more difficult than it ever was when I was working for someone else. The big difference for me has been in understanding what takes energy, and what doesn’t. And, using the hours I am working as best as possible. I still waste time and procrastinate sometimes, but I am never just waiting for a day to end like I did when I was working for someone else. There’s too much to do and if I am not working smart, I could be doing something else!
That feeling of, if I am not using my time smartly right now, I could be visiting with friends or family, working out, or playing with my dogs keeps me focused. It’s never about putting in the hours, it’s about getting results.
And since every week someone writes us asking how to manage a full time job, a growing real estate portfolio and family obligations, I thought I would give you 4 ways to get it all done with the time you do have (And still have energy left for fun).
President Obama sits down for a family dinner at 6:30pm most nights. If the President of the United States can organize his day and his priorities so that happens, there’s no reason why you can’t create your ideal typical day using real estate while you hold down a full time job and a great family life. Yes, he has a lot more support than most of us do, but he also has a lot more obligations. It’s about priority and focus.
If you haven’t read the article on time management, you should check that out. As I mention in the video, I think time management sells a lot of courses (like the idea of passive income) but it isn’t really possible. There are, however, some things you can do to better use your time.
What’s your best tip for getting more done? Share it with us on Facebook or Twitter!
“It’s impossible to find a good real estate agent. Nobody wants to do any work! They just send me garbage – if they even call me back”
My new client was really frustrated. After making several phone calls and going on one property tour with an agent, she felt strongly that there just wasn’t the right agent out there.
I get it. We’ve worked with a few dozen real estate agents over the last 13 years. Sometimes it feels like agents make a lot of money for doing very little. Other times it feels like all your agent is doing is making your life difficult by not returning your calls or taking forever to set up an appointment.
Many real estate investors become realtors because of the challenges working with some agents.
But, if you have the right agent, they are an important part of your real estate investing team. They will help you understand a market area by providing comps, market information, and insights. They will send you deals you may have missed. And they will save you a lot of time setting up showings, chasing other agents for information and handling paperwork (something few investors enjoy).
If you invest in a town you don’t live in, a great agent is your eyes and your ears on the ground. They are essential.
While I do believe that some agents aren’t very good (just like not all investors are good), I also don’t believe that is the real issue facing most investors looking for this important team member.
There are a few problems that get in the way of a great agent – investor relationship.
The first is that all Real Estate Agents are not the same. Some don’t want to work with investors. They have had a bad experience or heard investors are a pain. It doesn’t matter to them that investors provide far more repeat business than home owners. For some, it’s just not a category of client they want.
Second, as an investor, you are looking at a home differently than someone who wants to live in it. A real estate agent’s training is based on working with home buyers who plan to live in the property, not based on someone that needs to generate revenue from a property.
Many realtors think a property makes a great investment just because it has a secondary suite or because it’s beat up and needs work. It’s usually just a lack of education in the investment business that leads them to believe that. It doesn’t make them a bad agent.
Real estate investors care about the numbers. If it has a big bathtub, it only matters if a big bathtub gets a higher rental rate or will attract tenants easier than a regular one. At the end of the day price matters to an investor, but things like rental income relative to the price, type of tenants, ability to qualify for financing or get other financing options, and timing of the deal are more important than just price.
If this isn’t clearly communicated and understood, the agent AND the investor will get really frustrated with the work they will try to do together.
Third, many investors do a really terrible job of communicating with their agents. They aren’t focused enough to start with which makes the agent’s job next to impossible. Or, worse, they excitedly contact agents to do deals that can’t really be done. Many real estate investing courses geared towards GET RICH QUICK have very tricky and sometimes questionable strategies that agents are right to question! Some of the techniques work on one side of the border but don’t work on the other. Others are just risky and bordering on illegal.
So, what can you do? Here’s my recommendation to find great real estate agents for your real estate investment business:
First, get clear on what you are doing as an investor.
My client who was frustrated with the lack of quality agents out there was the source of the issue, not real estate agents in general. She wasn’t clear on what her investment strategy was. She wasn’t even certain she had found a good market to invest in.
She was calling really great agents that had been referred to her, and was blowing the initial contact because she wasn’t confident, clear or concise about what she wanted.
How could she REALLY expect to get the great real estate agents to work with her when she was going to take up so much of their time just figuring out what she wants to do?
It’s easier to blame the agent than to realize you are the issue.
Before you contact a great agent, get clear on your goals, your plan and your resources.
A good agent is busy. They will usually be happy to take on a new client, but they will be selective about who they give their time to.
It’s important to show an agent that you are going to work hard to get what you want, you know what it is you want, and you have already taken steps to collect resources to reach your goal.
If you can’t tell them about your experience because you’re new, you can show them the steps you’ve already taken and the steps you will take. This way, they know they won’t be wasting their time. Because, remember, they only make money when you buy!
Don’t worry if you are short on resources. You shouldn’t pretend to an agent that you have a bucket of cash under your porch waiting to drop it on a deal. Our agents know we don’t buy most of the properties alone (not sure how you’ll fund your deals – check out this article on the 5 Ways to Finance Your Deals).
If they don’t like your plans, you’re better off to find that out now then when you’re knee deep on a deal. But by this point you should already have some idea of where you are going to get money. Make it clear that for the right deal, a deal that meets your criteria – you will be able to get the funds to close on the deal. And commit to yourself that you will do everything it takes to do just that.
Second, start asking around. I believe that the best realtor for an investor isn’t the one who helped your best friend buy their house. It’s the realtor who is already working with other investors. Go to your local real estate investing club meetings. Ask other investors.
Do a search on Realtor.ca or Realtor.com for listings in the area you are looking to invest in. Find properties that are similar to the ones you want to be involved in and see who is actively listing the majority of them (or, even better, drive around and make note of the signs). We would probably lean towards finding someone that only has a few listings, vs the one that has every other listing. But I love to work with someone who is already active in my target neighbourhood as they will likely add a lot of value with information they learn while doing open houses, showings and comparable research.
Stop into local real estate offices. They usually have a lot of listings on the windows and you can poke your head in and ask about the different agents. Maybe you will even meet one that you hit it off with. We found the agent we work with in Whistler this way and she’s awesome.
You can also use the internet to find good agents. We’re not talking about google searches here… you are still trying to get recommendations. Look on forums or review sites.
Who Makes the Cut?
Once you have a few names of potential agents, make appointments to meet them in person (or over the phone if they are far away). You want to get to know each other. It’s not just about you finding a good agent to work with – it’s also about finding a good agent that wants to work with you. As mentioned, not every agent wants to deal with or knows how to deal with the special needs of a real estate investor.
Ask good, well informed questions. Be careful of agents that seem to commit to being able to do anything you want. Remember you’re an area expert and you want to work with agents that also are focused and specific. If you’re buying condos don’t hire a single family luxury home expert.
Here’s a few questions to ask a potential real estate agent:
What is their experience with real estate investing?
How do they know a property makes a good real estate investment? What criteria do they use to judge properties for investment purposes?
What you are looking for is someone that understands real estate investing. If they are an investor themselves that can be an asset but it’s not a requirement as long as they understand what makes a good investment.
How long have they been a real estate agent? Are you full time? Ideally you get someone that is a full time agent and has been for at least two or three years. A brand new agent will potentially lack the contacts and experience that you likely need. Someone who has been in the business 20 years should have excellent contacts but may lack flexibility. It depends what is most important to you … so you’ll have to think about who is your ideal agent and what you’re looking for. Every person is different – so don’t rule someone out just because of their length of time as an agent – but take it into consideration. My preference, however, is to only work with agents who are full time.
What is their specialty?
Some agents will specialize in a small market area, but will do everything in that area. Others will focus on condos, or larger single family homes in a wider area. Some agents take anything they can get. And some agents focus on working with real estate investors. Ideally find one that is a specialist in your market area and your home type. The more focused the better but it can be difficult to find someone with a serious focus.
Have they worked on deals that were financed by the seller? Some agents get skittish when you mention VTB (Vendor Take Back) financing or second mortgages. There is NOTHING shady or underhanded about VTB’s. There are a lot of advantages to VTB’s, for both the seller and the buyer. The seller’s loan is secured by the property, and you pay them interest. VTB’s just aren’t as common in residential real estate as they are in commercial transactions, so some realtors haven’t done a deal using VTB financing. Often what we aren’t familiar with scares us. Not being familiar also means they could struggle to explain them clearly to other agents they may have to work with.
Once you’ve found a great agent, the communication process really begins.
Be clear and specific about what you expect from them. Let them know your preferred mode of communication and the frequency.
Typically, most agents will work the hardest for you at the start of the relationship, and if you don’t do anything to show you are serious or to maintain that relationship, you will fade slowly onto their automated email list never to be thought of again. And if they don’t think of you, you won’t see the REALLY good deals.
Not all agents are the right ones for you. It will take some work. You probably won’t find the best one for you on the first call, but please know there are excellent agents out there. Many will work really hard for you. Many will really try to understand what you want, and bring it to you. The trick is that you have to know what you want and communicate that clearly. You have to figure out what is most important to you in an agent and a real estate deal.
If you’re finding it impossible to find a good agent, take a look at what you’re doing. It just might be fixed with a simple tweak of your own goals, plans and conversations.
Our tenants just gave us notice on a property we’ve owned for almost three years. The original plan was to turn it into a rent to own but we weren’t able to find a good tenant buyer for it, so we just rented it out.
Our investment partners were mostly interested in doing this deal for the cashflow that a rent to own can generate so they have expressed a desire to get their capital back (see things that can suck about doing rent to own deals). When the tenants gave notice, we pulled market comps and brought our realtor in to see what homes were selling for this year in that area.
The current market is not ideal for selling as things are just starting to improve, but we feel comfortable that there is enough value in the property for our investment partners to exit and get their money out plus hopefully a little bit of additional profit. We won’t make much money when we sell, but cashing in on a giant profit is only one of the many reasons you will sell a rental property. There are other situations where selling really is the best option, even when you thought you would hold the property for the rest of your life or you’re not maximizing profit to exit right now. An investment partner that wants out can be one situation where you’ll sell.
Selling a property is a huge subject. Are you selling it yourself or hiring a realtor? Do you stage the property or do you save money and sell as is? What is the right price to list at? Is the current market at the right phase in the cycle to list the property or is it really better to wait it out with whatever options you have to do that?
I’m not going to get into all the considerations around selling, but here are a few quick and lower cost ideas to help you prepare a rental property for getting maximum possible value in a reasonably quick time frame.
My biggest piece of advice is that it is usually better to have the property vacant.
I know you don’t want to be out a few months of mortgage payments so it’s really tempting to list your property while you have tenants living in it, but it’s much harder to set up times to have the home toured when you have to give a tenant ample notice. In many cases the tenants will refuse because it clashes with their schedule. Why should your tenants bend over backwards to help you sell your property?They don’t benefit from the sale. In fact, it is a big inconvenience for them and they might have to move.
As much as you might think people can see past dirt and junk, very few people can. It’s the biggest goldmine for you as a buyer … you (hopefully) can see what a clean up and a little updating can do to a place. Few other buyers can. Homes look best empty or staged. You will get a much better price for your property if you stage it, or at the very least, have it empty and clean. Finally, you should prep your property for showings. To do that you want to have it clean, freshly painted, little things fixed like those closet doors that won’t close and that sink that always drips, and the curb appeal maximized. These are low cost things to do that can increase the appeal of the home by thousands of dollars. While it’s possible to do this while a tenant lives there, it’s more difficult. It’s also hard to ensure the tenant doesn’t just bang up the new paint job or mess up the freshly cleaned unit before anyone can see it.
Finally, many investors, like us, often do not want to inherit other people’s tenants so we’re going to ask for vacant possession if we can get it.
A little caveat on this advice: it only applies to homes with suites where your market of buyers is home owners and investors. If you’re selling a trip-plex or any multi-unit property where your ONLY buyer is going to be an investor, I would not want it to be vacant unless it really needs a lot of work. Even if it needs work, I would probably try to do a lot of the work while tenanted or wait until the worst units are vacant, complete the work required on those units and then begin advertising while simultaneously seeking new tenants. The investor will be looking for the place to be tenanted so they have income coming in from day one.
There are a lot of reasons to sell a property. It’s not always going to be the right time in your market to get the maximum value for your property so if you do decide it’s time to sell then you must be ready to do what you need to do to make the property as appealing as possible.
If you’re ready to hire a professional, here’s how we recommend you do it (and some questions to ask and what you can expect to pay)
I think it’s a great idea to manage your first investment property for a while, so you can get a solid understanding of what’s involved. You’ll know what makes a great property manager and have a better appreciation for how challenging the job can be. That said; managing your own properties may not be the right thing for you.
To find out if you could handle the pressures and challenges of property management, you’ll want to do a bit of a self-assessment. Are you a reasonably tolerant person? Do you have any knowledge and experience with doing minor maintenance and repairs? Or, do you at least know who to call for what issue? Can you visit the property on a regular basis? Are you capable of keeping good records? This is not usually an enjoyable part of the job, but it is absolutely necessary!
There is so much involved in managing properties … the best thing I can suggest to you is that you imagine the busiest possible day, and then imagine having to handle a call from one of your tenants about a frozen pipe or a broken door lock. Are you going to be able to handle that situation?
If you answer “no” or “I don’t know” to three or more of these questions, you should seriously consider hiring someone to help with your property management.
So if you know you need a hire a property manager, you’re probably wondering how you can find a good one to work with.
Most importantly, when you’re considering hiring a property manager, read the contract before you sign it! I’ve had a few too many coaching calls with people who actually have no idea what the property manager services they’ve signed on for actually include.
Where to Find People with Money for Your Real Estate Deals
Raising Capital
Hey there, I’m Julie broad with Rev N You and today I want to answer the big question around raising money for your deals. Where are the people with money hiding? Well, if you haven’t found the super secret place where they all are. I’m going to explain how you can uncover people with money to help you fund your deals. So the first thing is you have to let people know that you’re a real estate investor. I have met a lot of people who keep it a secret from the people. They know that they have investment properties, that they’re taking training to become a real estate investor. You have to let people know! Now I get it at your job, it may not be appropriate, but your friends and your family, they can know what you’re up to and they should because they’re going to help you find those people with money.
Step one is to let people know what you do. When you meet people at social gatherings, you can say, I am an engineer by day, but I’m a real estate investor by night and soon real estate will be my full time gig, right? Or whatever the case may be for you. But you need to start letting people know what you do.
The second trick is that you can’t be boring about it. So find an interesting way to tell people what you do. I was just at an open house a week ago, just around the corner from where we live and it’s one of our investment markets. While we were there, some people come through to look at the home. One guy looked at me and he said, “how’s your guys’s house hunt going?” And I said “we live just down the street, but I collect old houses.” And he said, “Oh well that sounds like an expensive hobby.” And I said, “well other people rent them from us and they pay the mortgage, it makes it a more affordable hobby.” But I said, “yeah, it can be an expensive hobby.” And he started to ask me some questions and unfortunately his realtor dragged him away to go look at another house before we could carry on the conversation much. But you can see how quickly that engaged someone. Oh yes, I collect old houses. Right. It’s an interesting way to look at it. Be interesting!
The third thing, is it new? Because if they don’t hear something different then normal, you’re going to be ignored and it’s just going to go right over people’s head. If you say, Oh, I’m a real estate investor. I know this happened for us for years because people thought we were real estate agents! We actually buy the houses ourselves so we weren’t even being interesting enough. So you have to be new and interesting to people. You want them to remember you and think of you.
If you just start doing these 3 things, your conversations will change and you’ll start to find people asking you questions about your deals and soon people will ask you whether they can work with you on one of your upcoming deals.
Here’s some advice on the prevention side of things … simple strategy for screening and picking the best possible tenants.
The laws are different in every province and every state, so you have to look up your specific area but this will be a good general guide for most landlords.
“Well, we’ll just give him a few more minutes to show up,” the judge on the telephone line said.
We were waiting for our tenant to come onto our scheduled dispute resolution hearing (a conference call with the “judge”, the tenant, and the landlord) so he could defend his side of the story. We’d asked for an order of possession for our property because he was a month behind in his rent payments and had been paying a month late for a couple of months now.
To get this far, we had to issue several notices, provide multiple documents to the residential tenancy branch to prove he was behind on rent, and we had to prove that we had served him all the documents. This can be done in several ways, but in our case we’d chosen to send the final notice of the hearing by registered mail after posting several documents on his door.
It’s a lot of work to file all of this paperwork. There is also a filing fee of $50.
The judge put us on hold, to presumably call the tenant. If we had not showed up, the ruling would have been in favour of the tenant but it doesn’t work that way when the tenant doesn’t show. They make every effort to get him on the phone and look for ANY evidence that the tenant didn’t know or wants to dispute the notice.
Our tenant clearly did not answer his phone as the judge came back on and said “Ok well I guess we’ll begin.”
The judge then reviewed in detail whether we had given the tenant proper notification of the hearing. He went through the facts of the case next. It felt like he was asking us questions purposely designed to trip us up. For example, we had dated the receipt of rent payment but not noted what MONTH that rent was for. The judge questioned repeatedly why we did it that way and whether it was for the current month or the past month’s rent because it was clearly paid in time if it was for this month. We started to worry that the little mistake of omitting the month of rent that payment was for on the receipt was going to cost us the judgement.
All onus is on you Mr. or Mrs. Landlord.
If you’ve never had to take an issue to a hearing or a court – just know that you must prove everything and, in BC anyway, the judge looks for any reason to rule in the tenant’s favour. In the end, the judge reluctantly admitted our case was pretty clear and gave us the right to ask for an order of possession. Now we had to wait two weeks so we can issue an eviction notice. It hardly felt like a victory, but it was what we wanted.
It was a better result than the last time we had a hearing. Our tenants broke their lease and we lost several thousand dollars as we had to do some work to the property to repair their damage and we lost rental revenue. Despite the fact that they were breaking their lease and had a rent cheque that bounced, we weren’t allowed to keep a penny of their rental deposit. I’ll tell you more about that in a minute.
Bottom line, prevention is the best way to handle tenant troubles.
I’ve written a lot of articles to help you find the best tenants for your properties and below is a video on one of the ways we screen our tenants, but today I want to help you by informing you as to some of the most important things you can do to cover your butt in case you ever do have to try to win a judgement.
If a tenant is moving out – ALWAYS get notice in writing.
Verbal or text message is not enough. Get it handwritten on a piece of paper with their signature or at the very least in an email. Ideally, use the forms provided by the landlord tenant board for your area.
Which brings me to an important second point:
Use the Proper Notification Forms for Your Province (or State) AND Get Proof
If you have ANY issues with a tenant regarding violations in their lease, communicate this violation over the phone or in person and follow up with the EXACT notification that you are supposed to give (the notices vary by province and state and what notice to give for what violation). Make sure you have reviewed when you give what notice. Timing of notice is very important.
If you deliver a notification to a tenant and they are not home, in many cases you can leave it taped to their door. HOWEVER, you MUST have proof that you did this. Proof can be a witness who will sign off saying they were there with you or a time stamped photograph. It wouldn’t hurt to have both.
Finally, if you are dealing with a broken lease, the onus is on you to minimize your damages.
Begin advertising the property AS SOON as you get notice. PDF and save copies of any online ads. Take time stamped photos of any signs you put up or any flyers you put out. And if you put ads in the paper, keep copies of the paper. You have to prove that you made EVERY effort to rent the property.
It doesn’t matter if a tenant violates the lease six different ways – it’s 100% your responsibility to prove that you did everything you could to reduce the damages. And, it’s 100% your responsibility to follow the residential tenancy act rules. The tenants aren’t really expected to know the law, but you are.
It’s not fair, but there is no point getting upset about that fact. It is what it is. Just be prepared!
Keep records of every communication in a tenant file.
Note calls (times and dates and subject). Save text messages (take screen shot photos of your text messages). Give receipts for rent paid, if it’s paid in cash. If it’s not paid in cash, be able to show where it was deposited (here’s where it’s really helpful to have one bank account per property). If you have two units in the same property that collect the same amount of rent you’ll need additional proof to show who paid what rent – so keep receipts of e-transfers or pictures of the cheques or issue receipts.
If you think something will be important to note, then make the effort to note it with proof.
Here’s the good news. In almost 13 years of being rental property owners and having close to 300 different tenants, we’ve had 3 issues that led us to a hearing of some kind. That’s not that bad. Think about it … that is 1% of the time!
So don’t let this freak you out … but do let it inform you to know your local laws and if there are any issues (noise complaints, pets not approved, added occupants, late rent, bounced cheques …) make sure you document the issue and serve the appropriate notices just in case it ever gets to the point where you have to fight for cash or defend yourself in court. Also find out what you can and can’t add to your lease.
The Case We Lost
In that case we lost that I mentioned above, our biggest problem was because Dave was trying to be compassionate for the tenants’ situation. He tried to work with them too much and didn’t follow the actual letter of the law until we saw there was a big problem.
The two biggest issues were in not forcing them to put their notice in writing (they text messaged us their notice but it had ambiguity) AND we didn’t use proper notification forms from the beginning when the rent bounced, the lease was being broken and other issues arose. Because we didn’t follow the rules on little things, we were unable to win a judgement for the big things. Plus, we didn’t have a clause in our lease saying we were entitled to claim liquidated damages for a broken lease. We’ve since added it to every single lease and you might want to as well if you’re allowed in your area. Basically put it in your Lease or Tenancy Agreement that if they break the lease (by moving out earlier than the term states), that you have to right to charge Liquidated Damages. The amount has to be reasonable – probably somewhere around $300-500. It won’t guarantee you will get it, but have it in the lease so you can argue for it if they break the lease. The judge won’t give it to you if you didn’t put it in writing to begin with!
Hope you never have to find out how important this is -but if you do – at least you’re ready!
If you want more help on picking great tenants for your property, grab a copy of More than Cashflow. There’s an entire chapter dedicated to finding great tenants – plus the whole book will help you understand why you get bad tenants and how to prevent them.
How to Create the Perfect Script for Raising Money
Joint Venture Partners
I want to help you raise money for your real estate deals. And to do that, I’m going to give you the five questions that you need to answer in order to have an investor give you their cold, hard earned cash. So those five questions, get that pen and paper out.
#1 – Why me?
#2- Why now?
#3- Why this market?
#4 – Why this deal?
#5 – Why this strategy?
Now, there’s some key elements under each of those questions that you need to answer and you’ll also need to know that I’m not encouraging you to memorize a script to answer each of those five questions because the other person you’re talking to doesn’t have the same script. So if they don’t ask you the questions they’re supposed to ask you or follow the format that you’ve practiced to follow, then you’re going to be all messed up.
I recommend you get comfortable with the key points that you want to cover and know that those generally are the five key areas that you’re going to have to discuss. Somebody has a comfort level in what you’re doing. Now the key point and the point that a lot of people mess up is they memorize bullet points of facts and then they regurgitate them and… it’s not horrible, but it’s not a very engaging or a very influential way to communicate. Let me give you an example from a client that I was working with. Although I’m going to make up neighborhoods for the sake of protecting the hard research that she’s spent most of the year doing in the city of Toronto. She got on the phone with me to practice this cause that’s one thing we spend a lot of time helping our coaching clients do is refine their five why’s. If you want one on one coaching involving joint venture partners go to our coaching page. We would love to help you out.
She was working on these elements and one of the things was why this area, why this market? She picked the Albert area and how she’s picked Albert area after a year. She went on to tell me there’s 450,000 people working in downtown Toronto and they have high paying jobs in the financial industry, healthcare professionals and professional services. And those are good tenants because they have high paying jobs. This area is also mostly houses where as a lot of areas in Toronto are now totally condos. And she also said that it’s a 12 minute subway ride to downtown, so it’s really easy commute for people.It was a good family neighborhood. She gave me these facts and it sounds good, right?
Oh, I forgot one of the key elements, the price of houses in that area. It was still possible to find houses for under $500,000 and the layouts of them were conducive to adding a second and sometimes even a third suite so you could turn a single family family home into a duplex or triplex. So those were the facts and it’s good information but it’s not that engaging or interesting. So I made a little change and I basically said, okay, it’s good information. So now here’s how you want to tell somebody. You know what? I have spent all year finding the perfect area for investment. And for part of the year I was really excited about Lulu town and Francesca Ville because those two areas had the house layouts, they’re close to schools, they had good transportation. And I really thought that I’d be able to attract good quality tenants to those areas. But I wasn’t satisfied with the price of homes. I didn’t feel like there was enough opportunity there with the price of home that I wanted to buy and to be able to add suites. So I kept digging and I dug and I put hours and I’ve spent my Saturdays going into these areas and I finally found “Albert area.”
Albert area is perfect. I’m so excited about the area. I can find houses for under $500,000 I can put a little bit of money into it, $85,000 – $100,000 to turn it into a duplex or triplex and that house now has the potential to be worth $700,000 but I won’t go too far into the numbers I want to tell you about this area and why it’s so cool because it’s a 12 minute subway ride to downtown. There’s people commuting an hour or two hours into downtown Toronto for work and these folks, they can live in a house, not a condo, which is what a lot of people want, a lot of professionals want and they only have a 12 minute commute. The areas, the sub pockets of Toronto always get discovered. So I’m certain there isn’t that much time to act on this area because it won’t be too long before people realize that there’s still houses for under $500,000 that we can make a lot of money on.
She still has more information to convey, but she’s going to stop, right? You’re not going to do your whole spiel. She’s going to stop there and see if they have questions, comments, and then she’ll engage a little bit more. Maybe ask them if they’re familiar with the area and go from there. So it is a conversation you don’t want to get too enthusiastic and get too carried away and talk too much, but you also really want to turn it into a bit of a story. So I tried to turn it into a story of how she found the area, and I haven’t even gotten into the fact that she has a killer team that knows this area, that has insider access to city of Toronto information and a few other key details, which she would then work the rest of the conversation.
It’s a big subject and something I love working on. I love taking the facts that people have and helping them create an influential and story with impact that will help others raise money too. But for now, start thinking about your answers to those five why’s so that you can start crafting your own stories and creating your own conversations to raise money for your real estate deals.
What is the Right Split for a Real Estate Joint Venture?
Joint Venture Partners
Today I got a question coming in from one of my followers. They asked what’s the right split when you’re looking to someone to do a joint venture and they’re putting in all of the investment capital. My answer is that there is no right split. There are many ways to do a joint venture. It’s one of the reasons why we love raising money, not just joint ventures but private money, vendor take-backs, RRSP mortgages. The world of real estate is pretty phenomenal when you understand how to get the investment capital you need to do the deals you want to do. Specific to joint ventures, how we do it is we look to our partner to put in the initial investment capital, usually somewhere between 65 and $80,000 for the houses that we did in 2013. NOW it will be higher then that around $250,000 plus in 2020!
Then we have a reserve fund in place, which is usually two or three months of expenses. And we buy the property as we own it, they put in the initial investment capital. We own it 50 50 because my husband, Dave and I are doing all the work. We find it, we negotiate it. We’ve been working in the area for, well we’ve been buying in our main investment market for 12 years now. So we have area expertise in the team. We oversee it, we make sure it’s making as much money as possible every month for the life of our holdings. So that’s what we do in exchange for our 50% going forward if any money is required. So sometimes a tenant moves out and you think it’s time for an upgrade. Sometimes something goes wrong.
You might have to put a few thousand dollars in. When that happens, we split that 50 50 so 50% of whatever the expenses comes out of our pocket and 50% comes out of our partner’s pocket. When we sell, our partner gets their initial investment capital out first. Whatever’s left over, hopefully there’s lots leftover, either way it is split 50 – 50. Cash-flow that comes in is split 50 – 50, or goes to build up a further reserve fund depending on what’s going on in the property. So that’s how we do it. However, you can do it in all kinds of ways. We have joint ventures where our partner owns 25% and we own 75%. They didn’t put much money in, they just qualified for financing. We have partnerships where our partners own 60% and we own 40% or vice versa. Today we don’t deviate from our model, but in the past we weren’t as sophisticated.
We would work with whatever came our way and try to come up with a deal that everybody was happy with. So there isn’t a right way to structure it. And if you’re brand new, this is one of your first deals or your first joint venture deal and you’re trying to build a track record, you may want to give up more. You may want to put in some money, whereas in the future you might not want to or you may want to give up a higher percentage just to make it appealing to somebody to work with you when you don’t have an established track record. The only caveat I’ll put on that, or a word of caution is that you can pretty much expect they’re always gonna want that deal going forward. Even if you clearly communicate that this is a one time thing, I’m just doing it to build my track record.
It’s what you’re going to be happy with, what you’re comfortable with and what works for the resources you’re bringing to the table versus the resources that your partner is bringing to the table. It’s kind of a complicated subject, but hopefully that all makes sense and helps you a little bit. If not, we will be happy to get back to answer your questions.
How to Find Your Ideal Joint Venture Partner or Lender
Joint Venture Partners
One of the things I talk about all the time when I’m on stage giving talks about raising money, in our workshops or our live training about raising money for deals is; What you need to focus on when finding your ideal investor. I do this for two reasons. One is because it takes the focus off finding the money and kind of puts the power back in your shoes, right? Cause you’re no longer looking for money, you’re looking for somebody that is a great fit. And of course it’s critical to find somebody who is a great fit because if you don’t, it’ll be a pain in your butt. It’s very important to do that and it’s something a lot of people don’t do!
Many people think, I need somebody with money and then they can give me the money for the deal so I can buy more property. But there is more to it, you want to find somebody who’s a great fit and everything gets easier if you do that. But how do you know what is a great fit? It can be really hard to think about that and figure it out.
So here’s what you do.
Take out a piece of paper,
draw a line down the middle.
One side will be for what you DO want.
The other side will be what you DON’T.
All you’re going to do is make a list of everything do and don’t want an investment partner. So when we did this, we thought, okay, well we don’t want somebody who’s active. We want to be the only cook in the kitchen. So dinner turns out perfectly. We don’t want somebody who is an active investor. We don’t want somebody who asks us a billion questions. We don’t want somebody who only has a small amount of money. We don’t want somebody who wants their money out quickly.
Those are kind of things we started to write. And by doing that, we’re able to very clearly see who we do want. For example, we want somebody who’s hands off, they don’t want to be involved in the day to day decisions. They’re going to rely on us in our expertise and experience. To do that, we want somebody who has the financial capability of doing multiple deals. We don’t want this to be their last $50,000. We want somebody who can afford to do multiple deals. We want somebody who will ask some good questions to make sure their investment is secure, but they’re going to trust us and rely on us to make the decisions. They’re not going to challenge every little thing like, why did you buy that dishwasher?
So once you go through and you figure out what you don’t want, you can clearly figure out what you do want. Once you know what you do want, you’re able to sit across from somebody and ask really high quality questions to figure out if they’re a fit for you to work together. You can ask them, have you ever invested in real estate? Do you currently? Why or why not? Right? Find out if they’re active investor, what are you looking for in an in an investment, right? Do they want to be hands on? Do they want to be involved? Those are some of the questions that you can now ask because you know what you’re looking for, so hopefully that helps you raise money for your deals.
Finding Your Ideal JV Partner Resources
Go to local real estate events and start talking to people, build relationships and get to know them. A lot of people jump into a real estate deal with not much knowledge about a personal behaviors.
