Lessons Learned from Losing at Monopoly to an 11 Year Old

Hello Real Estate Investors in Hamilton Ontario!!

I’m back!! Just in case you didn’t notice 🙂 I was away on vacation at a friend’s cottage for a week since August is historically a pretty quiet month (except for the exclusive listing near James North I signed and sold in 24 hrs right before leaving… life as a Realtor/investor, never know when a deal might pop up so all you can do is be ready to act).

Anyways, the story I want to tell is how I (and three other adults) not only lost to an 11 year old at Monopoly but we were slaughtered.  Just check out the below picture, there are nine hotels on the board all owed by Christopher, my little cousin, who finished with 11 hotels and all our (Monopoly) money and properties.

Now how was a child able to beat me, a professional real estate investor?  Here’s how:

1. I was on his turf (not Hamilton): I was at an immediate disadvantage.  Christopher knew neighbourhoods, market values, rents, property values, investment strategies like the back of his hand.  The game was over before it started because he had a massive advantage in experience and he’d already done his homework.  Like taking candy from a baby but it was us adults who were the babies.
2. Negotiating: Because of his expertise, he was able to capitalise when negotiating the exchange of properties for property or cash.  In Hamilton terms, he would trade a property on Burlington St E for a West Mountain property, straight up (if you don’t know what I mean, I have some north end properties to sell you ;)).  He basically had his way with us.
3. Investment Strategy: Christopher invested heavily in building houses and hotels in order to collect higher and higher rents while carrying little cash.  Now I’m not saying to buy blindly or to fully leverage oneself but he knew his system and ROI #’s inside out.  He didn’t even have to think about how best to deploy his capital.  In Hamilton terms, similar to how investors struggle with what to invest in: single family rentals, town house condos, RTO, student rental Mac U or Mohawk, duplex/triplex/fourplex, apartment building, etc… while novices are still figuring this out, veterans are doing deals.  Us adults were the novices figuring out whether to buy property, build houses, utilities, or airports whereas Christopher already had controll over half the board.
4. Luck: yes, luck.  With the roll of the dice, the game is subject to chance and it may be the sore loser in me but I had poor luck in not being able to land on property that was available for sale.

Now that’s not the end of the story, for those who know me, I’m a competitive person who works hard to learn from his mistakes so here’s what i did:

1. Sought expert advice to go over scenarios and strategies that I had struggled with.  The expert?  None other than Christopher of course!
2. I sought expert advice as to which deals were good or bad, which neighbourhoods to invest, which strategies made sense, what are some market values (e.g. what to pay for a property which completes your colour set, as in you own Park Place and need to buy Boardwalk).
3. I replayed and analysed the game in my head looking lessons and for areas I could improve upon.

Later that day came the test, a rematch in which I won :)  Luck played a role as I rolled the dice much better this time but I was a million times better prepared.  How does this all relate to real estate investing in Hamilton?  Here’s how!!

• If you don’t know the market, rents, neighbourhoods to invest, systems, strategies, etc… someone else is going to eat your lunch.  I see this all the time when owners look to sell their own homes, when Realtors from the GTA list property in Hamilton, new investors in general.
• Be an area expert.  Do your homework and pick one city/town for investing.  For myself, to do the level of research and due diligence I do in more than just Hamilton just isn’t going to happen and I do this full time.  I can’t see how any part-time investor can think it wise to invest in multiple towns.
• Get expert advice from people you trust.  Firstly, understand peoples’ motives for giving you advice including how they are compensated, e.g.: financial advisors from banks, stock brokers, Realtors, 11 year olds who measures success by how many opponents they bankrupted.  I asked Christopher quite a few questions to gage whether or not I could trust his advice.  Family or not, he wanted all my (Monopoly) money 🙂 That said, he was open and candid with his advice and pointed out the bad transactions and I learned in minutes what would take me weeks to learn through trial and error by just playing the game.  Hmm, minutes vs weeks all by asking a few questions.  Makes sense to me!!
• If you are out of your element investing in Hamilton, get help and get it fast.  You can start by joining a real estate investing network BASED in Canada.  Build a team around you of Hamilton professionals: Mortgage agent/broker, lawyer, trades, Realtor, etc… where do you find these people?  Start with downloading my rolodex FREE here:http://www.mrhamilton.ca/free-stuff/rolodex/.  (And no, I don’t receive any incentives from the professionals in my rolodex to include their contact info.)

How about that for some wonderful lessons learned on a rainy day at the cottage. By the way, if we haven’t chatted in a while, please drop me a line about how your summer went or if you’d like to meet up to talk real estate.  From what Maria tells me, I think I’m booking appointments for October already…

Till next blog post – happy investing everyone!!

Erwin | MrHamilton.ca

PS: If you would an on-the-ground tour of Hamilton and select investment properties please let me know (email Maria and she’ll set it up: Maria (at) MrHamilton.ca)

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