Hello Ladies and Gentlemen Hamilton Real Estate Investors!!
I hope you all had a great weekend! I know we did along with 700 other attendees of the Real Estate Investment Networks annual ACRE/SOS weekend event.Â It was a busy weekend and it was so great to catch up and network with many investors.Â A few stories stuck out in my mind:
- Easy or turn-key investing does not return as much as more â€œriskyâ€ investments. E.g. we caught up with one investor we tried to help purchase an investment property in Hamilton three years ago. We made an offer that wasnâ€™t accepted so Luis (not his real name) chose to instead buy an easy investment that is a new construction, student rental condo with a two year guarantee in rent income. Three years later, the project is one year behind with a closing in September and Luis is not sure the closing will be in time for a student to move in.
The Realtor who sold Luis the condos thinks it has gone up $30,000 in value in three years.Â On the other hand, if Luis had bought a freehold house in Hamilton where the tenant covers all the expenses, he would be up around $80,000. Which investment is worth the risk and reward?Â FYI â€“ a recent article was published on how the rental supply will exceed demand by 20% in Waterloo when all the planned condos are complete. (http://www.therecord.com/news-story/6342400-waterloo-facing-sizable-glut-of-student-housing/). One building is Waterloos is already undergoing power of sale. Not sure about you but the risk on these student rental condos in Waterloo are too excessive for me.
- A tale of two investors: on one hand you have the new investor who is rightfully scared to be out of their comfort zone and learning all about how to run a business of real estate investments. On the other hand, you have Hassan (not his real name), a ten year REIN member, who shared with me his story on how he recently moved to Dubai and is raising capital to invest in Canadian real estate.Â How much money? MILLIONS.
According to Hassan, his minimum for a JV partner is 10 MILLION of investable capital. Any less and itâ€™s not worth his time.Â Now his pitch is to make investors aware of how Canada fared after the great recession of 2007/8.Â How Canada has one of the best banking systems in the world and they invest with cash, as in no financing.Â Back to the first investor whoâ€™s afraid of investing 50-80,000 in a rental property in Hamilton vs the Dubai investor handing $10,000,000 to Hassan for a share of the return. Fascinating stuff!! And this is just one story about capital flooding in from China and Dubai from investors who have first-hand knowledge of it happening.
- Head Research Analysts Don R Campbell and Melanie Reuter raved about the economic fundamentals of Hamilton on Saturday so if you have property already, I know youâ€™re happy. If you have yet to own a piece of Hamilton, you probably should according to the 3rd party research.
How Do You Evaluate Your Real Estate Coach?
With the number of coaches out there and coaching programs out there advertising there services including those membership programs with annual fees of $10,000-$15,000 per year, I felt sharing this article and my thoughts on the subject more timely and important than ever. A few months ago, Sarah (not her real name), a former work colleague of mine from my corporate days, reached out to me after attending a weekend seminar and signed up for their membership including coaching for $15,000.Â She remembered I was into a bit of real estate and asked me what I thought. Â Sarah gave me the name of her coach and organization and after a quick google, I couldnâ€™t find much about either. What coach doesnâ€™t have a basic website or at least a linkedIn profile??? I told Sarah I wasnâ€™t familiar with her assigned coach and referred her to Julie Broad who is one of the most respected coaches for a similar cost.
Anyways, the industry of real estate investing is full of people and organizations only interested in lining their pockets with your hard earned money. I see this on a weekly basis as Hamilton real estate investors come to me with their problems thanks to the advice from their trusted advisers (often their Realtor), they made some pretty poor purchasing decisions and Iâ€™m doing my best to give them advice on how to get out of trouble. Usually that means evicting tenants to bring their property down to the number of units allowed by the city and spending tens of thousands on renovations to comply with zoning and Fire Code.
So, I canâ€™t recommend for you enough to click on the link to read the article â€œHow Do You Evaluate Your Real Estate Coach?â€ and go to page 20.
Finally, my two cents on coaching, if youâ€™re investing in Hamilton, why not be coached by veteran investors like us who meet all the credentials in the article, andÂ your coaching fee is covered by our Realtor commission. Thatâ€™s a pretty good deal in my humble opinion.
Thanks for reading and happy Hamilton real estate investing everyone!
Erwin Szeto |Â MrHamilton.ca
Rock Star Real Estate Inc., Brokerage
PS:Â If you are just starting out investing, start byÂ spending more time with like minded people and take guided tour of Hamilton by joining us for the next Mr. Hamilton Inner Circle by clicking here!!!