Happy New Year Real Estate Investors in Hamilton Ontario!!
We at Team Mr. Hamilton hope you all had a wonderful holiday to de-stress, spend time with loved ones, vacation and most importantly reset to make 2013 the best year ever!Â I know we have!Â I’ll share with you what I did on vacation next week because this is a short week and we have preparation to do for Saturday (Jan 5th) Mr. Hamilton’s Community meeting.
Thank you to everyone who wrote letters to the city and made your presence felt at the recent rental licensing debate at city hall.Â Link to article: http://www.thespec.com/news/local/article/852060–strong-opposition-to-licensing-illegal-apartment-units
From those I have spoken to, the opposition is strong and the city’s report and argument for licensing is weak.Â Those from the community who spoke were all against licensing except one couple who owned student rentals but were unhappy with the decline of the Westdale neighbourhood, a popular place to live for both families and students.Â I’m not sure what the solution would be however, they should be grateful for the university and the students as that is the major contributing factor for the meteoric rise in property values in Westdale. As for Terry Whitehead’s comment about house fires in Westdale, my houses (are not in Westdale but) we have fire alarms everywhere.Â Every basement bedroom window is at least four square feet and can be removed without tools.Â Any wall or ceiling we’ve opened or built was insulated for noise and fire separation.Â All wiring has been inspected by a home inspector and/or a master electrician.Â My properties are inspected monthly by my property manager plus we drive by them pretty often. Myself and my coaching clients are not part of the problem and do not need big brother looking over our shoulders and taking money from our pockets.Â The city already has all the power it needs to go after trouble makers: property standards by-laws, Residential Tenancy Act, ESA, Fire Code, etc…
All the other delegates spoke against licensing including Tom Karadza of Rock Star Real Estate, a tenant who can’t afford to pay any more in rent and does not want to move back into her car and representatives for affordable housing.Â Who can blame them when the city estimates up to 30% of apartments will be lost due to licensing.Â And what happens when supply is limited but demand stays the same?Â Prices go up.
But enough of all that negativity.Â My friend and client Justin Chung who is an extremely active investor gets my nomination for REIN rookie of year has a story to share of his 2012:
As I write this, I’m currently sitting on a plane flying from Buenos Aires, Argentina to Lima, Peru (and loving the extra legroom on TACA Airlines).Â My wife and I have spent the past week vacationing in Argentina exploring Buenos Aires and Iguazu Falls and now headed to Peru to spend time in the Sacred Valley, including visiting the mystical Machu Picchu, which has always been one of my “bucket list” places to visit.
This is the first time in a long time where I’ve had the opportunity for some R&R and to reflect on the past year.Â It’s been a very busy 2012, especially as it relates to my real estate investing activities.Â Early in the year, there was a death in my immediate family.Â This was devastating to me and after much reflection, provided stark reminders that: (1) Life doesn’t always work out the way I want or expect it to; (2) I cannot take for granted the people I cherish most in my life; and (3) Life really is short and that I had to make the most of it in the limited time I have.Â So I decided that â€œto hell with itâ€, I’m going for it and that nothing was going to stop me.Â I set a goal of acquiring 1 investment property a quarter (only if it met my positive cashflow requirements, of course!).Â I’m happy to report that with a quarter to go, I’m already ahead of schedule.
1. It’s all about the team, baby. Although I began investing in real estate a few years ago (with a handful of student rentals, which I still ownâ€¦and love), it didn’t really start taking off until I recognized the incredible value of building a strong team to support me. This team includes your Realtor, mortgage broker, property manager, home inspector, lawyer, insurance broker, etc to name a few. I invested time into establishing those relationships, and building them to the point where a strong level of trust was established. For example, on a couple of my recent purchases in Hamilton, I put conditional offers on the property â€œsight unseenâ€, something I would have never done in the past. That only happens when you’ve developed a strong relationship with your Realtor, who knows the market inside and out and who has a solid grasp of your needs (I could not have done it without you Erwin â€“ thank you!!). Â It also doesn`t hurt that one of these set a record high for rent in a top neighbourhood!Â The key is that I viewed each of these relationships from a long-term perspective, rather than a short-term transactional perspective.
2. Ready, fire, aim. Â This was the name of the book that I have started to read recently (written by Michael Masterson), and a principle that comes from the book The Success Principles, by Jack Canfield. The analogy behind the principle is that you should get â€œreadyâ€ by figuring out what you want (which I would say many people will do), â€œfireâ€ by taking action now, and â€œaimâ€ by making adjustments after you see where you landed.Â A lot of people know what they want, aim at a target, but donâ€™t follow through and â€œfireâ€ with the action necessary to drive home these results. In the world of real estate investing, know what you want, run your numbers to make sure it makes sense, pull the trigger with an offer, do your diligence, and then adjust your systems and processes accordingly for your next purchase. Yes, it still is a little scary when you waive all conditions (does that feeling ever go away?), but taking massive action is the only way to get results.
3. Momentum is a beautiful thing. At one point this summer, I was closing on 1 property per month. Â With and without joint venture partners.Â Single family and multi-family residential properties.Â In different provinces to boot.Â All while maintaining a full-time job in Toronto.Â You need to have a system (and a few checklists donâ€™t hurt either!) in place to help you manage the process from offer acceptance through to closing, as well as managing the property post purchase. Â REIN does an AMAZING job of emphasizing having systems and processes in place.Â Â Yes, it can still seem like a lot of work. Â Yes, it can feel like you are juggling many balls at once. Â But like that analogy where in order to get a rocket ship into orbit, which requires the rocket to burn 90% of its fuel in the first 5-10% of the trip vs. staying in orbit (which only requires the other 10% of fuel), once I spent the bulk of my energy upfront, the remaining deals (i.e. staying in orbit) became easier and easier because I had gone through all the legwork and preparation already. Invest your most precious resource wisely upfront (time!) by building your team, studying the economic fundamentals of the city, understanding the neighbourhoods, crunching your numbers to make sure it meets your cashflow requirementsâ€¦then close your deal. Â Ensure the property is rented. Â Repeat.
Iâ€™m so glad that I had the opportunity to share some of my perspective. Â I wish you continued success!Â Now, if youâ€™ll excuse me, itâ€™s time to get off the plane and enjoy the rest of my vacation – Happy investing!
Thank you Justin! All those sight unseen deals were fun eh?!Â FYI readers, I would call Justin from the house when I found an good one and tell him why its a buy so it was unseen by him but seen by me.Â Feel free to ask him about how those deals worked out the next time you see him.
Till next time – Happy Hamilton Investing Everyone!
Erwin |Â MrHamilton.ca
PS: If you are just starting out investing, start by investing in yourself by getting training by Clicking here for FREE Training on “How to Invest in Nice Homes in Nice Areas”
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It was great working with you this past year Justin, and getting you that record rent. Looking forward to many more.
Randinator, nice work. I knew from the beginning that property would attract big rent. Love how it shows and the short walking distance to downtown hence the reason I told Justin to buy it 🙂
I like your informative articles as you know I recently joined your blog.Your sucess story is quiet impressive and the way you chase your GOAL and achieve it is remarkable.Keep up the good work.
In your above writing you talked about the “conditional offer on property ‘sight unseen’ “,
I just want to know What & How you make a conditional offer,I mean, what clauses/conditions you put in your offer.I hope you would pore some knowledgable comments on it.
Be safe –Enjoy your Vaccations
About 99% of our offers are at least conditional on both inspection and financing. This is quite common in our market. What is less common in the market is buyers writing offers without seeing the property personally. When my team does this with clients, we preview the property and call our clients when we’ve found a property that fits the system. I’ve been on both sides of this strategy because I too am a very busy professional and can not always make the time to see property. If you speak to our clients who have acquired the most properties in 2012, the all have busy careers and they all have strong enough relationships with us to write conditional offers sight unseen.
If you would like to discuss this further please come out to our next Mr Hamilton member meeting tentatively Feb 23rd. email Maria(at)mrhamilton.ca and let her know I invited you.