Hello Real Estate Investors in Hamilton Ontario (and surrounding areas)!!!
Thank you to everyone who wrote in to nominate us for REIN’s most prestigious award!! This year is my third year as a finalist for theÂ Michael Millenaar Memorial Leadership Award and here is the description from REIN’s website:
The Michael Millenaar Memorial Leadership Award is awarded to a Member who has gone above and beyond the call of duty in assisting other Members to become successful in their real estate acquisitions. The member has willingly completed selfless acts, shared their knowledge, made others feel welcome, and done it all without ever asking for anything in return. This is truly someone who understands the philosophy of: “The More You Give, The More You Get In Return.”
When reflecting on my career of assisting other investors to become successful, we have had our highs and lows and, unfortunately, regrets. Â Regrets where we failed to assist investors in taking steps towards financial security…
Almost exactlyÂ threeÂ years ago today, we started trying to help a fellow REIN member, let’s call him George (not his real name), who at the time had been a REIN member for over two years andÂ had yet to purchase his first investment property. Â A little shy to pull the trigger would be an understatement for this investor. Â Think about it – Â Monthly membership costs @ $200 (plus tax) x 24 months = $4,800 (plus tax) and one night a month away from the family invested in education he’s never applied. Â SoÂ I figured, I work with investors everyday, I know how to find the perfect investment properties for the right investors, I would be the catalyst to help this investor enter their first investment property. Based on George’s investor’s profile, he needed something simple and long-term. Â Hence we targeted a semi-detached house on the Hamilton Mountain.
Here’s the property. A good condition, three bedroom, 1.5 bath, finished basement, close to schools, parks and the Red Hill Valley Parkway. Â The rent would have covered all the expenses, a property manager, vacancy allowance and repairs and maintenance. Â Cash flow was about $100 per month after all of that.
Note that George’s wife even came along for the showings as she was growing impatient with George’s lack of action and results. Â The property was exactly what George needed but no, he didn’t pull the trigger even though Mrs. George gave the OK and that was the last time I ever saw him. Â I’m sure he’s fine, but he dropped out of REIN, likely because he wasn’t getting any return on his investment. Â The property was listed for $209,000Â and sold to someone else for $199,000.
Any guesses on what that property would be worth today?
Same style houses on the same street today list for $250,000, but that’s list so let’s assume today they would sell for $240,000 which they would sell for in a heart beat. Â That’s 20% appreciation over three years.
How much money did George leave on the table? Â About $40,000 plus George’s tenants would have paid the mortgage down $10,000 over those three years. Â Here’s the investment math:
Investment: ~$50,000 (20% down payment, light renos, closing costs)
Returns: $50,000 ($40,000 price appreciation + $10,000 mortgage principle reduction)
Return On Investment = 100% over three yearsÂ or 33% per year. Â Would you like to double your investment in three years? Who wouldn’t? Â Hindsight is 20/20 and we regret not being able to assistÂ George in becoming a successful investor. Â Admittedly we doÂ take ourÂ work a too personally and at the end of the day, George is his own man and is the one who has to live by his decisions. However, IÂ wish we could have done more for him.
The lesson is to take action, especially you REIN members as you’ve already gone through the most intensive residential investment training there is available. Â Even more especially to our REIN member clients as you are partnering with a team of Realtors who have been finalists for three consecutive years for “assisting other Members to become successful in their real estate acquisitions.”Â
In the end, it is your decision and hopefully you take action in whatever it is you do and toÂ our clients, we hope youÂ capitalize on the opportunities we place in front of you like we did George. Â If you’re not sure you can do it, don’t worry, we’ll teach you and provide the best supportÂ team you can have. Â Finally, I leave you with this quote from Sir Richard Branson:
Till next time – Happy Hamilton Investing Everyone!
Erwin |Â MrHamilton.ca
PS:Â If you are just starting out investing, start by investing in yourself by getting training byÂ Clicking here for FREE Training on “How to Invest in Nice Homes in Nice Areas”
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