Becoming a full time Canadian real estate investor can be challenging. If not done properly, it is rarely achieved. We must be able to create deals that involve both conventional and non-conventional ways of doing this business. By this I mean, sometimes we are putting our own money into a deal, but we are also doing deals using zero of our own money with our focus ideally being zero liability in every property.
Before even getting to step one, the biggest mistake I have seen is over zealous people who have decided to change their careers to become a full time investors who quit their jobs to dedicate all their time to the practice. The admirable idea of burning your bridges to ensure or “force” success can actually hamper your efforts in the beginning as you are not only cutting off your financial means, but also your mortgage qualification capability.It would make more sense to begin as an employed person and when your annual income from your real estate business is rivaling your income from your job, then perhaps make the jump.
The steps to full time real estate investing can be small but if calculated properly, can be significant and effective. Each step should be thought out well as to make the most of your time and resources. You must create realistic goals which includes a dollar amount, the types of property and exit strategies to create the desired dollar amount and a realistic time line.
To find their first property, many novice investors will go and talk to a realtor friend who in turn will often supply them with a number of MLS properties. The sad thing is, a lot of realtors, even those who state their investor credentials turn out to be relatively uninformed as to what a good deal is. The necessary property analysis (which I expect from a good realtor) in terms of monthly cash flow, estimated flip or renovation profits are not done or are stated as “potential” (the worst word in rel estate investing) and as a result, the novice investor has little to go on other than speculation. (which is the 2nd worst word in the real estate investor handbook) . Most realtors are not investors themselves and are therefore unsophisticated in term s of their investment knowledge. The problem is, the novice investor takes the Realtor’s advice and often ends up buying a retail deal.
Please don’t get me wrong. I am not putting realtors down. I respect them and have a number of great ones on my team. It’s just that if you don’t know how to “interview” a realtor prior to working with them, you can waste alot of time and perhaps engage in purchasing properties with them that perhaps are not the best deals. I know this first hand because over the years I have worked with all kinds. It can take a while to get the best realtors on your team….don’t settle!
A scenario which happens all too often to the unsuspecting investor is they buy their first investment property through their trusty realtor and for some reason the property doesn’t work out as promised. Usually the situation reflects negative cash flow due to vacancies, difficult tenants, higher than projected repairs or any number of discouraging results. This can be very, very expensive for the investor and ends up being so discouraging that the investor gets rid of the property and wants nothing more to do with real estate.
My suggestion to the novice real estate investor is to first get some excellent training to open your mind up to both the conventional and non-conventional ways of participating in the real estate business. It is a great and rewarding business to be involved in. It can have very little risk if you have educated yourself.
So, how to get started?
Get yourself into a real estate networking club, read as much Canadian based information (available on this site) and get some Canadian based training or coaching which provides education, financing and deal opportunities (also available on this site).
The new real estate investor needs to know many techniques and strategies, so please read the Real Estate Investor Tips articles on this site.
To make real estate investing your full or part time business, you must have all of the tools available to you in order to succeed.
To your success!
If you would like more information
email me at [email protected]
Challenges in Becoming a Full Time Real Estate Investor