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Surrey Real Estate Investors Club - Strategy Selection
- 1. Surrey Real Estate Investment Club Welcome! :
- 2. When I have conversations with successful investors they never give me stock tips. They always talk about fundamentals. There is a lesson here for entrepreneurs: Without a solid understanding of fundamentals, it is hard to make smart wealth building decisions. Learning to analyze quickly and efficiently â this is the knowledge that will separate you from the rest. And that knowledge is scarce. Mark Ford (Michael Masterson)
- 3. Introductions Welcome to the Surrey Real Estate Investors Club!
- 4. Future Plans 1. Strategy & Getting Started 2. Area Analysis & RE Cycle 3. Property Selection and Cashflow 4. Financing 5. Due Diligence & Making an Offer 6. Tenant Selection & Management ThenâŚ.
- 5. Sponsors Welcome to the Surrey Real Estate Investors Club!
- 6. Tonightâs Agenda ⢠Why or why not use RE as part of your investment strategy ⢠Different types of RE investing ⢠How to get started today!
- 7. The Legal Stuff⌠The information contained herein (the âInformationâ) is intended for general informational purposes only and should not be relied upon by recipients hereof. Although the Information is believed to be correct, its accuracy, correctness or completeness cannot be guaranteed and has not been verified by either Aspire Holdings or any of its affiliates. Views expressed in this presentation are based on research materials available from sources that Aspire Holdings (d.b.a. âAspire Real Estateâ) considers reliable but neither guarantees, warrants nor assumes any responsibility or liability of any kind with respect to the accuracy, correctness, completeness, or suitability of, or decisions based upon or in connection with, the Information. All real estate opportunities come with varying degrees of risk and past performance is not an indicator or guarantee of future results. Prices can go up or down and current performance may be lower or higher than any performance data quoted for comparisons.
- 8. A Simple Retirement Plan⌠⢠Buy ONE townhouse at $300k and rent it for the next 25 years. ⢠Each year income > expenses ⢠Average appreciation = 3% ⢠25 years later - zero mortgage, an asset worth >$600k and several $1000âs in monthly income! ⢠Like adding $2,000 / month to your retirement!
- 9. Why Real Estate? ⢠You can touch it! ⢠Can be leveraged, manipulated and controlled ⢠This makes it interesting! ⢠Provides diversification ⢠But it is a business and often a means to an end. What are YOUR goals?
- 10. Why NOT Real Estate? ⢠What is biggest risk in RE investing? ⢠How can you control that risk?
- 11. Why NOT Real Estate? ⢠Lower liquidity ⢠More education required? ⢠It is not passive income ⢠There is always risk â˘This is often higher with shorter term strategies
- 12. Ask Yourself: â˘Do you want to be a real estate investor? ⢠Why? â˘Do you not want to be a real estate investor? â˘Why not?
- 13. Different Types of RE Investing? ⢠REITs ⢠Second mortgages ⢠Pooled investment / private equity fund ⢠Money partner (in a JV) ⢠Realtor ⢠Mortgage broker ⢠Property manager
- 14. What is Your RE Strategy? ⢠Canada vs. US (or elsewhere) ⢠Residential vs. Commercial ⢠Single vs. multi-family (>4 units) ⢠Duplexes, triplexes, fourplexes ⢠Condo, townhouse, SFH, recreational
- 15. What Are Your RE Tactics? ⢠Should be driven by the market, the cycle, your experience, your strategy and your goals. ⢠Flips ⢠Wholesaling (assignments) ⢠Buy and hold (B&H) ⢠Rent-to-Own (RTO) ⢠Short / Medium / Long Term Exits
- 17. Getting Started Today âThe question is not what if I die tomorrow? It is, what if I live another 20 or 30 years the way I am?â -Kim Wolinski
- 18. Why???????!!!!!! ⢠What and How ⢠Fear/Greed/Hope âJust as goals are the fuel in the furnace of achievement, reasons âwhyâ are the forces that intensify your desire and drive you forwardâ -Brian Tracy (Maximum Achievement)
- 19. Gaining Clarity Grab a piece of paper and pen or pencil. Question: What do you like to do? What is your purpose? What would you dream of if you could not fail? Why do you want financial freedom? Why are you here (learning about real estate)?
- 20. I would like to I like to see them I love my kids. spend more time grow. with my kids. I would like to be I donât want I like to do⌠my own boss people controlling my time Question: Create a vision for yourself. What do you want life to look like in 5 years?
- 21. Obstacles! ⢠But âOur buts are HUGE. And the longer we sit on them, the more they continue to growâ -S. Stephenson (Get off your âbuttâ) ⢠Support âWalking with a friend in the dark is better than walking alone in the lightâ -Helen Keller
- 22. Obstacles! ⢠Disbelief âWhat we think, we becomeâ -Buddha ⢠Giving up âThe secret of life⌠is to fall 7 times and get up 8 times.â -Paulo Coehlo (The Alchemist)
- 23. More obstacles??? ⢠Identify them ⢠How are you going to solve it? Obstacle identified Action you can take to overcome challenge. I have been turned down for Find a JV partner. financing.
- 24. Nitty Gritty Question: What do you need to be where you want to be in 5 years? What can you do THIS YEAR to get you closer to your 5 year vision?
- 25. 5 year vision and what you need for it: Question: Need to earn $60,000 of alternate income a year to replace my current job. down your goals even further. Break 1 year 6 months ⢠Increase alternate ď§ Learn about source of income investing in real by 20% by investing estate in real estate. ď§ Buy one property to buy and hold
- 26. 5 year vision and what you need for it: Need to earn $60,000 of alternate income a year to replace my current job. Question: What can you do today?? 1 year 6 months 1 month/TODAY ⢠Increase alternate ď§ Learn about ďą Go to Surrey REIC source of income investing in real ďą Read 2 real estate by 20% by investing estate investing books in real estate. ď§ Buy one property to ďą Prepare finances buy and hold and talk to mortgage broker ďą Get in contact with a realtor
- 27. Take Away Summary 1. Educate yourself on the possibilities and options 2. The âwhyâ dictates the âhowâ 3. Keep taking action - however small!
- 28. â...the sure sign of failure is procrastination. Even setting a starting date of tomorrow is a bad sign. People who really, truly want to create a real and permanent change in their lives want to start now.â - Michael Masterson (Automatic Wealth)
- 29. Feedback, Prizes and Get Started! If you have questions or comments please let us know! Next meeting Wed. Feb 27th @7pm ⢠Find a new person in the group and tell them what you are going to do in the next month to achieve your goal! ⢠Follow up at next SREIC meeting.
Editor's Notes
- 7.00-7.15 Arrivals and networking (4-5 min pp)Food orders (their tab)
- 7.15
- Ian:From UK, former research scientist, teacher, commercial pilot and operations manager. Caro: From Colombia, Bachelors in economics and management, former commercial pilot, instructor. Sales and marketing background.Held investment properties for 10 years. More later on why we got more involved but for me it is now my âjobâ and what pays the bills with our Company, Aspire Real Estate. Association with Kiva.We certainly donât know everything and are constantly learning but we are both educators and love teaching and sharing and that is one of the reasons we started SREIC.Others are: although other clubs had some good education they can also be high-level, too pitchy, unfriendly, expensive. We wanted to do something different that would get people interested in the possibilities and in particular all the good things that are happening in our city. Soon to be biggest city in BC, >0.5m people now, 1,000 new people per month, voted #1 city to invest by REIN, but under-served at grass roots level for investors. Video on our website. Wanted something that would concentrate on the fundamentals â no interest in US or contract assignments (later) There is enough to talk about with just our simple, little retirement planClub Rules - No pitching without our consent. Honesty and confidentiality Open environment â ask questions, be friendly, participate (we have activities!)What we hope you gain from membership Enough knowledge for you to get started and start asking the right questions We canât cover everything and we donât have all the answers or experience. We will only tell you what we know about, that is why weâll concentrate on certain tactics. Our opinions. Not a get rich quick event.
- In these 1.5h meetings, itâs impossible to go in-depthFuture plans â 6 months of covering fundamentals of buying residential RE. May have some expert speakers in for certain topics such as financing. After that we hope to build a following of people who are taking action and want to continue to expand their knowledge and horizons.Bonus RTO?
- Sponsors: ARE, ABC, CREW, RNY. Our Company covering costs for the first several meetings but after that may need to charge a small membership fee.EPITR â next meeting (or Dave?) Wed Feb 13th 7.30 pm KingswayAttendee introductions â name, from, why youâre here, if you have investment property.
- We`re expressing our opinion - not selling, promoting or advocating anything and if you go out and use the Information it`s at your own risk and all examples we give provide no guarantee of future performance of any investment.
- 7.35Wealth generation â pension plan / accountant story
- You can drive-by and see whatâs happening If you have $50k to invest you can by just that value of stock (excl. buying on margin) but you can buy $250k worth of investment property If they each go up 5%, which will make you more money?Cf ROIs also Can be refinanced due to appreciation (unlike stocks!) Multiple ways to make money: appreciation, mortgage paydown, cashflow, forced appreciation, tax advantages Control: rent out storage space separately, or garage, solar panelsDiversification. Our goals: lifestyle and charitable return
- Here to present both sides. Write down what you think is the biggest risk in RE?
- It requires variable amounts of time and other skills Education (whatâs a good investment) Communication skills (tenant issues) Practical skills (fixing tap â example) Organization (bookeeping, raising money etc) Marketing (tenant placement) Overall: willingness to learn, positive attitude (things will go wrong â flood example), perserverance identify your strengths and weaknesses to help you decide if you want to do it and what strategies/tactics to use
- If you are interested in other techniques, then we may be able to point you in the direction of someone doing itWhat we know about and what we donâtWhat weâre going to be talking about here
- US: not something that has ever interested us. Be careful of âdealsâ â go and visitWe have properties in Spain, know people who have bought bare land in Costa RicaResidential: simple to understand, larger market, lower investment, easier to find tenants government loves tenants, lower cashflow (usually), leases easily brokenCommercial: long term leases, no rent restrictions, less tenant protection, financing can be easier to obtain (non-personal) larger amounts of money, more analysis, harder to fill, higher vacancy rates, bigger risksMulti-family: can be great but get specific training. More money involved and relies more on appreciation. Stabilization periods. Different financing methods.Duplexes: live in one unit and rent others (basement suites). Have to deal with all tenant issues. Tenant squabbles even if youâre not living there. better cashflow. Less vacancy effect.Recreational: management and placement fees, calendar occupancy, location, wear and tearStrata: lower price point (usually), mtc fees, other tenants (YCW), stabilty, special levies, CRF, DR but lower mtcSFH: complete ownership, simple, harder to cashflow (no suite or RTO) due to higher price point and more mtcStart with something you know and develop from there.
- Flipping is a short-term holdBuying under-market and then re-selling or renovating then re-saleCould be due to forced move, estate sale, poor marketing, poor upkeepHas its place, but can be high risk, especially in a flat/declining marketWholesale â find a deal, put it under contract and then assign contract to someone else for a feeLot of work, need connections. Transactional, not long-term wealth creation.B&H: Just put in regular tenants. Usually 5-10 year plan min. Pay down mortgage while covering expenses.Even if value doesnât increase, you have still made money.RTO: what we do now â reason is cashflow. Tenant will buy property in 1-3 years and for that right they pay an option fee and premium rent, which is ultimately credited back to them if they purchase. Best of everything â cashflow, locked-in appreciation, multiple exit strategies and generates great returns.The next 6 months we will be concentrating on the fundamentals as they relate to B&H and RTO.End 8.15 Serve food?8.20-8.45pm Caro - goals
- 8.00 Food delivery/ coffee
- Now I would like to bring your attention to this quote on the projector. Are you happy if everything is the same in 20 or 30 years? I bet most of us aspire for something slightly different or very different depending on who you are. I assume that we are all driven to this real estate meeting because we think real estate will provide us with something we want, but if during this process you find that is not the case⌠Its ok! We understand that real estate is not for everyone and will not fulfill everyoneâs aspirations. My aim with this presentation is to help you gain clarity or guide you towards it, motivation and to get you moving closer to your goals in this next month but my guarantee is that if you do nothing you will gain nothing. On that note lets get started!
- Why? The reason why we are here and invest or want to invest in real estate is very important in this whole process of gaining clarity and becoming the investor you want to be. What and How- Even though during our presentations and course here we will talk about what to do and how to do it we believe the most important question is WHY?. Not many people think about it and end up making the wrong investments:A friend we have who is also an investor is quite successful from the outside, since as many would think he has a lot of doors. But many donât realize he is unhappy and stressed out because he constantly has to travel to take care of his properties. Maybe if he had realized his why sooner he would have choosen a closer location or a different type of property. FEAR, GREED, HOPE: people that donât know why they are investing let their investments and decisions be driven by these factors. Ideally when YOU make a decision your goals and aspirations will be the decision maker. A good example is a person that buys buysbuys everything they see, like my friend. She goes out and buys clothes all the time, she is allowing greed (consumerism) drive her decision making instead of thinking maybe I can save the money and buy a house for my family or save for my retirement. Motivation- Why serves as a large motivator⌠providing the push to get you moving. Anthony robins says and I am paraphrasing that one of the worse places to be in is being comfortable⌠when you are comfortable there is no big push to change. By showing you your why and pushing it in your face we are making you uncomfortable. Hopefully fuelling your desire and driving you to act.
- How do we gain some clarity. First grab a piece of paper and a pen or pencil. We donât have enough time here to do it all in detail but I definitely recommend you do some of it here and finish it when you get home, if you have another half it is good to share this exercise with them too so your goals align. In your piece of paper draw 3 columns.We are using the first one here. Ask yourself the following questions and answer in the first column the best that you can. For now lets write down the answer to two or three of theseâŚ.In column two and three we are getting to the basis of what you want for your life. Ask yourself why⌠lets see an example..Personal exercise â not going to be sharedâŚ?
- Go through exampleâŚ.. Now you do it with your two or three thingsFor you parentsâŚ. I have a little photo⌠hahaNow you know what you like and what your main drivers are. With that in mind, with your current situation in mind, create a vision for yourself.. Describe in a paragraph or so what your life looks like in 5 yearsâŚ. I used 5 years as an arbitrary number since it not too far but not too close For now lets get started with a few sentences. Another way to look at this too is to think about what your ideal day looks like. Now that you know what your life potential is, hopefully you are feeling the desire burning and pushing you to get started. Before we do though, lets talk a bit about challenges.
- Now you have the desire burning lets not allow obstacles and challenges get you downâŚ. Lets talk about some of the general obstacles you will find. The most common one is your BUTâŚ. I would invest in real estate but I donât have money, I would do this butâŚ.Find what your buts are and donât let them continue to grow, donât believe them and start tackling them today. The best way to tackle them is by taking action, by knowing your why and finding support. Another obstacle is the negative nellies, most of us if not all have had a dream of ours crushed by someone else, at least verbally. When I was in kindergarden I loved Super girl and what do you think I dressed up as when halloween came? An older girl came up to me and crushed my dream telling me there was no such thing as supergirl, I knew she was wrong but I was still devastated. It doesnât matter who you are, rich/poor, smart/stupid people will always try to stop others from progressing or at least some people donât want others to be âbetterâ than them. A perfect example is something thatâs been happening to me for a little while. I have recently began a lifestyle change trying to eat healthier but many people that donât understand what I do, judge me or even worse try to tempt me with foods that I have mentioned I donât want to eat. Donât be a nellie or neil for others and donât let them get to you. Focus on why you are doing it after all its your life not theirs. Just by being here you are gaining support our support. We have found mentorship and peers that have similar goals to be very good support. It is also good to find a close friend or person you trust and tell them what your goals are so that you are accountable to them, ideally they would tell you theirs and be accountable to youâŚ. Well help you a bit with this later
- Disbelief, I am particularly susceptible to this one. I tend to not believe in what I am capable of and I focus too much on bad things I have done or that have happened to me as an excuse to form a but. Confidence on the other hand can be your best friend, after all, all the girls like the confident guys and viceversa. What I have learned is that in many cases half the battle is won if you are confident. I bet you would not be caring about what I say or listening to me if I wasnât showing at least a bit of confidence. Giving up⌠The easy way out of anything is to give up and also the sure way to fail is to either not start or give up. RE investing is not always easy, pleasant or comfortable but as long as it is getting you closer to your goals then those bad days will be worth it. When you are thinking of giving up go back to thinking about your why.
- These four obstacles I just mentioned may not be your challenges and I am sure we all will have different challenges moving forward with our investing and vision. So when you are getting stuck and are not sure what to do, do the following: identify your obstacle and then an action to overcome that challenge. This is also a good way to prove to yourself that getting started is not as hard as it may seem. For example:
- Now lets get to the Nitty Gritty of how we are going to get started TODAY! In your paper there answer the following question, with your 5 year vision in mind what are the things you need to accomplish it. Maybe break it down into your goals for the next year. Lets take a second to talk about goalsâŚ. Some people like them some people donât. I donât get stuck on my goals but I use them as a reminder of what I can do today to move forward. If you donât accomplish one of your goals donât worry just make sure next year, month, day you continue to work hard at accomplishing it, if it is still in line with your vision. Also, be careful to not choose to many⌠think of where you are today and choose 3 or 4 max. Anything more than that will just be a reason for a but and you will probably get frustrated and give up.
- Now lets break it down further. -Break down your goal into a shorter time frame. What can you do in the next 6 months or 3 months? You may or may not want to do this step⌠some people can go from one year to today but I like breaking it down a bit closer. Or sometimes I may skip the 1 year all together and only do 6 months and today.
- Now even further, What can you do TODAY?? This month.
- 8.30
- And on that note I would like to leave you with this quote!
- Magazine give-away (CREW sponsor). (promo code: 35% discount SREIC)Talk about RNY / JV workshop (only 2 in 2013) â prize draw and mention 30% discount (promo code: REIC)Other sponsorships needed. Next 2 mtgs by donation. New member referrals.Blog link summary of mtg.Sign-up on meetup now available â need to know numbers to let restaurant know.Out of room by about 9.15pm â networking questionOf course the main selling point is that we work with you to create the presentation you'll give to get money for your deals. The workshop gives you:Class time to practice in front of peersLeave ready to present your first deal!Additionally we're covering:â˘What is Private Money? How do you find it?â˘RRSP Mortgages - Steps to putting them together, Rules you need to know so you donât get in trouble & How to find tons of RRSP Investorsâ˘Joint Venture Agreements â what you must have in every contract!â˘How to set up your money getting funnel so, over time, people with money contact youNext event is in Nanaimo, BC on February 16 & 17