Hello! You're looking at a free long version from my chapter from the book: Real Estate Action II 2.0, I wrote this chapter together with other 45 real estate authors from accross Canada. Our book will launch in 2016. As I wrote a only a condensed version of my chapter in the book, I thought I would include the whole raw version here online. I am proud to say that I have revealed a little more than on the book itself and if you want to expand on my chapter, then you can do so below. Please leave me a note or a comment. Also I am always looking for real estate partnerships in Canada, Vancouver and worldwide. I am always available to chat at 604-957-0921. Simply leave a message and I will return your call.
Congratulations. I am sure as a Real Estate Investor in Vancouver it was not easy for you to make it all this way.
Perhaps you have already bravely won many battles in real estate– and if you have not, simply by reading this book you are now well on your way taking your first steps toward your journey to financial success.
It will be lots of fun, after all you are now puling the trigger and great wealth awaits for those who take action. Right? Well, not so fast.
The bad news is that investing in real estate is not easy and it is not going to get any easier, especially if you have been battling in Vancouver– although we can certainly make it a lot less harder with the right knowledge, courage and wisdom. The minute you chose to be a real estate investor, shark or a flipper, you made a conscious decision to take the road less traveled, and that will make all the difference. Real estate investing is a roller coaster ride by nature, and it certainly is a great ride. Producing 90% of all millionaires in the world amassing great wealth - and yet for some even better at extinguishing it. And Vancouver real estate was a greate driver!
The good news is that you now rejoice that you have chosen this path– that you have indeed decided to take your future into your own hands at all is already a great undertaking that requires courage. Besides, reading this book and especially this chapter (ahem) will give you seven lives, make you more handsome, and hopefully better at investing. Having chosen to carve out your path, you now own your future, whether you fail, survive or thrive is almost entirely up to you. This is the great quality of real estate investing: if done right, it can produce great wealth, love and health – and the time to spend them all!
This chapter is about the real estate wisdom my family and I acquired during the ups and the downs – and in particularly how my family and I went from there being poor young immigrants in Canada to achieving financial freedom through world wide real estate expansion. That is a great deal to cover, of course, but I will keep it short and practical as much as possible. After all, the possibilities of what you can do with real estate are enormous. So thank goodness for real estate.
Real Estate Investment is sacrifice
During my first lectures at university, my finance professor instilled this concept onto us: the definition of investing is sacrifice.
It is simply put, but the paradigm shift came when I started taking action – and that in order to have success financially I needed to compromise. I needed to make sacrifices at every step. And so, from nothing, my sacrifices began.
Sacrifice 1: It is washing dishes and cooking for international students to help my mother to pay the rent - we did not own during this time but we were preparing.
Sacrifice 2: Studying hard at university so I could get Honours and eventually be hired by one of world's biggest accounting firms.
Sacrifice 3: Leaving my corporate job to create my own business and join the real estate investment world.
Sacrifice 4: Saving money each weekend by not going out in order to give it to my mom to buy our first house – we did it.
Sacrifice 5: Not getting into lifestyle, acquiring a mortgage and a car payment early in life. "It would wreck the show," as my wise mother cheerfully put it once. A lot of couples do this right away when they get married: they buy a house, mostly in an expensive area with a high mortgage, and an expensive car loan. In their efforts, while honorable, they end up going to work to pay off bad debt every day. From my own starting point, I instead I bought a rental property, one that had two basements I rented. I turned my real estate into an asset. I lived in the top suite and collected enough to cut my mortgage payments by 75%.
Sacrifice 5: Not falling in love. The only time I made a mistake buying so far is because of my emotions. A pretty townhouse with a water view at the top of a market was a sure way to make me step away from my own fundamentals. Learn from my mistake: don't fall in love.
But, even though it was a bad call I can still rent it out with positive cash flow and get great enjoyment out of my beach house. I cannot say that for the investments I lost in the stock market.
My own starting point, for what it is worth, until now, has been all about compromises and sacrifice. If you want to be an investor you must be willing to sacrifice.
Use other people's names and marry OPM
The possibilities of what you can do with real estate, I repeat, are enormous. One golden nugget we have used for many years was using the names of other people - aside from also using their money of course. Benefits: You can leverage their name, income, and buyer status to purchase real estate in their name. When you start owning one, two or maybe five properties, it becomes very tough to continue on with financing.
Using other people's names can help you to leverage their 'clean name.' They also benefit because with you they gain a great partner and also work with other people's money: your money. Ensure: That you have a notarized first right of refusal registered on title as a charge – with a co-ownership agreement backing up the responsibilities of each party and an exit date, when you wish to dispose of the property. The first right of refusal will ensure that you can buy out the person on title before they can sell it. Secondly it ensures they cannot sell it without you. This is very important.
Stick to your family if you can
One simple trick is if your son/daughter/uncle/sister/father/mother has a great name and a great job then you can include them on title. For the bank, they can perhaps help you to qualify for that tough mortgage. At the notary level, you can simply add on the title that your family member owns 1% of the property and you own the other 99%. Another way to accomplish this is by having them co-sign for a loan. You will have to speak to your family member to see their level of comfort. If you have a trusting relationship this is a great way to move forward.
Alone we go far, together we can reach the stars!
Have goals that are beyond your financial freedom
Ultimately this may sound cliché, but it is actually crucial. If your goals are simply 'to make money,' I promise that at some point you will begin to stall. And even if you do not, rest assured that if you implement this simple philosophy your success rate will exponentially skyrocket.
Find your calling by following these three simple philosophies, which coincidentally can be applied to anything in life:
▪ Mastery – i.e. for me it was the mastery of the art of selling
▪ Autonomy – i.e. for me it was being able to make my own decisions
▪ Purpose – i.e. for me it was helping my family
Dan pink in a recent TED Talk on The Puzzle of Motivation speaks of these 3 as the science behind true motivation: "Is this some kind of touchy-feely socialist conspiracy going on here? No, these are economists from MIT, from Carnegie Mellon, from the University of Chicago. Do you know who sponsored this research? The Federal Reserve Bank of the United States."
Do this and you will be capable of insights of the most startling brilliance.
See past the deal and money, and see a way into helping others while doing so. Always make every deal a win-win because in the end it is the energy you take away from that deal that you will carry to the next. Money is simply a form of energy, and those who play nice with others win in the end – in so many ways.
Be Real! Be you!
There is only one of you and you have infinite capacity. To begin with, for you to be here now billions of spiraling atoms had to somehow join forces in an intricate way to create you. It is a special arrangement so powerful and unique and so infinite that it has the power to do incredible feats - and may perhaps only exist this once. So go do your deals with a zest and live life like it is an adventure, and you are the main character. This will help you get through the lows while reaching to the climax. Once Maxi Jazz threw out the great lyrics: "you don't need eyes to see, you need vision." And what better vision than if you can take yourself out of any stressful situation than to watch yourself from a movie screen?
What would your best self do in that moment? Meditate, pray, do yoga, do whatever motivates and encourages you to become SELF-AWARE, be always moving toward your best self.
Start moving early on and do not be afraid of possible circumstances
You only need to know 20%, the other 80% will come as you move along and take action. Russian artist Andrei Tarkovsky said: "No artist creates under ideal conditions." You will never have ideal conditions. Some of the greatest solutions coming from the greatest minds have come under the most atrocious conditions!
Mentor and Disciple
Align your self with greats in your own community – at least one great. If you attach yourself with someone who has had great success and has a proven track record, you can start emulating his or her actions and success – but do not simply copy them. I am deeply and variously indebted to my great mentor, Francimere Morrison, which also happens to be my mother. In order to become great, several things must happen, you must aim for the absurd in order to achieve the impossible – and she has made the absurd happen and today stands at a great place in my heart. Also from personal experience having action takers as mentors in my life like Ozzie Jurock helped me take the best from their experience and implement it into my own life. Get into a group of action takers! Create your very own or join an existing group like "The Real Estate Action Group (REAG)" by Ozzie Jurock and Ralph Case. The upshot is that you need to align with a great mentor. Get moving and find yours.
Which came first the courage or the fear?
This is not a riddle like the chicken or the egg. It is simple: fear comes first. You must have fear in order to have courage. The presence of fear is normal. There are many nay-sayers and negative people that get in between you and your dreams. Do not listen to them. Real estate is between your right and left year!
If you lack the wisdom, or knowledge, then courage will replace them both. Ultimately if you know only 20% you can learn the other 80% along the way. In order to have courage fear must be present. So don't worry, you are perfectly normal, just don't be paralyzed by it! But try to change fear into respect. All it takes is hard work, patience, resourcefulness and self-awareness.
This is especially true in Vancouver real estate market- "Be approximately right than precisely wrong!" - Warren Buffet
Whether you are in a Canadian bull market or a bear market always be approximately right. If you implement this philosophy not only will you ride out the waves but you will also be able to sleep at night.
Navigating the vancouver property market, whether you are selling condos, houses, townhouses or what have you, this is a must:
In an up market when selling, always leave something for the next party involved. If you add this buffer you will avoid being the last one standing when the music stops.
In an up market when buying, submit lots of offers and pick the one who likes you the most. It can come from a sleepy agent or a motivated buyer. They are both out there. Negotiate and get a great deal that you think is approximately right for the value based on fundamentals.
In a down market when buying do not wait for the bottom, just be approximately right. You will find that the down side is way less risky when the market is moving up. Light switches go on real quick when markets turn positive again – sometimes overnight.
In a down market when you are selling always price your property below the lowest property in your area. If you price your property high in a falling market it is like trying to catch a falling baseball with your glove facing down. You need to catch the falling baseball with your glove facing up. Otherwise you will end up chasing the market. Price it just below the lowest comparable property in your area. If the market goes down lower at least you will have caught it before it falls any further.
Live life like your greatest adventure and always be optimistic!
Optimism is not only healthy but it makes you more attractive. Your dog will even like you more! Optimism and good cheer in bad times will help you succeed. Making sure you do not grow arrogant in success will also require optimism to see life for what it really is - a great adventure where you can enrich your soul and make other's lives breathe a little easier! So do not forget that this is all just a ride! You can learn from ups and downs, and just like markets, our lives are also cyclical – we too go through ups and downs, like a rollercoaster – the important thing is to never give up and always be optimistic.
Paulo Coelho once said: "it's having the possibility of a dream come true that makes life interesting."
Daisaku Ikeda, a great Buddhist revolutionary, is infamous for saying: "while it is important to win, it's even more important to remain undefeated no matter what happens."
So get up, inspire action in your life, and those around you. Understanding is simply not enough. No matter how wonderful our dreams, how noble our ideals, or how high our hopes, ultimately we need courage to make them a reality. Without action, it is as if they never existed.
So get out there and take action!
- Make sacrifices and compromises early and always.
- Save as much money as possible early on in life.
- Find a Mentor that has a proven track record.
- Get a real estate agent that is investment oriented and knows the loopholes.
- Get involved with an active group of investors who are like-minded.
- Get into a well-researched publication and learn to time the market.
- Learn to cultivate your courage.
- Buy Land whenever possible.
- Use other people’s money and other people’s names.
- Make just one offer. But don’t go overboard either. Select your targets.
- Be inflexible with you offer, inch away slowly and be patient.
- Fall in love with the property. Walk away if it doesn’t make sense.
- Buy anything without doing your research or seeing the property.
- Hold onto losers. If there is no upside, and negative cash flow, sell it.
- Try to time the market. Always be approximately right than precisely wrong.