First Rental Property

If you are an aspiring real estate investor, one of the first books that you will probably come across during your research into real estate will be Rich Dad Poor Dad by Robert Kiyosaki.

This will be one of the first books you come across because this book is everywhere.  Go to any self help section or real estate section of a book store, and you will be able to find this book no problem.

If you speak to modern day real estate investors, they will confirm and tell you that Rich Dad Poor Dad was one of the first books that they read on their road to real estate investment.

I have personally yet to meet a real estate investor that owns more than 3 rental properties that has not read this book.

As a real estate investor myself, I often meet a lot of people who are interested in real estate and who are aspiring to become real estate investors themselves.

I have on the odd occasion heard some very peculiar stories from novice real estate investors as it relates to Robert Kiyosaki and the Rich Dad Poor Dad brand.

These peculiar stories told to me by new investors have always related directly to the Rich Dad Poor Dad Seminars.

What has always struck me as peculiar from these stories has been the following:

During these seminars, the participants are instructed to call their credit card companies and have the limit on their credit cards increased as high as they will go.  The participants are told that they will need these high balances on their credit cards in order to buy real estate.  In the class, they are also given scripts of what to say to their credit card companies.

When I first started hearing these stories from aspiring investors, I could not believe it.

I just dismissed these stories as being unusually peculiar and did not invest much more thought into this.

This past weekend, my fellow Real Estate Investment Network (REIN) member, Chris Davies posted on his blog a very eye opening interview of Robert Kiyosaki conducted by the Canadian Broadcasting Channel (CBC).  Watch this video, it may change he way you look at Robert Kiyosaki forever. In addition, the CBC also wrote an accompanying article which describes why Rich Dad Seminars are deceptive.

What are your thoughts? Is Robert Kiyosaki a friend or foe? Comment below.

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Do you ever wonder how some people become so successful?  Sometimes it seems that these people just have some sort of magic ingredient, that no one else has.

At other times, it seems that these successful people are so much smarter than the rest of the general public.

The truth of the matter is that generally speaking successful people are not that much smarter than the rest of the population, and they definitely don’t have some unknown, secret ingredient.  —  No offense successful people!  🙂

I have been carefully observing successful people in the hopes of cracking their code.  I wanted to find out what made them so different than everyone else.  I have come to realize that there is not much of a difference between successful people and those people that do not realize success.

I have also come to realize that successful people all do  a handful of things very well.  It is these handful of things that they do that differentiates them from the rest of the population.

Here is a list of the things that successful people do differently…


1)   They focus on completing the most important task first

This seems easy to do, right?  If it was so easy to do, then why don’t all of us do this?  Successful people are relentless in completing their most important task first.  This is a noteworthy practice because what it does is that it increases our productivity.  Steph Davis of Flipthiswholesaler.net wrote a recent article.  In the article she discusses,  focusing on the most important tasks.

2) They create a brand and an image for themselves so that they can gather a following

It is no secret that I have been creating a brand and an image for myself through this very blog that you are reading.

I have mentioned these two people before, but they are worth mentioning again because I think that they are currently two of the best Canadian online real estate marketers.  If you want to learn about brand and image, study careful what Tom and Nick Karadza are doing.  In my view, they have created, and continue to create for themselves a very strong following.

3) They create 26 hour days

This concept blew my mind when I first started realizing it. Since successful people are only focusing on completing their most important task, they begin to eliminate the less important tasks in their lives.

For example, let’s assume that an individual is faced with the following 3 tasks. I will list them below…

The tasks are:

1) Write a daily blog article for their blog — Time required = 1.5 hours
2) Research City X and neighbourhood Y in search of a rental property — Time required = 2 hours
3) Watch TV — Time allotted = 2 hours

In order to create more time in the day, successful people will cut out the least important tasks. In this scenario, you might have guessed it. The least important task is ‘watching TV’. By cutting this task out of one’s day, this individual has just added 2 hours of time in their day in which they can work on more productive tasks. If you can master the ability to eliminate less important tasks from you day, you will consistently be able to add hours into your day that you can spend working on more important tasks.

Neil’s Challenge #1

I have a challenge for all of you.

How much TV do you watch in a given day? 1 hour, 2 hours, 3 hours, plus?

For the next 7 days, don’t watch any TV at all. Sounds scary, eh?! Don’t worry, you can do it.

Instead of watching TV, work on some tasks that you consider to be more important. Over the week, compile a list and write down all of the tasks that you were able to complete during the time that you were going to be watching TV.

Try this for a week. You will be absolutely AMAZED at the tasks that you were able to complete.

Comment in the comments section below on some of the tasks that you were able to complete with this new found time.

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Today I would like to give a special mention to a  few noteworthy blogs.

I have been paying particular attention to a couple of blogs over the past few weeks.

I find the content on each of these blogs to be very good. Also, from my observation, the people that write these blogs have good integrity and they are smart business people.  Both blogs do a very good job of creating an image of the people ‘behind’ the blog. 

Below I have listed the links of the two blogs that I am speaking of.  I wish both of these blogs continued success because the information and the message that they are providing is very valuable. 

The blogs are…

Mark Loeffler’s Blog.

Mark Loeffler, a.k.a. The Versatille Investor is a fellow REIN member. Mark has expert knowledge on the Rent-To-Own method of real estate investing.

Nick and Tom Karadza’s Blog

Nick and Tom Karadza are two brothers who are real estate investors and Realtors. They are very genuine guys and master online marketers. Their blog is very interactive and well laid out. A must view.

Check out these two blogs and let me know what you think of them by commenting below.

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If you are an aspiring real estate investor looking to purchase your first rental property, you need to change the way you are using Facebook.

Also, if you are an existing real estate investor looking to purchase more rental property, you also need to change the way you are using Facebook.

We already know that many people in certain demographics have Facebook accounts, this is a given.  I guarantee you that most of these people do not fully comprehend the powerful marketing reach that Facebook can offer.

When I first started using my Facebook account, I didn’t really understand how powerful a marketing tool it was. However, when I started to observe how others used Facebook, I began to understand it’s marketing reach.

So why do aspiring and current real estate investors need to change the way they use Facebook?

This is because they need to create an:

1) Image
If you haven’t yet invested in real estate and you are looking to attract joint venture partners, you can demonstrate your credibility through the use of Facebook.  In order to show your potential partners that you are knowledgeable, you can post real estate related items on your Facebook page.  You can post interesting articles, and you can provide your thoughts on the article, in the form of a commentary.

Create a dialogue on Facebook with your ‘Friends’ and demonstrate to them that you have a keen interest in real estate investment and that you know what you are talking about.  When ‘Friends’ ask you questions about real estate investing via your Facebook page, take the time to mentor them.  Provide your thoughts and feedback publicly.

You can join real estate related investment groups through Facebook as well.  By doing that, you further demonstrate that you are someone who is interested in real estate, and you are able to network with like minded people.

I personally always post my most recent blog articles on my Facebook status.  This is because, I want people to know what I am doing and I am building my image.  I am a real estate investing expert and blogger.  This is the image that I am projecting to others.

As a real estate investor, in order to get people interested in what you are doing, you need to create a positive image.  Be mindful of what you are posting on Facebook. Make sure that the content that you are posting is always consistent with the image that you are trying to project. This is important if you want to build a positive image of yourself as a knowledgeable real estate investor.

Facebook is a powerful marketing tool.  Use it effectively.

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The secret to relationship success is so easy, you may not even believe it when I tell you.

The secret to relationship success is:

Keeping in touch

The most successful real estate investors understand the importance of relationships.  These investors are generally very good at maintaining the existing relationships that they have.  This ability is crucially important, as successful real estate investors do not become successful by themselves, rather they become successful because they leverage upon existing relationships.  These relationships are with their team of professionals.

As a real estate investor becomes a better investor, they are at a stage where they are purchasing more properties.  In order to purchase these properties, they have to rely on a multitude of people.  The real estate investor will need to work with some key people such as:

A Realtor

A mortgage broker

A Home Inspector

Real Estate Lawyer.

Once a real estate investor has bought a hand full of rental properties, they begin to get to know their team of professionals better.

Furthermore, the team of professionals all get to know the real estate investor better.  The result is that both the real estate investor and the professionals become more comfortable doing business together.

This is also the point in the realationship where the real estate investor can drop the ball…

Real Estate investors, just like the general public, are flawed in how they deal with people.  Most people are not good at keeping in touch with one another.  In fact, many friends are not good at keeping in touch with one another.  This is how people drift apart, and how friends lose touch with one another.

If a sub par effort is put in by both parties (or friends), the realationship is destined for failure.

If you are a real estate investor and you are serious about investing, you need to maintain an excellent team of professionals.  If you have people on your team that are great at what they do, then it is important that you do everything in your power to keep theses professionals as part of your team.

Investing becomes easier when you have a trsuted team of professionals that you can call upon in a time of need.

However, YOU have to be the one that maintains the relationship with all of these people. If you do a good job at keeping in touch with them, and staying close to them, they will get to know you better, and they will support you and go the extra mile for you when you are in a time of need.

In summary, having success with your relationships is easy to do.  It requires you to put in effort.  All you have to remember is these 3 simple words.

Keep in touch

If you do, you will start to notice improvements with all of your relationships.

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The title of this article is extremely thought provoking.
However, the content of this article can be easily implemented.

I recently had the opportunity to view a video interview of fellow real estate investor Julie Broad.

[youtube]http://www.youtube.com/watch?v=fEfNd6auWLY[/youtube]

I was able to learn something from Julie by watching this video. As a result, I felt that it was very important to share with all of you what I learned.

Julie is co-owner of RevNYou with Real Estate along with Dave Peniuk.

Julie mentions something in her interview that really opened my eyes to my own personal behaviour.

She made a comment that one of the factors that contributes to her success is that she has a purpose for everything that she does in life.

On the surface, this may seem like simple advice, or maybe even insignificant advice.

However, if you truly adhere to this advice, you become an extremely successful individual.

Hearing this advice from Julie made me realize that I do have purpose in my life, however, I can do a better job at implementing a purpose for EVERYTHING that I do in life.

By making this simple adjustment over just a few days, I can already see how much more productive I am.

This advice can apply to anyone who is in a position where they are looking to buy a rental property. As humans, we are generally inefficient, and we waste a lot of our time on tasks of little importance.

If we can always keep a mental note, that everything that we do has to have a purpose, we will start to realize tremendous results.

Here is an example to help demonstrate how having a purpose with everything you do, can lead you to becoming more efficient.

This evening I attending a meeting with fellow like-minded real estate investors. My purpose for being there was to attend one particular presentation that I had prior knowledge of before the meeting. I was looking forward to this presentation, and I enjoyed it.

After the presentation was over, I had no reason (or purpose) to be there any longer. In the back of my mind, I knew that I had to write a blog article today before the day was over.

As a result, I now had a new purpose, and that was to write a blog article before the end of the day. As a result, I left my meeting and came home so that I could write this article.

What’s the big deal you might be thinking? So what, I was at a meeting, I left the meeting, and then came home. Big deal !!!

Well, there is something significant happening here that I hope you caught onto. That is, I had a purpose of attending the meeting, and I attended. I then had a purpose of writing an article, and I did it.

Having a purpose allows us to stay focused on carrying out our goals.

Always have a purpose, no matter what it is that you are going in life.

I felt like throwing in the towel today folks…

As real estate investors, we have our great days and we have our, not so great days.

Some days you feel like an absolute genius, whereas other days you fear that your house of cards just may come crashing down on you.

The key to success with real estate investment is perseverance.  We hear that with everything though.  People tell us that we got to ‘stick to it’ if we want to succeed.

Yes, that may be true in some situations, but not all. I think that this is an old school way of thinking that does not necessarily always apply to the younger generations.

However, for the most part, if you ‘stick to it’ with real estate investing, you will win big.  After all it was our good friend Andrew Carneige that so eloquently said,

“90% of millionaires become so through owning real estate”

So, if real estate investing is such a ‘sweet deal’, why do people end up quitting after a short period of time?  Why don’t they ‘stick to it’?

Well for starters,

1)  It is not easy.

People think that it is very glamorous, but there is work involved with every rental property that you own.  Often people get the false impression that once they have purchased a rental property, all of the hard work is over. They think that the property goes up in value, and then you eventually sell it.

Although, that might be the eventual outcome, there is a lot of other work that goes into it.  This work involves, finding and screening tenants, overseeing repairs and maintenance, conducting regular inspections, dealing with any potential issues with the property and/or tenants.

Another one of the biggest reasons that people end up bailing on real estate investment, I believe, is because of,

2) Frustration

Wow, was I frustrated today!  Read this story, and tell me honestly if you would be frustrated at this.  Place your comment at the end of this article.  I would love your feedback.

Okay, so it all started in September of this year when one of my properties went vacant.  The tenants were really great people so I was sad to see them go.  Whenever there is a turn over with my tenants, both myself and my tenants contact the respective utility companies and have them switch the utilities back into my name, until there is a new tenant who ends up moving into the property.  Once the new tenant moves into the property, they switch the utilities into their name.  Simple enough, right?  Well, that’s what you would think…

The tenant and myself called the utility company in order to let them know of the upcoming move.  I usually always follow up with the utility companies about a week after the initial request in order to make sure that the request was processed.

As a result, I called in a week later in order to see if the change had been made.  When I called in, they said that no change was made, and that the utility bill was still in my tenant’s name. So,  I kindly asked them to make the change again.

Having depleted confidence in this utility company, I phoned in a couple of days later to make sure that the change had been made.  Sure enough the change was not made.  So I then asked them for the third time to kindly make the change, and ensure that the bills were no longer in my tenant’s name, rather that they were now in my name.

Guess what happened when I called in a few days later to check to see if the change was made?

You guessed it.  No change.

At this point I obviously realized that the people that I was talking to either did not care what they were doing, or there must have been some sort of gap in the training of these people, as they were not able to process this change for me.

After I called in for the 6th time and no change was made when I checked in a few days later, I physically went to one of the head offices of this utility company to see if I could talk to someone there that would be able to make this change.

I was told that there was no one there that would be able to help me, but I was given the telephone number for the ‘Office of the President’.  Sounds impressive, right?  Well not really, especially since I called the ‘Office of the President’, 3 more times to request the change.  The first time I called, I did not get a call back.  The second time I called, I talked to some guy that was getting confrontational with me (great customer service, eh?!) and then the third time I called they said that they would make the change but I never got a call back.

I did some of my own independent research and found out that a portion of this company got outsourced to another company. So, being the resourceful individual that I am,  I called this other company today, and they were much more helpful. The first person that I talked to was able to answer my questions properly.

It turned out that my information was not switched over at all by the other company.  It was a complete nightmare for me dealing with this previous company.

This issue is still not fully resolved, however, I now have some increased confidence dealing with this new company.

As you can see, by reading my uncharacteristic rant, real estate investing can be very frustrating at times. You deal with a lot of unnecessary B.S.

However, if you have the ability to endure this nonsense, you are going to be okay.

There is more to investing in real estate than most people think.

The general public believes that you can invest in real estate if you have the required money, you know about the area that you want to invest in, you have researched the property, and perhaps you know some other people that have invested in real estate as well.  Well my friends, it is not that easy…

What most people don’t realize is that there is one key variable that is required.  If this variable is missing, it does not matter how much money a person may have to invest in real estate, they just will never end up doing it.

This one key variable is:

The Psychological Variable

What is the Psychological Variable?

The psychological variable refers to the mindset of the individual real estate investor.  Everyone in this world is different, that goes without saying.  As such, there are no two people that share the exact same thought patterns.  As a result, some people might be better suited in invest in real estate than others, just based upon individual thought patterns.

What I am saying is that people create psychological barriers for themselves, that prevent them from investing in real estate.

This not only happens with investors just starting out, rather this also happens with experienced investors.

For example, a novice investor could create a psychological barrier for themselves in the following manner.

They could fear that if they purchase their first rental property, and it goes vacant for a period of time, they may not be able to pay the first mortgage on the rental property.

This can be a legitimate fear for people.

However, I know from experience that this is a risk that can be mitigated.  Many people can’t get past this fear, and as a result, create a psychological barrier which, creates a mental roadblock that prevents them from investing in real estate.

This not only happens with novice investors, rather it also happens with experienced investors.  Investors with multiple properties can fall victim to this fear as well.  For example, if an investor owns 6 rental properties, and they have the capacity and the funds to buy their 7th property, this investor may get nervous and create a psychological barrier for themselves.  They may fear that if they buy this next property, they may not be able to pay the mortgage on the property in the event that the property goes vacant.

Again, this is a legitimate concern.

In both scenarios with the novice and experienced investor, in order to combat this fear, and get their head in the game, they both have to ask themselves the following question:

What is the worst that can happen?
If both investors asses this situation and realize that if their properties go vacant for a period of time, they will experience financial difficulty, they should not purchase the property.  As a side note, this financial difficulty could be a result of the investor not having a sufficient reserve fund for their investment property.

If on the other hand, bother investors analyze the situation and see that they are in a good financial position, and able to cover the vacancies, they should realize to move ahead and buy the property.

They also would now be aware that they were creating a self imposed psychological barrier that was preventing them from moving forward.

Whether you are a novice or experienced investor, it is always important to take inventory of our own thought process.  Continually ask yourself,

“Am I creating psychological barriers that are limiting my ability to move forward?”

If this is the case, you need to get your head in the game.  The only way to move forward is to break down these psychological barriers.

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To read yesterday’s article, click here.

Buying your first rental property is not a difficult thing to do relatively speaking.

The key things that you need are a down payment and a mortgage. Your personal debt level is also taken into consideration when you are applying for the mortgage on your first rental property. If your ‘house’ is in order with regards to your personal debt, you should not have much trouble in obtaining a first mortgage for your first rental property.

When a real estate investor begins to acquire multiple rental properties, the financing of these properties becomes increasingly difficult.

As an example, the first purchase could be easy to do however, the 2nd, 5th, 8th, or 13th property purchase could prove to be a little bit more challenging.

If real estate investors are purchasing their properties in their own name (their name on title), it is only a matter of time that they hit a roadblock, and thus are not able to obtain financing (get a mortgage) from any financial institution. People tend to hit this roadblock at different stages, as each real estate investor’s situation is different with respect to their personal debt level. The roadblock will eventually occur.

This is because the Total Debt Servicing Ratios of the real estate investor have reached a certain limit. Because of this, mortgage companies and banks will no longer lend out any funds to the investor.

This means that every real estate investor will at some point in time, hit the brick wall, and will no longer be able to purchase properties. It is only a matter of time, but it will happen to all active real estate investors who are putting the wheels in motion and continually adding properties to their portfolio.

Enter the mortgage partner…

A real estate investor who has mortgage partners is able to continue to purchase rental properties, with no end in sight. Theoretically, a real estate investor could purchase an unlimited amount rental properties, using this mortgage partner strategy.

The relationship with the mortgage partner is as follows.

A real estate investor purchases a rental property. In this example, let’s assume that the real estate investor is working with a joint venture partner. The joint venture partner would provide the real estate investor with all of the money required to purchase the property, and the real estate investor would do all of the work. Let’s further assume that this scenario is a classic joint venture. As such, in a classical joint venture, the real estate investor and the joint venture partner would split the monthly positive cash flow 50/50. In addition, the real estate investor and the joint venture partner would split the proceeds of the sale of the property 50/50, after of course, the joint venture partner’s initial investment is returned.

A mortgage partner is used when the real estate investor can no longer be approved for mortgages by banks or financial institutions. So, in the above example, instead of the real estate investor’s name on the mortgage, it will be the name of the mortgage partner. Meaning that the mortgage partner is the one who qualifies for the mortgage. The mortgage is never in the name of the real estate investor here, because they have already reached their absolute limit with regards to the amount of mortgages they can qualify for.

This arrangement is truly a sweet deal for the mortgage partner.

The mortgage partner will often receive a substantial share in the property. A 10% share in the property is not uncommon.

The joint venture partner will receive their 50% share.

As a result, given the numbers stated above, the real estate investor would retain a 40% interest in the property.

Many experienced real estate investors who own large amounts of rental properties use this strategy.

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Do you have someone in your life that discourages you?

Are you ever really excited about an idea that you have, but then someone close to you convinces you otherwise?

Perhaps they convince you that the idea you have is not good, or perhaps they convince you that YOU are no good.

I like to call these people that discourage others, Dream Stealers.

Dream Stealers are everywhere and they are constantly trying to shatter the confidence of people close to them.

Dream Stealers are people who very readily, without solicitation offer their opinion. It is important to note that their opinion is always negative.

For instance, let’s look at the following example of a Dream Stealer in action.

You are tired of your current job and you are looking at making a job change. You have found a new job that you are really excited about. You are a bit nervous about applying for the new job, however, you know that the change will be good for you, and that you will really like the new role.

A Dream Stealer is someone that will put doubts into your mind. They will say such things as:

• “You are not going to like the job.”
• “The job is too hard.”
• “There are more qualified people than you applying for the job. Don’t apply, it is a waste of time.”
• “You are not smart enough for this new job.”
• “If you take this new job and end up not liking it, you can never go back to your previous job.”

Dream Stealers can be close family members, spouses, friends, or co-workers.

I have noticed that there are 2 types of Dream Stealers. They are:

1) The Unintentional Dream Stealer

The Unintentional Dream Stealer is an individual who will discourage someone. They will provide their negative opinions to the person that they are close to. The unique feature of The Unintentional Dream Stealer is that they don’t even realize that they are discouraging the other person. The Unintentional Dream Stealer provides so many negative opinions to the other person, however, they don’t perceive this information as being negative at all. The Unintentional Dream stealer truly does not mean any harm to the other person. However, they don’t realize that they are indeed harming the other person with all of their negative opinions.
This type of Dream Stealer is more common then the next type of Dream Stealer we are going to discuss. The other type of Dream Stealer is the Intentional Dream Stealer.

2) The Intentional Dream Stealer

These people really have issues. They make it a point to go out and discourage other people intentionally. They do not want to see this other person succeed, so they feed them with a lot of negative thoughts in the hope that they will become discouraged and take no action at the end of the day. I have noticed a common trait with these types of Dream Stealers. They often lack self-confidence. I have also noticed that Intentional Dream Stealers often want to control situations, and as such they prey upon people with less self confidence than themselves. Their ultimate goal is that they will discourage someone completely from taking any action at all.

So how does this relate to real estate investment, and rental properties?

It relates in a major way.

Both Unintentional and Intentional Dream Stealers influence the decisions of real estate investors on a daily basis.

Surely, we all can think of at least one person that we know that is an Unintentional Dream Stealer. Again, this type of Dream Stealer does not mean any harm to the other person, as they don’t realize that their negative feedback, is actually negative.

I have seen more than one real estate investor influenced into changing their decisions due to the influence of an Unintentional Dream Stealer.

Some things that an Unintentional Dream Stealer could say to a real estate investor are:

• “Are you sure you know what you are doing?”
• “Buying anther property, could make us go bankrupt!”
• “You don’t know enough about real estate market.”
• “You are not a good property manager.”

Hopefully, not many of you know an Intentional Dream Stealer. If you do know of one, you know that they are always out to discourage you, put you down, and they like to shatter your confidence.

I have seen real estate investors be completely discouraged after speaking with an Intentional Dream Stealer. Intentional Dream Stealer will say things like this:

• “You are a terrible real estate investor.”
• “You have lost so much money investing in real estate, how much more are you going to lose on this new rental property?”
• “You are not cut out to invest in real estate.”

We all know of and probably have Dream Stealer in our lives. It is important to recognize that someone is a Dream Stealer. Once you recognize who in your life is the Dream Stealer, you will be able to make the necessary adjustments in order to block our their negative opinions.  How do you block out their negative opinions?  Simple.  Don’t listen to them.

Easier said than done, I know!