First Rental Property

Hi Everyone,

I hope that you are all doing well.

It seems that lately, the topic of ‘fear’ has been on my mind, and for good reason as well.

As an active real estate investor, ‘fear’ should constantly surrounds you.

In my last post, I talked about how fear is constantly felt by experienced real estate investors. I described how these experienced real estate investors are able to decipher a secret to success. It is this very secret that gives them the confidence, focus and follow through in order to invest in real estate.

Today I want to talk about why I dislike fear so much.

I dislike fear so much because I have seen first hand how fear smothers the dreams of aspiring real estate investors.

I cannot count how many times, I have been contacted or approached by people that are interested in investing in real estate.  They come to me with such hesitation.

They are hesitant because they are afraid.

With this hesitation, they also show some excitement.  They are excited about the opportunities that investing in real estate will one day provide them with.

By nature, I thoroughly enjoy helping others, and I never turn down an opportunity to talk to someone about real estate investment, and share my knowledge with them.

I always pour my heart out and give them as much advice as I possibly can. I always share all the knowledge that I have, and I don’t keep any secrets as to how one can get started.

However, I know in the back of my mind, that the chances of this person’s success in real estate investment, lies only with them.  Time after time when I have conversations with people about getting started, despite how much time I have spent encouraging them and despite how much knowledge I have given them, I never know if they will ever succeed.

The reason why I dislike fear so much is that fear stops most of these people from ever doing anything.

Every single person that comes to me for advice, I tell them the same thing.

“You have to surround yourself with people that are investing in real estate, so that you can learn from them.”

This is a simple enough suggestion, right?

Wrong!

It is disappointing as to how few people take this advice.  The people that do take this advice (the minority) are the ones that forge ahead, become smarter, more confident, and become successful at investing in real estate.

The people that do not take this advice, are the ones that usually never get started.  They constantly stay limited with their knowledge of real estate, because they have no one to learn from. The people that they are surrounded by may be fantastic people, however, they may have no clue about anything related to real estate, business, or wealth creation.

When someone finally comes to the realization that the closest people in their lives, the ones that they love the most, may not have all the answers for them..that is when change starts to happen.

Aspiring real estate investors have to realize that you have to bring into your lives people with knowledge of real estate, people that you can learn from, and people that will push you to achieve more.

I can tell you this from experience, as I have learned so much from my friends and fellow colleagues at The Real Estate Investment Network. (REIN)

In my opinion, REIN  is the best network of real estate investors in North America.  I would be surprised if there was a group of equal integrity found anywhere else in the world.

To keep up to date with my blog, you can enter your e-mail address on the LEFT hand side of the blog.

To receive The First Rental Property Newsletter, you can enter your e-mail address on the RIGHT hand side of the blog.  In this newsletter, experienced real estate investors will share with you their experience of when they bought their first rental property.  They will also share with you some tips and tricks as to how to get started investing in real estate.

Best Regards,

Neil Uttamsingh.

Hi Everyone,

I hope that you are all doing well.

This week I closed on a rental property in Hamilton, Ontario, Canada.

Yay!

The process of purchasing rental properties is becoming very familiar to me now.  The process almost feels automatic.  However, it wasn’t always that way…

One of the biggest discoveries that I have made recently, that I would like to share with new and prospective real estate investors is this…

There is a secret to becoming a successful real estate investor.

This ‘secret’ as I like to call it, may not seem obvious at first.  The secret is however the linchpin to all future success in real estate investing.

Once you understand what this secret is, it is easy to see how some people become very good and experienced at real estate investing, while others who attempt to become successful, fail.

The secret is simply this…

Successful real estate investors are afraid of investing in real estate, however, they are able to manage this fear.

This may seem like a confusing statement.  It is however not confusing at all.  Let me explain…

No matter how successful a real estate investor becomes, the individual always experiences a degree of fear with regards to real estate investing.

This fear may be centered around having a vacant rental unit, selecting tenants, obtaining financing, or growing their real estate portfolio.

I know all about this fear because I experience it.

Here is where this blog post gets interesting… (if it has not already)

• Successful and experienced real estate investors are able to manage this fear.

The key to success is being able to manage this fear.

For example, as I mentioned above, I closed on a townhouse in Hamilton, Ontario, Canada this week.  With every property purchase that I have made, I have experienced a degree of fear.  More appropriately put, this fear has more so been anxiety that I have experienced.

I think that every experienced real estate investor feels some sort of anxiety or fear with each property acquisition, no matter how many properties they may have.

For myself, I was experiencing anxiety with regards to finding tenants for this property.  I was concerned that due to the time of the year (the end of summer), the property may sit vacant for a couple of months, as the rental market that I invest in, tends to slow down a bit come September.

New and aspiring real estate investors allow this fear to consume them.  Fear paralyzes them, and because of this, they end up never taking any action!  Which translates into….

NEVER BUYING THEIR FIRST RENTAL PROPERTY!!!

Experienced real estate investors are able to manage this fear because they are resourceful, and they know where to get answers when they need them.

For example, I am resourceful, and I rely on my real estate team.  Members of my real estate team have strengths that I do not.

I am become more confident about real estate investing because I know that my real estate team is good at what they do.

For example, my fear of having a vacant unit was quickly reduced when the property manager that I work with ADP Property Management, contacted me 2 days after my closing date, with a tenant that wants to move in September 1st.  If this works out with the tenant, they will move in simply 7 days after I closed on the property.  Not bad in my books!

Once again, I was able to manage this anxiety  by working with the right people.  My property manager has the knowledge and the network, in order to provide me with a list of potential tenants that I can chose from.

So as you can see, although I keep on plugging away as a real estate investor, there are still things that I am afraid of, or that I experience anxiety over.  In this example, it was the anxiety of having a vacant unit for 2 months plus…

I know how to eliminate and reduce this fear, because I know where to get answers.

This is the biggest difference between the experienced real estate investors and the investors just starting out.

The new investors trying to get things going, often do not know where to get the answers to their important questions.  They often do not know who the right people are to network with.  It is because of this, that many of the new investors fail at real estate investing, or don’t even start investing because they are too overwhelmed.

In order to become better as  a real estate investor, you have to understand and embrace the fact that you will be afraid of certain things, however, you have to forge ahead and manage those fears.

Your resourcefulness and the people you know in your real estate network will help you to manage and or eliminate these fears.

To keep up to date with my blog, you can enter your e-mail address  on the LEFT hand said of my blog.

To receive The First Rental Property Newsletter, you can enter your e-mail address on the RIGHT hand side of the blog.  In this newsletter, experienced real estate investors will share with you what they went through when they purchased their first rental property.  They will also share with you some tips and tricks that you can implement when you buy your first rental property.

Best Regards,

Neil.

Hi Everyone,

I hope that you are all doing well.

It has been some time since my last blog post.

I have spent some time enjoying the summer and travelling with my family.

Now that the summer is coming to an end here in Toronto, it is back to the ‘grind’.

Today I would like to talk to you a little bit about an age old debate that never seems to go away in the real estate investment world.  Quite frankly, this debate will never go away…

It is the debate surrounding:

Cash flow versus Appreciation.

More specifically, the question at hand is:

Is it better to buy investment real estate for cash flow or appreciation?

If you ask this question to any experienced real estate investor, who has been around for some time, and has invested in different stages of the market cycle, they will most likely tell you that they invest for cash flow.

I would like to turn this discussion on it’s head, and say that the most successful real estate investors are the ones that purchase for appreciation, not for cash flow.

When I first began my real estate investing career, I purchased for appreciation, simply because I did not know any better.  Purchasing for appreciation I thought was the only reason anyone would purchase real estate as an investment.

As time went on and I started to learn more about real estate, real estate investment, and the methods required in order to obtain financing on investment real estate, I started to buy for cash flow.

I started to buy for cash flow because I wanted to grow my real estate portfolio.

I wanted to buy property after property, and quickly discovered that I was only able to do this if in fact I purchased cash flowing properties.

Thanks to my amazing mortgage broker, Kevin Boughen, we were able to obtain financing on 4 properties within about a 2 year span.

As of August 2010, I have a portfolio of 5 single family residential homes.  3 of the homes I have purchased for cash flow, and the other 2 I have purchased for appreciation.

The largest gains in terms of equity appreciation that have occured have come from the properties that I have purchased for appreciation.

Today I was speaking with a very experienced real estate investor (who may be reading this).  Over the past 5 years, he has made 4 strategic purchases for appreciation.  After the 5 years, he currently still holds all 5 properties and has realized an appreciation gain of $500,000 from these 4 properties.

After a detailed discussion with him today, he really got me thinking.  Why would anyone buy for cash flow, when they could buy for appreciation and have much greater returns?

What do you think?

As a new real estate investor, should you buy for cash flow, or should you buy for appreciation?

To keep up to date with my blog, you can enter your e-mail address on the LEFT hand side of the blog.

To receive The First Rental Property Newsletter, you can enter your e-mail address on the RIGHT hand side of the blog.  In this newsletter, I will be interviewing experienced real estate investors.  They will describe their first rental property purchase and share with you some of the secrets to becoming a successful real estate investor!

Best Regards,

Neil.