First Rental Property

2003-2006
The Real World

Despite putting forth a tremendous effort towards my academics in University, I ended up with sub par grades.  Since my grades were nothing to write home about, I felt that the window of opportunity was closing for me with regards to attending a law or business school of my choice.

Nevertheless, one month after I graduated from university I began to study for my Law School Admission Test (LSAT).  I studied for 6 months and wrote the test in October of 2003.  I put in a great effort studying for this exam, however when all was said and done the grade that I got on the test was not good enough for me to be accepted to a school of my choice.

At this point in time, I was getting the hint that it was time to forget about law school and move on to something else. I decided to test the job market, and see what type of job I could find.
In early 2004 I landed a job with Canada’s largest bank.  The job that I got was an entry level role for new graduates.  It was a job as a personal banker.  In this role I was able to lend the bank’s money to people and invest people’s money in investment vehicles such as mutual funds and Guaranteed Investment Certificates (GICs).    It was maybe one month into my job at the bank that my interest in real estate began.

I had always been a very driven individual.  Not performing well on my LSAT or academically in University left me disappointed.

Finally realizing that perhaps I did not have the academic smarts in order to perform well on the standardized entrance exams (LSAT), I believe that I subconsciously focused a lot of effort into proving to myself and proving to others that I could succeed in life even though I did not attend law or business school.  It was at this same time seven years ago, when my interest in real estate started to develop.

Sometime in 2003…

…I became aware that a family friend purchased a new home in my home town.  They had purchased a pre-build home off of the plans from a Builder.  As a result, we witnessed this home being constructed.  They had actually purchased the home from the builder is 2002.  The home was completed in 2003 and that was the year that they moved into the home.

From the time that this friend had purchased the home until they moved in, the home had appreciated significantly in value.  They resided in the home for a while before they ended up selling it.  While they resided in the home, it continued to rise in value.

Watching this happen before my eyes, I thought to myself….

“Wait a minute. If they are doing this, and making money at it, why can’t I?!”

This is where the light bulb went off for me…

…It was through this realization that my interest in real estate was born.

I didn’t jump the gun

As interested as I was in real estate, it took me some time to build up the courage before I ended up purchasing a property.

For about one year, owning real estate as an investment was on the forefront of my mind.  I spent this entire time studying the real estate market in my home town, as this was the area that I decided I wanted to invest.  I exclusively focused my efforts on the new homes sales market.  As a result, I spent countless weekends visiting with Builders who were constructing new developments in my home town.  During this search period I was mainly interested in finding out what the prices were of these homes that were being sold, as well I was interested in the floor plan of these homes.  At the time, I thought that the floor plan was an important thing to consider.  However, looking back, it definitely wasn’t.  The most important factor was the location that I eventually bought in.

After about one year of research, I had located the Builder, and the style of home that I wanted to purchase.  I knew that I was ready to buy, it was now just a matter of figuring out how I would actually do it.

I was still working for Canada’s largest bank, as a result, I had made some contacts with people in the bank that were able to help me with this first purchase. Through a co-worker of mine, I was referred to a mortgage specialist that worked for the bank.

Not to be confused with a mortgage broker, mortgage specialists work exclusively for the bank that they are employed by and they only offer mortgage products from that particular bank.  A mortgage broker on the other hand can offer mortgage products from a multitude of differnet financial companies and lenders.

I was now linked in with the mortgage specialist who was helping me organize the financing for this property.  However, before all was said and done,  I encountered one major roadblock.

Based on the analysis that the mortgage specialist did, I was not able to qualify for a mortgage based on my income alone.

It was at this time that the mortgage specialist suggested that I have what she called “co-signers” on the mortgage.  The mortgage specialist recommended that I have some family members go onto the mortgage with me so that our collective incomes would be able to service the mortgage.

Both my Mum and Dad agreed to go onto the mortgage with me.  With their names on the mortgage, we were easily able to be approved for the mortgage.

I have been very fortunate and blessed, throughout my real estate investing career and throughout my life. I would not have been able to get started with real estate investing if it was not for the support of my parents.  My continued success in real estate investment has also been a direct result of their support, encouragement, and guidance.

With this initial property purchase under my belt, I began to think that I loved EVERYTHING real estate.  As a result, I thought that it made sense to obtain my real estate license and become a Realtor.

So I did exactly that.  While still working at Canada’s largest bank, I began to study for and I eventually obtained my Real Estate License.  I left the bank at the end of 2006 and started a new career as  a Real Estate Agent.  Little did I know at the time that this would be a very short lived career…

Business Life Story Part One
Business Life Story Part Two
Business Life Story Part Four
Business Life Story Part Five
Business Life Story Part Six

1999-2003
Bigger and Better Things

I applied to four universities and got accepted to all four of them. I applied to McMaster University in Hamilton Ontario, Canada.  Brock University in St. Catherines, Ontario.  Wilfred Laurier in Kitchener, Ontario and The University of Western Ontario in London, Ontario.

My older brother was attending McMaster University. I didn’t really like McMaster, so I ruled that school out from the start.  Also, I didn’t want to go to McMaster JUST BECAUSE my brother was going there.  I think that was the main reason why I did not like McMaster.  🙂

Brock University was my last choice, so I did not want to go there.  In the event that I did not get in anywhere else, I would have gone to Brock.

My decision was between Wilfred Laurier and The University of Western Ontario. Although I liked the Wilfred Laurier campus, I thought that the school was too small.  It almost felt to me like another high school.  I ended up choosing The University of Western Ontario, because I liked the campus.  The campus was huge and it looked kind of like a golf course.  In addition  I knew so many people from my graduating class that were attending school there. There were 20 people in total from my high school graduating class that chose Western.

While in University, I was laser focused on studying and getting high marks. My game plan was to achieve really high grades and then apply to graduate school. I was either going to go to law school or business school…that was the plan.

I had never studied harder in my life, than I did in my first year of university. After a few of my first exams in university, I received sub par grades, and I realized quickly that this could not continue. As a result, I increased the amount of time I spent studying in order to increase my grades. The increased time that I spent studying did not translate into increased grades, rather I was getting the same results.

I struggled academically throughout University.   I invested a lot of time studying but never got the results that I was aiming for. All was not lost in University, as I really hit my stride with social networking and again involvement with the University Students Council.

I ran for the President of the University Student’s Council in my final year of University.  One of my closest friends, Parag Shah of Garage Living convinced me to run in the election.

With this experience, I had a campaign team of over 40 students working hard for me, and we had a target audience of 26,000 undergraduate students.  Throughout this campaign, I made some really great friends who were very unselfish and who helped me every step of the way.  I could not have succeeded in the campaign, if it was not for the hard work from these friends.  At the time that I am writing this article, it has been 7 years since the campaign, and I am still very good friends with many of the people that helped me.  This was an amazing experience because it showed my how unselfish and helpful people can be when you need them.  It also showed me that sometimes people that you think that you can rely on disappear when you need them the most.

For the first 23 years of my life, I did not think much about real estate at all, in fact I was not interested in it at all.  It was not until after University that my interest began to develop in real estate.  I also have a very good theory why this interest developed in the way that it did…

Click here to read Neil Uttamsingh’s Business Life Story Part One
Click here to read Neil Uttamsingh’s Business Life Story Part Three
Click here to read Neil Uttamsingh’s Business Life Story Part Four
Click here to read Neil Uttamsingh’s Business Life Story Part Five
Click here to read Neil Uttamsingh’s Business Life Story Part Six

Click here to read Neil Uttamsingh’s

1980-1999
The Beginning

I was born on June 5th 1980 in Etobicoke, Ontario, Canada. Growing up I was a pretty talkative and fun loving kid with my family. Once I began attending school, I took on a much different personality. Throughout all of my elementary school days, I was a fairly quite kid, who was not much of an attention seeker.

Things changed for me quite dramatically in high school where I became very involved with the Student Council. Looking back, when I look at my years in high school, I realize that the saying, ‘success leaves clues’ is very true. I began to accomplish many things in high school that I am still very proud of today.

I was voted Student Council President during my final two years of high school. I was elected Valedictorian by my graduating class, and I was also voted as the nicest person by my graduating class.  In addition, I received the Principals Award upon graduation.  It was an award given to only 2 members of the graduating class who had demonstrated student excellence throughout their years in high school.

I left high school excited about the possibilities that existed out in the real world. Although I was sad to be graduating, I was looking forward to going onto bigger and better things.  At this point, I had absolutely no interest in real estate.  If anything, I thought that I was going to become a lawyer…

Click Here to read Neil Uttamsingh’s  Business Life Story Part Two

Related Articles:
Business Life Story Part Two
Business Life Story Part Three
Business Life Story Part Four
Business Life Story Part Five
Business Life Story Part Six

Greetings Everyone,

Today I have a special treat for you.

I am bringing to you the first guest post for my blog First Rental Property.

The post comes courtesy of Scott Ficek.  Scott is a Realtor and Investor for Re/Max Advantage Plus.

Scott is a fellow real estate blogger and came across my blog on the Everything Home Blog Carnival.

You can check out Scott’s new blog.  He specializes in Maple Grove Homes.
And now, here is the post.  Thanks again Scott for your contribution!

7 Tips to Keeping Your Tenants Happy by Scott Ficek

As frustrating as tenants can be at times, as landlords, we all need to remember that they are essentially our customers.  They are paying us money for the use of our product (property).  While I believe that you should never be a push over when it comes to rent payments and lease violations, there are some simple items that you can do to keep your tenant’s happy.  And happy tenants will typically treat your property better, pay their rent on time, and stay longer (which decreases your turnover expenses).

Here are 7 ideas that I try to keep in mind when I am managing my properties:

Number One
This is the number one rule….Be courteous and respectful to all your tenants all the time.  The tenants will reciprocate.  Then when you need to be firm, the tenants will listen and they will know you are serious.

Number Two
Answer your phone when your tenant calls or at least return their calls promptly.  Many landlords make the mistake of being annoyed by the calls.  This is the job/responsibility you have chosen.  I would rather take the call and find out about the leaking drain than to ignore the calls and then have a huge repair bill when the floor and ceiling are damaged by water.
When you get a repair request, fix it promptly and properly.  Nothing can lead to tenant unhappiness more than a problem that is not repaired.  Even a loose door knob can be frustrating eventually.  Remember that if the tenants think you don’t care about the building, they won’t care about the building.

Number Three
Stop by and check on your property occasionally.  Make sure to say hi to the tenants and chat with them.  This lets the tenants know that you are a person too.  It is harder for the tenants to not pay the rent or destroy your house when they like and respect you.

Number Four
If the tenants renew their lease, get into the property each year and do all the repairs that not only the tenants ask about, but check all the systems in the house and make repairs as needed.  These small fixes will be noticed, plus when the property does turnover, you will have less work to do.

Number Five
Everyone forgets to mail a bill once in a while.  If the tenants have always paid on time in the past, cut them a break and waive the late fee this one time.  Even credit card companies do it for their good clients.

Number Six
Depending upon the type of rental, I have even seen landlords give the tenants presents like hams or turkeys for Thanksgiving.  It may cost you $20-30 per tenant, but you are probably the only landlord that may ever do it.

Number Seven
Keeping your tenants happy is not just for their benefit.  Happy tenants will stay longer, pay their rent on time, and keep your investment (property) in better condition.

If you would like to do a guest blog post for First Rental Property, feel free to leave me a comment in the comment section, or e-mail me at neil@firstrentalproperty.com

Greetings Everyone,

I am particularly interested in the topic that I am writing about today.

Today I am going to talk about,

Financial Intelligence a.k.a. Financial IQ

It is believed that in order to be successful as a real estate investor, you have to have real estate knowledge.

This goes without saying…You definitely need knowledge.

The more knowledge you have, the better you can become as a real estate investor.

Many believe that in order to gain more knowledge with regards to real estate investing, you need to join real estate investment groups.

This is a very good strategy to take as you are able to network and learn from the experience of other real estate investors.

However, you must be aware that real estate investment groups can be a trap.

These group can be a trap for many aspiring real estate investors because they serve as a ‘crutch’. Many wannabe investors join these groups and think that just because they have joined an investment group, they are magically going to become so much smarter with respect to real estate investment, and be able to instantly make, one million dollars…

My friends, this is not true.

Being associated with a real estate investment group, does absolutely nothing for you.*

*YOU are the one who has to be in control of you destiny. As such, YOU have to be in control of increasing your  financial IQ.  No investment group will do this for you.  You have to do this yourself.

You have to take the initiative to further yourself by increasing your financial IQ independent of these investment groups.

To quote Donald Trump,

“Good investing requires financial intelligence. Billionaires are often blessed with a high financial IQ. Most of them could be considered financial geniuses. But your financial IQ is not a fixed number, and you can improve it each and every day. My financial IQ is constantly improving as I watch over my many businesses and my staff. I work hard to make sure that they remain assets, not liabilities, and you should look at your holdings in the same way”

As straight forward and common sense as this concept may seem, it is not straight forward and it is not common sense.

The reality is that many people do in fact use real estate investment groups as their real estate ‘crutch’.

Just by being a member, they think that that is sufficient action required in order to become a smarter real estate investor.

I personally came to the realization myself that I was relying too heavily upon my investment groups for Financial knowledge.  I quickly realized that I was not putting in enough of my own time in order to increase my financial intelligence.  This is a fatal error.  Once I realized this, I made a push to increase my intake of real estate related materials.

Below I have listed the two changes that I have made, in an effort to increase my financial intelligence.  I recommend that you make 2 changes as well in order to increase your financial IQ.

Here are the changes that I have made:

1) I am going to focus more of my time reading The New York Times Business and Real Estate section.  Located on this site, there is great information on what is happening both in the real estate and business world.

2) I am going to spend more time reading the blog of John Fedro, a.k.a. J-Fed. John is a fellow blogger who invests in mobile homes. This is a concept that I am interested in and want to learn more about.

In summary, I realized that I was relying too heavily on my real estate investment groups for financial intelligence.

As a result, I am making sure that I take the bulls by the horn and proactively educate myself each and everyday in order to increase my financial IQ, just like The Donald recommends.

If you are serious about increasing your financial intelligence, and you are interested in investing in real estate, I encourage you to do the same as well.

If you like reading my blog, keep up to date with new posts.  In order to do this, you can enter your e-mail address on the left side of the blog.  You can also click on the orange RSS button at the top right hand corner of the blog.

Greetings All,

I am back with another blog post.  Sorry it has been so long.  The studying for my Canadian Securities Course is in full swing, and as predicted is taking up much of my spare time.

Regardless, I am going to keep the blog posts coming.  Once my studying is over, I will post more frequently.

Now on to business.

Today I want to talk to you about Emotional Investing and Gut Instict Investing.

My fellow real estate blogger John Fedro, a.k.a. J-Fed wrote a very good article discussing emotional investing. You can read his article here. It was posted last week on Josh Dorkin’s premiere real estate social networking site Biggerpockets.com.

Last week I was having a detailed conversation with an experienced real estate investor on this topic.  It was a good conversation as we were both in agreement on this topic.

Here is a summary of what we talked about.

Emotional Investing

As you may or may not know, emotional investing is the worst type of investing you can do. If you are emotional with real estate investing you will definitely screw up many a deal.

What does emotional investing mean?

Emotional investing essentially is when you make decisions based on your feelings, and not based on logic. When you are investing in real estate you have to ensure that you work out all of the numbers on a particular rental property, and make a decision on whether to buy the property based on these numbers.

If you find that your emotions are taking over on a particular deal, this is the time where you need to pause and take a step back. More often than not, if real estate investors make emotional decisions with regards to purchasing rental properties, they are bound to make errors.

It is commonly believed by experienced real estate investors that all emotion MUST be removed from your decision making process. I agree 100% percent with these real estate investors. This is age old advice, so I will leave the explanation at that…

However, here is where the interesting, and perhaps controversial opinion comes into play.

Sure, we all know that we need to remove our emotions from our real estate investing decisions. Fine. Done and done.

However, how many of us know that we always have to invest according to our gut feeling?

The Gut Feeling

Whenever I am making a decision, and I go against my gut feeling, I can always feel it. I always know at that particular time that I am in fact, going opposite of what my gut is telling me to do. And guess what???

My gut feeling always is correct.

I cannot recall a single time in which my gut feeling has been wrong.

With regards to real estate investment, we need to always go by our gut feeling and invest in rental properties using this strategy.

For example, you may be considering a potential rental property that you want to purchase. The numbers and your analysis may look absolutely great. The cash flow could be awesome as well. Despite all of this, you have a funny feeling, a gut feeling that you should not invest in this property.

Your gut could be telling you this for a number of reasons. Perhaps you do not feel comfortable about the location that the property is located. Also, you could be concerned about your ability to find and locate tenants. Further, you might be concerned about your reserve fund, in that you feel that you do not have sufficient cash reserves in place in order to fund the property in the event of vacancies.

If there is ‘something’ that is holding you back from moving forward on the deal, you have to pay attention to this feeling. Often times, it could be your gut instinct ‘talking’ to you.

Listen to your gut people, it is always right!

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Greetings Everyone,

Last week I had the opportunity to speak at a real estate seminar held by W & B Academy.

I was asked to speak about my experiences as a professional real estate investor.  This was a significant milestone in my real estate investing career, because by presenting at this event, I can now officially add the title of ‘real estate speaker’ to my list of credentials.

If you plan on taking real estate investment seriously, you must do things that will help to increase your credibility.  You want to be able to stand out from the crowd of other real estate investors, and demonstrate that you are a motivated go getter.  Once you have some specific knowledge on real estate investment, and you feel confident on the topic, I suggest you do the following:

1) Write an article on the topic of real estate for your local newspaper

You don’t have to be published in a newspaper.  It could also be a magazine, or perhaps a newsletter that you write for.  Just make sure that you write something, and that you get it published somewhere.  This article that you write will bring you credibility down the road.  Just wait and see…  🙂

For example, I have been featured and quoted in the Canadian Real Estate Magazine October 2009 issue and the March 2010 issue.

2)  Get a speaking opportunity or run a workshop for beginners

Getting a speaking gig on the topic of real estate investing is a great thing to add to your resume.  It brings great credibility, and you can leverage this experience in order to obtain additional speaking opportunities.

Another idea that you can do is to run a workshop for friends who are looking at getting involved with real estate investment.  This platform will benefit both yourself, and those that are in attendance.  You will benefit as you will gain some experience in speaking on the topic of real estate investment.  Your audience will benefit from the knowledge that you provide them with.

Here is a video clip of my presentation this past week for W & B Academy.  A lot of the content for my presentation came from my previous article series, How to buy your first rental property.

I am going to be making an effort to add more regular video content to my blog, just like Steph Davis.

Check out the video, and let me know what you think of it.  You can place your comments below.

[youtube]http://www.youtube.com/watch?v=Lrxe-cR-LoI[/youtube]

Greetings Everyone,

This week I had a very insightful conversation with a real estate investor.  It wasn’t just any real estate investor, rather it was a real estate investor who had been investing in real estate for 20 years.

This conversation that I had was particularity important to me, as most of the real estate investors that I know, and network with, have not been investing as long as 20 years.  The investors that I know mainly have been investing for under 5 years.

As a result of this, the perspectives of the real estate investors with under 5 years of investing experience are quite different than the 20 year investing veteran.

Here are some key takeaways from my conversation with this very experienced real estate investor.

1) He had a partner

When this real estate investor purchased a property 20 years ago, he had an investment partner.  He still has the very same investment partner today.  What I learned from him is that pooling your efforts and partnering up truly can have benefits.  If both people in the venture are equally committed to invest long term, you can achieve more together, than you could achieve alone.

2)  He paid his mortgage down

After 20 years, his investment property was free and clear with no mortgage.  He had the same tenant in the rental property over those 20 years.  As you can see, the tenant had paid off the mortgage for him.  I can honestly say that this is the first one on one conversation that I have had with a real estate investor who has had a tenant pay off his mortgage.

Now days, it is very common for real estate investors to obtain mortgages with extended amortization periods.  It is not uncommon to have a mortgage on a rental property amortized over 35 years.  This tactic is used so that the payments on the mortgage are less, and thus, the monthly cash flow on the property is greater.

The majority of the real estate investors that I know that have been investing for 5 years or less have 35 year amortization term mortgages.

It seems that the modern day real estate investor is a fan of the longer amortization periods, whereas the ‘old school’ real estate investor is a fan of the shorter amortization periods, such as 25 years or less.

There of course is no right or wrong answer as to which amortization period is better, as they both have certain upsides.

However, this veteran real estate investor got me thinking…

I would much rather pay off my mortgage sooner, with less cash flow than pay my mortgages off slowly with higher cash flow.  What do you guys think?

3) He had property management

This investor bought a bunch of properties all over Southern Ontario over the past several years.  He had quite a busy portfolio, and as a result, opted to use property management to look after his properties.

Many old school investors understand that hiring property management is a part of the business of real estate investing.  In addition, many current day investors, try to ‘do it alone’ with no property management.  This can only work when you have a limited number of properties.  The more properties you start to accumulate, the greater need you will have for property management.

4)  He purchased properties in many markets

Another observation that I made was that he did not buy just in one specific area, rather, his investments were spread out across many different real estate markets.

Many real estate investors that I know with under 5 years of real estate investing experience feel that you have to stick to one particular area, and buy all of your rental properties in that area. These investors feel this way because their theory is that you have to master a single geographical area. When you master that area, you will know what the values of the homes are, what rents are being obtained. You will also know the good and bad areas to invest in.

Clearly there is no right and wrong answer here. As a real estate investor, you can purchase all of your rental properties in the same geographical area, or you can buy them in many different markets. The choice is yours.

In summary, I really enjoyed my conversation with this veteran real estate investor.

As humans, we can fall victim to doubting ourselves, and possibly doubting our actions.  As the saying goes, “It’s human nature.”

Anyone that tells you that they have never doubted themselves is lying to you.

The conversation that I had with the veteran real estate investor made me realize that despite MY doubts, I am definitely on the right path. The path to success!

Keep reading more of my articles! All you need to do is enter your e-mail address on the left side of the blog. Or you can click on the orange RSS button on the top right hand corner of my blog.

Hi Everyone,

I will be making a change to my blog shortly, that I wanted you all to know about.

For the past few months, I have been releasing a blog post daily. Many of you have been following my daily posts, and I thank you very much for that.

I have recently decided to make a modification to the frequency of which I will be releasing content to my blog.

I have come to this decision, as I am going to be studying for the Canadian Securities Course.

This is a course that I need to get under my belt, as this will help me to advance in the banking industry.  The industry that I currently work in.

I have actually attempted this course a couple of times over the past several years, and failed it both times.

The exam is in multiple choice format, a format that was never really my strong suit.

Needless to say I am going to have my hands full studying for this course over the next several months. I anticipate that he course is going to take up the lion’s share of my spare time over the next 5 months or so.

I am still planning on releasing weekly content on my blog, however, I cannot commit to the daily blog posts that you have become used to over the past few months.

I want you to all stick with me, and continue to read my posts, even though they will be a little less frequent than you have seen over past few months.

Hang in there. It will be worth it.

In closing, I would like to refer you over to an article written by a fellow real estate blogger and REIN member.

Chris Davies wrote a very good article outlining the recent mortgage changes in Canada. His article was much better than mine.

Greetings Everyone,

Today there was a significant announcement made by Jim Flaherty, the Canadian Federal Minster of Finance in regards to mortgage rules in Canada.

The announcement outlined 3 ‘changes’ to the Canadian mortgage industry. These changes, as explained by Jim Flaherty were a proactive move on the part of the Canadian government in order prevent  a potential housing bubble in Canada.

Although I do not agree with all of the comments made by Jim Flaherty today with respect to these recent changes, I think that this is an excellent move on the part of the Canadian Government.

This announcement is yet again another demonstration of Canada’s prudent fiscal policy.  It is decisions such as these made by the Canadian Government that help to keep Canada a fiscally responsible country.

The Canadian Broadcasting Channel put out an article today that outlines the 3 recent changes to the Canadian Mortgage industry. I recommend you read this article, and watch the accompanying video.

For your reference, the 3 changes announced by the Canadian Governement with respect to the mortgage industry are:

1) Borrowers need to be able to qualify for a mortgage based on the 5 year fixed mortgage rates.  Despite the fact that they intend to obtain a mortgage for a shorter term, and with a lower interest rate.

3)  People buying non-owner occupied homes, will be required to put down 20% as a down payment.  A down payment under 20% for a non-owner occupied home, will no longer be allowed.

What do you think of these recent changes?  Will it help the Canadian mortgage industry, or hinder it?