Real Estate Investing is like the Mafia, once you are in, you can’t get out

Posted by neil on November 15, 2010
General / 11 Comments

Hi Everyone,

I hope you are doing well.

I thought that I would change things up a bit for today’s blog post and talk about some of the negatives of real estate investing.

By now, most of you know my writing style and my general philosophy.  I am a positive person, I like to write motivating articles and I like to write about the benefits of investing in real estate.

However, today I thought that I would talk about all the reasons why a person should not become a real estate investor.  Any experienced real estate investor will tell you that succeeding as a real estate investor is not easy.  There are times when you feel on top of the world and there are times in which you want to ‘throw in the towel’ and quit real estate investing for good!  My real estate buddies Julie Broad and Dave Peniuk chronicle their adventures as real estate investors at their blog Life As Real Estate Investors.  This is a great blog to check out if you have not done so already.  Their blog will give you a real sense of how it is to be a real estate investor.

In this post I chose to focus on some of the negative aspects of real estate real investing, so you will be able to see that there  ACTUALLY are negative aspects about the business.  It is important to be aware of these negative aspects.  The more awareness we have of these downside of the business, the greater chance we have of finding solutions to these problems, and the greater chance we have of not letting these negative things effect us and get our spirits down.

Here we go.  Here are the top ten reasons why you should NOT become a real estate investor.

10.  You have to deal with tenant issues

Whether you chose to manage your properties on your own, or whether you have a property manager looking after your properties, you will have to deal with tenant issues as they arise.  This can cause anxiety, as dealing with tenant conflict is never a fun thing.  You can never sit back and be totally hands off when you own multiple properties, or even one property for that matter. Depending on the tenant profile that you have selected, you may be surprised as to how ‘hands on’ you need to be as a landlord. Be prepared that you are going to have to deal with difficult issues with tenants.

9.  You have to worry about additional payments

If you own the home that you live in, you are making various payments in relation to your home each month.  Payments such as mortgage, taxes, utilities and many others.  If you own a rental property, you have a whole set of other payments that you have to worry about as well.  You better be on top of things, as a few missed payments can spell disaster for you.  Don’t fall behind on your mortgage payments on your rental properties, and don’t fall behind on your property tax payments.  If you do, you are getting yourself into serious trouble. 

8. You will never have enough money in your reserve fund

I have been around long enough to know that most investors are never happy with the amount of money they have in their reserve fund.  Some investors keep a tremendous amount of funds in their reserve fund, in anticipation of the “end of the world”.  However, most investors keep ‘just enough’ money in their reserve fund to get by.  Investors always worry about their reserve fund, as they constantly wonder if they have enough money put aside in the event of  major repairs or extended vacancies.

7.  You will not fit in

Whether you like it or not, owning  rental properties is not something that many people do.  I have heard a number of different stats on this topic.  Since I am Canadian, I will give you a Canadian stat.  The last stat that I heard was that 5 % of Canadians owned a property in addition to their principal residence.  That is not a large percentage as that equates to…5 out of 100 people.

Whenever you are the ‘five’ out of 100 people, you are clearly in the minority.  When you are in the minority, generally, you don’t fit in with how the rest of society operates.  For example, if you strike up a conversation with people and talk about the challenges that you face as a landlord, it is very possible that they will not relate to you, as they have no idea what you are talking about.

Plain and simple, as a real estate investor, you are weird, and you do not fit in.  Get used to it.

6.  You will have less disposable income

Experienced real estate investors  will be the first to tell you that they are ‘house rich and cash poor’.  As a real estate investor, owning a rental property is a big commitment.  In reality, you are going to have to put in your own funds (from a job or other source) in order to replenish reserve funds or to pay for any repairs, maintenance, or vacancies from time to time.  I know this last sentence has some of the aspiring real estate investors figitting in thier chairs as they read this.  Some of the experience real estate investors might be thinking…”Neil, did you just say that?”  Yes, I did.

I will say it again.  You put in your own funds (from your job or from another source) in order to sustain your portfolio.  This is the reality.  Anyone who tells you differently is probably lying to you.

5.  You will always regret selling a property

People who understand the value of real estate as an investment, understand that you benefit by holding real estate long term.  As a real estate investor, if you sell a property at some point during your real estate investing career, there is a good chance that there will be a part of you that regrets selling the property at that period in time.  This is because, if you held the property for another 5 or 10 years, you would benefit from additional cash flow, mortgage pay down and potential appreciation.

No matter what the circumstances are, when you sell a property, there will be a part of you that will second guess that decision.  It is not fun to live with regrets.

4.  People Judge You.

Further to point number 7, not only will you not fit in, people will judge you as well.  People can often be hostile towards you if they find out that you own a rental property or two.  They think that because you own a rental property, you must be a) rich, b) given money from a family member, c) involved in illegal activity, d) from a well off family, e) lucky, f) won the lottery, g) unfairly given money that you did not have to work for, etc.  The list can go on and on.  Plain and simple, people judge you and wonder where you got the money to invest in real estate.  They tend to think that you were born with a silver spoon in your mouth.

3.  You strive to obtain goals that are not your own

The more you surround yourself by other real estate investors, the more you learn.  As you learn more, you also start to unknowingly compete with other real estate investors.  You quickly find yourself in a position in which you are constantly comparing yourself with other real estate investors.  One area of comparission, and also the most obvious one relates to ‘how many’ properties you own.

Believe it or not, but people get caught up in a frenzy where they try to buy as many properties as they possbilby can, trying to keep pace with other investors.  People get so caught up in this activity, that they don’t take anytime to stop and think what they are doing.  Soon enough, they find themselves in a position in which they have taken on too many properties, that they can’t manage. As a result, their stress level goes up, and their personal lives suffer.

2. Life is more important than just trying to make money

It is easy to get caught up in life focussing on activities that are worthless.  Many people focuss exclusively on trying to make money.  More often than not, people who pursue wealth creation exclusively are not happy.  You have to have balance in your life, in order feel fullfilled.  Some real estate investor pursue investing in real estate as their sole focus.  This is not the right thing to do, as life is more than just about making money.

1.  Real Estate investing is like the Mafia.  Once you are in, you can’t get out.

True veteran real estate investors never give up investing in real estate.  This may sound noble, however, sometimes it is something that is done against their will.  Buying rental properties is a big undertaking.  Once you have purchased a property, sunk your own money into the investment, looked after repairs, maintenance and fed the property with your own personal funds to cover vacancies, you want to make sure that you realize a good profit from this investment.

Since you have put so much money, time and effort into your rental property, it doesn’t make any sense to exit from the investment, even if you are burnt out and do not want to deal with the investment any longer.  Once you are invested, you are stuck with it. You are stuck with it because you want to hold it long enough that you are able to profit from the investment in a major way.

Best Regards,

Neil Uttamsingh

PS: To keep up to date with my blog, enter your e-mail address on the LEFT hand side of the blog.  To receive The First Rental Property Newsletter, enter your e-mail address on the RIGHT hand side of the blog.  In the Newsletter, experienced real estate investors will share with you how they bought their first rental property.  They will also share some tips and tricks to help you get started.

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Business Life Story Part Seven

Posted by neil on November 13, 2010
General / No Comments

Hi Everyone,

I hope you are all doing well.

It has been quite some time indeed since my last installment of my Business Life Story.  It has been so long that many of you probably don’t remember the previous posts, or have not been subscribed long enough to receive them.

Fortunately, I am able to share all installments with you, with just a simple click of your mouse, you can relive my ‘story’ by checking out the previous installments below.  By reading through the articles, you can learn how I became a real estate investor, and learn about the path that I took in order to get to where I am today.

Business Life Story Part One

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

In the Business Life Story Part Six, I discussed the first 2 property purchases.  In this installment, I am going to describe the remainder of the property purchases.

After my second property purchase in October 2008, I went on to buy 3 more properties between October 2008 until August 2010.

At the time of writing, it is November 12th 2010 and I own 5 rental properties in total.

The three properties that I purchased between October 2008 and August 2010 have all been located in Hamilton, Ontario Canada.

The fact that I purchased these properties in this particular market had a lot to do with the education I received from my real estate investment group, which is called The Real Estate Investment Network, more affectionately referred to by it’s members as REIN.

My association with REIN allowed me to and continually allows me to meet very smart entrepreneurs, business owners, and savvy real estate investors.  Many of these people have helped in making me smarter.  I have become smarter as an investor simply by observing what other more successful people are doing and trying to recreate what they are doing to the best of my ability.

My three Hamilton properties are all generating positive monthly cash flow.  To the novice investor this means that with the monthly rent that I collect, I am able to pay for all of the monthly expenses and still have some money left over as my profit each month. The fact that I could buy these properties in Hamilton and cash flow them monthly was a big selling feature which resulted in me buying these properties.

A number of years ago, Hamilton was identified as a region in Ontario with a very bright future.  Jobs are being created in this area, and where there is job growth, real estate values are always effected in a positive manner.

My plans are to continue to grow my portfolio of rental properties.  I am keeping a careful eye on the management of these properties.  I am always looking to move forward and acquire more properties by partnering up with the right joint venture partner.

As I have mentioned in previous posts, it is good to exercise extreme due diligence when selecting joint venture partners.

Through my association with REIN and after meeting a large number of real estate investors, I began to notice that a good number of these members had different types of products and services related to real estate that they sold.

Some people were Realtors, some people offered real estate services at a cost, and some people sold real estate informational products.

Watching all these people essentially ‘monetize’ real estate products and services really got me thinking as to how I could do this myself.

After some careful thought and some research on my end, I decided that I would establish my own real estate blog.  It was at this time that First Rental Property was born!

Picking the focus for the blog was easy for me.  I have always been genuinely interested in helping other people.  Therefore the theme of providing knowledge and confidence to new and aspiring real estate investors made complete sense to me.  I knew that this was a topic that I could write about with great ease.

Although my intent was to monetize First Rental Property from day one, I have yet to do so.  The blog has been in existence for about one year now and I have not generated any revenue from the blog.

I have enjoyed building a large readership, however, the monetization of the blog has always been the plan.  As the blog continues to grow, I will be incorporating different monetization strategies into the blog.

The Future

As far as the future is concerned, I plan to continue to actively manage my real estate portfolio. I will continue to acquire more properties with  joint venture partners, and continue to produce quality content for First Rental Property, as well as to incorporate monetization strategies as the blog continues to develop.

Best Regards,

Neil Uttamsingh

PS: To keep up to date with my blog, enter your e-mail address on the LEFT hand side of the blog.  To receive The First Rental Property Newsletter, enter your e-mail address on the RIGHT hand side of the blog.  In the newsletter experienced real estate investors will share with you tips and tricks on how to buy your first rental property.

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Why is Remembrance Day Important?

Posted by neil on November 11, 2010
General / 2 Comments

Hi Everyone,

I hope you are doing well.

Today is November 11th and that means that it is  Remembrance Day here in Canada.

The majority of the readers of First Rental Property are from North America, and as a result are very familiar with this day and what it means.

To the many American readers I have, your day is known as Veterans Day and it  also occurs today, as you know.

Remembrance Day, also referred to as Poppy Day, Veterans Day, or Armistice Day is observed in Commonwealth countries.

The purpose of the day is to remember the sacrifices of members of the armed forces and civilians during times of war.

Increasingly, this special day is also acknowledged by many non-Commonwealth countries.

I find it fitting to give this background of Remembrance Day as readers of First Rental Property come from 50 different countries and territories around the world, and as a result may not even know what Remembrance Day is.

Today I took the opportunity to attend a Remembrance Day ceremony held in my Town.

It was great to see the event so well attended.  Many people took the time out of their day to show their respect and remember those that gave their lives in order to protect their country.

It was great to see a good number of living veterans in the crowd. For some reason, I thought there would be a lot fewer in attendance given the fact that they are all aging.  It was great to see so many of them, decorated with all of their medals.

I also took note of the fact that there were kids in attendance.  Remembrance Day is not a holiday here in Canada.  As such, this meant that these kids had coordinated with their parents or teachers in order to attend the event.  This I found impressive, as many adults are indifferent to this day, and don’t take nearly as much time to reflect when compared to kids.

Here is a picture I took at the event:

remembrance day

I have consciously made the decision not to talk about real estate investing in this post.

I decided this because in life there are more important things than real estate investing.

Today is an example of one of them.

If you so incline, don’t forget to take some time today to remember the sacrifices made by others, so that we can live in peace.

Best Regards,

Neil Uttamsingh.

PS: Follow my blog.  Enter your e-mail address on the LEFT hand side of the blog.

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The Dark Side of Real Estate Investing

Posted by neil on November 07, 2010
General / 8 Comments

Hi Everyone,

I hope you are doing well.

Very often we hear about real estate investors who have become successful at investing.  We can read about these people everywhere, especially on the ‘Blogosphere’.  People like to write about their successes, and how well they are doing as investors.

However, we don’t often hear from the real estate investors that have failed, and who are no longer investing in real estate.

I have yet to come across a real estate blog written by a former swiss made rolex clones real estate investor, who has lost all of their money, and who are no longer investing in real estate.

The reality is that when people fail as real estate investors, they disappear into the night and we often never hear from them ever again.

This is unfortunate because these people have made mistakes that all of us can learn from.

As my blog has become a lot more popular over the past year, I have spoken to a number of people who have failed as real estate investors.  The truth is that there is not much of a difference between those that have failed and those that have succeeded.  For the most part, everyone starts off with great ambition, and with hopes of accumulating wealth through investing in real estate.  This is fine and dandy, but…

In only takes one mistake to fail.  Often it is this one mistake that wipes out the real estate investor altogether.

I will share with you one common mistake that is made by aspiring real estate investors.

This mistake relates to the purchase of new construction properties.  On a number of occasions, I have seen people make grave errors with this investing strategy.

Unlike many experienced real estate investors, I am a proponent of buying new construction.  If the numbers work, and you are buying in the right location, under the right market conditions (ie: transitional area)  you can really do well in terms of equity appreciation with new construction.

Despite all of the advantages of investing in new construction, I have witnessed people make huge errors with this this buying philosophy.

For example, In the Greater Toronto Area there were increasing numbers of people buying new construction from 2003 until about 2007.  The area was experiencing a rising market, and it was easy to look like a genius if you purchased new construction during these years.  It was not uncommon to realize  double and triple digit returns year over year, depending on the size of your down payment.  It was a great time as a real estate investor, and those that purchased during this time, realized substantial gains in property values.

This rising market made people believe that it was easy to make money investing in real estate, and as a result, people did not take the time to do their own personal research before buying.  They blindly jumped into buying new construction properties with that hopes that the property would rise in value and that they would profit.

I have been contacted by a number of people who bought new construction during the past several years and who have now found themselves in a position in which they are unable to obtain a mortgage for their new property.  Some of these people were able to able to obtain a mortgage at the ‘eleventh hour’, by bringing in mortgage partners,  however, many of these people ended up losing all of their deposit, and in some cases, even more than just their initial deposit.

I have seen people lose between $20,000 to $50,000 when they have attempted to purchase new construction properties and have not been able to close (obtain a mortgage) on the property.

When people are not able to close on the property, due to the fact that they are not able to be approved for a mortgage, they lose their deposit to the builder, and in many cases are sued by the builder for additional amounts.

There is one common mistake that these would be investors make, that results in the eventual loss of their money.  Their mistake is as follows:

They deposit money with a builder to buy a new property, yet they NEGLECT to determine if they are able to obtain a mortgage on the property, prior to making their deposit.

When the closing date for the property draws closer, they then try to obtain a mortgage by approaching their bank or mortgage broker.  This is often too little too late.

Had the individual first consulted their bank or mortgage broker, prior to depositing their money with the builder, they would know from the very beginning if they are able to afford purchasing the property or not.

It is a sad state of affairs, however, I have seen a number of people fall into this trap.  This truly is the dark side of real estate investing.  It is not pleasant to witness these people lose so much money.

What is even more troubling to me is that people think that they are invincible.  I have had a few occasions in which people have approached me and asked me questions about buying new construction.  I have spoken to them about the pros and the cons, and have advised them that BEFORE they do anything, they must first consult an experienced mortgage broker, so that the mortgage broker can advise them as to whether nový Mentolové příchuť Náplně or not they are able to afford the eventual mortgage on the new property.

I have given people this advice and on a handful of occasions they have not listened to me and gone ahead and purchased a new construction property, without even checking to see if they are able to afford the mortgage.

Having only been investing myself for under 6 years, I am not sure if this phenomenon of stupidity is a recent one, or if it has always been around.  I am wiling to bet that it has always been around, however, I would like to hear from those of you who are veteran real estate investors and who have insights to share on the new construction market.  Please share your comments.

In summary, there are a lot of people who lose large amounts of money trying to become real estate investors. We seldom hear about these people, and only seem to hear from those that are doing well and having a certain degree of success as a real estate investor.

It is very important to be aware, that with just one simple mistake (the mistake of not consulting a mortgage broker or bank) prior to purchasing a new construction property can very easily end a real estate investors career before it even begins.

If you make this type of mistake, you may dig a hole for yourself that may take you a lifetime to climb out of.

Continually educate yourself when it comes to real estate investing, and learn from the mistakes of people who have gone before you.

Best Regards,

Neil Uttamsingh.

PS: I can help you avoid the mistakes that many new real estate investors make.  Subscribe to my blog today. 

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The Canadian Real Estate Blog Carnival

Posted by neil on November 06, 2010
General / 3 Comments

Hi Everyone,

I hope you are all doing well.

I have a number of things to update you on.

First off, I would like to give a shout out to Rachelle of Landlord Rescue.

As I have mentioned before, Rachelle got the ball rolling and has created a Canadian Real Estate Blog Carnival.

You can read some of best posts from Canadian Real Estate bloggers at this carnival.

In case you missed the first three additions, I encourage you to check them out:

Canadian Real Estate Blog Carnival, First Edition
Canadian Real Estate Blog Carnival, Second Edition
Canadian Real Estate Blog Carnival, Third Edition

I was very happy to receive an ‘honourable mention’ in the 1st edition, and win the silver medal in the 2nd edition!

I was away for a few weeks and wasn’t able to submit an article for the Third edition, but I will definitely be submitting an article for the upcoming Fourth Edition. Stay Tuned!

In the upcoming fourth edition, I am looking forward to reading posts from from some of the best Canadian Real Estate bloggers including Julie Broad and Dave Peniuk from Life As Real Estate Investors and Nick and Tom Karadza from Rock Star Inner Circle.

If you are a new real estate investor looking to educate yourself on the topic of real estate investment, The Carnival is a must read for you.  Although this carnival has specific Canadian content, much of the content would be of great value to real estate investors from all around the world, especially investors from the U.S.A.

You will be pleasantly surprised as to how much you will learn by reading The Canadian Real Estate Blog Carnival.

Best Regards,

Neil Uttamsingh.

PS: To keep up to date with my blog, enter your e-mail address on the LEFT hand side of the blog.  To receive The First Rental Property Newsletter, enter your e-mail address on the RIGHT hand side of the blog.  In The First Rental Property Newsletter, experienced real estate investors will share with you how they purchased their first rental property.  They will also share with you some tips and tricks you can use to help you buy your first rental property.

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3 Reasons why you need an accountability partner

Posted by neil on October 13, 2010
General / 3 Comments

Hi Everyone,

I hope you are all doing well.

As a new real estate investor, you may not yet understand the importance of associating yourself with goal oriented and like minded people.

Doing this is absolutely critical to ensuring your success as a real estate investor.

Fellow Canadian Real Estate Investors and Bloggers Tom and Nick Karadza have done a lot of reading on the topics of real estate and business.  They have a number of great recommended readings over at their Rock Star Inner Circle Blog. A number of books that they recommend discuss the importance of associating yourself with goal oriented and like minded people.  In addition, topics such as ‘accountability partners’ are discussed in some of these books.

We will now dive into today’s blog post, as I will discuss with you 3 reasons why you need an accountability partner…

The First Reason you need an accountability partner…

Real Estate investors are an entrepreneurial lot.  As entrepreneurs, we all personally hold ourselves accountable in different ways.  Some of us are very good at being accountable, and some of us are not very good at being accountable.

From my observation of real estate investors, I believe that most lack an ability to keep themselves accountable.

Due to the fact that most of us have a poor ability of keeping ourselves accountable, we need all the help we can get with this.

Therefore, the first reason you need an accountability partner is because your partner will keep you on track. When you are on track, you stay focused on your goals.  Due to this rediscovered focus you are able to complete tasks and accomplish goals more rapidly than you would have been able to, had you not been matched up with your accountability partner.

The Second Reason Why you need an accountability partner…

A good accountability partner can be a great help.  Not only can this person help us, they can also serve as a gauge as we measure our own success in comparison to our partner’s.

For example, you may have two individuals acting as accountability knockoff richard mille rm 52 02 partners for one another.  The first partner, let’s call him Sanjay, owns 3 rental properties.  The second partner, let’s call him Frank, has not bought his first rental property yet.

As Frank and Sanjay engage in their discussions as accountability partners, Sanjay’s experience in purchasing 3 rental properties can prove to be a great help for Frank.

Frank can try to reproduce Sanjay’s success, by purchasing his own rental property.

No one really likes to be left behind.  As such, Frank can use Sanjay’s success as a motivator in order to push him closer to the goal of owning his first rental property.

The Third Reason Why you need an accountability partner…

An accountability partner will help you to become smarter.  Each person in a 2 person accountability partner relationship has different strengths.

For instance, one partner may be great at raising joint venture money, while the other partner might be great at building a strong real estate team.

Because of the different skills sets that you and your partner have, you can easily learn from one another.  With dedication and commitment, you can learn from your partner and become better at tasks that perhaps you were previously not very good at.  Since you will now be better at tasks that you were once not very good at, your level of overall intelligence and general knowledge will have increased!

So in summary, the 3 reasons why you need an accountability partner are as follows:

  • Your partner will keep you on track. When you are on track, you stay focused on your goals.
  • They can also serve as a gauge as we measure our own success in comparison to the success of our partner.
  • An accountability partner will help you to become smarter.

Best Regards,

Neil Uttamsingh

PS: To keep up to date with my blog, enter your e-mail address on the LEFT hand side of the blog.  To receive The First Rental Property Newsletter, enter your e-mail address on the RIGHT hand side of the blog.  In The First Rental Property Newsletter, experienced real estate investors will share with you how they bought their first rental property.  They will also share with you some ‘tips’ and ‘tricks’ to help you buy your first rental property.


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The #2 reason why real estate investors don’t become successful

Posted by neil on October 13, 2010
General / No Comments

Hi Everyone,

I hope you are doing well.

Today’s blog post was inspired by Jason Hanson at the Bigger Pockets Real Estate Blog.   Jason’s recent article was titled The #2 reason real estate investors don’t become successful (and what to do about it)

In Jason’s article he raised a couple of great point which I would like to speak further on.

As a new real estate investor reading this post, pay special attention to these points, as this applies directly to you.

In Jason’s article, he describes a book that he read about John D. Rockefeller.  In the book, Rockefeller explained that most people never become successful because they have a ‘lack of concentration’.

I could not agree with this statement more.

As Jason articulates in his article, if you never put in a consistent effort in growing your real estate business, it will never happen.

What I enjoyed the most about Jason’s blog post was a statement that he made.  I have provided the statement below, and below the statement, I will give my interpretation.  Here is the statement:

“In short, if you want to be rich (in any business) have a long-term focus and don’t let anything distract you. Also, I highly recommend writing yourself a promise and signing it and looking at it every time you think of doing something else.”

Jason is bang on with his first point.  New real estate investors, please pay attention.  Jason says that, “if you want to be rich (in any business) have a long term focus and don’t let anything distract you.”

This is great advice because in the real world of real estate investing, distractions are all around us.  Distractions could come in the form of other business ventures that we are thinking about pursuing, or distractions could simply be unproductive time spent on less important tasks.

Being focused, and not being distracted are key to success as a real estate investor.

Further, Jason makes a recommendation that I really like.  He suggests writing down a promise to yourself, signing it, and looking at it every time you think of doing something else. (other than staying committed to real estate investing)

This sounds like a really simple thing to do.  However, the act of doing this can be extremely powerful.

So in summary:

  • Real Estate investors fail often because they have a lack of concentration.
  • In order to stay focused, have a long term vision and don’t let anything or anyone derail you from your path.
  • Make a written promise to yourself, sign it, and look at it every time you think of bailing from real estate investing.

Thanks again Jason for your great post.

Best Regards,

Neil Uttamsingh.

PS: To keep up to date with my blog, enter your e-mail address on the LEFT hand side of the blog.  To receive The First Rental Property Newsletter, enter your e-mail address on the RIGHT hand side of the blog.  In the Newsletter, experienced real estate investors will be sharing with you how they purchased their first rental property.  They will also share some ‘tips’ and ‘tricks’ with you as to how to buy your first rental property.

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How many rental properties do you need to retire rich?

Posted by neil on October 11, 2010
General / 12 Comments

Hi Everyone,

I hope you are doing well.

Before I dive into today’s blog post, I would like to thank fellow Canadian Real Estate Investor and Blogger Chris Davies.  I was chatting with Chris this week, and he gave me some great tips as to how I can improve my blog.  One of the blogs that he recommended to me that I am going to be leveraging in order to improve my blog is SEOmoz.  The SEOmoz blog has nothing to do with real estate investing, however, everything to do with Search Engine Optimization — which is something that I am going to be learning more about and integrating with First Rental Property.  Thanks again Chris!

Now for today’s blog post…

Today’s post was inspired by fellow Canadian Real Estate Investors and Bloggers Julie Broad and Dave Peniuk of Rev N You.

In Julie and Dave’s recent Rev N You Newsletter, they talked about figuring out your ‘why’ when you are buying rental property.

Over the past couple of years, they have met a number of real estate investors who have purchased 30 or more properties in a very short period of time.

Despite these large portfolios that these investors have accumulated in a very short period of time, they are not satisfied.  They are not satisfied because they never took the time to figure out WHY they were investing in the first place.

When I read this in Julie and Dave’s Newsletter, I knew exactly what they were talking about, because I see this happening as well with real estate investors that I know, or hear about.

It has been my observation that some real estate investors become obsessed with buying as many properties that they can.  Some investors ‘explode’ onto the real estate investing scene and buy a lot of properties REALLY fast.  Before the dust has settled, some find that they are in a situation in which they despise….very unhappy, and holding a large portfolio of rental properties.

For instance, they now have a lot of additional stress with the management of these properties and with dealing with all of their tenants.

Why it pays to be self aware…

Most Real Estate Investors just like most of the general population are not overly self aware.  Due to this lack of self awareness, people do things without really thinking why they are doing it.

Fortunately, I have always had a high degree of self awareness.  This has helped to guide me through my real estate investing career.  If and when I begin to question what I am doing, I have to stop and ask myself the reason why I am investing in real estate.

As a new real estate investor, being self aware is crucially important.  Generally speaking, the more self aware you are, the less stress you will cause yourself down the road.

Here is an example of what I mean…

Some new real estate estate investors think investing is all about money, and all about how many properties you can buy and how fast.

Fortunately, I came to realize early in my real estate investing career that it is not all about that.

This past year, I  had to turn down an individual who wanted to joint venture with me.  He was a guy with access to a large amount of capital and with experience in real estate.

When he first asked to joint venture with me, I struggled slightly with the decision making process, as all I saw were ‘dollar signs’, as I did not want to turn down this guy’s money.

Being the extremely self aware individual that I am, it did not take me long to figure out that I had to listen to my gut and not joint venture with this guy.

He was someone that did not have the same core values as myself.  He viewed life and business much differently than I did.  His time horizon for investing did not match up with mine.  Due to all these factors, my decision to turn him down was very easy.

Having only been investing in real estate for a little over 5 years now, I know well enough never to venture with someone who does not share the same core values that I do.  This in my mind is a recipe for disaster.

Unfortunately, there are so many investors who do not realize this and jump into partnerships with anyone, just because that other person has money to invest.  They get blinded by the dollar signs, and more often than not, are left cleaning up a mess and/or are completely miserable.

What I have learned by observing others…

I have been fortunate to learn a lot by watching what other investors do.

What I have learned is that in this point in my real estate investing career, I would only joint venture with family members (people that I am related to) or with people who have core values that match up closely with mine. (this could be close friends, friends or acquaintances — however, there has to be an alignment of core values)

Due to this decision on my part, it may take me longer to build my real estate portfolio, however, I will be much happier and will not be adding any unnecessary stress to my life by partnering with people just because they have money to invest.

So how many rental properties do you need to retire rich?

There is no right or wrong answer to this question.

This all comes down to your own personal goals.

As you can see from my example, I am choosing to grow my portfolio more organically…

It is perfectly okay to grow your portfolio in this manner.

If you are a new real estate investor, you may only need one rental property to meet your real estate investing goals.

Let’s say for example, you chose to purchase 3 properties.   Depending on your individual circumstance, there is no reason why you cannot do this on you own.  For some it may take a number of years to acquire 3 properties by yourself.  Whereas with others, it may only take a few months in order to achieve this.

At the end of the day it is important to remember:

  • There is no ‘secret’ number of properties required to retire rich.
  • It is completely fine to grow your portfolio organically (by yourself)
  • If you do joint venture with someone, make sure that you are not doing it just for the money, and that your partner and yourself are well suited for one another.

Best Regards,

Neil Uttamsingh

PS: To keep up to date with my blog, enter your email address on the LEFT hand side of the blog.  To receive The First Rental Property Newsletter, enter your e-mail address on the RIGHT hand side of the blog.  In The First Rental Property Newsletter, experienced real estate investors will be sharing how they purchased their first rental property.  They will also share with you some ‘tips’ and ‘tricks’ as to how to buy rental properties.

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Fools Get Wealthy

Posted by neil on October 08, 2010
General / 2 Comments

Hi Everyone,

I hope that you are all doing well.

Don R. Campbell, fellow real estate investor and President of The Real Estate Investment Network, a.k.a. REIN, is a wise man.  Don is a Canadian Best Selling Author of the book Real Estate Investing in Canada.

Don made a comment a few months ago that I particularly enjoyed.

His comment was…

“Fools get wealthy.”

Over the past several years, Don has been instrumental in changing the conversation on real estate investing in Canada.  In my opinion, Don provides a lot of insightful commentary on the real estate market and the key economic factors effecting the real estate market in Canada.

With regards to Don’s statement, “Fools get wealthy”,  he explained that the super successful people are often referred to as fools, by the rest of the population.  They are ‘fools’ because they are not normal people, nor do they behave like normal people. These ‘fools’ do things that normal people would never consider doing…

What I am trying to explain to you is this…

If you are a new or aspiring real estate investor, you are a fool!!!

Here is why…

Real Estate investors are a unique segment of the population.  There are not very many of us.  As an example, in Canada, it is estimated that 94% of homes are owner occupied.  This leaves us with 6% of the homes in Canada as rental properties.

Plain and simple, if you own a rental property, you are not like the rest of the population.  You are in the minority.  Since you are in the minority, many people will classify you as being a ‘fool’ for taking on the ‘risk’ of owning a rental property.

As a new or aspiring real estate investor, here is the first point you need to recognize.  The point is:

  • People will think you are a ‘fool’ for owning a rental property.  Having a rental property is not a ‘normal’ thing to have.  You are a ‘fool’ for taking on the risk of owning a rental property.

Further, if you take the time to study some of the people who have achieved great success with real estate investing, you will notice some common characteristics.

Fools will have done and continue to do a lot of things different from the normal population.

Here are some examples of what ‘fools’ do differently from the general population.

  • Fools study successful people, in order to find out common characteristics between these people
  • Fools get up early in the morning, in order to get a head start on their day.
  • Fools continue to work hard, even when they have ‘made’ it.
  • Fools want to constantly improve themselves everyday
  • Fools generally never focus on making money, they focus on what they enjoy
  • Fools know that working hard does not necessarily guarantee success
  • Fools know what they are surrounded by opportunity everyday

In your opinion, what are some other things that ‘Fools’ do differently when compared the rest of the population?

If you are a fool, be proud of yourself!  After all, “Fools get wealthy.”

Best Regards,

Neil Uttamsingh

PS: To keep up to date with my blog, enter your e-mail address on the LEFT hand side of the blog.  To receive The First Rental Property Newsletter, enter your e-mail address on the RIGHT hand side of the blog.  In the First Rental Property Newsletter, experienced real estate investors will share with you how they purchased their first rental property.  They will also share with you some tips and tricks in order to help you get started.

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How To Be A Quick Turn Real Estate Millionaire

Posted by neil on October 04, 2010
General / 1 Comment

Hi Everyone,

I hope you are doing well.

This past weekend, Ron LeGrand was in Toronto presenting to members of Don R. Campbell’s Real Estate Investment Network (REIN).

For those of you that do not know, Ron LeGrand is renowned in North America as a real estate expert and lecturer who has taught thousands of people how to earn big incomes through his ‘quick turn’ real estate strategy.

In Ron’s ‘quick turn’ real estate strategy, personal income and credit is not used when buying and selling properties.

Ron has personally bought and sold more than 1,600 homes and is known as the “Guru” of quick turn real estate.

Ron, also known as the “millionaire maker” has taught more than 250,000 students how to be a Quick Turn Real Estate Millionaire.

I am a member of The Real Estate Investment Network (REIN). At our member events, I often help out where ever I can.

After Ron had finished presenting this weekend at our member event, myself and a fellow REIN member and friend got the opportunity to drive Ron back to the Airport so that he could catch his flight back to the USA.

Our member event was being held about 5 minutes away from the Pearson International Airport in Toronto, and we were driving Ron directly to the Airport.

I took these 5 minutes to ask Ron the most intelligent questions I could think of. I always take full advantage of asking successful people questions, in order to gain an insight into how they view things.

Here is what I asked Ron:

Neil: “Ron, in your years of presenting to students all across North America, what do you feel has been the commonality between the students that have become successful with the Quick Turn strategies?”

Ron LeGrand: “They have been committed.  They weren’t just there (in the class) to collect information.”

Further, I told Ron that Don R. Campbell of The Real Estate Investment Network, has a great quote.  I told Ron that the quote is, “The most successful people do not wait for all of the lights to turn green before taking action.”

Ron commented that he liked that quote and gave a quote of his own.  His quote was something to the effect of, “80% of America’s CEOs have made crucial decisions with only 20% of the information”

So what does this all mean to you?

If you are an new real estate investor, there are a couple of big take aways for you from my discussion with Ron.  The first take away is…

  • In order to become successful, you have to be committed.  As Ron said, the most successful students that he had were all committed, and they were not just there to collect information.  Listen to Ron and stay committed!

The second big take away is a little less obvious, however, equally as important.

  • As the wise Philip McKernan says, ‘In the absence of clarity, take action.”  This is the exact same message that Ron is conveying.  The most successful people in the world became this way because they had to often make important decisions when they did not have all of the necessary information.  The point is that they did not wait for this information and for complete clarity.  They pulled the trigger, took the leap of faith, and took action…even when they were not certain what the result would be of their actions

Best Regards,

Neil Uttamsingh

PS: To keep up to date with my blog, enter your e-mail address on the LEFT hand side of the blog.  To receive The First Rental Property Newsletter, enter your e-mail address on the RIGHT hand side of the blog.  In the Newsletter, experienced real estate investors will share with you how they purchased their first rental property.  They will also share with you ‘tips’ and ‘tricks’ to help you buy your first rental property.

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