First Rental Property

Hi Friend,

I hope you are doing well.

If you are interested in buying your first rental property, and have not done so already, you will benefit by reading this post.

There may be many factors that are holding you back from buying your first rental property.

When I first started out as a real estate investor, it took me about one year of doing research and asking questions before I took the leap and bought my first rental property in Oakville, Ontario, Canada.

I have since gone to purchase Oakville real estate, Hamilton real estate and Toronto real estate.

In an effort to help shed some light on why you have not bought your first rental property yet, here are 5 reasons that are holding you back:

1) A Lack of Education

You may know a little about real estate investing, however you don’t know enough.  You read some blogs here and there, but that is where your education ends.  For most new real estate investors this is not enough.  You need to start to talk to people who own rental properties and learn about their experiences.  This action will push you over the edge, so that you feel comfortable enough to buy your first rental property.

2) You Are Not A Member Of Real Estate Investment Groups

Real Estate Investment Groups are the perfect place to meet people who own rental properties.  At these groups, you will find experienced real estate investors as well as real estate investors who have *just* purchased their first rental property.  It has been my observation that real estate investors attend these groups for support.  If you are to become a real estate investor, having support is essential.  You need to have people that you can go to, to ask advice on real estate matters.

If you are not a member of a real estate group, you need to join one.  If you live in the Greater Toronto Area, consider attending my monthly Real Estate Workshop called, Landlord Bootcamp For Beginners.

 3) You Do Not Know A Good Mortgage Broker or Mortgage Specialist

Financing is one of the most important topics that you need to understand when you are buying a rental property.  Everyone’s personal financial situations is different.  Depending on your situation, you may need to consult either a Mortgage Broker or a Mortgage Specialist. If you are in the Greater Toronto Area, the mortgage broker you should contact is Kevin Boughen and the Mortgage Specialist you should contact is Chester Yu.

 4) You Are Not Associating Yourself With the Right People

People are either positive or negative.  Which are you?  This is an important question to ask.  An equally important question to ask is, what about the people that you hang around with the most?  Are they positive or negative?  So, so, so many times I remember hearing advice from people who did NOT own any rental properties.  They would be giving me unsolicited advice on whether or not I should be buying a rental property.  Since you are a new real estate investor, it is important for you to associate yourself with positive people who have experience owning rental property.  Never take advice from someone who has NOT accomplished something that you are trying to achieve.

 5) You Are Not Working With An Investment Focussed Real Estate Agent

A very common questions that new real estate investors ask is, “How do I find a rental property?”  The best answer for this is, “Work with someone who knows where to find rental properties”.  Lots of new real estate investors struggle at the beginning trying to find properties that they think would be a ‘good rental property’.  The truth is that, most new real estate investors have no idea where to begin their search for rental properties.  It is always best to work with a real estate agent that understand rental properties, as well as the market that you are looking to purchase a property in.  Working with someone like this will help you in the long run as it will make the process less frustrating.  The process will be less frustrating because real estate agents with knowledge of rental properties know which types of properties are suitable investments.  Most importantly, they will know where EXACTLY you will be able to find these properties in your market that you have chosen to invest in.

In Summary

If you are a new real estate investor and you have not purchased your first rental property, these 5 factors may be holding you back.  If you put in some effort and work towards overcoming these factors, you will be able to buy your first rental property.

Stay focused and committed!  You can do it!

Happy Investing!

Best Regards,

Neil Uttamsingh

ps: Remember, I am an experienced real estate investor and Licensed Realtor. I help new real estate investors like yourself purchase your first rental property.  If you are interested in buying Oakville real estate, Hamilton real estate, or Toronto real estate, send me an email at, NEIL@FIRSTRENTALPROPERTY.COM, and I will help you get stated!

Hi Friend,

I hope you are doing well.  One of the most common questions I get asked by new real estate investors is,

‘Where should I buy a rental property?’

When I was first starting out as a real estate investor, all I knew was that I wanted to buy Oakville real estate, and that was about it.  I did not know any other details other than that.  Since then, I have expanded my real estate portfolio and I own Hamilton real estate and Toronto real estate as well.

If you are a new real estate investor and are wondering where YOU should buy your first rental property, you need to read this blog post.

The simple answer to this question is:

“It depends”

In my mind, it depends on 2 major factors…

These factors are:

1) Where you live 

and

2) How much capital you have to invest

Where you live

My answer to all new real estate investors is the same.  My answer is, “Buy a rental property close enough to where you live so that you can self manage the property’.  This does not mean that you have to buy your first rental property in the same city or town you live in.  The property you purchase can be in a neighbouring city or town.  The most important thing to consider here is that the property needs to be close to you so that you can manage it YOURSELF.

How much capital you have to invest

This is a tricky point because a lot of new real estate investors don’t understand this concept right off the bat.  Depending upon how much capital you have to invest will definitely influence where specifically you invest.  Here is a clear example to help illustrate this point:

CASE STUDY

You have $100,000 to invest in a rental property and are trying to determine between 2 towns, which is the better town to invest in.  The towns are, Town A and Town B.

Town A

Town A has rental properties that cost on average $500,000.  The appreciation of properties in Town A year over year have averaged 7%. The tenant profile in Town A is low maintenance and the type of tenants that rent are professionals earning above average incomes.

Town B

Town B has rental properties that cost on average $150,000.  The appreciation of properties in Town B year over year have averaged 3%.  The tenant profile in Town B is high maintenance.  The type of tenants that rent are individuals with sub par credit history.

If you are a new real estate investor, take note.  You invest your money in Town A.

You invest your money in Town A because…

• You will have ‘easier’ tenants to manage, and,
• You will experience greater property appreciation.

Hello Friend,

I hope you are doing well.

There is a lot that we can learn from YOUNG real estate investors.  These young investors never get caught up on how to buy a rental property.

I have dealt with many real estate investors over the years.  The investors that I have interacted with have been of different ages and cultures. They have lived in many different countries including Canada, America, Africa, Asia and Europe.

The one commonality that I have noticed among all of these investors was that the Young Investors were the most motivated of the whole bunch.

Taking it a step further, the young real estate investors were the most motivated to buy a rental property.

There is a lot that older real estate investors can learn from the young ones.

When young real estate investors want to take action and buy, older ones want to stop and analyze.

When young real estate investors have intelligent questions, older real estate investors have skepticism.

In my opinion, real estate investors in their 20s are the most motivated to take action.

Real estate investors not in their 20s can learn a lot from this age group.

What Motivates Young Real Estate Investors?

In my opinion, what motivates Young real estate investors is that they do not have ‘bad’ experiences to draw upon.

Young real estate investors are full of energy and enthusiasm.  They want to take action and invest.  They enjoy the idea of creating cash flow and they love the idea of appreciation.

All aspects regarding a rental property investment will go right for young real estate investors.  That is because they believe that things will go right!

What I wish for…

I wish that older real estate investors thought the same way that young real estate investors did.  The ‘fearless’ approach that young real estate investors have is the right approach and the right attitude to have when buying your first rental property.

As the great Steve Jobs once said, “Stay young, Stay Foolish”

Happy Investing!

Best Regards,

Neil Uttamsingh

ps: If you are interested in buying your first rental property contact me at neil@firstrentalproperty.com.  We can help you with the transaction and educate you every step of the way.  We are serious in helping you buy your next property, are you?  Contact First Rental Property today! neil@firstrentalproperty.com

Hello Friend,

I hope you are doing well.

I often speak to new real estate investors who are trying to figure out how to buy their first rental property.

There are many factors that sometimes stall  new real estate investor from taking action.

One of the biggest factors that stalls new real estate investors is deciding on WHERE to buy their first rental property.

New investors often experience information overload, because there are so many options as to where you should buy your first rental property.

Unfortunately I see it far too often.  People can’t make up their mind and spend so much time debating which area they should by their property in.

My Advice to you…

If you are a new real estate investor and you are looking to purchase your first rental property, my advice to you is to buy a rental property in a proven area.

What this means is that you need to buy a rental property in an area that has experienced good appreciation, has a good tenant profile and is in an area in which there is potentially good cash flow.

The biggest problem that new real estate investors face…

The biggest problem that new real estate investors face is that they don’t listen to the advice of experienced real estate investors.  This is not meant to be harsh critisism, but unfortunately its reality.

I know this because I have given lots of advice to new real estate investors over the years.  Some new investors get caught up on which area to purchase in, and they debate this topic back and forth for weeks, months, or even maybe years.

They never end up taking action, and time passes them by.

The Answer is Simple

The answer is simple.  As a new real estate investor you need to buy a rental property in an area that other real estate investors have bought in.

The key factor is that the real estate investors that have purchased before you, have to have been successful purchasing properties in this given area.

If the real estate investors have been successful, this means that they have bought properties that have experienced appreciation, have a good tenant profile and have potentially good cash flow.

If you are a new real estate investor…

If you are a new real estate investor don’t complicate matters.  Buy a rental property in a proven area.  An area in which other real estate investors have been successful purchasing in.

Happy Investing!

-Neil Uttamsingh

ps: If you looking to buy your first rental property, let us help you with the process.  First Rental Property is now a Realtor and can help you with any real estate transaction.  If you are thinking of buying, send me a message at NEIL@FIRSTRENTALPROPERTY.COM, and let us guide you through the process.  Become an action taker and buy your first rental property today!  Contact me at NEIL@FIRSTRENTALPROPERTY.COM

Hi Friend,

I hope you are doing well.

Earlier this month I wrote a blog post called, First Rental Property To Make A Huge Announcement In September.

The rumors are true.

First Rental Property will be making it’s BIGGEST announcement EVER, today at 8pm EST.

The news is going to be very significant for those of you who are new real estate investors or who are looking for advice on how to buy your first rental property.

Stay tuned!  The news is going to be GROUND BREAKING!

Best Regards,

Neil.

Hi Everyone,

Hope you are all doing well.

Today I am going to tell you what I think about real estate clubs. I am going to tell you whether I like them, or whether I think that they are a waste of time.

My feelings on real estate clubs are mixed, and I will tell you why.

Lots of aspiring real estate investors looking to buy their first rental property are faced with the same decision.  This decision is whether or not they should join a real estate club.

Real estate clubs can be both good and bad.

Here is one of the reasons that I think real estate clubs can be ‘bad’…

• 1) Real Estate Clubs try to sell you something

Most if not all real estate clubs will try to sell you something.  The sale is usually a product, service or membership.

Memberships

Most large real estate clubs will charge membership fees.  Many of the smaller less establish real estate clubs will charge a very small fee.  In addition, lots of small real estate clubs will not charge a fee to their members.  In the case of ‘membership fees’, the clubs that charge these fees are obviously selling to you a membership and that is how they make money.

Products

Some of the larger real estate clubs and even the smaller real estate clubs will try to sell you a product.  The products for sale come in many different forms.  The product could be a book or even perhaps some DVDs on real estate and real estate investing.

Sometimes the products for sale are tickets to a more exclusive seminar being held by the real estate group itself.

This is a classic case of ‘up selling’!

Service

Real Estate clubs can also sell you services. Often these services are sold indirectly to you as the member.  Real estate clubs may co-operate with Realtors, Property Managers or Mortgage Brokers.  The Realtors, Property Managers and Mortgage Brokers all have services to sell to you as the consumer.

My Assessment of Real Estate Clubs: Are they worth joining?

One thing that all new real estate investors need to realize is that, real estate clubs sell stuff!  If real estate clubs pretend that they are not selling things to you, they are lying.

An Important Distinction to make…

Just because real estate clubs sell you things, this should not prevent you from joining these clubs.

Real estate clubs are a great place to learn about real estate investing because experienced investors and eager new investors attend these clubs.  As such, new or aspiring investors are exposed to many other people who have bought real estate as an investment or who have just purchased their first rental property.  Learning from people who have accomplished something that you yourself are trying to accomplish is the only way to go.  Far too often, aspiring real estate investors become discouraged after listening to the advice of non-real estate investors.  These non real estate investors can sometimes be close friends or family of the aspiring investor.  The aspiring investor my be told that buying a rental property is “too much work” or that “all tenants are terrible”.  This of course is not true.

Further, the Realtors, Property Managers and Mortgage Brokers that hang out at real estate clubs are generally very knowledgeable when it comes to investment real estate.  More often than not, these are professionals who are real estate investors as well.  As such, they are not only able to provide you with their specific services, but they can also provide you with first hand information on the do’s and don’ts of real estate investing.

In Summary

In regards to my previous comment above, I do not feel that real estate clubs are ‘bad’.  Rather, these clubs are sometimes perceived as being bad because of the fact that they ‘sell something’.

Just because real estate clubs sell something does not make them ‘bad’ at all.  On the contrary, real estate clubs (good real estate clubs) that sell products, memberships or services to their members are doing their members a favour.  They are doing their members a favour because they are educating their members with the products, memberships or services.

Every new real estate investor needs to learn how to become a successful real estate investor and landlord.  You can only learn this by speaking to and learning the best practices from already successful real estate investors.

So the next time you are on the fence about joining a real estate club.  Remember…

Just Do It!

Best Regards,

Neil Uttamsingh

Who talked you out of jumping in those puddles when you were little?

Your buddy probably did…

Who held your hand and warned you not to run onto the road?

Your buddy probably did…

Think back to your school days.  When you were a young student in elementary school or junior school, did you ever go on any field trips with your class?

Did you ever go for walks with your classmates outside of the school grounds?  Depending on where you attended school, maybe you went for a nature walk or a walk around the block…

Whatever the case was, whenever you would embark upon these journeys and leave the school grounds, to keep you safe, your teacher matched you up with a ‘buddy’.

Your buddy was someone that you would stick close to.  Both you and your buddy knew that you were each responsible for one another.  If something bad were to happen your buddy, you would be in trouble, as you were held accountable for the safety of your buddy.  After all, it was your duty to make sure that your buddy was okay at all times.

Your teacher assigned you a buddy so that you could protect one another.  Your mission was to make sure that your buddy did not get into any dangerous situations.

If you tried to wonder off the path you were walking along with your buddy and your classmates, your buddy was there to pull you back in line.

• The buddy system works the same way with real estate investing.

As a new real estate investor, you will embark upon a journey into the unknown, when you are researching how to buy your first rental property.  After you purchase your first rental property, you will especially be entering into the unknown, as you will probably have no experience as a real estate investor.    There will be times in which you will want to quit and deviate from the real estate investing path that you have chosen.

The role of the real estate buddy is to pull you back on track when you are losing focus.  Just like your buddy from grade school, your real estate buddy is there to protect you.

Your buddy from grade school stopped you from jumping into puddles.  Your real estate investing buddy will stop you from jumping ship from real estate investing when the going gets tough.

Your real estate buddy should be someone that is like minded, and who also invests in real estate.  Ideally, your real estate buddy should be more knowledgeable than you regarding real estate investing.  That way when the going gets tough for you, your buddy can offer you advice and proper guidance.

• Without question, all new real estate investors need a real estate buddy.

Whenever you are about to make a financial blunder or make a risky move with respect to your real estate investing business, your real estate buddy will be there to make sure that you don’t make a mistake.

After all, your real estate buddy is there to keep you in line!
Best Regards,

Neil Uttamsingh

ps: If you would like to learn how to become a real estate investor,  subscribe to my blog today!

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

Step Seven is where the rubber hits the road.  A lot of people investing in real estate for the first time feel a lot of anxiety at this step.  If you begin to feel anxiety yourself, rest assured that this is normal.

In this step, you travel to and visit your short list of potential rental properties with your realtor and you put in an offer on a property!

The thought of putting in an offer on a property may make you feel like the picture of the monkey above!

Like I said, feeling anxiety is normal.  If you have followed Step One through Step Six thus far in this article series, you will be in a very strong position when you put in an offer on your first rental property.

After you have viewed the short list of potential rental properties with your realtor, it is up to you to pick one of these properties and put in an offer to purchase.

Since these potential rental properties are nearly identical (property type, geographical location, etc.), it is wise to base your final decision on which property to chose based on which property yields the highest monthly cash flow.

You will be able to know which property will yield the highest monthly cash flow by analyzing the property using the 10% Rule, referred to in step six.

The Holy Trinity of Writing Offers

I heard a saying not too long ago referring to ‘social media’. The saying was that,

‘The Holy Trinity of Social Media is Facebook, Twitter, and Linkedin’

I thought that this was a creative saying, and quite accurate as well.

With regards to offer writing there is also a ‘Holy Trinity’ of conditions that you must abide by.

Holy Trinity Rule #1

The Financing Condition

In your first offer to purchase that you submit, you will be entering in a financing condition into the agreement.

What is The Financing Condition?

• It is a condition built into the purchase and sale agreement that protects the interests of the buyer (you)

• It allows the buyer to arrange financing for the property. The condition is time sensitive, meaning that buyer has X amount of days in order to fulfill this requirement.

• If the buyer is not able to obtain the necessary financing for this property in the required time period, the condition is structured such that, it allows the buyer to walk away from the deal.

• This condition should be included in every single offer to purchase that you make.

Holy Trinity Rule #2

The Home Inspection Condition
As equally importnant as the financing condition is the Home Inspection condition.

• You should never skip getting a home inspection.

• I know some real estate investors who foolishy skipped this step, and it ended up costing them thousands of dollars in repairs.

• You always need to have a qualified home inspector inspect the house before you purchase it.

• Just like the financing condition, you have a set amount of time in order to carry out the inpection.  If for whatever reason, the inspection is not favourable to you, you can walk away from the deal.

• Instruct your realtor when he/she is writing up the offer to purchase to insert the home inspection condition into the offer.

Holy Trinity Rule #3

Lawyer’s Approval Condition
Before you agree to purchase a rental property, you will want your real estate lawyer to review the purchase and sale agreement.

Having your real estate lawyer review the purchase and sale agreement provides a check and balance in the process.

Not all real estate transactions are the same, and not all of them are straight forward, that is why you always want your lawyer to review the deal before you agree to it.  Good real estate lawyers have years of experience working on real estate transactions.  They have worked on many straight forward transactions, and they have seen their fair share of deals end up going sideways and upsidedown…

If there is something unusual in the deal, the real estate lawyer will be the first to notice it, and can advise you accordingly so that you are able to mitigate your risk.

Once you have put in your offer, and all three of the Holy Trinity Conditions have been satisfied…

Guess what?!

You have just purchased your first rental property!

Take some time to click your heels and celebrate!

So now, all of the hard work is done, right?!

Not really.

The easy part is over.  Now the hard work begins…

Stay tuned for Step Eight of How to buy your first rental property…

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Related Articles:

Step One – How to buy your first rental property

Step Two – How to buy your first rental property

Step Three – How to buy your first rental property

Step Four – How to buy your first rental property

Step Five – How to buy your first rental property

Step Six – How to buy your first rental property