First Rental Property

Hi Everyone,

Today I am going to talk about, How to increase your chances of success as a real estate investor.

Sounds cool, does it not?!

In reality, increasing your chances of success as a real estate investor is quite simple.

Is that a bold statement for me to make?

Perhaps.

However, I can confidently make that statement as I have observed some very successful real estate investors over the past 5 years and have been able to learn from their mistakes. In addition, I have made some mistakes of my own that I have been able to learn from.

Rather that providing your with an extensive list on the “things that you can do in order to be more successful as a real estate investor”, I am going to discuss one topic.  This topic, again, may seem quite basic, but then again, everything is quite basic at the end of the day.

Here we go…

The number one way that I believe that you can increase your chances of success as a real estate investor is by…

Explaning to people what you do.

Some of you might be thinking at this point…”Neil, are you serious?!  Is that it?”

Well yes my dear real estate investors, that is it.

Here is how I have come to this conclusion.

1) The most successful real estate investors explain to other people very well what it is that they do.

Over the past five plus years as a real estate investor, I have met and been associated with probably hundreds of real estate investors.  Some of the most successful, in terms of numbers of properties purchased, can explain clearly to people what it is that they do.

Many people have coined this as the ‘Elevator Speech’, which is esentially explaining to people in a few short sentences what it is that you do.

For example, my short elevator speech would be,

“Hi my name is Neil.  I am a professional real estate investor.  I purchase positive cash flow condo townhouses on the ‘Mountain’ in Hamilton, Ontario, Canada with joint venture partners.”

I don’t want to talk about the elevator speech here because I have noticed that the elevator speech is what trips up a lot of real estate investors who are just starting out.

These new investors worry so much about the perfect words to say when someone asks them about what they do.

I have witnessed and spoken to a number of real estate investors that stress out so much about this… the dreaded elevator speech.

Here is where I want to simplify things.

I am not an anti-elevator speech guy by any means.  However, what I do believe is important, especially for the new real estate investors is to…

CLEARLY explain to others what it is that you do.

Why is it important to CLEARLY explain to others what is is that you do?

If you are an experienced real estate investor reading this, you know that 99% of the time when you tell someone that you are a real estate investor, they think that you are a Realtor.

This is an understandable assumption on the part of the person that you are speaking to.  They have assumed that you a Realtor because you have not explained to them clearly what it is that you do.  (I know because I have been guilty of this many times!)

Sure at the beginning, they may ask you…”You are a real estate investor?  Does that mean that you are a Realtor?  This is your cue to jump in there and explain to them clearly the difference between a real estate investor and a realtor, and specifically what it is that you do.

Personally, I was not that good at explaining what I did when I first started investing.  I would give people a brief explanation and expect them to fully understand what it is that I did.

After I was getting so many confused looks when I told people what I did, I began to realize that I was not CLEARLY explaining myself.

This experience has served as a great lesson for me.  If there is one piece of advice that I can give those of you just starting out as a real estate investor, it is this…

Be very good at explaining to others what it is that you do.  Being good at this will open up doors for you down the road.

The more people that know what you are doing means, the more people who may one day wish to participate with you in some capacity with your real estate investing.

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

To sign up for The First Rental Property Newsletter, you can enter your name and e-mail address on the RIGHT hand side of the blog.  In this newsletter, you will be able to read about and hear from experienced real estate investors and their experience when they purchased their first rental property.

Best Regards,

Neil.

Hi Everybody,

I am happy to announce that I have released the first audio podcast for First Rental Property in today’s blog post.

This audio podcast will be a first in a series of interviews with experienced real estate investors.

In each audio podcast, an experienced real estate investor will describe in detail their experience when they purchased their first rental property.

It is my intent that you will be able to pick up clues and tips from these investors, so that you can successfully take action and buy your first rental property.

These investors will have years of experience in real estate investing. The investment strategies that they use will differ. I encourage you to take notes while listening to these Podcast as well.  Learn as much as you can.

As time goes on, and the more Podcast you listen to, I guarantee you that you will begin to notice similarities among these investors.

In these audio podcasts, the following items will be discussed.

1) Where the investor purchased their first rental property?

The specific city or town, province or state, as well as country.

2) How much they paid for the property, and how much they put as a down payment?
This information will be important to know, so we can determine what their initial loan to value ratio was.

3) If the investor still owns the property.

In this first audio podcast, I have interviewed myself. I hope that you find value in listening to this interview. You can access the audio podcast by clicking on the following link…

Neil Uttamsingh’s First Rental Property Podcast

After listening to the podcast, if you have any questions, please leave your questions or comments in the comments section below.

As always, you can keep up to date with my blog by entering your e-mail address on the LEFT hand side of the blog.

To sign up for The First Rental Property Newsletter, you can enter your e-mail address on the RIGHT hand side of the blog. Via The First Rental Property Newsletter, you will receive more interviews with real estate investors who have purchased their first rental property.

Onwards and Upwards,
Neil Uttamsingh.

Hi Everyone,

Believe it or not, some people become obsessed with real estate investing.

This obsession often begins at the early stages when an investor is just starting out.

What does the obsession look like?

1. An individual obsessed with real estate investing may always be reading books related to real estate investing.  Not only would they be reading these such books.  These books would in fact be the only type of books that they would be reading.
2. An individual obsessed with real estate investing would also constantly be thinking about investing, and how they can increase the scope of their investing.  Once again, this would be the dominating thoughts in their head, and they would not give much thought to anything else other than real estate investing.
3. An individual obsessed with real estate investing would always be talking about real estate investing with others.  Perhaps they would be discussing their current real estate investments, or pitching joint venture ideas to people they know.  Again, the topic of real estate would be the only topic that they would want to talk about.

The only way to make sure that you don’t become obsessed with real estate investing is to obtain balance in your life.

How do you obtain balance in you life?

The only sure way to obtain balance in your life is to find something that you are equally  passionate about as real estate investing.

If you love real estate investing, find something that you love just as much.

How do you find something that you love just as much as real estate?

This is the tricky part because this ‘something’ is sometimes not easily found.  The only way that I believe you can find this other ‘thing’ is to try many different things.

Perhaps you like to draw.  If so, focus some time each and every day to drawing. Try to become better with each passing day.

If you like sports, spend some time each day playing a particular sport, until you find a sport that you really, really enjoy.

If music is your interest, allocate some time each day to listen to music, or learn how to play an instrument.

Maybe you like to garden.  If so, spend time working in and improving your garden.

Why do you need balance in life?

I have concluded that being overly obsessed with real estate investing is not good.  I see a lot of people, both new and experienced investors who are obsessed with real estate investing.

In my books, this is not a good idea.

It is not a good idea because these people tend to derive their sense of self worth from their real estate investments.

If one day, they lost all of the rental properties they had, they would be left feeling very empty inside.

This void would be felt because they would have nothing else left in their lives that brought them the same level of fulfillment that their real estate investments did.

They would feel lifeless and discontent simply because they had put all their eggs in one basket.

The benefit of having balance

When we learn to put our eggs in more than one basket, we become happier and more focused.

For example, if you learn to both enjoy real estate investing and painting art work just as equally, if one of these interests departed your life for good (your rental property burns down in a fire), you would have another interest to fall back on (painting artwork), which would be able to bring you the same amount of joy.

If you don’t have balance in your life currently, search for something that brings you joy.

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

To sign up for The First Rental Property Newsletter, enter your e-mail address and name on the RIGHT hand side of the blog.  In this Newsletter, you will be able to read about the experiences of seasoned real estate investors, as they will take you through step-by-step how they bought their first rental property.

Onwards and Upwards!

Neil Uttamsingh

Hi Everyone,

Would you believe it if I told you that novice real estate investors are bullied by members of their real estate team?

Sounds crazy, doesn’t it?

This is an unfortunate situation that some aspiring real estate investors find themselves in when they are first starting out investing in real estate.

These new real estate investors find themselves in this difficult situation when they are surrounded by a real estate team that does not have their best interest at heart.

When a new real estate investor is first selecting their  real estate team, they have to be careful.  If they are not careful  the people that they select to their team may not be compatible with them.  Even worse, these members of the team could create a hostile learning environment for the aspiring real estate investor.

In previous posts I have talked about your Real Estate Team, and the importance of picking a solid team of great people that you can count on.

It is incredibly important for a real estate investor to select people that they are ‘in harmony’ with.

What does ‘in harmony’ mean?

‘In harmony’ means, selecting people to one’s team that have the your best interest at heart.

From my personal experience, I have always selected people who:

1. Know more than I do
2. I like
3. I can trust
4. I feel comfortable around
5. Who are ‘good people’.
6. I can get along with
7. Who treat others with respect

Why do new real estate investors end up getting bullied by members of their team?

Many new real estate investors when they are first starting out are not confident.  They are not confident  about their real estate knowledge, or they may not be confident about their abilities.

Due to this lack of confidence, novice investors will often listen to any advice that is presented to them.

Advice is often free, and because of this, new investors have to be careful who they are listening to.  Just because advice is free, does not mean it is good advice.   There are real estate ‘professionals’ out there that are looking to take advantage of new, unsuspecting real estate investors.

In the real estate investing world, there are many great Realtors, Lawyers, Accountants, and Mortgage Brokers who all offer advice to the aspiring investor.  At the same time, there are also very poor Realtors, Lawyers and Mortgage Brokers who offer terrible advice to the novice investor.

These poor professionals who lack integrity often prey upon new investors just starting out. These poor professionals can bully new investors in the following ways:

1)  Mortgage Broker – A poor mortgage broker can bully a new real estate investor into selecting a certain type of mortgage product that may not suit the needs of the investor.

Further a poor mortgage broker may convince a novice investor that it is ‘okay’ to commit mortgage fraud by lying about details on their mortgage application.

2) Real Estate Lawyer – A poor real estate lawyer can  bully the new investor into paying increased fees for no good reason.

3) Realtor – A poor Realtor may bully the new investor into buying a rental property that is overall a poor choice.  The property may not be a good cash flowing property, or it may be located in a poor location.

How to get rid of the real estate bully.

As a real estate investor, at some point in your investing career, you may end up with someone on your team that should not be there.   Somehow people that you do not totally ‘jive’ with will find their way onto your team.  Perhaps initially when you were selecting them to your team, you thought that they were someone completely different to the person they turned out to be.

At the end of the day, if this person does not have your best interest at heart, it is okay to get rid of them.

Attention New investors…avoid the real estate bully by always selecting to your team, real estate members that you are ‘in harmony’ with you.

Keep up to date with my blog by entering your e-mail address on the LEFT hand side of the blog.

To Sign up for the First Rental Property Newsletter, enter your name and e-mail address on the RIGHT hand side of the blog.

In the First Rental Property Newsletter, experienced real estate investors will be sharing their personal stories of when they bought their first rental property.  Learn from these experienced investors by signing up for the Newsletter.

Onwards and Upwards!

Neil Uttamsingh

[youtube]http://www.youtube.com/watch?v=Uo-gJRevzv4[/youtube]

Hi Everybody,

I made an observation some time ago that people are afraid of real estate investors.

To the average person, real estate investing is like a mysterious black magic.  People don’t understand how real estate investors do what they do.

I had always noticed and come to accept that not everyone is interested in real estate or real estate investing.  That is fine, and I am cool with that.  People have different interests in life, and that is the way the world should be.

• However, one observation that I have made is that sometimes people who ARE interested in real estate investing,  aspiring real estate investors if you will, are afraid of experienced real estate investors.

Why is it that aspiring real estate investors are sometimes afraid of experienced real estate investors?

Truthfully, I have not been able to fully figure this out yet, however, I do have a number of ideas as to why this is the case.

Here they are in no particular order:

People are afraid of the unknown

A real estate investor has travelled a path that not many other people have travelled.  As an example, in Canada, less than 3% of the Canadian population owns more than one property, which means that less than 3% of the population also has more than one mortgage.  (reference: Peter Kinch)

That means that less than 3 out of 100 people would have ever owned more than one property at any given time, and had more than one mortgage.

Given the example above, clearly real estate investors are in the minority.

Since real estate investors in the MINORITY…

They are often not understood by the MAJORITY.

As such, aspiring real estate investors sometimes are intimidated to ask questions of more experienced real estate investors.

This intimidation can simply come from the fact that newer real estate investors don’t fully understand how the experienced investors were able to get started as an investor, or how they were able to build a large portfolio of rental properties.

People are afraid of rejection

Aspiring real estate investors often have a lot of hope and conviction that they will one day become a successful real estate investor.

These newer real estate investors sometimes follow more experienced real estate investors, in order to see what they are doing.  (As an example, I have a lot of new and aspiring real estate investors who are following this blog, in order to see what I am up to.)

Sometimes newer real estate investors never end up asking experienced real estate investors any questions or for any advice.

I believe this is the case because sometimes newer real estate investors are concerned as to how the experienced real estate investor will react.

Aspiring real estate investors sometimes have the fear that if they ask experienced real estate investors for help, the experienced real estate investor will refuse to help them.

This could be because the experienced real estate investors is too ‘busy’, or because they have no desire to help those in need.

Nothing Ventured.  Nothing Gained.

If you are a new real estate investor, and you need help getting started, you must leverage upon the  experienced real estate investors.

It is true, that at the beginning, there are going to be a lot of things you do not know about real estate investing.  That is normal and that is okay.

• There are a lot of things that I don’t know.  What I do know is that I will continue to grow and become a better real estate investor by seeking the guidance of real estate investors who have more experience than I do. 
  

Not Everyone is Willing to Help You

New real estate investors, take note.

Just because someone is an experienced real estate investor, this does not mean that they will be willing to help you.

All is not lost though if you encounter an unhelpful and experienced real estate investor.

If you approach experienced investors with questions and for help, and you do not get a warm response from them, do not be concerned.  There are so many people out there who have experience with real estate investing who would be more than happy to help you.  So don’t lose any sleep if someone IS NOT willing to help you.

These People Are Willing To Help You

If you do not follow them already, you really should because they are very nice, down to earth, genuine real estate investors and educators.  They are fellow Canadians, Julie Broad and Dave Peniuk.  They are two people who are doing a great job helping and educating new real estate investors.

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

To sign up for The First Rental Property Newsletter, you can enter our name and e-mail address on the RIGHT hand side of the blog.

Onwards and Upwards!

Neil Uttamsingh.

[youtube]http://www.youtube.com/watch?v=uej4CYpya68[/youtube]

Hi Everyone,

Being a real estate investor can be a difficult task at times…

I always hear people talk about real estate and how they will one day invest in real estate and purchase their first rental property.

I should really keep track of how many people I have talked to who have been interested in real estate investing, and the amount of people that have actually taken the leap, and invested in real estate.

I have always found the the percentage of people that end up investing in real estate, compared to those that just talk about it, is quite small.

I think that this percentage is small because people have no faith or lose faith in their ability to follow through and purchase real estate.

Whether you are a new or an experienced real estate investor you always have to KEEP THE FAITH.

What does ‘KEEP THE FAITH’ mean?

“Keep the Faith” means constantly believing in yourself AND believing that you will eventually purchase real estate and create wealth through this vehicle.

How do you believe in yourself?

The truth here is that people are not taught how to do this.  If people are not taught how to believe in themselves… how is an individual supposed to believe in oneself?  Again, learning how to believe in yourself is not taught, it is a learned behaviour that the minority of the population benefit from.

You learn how to believe in yourself by reading books

I have learned by watching and studying successful people in real estate that in order to BELIEVE in yourself,  you need to read books.  These would be books related to real estate and books related to personal development.  Not only does reading these types of books increase your own knowledge of real estate, they also help you to become inspired, become more motivated and confident.

How have I come to the conclusion that reading books help you to believe in yourself?

Truthfully, this took me a while to discover.  One day, I did however start to notice a commonality among the top performing real estate investors and real estate entrepreneurs.  This commonality was simply that they all read books on real estate and books on personal development.

A tip for new real estate investors

Don’t just go out and buy any book on real estate or personal development.  Rather, pay close attention to what experienced real estate investors and real estate entrepreneurs are reading.  Don’t re-create the wheel.  Start to read the books that have been read by others that have come before you.

One of the first books that I read that has helped me so much in business and in real estate was:

Think and Grow Rich

If you have not read this book, I highly recommend that you do.  All of the successful real estate investors that I know have read this book.

Are you an experienced real estate investor?  If so, what books do you recommend for the new real estate investors to read?  Please leave your comments in the comments section below.

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

To sign up for The First Rental Property Newsletter, you can enter your name and e-mail address on the RIGHT hand side of the blog.

Onwards and Upwards!

Neil Uttamsingh

[youtube]http://www.youtube.com/watch?v=lIr_qeO4JXQ[/youtube]

Hi Everyone,

Many new real estate investors ask themselves the following question when they first start out investing…

“Should I invest in my first rental property by myself, or should I partner with someone MORE experienced?”

Sometimes new real estate investors fear ‘going it alone’ and purchasing their first rental property by themselves.  As such, they partner with someone just for the sake of having a partner.  In many of these newly formed partnerships, there may not be any value that either partner brings to the transaction.

For example, let’s take a look at the following scenario.

We have 2 independent real estate investors.  Each investor is too afraid to invest by themselves in a rental property, and as a result, they form a partnership and invest together.  Further, the level of knowledge of these 2 investors is about the same, as they are both at a novice level.

This is an example of a real estate partnership in which there is no value brought to the table by either of the investors.

When considering getting involved in real estate partnerships, one has to examine what REAL value they bring to the table.

Value in real estate partnerships can come in 3 forms.

They are…

TIME

KNOWLEDGE

MONEY

Time

Time is an important variable in effective real estate partnerships.  Simply put, in an effective real estate partnership, you have one partner who does not have any time, yet wants to invest in real estate.  The other partner will have available time on their hands to manage every aspect of the real estate transaction.  This person is often referred to as the real estate expert.  (As an example, I am the ‘real estate expert’  in my real estate joint venture partnerships.)

Knowledge

Knowledge is an equally important variable in good real estate partnerships.  There will often be one partner who wants to invest in real estate, however may know very little about real estate.

The other partner, will have a great deal of knowledge in a specific real estate market.  They will know the prices of houses and the market rents inside and out in that geographical area.  They will also have a  solid real estate team working for them, consisting of a mortgage broker, real estate lawyer, and quality Realtor, just to name a few.  (As an example, I posses all of the knowledge as the ‘real estate expert’ in my real estate joint venture partnerships)

Money

Money is without question an important variable in effective real estate partnerships.  Using the traditional example, there will often be one partner with the money to invest in real estate, but no time or knowledge.

On the other hand, there will be the other partner (real estate expert) who invests the partner’s money into the real estate transaction, and has all of the time required to successfully manage the investment as well, they will possess all of the knowledge required in order to pick great rental properties in excellent locations.  (As an example, I take on the role of the ‘real estate expert’ and I invest my partners’ money in our real estate transactions)

What other variables make an effective real estate partnership?

You can leave your comments in the comments section below.

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

To sign up for the First Rental Property Newsletter, you can enter your e-mail address on the RIGHT hand side of the blog.

Onwards and Upwards!

Neil Uttamsingh

[youtube]http://www.youtube.com/watch?v=2tKQfbQOq5E[/youtube]

ps: Thank you to The Versatile Investor, Mark Loeffler for giving me the idea for this blog post.

What’s up Everybody?

I am always speaking with new and aspiring real estate investors.

I love chatting with people and hearing about how they are starting to get involved with real estate investing.

Most conversations I have are very positive.  However, I had a couple of recent conversations that I found somewhat concerning.

A small hand full of aspiring real estate investors were doing all the wrong things, in that they were setting themselves up for eventual failure.

When I spoke with these new and aspiring investors they were not in good spots in their real estate investing careers. Some of these people had been investing for a few years, while some others had just started to invest.

In speaking with them, I could easily tell that they did not have what it takes to make it as professional real estate investors.

It was easy to notice this, as there were commonalities shared among these investors.

These investors shared 2 ‘traits’ that will eventually lead, in my opinion to the destruction of their real estate investing careers.  These traits were:

1) Greed

There is no good way to sugar coat what I am about to say, and that is:

Humans are greedy.

As a new or aspiring real estate investor, if you are motivated by greed, or you allow greed to continualy influence your decision making process, chances are that you will get your rear end handed to you at some point in your real estate investing career.

Greed clouds judgement and it forces individuals to make poor decisions.  If you are a real estate investor, and you are continually making poor decisions as influenced by greed, sooner or later, one of these poor decisions will end up costing you financially.

2) Lack of due diligence

The second trait that these investors shared was that they exercised a lack of due diligence. Simply put, these wannabe investors did not do any of their homework, and got involved in real estate transactions that they had no business getting involved with in the first place.

Personally, I cannot fathom how people invest in real estate without doing their homework first.  Buying a rental property is often times one of the biggest investments one can make.  If you are making a big investment, surely one would think that you would do your homework first.  Right?

People take so much time researching what type of flat screen TV or car to buy.  Sometimes people take years doing this research.  Why isn’t the same due diligence exercised when people buy real estate?

I know the answer to this.

It is because Greed will often cloud their judgement.

If as a new real estate investor, you are constantly suppressing your desire to be greedy, and you are completing necessary due diligence before investing, you are two steps ahead of those individuals that are not.

To keep up to date with my blog, click on the orange RSS button at the top right hand corner of the screen.

To sign up for The First Rental Property Newsletter, you can enter your name and e-mail address on the right hand side of the blog. (All the cool people are doing it)

Onwards and Upwards!

Neil Uttamsingh

[youtube]http://www.youtube.com/watch?v=G0j7F5wQzfE[/youtube]

ps: learn how to make it as a real estate investor by following Don R. Campbell’s Blog

What’s up Everybody?

If you are new to real estate investing, and are looking to buy your first rental property, there are many things for you to consider.

One very common question that new real estate investors ask is,

“Where should I buy my first rental property?”

I recently polled experienced real estate investors who each owned multiple rental properties.  I asked these investors if they had purchased their first rental property close by to where they live, or far away from where they live.

These investors revealed that there are generally 2 schools of thought as to where a new investor should buy their first rental property.

As you may have guessed, the results of the poll were split.  Half of the experienced investors had purchased their first rental property close by to where they lived, and the other half had purchased their first rental property far away from where they lived.

How Far is Too Far?

The furthest distance that one of the investors ended up purchasing their first rental property, ended up being thousands of kilometers away from where they lived.

Are you surprised?

If you are, don’t be…because this is not uncommon.

A number of real estate investors actually do start out with their first rental property very far away from where they live.

Why would someone purchase a rental property so far away?

Often times, people end up buying a rental property very far from where they live because of a better opportunity.  Not all cities and towns make for good places to invest.  As such, if you find yourself living in a place where there is no upside to the real estate market, it is very wise to invest in another city or town.

Once an individuals begins to research the different cities and towns in their respective country, they may find a much better opportunity to invest many kilometers (or miles) away!

The Key to Success if you buy ‘far away’

If you end up purchasing your first rental property thousands or hundreds of kilometers (or miles) away from you, you better be well organized…otherwise your investment could end up being a disaster!

The experienced investors that took my poll spoke about one very important key to success with purchasing a rental property far away from where they lived.

The key to success of the investors that purchased far away from where they lived was that they had a very good property manager, and a strong real estate team.

This variable was absolutely critical to the success of these real estate investors.

Why purchase a rental property so far away, when you can purchase close to home?

On the flip side of the coin, many real estate investors who purchase their first rental property, end up buying a rental property close to where they live.

Sometimes these investors are fortunate in that they live in, or close by to cities and towns that have great real estate markets and a very solid economic future.

As as an example, many real estate investors living in Southern Ontario in Canada, are located in a great location.  This is a great location as there are at least 10 strong cities and towns to invest in all within about an hours drive.

The disadvantage to buying close to where you live

With the good there is also the bad.

Sometimes people who end up buying a rental property close by to where they live, obsess about it too much.  This obsession is not beneficial because at the end of the day, it does the real estate investor no good.

This obsession can take on the form of… constantly driving by the rental property.

During these drive bys the real estate investor often can become too concerned about the physical appearance of the exterior of the property.  I have known real estate investors to grumble that their tenants had not cut the grass, or that they had not picked up the flyers from the front porch.

The funniest story I every heard about an obsessed landlord/real estate investor was quite scary actually.  This landlord was always so concerned about the physical upkeep of the property, that he came by one afternoon without notifying the tenants and started to sweep with a broom the outdoor porch, that was connected to the property.  The tenants came out of the house, as they heard some noise on the porch, and they saw their landlord there standing with a broom.  The funny part is that the porch wasn’t even dirty at all.  The landlord had some explaining to do…

If you own a rental property close by to where you live, there is no need to obsess about the property.  This will do you no good.

So there you have it.  There is no simple answer as to where you should buy your first rental property.

It can be close by or far from where you live.

If you do buy the property far away from where you live, please make sure that you have a very good property manager and a strong real estate team that you can rely on.

To keep up to date with my blog please click on the orange RSS button at the top right hand corner of my blog.

To receive the new First Rental Property Newsletter with tips on how to buy your first rental property, please enter your name and e-mail address in the form at the right hand side of the blog.

Onward and Upwards!

Neil.

[youtube]http://www.youtube.com/watch?v=emN0qGCjtIw[/youtube]

What’s up Everybody,

Do you ever wonder how some people become super successful investing in real estate?

I had always wondered this before I purchased my first rental property back in May 2005.

I was under the impression that in order to become successful in real estate investing, all I had to do was buy one rental property a year.  That was the extent of my plan.  I thought that if I did this, I would instantly become successful in real estate investing.

Although I had the right idea, I was missing a key component in my strategy.  This was a key component that I did not realize until some years later.

This key component that I was missing was: Geographic Specialization.

For those that do not know, geographic specialization with regards to real estate investing means that you grow your real estate portfolio by purchasing the same property type in a defined geographical area.

For example, over the years as I have become a better real estate investor, I have chosen to invest in condominium townhouses (property type) on The Mountain (geographical area) in Hamilton, Ontario Canada with joint venture partners.

Personally, I have come to realize the importance of geographic specialization with respect to real estate investment.  This however, did not happen overnight for me.  This realization came from a few years of studying strategies being taken by successful real estate investors such as Don R. Campbell.

In an effort to help those of you new to real estate investing, I have provided a list below of the steps one needs to take in order to become a geographical specialist.

Here they are in no particular order:

1) Research your area

If you are going to purchase multiple rental properties in a given area, make sure that it is a good area to invest in not only today, but tomorrow as well.  You want to make sure that the area that you have chosen to invest in will also be a good area to invest in, in the future.  You will want to ask yourself questions such as:

1. Are people going to be moving into this area in the future?
2. Is the municipal government promoting the area as a good place for businesses to relocate to?
3. At what level are businesses being taxed?
4. What industries are going to fuel the growth in this area, in the future?

*what other question do you think you should ask yourself?  Leave your comments in the section below*

2) Once you have chosen your area, don’t buy anything outside of it

Most experienced real estate investors will admit that this point is easier said than done.

The purpose of picking a geographical area and sticking to it, is to become an expert in that given area.  The more knowledge you have of that particular geographical area, the better you will become as a real estate investor.

Here is an example to demonstrate my point.

This morning I traveled to my geographical area of ‘The Mountain’ in Hamilton, Ontario, Canada.  I was there to visit one of my properties and speak to my tenants who had just moved in.  Before I headed out to Hamilton in my car, I checked some of the recent listings for condominium townhouses for sale on ‘The Mountain’.  As I was driving through the area, I noticed the for sale signs on the properties that I had reviewed earlier, in addition, I also saw a few more for sale signs on other properties.

The cool thing about this is that because I know so much about this geographical area, I know exactly how much these properties  should sell for, and I know exactly how much rent can be charged for each of these properties.

Because I have such specialized knowledge in this area, there is no chance that I will every overpay for a property there.  In fact, because I know the area so well, there is always an opportunity to purchase a property slightly under market value.

Purchasing a property slightly under market value is always a good thing to do if you can, because you are able to create built in equity from the moment you purchase the property.

So there you have it…a short list with only 2 items!

It is a short list, however, it is a super important list.  There is no question, that if you specialize in a specific geographical area, you chances of success with real estate investing will increase.

What do you think?  In order to become a geographic specialist, what other things do you have to take into consideration?

Leave you comments in the comments section below.

Also, I forgot to tell you that all the cool kids are keeping up to date with my blog.

To be cool like them, enter your e-mail address on the left hand side of the blog.  Or, you can click on the orange RSS button on the top right hand corner of the blog.  🙂

[youtube]http://www.youtube.com/watch?v=GkIO6ra-xDE[/youtube]