First Rental Property

Greetings Everyone,

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

Today I am going to talk about,

Financial Intelligence a.k.a. Financial IQ

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

This goes without saying…You definitely need knowledge.

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

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

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

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

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

My friends, this is not true.

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

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

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

To quote Donald Trump,

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

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

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

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

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

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

Here are the changes that I have made:

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

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

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

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

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

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Greetings All,

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

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

Now on to business.

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

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

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

Here is a summary of what we talked about.

Emotional Investing

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

What does emotional investing mean?

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

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

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

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

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

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

The Gut Feeling

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

My gut feeling always is correct.

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

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

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

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

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

Listen to your gut people, it is always right!

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Greetings Everyone,

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

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

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

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

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

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

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

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

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

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

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

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

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

So far in this article series, we have discussed the first three steps that you must take in order to buy your first rental property.

In Step One, we discussed the importance of determining WHY you are buying your first rental property.

In Step Two, we described on how to finance the rental property.

In Step Three, we talked about methods that you can use in order to determine what location you will invest in.

In step number four, we examine the economic influences of the location that you have chosen to invest in.

This is a crucial step because if the economic fundamentals are not strong in your chosen area, you have picked the wrong area.  If you have picked the wrong area you need to go back to the drawing board, and pick a different area.

Step four is essentially a check and balance in place in order to make sure that you are on the right track, and that you have chosen a location to invest in that has has a future.

I have derived the majority of the information for step four from Don R. Campbell’s Property Goldmine Scorecard.  Don R. Campbell is the President of the Real Estate Investment Network, REIN.  I have used the information contained in the Property Goldmine Scorecard in order to assist me in purchasing rental properties.

Many other successful real estate investors and REIN members have also used the Property Goldmine Scorecard to varying degrees, in order to help them with the purchase of rental properties. REIN members that have a very good working knowledge of the Property Goldmine Scorecard are members such as Wade Graham of Higher Ground Real Estate Investment Inc., and one of the guys I know behind the scenes at The Rentables.com

With step four, we begin our examination of the location that you have chosen by asking property specific questions.

Property Specific Questions

1) Can you change the use of the property?

This is an important question to ask.  If you can change the use of the property, you can potentially increase the income you are generating from the property.  For instance, if you are dealing with a single family home, are you able to easily convert it into a legal duplex?  If that is the case, you may be able to dramatically increase the income potential from this property.

2) Can you buy it substantially below retail market value?

Many real estate investors live by the rule that you can only make money when you buy a property.  They put emphasis on always buying below market value.  Whenever you can buy below market value, definitely do so.  However, buying below market value is not the only way you can make money investing in real estate.

3)  Can you substantially increase current rents?

You would be surprised how many landlords have rental properties, and on their properties they are charging the wrong rental amount. Many landlords are too lazy to increase their rents with their tenants on a yearly basis. As such, a landlord could own a rental property for many years, and never once increase the rents on the property. If this landlord ends up selling their property, and you buy it with the existing tenant still occupying the property, the rent that the tenant is paying will be well below what the market rent should be.  If this is the case, you now have the opportunity to increase the rents substantially.

4) Can you do small renovations to substantially increase the value?

It is amazing how little effort is required in order to dramatically increase the value of a property. To increase the value, you have to focus on all of the right things. Some cost effective things that you can do to increase the value of a rental property would be:

• Freshly paint the property
• Replace worn carpets with a neutral tone carpet or with laminate flooring
• Re-finish old looking kitchen cabinets
• replace outdated appliances with new, slick looking appliances

In the next article of this series, we are going to conclude Step Four.

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Step Four Continued – How to buy your first rental property

The third step that you must take in order to buy your first rental property is to determine the location in which you are going to buy the rental property.

In part one of this series, we talked about determining WHY you are buying your first rental property.

After you have established why you are buying the rental property, you then have to determine how you are going to finance your rental property.  This is the second step you must take.

Determining your location

This is the stage in which you will begin researching potential areas to invest. The first step that you should take in order to find potential investment areas is to start networking.

1) Contact your local Realtors Office

One place you can start your research is by contacting your local Realtors office. The purpose of this activity will be to speak with a Realtor in this office who specializes in buying and selling investment properties. When you find a Realtor in this office who specializes in investment properties, you can ask them the following questions:

• Where are these potential rental properties located? (You want to know if these properties are close by to where you live or further away from where you live.)
• What is the price range of these rental properties? (From Step Two of this article series, you will already know what the maximum amount is of a mortgage that you can afford.)
• You will want to also ask this realtor to give you a description of the tenant profile that lives in these properties.  You want to know at the very beginning what type of tenants you would be potentially dealing with.  You will want to know things such as, are they high income or low income earners?  Are they long term tenants or are they transient?

2) Ask your mortgage broker where he/she is investing

From Step Two of this article series, you will recall that the mortgage broker that you are using should have experience in doing mortgages for rental properties, and should as well be a real estate investor.

As a result, you can gain a lot of insight from your mortgage broker as to potential areas that you can invest in.  When I first started actively investing in real estate, I did a lot of independent research myself.  It wasn’t until I spoke to my mortgage broker in detail about where he was investing that I ended up deciding that I was going to invest in the same area.  I owe a big thank you to my mortgage broker, Kevin Boughen, for helping me determine the area that I ended up investing in.

If your mortgage broker is investing in a location that you do not necessarily want to invest in, there are many other ways in which your mortgage broker can still help you.  Since your mortgage broker will be dealing with many other real estate investors, he/she will be able to share with you stories as to where these other people are buying rental properties.

Taking it even one step further, if your mortgage broker’s other clients are agreeable, you could even contact them yourself, and ask them questions about what location they are investing in, and you can also ask them about some of the challenges and opportunities they have found in their particular location.

3) Join a quality real estate investment network

For the Canadian readers, the best real estate network that you can join, hands down is The Real Estate Investment Network, REIN. This organization is by far the best Canadian Real Estate Network, and arguably the best Real Estate Network in North America. When you are trying to determine that location that you are going to buy your first rental property, you can ask many of the action takers in this group as to where they are investing. Really helpful members of this group that would be happy to help you with any questions would be people like Chris Davies, Danielle Millar, Mark Loeffler, and Carla Johnson.

For the American readers, one of the best online real estate networks that you can join is Josh Dorkin’s Biggerpockets.com. This is a premier real estate social network. There are a multitude of very knowledgeable real estate investors associated with this network. Experts in their own different fields are John Fedro and Steph Davis. John and Steph again are two action takers that would be more than happy to help, if you have any questions.  By associating yourself with a network such as Biggerpockets.com, you will be able to speak with many real estate investors who will help you in determining what location you should be investing in.

In speaking with a specialized Realtor, speaking with your mortgage broker, and by networking with a quality real estate investment network, you should be able to creates a short list of places to invest in, or you should be able to narrow your list down to one particular City or Town in which you want to focus your effort on.

If after going through this exercise you find yourself in a position where you have a long list of potential places to invest in, it is in your best interest to pick one of those locations and stick to it.

Focus is very important.  Thus your ability here to focus on one area and one area alone is the key to getting started.

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Step One – How to buy your first rental property
Step Two – How to buy your first rental property
Step Four – How to buy your first rental property

In this article, I am going to discuss the second step that you must take in order so that you can buy your first rental property.

In the first article of this series I discussed the first step that you need to take in order to buy your first rental property.  As a recap, this first step is determining WHY you are buying.  Once you have firmly established in your mind why you are buying, you are ready to move onto the next step.

Step Two – Figure out how you are going to finance the property

Often times people put the cart before the horse. They think that they can start to look at potential rental properties, and once they have found one that is suitable, they want to buy it. They then try to obtain financing for the property, and often times become disappointed because they are not able to afford it.

People make this same mistake when they are in search of their own principal residence. They go out and find a house that they adore, and then they try to get financing for it. This is not the right process to take.

Before you even start to research any potential rental properties you need to consult with a representative in your bank or with a mortgage broker.

If bad credit is preventing you from buying a property, you need to consider The H.O.P.E. Program.  They have helped more than 12,000 people get homes who NEVER thought they could, assisting even those with POOR credit get qualified.  This is one of the best Rent To Own Programs out there as it gives access to thousands of property listings for Rent To Own homes.  CLICK HERE to enrol in The H.O.P.E. Program or to have your credit repaired.

If you chose to deal with your local bank, the person that you deal with at your bank branch should be the individual who is responsible for doing mortgages. Although your bank branch can get the job done, I am a fan of dealing with mortgage brokers. I like dealing with mortgage brokers because, if you select a good mortgage broker, their level of knowledge will be quite high. As such, they should be able to answer all of your questions.

I also highly recommend that you deal with a mortgage broker who has experience in providing mortgages for real estate investors. In addition, I also highly recommend that the mortgage broker that you are dealing with is a real estate investor, and owns at least one rental property. Not all mortgage brokers are created equally, and as a result, their level of knowledge with providing mortgages on rental properties can vary dramatically.

One of the best mortgage brokers in the business, providing mortgages on rental properties is Kevin Boughen. Kevin is my personal mortgage broker. If you have any questions regarding financing your rental property, or are in need of a mortgage for your rental property, contact Kevin at kboughen@dominionlending.ca

Determining your down payment

This is one of the important points that you will be discussing with your mortgage broker. Clearly, every person’s situation is different. People will have differing amounts of money that they can put down, as well, people will be earning different amounts of income. These variable come into play when your mortgage broker is determining your financing.

A general rule of thumb, that you should confirm with your mortgage broker is that you should be putting as a down payment 20% of the purchase price of the property.

In Canada, putting down 20% of the purchase price of the property, in most cases allows you to avoid paying the Canada and Mortgage Housing Corporation, CMHC premium.

Also, if you have plans on purchasing more than one rental property, putting down 20% of the purchase price of the property is a good strategic move. This move will be to your advantage when down the road you are trying to obtain financing for future properties.

Determining whether you should get a fixed rate or variable rate for your mortgage

There is no right or wrong answer here. This answer depends upon your risk tolerance and what you feel more comfortable with.

In simple terms, with a fixed rate mortgage, the interest rate on the mortgage that you are paying is fixed for a set period of time. As a result, the interest rate on the mortgage does not increase or decrease throughout the duration of the term. An average term that people will have for their mortgage is 5 years. It is important to note that the term is very different from the amortization.

With a variable rate mortgage, the interest rate on the mortgage can rise or fall throughout the duration of the mortgage term. These fluctuations can be unsettling for novice real estate investors. The fluctuations sometimes cause anxiety on the part of the investor, because they do not know what their exact payments are going to be on the mortgage. For example, with a variable rate mortgage, as the interest rate increases so too will the payment on the mortgage amount. This rise in price is often inconsequential if you have done your due diligence and have mitigated any potential risk to you with regards to the increase in price that you will be paying.

Get your pre-approval from your mortgage broker

There are a number of different terms that are used for the pre-approval.  Another interchangeable term is the ‘pre-qualification’.

At the end of the day, whether you call it a pre-approval or pre-qualification, it all means the same thing.

What it means is that you have the go ahead from your mortgage broker to go out and start to look at potential rental properties.

As this point your mortgage broker would have examined many things.  They would have looked at how much of a down payment you are putting down, how much income you earn, what your existing debt is, as well they would have reviewed your previous credit history.  These are all variables that effect the financing of your future rental property.

Once all of these items have been reviewed by your mortgage broker, they will give you a price range in which you should begin looking in.  In most cases, they will give you the potential mortgage amount that you should not exceed.

For example, your mortgage broker may tell you:

“Neil, you can afford a mortgage up to $200,000 on your next rental property”

If this is the case, I know that once I begin my search for a rental property, I cannot purchase a rental property over the $200,000 mark, as I would not be able to afford it.

In summary, once your mortgage broker gives you a pre approval, this is essentially a ‘green light’ for you to go out and begin researching potential rental properties.

Happy Investing!

Neil

PS: The H.O.P.E. Program has helped more than 12,000 people get homes who never thought they would be able to, assisting even those with POOR credit get approved.  This is one of the premier Rent To Own programs as it gives access to thousands of property listings for Rent To Own Homes.  CLICK HERE to enrol in The H.O.P.E. Program or to have your credit repaired.

Related Articles:

Step One – How to buy your first rental property
Step Three – How to buy your first rental property

If you want to be a results oriented real estate investor for the long term, you can’t do it alone.

There is a saying, ‘It takes a village to raise a child’.

Well, with respect to real estate investment, ‘It takes a team to make an investor’.

I have discussed in previous posts some of the key members that you will need on your team of professionals, a.k.a. Real Estate Team.

The list does not stop with these people.

There are many more people that you will have on your team, that will all serve a very important function.

It is very important to assemble a great team, because you will have to rely upon these people in a time of need.

If you have a collection of great people working with you, they will unknowingly help to alleviate a lot of stress from your life.

Speaking of stress…today I had a situation arise where I realized that I needed to have one of my newest rental properties painted and painted fast. When I closed on the property, I did not spend any time or money upgrading the interior because I thought it looked fine. Although the existing paint job wasn’t THAT bad, looking back, I should have had the unit painted right after closing. Luckily, I have a very good painter on my team of professionals that I was able to call.

Because I know him, and I am comfortable with him, he is going to go check out the property this week by himself.  He will access the property through a lockbox I have at the property.  Once he takes a look around he will send me a quote for the paint job, I will approve it, and should he should start and finish the job within a few days time.

Having someone like this on my team, who is so responsive and willing to jump into action when called upon is a great help for me.

It wasn’t always like this though, I had to go through a really brutal painter to get to this good one. The first painter that I had was lazy and tried to rip me off on one of the jobs that he did.

The moral of this story (and this article) is as follows…

Assemble a team of professionals. As a real estate investor, you will need to rely upon these people. You will not become a successful real estate investor all by yourself. When you do become successful, you will be successful because of all of the contributions of the people on your real estate team.

Fellow real estate blogger Shae Bynes wrote an article called The 7 Day Plan for Aspiring Real Estate Investors. This was a well thought out article, that I would like you all to check out.

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If you are an aspiring real estate investor looking to purchase your first rental property, you need to change the way you are using Facebook.

Also, if you are an existing real estate investor looking to purchase more rental property, you also need to change the way you are using Facebook.

We already know that many people in certain demographics have Facebook accounts, this is a given.  I guarantee you that most of these people do not fully comprehend the powerful marketing reach that Facebook can offer.

When I first started using my Facebook account, I didn’t really understand how powerful a marketing tool it was. However, when I started to observe how others used Facebook, I began to understand it’s marketing reach.

So why do aspiring and current real estate investors need to change the way they use Facebook?

This is because they need to create an:

1) Image
If you haven’t yet invested in real estate and you are looking to attract joint venture partners, you can demonstrate your credibility through the use of Facebook.  In order to show your potential partners that you are knowledgeable, you can post real estate related items on your Facebook page.  You can post interesting articles, and you can provide your thoughts on the article, in the form of a commentary.

Create a dialogue on Facebook with your ‘Friends’ and demonstrate to them that you have a keen interest in real estate investment and that you know what you are talking about.  When ‘Friends’ ask you questions about real estate investing via your Facebook page, take the time to mentor them.  Provide your thoughts and feedback publicly.

You can join real estate related investment groups through Facebook as well.  By doing that, you further demonstrate that you are someone who is interested in real estate, and you are able to network with like minded people.

I personally always post my most recent blog articles on my Facebook status.  This is because, I want people to know what I am doing and I am building my image.  I am a real estate investing expert and blogger.  This is the image that I am projecting to others.

As a real estate investor, in order to get people interested in what you are doing, you need to create a positive image.  Be mindful of what you are posting on Facebook. Make sure that the content that you are posting is always consistent with the image that you are trying to project. This is important if you want to build a positive image of yourself as a knowledgeable real estate investor.

Facebook is a powerful marketing tool.  Use it effectively.

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There is more to investing in real estate than most people think.

The general public believes that you can invest in real estate if you have the required money, you know about the area that you want to invest in, you have researched the property, and perhaps you know some other people that have invested in real estate as well.  Well my friends, it is not that easy…

What most people don’t realize is that there is one key variable that is required.  If this variable is missing, it does not matter how much money a person may have to invest in real estate, they just will never end up doing it.

This one key variable is:

The Psychological Variable

What is the Psychological Variable?

The psychological variable refers to the mindset of the individual real estate investor.  Everyone in this world is different, that goes without saying.  As such, there are no two people that share the exact same thought patterns.  As a result, some people might be better suited in invest in real estate than others, just based upon individual thought patterns.

What I am saying is that people create psychological barriers for themselves, that prevent them from investing in real estate.

This not only happens with investors just starting out, rather this also happens with experienced investors.

For example, a novice investor could create a psychological barrier for themselves in the following manner.

They could fear that if they purchase their first rental property, and it goes vacant for a period of time, they may not be able to pay the first mortgage on the rental property.

This can be a legitimate fear for people.

However, I know from experience that this is a risk that can be mitigated.  Many people can’t get past this fear, and as a result, create a psychological barrier which, creates a mental roadblock that prevents them from investing in real estate.

This not only happens with novice investors, rather it also happens with experienced investors.  Investors with multiple properties can fall victim to this fear as well.  For example, if an investor owns 6 rental properties, and they have the capacity and the funds to buy their 7th property, this investor may get nervous and create a psychological barrier for themselves.  They may fear that if they buy this next property, they may not be able to pay the mortgage on the property in the event that the property goes vacant.

Again, this is a legitimate concern.

In both scenarios with the novice and experienced investor, in order to combat this fear, and get their head in the game, they both have to ask themselves the following question:

What is the worst that can happen?
If both investors asses this situation and realize that if their properties go vacant for a period of time, they will experience financial difficulty, they should not purchase the property.  As a side note, this financial difficulty could be a result of the investor not having a sufficient reserve fund for their investment property.

If on the other hand, bother investors analyze the situation and see that they are in a good financial position, and able to cover the vacancies, they should realize to move ahead and buy the property.

They also would now be aware that they were creating a self imposed psychological barrier that was preventing them from moving forward.

Whether you are a novice or experienced investor, it is always important to take inventory of our own thought process.  Continually ask yourself,

“Am I creating psychological barriers that are limiting my ability to move forward?”

If this is the case, you need to get your head in the game.  The only way to move forward is to break down these psychological barriers.

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Do you have someone in your life that discourages you?

Are you ever really excited about an idea that you have, but then someone close to you convinces you otherwise?

Perhaps they convince you that the idea you have is not good, or perhaps they convince you that YOU are no good.

I like to call these people that discourage others, Dream Stealers.

Dream Stealers are everywhere and they are constantly trying to shatter the confidence of people close to them.

Dream Stealers are people who very readily, without solicitation offer their opinion. It is important to note that their opinion is always negative.

For instance, let’s look at the following example of a Dream Stealer in action.

You are tired of your current job and you are looking at making a job change. You have found a new job that you are really excited about. You are a bit nervous about applying for the new job, however, you know that the change will be good for you, and that you will really like the new role.

A Dream Stealer is someone that will put doubts into your mind. They will say such things as:

• “You are not going to like the job.”
• “The job is too hard.”
• “There are more qualified people than you applying for the job. Don’t apply, it is a waste of time.”
• “You are not smart enough for this new job.”
• “If you take this new job and end up not liking it, you can never go back to your previous job.”

Dream Stealers can be close family members, spouses, friends, or co-workers.

I have noticed that there are 2 types of Dream Stealers. They are:

1) The Unintentional Dream Stealer

The Unintentional Dream Stealer is an individual who will discourage someone. They will provide their negative opinions to the person that they are close to. The unique feature of The Unintentional Dream Stealer is that they don’t even realize that they are discouraging the other person. The Unintentional Dream Stealer provides so many negative opinions to the other person, however, they don’t perceive this information as being negative at all. The Unintentional Dream stealer truly does not mean any harm to the other person. However, they don’t realize that they are indeed harming the other person with all of their negative opinions.
This type of Dream Stealer is more common then the next type of Dream Stealer we are going to discuss. The other type of Dream Stealer is the Intentional Dream Stealer.

2) The Intentional Dream Stealer

These people really have issues. They make it a point to go out and discourage other people intentionally. They do not want to see this other person succeed, so they feed them with a lot of negative thoughts in the hope that they will become discouraged and take no action at the end of the day. I have noticed a common trait with these types of Dream Stealers. They often lack self-confidence. I have also noticed that Intentional Dream Stealers often want to control situations, and as such they prey upon people with less self confidence than themselves. Their ultimate goal is that they will discourage someone completely from taking any action at all.

So how does this relate to real estate investment, and rental properties?

It relates in a major way.

Both Unintentional and Intentional Dream Stealers influence the decisions of real estate investors on a daily basis.

Surely, we all can think of at least one person that we know that is an Unintentional Dream Stealer. Again, this type of Dream Stealer does not mean any harm to the other person, as they don’t realize that their negative feedback, is actually negative.

I have seen more than one real estate investor influenced into changing their decisions due to the influence of an Unintentional Dream Stealer.

Some things that an Unintentional Dream Stealer could say to a real estate investor are:

• “Are you sure you know what you are doing?”
• “Buying anther property, could make us go bankrupt!”
• “You don’t know enough about real estate market.”
• “You are not a good property manager.”

Hopefully, not many of you know an Intentional Dream Stealer. If you do know of one, you know that they are always out to discourage you, put you down, and they like to shatter your confidence.

I have seen real estate investors be completely discouraged after speaking with an Intentional Dream Stealer. Intentional Dream Stealer will say things like this:

• “You are a terrible real estate investor.”
• “You have lost so much money investing in real estate, how much more are you going to lose on this new rental property?”
• “You are not cut out to invest in real estate.”

We all know of and probably have Dream Stealer in our lives. It is important to recognize that someone is a Dream Stealer. Once you recognize who in your life is the Dream Stealer, you will be able to make the necessary adjustments in order to block our their negative opinions.  How do you block out their negative opinions?  Simple.  Don’t listen to them.

Easier said than done, I know!