Hello fellow wealth hackers!!
How do you convince someone to invest in real estate?
This was a question I was asked while on a podcast, which caught me off guard, as I generally don’t try to convince anyone actively. I don’t tell someone to their face they should invest in real estate, but maybe I should because that’s my exact advice to my family.
My cousin, Christopher, is about to turn 19 and he’s joining the Canadian Armed Forces. I couldn’t be more proud of him. Christopher is like a little brother to me and I’ve kept a close eye on him because we lost his father, my uncle, too soon to stomach cancer just over ten years ago.
Christopher is a major gear head. He’s watched every episode of that popular TV show, Top Gear, five times each. His video game time is spent doing simulators of trains, planes, and automobiles. So naturally, he went to college to become a mechanic. In a few weeks, he will travel to Quebec for army basic training then Kingston for job training for 30 weeks. Once he’s done training and is working, his salary will be in the 60k range and he will get a full pension after 25 years of service. Not bad?
As a treat to Christopher, I allowed him to chauffeur my family and I around as part of his send off party in my new BMW. He loves cars and driving fast, but he said he can’t afford the payments. I agreed with him, he should never be paying so much for a car at his pay. We also talk about how cars and houses are liabilities if they don’t make you income.
This is all beginner stuff to all you listeners. If you’re going to buy a home, treat it like an investment. You’re buying for value, and the property has value add opportunities, whether it be renting out rooms or the basement or the garage or a parking space etc… there is demand for both rental and resale. We covered all the basics and I told my cousin to rent and not buy his home, but instead buy an investment property in Hamilton. Why?
The armed forces has some wonderful subsidized housing and dining options. My cousin’s room and board and MEAL Plan is about $100 per week. To me, that’s a no brainer for a single guy. Also, he could be transferred anywhere in Canada for work, including poor investment towns. It make sense he invest where I can keep an eye on things, where he can adopt my real estate team to manage his property for him. No need to reinvent the wheel.
That is my honest advice to my cousin in how I convinced him to invest in real estate.
More generic advice for the starting investor is to invest within an hour drive of where you live. If your target area is too far, it makes management challenging and you are less likely to make the commute necessary to grow and manage your portfolio. If you don’t invest where I invest, that’s totally cool, I have referrals for London, Kitchen/Waterloo/Cambridge, Barrie, in the East: Bowmanville, Oshawa, Peterborough, Lindsay, and downtown Toronto with full service teams just like I have in Hamilton, Brantford, St. Catharines, and Niagara Region.
This is your investment for your retirement or to fund your child’s education or a downpayment for their home. You don’t want to trust this process to just anyone, only settle for the best.
Speaking of the best, many of you have been asking for updates on our AirBnb property. June was great as we grossed $4,300 including HST, but excluding cleaning fees as that expense is a pass through. Guests pay what we pay the cleaners so personally, I leave it out for this analysis. We collected HST. AirBnb does not collect HST separately, so it comes out of our revenues, and we pay HST on a bunch for cleaning, property management and all our operating expenses. We had lots of capital expenses and one party to clean up after, so June was overall negative cash flow and we are ironing out the wrinkles with the property.
In July we had a breaker fail. The symptoms were: the 2nd floor lost power, flipping the breaker did nothing, but it hummed when flipped on. An emergency electrical service call was needed for $150. July generated the same revenue as June, but without having so many capital costs, our expenses reduced by $1,900. For July we will positive cash flow about $1,000 better than a single family. Keep in mind, summer months are better than other months of the year and as such, we were 90% occupied in the month of June and July.
Our bookings are over 90% for the next 30 days which is great and fingers crossed we keep some momentum for September.
Note, this is just one of my properties and it made a lot of sense for this particular property to be an AirBnb. The rest of our portfolio is student rentals and legal basement suites. My wife and I are professional investors so we do what makes most sense with each property.
We are wealth hackers, and as such I’m starting stock option trading today. My friend Omar, who owns over 30 properties, is going to show me how. Omar only works 30 minutes a day while options investing. He has more than me, works way less than I do, and stock options is how he raised the majority of his downpayments to buy his 30+ investment properties. Omar has been telling me to invest in stock options for almost two years and I didn’t really listen to him until I found out he taught my electrician who updated the electrical in my AirBnb to earn six figures in his first 12 months. This I have to learn and I’ll provide updates here from time to time. I am also having Omar and his business partner, Matthew, both with 12 years experience options investing, on an upcoming episode.
Omar and Matthew are wealth hackers and are speakers at our Nov 9th Wealth Hacker Conference. Omar and Matthew have taught over 50 of their friends and family how to invest selling stock options. Funny enough, they’re all real estate investors too. Omar makes a mid six figure income working a fraction of what I do, hence we want to share this with the world.
Wealthhacker.ca for details and to get your tickets. Iamawealthhacker is my discount code for you. November 9th at the Toronto Congress Center near Pearson Airport, all the best wealth hacks in real estate investment, stock option investing, and starting a small business. My friends Tom and Nick Karadza started a small business from zero and were awarded the Profit 500 award as one of the top 500 fastest growing companies in Canada for the last three years. Visit www.wealthhacker.ca for more details and again, iamawealthhacker is my discount code for you listeners.
New Investor at Age 24, Working 3 Jobs, Lessons Learnt Buying First Property, Importance of Network and REI Friends with Joseph Costanza
On to this week’s guest, young Joseph Costanza who bought his very first property at the age of 24. He’s a young hustler having a job since 16, and several side hustles as a bartender and landscaping. After graduating from university as an architect, Joseph was lucky enough to get a job in his field of study as an intern architect and quickly realized having a job did not translate into freedom, hence he researched then decided on real estate.
After being referred to myself and my iWIN group, Joseph, coached by Tammy Ditomaso on my team, acquired his first rental property. It’s a single family home he is turning into a house with legal basement apartment.
Joseph is here to share his experience, the importance of surrounding oneself with like-minded people, and has some tips on how to measure to produce drawings as part of the building permit process. Joseph is an architect, so he does his own drawings.
To follow Joseph:
Do you have questions on wealth hacking? The shortest path to financial success or questions on investing in: houses, basement suites, coach houses, syndicated mortgages, private equities, public equities, sandwich leases, lease to own, student rentals, AirBnb, wholesaling, off market deals, house construction. I’ll admit when I don’t know and will dial a friend for an answer.
If you have a question, we don’t have any fancy means to receive questions so if you enjoy the show and want to leave a five star review on iTunes, your question will definitely make its way to me and I’ll answer your question on a future episode of this podcast.
I’m also grateful for all your positive comments and fans of this show. It is my view that life would be a bit better for everyone if we all could make and save a bit more money at the end of the month and if you make a lot more then your family and community would benefit even more and nothing would make me happier. Till next time, my name is Erwin and I am a wealth hacker bringing you the truth about real estate investing for Canadians.
TitanInvestmentRealEstate.com – would you like to know how our investors returned 341.8% on positive cash flowing real estate over the last five years? On average, that was 68.4% per year, just imagine what winning in real estate could do for you. If you would like to know how we did it, ask us how by calling 289-288-5019 or email us at email@example.com. Don’t delay, the top markets we focus in are trending upward in price, so you can pay today’s price or tomorrow’s price.
Till next time, just do it because I believe in you.
Hamilton, St. Catharines, Toronto, Land Development, soon to be builder and Real Estate Investor