Real Estate Investor & Marketing Specialist · Montreal, QC · Member since 2013 · 182 posts · 367 votes
Hey guys,
I am a full-time real estate investor from Montreal, Canada. Almost 3 years ago, I started flipping single-family houses and subdividing land on a part-time basis. One year later, I was able to go at it full-time along with my business partner. To date, we have completed over 20 transactions.
In September 2016, my partner and I decided to keep flipping, but to focus most of our attention on buying rental properties in order to build sustainable long-term wealth.
Fast forward 12 months later, we went from 0 unit to 54 units with a little over 1.7 million dollars in equity (along with 3 million in mortgage).
The key is simple: You just have to do it. Take action! Nobody else will do it for you. Everything you buy should ideally be off market, and you have to be very careful with your calculations in order to buy properties that will surely yield great returns. If you analyze the right way, you will decrease your risk drastically.
No we are not rich, and we used OPM (other people's money) to complete all of our purchases.
@Guillaume D. Any tips on the best ways to find off-market homes? My partner and I are getting close to buying our first investment property (single family) and I'm hoping to find a good off-market offer but am unsure as to how to find them.
@David Collier Jr Hey David! Great to hear that. You are totally right when referring to analysis paralysis. The only way to invest in real estate it to make offers. If you don't make offers, you will never buy anything. Analyzing a deal is only one step amongst many, so people cannot stop there.
What's most important is to NOT be afraid of getting rejected. You will get 99 "NO" for one "YES". In my market, they say 0.5% of properties for sale are actual "deals", generally speaking. Keep it up and good luck on your Triplex offer. Keep us posted.
@Jose T. Hey Jose! Glad I could help motivate. Check out CIIQ (Club Investisseurs Immobiliers du Québec), Immofacile, Immopreneur (Jf Tremblay) and Flip Academie, LEVIC, Mordus d'Immobilier, Pros de l'immobilier, and so on. They all put up RE events as well as networking events in which you can learn a lot as a new investor and you can make a lot of contacts.
@Peter Tverdov That is correct! The most equity we have given away so far to investors is 33.3% on a particular rental property. It's key in order to acquire a lot of units quickly without having to use your own cash. Having 50% or 66.6% of something is better than 100% of nothing, as they always say ;)!
@Adam Britt There are deals on the MLS, don't get me wrong. I've done some pretty good deals off of it, but they were all "Land Subdividing" deals in which other potential buyers hadn't realised the potential. I've never bought a conventional fix-and-upper or buy-and-old deal off the MLS though because, in my market in particular, competition is so fierce that people are willing to overpay big time to buy properties. House flipping has gotten so popular because of all of the TV shows that some inexperienced investors are buying properties so high that they inevitably end up losing money and I don't want to be bidding against these people.
The beauty with off-market deals is that you have less competition, which makes it actually easier to find good deals than on the MLS, in my opinion of course.
When you don't have time to find off-market deals, you have to find a way to automate the whole process or you have to hire someone to do it for you. When I started, I was doing direct mailing by hand all by myself. I would get to work 2 hours early, waking up at 5am, and I would do my mailings before anyone else would get in the office.
Later on, I hired somebody part time to do it for me. I would pay her $15/hour plus a bonus of $1000 every time I would close a deal coming from the mailings she was sending in.
Now, I have a firm taking care of all of the direct mailing (automation), and a full-time employee handling all other potential deal sources.
In other words, I know this is probably not what you want to hear, but you just have to make it happen. We all are busy and tired. You need to find ways to break through and if it means hiring it out, then you should consider it. My 2 cents!
@Jose T. Hey Jose! Glad I could help motivate. Check out CIIQ (Club Investisseurs Immobiliers du Québec), Immofacile, Immopreneur (Jf Tremblay) and Flip Academie, LEVIC, Mordus d'Immobilier, Pros de l'immobilier, and so on. They all put up RE events as well as networking events in which you can learn a lot as a new investor and you can make a lot of contacts.
Some excellent points of course! I will have to really consider off market. You are quite right here too, there is a lot of competition with much more cash than I have. I'll try to read up on some additional off-market strategies. I've got a hundred other ignorant questions, but I think I need to try to educate myself before I keep pulling on your time asking things I should already know!
Congrats on taking action and your success with these deals. How are you handling management on these units? I've passed on some 8-16 unit deals that were between a 30min to 1 hour drive out because they were too small for a manager and just a bit too far out to self manage like I would want to. Just curious how you are structuring that aspect. Keep it going and good luck on the 8-plex!
Congrats on your deal! Impressive. I have an idea but how exactly do I run numbers to know if a property is worth purchasing? Should I drive for properties not listed? Im planning on buying my first 4plex early next year, live in one unit and rent the other three for my first investment.
@Guillaume D. Thank you for sharing your very high level story. Hearing about the reported success of others is great but too many posts are far too high level for anyone else to benefit. It's like saying I increased my flat bench from 315 to 385 in 12 months without giving any details - good for me but no one else can benefit unless I lay out what steps (specifically) I took.
Your replies mention off market deals; how did you find deals that worked well for you but that no one else had access to or your were smarter than everyone else? You used other people's money? What type of financing? How did you establish the necessary relationships.
I am not calling you to the carpet, simply sharing the perspective of a relatively new REI trying to learn from the success of others. A smart person learns from his mistakes, a truly wise man learns from the mistakes of others.
I first must commend your entrepreneurial spirit and ability to build a team around your assets/business. That is surely a wealth building mindset.
I personally, playing devil's advocate here, am not a huge fan of such large amounts of debt/leverage (3 million in your case). I think the risks outweigh the benefits. While your story is inspirational in the business building, I think it's very misleading in smart investing. My intention is not to dismiss you and your partners hard work, but to simply point out that 0 to 54 units in 12 months with a "you can do it too," sounds like a late night infomercial. And Leveraging people's paid off mortgages to fund your deals because they can't "feel" the cash leaving proves my point on how risky it really is. When part of the goal is just how many properties can I accrue the bigger picture gets missed.
Being a millennial myself, I think the attitude look at me and how much I've done by "fill in the blank age and time" is a dangerous notion. Most sustainable wealth is built slow and steady over time (not something this generation favors, instant gratification). Like I said, I'm playing devil's advocate here because my personal investment and business philosophy leans more toward the Mark Cubans, Dave Ramseys, and JL Collins. Avoid debt, spend less than you earn and invest the surplus. Just a different point of view.
Again, much congrats on your business success. You've built one heck of a team :)
@Scott MacArthur Right now, we are managing them ourselves since we are in real estate full-time. Our plan is always to manage them at the beginning to make sure we maximize the potential of the properties, and then we will hire a firm to manage them. It's important to understand that almost all of the income properties we are buying have huge potential for increased revenues so we have quite a bit of work to do to maximize their potential. However, this is what makes our purchases such great deals.
Every property we have ever owned is within a 1-hour drive maximum in order to keep it easier for us to manage.
@Margaret Refile The numbers game is kind of hard to explain in a nutshell and is very specific to your market and to the specific deals you are looking at. Good luck with your next purchase!
@Account Closed I hear where you are coming from and I agree with you that this is very high level as it should be for a forum post. I could probably discuss for 12 hours straight with you to share my story, but we both know that's not possible ;)! I have given insights on financing strategies in my other comments so you can check it out. Finding off-market deals can be done through direct mailing, driving for dollars, through contacts you make throughout the years, calling up rental property owners to see if they would be willing to sell, you name it! I've found deals using all of these strategies.