It all started for me exactly 10 years ago, in April 2010 when a friend of mine and I boarded a plane to Miami to look for our first investment property. It was a post 2009 recession time so obviously we heard many opinions on a topic of this is not the time to buy real estate and that we do not what we are doing. It was scary and for sure we did not know what we were doing but we went anyway. The result of the trip was our first investment property, a condo we purchased at a 60% discount in comparison to its highly inflated price prior to the recession:
Many things have happened since and looking back I can honestly say it was a life changing decision for me…
So today I wanted to sum up the lessons I learned during my 10 years real estate investing journey:
- Do not depend on a single real estate strategy. For example, what we experience today with the COVID-19 pandemic will likely impact those investors who solely were dependent on short-term rentals to have a positive cashflow from their properties;
- Do not depend on a single location. Some places could be hit harder than others when the recession hits. I can think of Orlando, the city that is highly dependent on the tourism or a province of Alberta that will see a decrease in oil production;
- Do not speculate. The income from your rental unit should be greater than the expenses (positive cashflow) or equal to those at a minimum. Asset appreciation over time should be considered a bonus, not a primary way of making money;
- Find what you are good at and develop that skill. I don’t like renovations for example but I am good at working with investors; so in most of the deals I am part of – I handle all communications and marketing. And I work every day on improving those skills;
- It is OK to be a passive investor. Active real estate investing is not for everyone and there is nothing wrong with investing with someone else;
- If you want to be an active investor, hire a mentor. It will help avoiding mistakes someone else already did (and mistakes in real estate could be very costly) and will shorten your journey to success;
- Understand it is a marathon and not sprint. Investing in real estate could change everything for you relatively quickly but it will not happen overnight. Patience is the key;
- Nothing will happen without action. The first deal is the hardest, but it needs to be done. Have someone helping you doing it, if necessary;
- Believe in yourself and never give up. In every stage of your journey there are good days and there are bad days – remember, the size of a man is defined by a size of a problem that knocks him down.
I really hope this helps, especially in the situation we are all in today. I personally view it at a time of many opportunities to come. 10 years ago my friend and I embarked on our personal journey to financial freedom, this time around I hope to be able to help many people to do the same!