Sadly, the real estate market is often manipulated by two key emotions: Hype & Fear. These two emotions are used continually by certain people within the real estate market to get you to take action. Free Seminars (which turn out to be one big sell-fest trying to get you to buy their products) what did you think, they were putting on a free event out of the goodness of their heart?
Or late-night TV infomercials often based in systems that aren’t based here in Canada; or syndicators telling you that a certain city is the best place to buy, and then selling you a property there. These are just a few of the hundreds of ways in which your emotions are taken advantage of in the real estate market. Your job is to cut through the hype and see what is real.
Some of those syndications may be good investments, but you’ll only know if you do your COMPLETE due diligence. Some of the packages being sold at so called-free seminars may be helpful to you, but don’t get caught up in the ‘there are only 9 packages available baloney'. There are always more where they came from – they’re just using fear of missing out. Do your homework and make sure that what you are about to buy is real, proven over at least 10 years of market ups and downs and actually works in your geographic area! Sometimes a $5,000 investment in a seminar would be better spent investing in real estate.
Real Estate investing is not about get rich quick,
so don’t buy into anyone who tells you it is.
The real estate market is constantly changing and the strategies that worked a few years ago might not work today. Similarly, the people you meet may have investment systems that truly do work for them, but won’t work for you.
That’s why it is so important to approach this business with a healthy perspective on what it is you plan to accomplish, served up alongside an equally healthy dose of scepticism.
What do you need to do?
- 1. You need to buy real estate. Always remember that your goal is to take action and buy real estate that fits YOUR system. In real estate investment, closing a deal represents your Critical Success Event.
2. Keep it real.
- The tips outlined in this book and Real Estate Investing in Canada will help you practice the real-world application of that old adage, information is power.
- Never forget that you’re responsible for the decisions you make based on the information you’ve gathered. Make sure the information you use is dependable -- and comes from dependable sources. You don’t want to spend money needlessly and you certainly do not want to lose money. Avoid those who have just decided to call themselves real estate experts because they have done well in a hot market… look for a long term track record.
3. Keep it relevant.
- This is the crux of Chapter 3 regarding due diligence. You need to learn to make business decisions based on data that’s relevant to your specific market. You’ll discover that a national average price means NOTHING to you, although it is discussed in detail in the media and on the internet.
Red Flag: The positive investment economics of one city won’t apply to every neighbourhood in that city. Likewise, a positive national real estate number does not directly affect your local region. Use the Property Goldmine Scorecard found in the appendix of this book to ensure you are asking the key questions. Not every property will perform the same as the neighbourhood, do your homework
4. Ask: What’s behind the curtain?
- Apply the same “what’s behind the curtain?” rationale to every deal you encounter. This is also true of every Joint Venture partner, every mortgage broker, every ‘real estate guru’ and every advisor you listen to. Find out what the truth is, and also find out what their REAL motivation. You may be sadly surprised.
Red Flag: As a novice investor, you’re an obvious target for “experts” who want your money! They will try to sell you systems. They will try to talk you into deals. They will want cash up front – in exchange for information you haven’t yet seen.
Learn the “What’s Behind The Curtain?” Questions!
Ask yourself:
What is in it for them?
Do they have a financial incentive to get me to take a particular action based on the information they’re giving me?
Do they have experience in the market or are they part of the cult of opinion? (These guys know someone who knows someone who did something somewhere. That’s not good enough for you!)
Are they currently investing in real estate and using the strategies they’re teaching?
Do they have a bare minimum of 20 real estate transactions to their name, thereby giving them the experience of dealing with different buying and selling situations?
Have they been investing for at least five years, preferably 10 years, giving them experience in different market conditions? It’s even better if they’ve been through a full up and down real estate cycle, which often takes a decade or more.
Key Insight: This book will help you investigate every deal and every person that comes your way. Don’t invest on basic rules of thumb… and definitely don’t invest based on just a list of 97 Tips. Use the tips to enhance your investment system (such as the REIN™ ACRE System that has been proven with over $1.3 Billion dollars of real estate purchases).
"General rules of thumb” are for those who don’t really want to create long-term success. Be aware, don’t get caught up in the hype of the market and most importantly do your own homework. I know it is easier just to sit back and listen to someone tell you what to do, but by doing that you are putting your future in someone else’s hands. Someone who may or may not have your best interests at heart. Ask yourself: “Are you truly ready to do that… or are you ready to take control."