I would recommend grabbing a pen and paper, or opening up a text document and taking some notes. The following will require you to give some thought to why you are here and what you want to achieve. I’ll need this information to help you attain your goals. It will also raise questions you’ll want answered. Write them down and ask me. This is not meant to be an exhaustive examination of Real Estate Investing in the Victoria Market. That would fill a book and then some, this is meant to get you thinking about the possibilities so when we sit down together to finalize your game-plan you will already have a very good idea where you want to go with it.
What are your goals?
Obviously you’re here to make money but what kind of money? If this seems like an odd question read on and it will all make sense. I’m not talking about Monopoly money vs. Pesos. I’m talking about Cash or Cash Flow. Are you looking for a quick turn around with a big payoff or are you interested in long term freedom. If the ultimate goal is financial freedom, a regular income stream with little effort then we’re talking about Cash Flow. Cash Flow comes from having multiple properties or a single property with multiple tenants, which ultimately gets paid off and develops a stream of income on a regular basis. If this is where you want to be you’re looking at the Buy & Hold or the Buy-Fix-Hold.
If Cash is your goal, a onetime payoff that increases your cash position, perhaps allowing you to make a bigger down-payment in the future, than the Buy & Flip or Buy-Fix-Flip is for you. There’s no reason not to do both, and in fact many of my clients have started with a buy-fix-flip in order to take advantage of the lower minimum down payment options available when buying a residence, getting into a better position for the buy and hold but the Buy and Hold will ultimately offer you freedom.
“It’s better to make 1% of a hundred people’s efforts than 100% of your own.”
– Author Unknown
The philosophy behind this mind set is quite simply that you are still making the same, 100%, but are left with your time. For most of my clients that’s the ultimate goal, an income stream without the time commitments of 9-5 to earn it. How much flows down that stream is entirely up to you.
Whatever your goals are, and however you decide to make them work for you, they must be clear in your mind. Success in Real Estate Investing isn’t difficult, but it requires focus and patience. You have to create a game-plan and play that game-plan. That isn’t to say the plan won’t evolve, or that you can’t have multiple game-plans, but each play must be defined very clearly in order to succeed.
With your goals in mind start to consider the two key elements to your game-plan… What will I buy? How will I buy it? I will look at these in further detail shortly.
What is your experience? This may help you specialize.
Do you have any special skills that you might be able to take advantage of? Perhaps you are a plumber, or your sister is an electrician. Maybe you’ve had some drywall experience or you’re just a handy person. Great!!! You’re sweat equity can be converted into real equity. Maybe that should become part of your criteria. Fixer-uppers, Single Family Dwellings that can have suites added. You don’t need special skills to succeed in Real Estate Investing but if you have them, use them, work them into your game-plan.
What Will I Buy?
As mentioned before there are a variety of possibilities for Real Estate Purchases but one rule holds true for every successful purchase. Make your money going in. Make sure the buffer you set, whether it is 10-20% on less expensive properties, or $20,000-30,000 on higher priced properties, exists in every property you buy. This means not buying everything that hits the market. This buffer buys you peace of mind, it allows you to sell if you run into a problem, and not take a loss. It means you have made an investment as opposed to a speculation. You have already made money. You could sell tomorrow and be up a few thousand. Make this part of your criteria.
Fix & Flips:
This involves purchasing properties that are being sold well below market value, possibly under duress. Foreclosure sales, divorce sales, estate sales, sales that arise out of employment changes: there are a multitude of reasons a property may be sold below market value and you can take advantage of these opportunities if you are ready to act quickly and know how to find these properties. That’s where I come in. My lead generation network is devoted to unearthing these investment opportunities.
This involves buying properties that possess Latent Value. Latent Value can range from having the potential to add a suite, to completely tearing down an existing structure and erecting something that represents the Highest and Best use of the land. This could also include applying for rezoning, not making real changes to the property but creating value by increasing the potential of the land. The condition of a Buy-Fix-Flip purchase can easily fall under the conditions listed in the Buy & Flip above but the potential upside is greatly increased by making wise investments into the land. Caution!!! Not all investments pay off. Will lifting a house and adding 12 inches of basement height, then throwing a suite down there as a mortgage helper pay off? Depends what you get the house for but not likely. Will paint, some new handles for the kitchen cupboards, and ripping out the 70’s shag carpet to expose the hardwood below? Good chance.
Free Real Estate Investment Meetups
If you want to learn more about investing in a casual and friendly environment join us at one of our regular conversation meetings or topic specific events with The Victoria Real Estate Buying & Investing Meetup Group. This group is for both the beginner investor, and the experienced investor with an extensive portfolio.
Experienced investors are encouraged to share their knowledge and expertise with other members of the group. If you want to learn the basics of Real Estate Investing, or take your existing portfolio to the next level we can help. All levels of Investors are welcome.
Have Investor Inquiries or Questions?
Submit your investment inquiries in the form below or request a private consultation to discuss your Real Estate Investment portfolio and goals for future investment.