Buying Turn Key Properties
I thought I knew everything there was about investing in real estate. I mean, I attended a bunch of seminars, I read a ton of books about investing in real estate. Plus, I have an MBA and a couple of years of work experience, I know what I’m going to be rich.
Boy was I wrong.
Investing in real estate is a whole different ball game, and it will overwhelm you, it did for me. You are essentially starting a business, and if you’ve never run a business before, where you’re the boss, it can be very stressful.
Yes, you need to start somewhere, but my somewhere was for someone whom had a ton of experience with investing in real estate.
I had none, and when I finally stepped back after a couple of years to analyze my business, I realized there were a lot of things I would’ve done differently, because I did a lot of things wrong.
And, if I had to do it all over again, instead of just diving in head first like I did, this is what I would’ve done, to set myself up right from the beginning for success….
And less stress!
It's now been over 5 years, the end of 2013 to be exact, since I purchased my first investment property, a 6 bed, 2 bath duplex in Windsor, ON for $48K, to flip.
It was such an amazing rush, that about 2 weeks later after getting an accepted offer on the duplex, I made an offer on another duplex, for $87K, to fix and flip, or wait, maybe keep as a rental, or wait, maybe refinance it.
I didn’t know. All I knew was that when I ran the numbers, I was going to do very well. $30K on the first one, $40K on the 2nd if I flip it. Oh, look at this, a 22-unit mixed used commercial property just came for sale, let’s make an offer, the numbers show that after renovating it, it’s going to generate almost $2K a month in cash flow.
Yup, that happened. To the point that over the next 11 months I ended up buying 15 properties, which included an 8-unit mix use commercial, a fourplex, another duplex, and another, a single-family home, and another. Basically, anytime I saw a deal, I figured it was a deal, and I had to buy it.
I had no game plan though.
I was basically buying properties because it seemed everything was a deal, now realizing that I wouldn’t have bought most of them if I could go back, nor would I have paid what I paid for some of them, knowing what I know now.
But I didn’t know better at the time. I was buying these properties without any idea of what I was doing, nor any idea how much time would be involved when you own another property besides your own, nor the systems you need in place so everything runs smoothly, nor the team you need to help you run your business, nor the costs involved and the time involved. NOTHING.
I had basically set myself up for failure.
Luckily, I didn’t fail, I eventually turned my business around and built a solid foundation.
But, at the time, I was like a chicken with its head cut off. To the point where I was just trying to stay afloat, because I had tied up all my capital into so many properties so quickly.
And because I was tying up so much capital into all these properties, and the renovations needed at all these properties, there were times where I had to sell a property at a loss instead of keeping it in my portfolio because I needed the capital to complete renovations at another property, or to pay the mortgage at another, or pay back the private lender.
There were times where a property sat vacant for months, because I didn’t have the capital to do the renovations, nor the team to even do them, and there were times where a property wasn’t being rented because I didn’t