Some simple investment considerations for purchasing investment properties in Edmonton or just about anywhere else.
Recently a young sponge for everything real estate told me a story about an investment seminar he attended. He said he didn’t really learn much because it was the free one, but they pushed another seminar saying you’ll learn more. So he paid for the next one and sure enough the wizard peeled more away secrets away, apparently giving more information but still selling more seminars saying “we’ve given you just enough information to be dangerous.”
Lol. Sounds like a typical seminar sales.
There are a lot of places you can find information on investing in real estate. In some cases you might even be asked to get on a bus and tour some properties, or spend whopping sums of money monthly. One of our regular blog readers (Laura or LP) recently suggested another blog on one of our threads saying they’re more respectful to investors. LMAO. It’s funny to even think she’s serious.
I respect investing, fundamentals and research. However selling their own properties by providing "advice" and "insider tips" for a fee is a great racket, and buyers who get sucked in by these "investment gurus" aren’t doing their due diligence properly, in my opinion.
Although I have worked extensively with investors in the past, selling entire projects, retailing projects out (in what seems like a life time ago) and even the odd office building, the majority of my business now is working with people buying and selling their primary residence. I just prefer working with people on something more personal. In fact, in the past two years I’ve only helped one buyer acquire two investment properties (unless you count parents who rent properties to their prodigies then I’ve sold considerably more investment properties in the Edmonton area). At the same time I have sold numerous properties for investor clients. It’s not that I couldn’t have sold more properties to investors, it’s not that it was too easy either. It simply comes down to working with people that we fit with.
The buyer investor I did work with is one that I’m obligated to as he’s been a very good client and said he really wanted my help. I agreed since the investments were going to be for a long term hold and were based on solid fundamentals and good value.
So it’s not that I don’t respect investing in real estate, I respect it enough to not treat it lightly. It’s not something that someone can just decide to do one day and then change their mind three months after the fact when it’s not working out. In Edmonton it seems that everyone forgot the risks that come with investing in real estate. Alright, enough yada yada yada. When I do talk to people about investing in real estate here are a few things I tell them to consider.
So without further adieu here are a few things to consider when investing in Real Estate in Edmonton or anywhere else:
- Don’t fall in love with your real estate investment. This doesn’t mean be a slum land lord. It does mean that you shouldn’t get so attached to it that you won’t be able to make rational decisions.
- Know your investment characteristics. Liquidity, marketability, leverage, manageability, taxation, risk, yield, cash flow and required capital, etc. Books have been written on almost all of them but you need to know what characteristics your investment has and which ones are going to make your investment successful.
- Understand your measurement for a successful investment. Most amateur investors will talk about cap rates, and rates of return. While these measurements are important towards measuring your investments, they can be overly simplistic and they may not take into account such things as taxation, appreciation, costs and so on. .
Now, I would be negligent if I didn’t discuss a simple thing like basic economic laws. Like the law of supply and demand. This much debated economic law is the basis for 3 appraisal approaches to value: market, income and cost.
One other thing you should understand is the relationship between time, value and money. This can help you can compare any investment to another investment.
Last but not least: work with experts, especially if you don’t know what I’ve been talking about in the preceding paragraphs.
And by the way, the above is my opinion only, and if you’re lucky you’ll see it republished on some other blogs word for word (except for my name of course). No shit. The other day I found one of my articles copied and republished word for word in another blog by a C21 agent in Ontario. He didn’t change a thing. (It was my article on walk throughs).
So just in case you didn’t already know this…We write our own stuff here or we reference the source. Maybe some other bloggers should try that (sorry for the end of blog rant).
Did you contact the blogger who plaigarized your work?
Blog plaigarism is a pet peeve of mine – I see a lot of bloggers copy full articles from news sources without linking back and it irritates the heck out of me.
You might also consider copyrighting the blog with a Creative Commons license of some sort. (http://creativecommons.org/)
I agree completely, and that’s part of the reason why I’m involved with Real Estate Investment Network. After working in property management in edmonton for more than 13 years, REIN investors are (usually) the best informed, focused, and educated. The system is very solidly focused on fundamentals.
I always let people know when I’m going to use some of their material (if I’m following fair-use or if they’re letting me use more). In at least one case (http://chrisdavies.ca/?p=33) they gave me extra resources and I got a link to my blog to help my page rank!
Chris,
One of the reasons I titled this article the way I did is that many first time investors have visions of grandeur. Then many realize too late that there is more to it then just buying a property.
Some of the poorest investment decisions in this market that I have seen have been made by REIN members.I’ll give REIN credit for the information they provide but it does come at a hefty price.
So why is it that so many have made bad decisions on property choice, and timing, ect..
One of the problems I have with groups like REIN is the artificial demand they create by organizing bus tours of buyers but that’s a whole other matter. It does create a Mcdonalds drive through approach to investing.
Information is always good. If REIN is your source great. I’m happy for you.
You maybe one of the few who has applied their principles correctly because many have made very poor property choices.
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Sheldon, I couldn’t agree more. Especially in the past couple of years there seem to have been much speculation going on by amateur “investors” who did not do their homework. Thankfully markets have way of correcting themselves nicely usually at the expense of the uninformed.
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“Campbell is concerned about novice investors not researching what they’re buying and what the market potential is. The most common mistakes are investing for the short term, getting emotionally too high or too low as markets move up and down and buying the wrong property.”
http://www.canada.com/saskatoonstarphoenix/news/personal_finance/story.html?id=354b2162-0982-4a65-93d9-259cb2f2a329
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Fact, Sheldon has been an investor himself.
Fact, A hefty amount of vacant property for sale as we speak is owned by realtors, many with more than one property.
Fact, Sheldon must be intimidated by the other blog.
Fact, the other blog was recommended as it has more informative and positive info for investors.
Fact, I have pee’d off and insulted sheldon several times with my opinions on overpaid unjustified realtor fees.
Fact, Sheldon is dealing with investors on a regular basis. He just is low key on this fact as investors are not to popular these days.
In closing people please don’t fall for the good boy image he is trying to create. It is bunk.
Sort through the info on this blog as you would the National Enquirer.
I enjoyed the article. Especially the part about “holding property long term:. That is basically the only type of investor with whom I will spend time. Too many people trying to “fix n flip”, and dont know what they’re doing. Many dont stop to realize this fact: They are buying property in an “Up-Market” right now, so no matter what the condition of the house, the investor is paying “Top-Dollar” for it. To make things worse, he is often competing against people who want a house to live-in. Those gypes of buyers will spend more money, since they are looking for a “home”, not a quick profit.
Keep up the good work…
Great post Sheldon. Couldn’t agree more with: “In Edmonton it seems that everyone forgot the risks that come with investing in real estate.”
When are we going to have a “Who’s Laura” post?
LOL
who is this lady laura, who is insulting the person whose blogs she regularly visits. have some thankfulness and decency
I just love the articles this guy writes, makes easy to understand real estate.
http://www.ozziejurock.com/insights/sun.asp
I have been an income real estate investor and manager for over 25 years, right back to the last boom and bust. My best advice is to be prepared to hold your investment for a long time and also be prepared to spend a lot of time learning to competently manage your property.
Fact, Laura is not a very happy “woman”
Fact, Laura rolls her eyes on bunny’s posts.
Sheldon, I have to agree with some of the people in REIN, and lots of the new investors in the Edmonton area. Perhaps part of the problem with REIN is it makes it too easy to find joint venture money-partners, or by doing only part of the due diligence gives investors a false sense of security. There is no substitute for your own due diligence, fact checking, and looking close-up yourself.
There are a lot of yahoos out there with too much money, and just enough knowledge to be dangerous.
Sheldon said….I respect investing, fundamentals and research. However selling their own properties by providing “advice” and “insider tips” for a fee is a great racket….
People, Sheldon is doing the exact thing with this blog. The purpose of this blog is contacts. Yeah I am sure he has fun with the blog but really it’s about contacts. This added with his realtor fees is also “a great racket”.
If you research real estate blogs and how to manage them you will discover it’s all about contact and exposure. See how many links just on this page that lead you to his property for sale or “free online evaluation”.
So if you are trying to understand the market, here is a lesson. Real estate blogs are about exposure first and everything else after.
Fact. Sheldon cried for hours and it took lots of hugs to get over laura’s hurtful comments.
Fact most times Laura doesn’t know what she’s talking about
Sheldon,
I knew that one would get to you. You are so easy to upset. As your blog posters are mainly renters(your target audience) in your position I would try to lure them in as well.
To be sure, I know what I speak of as often as you or anyone else here that comments. I see from facebook your education is no higher than mine.
You young man need to take it as you dish it. The blog is about opinions and everytime someone doesn’t agree with yours you get quite rude.
***Look further LP and you’ll see some specialized education particularly in the field of real estate. LOL…”My main targets are renters…you really are a nutter”
Fact: Laura insinuating that level of education having ANYTHING to do with knowing what they speak of displays she doesn’t know what she speaks of.
Fact: Large portions of the biggest nutters and quacks in the world have doctorates.
Fact: Many of the comments in Lauras post declare to be fact are at best speculative opinion based on limited information.
jesse,
r u a buddy of Sheldon’s?
Yes my opinions are speculative based on all the same info everyone else has.
I do however stand behind the “facts” posted earlier.
I don’t know Sheldon at all. Haven’t even talked to him in the comment section on his blog. But I found your “facts” pretty r******d.
edited
jesse,
which fact didn’t you like? I can make sense of any of them. so please do tell which you dispute or find “r******d.
BTW, you have made yourself sound R*****d just for using that word. We get feisty on this blog but we don’t actually call names and certainly not that one.
“Fact, Sheldon must be intimidated by the other blog.”
This statement is that word. Seriously, unless Sheldon has told you he intimidated by the other blog you cannot know this. I’m sorry but stating somebody elses disposition towards an internet blog as a “fact” is absolutely absurd.
“Fact, I have pee’d off and insulted sheldon several times with my opinions on overpaid unjustified realtor fees.”
Although I imagine this is likely, once again as a statement of “fact” it is absurd.
Not a single one of your statements of facts were actually facts. Most of them were opinions and some of them generalizations but not a single one of them were “facts”. So I stand by my evaluation of your post.
Jesse,
If Sheldon was not intimidated by the other blog, why did he go out of his way to name me and speak of it in his post, believe me he did not like that I directed people there.
Anyone who is a regular to this post knows i have insulted sheldon b4 so how is this absurd??
come on, can’t you do any better than that.
this is not a fact but it is my opinion….I feel some bloggers are in fact sheldon himself using another name, or buddies of his.
HAHAHA
Fact, Laura claims to have been abducted by aliens and believes the moon landings are fake and that the stargate program is real.
Fact, Laura is threatened by me greatly.
Fact, Laura enjoys arguing for arguments sakes and when her points are proven wrong she counters with illogical arguments.
Fact, Laura thinks insulting someone lends credence to her arguments.
See laura, I can do it too. Look at all my “facts” HAHAHAHAH.
Laura, just to be crystal clear. I am not disputing the truth of anything you stated. I am merely stating that in no way are the “facts”. When you call them facts it immediately detracts from the validity of anything you said as apparently you don’t even know the definition of “fact”.
jesse, how do you get crystal clear from that rant?
hahahaha. Too good. You make my day bright.
Oh man, was that entertaining.
I always go through this blog every once and awhile and this one…what was the subject?!
Why are you so paranoid, Laura?
This is Sheldons bread and butter and of course he’s going to get as many contacts as possible, and this is his blog!
Anyway, I doubt most of the blog posters are renters.
Signed,
House, condo and building owner blog poster.