by Teresa Leung | Jul 9, 2016 | Blog, Real Estate Investing Tips, Success Principles
“Teresa, why would I ever want to partner in a Joint Venture real estate deal and give up 50% of my equity, mortgage pay down and cashflow, when I can invest on my own and make 100% of the profits?”
Before I answer this question, let me explain what real estate joint ventures (JV’s) are.
In a nutshell, there are usually two parties in a JV – the Money Partner and the Working Partner.
The Money Partner is responsible for providing the capital which includes the down payment, qualifying for the mortgage, all closing costs, two months of reserve funds, money to purchase furniture (if it’s a furnished rental), and money to do renovations (if it’s a fixing and flipping type of property).
The Working Partner on the other hand provides the sweat equity and is usually responsible for finding the deal, negotiating on the deal, furnishing the property, overseeing the renovations, finding tenants and all property management duties. The Working Partner has often invested thousands of dollars and hours in real estate investment training, and should have a good track record.
The property is usually held for a set number of years or until the value goes up a certain percentage, or when the partners mutually agree to sell the property.
During the holding period, the monthly cashflow (money left over after all expenses and mortgage payments) are split 50%/50%.
At disposition, the mortgage gets repaid and the Money Partner gets reimbursed their entire capital contribution (down payment, closing costs, furniture, renovations, reserve funds, etc.). After that, any profits (or losses) are split 50%/50% as per the ownership.
So back to the question, why would anyone want to do such a thing? Typically, the Money Partner is a busy individual usually with successful businesses or careers they want to focus on. They want to be in real estate but they don’t have the time or inclination to become experts.
That’s where the Working Partner comes in. They have spent thousands of hours to become experts. They know how to find the deal, have the expertise to maximize rental income (sometimes even double of what someone inexperienced can achieve on their own!), and they know what to do to minimize risks. They deal with all tenant relations and provide monthly or annual financial statements to the Money Partner.
Word of caution: Whether you are the Money Partner or the Working Partner, it’s always important to do your due diligence on your partner as real estate investing is a long-term game, because at the end of the day both partners share the same investment.
What does each party gain from a Real Estate JV partnership?
For the Working Partner, they are losing time, but gaining the capital to grow their real estate portfolio using other people’s money.
For the Money Partner, they are putting in the money and they sit on their behinds and make money in their sleep, so they gain time.
Each party brings something to the table that the other doesn’t have. In other words, a JV partnership is a win-win!
by Teresa Leung | Jun 4, 2016 | Blog, Real Estate Investing Tips
One of the things I enjoy here at Point B Investments is watching clients, like the Storys, succeed in building wealth through strategic real estate investing.
Ross and Mary Story were interested in real estate investing as a way to create some additional income, but were nervous about being landlords. Now they own a beautifully furnished condo in Abbotsford which they have rented to their dream tenants.
The couple decided to start with a small condo as their first investment. I ran through some numbers with them to show that if they furnished the condo, it would have good positive cash flow and a healthy ROI.
Attracting the Ideal Tenants
Because they were hesitant to make the leap into being landlords, it was important for them to have good tenants. In order to accomplish this, they had to match the place to the people they envisioned living there.
Working within their furniture budget which we had worked out, they spent a few weekends to make their home look like a magazine photo shoot. Mary has an eye for photography and was able to take several beautifully staged shots of the suite.
They then wrote a killer ad for the place. Borrowing from existing written material about the building, Mary highlighted what they had done and described their ideal tenant as “a professional or a down-sizing couple.” The suite was fully furnished, right down to cutlery & face towels so that tenants could “move in immediately with just your suitcase and toiletries.” Within minutes of posting the ad they were contacted by a downsizing professional couple that ultimately became their tenant.
The Story’s received many more inquiries as well, which goes to show that there is certainly a big demand for this type of suite. But the price they set and furnishings they added eliminated many of the queries they didn’t want. For example, the sofa does not convert into a bed, so people who needed extra sleeping room didn’t bother contacting them. By furnishing the unit with the ideal renters in mind they were able to attract exactly the type of tenant they wanted.
They also found that it was a lot of fun putting together the perfect suite as a couple!
“We never doubted that furnishing made sense,” they told me, “and when that lease gets signed, you know the hard work was all worth it.”
I asked them if they had other words of advice for first-time investors:
“It’s scary to commit to that first property. But it makes a huge difference to have a realtor who understands your mindset and can guide you through the journey. Find someone you trust, then trust them. Teresa helped us gain confidence by guiding us to something small and new. The price was less daunting and we had the security of a warranty on all the appliances & fixtures.”
“It has been such a wonderful experience working with Teresa. We were initially hesitant and anxious to enter the world of real estate investment but with Teresa’s help, we were able to purchase our first property with confidence. I don’t think we could have done as well in our first venture without all of Teresa’s knowledge, patience, and experience to guide us. The property she found for us was perfect for newbie investors such as ourselves. We so thoroughly enjoyed our first experience furnishing and tenanting our first rental suite, in fact, that we are anxious to find our next property and will no doubt greatly benefit once again from Teresa’s expertise and guidance.”
Thank you, Ross and Mary!
by Teresa Leung | May 7, 2016 | Blog, For Inspiration
If there’s one thing I say over and over again to clients, it’s to make sure your investment generates positive cash flow.
Here’s an example of a savvy teen who understood this principle, so much so that Ellen Degeneres interviewed her!
Click on link to view: https://www.youtube.com/watch?v=GTTczC27fko
by Teresa Leung | Apr 2, 2016 | Blog, Real Estate Investing Tips
You’ve found a property you’d like to investment in, but there’s a good chance that the seller will receive multiple offers. What can you do to increase your chances of winning the bid?
Price
An obvious thing to consider is price. It’s a good idea to put in your best offer because you may not get a second chance. In some cases you may have to go above the asking price. Is this something you’re prepared to do? Calculate the highest price you can afford that will generate positive cashflow on the property. Let the numbers make the decision for you, not your emotions.
Subject Clauses
Every seller’s desire is to receive a subject-free cash offer. Obvious, not all buyers can offer 100% cash, but one thing you can do is include as few terms and conditions as possible to make it more attractive to the seller. You can also offer to get an inspection done BEFORE the offer deadline date (i.e., bring the inspector with you when viewing the property).
For buyers who need a mortgage, it’s important to get your financing pre-approved BEFORE even viewing properties. I recommend putting in the financing approval clause because in some scenarios, you may be approved for financing, but the property may not get approved due to a variety of scenarios such as upcoming special assessments for condo’s or the banks appraised the property for a much lower amount than your offer price.
Timing of the Offer
Try to put your offer in early, but keep in mind that sellers are not obligated to consider, respond or counter your offer, even if yours was presented to them first.
Stay in close contact with your REALTOR® when they present your offer in case you need to make a quick change if the seller counters your offer.
Cashflow Analysis – Stay Positive!
And always, always, have your cashflow analysis in mind when considering what you would do if met with a higher price counter offer from the seller.
Remember that this is your investment, and sometimes winning a bidding war isn’t worth it if you don’t remain cashflow positive with the property.
Are you ready to put your offer in on a property? Contact us and we’ll get you on the right track to purchasing a cash flow positive investment.
by Teresa Leung | Mar 5, 2016 | Blog, Real Estate Investing Tips
With a plethora of real estate investment seminar companies in the Canadian marketplace promising massive wealth, it’s hard for a novice investor to determine which is best for their individual set of circumstances.
In the pursuit of real estate investing success, I have attended over a dozen different real estate seminars during the past three years, from national Canadian companies such as the Real Estate Investment Network (REIN), Keyspire, CREW’s Investor Forum and Raymond Aaron to national U.S. companies such as Rich Dad Seminars and Peak Potentials Real Estate Intensive to Vancouver area local Meet-ups such as Women Investing in Real Estate (WIRE), Synergy REIN and too many more to mention here.
Sometimes I would see the same people at some of these seminars and we would joke around with one another calling ourselves “Seminar Junkies.” Some were very serious investors, while others have never really gotten anywhere.
As a seminar junkie, I discovered that not all seminar companies are created equal. Based on your investment goals and your current financial situation, one company will likely be more suitable over another.
Choosing a seminar that’s right for you
Being a seminar junkie isn’t the most efficient way to reach your real estate investing goals. On the other hand, you don’t want to miss a seminar that could prove to be very valuable for you as an investor.
To help you decide which one is right for you right now, I’ve highlighted two of Canada’s top real estate investing education companies, as well as my favourite local Meetups.
REAL ESTATE INVESTMENT NETWORK
The Real Estate Investment Network™ (“REIN™”) has been around since 1992. Founded by Don Campbell, one of Canada’s most respected seminar trainers and successful investor, REIN has been educating novice to veteran investors how to create a business income from real estate.
REIN Highlights:
- monthly evening education and networking workshops from 5:30pm-10pm
- monthly “Behind the Curtains” report of news stories relating to real estate and how to read between the lines to learn what the real story is
- monthly magazine mailed to you with investment area highlights and investing tips
- on-line member forum containing educational blogs, area reports, essential forms, and an interactive area where you can ask questions and other REIN members can answer them, recommended real estate suppliers to form your ‘Power Team’
- focus on economic fundamentals of geographic areas and top investment towns
- focus on positioning yourself as an sweat equity partner in joint ventures with money partners
- focus on where and how to find (and analyze) income properties
- lots of networking time during workshops to build business relationships
- annual 3-day real estate intensive workshop aka ACRE weekend
- optional coaching program
Cost of REIN Membership:
Primary Member: $199/month with 18-month minimum commitment
Associate Members: $99/month if you go under another REIN member who is a spouse or business partner
Optional Coaching: $99-$499/month depending on level of coaching desired, with $499 for non-members
Teresa’s Recommendation: I believe that Motivated Go-Getters would benefit the most from a REIN membership. Many of my mentors and business partners are REIN Members who’s making some serious money with real estate investing as their full-time business. If I were to compare REIN with a car brand, it would be the Toyota. Reliable, affordable with long-term results.
KEYSPIRE
Keyspire, formerly known as Lifetime Wealth Academy, started in 2012. The founders are Michael Sarracini and Scott McGillivray of HGTV’s hit renovations show, Income Property. Even though Keyspire is relatively new to the Canadian marketplace, especially in Western Canada where they launched their first workshops in Spring of 2015, this company is attracting a new market of Action-takers.
Keyspire Highlights:
- 3 ways to invest: 1. Syndicated mortgages 2. Land development 3. Real estate asset investments
- 4 ways to win: 1. Cashflow 2. Principal recapture (mortgage pay-down) 3. Passive Appreciation 4. Active Appreciation with renovations
- preferred real estate power team suppliers such as Investor-focused REALTORS®, mortgage brokers, lawyers, accountants, syndicated mortgage companies and land development companies.
- year-round 3-day Investor Summit with expert guest speakers and successful investors (one Investor Summit included with annual membership)
- pre-analyzed deals ready to go
- Mastery 90 Events: quarterly market update, networking and goal setting workshops in local member cities facilitated by Keyspire Preferred REALTORS® and Keyspire team member(s)
- online webinars for training in all areas of real estate investing from goal setting to property management and joint ventures
- video blogs with real estate experts
- online member forum for deal announcements and joint venture opportunities
- access to proprietary investing software that is not available to the public (helping members to easily analyse properties and return on investment)
- on going coaching throughout the year with unlimited property analysing
- networking time during Investor Summit and Mastery 90 to build business relationships
- annual curriculum with focus on reaching real estate goals
Cost of 2-Hour Introductory Wealth Tour workshop: $25 or free if registering online prior to the event
Cost of 3-day workshop: $1,997 for 2 people (spouse, family member, friend, business partner)
Cost of annual membership: $15,000 for 2 people
Teresa’s Recommendation: I wouldn’t be put off by the seemingly high cost of the workshop or the annual membership as the value that Keyspire delivers is worth every penny. I would recommend Keyspire for professionals, business entrepreneurs and company executives who currently owns under-performing investments with their banks or financial advisor and want to learn options with real estate that produces much better returns. Keyspire’s annual membership gives members access to some exclusive investment opportunities, preferred service providers who understand real estate as an investment, and outstanding real estate education. What car brand would Keyspire be compared to? The Mercedes Benz: Understated sophistication.
CREW’s INVESTOR FORUM
CREW’S annual Investor Forum is a weekend event that usually happens every March in Toronto. They have amazing real estate investment experts from all over Canada to teach novice to experienced investors specialized topics to create success in this arena. I’ve been lucky enough to attend one in Vancouver a few years back when they had the event here, and in Toronto last year.
Investor Forum Highlights:
- gold nuggets of information from successful investor speakers throughout the weekend
- national speakers travel to speak at the workshops, saving people money and time by having all the experts in one place
- there’s a luncheon, awards ceremony and plenty of time for networking with Canada’s best in a comfortable atmosphere
- Canadian, US, and commercial investment advice
- no annual fees, so anyone can attend!
- Cost of Investor Summit Weekend: $67 to $495 depending on whether you want to attend the full meal deal or just pick and choose the events you are interested in. Take a peek at their website for more info. http://theinvestorforum.ca/
Teresa’s Recommendations: Investor Summit is a great place to learn and to create your investment power team; from REALTORS, to Real Estate Investment firms, to Accountants and Lawyers who specialize working with investors. You get to meet some of Canada’s best speakers and experts, making this an annual event one that should not be missed! CREW’s Investor Summit would be like the MINI Cooper. Compact, and full of value.
Women Investing in Real Estate (WIRE) Meetup
WIRE is a REIN spin-off founded by Veteran REIN Member, Laurie Finnigan of Legacy Wealth Income Properties. It’s mission is to offer a safe and relaxed environment for like-minded women to be educated, empowered and encouraged to invest in “income-producing” real estate with the goal of achieving financial freedom and independence.
WIRE Highlights:
- monthly workshops with various expert speakers, successful investors and REIN veterans & service providers
- topics such as rent-to-own, how to analyse a property for long-term cashflow, to financing tips
- introduction to Legacy Wealth Income Properties’ investment opportunities
- networking with like-minded women
Cost to attend a WIRE workshop: $25 which includes snacks and drinks (sometimes a glass of wine). No annual membership required.
Teresa’s Recommendation: WIRE is great for women who enjoy learning from the experience of successful female real estate investors. The low entry fee and no annual commitments means you can go to the workshops when there’s a topic that interests you. I would say that this is for the budget-conscious novice investor who is looking for affordable investment opportunities and networking with other like-minded women. WIRE would be the Ford Focus. Super affordable offering great value, and made especially for a woman (because it self-parallel parks too).
Synergy Real Estate Investment Network Meetup
Best-selling author and commercial mortgage broker, Sua Truong, founded Synergy REIN, formerly known as Surrey Real Estate Investment Network. Its mission is to provide an alternative Meetup group that is fun, inexpensive and full of structured education in a fun, friendly and relaxed atmosphere.
Synergy REIN Highlights:
- inexpensive education for the ‘Newbie Investor’
- quality speakers from local experts to successful investors
- specific monthly topics such as how to be successful with furnished rentals, how to avoid a tax audit in your real estate investments by former CRA auditor, to inspirational success stories
- USA and out of province investment topics
- ability for attendees to pitch deals and joint venture opportunities at the end of each workshop
- networking with like-minded individuals
- bi-weekly workshops in Surrey and in North Vancouver
- snacks, dessert, fruit and drinks
Cost of Synergy REIN Membership:
- $100 per year – includes all workshops at all chapter locations (Surrey, Burnaby, and Langley)
- or $10 to attend individual workshop
Teresa’s Recommendation: Synergy REIN is unlike any other education group as there is absolutely no selling or competition among the real estate service providers who run this non-profit organization. They allow attendees to share and pitch their deals, and the speakers always offer great education on various topics. I recommend this for investors of all levels and even to members of other seminar groups to supplement their local content, learn of deals from other members and to network. Synergy REIN would be like the Toyota Prius. Just like the hybrid, Synergy REIN is fun, inexpensive, and gives good mileage.
Now that you have the complete low-down on the major real estate investing education companies and workshops, it’s time to take action and join one or a few of them to advance your education in real estate investing.
Teresa Leung is an active Investor and Investment Realtor® (Keyspire™ Preferred Realtor®) specializing in helping people grow their wealth exponentially through the acquisition of strategic real estate investments. She is also CREW’s 2015 Finalist for Realtor® of the Year. www.pointBinvestment.ca.
by Teresa Leung | Feb 3, 2016 | Blog, For Inspiration, Success Principles
With a new year comes an opportunity to reflect the past year’s successes and lessons learned, and set goals for the upcoming year. As a Real Estate Investor, I reviewed my life priorities, added goals associated with each of them, and defined a plan of action to achieve what I want for 2016.
Here are the 7 life priorities that I have identified for myself for 2016:
- Finances
- Self-Development
- Relationships
- Health and Fitness
- Spirituality
- Real Estate Investing
- Hobbies & Recreation
What priorities have you set for your life? Perhaps you have identified some that are similar to my list?
Identifying your priorities is a great first step, because it gives you an overall picture of what’s important to you in your life right now. The next step is to be clear about the goals associated with each, because that’s what gives you a sense of direction.
- Real Estate Investing – increase # of doors to 18 by end of 2016
- Finances – maintain same level of income in 2016 as in 2015
- Self-Development – finish commercial real estate program and one public speaking course
- Relationships – have #1 relationship with my teenager
- Health and Fitness – go on low carb diet and remember to take my Usana vitamins daily
- Spirituality – continue to attend church on Sundays and donate monthly
- Hobbies & Recreation – learn how to use my Sony camera and make an album of my favorite photos for Christmas 2016
When creating my goals, I purposely set out to make sure they are realistic for me. I didn’t want to make them too aggressive because I don’t want to stress myself out when trying to achieve them.
Most people stop here. But the key to achieving your goals is to have a plan of action. Below are the actions steps I have taken, or will take, to achieve the first 2 goals just to give you an idea of how it’s done.
- Real Estate Investing – increase # of doors to 18 by end of 2016
- Host Cashflow 101 evenings with fellow investors and network
- Research JV-worthy projects to promote to other investors and clients
- Finances: Maintain same level of income in 2016 as in 2015
- set lunch & dinner dates with all past & current clients
- exhibit and speak at minimum 7 Keyspire events
- contributing author in new book, “Tax Savings Bible” – done!
- Become Finalist for Realtor of the Year 2016 with Canadian Real Estate Wealth Magazine
- Continue writing for Canadian Real Estate Wealth Magazine
- Continue blogging and updating business website
You’ll notice that some goals don’t need any additional action, because I’m just maintaining what I’m already doing. For some of your goals, it’s ok to just maintain. For the goals that make you stretch outside of your comfort zone, you will need to add many action items and review daily, weekly and monthly and adjust accordingly.
Also, it’s best to tell others about your goals to make yourself accountable. You said it, so you MUST do it.
More importantly, I’ve share my goals and the process I go through because I hope you find this helpful as you define your own life priorities, set your goals, and start making your 2016 dreams a reality!
