How rentals can awaken your you to your DREAMS!

How rentals can awaken your you to your DREAMS! I emigrated to Canada in 2007 from the UK and my previous life I was in the Royal Navy for just short off 11 years serving all over the world including the Bosnia conflict, Iraq and Afghanistan conflict before I was injured in service and pensioned out. I did a couple of years working while I was waiting to emigrate and fulfill a boyhood dream of moving here. I spent a summer on Sproat Lake on Vancouver Island, with the crazy hot temperatures of the Alberni Valley and the jet skis, partying on all these cool boats as a young 16 year old, I said to myself, “I am going to live there one day.”

Needless to say I emigrated with a wife and two kids at 30 years old, I didn’t bring a lot, I basically had half. 20’ container with kids toys, a couple of smaller furniture items and a few thousand dollars. At the emigration seminars we attended in the UK they would say you need at least 100-200k to emigrate, and I guess you would to do it comfortably, but I had no where near that and I wasn’t letting no money stop me fulfilling a dream!

Fast forward 18 months and I had a decent job, had got my permanent residency and could now get a mortgage, so the line of credit I purchased my primary residence with could be paid off, and I could drop down to a nice 5.7% interest instead of what I had been paying close to 8%: The house we bought had increased in value so I pulled a little equity out, bought a second home with 5%% down, a town house, decent three bedroom in decent area. Now what made me buy a rental? In the Uk as I moved around with the Navy and life a couple of moves and the benefit of hindsight, I learned that I would have been better renting where I moved to, and rented out the home I had owned from a cash flow standpoint instead of selling up and moving each time. Not understanding cash flow at this point in time just realizing I would have been less Broke. Needless to say I had developed somehow the plan that if I can buy 3 rental houses over the course of my working life, then pay them down over the 20 years I had left working, then with my pension and income from three rentals I’d be ok.

Now I’m a pretty handy guy so when I bought the first Canadian rental I figured I could fix it all, manage it and the $53 positive cash flow would be the gravy I get to keep for all my effort! In the back of my mid this was also the 15 year plan to remortgage and pay for the kids to go to college, and if they didn’t go, a Porsche! About 12 months after owning this the value had increased by about $20k so I had some equity and I was a rock star, a real estate mogul, I’d picked a winner, it paid all the bills, it was a home run, or so I thought! Then I needed some cash, with everything tied up and leveraged out and too much month left at the end of the money, how was I going to pay for a Christmas holiday back to the UK (where everything is double) and enjoy Christmas. I didn’t want to sell so I was racking my brains on how to get the cash out since I was leveraged I couldn’t borrow more, then like a flash of light I had an idea! I approached my cousin who also had a rental himself but was considering getting another. We were already in another business together, and still are, so we had a trustworthy relationship. My proposal was, there was a total of 30k equity in the property, if he bought in for 20k and gave that to me, then he would get first 20 k on sale and 60/40 anything after that, so basically if it sold the next day he would get his 20k back plus another 6k and I would get my original deposit with no more as I’d already been paid out. Seemed like a win win. With our kids the same age the college idea seemed to work for him (I didn’t mention the Porsche!)

After the Christmas in the UK which was great, I was reflecting and thinking wow a year ago I put 6K down then a year later I got 20K AND still owned the house, that was over 300% return on my money and I still owned the house. This blew me away, this was a game changer for me and my mindset, not knowing about joint ventures or renovate and then selling to yourself and your joint venture partner and getting returns on your money, cash in hand and still owning for the big picture, long haul stuff. I was blown away, I started going to seminars, some were great, some not so great, I joined REIN, but did nothing except listen to the CD’s in my car, I didn’t do any of the things they talked about, didn’t attend any conferences or meetings of REIN, just listened and absorbed on my 6 minute commute to work. So really did nothing. What did I need to know I was on the road to freedom, so I thought. Quickly realizing I couldn’t get any more mortgages and I had no more down payments, we spent that on Christmas and visiting family in the UK remember? Basically I did everything I would tell me not to do today. Yet it was all part of the journey I had to take. Fast forward to today I have had quite the journey with ups and downs then finally realized that to grow that business, the real estate one, I needed to change; I was at 5 rentals and things were not organized how they should be. This all started a few years ago, in July 2013, yes I could struggle through and get results out of sheer tenacity, or I could realize I am not really that smart and copy those that are. I started doing things properly, treating it as a business and I also became what I call ‘active’ in REIN, started using the systems, being engaged in the real estate community and really learning to master my craft.

Since that shift my business has grown exponentially, and is now what I like to call a business, supports my lifestyle, and I am grateful for the path it took me and the lessons I have been taught along the way that humble you. It makes you a better servant to others like your joint venture partners, your lifeblood clients, the tenants and everyone who relies on you every day. As of writing we own 15, used to be 17 but sold a couple in the recent upswing we didn’t want to hold as they were looking like problems in the future and didn’t match our plan. We also manage all our units and the units of our joint venture partners so we have a property management division that deal with that, has a couple of shareholders working full time, employs a multitude of sub-contractors when we are renovating our properties and installing suites and project manage those ourselves. We have found a solid system that works even when the markets are not increasing at all, and vacancy is high using our systems we can still achieve comfortably annual returns of between 15-25% for our joint venture partners. What we do has come from trial and error and also listening to many experts about various parts of the business and constantly refining. The biggest game changer was when I started to implement REIN’s systems, it really helped me get the groundwork fixed and corrected, creating a solid foundation so now we can go back into a growth phase instead of survival phase we had plateaued at. I am also now surrounded with like minded people and attending the meetings, going to the annual and monthly meet ups with all the fellow ‘nerds’ it keeps me fueled to keep going, keeps my tempo and my state optimal. Not everyone will have an awakening, it may be more gradual, or actually to be true I have lots of them all the time, however that one joint venture, even though I didn’t realize what a joint venture was, really was an AHA moment.

What were yours?

If you haven’t had any in real estate yet perhaps get yourself connected to people who are involved and succeeding and believe me, when you see what CAN be done, even though everyone else tells you it can’t, then you will have an awakening of your own.

To close off, I was told by many not to consider buying a house on the waterfront on Sproat Lake because I’ll never be able to afford it, after my awakening it was just a matter of time, and almost 22 years after I had spent the summer on the Lake dreaming, my partner and I bought a waterfront property on Sproat Lake opposite where I had spent that summer! What dreams do you want? Is it worth getting awakened to achieve them? What can you do to become awakened? Only you know the answer. If you would like help to achieve your dreams then perhaps we can help you, reach out and connect we’d be glad to help!

#rentalhouseprofits #RevNyou #rentalhouses #GarySpencerSmith #PortAlberni #welath #investments

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