In 1996, after 25 years of very hard work in two careers with the benefit of the guidance of 3 mentors, I sold out of the business I was in and made my big move. And within 18 months, at a point when we were ‘that close’ to reaching our financial independence, the bank put the company into receivership, and just like that, all the capital we had was gone. We still had some RRSP savings and a home with a LOC on it. So after a period of depression and then a couple of years working for two firms, I started my 3rd career in 2002 by making a (scary to us) move into owning, developing and operating investment real estate, something I always wanted to do but knew nothing about.
There are many ways to invest in real estate, from active to arm-chair and everything in between. And we did them all. We purchased 90 residential properties in 6 years, renovating most of them. Our strategy was to operate on a 2 to 1 ratio - so we flipped 60 properties and kept 30 as long-term rentals. During that time we also purchased 7 apartment buildings, with partners, which we then renovated substantially, converted to condos and then sold the individual units. In 2004 my wife joined the effort full-time and by 2007) we had reached our goals, and that was because we worked at it full-time plus, and because we were lucky enough to be investing during boom times in Alberta. Normally I would say this would take 15 years at minimum, and often more like 20-25 years, assuming one approached it as a part-time endeavour, meaning that it would swallow up about as much time as people spend on an active hobby.
My Work with Investors Over the Years
Since my start in real estate back in 2002 I have worked with literally hundreds of property investors in as many roles as you could imagine. I have partnered with, coached, advised, loaned money to, and provided mortgages for in my capacity as Mortgage Broker. I have crafted work-out plans for investors who were about to hit the wall, which sometimes meant connecting them with experts in various fields to address specific needs. In doing all this I learned that investors often bought the properties that did not serve their interests because they didn’t truly understand how to analyze the financial potential of properties, and also that most did not have the business training needed to properly manage their cash-flow. So with those lessons in mind I co-wrote the REMA Real Estate software suite during 2007-2008 to assist investors with analysis of prospective purchases, cash-flow projections and management of their existing properties. Then in 2009 I became a Mortgage Broker specializing in property investors’ needs. That move allowed me to continue my work with investors and actually be paid by the banks for my efforts, which made it a win-win.
Since 2002 I have provided Consulting Services for Investors and Small Business Owners primarily around business and real estate analysis, budgeting, projecting and planning. For example, I developed a sophisticated financial analysis process for investment property portfolios that allows me to then walk investors through what my analysis reveals to find opportunities to improve the performance of their portfolios, and to make those decisions within the context of their long-term life plans. I am always open to a conversation to see if there is a way I can make a meaningful contribution to the performance or direction of your business or real estate investments.
Why do People Buy Rental Properties?
I can safely say that nearly all the investors I know of buy rental properties because they have decided that will be their path to providing at least some degree of financial independence. But in working with investors as I described above, I learned that very few of them actually had a clearly defined set of objectives, and that even fewer knew how much income they needed those properties to generate to create that FIL, or how many properties and of what type it would take to generate the required income. So I took to asking investors how much income they needed at their point of financial freedom, and nearly every single one answered with exactly the same figure - $10,000 per month! So I decided that I had to create a process to address this gap so that investors could define clearly the financial elements of both their goals around financial independence and of the strategies they would use to achieve those goals. And that brings me to Garth’s Roadmap to Financial Independence. So let’s take a look at a summary of how my process will allow you to clearly define the following, with each section unfolding in a clear and simple step-by-step process.
THE VISION FOR YOUR FINANCIAL INDEPENDENCE
INCOME & COST ANALYSIS
THE ROLE OF INVESTMENT REAL ESTATE IN YOUR PLAN
CAPITAL FUNDS REQUIRED ANALYSIS
HOW WOULD THIS APPLY IF MY PLAN DOES NOT INCLUDE INVESTMENT REAL ESTATE?
For those who want to generate the income in ways other than investment real estate there are experts in many fields who can help create those plans, but this process through Parts 1 & 2 will get you to a point where you know what you need to generate, and that is the key to then determining how to go about doing it.
- Jim Osterreicher, 2015
- Robert McLeod, Realtor and Managing Partner, McLeod Project Marketing, 2010
- Chris Pryce, Client , 2015
- Barry McGuire, Ritchie Mill Law Office, 2016
- Jim Hassett, Partner, Hassett & Reid LLP, 2010
- Norman Glover, 2013
- Tony La, Client, 2013
- Linda & Rod Nagata, 2015
- Wade Fenner, Edmonton, 2015
- Thomas Beyer, Properties Group, Majority Owner, President, CEO, 2010
- David Sanbrand, Client, 2015