Archives for 2017

We live in a hyper-connected yet very distracted world.  Our minds are wired to take in information at all times (which in nature was a great asset to sense danger) and with so many information sources it becomes very easy to become distracted.

This factor leads to procrastination not necessarily because of laziness, but because of instinct.  If your goal is to have consistent motivation, focus, and be as productive as you know you can be, then this skill needs to be practiced just like learning how to play the violin.

Having a crystal clear direction as to where you want to go, why you want to go there, and what it would mean for you/family/customers once you get there is critically important to keeping you on the pathway to reaching your goals.

Airplanes are off course over half of the time on long trips, but the auto pilot keeps adjusting the plant back on course – clarity of your vision is what will bring you back on course in your business or personal life. Further, this clear vision will also allow you to measure your progress to see if the activities you are focused on are getting you closer or further away from that destination.

For instance, if you wanted to grow your real estate portfolio in Calgary, Edmonton, or across Canada to 100 doors in 5 years then you could break down that objective into quarterly and monthly milestones.  What is your vision for your company? Your family? Your community?

Let me know your thoughts.

Respect The Hustle,

Tim Reid

We are back with V3 of the flipping fundamentals series – in this edition, we will be covering how to market for deals in any market.  One of the fundamentals of any business is to have a product that you can sell at a profit, sounds simple right? In concept it certainly is, execution in real estate on this point is more complex than most.  If you were to create a company that sells widgets you would naturally go to the widget wholesale in your area and then create an account, buy inventory, mark that inventory up, then sell it to customers that came into your widget store.

In real estate, there are no wholesale warehouses you can go to in order to obtain inventory at a discounted price. (see rule#1 in real estate – always get a discount)  Therefore, you need to market to the public so that owners with distressed homes and/or distressing circumstances will contact you.  After all, it would be a better method to have the business come to you rather than you chasing the business!

There are a number of ways to market for these properties:

1. Direct Mail
2. Online via social media, website, google ads
3. Door knocking
4. Networking with realtors
5. Networking with mortgage brokers
6. Creating relationships with foreclosure lawyers or insurance companies (IE Genworth, home guarantee)
7. Kijiji and other free classified services
8. Auctions called sheriff sale Canada
9. Foreclosure listing services
10. Driving communities to look for neglected or vacant homes
11. MLS listings over 100 days on the market
12. Wholesale Investors

Because they’re a lot of ways to market your intention to buy houses to potential sellers, I would recommend that you pick 2-3 strategies to focus on depending on what best suits your budget at the beginning of your real estate career in Calgary or your local market place.

Before picking the strategies that you think will work best, you need to define your target market – which means in our context a market such as “ugly houses wanted” or “any condition as is welcomed” these would-be owners that have very distressed properties and may not be able to sell the property the traditional way due to its condition. (you can pick any distressed circumstance that you like to market to)

Once you have your target market (or markets) picked out then you need to craft messages that will resonate with those homeowners to get them to take action and contact your company.  In marketing there is a concept called test, measure, adjust.  Think of your marketing machine like an old FM radio: you pick a station you want (your client) you tune the radio to where you think the best reception will be (your marketing message to be tested) then you see how you did (the reception on the radio or your conversion rate with your customers) then adjust accordingly to get better sound on the radio or more calls and emails from your target market.

This concept is also known as A/B testing where you may have 2 marketing messages running at the same time to see which one is working better then you keep the top performer and then create a new message to test/measure against.

Once you are getting leads, you need to come up with a systematic way to:

1. follow up with the homeowners
2. view and estimate the properties
3. run the numbers to ensure profitability
4. make offers quickly and efficiently
5. Finance the property
6. Flip the property

It is common to go over 100 leads shortlist 10 make offers on 5 and 2 will get accepted and 1 of them will be a profitable deal.

Real estate is a game that is won based on the numbers, we will dive into that area in the next edition with some examples of deals, the process for due diligence, and more!

Respect The Hustle

Tim Reid

Balance in business is B.S – I have to come right out and say it.  Some will disagree withe me on this point for sure…and that’s OK.  I have read a lot of material on success, wealth, and making money over the years and I would have agreed with the “balance camp” in the past for sure.  When I was working in my career as an engineer for a large corporation I was always seeking the fabled “work life balance” that gets talked about often, yet rarely achieved.

I had higher than industry standard vacation days, and in almost 10 years working at that company more often than not I was scrambling to use them all before the end of the year! (it was a use em or lose em’ structure). How does one find balance in that circumstance? There are many careers that face the same dilemma, and we are becoming a nation of distracted/over worked balance seekers.

I feel that there is no such thing as balance in your career, business, life as a whole – I just watched a video by Grant Cardone one of the thought leaders I have a lot of respect for and his stance is that you need to commit to excellence in all areas of your life not just average results in many trying to keep everything “Balanced”. I have to agree 100% because I have made a lot of sacrifices since I chose to leave the corporate world last year, and the further I get away from what most people would consider “balance” the more opportunity I see, more contacts I meet, and the more successful by business becomes.  That is why I think balance is BS.

Respect The Hustle,

Tim Reid

Welcome back to the second issue! Once you have determined what part of the cycle your market is in and you see there are opportunities to flip some real estate in your local area, you will need to build your “power team”.  Real estate investing like all businesses are not a solo sport, even if you are a solo entrepreneur at the moment you still have a lawyer you consult with and hopefully an accountant to file your tax return for maximum tax savings.  Here are the main team members you will have to get on the bench to help you with your real estate empire.

1. Realtor
2. General contractor
3. All sub-trades if you intend to be the general contractor
4. Lawyer
5. Accountant
6. Book Keeper if you are doing a lot of transactions
7. Real Estate Appraiser
8. Property Inspector
9. Architect/Draftsperson for permits and drawings
10. Mortgage Broker
11. Insurance Broker
12. Joint Venture Partners
13. Hard money Lenders
14. Virtual Assistant
15. Marketing Consultant

Holy cow what a list! You may be thinking that is a lot of interviews and web research to find all those people, this does take some time – which is why this power team is included for our clients in the Alberta region.  Here are some best practices to find these professionals in your local market place:

1. Network with other real estate investors in your area that are already flipping houses successfully and ask for referrals
2. Interview each of the prospects and ask them how many real estate investors that they currently have as clients
3. Ask your realtor what percentage of real estate investors do they have as clients? (over 50% is a good indicator they know what investors are looking for)
4. Ask your mortgage broker what percentage of your mortgages involve private money? Have you worked with blended mortgages before? IE part private and part bank financing
5. Keep in mind accountants and lawyer’s advice is often at odds with each other…liability and tax savings can be a balance between the two– do what you feel is best to sleep well at night!
6. Ask for referrals from 5 sources for VA’s there is a lot of competition in the space, a US-based company that outsources to other centers is ideal here
7. Marketing company only by referral from other real estate investors – very competitive market space with huge companies such as real estate brokerages competing for keywords and mind share in the online world

Once you have your power team built it is time to start marketing for properties and looking for deals! Stay tuned for the next Issue where we will dive into where to find great deals in any market!

Respect The Hustle

Tim Reid

Are you interested in real estate investing in Calgary or other centers in Canada? Have you watched one of those many shows on TV and think that this investment vehicle could be the one that changes the trajectory for your financial future? If so, then you are in the right place – I will be writing over the next few weeks about the fundamentals of the flipping strategy.  This is actually one of the most difficult strategies there is in the real estate business because it has so many moving parts and variables.  That said, it is one of the fastest ways to build your capital base to be able to execute the other strategies in real estate such as rent to own and buy and hold.

The first thing to consider is your real estate market, this means the area that you intend to flip houses is – often your own back yard when you are starting out because building a power team and sourcing professionals (trades and others) that you can trust to keep your best interests in mind can be a challenge. After doing your homework, you may find that your own back yard may not be the easiest place to flip houses.  The strategy does work in all markets at all times in all areas – but real estate is very cyclical and there are certain parts of the cycle where flipping is the primary strategy that works well.

The first rule in all real estate is to make money in the BUY, which means you need to purchase the property substantially below market value, so that part of your profit is built into the deal.  This also allows for more contingency in your project budget to account for unexpected costs as you work through your renovation.  In markets that are currently showing a large number of foreclosures, divorce, economic downturn you will have more success negotiating below market value prices for homes.

You will need to check with stats Canada, local governments, and other resources to find out as much information as you can to determine what part of the real estate cycle your target market looks like it is headed into (or out of).  Employment is a good metric, and in-migration VS out-migration which will answer the question of: are more people moving into this area or out? We certainly want more people to come in!

The overall key to flipping is to be able to add maximum value (forced appreciation) to a property for the lowest cost, and then be able to turn that inventory as fast as possible – no matter what it takes. Once a system is built around these core fundamentals, you can scale hour business up to as many homes as you want for the year – also once you have the system down you can copy and paste it into another market to give you more options to operate in the most profitable area dollar for dollar!

Respect The Hustle

Tim Reid

There are many people in our society today that have followed the standard pathway of school-degree-career to find success, just like I did after listening to my mom (love you mom!) does that sound familiar? I eventually found myself on the slow ascent of the corporate ladder and it was not going as fast as I would have liked. So, I decided that there had to be a better or different way to earn an income (other than getting a second job) – reading countless books I found real estate as a common theme in all these wealth building books.  What I found was that there are 3 pillars of wealth that have been the common denominator for all highly successful people:

1. Real estate (the most common – think Trump, Marriot hotels, Hilton)
2. Stocks (warren buffet)
3. Businesses (Microsoft and bill gates, Steve jobs)

I didn’t know squat about picking stocks, however I had a small business before college so I decided that real estate was the pathway to greater wealth/financial freedom.  During my reading I got invited to a 2 hour seminar about real estate, which led to a 3 day bootcamp that showed me all the ways one could make in real estate.  Excited and a little scared I ventured off into the woods waving my flag around saying “look at me I’m doing real estate!” At this point I had some successes to be sure, some failures to go along with them and had a hell of a lot of learning and fun along the way.

I had not done a lot of personal development, mindset work, or seminars to support the most important thing in business/entrepreneurship – the 6 inches between my ears!  Once I put a bit more work into this area I realized that my real estate business was not doing as well as it could of because I did not have a well defined direction or WHY. Let’s be clear: I had financial goals, things that I wanted, life experiences that I wanted to achieve but a lack of a solid reason for why I was in business.

After attending a mastermind group and working with a coach I stumbled upon the true reason behind why I was doing what I was doing, what truly drove me forward and could help me stay motivated even during the harshest of storms in the business—- helping other people reach their financial goals so they can have the lifestyle they have always wanted and have more time off.  Coming to this conclusion has changed my business and life forever! I get up every morning excited to help people learn how to invest in real estate (and now other businesses as well) to get killer returns, and show those that want to get their hands dirty how to build a successful real estate business from the ground up faster and with less mistakes than they can on their own.

Having clarity around the purpose behind your business/career/life’s work filters down through everything you do, your marketing, how you interact with clients, customer service – love your customers! Taking a page from Scott schilling “Learn to love people or you shouldn’t be in business!” I agree with this statement 100% you have to adopt a customer first mindset to create true win-win outcomes.  What is your why? Email call or post to our socials and let us know what your why is! I would love to hear your stories.

To your success,

Tim Reid

Having a property that cash flows enough is a tricky proposition in the Calgary marketplace – specially now with the depressed economy rents are down and that is a fact. So what do you do? Get creative on how you can generate extra revenue streams in this article https://www.biggerpockets.com/renewsblog/earn-more-money-from-rentals/?utm_source=newsletter the writer on bigger pockets provides some interesting ideas to get the creative juices flowing.  The parking idea I have seen for a lot of years when I was younger going to flames games near the saddle dome where parking was scarce during game nights.

There are a lot of creative things that you can do to offer add-on services to your tenants, many will pay more for perks such as dry cleaning, landscaping, housekeeping, think of new and innovative ways to help you tenants with things they need such as tax planning, or partner with a chef and offer a tenant cooking class – the sky is the limit.

To your success,

Tim Reid

Entrepreneurs have an almost mystic- risk loving, 9-5 schedule smashing persona in the eyes of the majority of regular society. What do they really DO when they are staying up late toiling away on the next big new idea?

The basic fundamental result of what Entrepreneurs do with all that risk taking and effort is this:
transfer VALUE to the marketplace. Most would say that they “run businesses” “create products/services” – while that may be true they are ultimately providing value to their clients in the market. After all, if that product or services does not create consistent value for the client – then it won’t last very long in our highly critical/competitive market place.

The value that business owners create could be something new, something innovated, or a new method of delivering a product, or even the product of someone else in a unique way (affiliate marketing).

Value is not just the result that the product brings to the customer – it also encompasses a host of other things (to name a few):

1. service
2. customer experience
3. trust and loyalty (starbucks reward card a great example)
4. value exterior to the product result (confidence from a new suit)
5. Entertainment or piece of mind

Modern Entrepreneurs have to provide all of these things and more – working 60-95 hour work weeks while making their best effort to have health/happiness at the same time.

Large companies make a lot of great products – but they have over the last number of years started lacking in some of the areas listed above.

Value means something different for everyone – the Entrepreneurs our there are listening a lot closer than most large corporations out there.

What is the Value you are really looking for? Let us know: We are listening!

To your success,

Tim Reid
-Respect the hustle

The phoenix group was very excited to be asked by GlobalTV News to do an interview to discuss the foreclosure increase in Alberta recently! We are seeing an up-tick in foreclosures up in the great white north in Edmonton. This follows the historical trend where the volume of foreclosures will be highest in Calgary due to the exploration/engineering/geological positions being the first to go in an oil downturn, then the front-line jobs are at risk 6-9 months down the line.  The most important thing to remember – is that there is help out there for struggling home owners, before the banks get involved companies like ours can help with:

1. Education on your options
2. provide foreclosure rescue
3. pay back payments/provide a quick sale
4. help with moving costs+ first/last months rent
5. many other services to help you move forward in a positive direction

Full article and video here:

Foreclosures in Alberta up about 25% annually for past 2 years

We were honored to be Interviewed by CBC news to get an update on where foreclosures are going in Alberta recently. Indicators show that the market in Calgary has likely reached the lowest point (no one can really know for sure) and that there is still a long way to go before things are business as usual in the Alberta market. Recently we have seen a month-month difference of 10-15% in foreclosure bases requests to our firm, further details here to read full article:

http://www.cbc.ca/news/canada/calgary/foreclosures-alberta-calgary-rising-2017-1.4108646