Archives for 2020

Let’s Talk Goals

a goal wothout pa plan is just a wish

With school now back in session for 2020 and a lot of uncertainty in the air, the last thing on the mind of a lot of business owners in real estate and others is their goals for the last quarter of the year.

Just because it is hard to see the horizon, does not mean you can skip having a destination! Imagine for a moment the mayflower not having a destination of coming to Canada…” North America or thereabouts” would not have got our ancestors here to our great nation!

We often think of the things we DON’T want as opposed to what we DO want:

  • I don’t want to go broke
  • I don’t want to get divorced
  • I don’t want to lose my job

What you put out into the universe (or god of your understanding) is what you will get back – having your focus on your intentions and GOALS consistently will move you toward them. It has been said that “what you focus on expands” so if you constantly focus on what you DON’T wand then you will get more of that.

Having goals is very important, however often they wind up like resolutions – never accomplished and only done once or twice per year. Thinking about your goals ALL THE TIME and re-visiting them and re-evaluating them to get valuable data on how well you doing (or not doing sometimes) is key to making them happen.

We have all set goals that maybe we didn’t meet in the timeline that we set out….sound familiar? The conclusion our lizard brain can make in this scenario is that “setting goals doesn’t work, I never meet them anyway” which is of course not true just feedback that there are adjustments that need to be made.

When setting goals it is important to make them around things you TRULY want, have them be specific, time-bound (with a realistic timeline), and measurable. If these ingredients are not present then you have a recipe for disaster! When you can’t measure your progress you feel like your never going to get to the destination, when you set unrealistic timelines then running out of time/stress/anxiety will follow, and if what you are working on does not move your closer to something you are passionate about then how often will you make consistent action toward it? (not very often, just like the treadmill collecting dust of the gym membership not getting used).

We suggest having both short term and long term goals, in all areas of your life: personal, spiritual, health, work/business, financial, creative ETC – whatever sectors of your world that you want to improve, for some there are areas that are humming along great and no significant changes needed.

When creating your goals, be conservative with your goal/timeline – be kind to yourself. The motivation to keep working on them is derived from having confidence that through consistent action you CAN achieve them if you surpass them or crush them early then FANTASTIC! This outcome is much better than reaching your goal date and only being half done and discouraged – which is not helpful, remember to adjust and re-set the goal self- beatings are not conducive to motivation for goals!

What are your goals for the last mile of 2020?

Contact us and let us know, we would love to hear your vision for your world over the next few months.

To your success,

Tim Reid

-Respect The Hustle

What is your real competition?

What-is-your-real-competition

Recently I was reading a marketing book which told the story of Coke when they were preparing to enter the Russian market many years ago. Like a large well funded company they spend a lot of time and resources researching the market and customer behavior.

What the found was that the biggest competitor to their product was the CITY BUS! The fact was that a lot of Russian consumers did not have enough disposable income to enjoy a coke PLUS ride the bus home! I know that is hard to fathom today (this was many years ago) or in many developed countries around the world.

However the lesson is still just applicable today as it was then, you need to ask yourself as a real estate business owner (or any business) when you enter the market for the first time, launch a new product, or expand your reach into new markets: what is my real competition in this space?

The facts could be far from your assumptions, and we all know what an a** assumptions can make out of business owners with the best intentions.

To your success,

Tim Reid

-Respect The Hustle

Delegation Will Set you Free

4 people's hands in fists coming together, signifying teamwork and delegation

When we start off any business, real estate being no exception to the rules of course, we have to wear all the “hats”. These are things that the 9-5er may not have ever even thought about before such as:

  1. Accounting/book keeping (they are NOT the same thing)
  2. Sales
  3. Marketing
  4. Deal Analyiss
  5. Underwriting
  6. Negotiating
  7. Business Credit
  8. Corporate Financing
  9. Total Cost of borrowing
  10. Mangement
  11. HR
  12. Operations
  13. Creating Systems (critical)
  14. Time Management
  15. Social Media
  16. Traditional Media
  17. Branding
  18. Legal
  19. Building your power team

Seems overwhelming right? Well, that is OK because you do NOT have to go it alone. Even though you may not have the budget for full time staffing in many if not all of these areas in the beginning, you can outsource almost everything these days. I would suggest that even IF you did have the budget to hire a bunch of full time staff that it would be an ineffective allocation of resources.

Why? Primarily because you are learning what you are great at in the list of skills above, and what your time will be worth to your new business (or even existing) – and this is VERY important to know before you decide where to delegate/outsource/hire any role in your new empire.

Rome was not built in a day, as they say – great companies aren’t either, it takes some time to build them up and add head-count. I have seen countless businesses start and fail because they added a bunch of staff before they were ready and it killed their cash flow (employees are expensive) especially when compared to contractors. You can even rent board members, advisors, even a CEO for a few days per month to give the guidance you need for a fraction of the costs.

Now, when you are clear on what you love to do and really hate to do in your business (such as accounting/book keeping for example) then you can decide what to delegate, when, and to whom.

The whole reason we start a business is to have freedom, have fun, and provide value to the market place in a way that is fulfilling. How the heck can you do that if you despise a bunch of tasks you have to undertake every day? Simple: you CAN’T.

With that in mind, budget and map out on the calendar when you want to outsource making it a goal – having X increase in stabilized revenue then we can hire Y which will free up Z amount of hours for your the Entrepreneur to spend more time working ON the business and not IN it.

To your Success,

Tim Reid

-Respect The Hustle

Avoid Bank Penalties with Blended Mortgages

penalty notice

When real estate investors start out, normally they use their own resources: credit, down payment, bank financing. This is the common way we all get started in real estate investing, however without having knowledge of creative financing structures the penalties can bite into your profits big time!

Whether you plan to flip, RTO, or renovate and refinance the property how your mortgage is set up is key to maximizing your profits. The bank’s and most mortgage brokers will never tell you anything about how to use blended mortgages – why? Because it isn’t in their interest to help you pay less interest and reduce fees, that is how they make their money!

A blended mortgage is defined as using 2 or more different mortgage products to fund your deals. There are private mortgage and financing options that are available, further, a variable VS fixed-rate mortgage is important. LOC’s do not have penalties when paid out early, and fixed-rate/variable-rate mortgages have pre-payment penalties in almost all cases.

Some mortgages will allow you to blend/extend the mortgage and use it to purchase another property. However, this can be problematic because of the price difference between properties 1 and 2.

When you plan to refinance/sell the house in the short term, then finding creative ways to minimize that penalty is a wise thing to do. Using blended mortgages+private money to structure the deal is one of the things we specialize in at the phoenix group.

Example: a 300K property you could get a LOC for 65% of the value 195,000 and a fixed-rate mortgage for 15% (total LTV 80%) 45,000 to fund your project. Now, you have a penalty to pay on the fixed Mortgage of only 45K rather than the full 300k! This is one of the things the bank will never tell you, however with the right guidance they can be sold on these structures easily and effectively.

Stay tuned for more insider secrets like these.

PS: If you want to learn how this strategy and others work Contact Us to book a discovery call to have a chat on how we can serve and support your real estate pathway to wealth.

To your success,

Tim Reid

-Respect The Hustle

3 Must Reads For Real Estate Investors

learning estate

They have always said that readers are leaders! I totally agree with that in real estate investing and business – there are a lot of skills to be learned. There are a lot of real estate courses there, that they do a debatable job of teaching the real estate tactics, but what about the other business skills that you need?

I started to coach other real estate investors as a Canadian for Canadians because I learned how much I DIDN’T know after school and working my way through the corporate world.

Business is 80% the same for any industry, and having some great insights from people who have been there before will give you a head start and cut the learning curve by years.

3 Books that all Real Estate Investors should Read:

  1. Duct Tape Marketing – John Jantsch. This book takes the fundamentals of all marketing and makes it applicable to the small business in simple easy to understand terms
  2. The Lean Startup – Eric Reis. This book shows you how to take a product or service to the market efficiently without spending too much money.
  3. The 4-hour workweek – Tim Ferris. One of the best books on the entrepreneurial method and how to think like a business owner and not a technician

Coaching will also exponentially cut your learning curve, and help you replace years of learning, reading, trial, and error – Contact us to set up a discovery call to help us serve and support you to the highest level

To your Success,

Tim Reid

-Respect The Hustle

RRSP Myths Real Estate Solves

RRSP Money Stacks

We are told by banks, government, and traditional financial advice to save money in our RRSP’s because you get to grow your investments tax deferred. Now, what does DEFERRED really mean? What that actually means and many do not understand or even if they do it often gets forgotten…you pay the tax LATER is what that means.

Do you know what the tax rate will be in the future? I would suggest to you that it will be higher than it is today – during the great depression the highest tax rates increased. With the current state of the world I would bet your going to see increased taxes over the coming decades to pay for the assistance the Governments around the world have had to put into the economy.

When you start taking your RRSP funds out when you retire you will have to pay whatever tax rate that the feds decide to set at that time. Have 1,000,000 saved? That could only really be 600K or 700K you could actually spend – scary thought right?

I believe in Cash flowing assets – real assets like fully optimized single family homes (contact us to learn more about what that means) and multi-family assets. No matter the tax rate in the future, people will always need to have somewhere to live, and rental rates are tied to inflation protecting your earning ability.

RRSP’s only really benefit the owners if they are Self-directed and you use them for real estate backed arm’s length mortgages. This is something we help people with on a regular basis, after learning the TRUE COST of most mutual fund investments people are shocked at what a ride they are being taken on….in favor of the bank’s/mutual fund companies interest and not their own.

If you found value in this post please feel free to share!

PS: If you would like to learn more about how to analyze the fees your being charged on your investments/how to build a cash flow machine for generations through real estate. Contact us for a complimentary discovery call

To your success,

Tim Reid

-Respect The Hustle

Property Manager Nightmares

When we look at building a large portfolio of rental properties in real estate investing in Calgary or any market outside our “backyard’ you need to hire a property manager. Or do you? This was what we thought when we started in multi-family buildings.

The asset was out of town and not a logistical drive time to our home base – so we hired the largest management company in the town.  Things were good for a time until the real estate train started to fall off the rails BIG TIME! Turn over, repairs, lease-up fees started to steadily rise over just about a 1 year period.

There was a staff change over at the company, which normally should not have the impact that it did if they have good systems in place.  What I learned was that the company did not own any multi-family buildings and had the following bad habits:

1. Used their own repair company that caused a bunch of issues with repeat repairs

2. Every little maintenance item was being fixed with expensive trades for items that were often tenant caused or part of normal tenant maintenance.

3. Tenant screening was not done very effectively

4. Overtime being charged for non-emergency issues

Some of the things that you need to consider when looking for a property manager are items such as:

1. checking references and referrals from other building owners

2. Deciding when you actually need a property manager

3. what is their reporting process for repairs and items that come up within the building

4. What is the tenant screening process they use

5. How often do they inspect the units?

A management company that does not OWN real estate will never treat the building with the respect it deserves, because they only think like a fee-collection machine rather than how to keep the building running smooth – for the most part, not all management companies are bad.  I have just never found one that is highly effective that does not own real estate themselves.

With this asset, the solution was to hire a resident manager and shift the asset management role in the house, which is critical for the success of a multi-family asset.

Property managers left to their own devices can wreak havoc on your portfolio – you have to manage the managers even the best ones out there – because things can change such as a key staff member leaving and causing issues until they have a great replacement.

Have a hard look at whether or not you NEED a property manager, with all the modern advances in technology having a resident manager + an asset management plan could be a better way to manage your remote assets.

To you success

Tim Reid

-Respect The Hustle

National Turtle Day 2020

Turtle day, slow methodical ways, get rich quick

Today is national turtle day, which made me think (other than of my appreciation for turtles and all things nature) of how the life of a turtle with their slow methodical ways relates well to real estate. There are so many “get rich quick” schemes out there, and a lot of actors in real estate that make it look as if there is quick money in the game of real estate investing.

Can you make money quicker than some other methods in real estate? Of course, you can, however, that is not possible until you have education, experience, a good business model built with excellent systems! Flipping houses looks fast on TV, however in real life depending on what market you are in it typically takes 3-6 months to take a project from A-Z.

Could you flip 30-50 homes/year? Yes it can be done and I have associates that do this in CERTAIN markets in Canada and the USA – that takes a lot of help (staff) capital and credit + a lot of experience which results in a great system that works for your local marketplace – did that happen overnight? NO! It happened over years creating and refining the systems so that those real estate entrepreneurs could scale their business to that level.

When you get into learning any game in life, real estate, business, hockey, monopoly you will lose a few games learning the rules – I think we can all relate to that! Real Estate Investing is no different, you will have to learn the rules, make some mistakes, and get better as you go.  The best way to collapse that learning curve and avoid mistakes is to work with someone that has been there before and lost a bunch of games to get really good at it – real estate coaches in your area/strategy that you are interested in will really help you get results faster.

Real Estate like the turtle, is not going to make you wealthy fast – but it will get you there using consistent methodical strategies. Be like the turtle not like the hare of the children’s fable running around without the right tools/mindset to be successful.

To your success,

Tim Reid

-Respect The Hustle

 

Flipping Houses in Uncertain Times – Tips and Tricks

tricks,tips

There are uncertain times ahead for Calgary real estate investing, Investing in Alberta at large and around the world at this time.  One of the most popular strategies is generally flipping houses, which is on all of those damn TV shows that give people a “reality tv” view of the world which is 100% false!

Will, there be deals in this marketplace I have been asked a lot recently – I think there certainly will and we have been seeing those starting to happen.  When it comes to flipping homes there are some key ingredients;

1. Making money in the BUY

2. Keeping your budget under control – 15% contingency for the renovation and for the ARV

3. Manage the time so your project is done on time and back up for sale quickly

4. Ensure that your sales price is one that will sell quickly (below market for the renovated condition)

5. Don’t get emotionally attached to a sales price – you need to drop it until it sells.

The market will be unpredictable, there are a lot of factors for real estate investors that need to be considered:

1. affordability will be down

2. not as many buyers in the market

3. housing starts in Alberta will be way down this year

4. Inventory will move slower than normal

5. Value placed on renovations will be lower in some price points

Real estate is a business that is all about the numbers, when you are flipping a house there is not a lot of customer service, warranty, staff to worry about (until you are a much larger organization) because most of the operation is done with contractors.  When you are executing in this market space in Calgary especially that has been hit hard recently due to the pandemic of COVID-19 – you need to work with others that have been there before through different market cycles.

Is this your first foray into real estate, congratulations you are getting in at a good time – why? Because more money is made during a crisis than at any other time.  That said, the exit for the real estate will be more challenging, you need a rock star real estate agent and power team to help you.

We are here to help serve and support connecting you to the right resources to be successful in this area of real estate or any other you looking to learn or expand into.

Contact us here to book a time to chat

 

To your success,

Tim Reid

-Respect The Hustle

Is Sales a Dirty Word Still?

thingking, idea, settings, money

I was on a masterclass with Lisa Sasevich who is known as the creator of the “invisible close” and she was giving out the gold nuggets on this call for sure! During uncertain times we as business owners, entrepreneurs, and real estate professionals start to think …WOW I can’t sell right now people are scared!

There is certainly a right way and a wrong way to do sales in any world environment, that is for certain.  This all comes back to how much you believe your product/services HELPS PEOPLE! Certainly, there is a more delicate approach to your messaging, your tone during times of economic challenges – shift to educating and serving your customers/prospects in any way you can (which you should do anyway) even if that is a referral outside of your business.  No, this will not hurt your sales in the long run – you will get referrals in return by being helpful and a “good corporate citizen”

Now, when times are more challenging fear goes up both in the prospect and the company – fear of rejection, heightened emotions, all of these things contribute to call-resistance (reaching out to customers on whatever channel works for you) this is NATURAL. The trick is to surround yourself with positive influences like Lisa, other thought leaders like Brian Tracy master sales trainer – and many others to keep you motivated to PIVOT and offer new services consistent with the current needs of the marketplace.

There will be people that reject your offers, that is OK they are just not ready to take the journey to the outcome that the product provides – that has NOTHING to do with your personality, keep that fact in mind it will help your resistance to make those calls on your clients. Sales is not a bad thing, or a dirty word – nothing happens in the world without sales, relationships are sales, getting on the damn phone and calling your network, vendors, clients are sales – you have to sell yourself on doing those things.  Sitting on the couch and watching Netflix is a sale you made to yourself – too much of that won’t get you closer to your goals…but it’s still a SALE. The word can be neutral, negative, and VERY positive when your company brings value to the customer’s life.

To your success,

Tim Reid

-Respect The Hustle