HOW TO MAKE A MILLION IN REAL ESTATE
By Cindy Wennerstrom-Wroblewski, Investor and Consultant
In my 22-plus years as a real estate investor, the million-dollar question has always been “how can I make a million dollars, Cindy?” Well I’m about to let the cat out of the bag.
If you’re thinking the secret to becoming a millionaire in real estate is “easy,” or involves some kind of divine intervention or “luck,” I’m sorry to disappoint you. Devotion, dedication, perseverance, persistence and passion are the key ingredients to success in just about anything you do in life, so why would real estate be any easier? Yes, it’s true that real estate has surely made more millionaires than any other avenue globally, but that’s merely because housing is all around us. It can’t be avoided. It’s there for all to live in and for the less faint of heart to invest in.
Investing in real estate also involves a great deal of investment in you. To make a million it will take a million, well maybe not a million but a lot of hours of dedication to learn how to do it the “right” way. You’ll need to read books and magazines, just like this one, and attend networking groups and conferences devoted to encouraging collaborative growth within an investor community. This is where you will begin to build your “team,” of like-minded investors, all with specializations you don’t have, to assist you on your quest to become a millionaire investor.
Once you’re ready to dive in and make your first purchase, you’ll call on your investor team:
An agent to help you find the gem to start with
A home inspector to make sure you go in with your eyes wide open
A mortgage broker who specializes in investment properties and lending funds for renos
A rental investment design consultant, like myself at Oro Properties, to guide you on the most appropriate renovations to attract the best tenants or future buyers and get the best bang for your buck
A contractor to provide you with a renovation assessment pre-purchase and also do your renos
A plumber to do a camera drain inspection before conditions are closed – this can save you up to $15,000 on your purchase price and a ton of headaches post purchase)
An insurance broker who understands the specialized needs of investment rental properties
A lawyer to close your deal and protect you and your investment
A stager to help stage the suites post reno and pre-rental
A tenant find service company, like Oro Properties, dedicated to marketing and selling your style of housing to the best possible fit of a tenant
A property manager for out of town rentals
An accountant specializing in rentals to ensure you’re getting the maximum tax advantage
Your team along with you inner passion will be the foundation of your success. The players will change as your investment career evolves, but the fundamentals remain essentially the same. The key to your success – and sanity – is to remember that you cannot do or be an expert in everything. If it’s not your passion or area of expertise, hire it out.
Now that the fundamentals are out of the way, it’s time to have some fun. All deceptions aside, purchasing homes to renovate and rent is anything but easy, especially in the beginning. It requires tireless fervour to accomplish your dream. Slack off and so too will your millionaire mindset and bank account. When you’re in the game, you’re in it for the long haul. But what’s your game?
Whenever I’m asked what the “best” type of real estate is to get into my reply is easy: “what makes you feel the most comfortable?”
For me, a natural consequence of starting my investment career at the age of 24, while in university, meant that student housing was the most familiar and comfortable. I was a student, so of
course I understood their needs wants, desires and most importantly their budgets. It was a perfect place for me to begin. As I matured and evolved into a young professional so too did my tenant profile which morphed into young professionals, families, divorcees, baby boomers and the list goes on. While the clientele morphed, my investment vehicle remained exactly the same – bricks and mortar in the form of duplexes and triplexes.
In my experience and opinion, duplexes and triplexes provide the most advantageous exit strategy and are some of the most sought after rentals in the marketplace. I know what you’re thinking. What about the tens of thousands of condos that everyone seems to be fighting over? Let them fight. The millionaire in you will be made from bricks and mortar not an outline of air in the sky. Sure some may make their millions there, but it won’t be in a traditional way and I’m pretty certain it will take a lot longer. Remember that purchasing land or “pre-built” condos are considered “speculation,” not investing. There is surely money to be made in speculative purchases but it is a completely different beast and should be treated as such.
So why duplexes and triplexes over all the other options? There are many reasons I choose them but here are a few: