6 Lessons From The CRE Investor Forum

I got back recently from the Canadian Real Estate Investor Forum in Toronto, and all I can say is… WOW! What a great event it was — world-class speakers, real estate investors, and motivational speakers all rolled up into one event.

I thought I’d give you a little recap on what happened during the weekend, and the top lessons I learned while I was there.

Friday (Day 1)

Every time I sleep in a new bed while traveling, I don’t get a good night’s sleep.  This time was no exception, as I was up until about 3am and I woke up at 7:30 to prepare. Fortunately the crisp morning air and 4-block walk to The Carlu woke me up a bit.

Arriving at the main hall around 8:45, it was already buzzing with activity.  I checked in, grabbed some breakfast and a tea and moments later… Don Campbell tapped me on the shoulder to say hi.  I hadn’t see Don in many years, so it was good to catch up a bit (although I’m sure my half asleep look left him wondering  if I’d be able to stay awake all day)

 

Frank O’Dea

The first speaker of the event was Frank O’Dea, who created the highly successful business the Second Cup and Proshred.  I’ve heard Frank speak before on an audio CD interview, and I truly enjoyed listening to his wisdom.

But seeing him live was such a different experience!  He truly is an excellent speaker, sharing his story of personal struggle from the streets of Toronto, all the way up to creating multiple successful businesses.  What most impress me though was his dedication to helping others, as he described some of the atrocities he’s seen throughout the world and how he’s started foundations to help people in many countries.

Lesson #1: His words still ring in my mind and give me goosebumps just thinking about them…

Don’t tell me you can’t make a difference

Don’t tell me you can’t change the world

It was an incredibly inspiring way to start the morning, and I think the #1 thing I learned from him was that he made a difference because he networked and talked to people, not because he had a great idea.

Frank lives in Ottawa and I hope some day to be able to take him out for a meal and hear more about how he’s making a difference in people’s lives.

 

Peter Kinch

I saw Peter Kinch speak many years ago and he is definitely a mortgage broker who knows his stuff.  He’s based in British Columbia, but his team can do mortgages for investors all across Canada.

He spoke about the new government rules for CMHC insured mortgages and where he thinks interest rates will be going (nowhere in the short term during the elections).

Lesson #2: An interesting statistic he told us was that < 5% of the mortgage market is for real estate investors, but over 70% of the mortgage fraud and default comes from that group!  No wonder banks are so strict with their lending rules to investors.

 

Don Campbell

I hadn’t seen Don speak in many years, so it was good to hear a refresher on his strategies for identifying up and coming real estate markets to invest in.

Lesson #3: I was particular impressed with the new way he boiled down all the complicated statistics into a simple diagram that showed how certain factors affect (and can almost predict) where real estate prices will go in any given market. For example,

  • GDP growth  feeds jobs growth
  • Job growth feeds Population increases
  • Population increases feed increased Rental demand

and so on, with the end result being higher real estate prices.

 

Julie Broad

I recently bought an iPhone 4 and I brought it with me to the weekend event.  I started taking notes on paper for the first few people and then I thought, “Why not enter them in my iPhone directly?”  It worked great for awhile… all throughout Julie’s presentation and half of Philip’s (the next speaker).

But somehow they all just disappeared!  It was a little annoying to say the least, considering I’m a ‘techie’ and I know the difference between the ‘Save’ button and ‘Delete’.  In any case, my comments on Julie’s presentation are from memory, so bear with me (and Julie — sorry if I mix anything up!)

 

Julie told her personal story about how her and her partner Dave (now her husband) bought a property in southern Ontario, which eventually became a real nightmare for them both.

Only one property manager in the area would manage the property for them, and it turns out that not only was he stealing cash from them, he was actually arrested for assaulting one of the tenants and the property became known as a crack house!  They eventually sold the property, but not without the stress from the situation causing them to break up for over a year.

I can completely identify with Julie and Dave regarding the ‘crack house’ situation — a past property manager neglected one of my properties so badly (and let in some questionable people) that the Ottawa city health department closed down the unit.  I’ll save the details for another blog post 🙂

Lesson #4: One tip I remember was that rental real estate is NOT passive income, and as soon as she changed her thinking about this, their portfolio and profits began to improve.

 

Philip McKernan

I missed the beginning of Phillip’s presentation and of course lost half my notes on my iPhone. Some of this is from memory, so bear with me (and Phillip, please correct me if I’m wrong)

Phillip spoke about international investing and how many investors don’t know the reason they’re investing in the first place.  Giving an example close to home (the US market), he said investors should know WHY they’re buying property up front.

Lesson #5: If you’re buying a home in Florida because it’s cheap, that’s not a good reason. If you plan to hold it as a vacation/retirement property, that’s okay, but don’t expect it to go up in value for awhile.

If you’re buying it as an investor, make sure you have a team in place and know what you’re doing.  In fact, he’s written 2 books to show Canadians how to invest in the US — South Of The 49, and Fire Sale.

 

Mark Weisleder

I missed most of Mark’s presentation because I was out in the hallway networking with many of the exhibitors, some of whom I hadn’t seen in years.  But I was able to catch one interesting piece of information…

Lesson #6: He’s seen some investors put the following clause on Schedule A of their offers using standard realtor forms…

Seller agrees to discharge any mortgage, lien or

encumbrance at his expense on or before closing

The problem with this is that it overrides the standard clause in the realtor form which includes an exception for things like utility easements.  He was cautioning people not to allow this clause, as it allows the buyer to get out for any reason.

The reason for this is it’s impossible to fulfill because utility easements can’t be discharged.  I assume he meant you wouldn’t want this if you’re selling property because if you’re buying, being able to back out of an deal for any reason is a good advantage to have. 🙂

 

That’s it for the Day 1 summary.  The Day 2 summary should be coming out shortly, and I’ve got more lessons learned, so stay tuned.

 

If you attended the Investor Forum, what lessons did you learn on Day 1?

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Paul Blacquiere

Founder and Editor at Spirepoint Wealth
Paul is an entrepreneur, investor, speaker, educator and publisher. He is founder and editor at Spirepoint Wealth, a financial education company dedicated to helping people improve their finances, create more cash flow and build long-term wealth.
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  • Julie Broad says:

    Paul – great summary!! Sorry about the iPhone troubles though!! You picked the biggest point I tried to make in the presentation so I am pretty happy it sunk in – even without your notes!!

    Mark also had a great list of things that were red flags when it came to tenants … I, unfortunately did not take notes but I remember a couple were:
    – avoid tenants with stories
    – avoid tenants (women) that flirt or flip their hair

    🙂

    It was great to meet you at the event!!

    • Paul Blacquiere says:

      Thanks Julie! It was great to meet you too.

      Overall I love my new iPhone, but this is the first time it just deleted something. I thought that only happened on Windows… go figure! 😉

      I am a big-time note taker when listening to presentations. I find it helps me remember more, especially if I review my notes afterwards.

      However, I didn’t need to write down that lesson about real estate being ‘passive’… deep down, I already knew it! I just hadn’t heard someone verbalize the way you did, so it stuck with me pretty easily.

      Thanks for the tips from Mark. I learned about those a long time ago. I had a friend, a young guy, who bought his first triplex right beside mine. I guess one of the female tenants liked him and he made the mistake of giving all the tenants his cell number.

      For months he told me stories of how this tenant would call him at 2am to see what he was doing, ask him when he’s coming by, etc! He eventually sold the building at a loss I believe… he should have just change his cell number, it would have been cheaper 🙂


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