Ho Hum, Another Real Estate Book That Wants to Make Me Rich?
The vast majority of real estate books usually centre around either selling you on a specific strategy or process that only the authors have mastered (and that you need to pay thousands of dollars to really put to use yourself) or are merely a big picture discussion about how real estate can be a great asset class. It’s nice to know that some people make money with real estate and that mortgages are a decent way to use leverage most of the time, but it doesn’t really tell me the nuts and bolts of how I’m supposed to do anything like that.
This book is the exception to the prejudices and stereotypes that I had about the niche – and it is written with the Canadian market in mind! Julie Broad is the author, and if you’re not sure about her financial chops you’re free to look her up and see that she has an MBA as well as some pretty good experience within the industry. The interesting thing about how this book got into my hands is that Mrs. Broad didn’t just send me a copy and paste generic email asking for some very juice, she actually took the time to read and comment on a recent article I’d written about investing in building new townhouses to rent in Saskatoon. I’m fairly certain she’s up for answering more questions if you ask her on the comment thread.
So anyway, what makes this book different? Well the first thing you realize is that this woman isn’t just selling you the dream. She is right up front with of the biggest headaches she has encountered in her time dealing with real estate. I’m not talking about having to install a new toilet, I mean stuff like being stolen from by a crooked property manager, ending up in criminal news headlines through no fault of her own, and dealing with insane knife-wielding clients (it was a butter knife – but still!). I think this is commendable and it gives the book a huge degree of credibility in my eyes.
At times the raw honest Mrs. Broad brought to the table made me seriously question if this is an asset class I want to touch with a 10-foot pole. By the end though, the common-sense strategies she recommends really ring true to me. Her preferred investment style of becoming an absolute expert on a relatively small geographic niche (as opposed to looking in a bunch of different markets for “great deals”) is so simple and yet it’s the first time I’ve heard anyone espouse this philosophy.
Anyway, I won’t spoil the whole book, but here are my favorite parts:
- “The Five Biggest Myths in Real Estate”
1) Real estate gives you passive income.
2) Once you own a certain number of properties you will be successful.
3) It’s all about the numbers.
4) To reduce risk, all you need is a corporation.
5) Real estate investing is easy.
- Only buy properties with a CAUSE
C = Convenience
A = Attracts Families
U = Under the Average Price
S = Starter Home
E = Economic Fundamentals
- Becoming an expert on a specific market area is a great asset. If you know the main industries of an area, where the schools are, what the demographics are like, the local politics, etc. Then you can be much more efficient and effective in your dealings. It strikes me as extremely logical that focusing almost exclusively on one geographical area that you will know better than anyone else would give you several large advantages, and would simply allow you to be very confident about your value determinations when it came to properties.
- The fundamentals on how to make a real estate deal. Forget all the fancy income projections philosophical real estate strategies – what about the raw basics on how to draw up the perfect offer to purchase? How about an introduction to what a real estate negotiation often looks like? This section was perfect for a beginner like me.
- Dealing with “your team”. Mrs. Broad explains what to look for in a great mortgage broker and how to develop relationships with the various people needed to get you access to money. One other valuable tidbit was that “your team” is never set in stone and forgotten about as a static entity. It is constantly changing due to people you’ve worked with in the past moving on for various reasons.
- “Tenants, Toilets and Tons of Fun With Property Managers”. This chapter was a really open and honest look at what can go wrong in this area, and how it can radically affect your whole business venture (as well as your sanity). To be honest, since I have a low threshold for this part of real estate investing (the pain in the ass part), this basically solidified my perception of myself as someone who would need a partner that was better at this sort of thing.
- Creating Your Own System for Success. Other real estate presentations I’ve been to have tried to make a lot of money out of selling you on their “magical system” that is the only one that can possibly work – but luckily it also works in every single scenario. This book advocated for a far more nuanced view that can be boiled down to the idea of finding what processes work best for you, and then applying them consistently in order to stay efficient and organized. Different people work best in different ways, but determining what system fits your needs strikes me as very practical.
The book is available on Amazon.ca and I highly recommend checking it out if you’re considering taking the leap in the world of Canadian real estate like I am. Hopefully over the coming months and years I’ll be able to give you Young and Thriftians (Thriftyites?) some updates on my personal adventures and the mentor role I’m hoping Mrs. Broad might be interested in playing in them.