I watched my husband sprint off as if he were a contestant on The Amazing Race, only this was the real estate version.
We’d spent months touring different properties, conducting market comparisons and studies; finally we’d found two properties that met our objectives. Each property was in decent condition and priced to sell. We were excited to find two good potential deals.
Our plan was to purchase both of them (one single family home and a duplex). The plan ran smoothly at first, until a problem arose with our investment partner.
In the beginning we thought we could quickly sidestep this glitch by simply acquiring new partners. The dilemma: any potential partners would have to decide right away since there was only 48 hours left. It may be easy to decide to invest $500 in a weekend, but $50,000 takes a lot more finagling to make happen. My husband I decided to attempt to make it happen because we believed wholeheartedly in the potential of the investment.
For two days straight we made phone call after phone call looking for someone with the interest and the means to go in with us on these deals. At the end of the 48 hours we were ecstatic…we’d found two new investors willing to join us.
Next step: put together the financing.
Along with my husband and I, we had found a medical doctor and a veterinarian to partner with us; with some high income and high net worth individuals on our team we assumed securing financing would be a piece of cake – we were very wrong
I started out by saying it, and now I’ll say it again:
Investing in Real estate may be simple, but the process is not always easy.
I always get disturbed at these infomercials which promise people “instant riches” through real estate investment. These unsuspecting individuals buy videos and books and attend seminars thinking that with little effort they’ll be able to become a millionaire real estate tycoon- this is far from being true.
So back to our story: Dave, my husband, was in a race against time trying to get to his destination. See, when we got our partners was when the real problems began. Neither of them qualified for loans to purchase the properties. At this point the only thing left to do was ask for an extension, which we received (only 4 days), and set out on our next quest: we needed to secure private financing – so we headed back to the phones!
For 4 straight days we called everyone we knew looking for the necessary funds. When it was over we had what we needed, except there was still one problem. The cheques needed by over 7000 kilometers away in Kelowna, BC. Unfortunately we were in St. John’s, Newfoundland; we had 48 hours to get the cheques there in time.
After doing a lot of checking we realized that our options were limited. In the end we decided see if we could take the cheques to the Post Office in order to get them delivered the next day, which was our deadline day.
It turns out that we had less than 30 minutes to get to the Post Office before the courier departed for the evening. Seeing as this was our only option, we thought we may have to say goodbye to the overnight shipment option.
This is where we pick up the story with Dave making the mad dash to the post office. Thankfully, he made it in just the nick of time.
I will admit that every deal is not filled with so much suspense and drama. However, the lending landscape has changed dramatically in recent months and financing your investments is going to be very challenging. Those looking to invest in real estate will find the many of the financing programs which used to be available have gone away. Both conventional and private lenders can be really strict when it comes to protecting their investment capital.
Disappointment and let downs are a natural part of the real estate investment game; if you are easily discouraged, pick a career with less risk. You have to be persistent to succeed in real estate investing.
The reality is that both the veteran and inexperienced investor make the mistake of thinking real estate is the way to ‘get rich quick’. The truth is that real estate investing is a great way to get rich, but there’s work involved!
Real estate investing is quite simple. By following certain tried and true strategies you will certainly experience success, if you don’t give up. But, it’s not easy. Anything that sounds too good to be true probably is.