Real estate is get rich slow. Folks don’t like that word: Slow. They often look for shortcuts instead.
However, there are no shortcuts to success. None.
“There are no shortcuts to any place worth going,” Beverly Sills, American operatic soprano
If you have heard about someone who wrote a business model on the back of a napkin and sold his idea for $180 million two years later, you are reading about something that happens less often than winning Lotto 6/49 where the odds of becoming a millionaire (according to CBC, https://www.cbc.ca/news/lotteries-what-are-the-odds-1.775281) if you pay $2 are approximately 1 in 14 million. That is, you have a .000007142% chance of success. Some chance.
If you took that same $2 and invested it in a real estate investment with a typical 22% pa IRR, internal rate of return (which includes cashflow, real estate inflation/appreciation and mortgage principal paydown), it would turn into nearly $107, 20-years later.
“Invested” in Lotto 6/49 tickets, that twoney will turn into a trivial amount of money, $0.000000001428.
Placed in a bank savings account with an interest rate of 1.7%, your $2 becomes $2.80, 20-years later.
Which is better? $107 or $2.80 or $0.000000001428. If you answered with the first number you are well on your way to understanding this quote:
“You simply cannot save your way to wealth, you have to invest your way there,” Bruce M Firestone
|real estate||22%||IRR||$ 106.72|
|bank savings||1.70%||$ 2.80|
It is incredible how many real estate investors and landlords will spend at least one hour a day with their dog or whole weekends polishing/tinkering with/pimping their $315,000 Ferrari 812 Superfast but resent taking a tenant’s phone call or responding to the occasional text or email.
If you own a rental property worth say $500,000, you should treat it at least as well as a gas-guzzling, money sucking car or a dog that’s sole job appears to be turning good food into poop for humans to pick up with their hands.
Are you freaking kidding me? You’ve heard this one: “Man is dog’s best friend” right?
Mind you, the 812 is pretty awesome:
On average, according to Pet Hero (https://www.pethero.com/blog/pet-tips/much-time-really-need-take-care-dog/):
The absolute minimum amount of time you need to spend taking care of your dog daily is around one hour. To feed, walk, clean, exercise, and play with your dog, you will need this amount of time.
Often, however, dogs can take longer than this. If they get sick, make a mess, or are just being generally adorable, you might find yourself spending two, three, or even more hours with your new best friend.
In addition to daily tasks, you can expect to spend a few hours monthly taking your dog to vet, grooming, or training visits. These can be scheduled in advance, but it is still time that you will need to set aside for pet care.
If you can’t spend at least a similar amount of time on your real estate portfolio as you do with your pooch or hot car, you should find something else to do.
Here are a few pointers—
One day, a tenant calls her landlady. “Help!” she says, “I’ve got ants in our kitchen.”
The landlady, naturally, turns to her husband with her hand over the phone and says, sotto voce, “Why the heck is she calling us?”
The husband replies sarcastically, “Hmm, let me see. This is the first call we’ve had from Jenny (their tenant) in over two years. She keeps our townhome beautifully and pays $2,500 a month for that privilege, which means we’ve collected more than 60,000 DOLLARS from her. Gee, I guess I can go to Crappy Tire and pick up six ant traps for 5 bucks and take them over.”
You can’t plan on winning the lottery, but you can plan on becoming a millionaire through real estate investing and owning your own PB4L, a personal business for life…
Lastly, based on studies in elite performance, author Malcolm Gladwell contends that it’s “an extraordinarily consistent answer in an incredible number of fields … you need to have practiced, to have apprenticed, for 10,000 hours before you get good.”
Think about that: You need to put in 10,000 hours to become an elite level anything. That includes, in our view, real estate investing and whatever PB4L you are running. Why aim to be mediocre? To get mediocre returns? No thanks. So, get going!
Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD
ROYAL LePAGE Performance Realty broker
Ottawa Senators founder
Real Estate Investment and Business coach
MAKING IMPOSSIBLE POSSIBLE
 From Wikipedia: The broken windows theory is a criminological theory that visible signs of crime, anti-social behavior and civil disorder create an urban environment that encourages further crime and disorder, including serious crimes. The theory thus suggests that policing methods that target minor crimes such as vandalism, public drinking and fare evasion help to create an atmosphere of order and lawfulness, thereby preventing more serious crimes… The theory was introduced in a 1982 article by social scientists James Q Wilson and George L Kelling. It was further popularized in the 1990s by New York City police commissioner William Bratton and Mayor Rudy Giuliani, whose policing policies were influenced by the theory.
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