Yesterday I got a reader question…
I am an ambitious 23 year old working in the Alberta oil field. I have done very well for myself since I was 19, buying a house and having a handsome RRSP account. Seeing the toll this has on my body got me looking for alternatives to “working” the rest of my life. I have read lots of books about budgeting and money, most of them talk about rental properties. Knowing this is something I would be interested in I started reading books about real estate investing. Having only bought my first house a year ago I know very little but I am excited to learn! All the books that Chapters sells about this topic are Don Campbell’s work. As you say, they all point to his REIN membership and workshops. Before signing up for expensive 17 month membership I figured I would do some “googling” and see if it was worth it. After all I want to avoid the real estate scams. I read your article slamming the REIN network and Don Campbell. Being totally open minded to both sides of the story I have simply one question for you.
If you were in my shoes having no real estate investing experience (and smart enough to jump in blind). What would you do for education, is there a “better” learning system them REIN? Are there Classes I could take at NAIT or U OF A? (I ask because I don’t see any) Is there other books, systems, networks.??
What would you do, I was interested in REIN not because I think its “worth it” or a “good system” but simply because I don’t know where else I should turn!!!
Thanks for your response!
Answer To The Question
Thanks for asking, one of the problems with real estate investment in general is that it is intensely local. For instance when you read this blog, know that I am in Ontario which has very different tenancy laws than Alberta.
The Facts About Real Estate
I want to point out that in spite of the books you have read about wealth and wealth creation, if you look at Forbes list of the top 100 Wealthiest People In The World there are only a few that made their money in real estate. This also mirrors my experience dealing with hundred of landlords through the years.
Facts About Landlords
Landlords are employed, and make their money in other fields, there are a few real estate agents who have been successful enough to transition to being investors. They do not have to rely on the income from their properties. They cash out when they sell or refinance. The bank will not lend you money if you are not employed. If you are self employed, you have to put more money down than someone who is employed.
If you don’t believe me walk into your local bank and tell them you are a self employed real estate investor and want a mortgage. Then go back with a pay stub from Joe’s Pizza. You need income to qualify.
Cash Flow Non Existent
Generally the cash flow from houses ends up being virtually non-existent. This is because of the high maintenance costs over time. Income from rental properties is taxed as passive income which is another problem.
I understand what you are saying, the job you have is physically demanding, and you would like to figure out how to retire. One of your best bets is to go get more education and get a less physically demanding job. This way you will still qualify for mortgages easily.
Books For Education
As for your question, I suggest that instead of your local Chapters, you start ordering books from Amazon and online. There are a few writers I would heartily recommend. I would read anything John T Reed writes about real estate. You have to keep in mind, he’s from the United States so all his books will reflect that. You have to order them from his website.
What I am Currently Reading
I am currently reading Landlording: A Handymanual for Scrupulous Landlords and Landladies Who Do It Themselves by Leigh Robinson. He’s clear, he’s concise and he doesn’t waste one page blowing sunshine up your ass, discussing dreams of your personal Belize and other complete nonsense.
You Must Read The Real Estate Guru’s Bullshit Checklist
Read his list of Real Estate B.S. Artist detection checklist and see how often REIN’s activities qualify. This checklist is by far one of the best things you can read to help you steer clear of people who are dying to separate your from your hard earned money. Many guru’s don’t even own property. Their business is to tell other people how to be successful in real estate.
All Provincial Landlord & Tenant Boards
Another great source of information is your province’s tenancy board. You can read up on what you can and cannot do in your province and the rules about the business of renting. You can also probably find an Alberta paralegal handbook with the latest case law for sale at the government bookshop, and more tenancy appeals and decisions at Canlii.
Your Provincial Real Estate Board
The Alberta Real Estate Board does offer courses for real estate management, and obviously all kinds of courses to teach you how to become a real estate agent. Some of these might interest you. I’m not sure what the cost in total is but it costs less than $3400 from what I can see to become licensed to manage real estate.
Douglas Gray – Real Estate Author
Douglas Gray was a canadian real estate lawyer, and from what I can see from reading the book preview on Amazon, his book The Canadian Landlord’s Guide: Expert Advice for the Profitable Real Estate Investor contains more info than all of the REIN books combined. That’s because he doesn’t waste time with discussing luxurious lifestyles and vacation destinations.
You can learn a lot from landlords themselves probably for the price of lunch or a cup of coffee. There are quite a few crusty old landlords with some extra time on their hands to help guide a newbie.
I have one landlord who owns a small building who comes in to help me out with “stuff” and learn about the business. You could do the same.
Small Local Real Estate Groups
Finally you can go to local real estate groups, like the Durham REI here in Durham. Guess what their membership fee is? NOTHING, it’s free. Once per month or so they have talks where they invite people. There’s other professional landlord associations as well that can be joined for a lot less than REIN and they have regular events and also paperwork and goodies for the beginning landlord.
Real Estate Institute Of Canada
The bottom line is that there’s plenty of places to learn and if you pay $3400 you really should get a certificate… you can even take the courses offered by REIC to go towards a Certified Property Management designation. These are actual courses with actual content.
In short, you’re better off getting your education anywhere but REIN, Rich Dad or any other of these organizations. But I have to tell you that after spending a couple years in school myself learning about the business, it’s probably a lot more fun to hang out at their networking events then to actually study the business. What do you all think? Any present or former members of these mentorship and “learning” groups want to chime in?