How I got my start investing in commercial real estate.

 

I started like many Canadian real estate investors- looking for a safe place to invest.

 

I moved to Calgary AB at 17 and got my BA in Economics.  My first real estate investment was in 2004; a 1943 war-time house with no basement or central heat.  I made many mistakes.

 

When I started my real estate career I was young, no family, so working long hours and weekends didn't bother me.

 

Eventually I built a small portfolio of single family properties and was flipping homes - I figured this was the way to invest in real estate.  Buy undervalued residential houses, fix them up and either rent or sell them.

 

From 2004 to 2008, this strategy worked very well.  In 2008, when the financial crisis hit, and my rental properties were making a few hundred a month in cash flow, all of a sudden, 1 vacancy whipped out my cash flow for the year.  Then, rents started falling.  I was being forced to sell properties.  I recall having to rent out the house I lived in, and moved into a fixer upper I couldn't sell.

 

The little empire I'd built was crumbling.  My foundation for investing was built on speculation and hope - not sound principles.

 

Technically, I was a millionaire on paper at 30, but I was miserable and working  2 full-time jobs- my day job as a commercial lender and nights and weekends flipping properties.

 

Equity rich, cash poor.

 

When the market shifted in 2008, I was forced to sell many of my properties.  It was my wake up call- investing solely for Market Appreciation was gambling.

 

I had bought into the typical real estate investing Dream: owning 10-17 Single Family Homes and one day I could retire...

 

Around this time I met my (now) father-in-law, a 40 year veteran developer and commercial real estate investor.  He showed me how to raise money and find value add commercial properties.  He taught me a systematic way of investing in the right properties.

 

Today, I am not retired (I still actively invest), because I love it.  Each property I invest in has the potential to earn high 6 and generally 7-figures.  I control my schedule and love what I do.

 

My goal was to live life on my terms and I would say, that is a reality.  I still wake up at 5am, put in a full days work.  But, I travel when I want.  I take my kids to school, soccer and go golfing on Thursday's at 1pm if I want.

 

There is still work to get to my dream, which is to pass along a certain amount of cash flowing real estate to my 3 kids - and is what keeps me going.

 

In my experience, few real estate investors have stress-free financial independence.

 

Just because you have a portfolio of $20M or $50M in real estate holdings, it may not equate to having enough passive cash flow to stop working.  The amount of cash generated from your assets- will determine how much passive income is left at the end of the month.

 

And this is why I share some of the lessons I've learned and continue to learn as a real estate investor.  I'm on the journey, like you.  Still figuring things out.

 

I still make mistakes (like a simple clause in a recent deal that cost me $700,000).

 

I have the unique benefit of accessing some of the top commercial real estate investors in Canada and the US.  And, I want to share the lessons learned with you.

 

Why?

 

Because commercial real estate (CRE) is generally misunderstood by outsiders.  It's common for new investors to be taken advantage of by insiders.

 

Not understanding the "Game of Commercial Real Estate" can be very expensive.  When I was just getting into CRE, I met 2 guys who lost $6,000,000 on a single property.

 

They were smart residential real estate investors - and were in way over their head on a deal.  Something like that can take years (if ever) to come back from.

 

The Game: finding opportunities that others don't see.  It's adding value and having a real competitive advantage in the market.

 

If you're just getting started and wondering if I'm someone you can trust for information - a good first place is to listen to my podcast: The Investing Advantage. I think there are over 197 episodes.  You can get a sense as my values and what I believe in.

 

I don't have all the answers.  I'm just a guy who has committed to learning real estate investing and have been in it full time since 2004.  Over that time, I've learned some valuable lessons, which I share freely.

 

Why?

 

If you don't know my backstory, my parents, both teachers, invested with someone they trusted when I was 18 years old.  They remortgaged their house and put $100,000 (way more than they should have) in a risky opportunity.  They didn't fully understand the deal or the risks - but the trusted and saw alot of other very successful people in our home town (Whitecourt AB) putting money into the deal.

 

They ended up losing the entire amount and spent the next 10 years paying of the mortgage again.

 

1 mistakes - set my parents back 10+ years.

 

Living this and seeing the consequences and strain it can put on people (over years) is why I do what I do.

 

Side note - In 2008, I lost $250,000 investing with a well known 'Canadian Real Estate Guru'.  Which is why I've somewhat jaded and skeptical of many of the real estate 'guru's online today.

 

That's a little about me, professionally.

 

Personally - I love to mountain and road bike, run, weights (sealfit), golf, waterski, snowboard (last year my wife got me into downhill skiing).  We travel a bit and spend most of our evenings taking our 3 kids to soccer.