The secret of a 'FIRST' deal ever - SUCCESS

A friend of mine suggested that I read Robert Kiyosaki's, "Rich Dad Poor Dad", and I bet this book was a game changer for me, as it has been for a lot of investors. It helped me understand the game of money. I now wanted to transform my wallet from poor to rich, but before I could do that I had to transform my mind, I had to start to think like an entrepreneur, had to do something different. I decided to read and research real estate. I came across a real estate networking group, which I started to attend. This is where I found my partners, my team. 

We attended a week end real estate investment training course. But our education actually started, as we stepped out of the classroom into the real world. We set goals, read books, listened to bigger pocket pod cast, did door knockings, cold calls, spoke to real estate agents etc etc, anything and everything that we could think of to help us procure our first property. We would have knocked at least 60-70 doors in 6 months time. Real estate investment was a side hustle, my partner and I still continue to work full time. We dedicated our evenings and week ends doing this. But no success. We wanted to quite, but we didn't. We kept telling ourselves 100 knocks before we get our first deal. Then one day our phone rings - it was from a client who wanted to sell his apartment because he owed taxes to the city and the city was going to auction his property. He didn't have much time and neither did we. All we knew that we had to get there and get this deal done, but most importantly, we need to take care of this gentleman with honour and dignity.

We rushed to his apartment in same evening with our realtor. We worked out the details of sale and he agreed to sell his apartment for $220000. The actual value of the property was $330000. We were definitely in positive equity. Now we had to come up with the money. We didn't have time to arrange for loans or mortgage, so the two of us decided to use our HELOC (home equity line of credit). With the closing cost and lawyer and realtor fees we got the apartment for $228000. My partner and I were now owners of an investment property. We made through the first step.

Apart from getting the deal it was important to us, to maintain the dignity for the individual who sold us his apartment. Our realtor helped us find a rental apartment for this individual and we made arrangements for his move. We wanted to ensure that his transition into his new place was smooth and easy for him as well. 

Now came the challenge of cleaning up the apartment. It was full of garbage and clutter. The previous owner was a hoarder and therefore the apartment was full of stuff whose actual destination was the garbage bin. It took us approximately 4 days to clean up. It didn't take us long to learn our first lesson - 'We are investors and need to learn to work like investor". Going forwards we decided to hire people to get the job done, rather than to do it yourself.

Step number two - Doing the numbers for construction and finding the right contractor

The apartment was now clutter free and we had a visible floor plan and working space. We had to decided what needed to be done and how were we going to do it? How much were we going to spend to do the renos? We started to interview contractors -giving them a basic idea of what we were looking to modify in the apartment. Talking to various contractors we learnt that the cost of renovation is going to be between $35000 - 40000. Once we selected the contracted, we requested that we view one of their properties, prior to making a final decision. Decision on the contractor was made. We gave him a time line of 4 weeks to complete a two bedroom one washroom apartment, knowing very well that this will get stretched to 6 weeks.

Step number three - Be prepared for the unexpected - get your grounds covered always.

5 weeks into the construction, we had water pipe break in the apartment, damaging all the new floors and base boards and kitchen. This delayed the project further. We now had to wait for the insurance company, to do it's inspection and evaluations and then give us the green light to restart the project. Always ensure that you have your insurance policy in place before you do any renovations, unexpected things do happen. The project was finally completed in 12 weeks from the time it started.

Step number four - coming up with a list price for sale.

Our real estate agent took it from here. We discussed the comparables with him in the building and in the areas nears by and decided to list the property for $527900. Our property got sold for $520,000 within 24 hours. The average selling price for a two bedroom, one washroom condo in that building was $489,000. Doing the renovation, using the right colour combinations, gave the apartment a feel good factor. It helped in boosting the sale price and transforming our wallets from poor to rich. We made a total profit of $228,000.

Our success with our investment goes to our team, without whom this would not have been possible. We are now working on our second investment property. This is my first attempt in writing a blog, so any comments good or bad, will be highly appreciated. I hope it was informative and I hope to write more about our teams second success story soon.