By Paul Sheremeta
I remember vividly the first time I heard about Don R. Campbell and REIN. I was in a Chapters store in Toronto. On the shelf, I spotted a book called Real Estate Investing in Canada: Creating Wealth with the ACRE System. As I had always held the belief that a person could do well investing in real estate, I was drawn to this book. I sat down with it in the store and, within minutes, I knew that I would not be setting that book back on the shelf.
The discovery of Don’s book couldn’t have come at a better time. After the breakup of a long-term relationship, I had taken a second job in an attempt to alleviate some of the financial difficulty I was experiencing. After a year of working seven days and about 70 hours a week, I was completely exhausted. I knew that I could not keep that pace up for much longer. I needed to find a better solution. I took an honest and hard look at my life and where I was headed. I asked myself “Is my current behaviour working for me? If I continue down the path I am on where will I be five years from now? ” I decided that I wanted to make a change. I began not only reading the book once but also studying it. I re-read chapters, I highlighted sections, I underlined, and I completed exercises. I wanted to absorb as much of the information contained in those pages as I could.
I wasn’t able to put all of my newfound knowledge into action just yet though. There was still more work to be done. I moved back to my hometown of Vancouver, BC where all my immediate family was. I found an excellent job in my field (I work as a custom cabinet maker), and I began cleaning up some financial messes. I paid off student loans, I eliminated high interest credit card debt and I completed the four years of income tax returns that were hanging over my head.
During this transitional period of my life, I began charting a course for success. I met, eventually moved in with, and then married, my wife Melissa. I purchased a copy of Don’s book, 51 Success Stories from Canadian Real Estate Investors. I now had knowledge of the ACRE system, and examples of people who were enjoying great success from real estate investing. I joined REIN shortly after purchasing 51 Success Stories.
Today Melissa and I own three properties - our personal residence and two investment properties. The cash flow from our investment properties is exceptional.
Not everything has been smooth sailing though. There have been some growing pains and valuable lessons learned along the way. Our first deal nearly didn’t happen. The plan was to convert our residence at the time into our first investment property while we moved to a new home. We thought the financing was a slam dunk as we had been conditionally pre-approved by our bank. One of those conditions or more precisely our handling of one of those conditions nearly cost us our first investment property and our new home. The bank required us to provide a signed lease guaranteeing a certain income for the first year of our new investment property. We were able to show that the income we would most likely generate, from our fully furnished executive rental, was much higher than the bank required but we couldn’t provide the signed lease because we could possibly have 12 different guests staying at our property in that first year ( the minimum stay is 30 days ). The bank wouldn’t budge and time was running out. We had an accepted offer on our new home (with multiple back-up offers) and no financing. Fortunately, I was a REIN member at this point. Through my networking at REIN meetings I had become an acquaintance of mortgage broker Peter Kinch. We contacted Peter and, at the 11th hour, he secured financing for us with another bank!
With our second investment property a similar scenario unfolded. This time another seemingly small mistake on my part created all kinds of stress and potentially jeopardized the deal. We had an accepted offer on a good property in Devon, Alberta. My mortgage broker contacted me and asked if he had my permission to go ahead and order an appraisal for the bank on the new property. I instructed him to wait. I was flying out to Devon in two days to meet with our property inspector at the new property. If the inspection went well, then we could confidently remove the inspection subject and order the appraisal. Honestly, I thought I was being a good businessman. My thinking was that if the property inspection turned up some big surprises, and we decided to not move forward with the property, then at least we would not be out the cost of the appraisal. Big mistake! During the subject removal process, time is of the essence and we ran out of time. I had to call my REALTOR® and ask for a 24 hour extension on the subject removal date. This was a phone call I did not enjoy making, as this was not how I wished to run my business. Fortunately, we were granted the extension. We used 21 of the 24 allotted hours and I was stressed the entire time! The appraisal came through at the 11th hour. We secured financing, removed our financing subject, and closed on the property. It is now an excellent addition to our portfolio but we came very close to missing out.
Although Melissa and I feel that our real estate investing journey is still in the early stages, we are already grateful for all that real estate investing provides for us. We look forward to new challenges and further growth. In the future, we hope to share the success that we have been having with joint venture partners while capitalizing on buy-and-hold, rent-to-own, and multi-family investment strategies.
As I mentioned earlier, 51 Success Stories from Canadian Real Estate Investors, was the book that led directly to my REIN membership. Recently I’ve been reviewing some of the exercises that I completed while working through the book during the summer of 2011. On page 229, I was asked to list three large accomplishments I’d really like to achieve in the next two years.
I had written: Purchase my first positive cash flow investment property and marry Melissa.
Question 3, on that same page, asked me to list the large indulgences I will reward myself with to celebrate major milestones in my life and my real estate investments. I had written: A nice vacation - Europe, maybe Hawaii, a Ferrari and a Dream Home.
As I wrote this, four years ago, my life was in transition. Those were definitely indulgences and they seemed very large to me. Although I have re-read many of the success stories in the book over the years, I hadn’t paid much attention to what I had written. When I did pay attention to my words, about a week or two ago, I was blown away! The accuracy of my dreaming was amazing, almost spooky!
Today, Melissa and I are indeed married and living together in our home on the North Shore in Vancouver. Our third wedding anniversary is just a few months away. In 2012, for our honeymoon, we spent an amazing eleven days in Maui and Kauai! In less than a month’s time we will be spending three weeks in Italy and Paris and I will be driving a FERRARI in Maranello just days before my 45th birthday!
If I could offer some advice: Dream big. Write stuff down and then forget about it (kind of). Work hard. Surround yourself with likeminded, experienced, and successful people. In just a few short years as you review the things you have written down you will be amazed to discover that many of those things are a reality now!
Paul and Melissa Sheremeta are strategic real estate investors who own cash flowing properties in B.C. and Alberta. Paul is a B.C. REIN member and a dedicated student of investing strategies. He and Melissa live in North Vancouver B.C. Contact Paul at firstname.lastname@example.org