By Chris Lohnes
You know, I’ve been asked this question more often than I expected: “Why REIN? Why do you pay a monthly membership to attend meetings four times a year?” I’ve even had someone be so bold as to ask me, “Why are you a member of REIN if you aren’t buying properties?” That question surprised me because, to me, the inherent value of REIN goes beyond purchasing a property.
It first occurred to me to invest in real estate when I read Robert Kiyosaki’s Rich Dad Poor Dad, which had left me feeling optimistic, as though my understanding of passive income had been refocused. (Years later, Don Campbell would use the expression “broke my brain” to describe a similar feeling.) After reading Rich Dad Poor Dad, I asked the question most of us asked in the beginning: “I wonder if there is something more Canadian-focused I could read?” Enter Real Estate Investing in Canada by Don Campbell. Armed with the knowledge I’d gained from this book and my previous readings, I boldly defined my exit strategy, completed the goldmine scorecard (mostly), and bought my first property.
What an adventure! I had questions, but when I took a look around at my inner circle, I was already past their experience level with real estate. They had lots of second-hand horror stories to offer as to why real estate investing was a bad idea beyond owning your primary residence, but in reality, none of my friends or family had committed to investing in a rental property themselves. So I persisted.
Lessons came fast and sometimes furious. I moved out of my primary residence a year later but kept it as a rental. Here’s where I learned that just because you like a house and you know the house and neighbourhood, it doesn’t necessarily make it a good rental property. I also discovered that, once I owned two rental properties, my inner circle could now definitely not relate, and getting a sympathetic ear to discuss any challenges is tough when no one can relate. All they hear from you is: “I have three houses and a furnace broke, boo hoo.” So, you have to stop talking about it and stop asking for input. This can be and is an isolating feeling. How does it motivate you to build your portfolio? It doesn’t, really. So, my own story continued like this for many years, all while reading books written by REIN authors but not being part of REIN.
Then in 2015, I joined REIN. In the first meeting, I met my mentor. Though he didn’t know me, Don Campbell was a celebrity in my eyes. I got a chance to speak with him one-on-one (Don always makes himself accessible to members, by the way) and he “broke my brain” in the first five minutes. In just the short time we chatted, Don re-calibrated my thinking such that, within three months, I was able to qualify for financing again—something I had not been able to do for a couple years due to being self-employed. (Ask me about that sometime.)
If I hadn’t been part of REIN, I may or may not have been able to purchase that $400,000 side-by-side duplex, which now cash flows conservatively $500/month. In another opportunity (thanks to REIN, I now see good opportunities in abundance), I was able to put in an offer over asking price! Strange that I should celebrate that, right? There was no bidding war, I was given first dibs on a property before it went on the market, and yet I offered over asking price? Yep. And I’m proud of it to this day.
As many investors can attest, as you accumulate more properties, the financing gets more and more complicated. Normal offers allowed five days to secure financing; I felt like I needed 10 to be sure. I offered the seller $1,000 over asking price if she would allow 10 days for financing. She agreed, and we closed the deal. I then put $30k of improvements in the property and the after-repair appraised value shot up $100k above the original purchase price! REIN taught me to see more than just the standard offer. Try to see what the seller really wants and then try to accommodate while making a favourable deal for yourself as well.
Shortly after these successful deals, I began studying joint ventures. I wasn’t buying property, I was educating myself. So, why continue as a REIN member? In my mind, because of my involvement in REIN, I had made changes to my portfolio that had saved and earned me tens of thousands of dollars some by avoiding unsophisticated investments, some by making subtle adjustments, and some by networking with great people. The connections you make and the resources available to you as a member of REIN far exceed the monthly membership. In my mind, investment in REIN is an investment in myself, and it has nothing but improved my personal and investment position.
This year, I purchased my first joint venture property in a new-to-me geographic area. Through REIN, I was able to act quickly, establish a solid team based on qualified referrals, get short-notice advice on navigating city regulations, get a known duplex-conversion contractor on-site at home-inspection time, and deal with other challenges with confidence that my advisors were sophisticated investors. The value of REIN definitely pays back my portfolio more than it costs monthly.
That’s why I am a member at REIN. See you at the next meeting.