Real Estate Investing: Review Of The Canadian Real Estate Action Plan

real estate investing

This week I wanted to highlight a great book on real estate investing called The Canadian Real Estate Action Plan: Proven Investment Strategies To Kickstart & Build Your Portfolio by Peter Kinch.

One of the reasons I read these books is to increase my knowledge of what other people are reading and expose myself to other trains of thought to help me inspire my clients, (and myself), to be better with their own investments.

The book is perfectly titled because it’s a step-by-step plan on how to really move yourself into real estate investing. I’ve written many articles in the past on real estate investing and I consistently recommend the Canadian Real Estate Wealth Magazine because it’s easy to read and there’s great content in it.

 

Taking Real Estate Investing A Little Deeperreal estate investing

Peter Kinch shows you how to build a plan starting in an area that a lot of people probably don’t think about when they begin their venture into real estate investing. The question he asks is, “Why are you buying real estate?”  Many new investors do not ask this of themselves as they begin to build their portfolio.

Are you buying real estate just because you want to own real estate? Generally that isn’t the reason. More often you are buying because of what the real estate is going to get for you. That could be cash flow, future development or capital gains or creating an income for your retirement or many other possible scenarios.

Related: Reducing The Risk When Flipping Real Estate

 

real estate investingWhat Are Your Goals?

I thought it was fantastic to see a book on real estate investing start by asking these type of questions. Many people that come and see me say they want to start a new business or new investment. The key for me is helping them to understand why they want to participate in this new venture.

I ask them: Do you want flexibility? A more comfortable lifestyle? An income stream?

Simply wanting to own real estate is generally not the “real reason”.   Owning real estate is actually pretty boring! Based on that goal, what do you need to support your lifestyle and achieve the goal you’ve set out? How much real estate do you need to buy? The book goes through the formulas and the calculations that you need to do to figure out the answers to the questions that fit your goals.

 

It’s All About The Money

At some point the book diverts into the banking end of things to determine how you manage your money, where you borrow your money from and how you borrow it. Most new investors assume they will be able to go to their bank and the bank will lend them money for their new real estate investment property.  This used to be easy money when real estate was involved and is now a lot harder than it used to be.

real estate investing

With the changes effective recently to the mortgage rules, it is now more and more difficult for people to go out and get mortgages to buy single-family homes.

Keep in mind that the author of the book I’m reviewing here is a mortgage broker himself, so there is a bit of bias.   Having said that I agree with his bias. He emphasizes that you should use a qualified mortgage broker for helping you through the process of obtaining a mortgage, you will generally get the best rates and allow the broker to do the shopping for you, and you will add another valuable advisor to your team.

Once you decide what you want in your life and how much property you want or need, the book starts to talk about the down payments. Where are you going to get the down payments for the properties you are going to acquire?

The author talks about how to qualify at the bank, how do you go through and make sure you’re able to qualify for lots of mortgages.  This section is very helpful and offers a few good tips to investors.

The middle of the book is structured as if it was a course. During “lunch” in the book, they go through commercial mortgages and they talk about the difference between residential single-family home mortgages and a commercial mortgage.  Once again, offering some useful information for investors.

Related: 5 Real Estate Investing Mistakes You Can’t Afford To Make

 

real estate investingA Great Overview

I’m officially beating the dead horse when it comes to talking about the importance of building your advisory team. You need a good accountant, good lawyer, good mortgage broker, a good business advisor…they are all the spokes within your wheel.

The Canadian Real Estate Action Plan is a helpful summary in real estate investing; it’s not in enough detail for someone who is truly thinking about getting into the market but it gives a great overview.

In another upcoming blog post I’m going to continue on with a review of The Canadian Real Estate Action Plan by Peter Kinch and dive into his 3 Action Phase for real estate investing!

Have you read any great books or real estate investing? Let me know in the comments below.

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