Allow me to paint a picture: after finding the right market, one with both stability and potential for appreciation, you get your hands on that ideal property after buying it below market price. You make a few low-cost renovations (or none at all) and next thing you know, potential tenants are knocking on your door, paying off your mortgage and then some. Sound like a perfect world? Sounds terrific, to be sure. But what would really tie all this up in a bow is just one more detail: low to no-cost, reliable property management.
Achieving positive cash flow is why we invest in real estate in the first place. We have different reasons for wanting it… to pay for our annual vacations, send the kids to school, upgrade our own homes or perhaps to spend less time at the office and more quality time with family and friends. Whatever the case may be, we didn’t do it to add more hours to our own work week or take more time away from doing the things we love.
That’s why it’s important to find a trustworthy property investment company, group or advisor that only offers projects which contain all these factors, reducing the amount of time and energy you spend on making positive cash flow to a minimum. Simply put, a proven, savvy investment advisor or group is invaluable. If you do your research in finding the right advisor, one that shares your goals, it may be the last stringent due diligence you need to make.
So what criteria should you use when sorting the duds from the winners?
Check out their website, thoroughly. Learn what their principles are and their fields of expertise. There should be pictures and bios on the principals of the company, and their background should be extensive. They should offer plenty of testimonials in each stage of the process – acquisition, closing and follow-up. And those testimonials should read like a book of what you want to achieve.
Plan for the future
Your portfolio might only contain local properties at the moment, but eventually you’ll need to diversify across Canada. And how about your holiday and retirement goals? Finding a group that carries the criteria of passive, positive cash flow to an international level is something hard to come by, but priceless.
The team’s mission
Are they only out to make money, or does it mean something more? We all want to make money, of course, but excellent customer service is going to come from those who want to give it. Are they dedicated to your well-being and education? Do they want to inform you as much as possible about each market or do they merely expect you to rely upon their word? What type of educational materials are they offering besides the properties they wish to promote?
Check out their current and past properties. How often do they offer new property investments to their database? Does it seem like they hand-pick each real estate opportunity, or do they just throw anything up on their website in the hopes someone will bite?
How much due diligence have they completed on each market and project and how much of this information do they make freely available to you? The proof is in the pudding… not only should they only offer you fully turn-key projects with reliable property management, but their market due diligence should be thorough and prove why they’ve chosen to offer that particular property to you.
The whole point in finding an international investment property advisor, company or group is to lessen your own load in finding such properties yourself. What’s the point in selecting a company that doesn’t make the grade in due diligence, offers no assistance with creative financing or joint venture opportunities, or that leaves you in the dust after their commission checks are cashed?
What you want is an advisor you can count on during all stages of the process, a group you can trust in the long-run to keep you informed of emerging markets. The only thing you should have to do is sign your reservation contracts, send in your deposits, go through financing and sign your title at closing. After that, you just cash your rental checks and wait for the next great negotiated deal in the next hot market. THAT’S what a truly passive, positive cash flow real estate portfolio looks like. Anything else is an imitation, and a waste of your time.
Don’t back down on your expectations
Ultimately, the group you select must adhere to a high level of criteria before you trust them with your most valuable asset – your peace of mind. In the end, the company you choose should have your best interests at heart, know how and want to conduct thorough due diligence on your behalf, and only offer property investment projects to you that have passed the five-point test:
- Stable, yet emerging local and international markets
- Negotiated, below-market value price points
- Current tenancy on medium to long term leases
- Positive cash flow after expenses
- Passive, stress free income with low to no cost property management
If the advisors you’re considering don’t offer you all this, you might as well hang up the phone. Because if you don’t, you could very well end up giving yourself more stress and hardship than if you had never decided to invest in real estate in the first place.