The First Deal is the Hardest
How a 26 Year Old is Quickly Becoming a Big Time Real Estate Investor
Vanessa is a 26-year-old real estate investor from Toronto who already owns 28 doors spread out over seven properties, but she is just getting started. Thanks to her strong mindset and a strong “why”, Vanessa is well on her way to her goal of owning 100 units. Like many successful entrepreneurs, Vanessa has a strong "why" to work as hard as she does. "I had this vision about how I wanted to start my own nonprofit organization for kids that have autism and for kids that are addicted to substances, different things I've seen or have experienced in my family and causes I want to support. And then just to be able to give back to my mom like she's worked so hard all her life. And while she's still here and on this planet, I want to not only make her proud, but give her a lifestyle I feel like she deserves to experience." Her "why" was strong, but she wasn't sure how to achieve these goals.
Breaking the Cycle
Vanessa came from humble beginnings. Her father was a factory worker who immigrated from Sri Lanka, and her mother immigrated from the Philippines. In her family, men handled the finances and women contributed when they could by taking on minimum wage jobs. Since women did not bring as much to the table financially, they also did not have as much of a voice in other decisions the family made. Vanessa did not want to continue this cycle and wanted to contribute financially. To Vanessa, money was more about freedom of time and how it can serve other people. Her father was highly supportive of her ambitions. He took her to an investment seminar, the Millionaire Mind Intensive, when she was only 12 years old. At the seminar, Vanessa was introduced to the idea of real estate and multi-family property investments; she was immediately intrigued. She loved that the people around her at the seminar had big goals and had the mindset that they were in control of their financial futures. After listening to the speakers at the seminar and attending breakout sessions with knowledgeable investors, Vanessa began to visualize herself. She imagined being one of the speakers and saw herself introducing herself to the crowd, "Hi, my name is Vanessa. I am a multi-family investor in Canada, and I currently own one hundred units.
The Power of Networking
Through the Millionaire Mind Intensive seminar, Vanessa and her father met other like-minded individuals interested in or already investing in real estate. These people understood that you don't have to be a victim of your circumstance, and each of them had big goals, just like Vanessa. She found that the people in her networking groups would act almost like parents and wanted to share their failures to prevent her from making the same mistakes. Vanessa recognized that she can learn something from everyone around her, which is part of the reason networking has been a large part of her success. Through networking, she gained immediate connections and built relationships with people that could potentially help her later. She believes, "you are not going to get wealthy by yourself. No one gets rich or wealthy by themselves." This mindset is part of what helped her close her very first real estate deal.
The First Deal is the Hardest
Vanessa closed her first deal, a duplex in Sudbury, Ontario, which is about 3 1/2 hours away from Toronto in September of 2018. The deal didn't come easy; two lenders turned her down before finding one who would work with her. Eventually, she paid $140,000, which included a 25% down payment. She had saved up some money through her full-time job as an office manager, but it wasn't nearly enough to cover the costs needed to close the deal. She had the brilliant idea to have her family help raise the funds she needed to cover the down payments and closing costs. She offered them a 10% return on their investment for two years. She bought the house from a man named Terry, who she had met through a networking group. Terry had been diagnosed with cancer and wanted to sell his properties. None of his children wanted in on the real estate game, so he sold his property to Vanessa. The duplex was an undervalued property and only needed some minor repairs and had immediate cash flow. Through the ideas and connections she made through seminars and networking, Vanessa was finally able to call herself a real estate investor.
From a Duplex to 28 Doors
Learning how equity works was a huge turning point for Vanessa. The duplex she purchased for $140,000 grew in value to $270,000. She realized that equity was "my money that I can access to refinance, to leverage, to close more deals." So, she took refinanced the duplex in order to use the equity to purchase another property. Vanessa is lucky to be investing during such a hot real estate market where values are increasing quickly so she can have the ability to leverage equity to purchase new properties. She also does something that many other investors shy away from; purchase in areas they are not familiar with. She did a lot of research on Sudbury and the surrounding area. By talking to people from the area, she learned that people like to stay put and don't usually purchase their own homes. Vanessa has also hired a property manager and has other people like a handyman and a painter in her contact list to help her out when she needs it. She admits she does not know how to do everything, but she says, "You don't need to have all the information, you don't need to have all the resources, you don't need to have the right people in place, you just need to be strong enough at the highest level because then you'll go get the resources, you'll get the right people, you'll figure out how."
Her Next Moves
Vanessa has learned lessons along the way that she applies to her daily life. Vanessa does not worry about impressing others with material objects like designer clothes or a fancy car. She carries that same attitude into the real estate she invests in. She has had times when she let emotion get the best of her. She wanted to buy the prettiest property in the hottest area even if they did not have a great rate of return. Those offers never got accepted, but it taught her to think about what is really important in real estate investing which she says is to look for, "what's going to get your best rate of return and not being all caught up in all the details of the location and how it looks." Vanessa continues to work a full-time job to cover her expenses and does not touch the income her investment properties are generating. She has read books like Rich Dad, Poor Dad and The Richest Man in Babylon which have given her tremendous insight on how to generate wealth. She says that "the rules of money and building wealth are just so historical and so finite that you can start from zero or you can start from ten thousand one hundred thousand. And to build wealth, there's just simple rules. And one of them is paying yourself first and at 10 percent." Living in a fiscally responsible way, networking, and having a positive attitude have helped propel Vanessa's real estate investing journey and can do the same for you.