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From Struggling Small-Time Landlord to Sophisticated Investor – Part 1 of 3

In addition to being an Associate at Two Sevens Capital I am also a small-time landlord and investor with Two Sevens Capital.

This article is part one of a three-part series about how and why I went from being a small-time landlord to investing in apartment buildings through Two Sevens Capital and the lessons I’ve learned along the way.

Part 1 – What motivated me to invest in real estate and how I got started.

Part 2 – My experiences as small-time landlord.

Part 3 – Why I searched for a better option and how I’m investing today.

What motivated me to invest in real estate?

My goal was to buy a house that would cover all its costs and use the profits to offset part of the rent on my apartment. The basic strategy was to rent where I live and rent out what I own. The benefits of this are that I gained a toehold on the property ladder and had a mortgage being paid down a little every month.

How did I find the deal?

I did a lot of research to find cities and neighbourhoods where I could cash flow positively (cover all my expenses including mortgage, property taxes, and insurance) and potentially benefit from price appreciation.

All the candidate cities I looked at fit within my budget, had growing local economies, strong rental markets (low vacancy and higher rents), and offered institutional amenities such as colleges, universities, and hospitals. This left me with a short list of cities to focus on. From there I became an expert at finding the best neighbourhoods within those cities typically by focusing on the ones with the best schools and proximity to grocery stores and recreation.

Finally, I began to monitor my target neighbourhoods watching closely for listings I felt offered the greatest potential and eventually found a great house and bought it. My work as a small-time landlord was just beginning.

Lessons Learned

  • Knowing why you’re investing and what your goals are is crucial and it should dictate the type of opportunities you’re looking at.
  • Finding a deal is tough and requires a lot of patience, research, and effort.

Stay tuned for part 2 of this series where I’ll talk about my experiences with being a small-time landlord.

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