Getting married is easy
Reminding me of real estate investing
Building a successful 7 to 8 figure real estate portfolio is more than just investing in each individual property.
Today's newsletter is a sample of what I will be writing more of in the “7 to 8 Figure Real Estate Investors with Eric Chang” newsletter and Facebook group.
You can join the group for free here:
https://www.facebook.com/groups/535857495905611
One common thing I heard from divorced couple is:
"Getting married is easy, divorcing is complicated"
This reminds me of investing in real estate.
It's common for real estate investors to "accumulate doors".
In the real estate investing community, it's common to hear people say:
I have 20 doors, 50 doors, 100 doors, or even 500+ doors, etc.
It's quite the accomplishment to "accumulate doors".
It can take years to "accumulate doors".
It's even addicting to "accumulate doors".
Just like most people don't think about getting divorced when getting married, most real estate investors don't usually think about exiting when investing.
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One of my real estate mentors shared his thought with me couple years ago:
I spent years focusing on acquiring doors, I never thought about selling.
I always assumed my children will want my properties.
As he transitions to a later phase of his life, he is starting to think about exiting the first time in his life.
Except, his kids now live in 2 different countries far away from his properties.
Not to mention, they don't share the same passion of owning his properties the same way he has.
I made this same mistake few years ago.
I was so focused on reaching the goal of owning 100 doors, I would buy any properties that "hit the numbers".
Sure, from the numbers stand point, those properties are fine.
I never thought about what to do when I need to exit.
In other words, what are my options?
All I could think of, was how could I get into these properties?
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Recently I'm looking into another multi-family project.
During due diligence, I spent close to double the time on developing the exit strategies for this project vs. the time I spent ensuring the project will be profitable for my partners and I.
2x the time!
The property is in a great neighbourhood.
It's highly desirable.
The numbers hold up.
It's great to buy right?
Getting married is easy.
So is buying a property.
Having a well planned out exit strategies is more important than investing in the property.
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The mistake I made few years ago, I'm still "dealing with it" today.
Don't get me wrong, those properties are performing well.
But they're not fast to sell.
If I put all of them for sale in the same market, I would end up competing with myself due to limited number of buyers for that type of properties in that market.
It will take me a few years to finally sell those properties.
I still remember it took me few days to run the numbers and negotiate the terms to buy those properties.
Now it will take me few years to sell.
Getting married is easy, divorcing is complicated.
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When you're looking for your next real estate investment, spend more time developing your exit strategies than owning strategies.
Investing in a property is easy, getting out is a whole different story.
Due diligence is not just about owning.
Exiting is more important than owning.
Consider spending 2x the time on that.
If you like my work, I invite you to share it with others.
Happy investing,
Eric Chang
Calgary, Alberta
November 19, 2024
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