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Investing in real estate has this mystical allure to it. It seems exciting and has always had hidden promises of wealth and riches.
So naturally it’s fun to think, plan and plot about it!
Our family has been involved investing in real estate in one way or another since the late 1980′s. In this post we want to share some of our experiences with the hopes of getting you to think differently about your own investing.
How it Began…
In the late 1980′s the real estate madness was in full swing in Ontario. ”Flipping” houses was becoming a popular fad and our family started buying a selling single family homes in Mississauga, Ontario.
It proved quite profitable and relatively simple.
Buy a property from a new home builder. Wait six months to take possession, sell the property for 20% to 25% more than you bought it for.
Cha-ching!
Beginner investors started getting into the act, which was a sure sign the party was almost over, and began buying and selling everything they could find.
It became the topic of every backyard BBQ.
Large properties, land, condos, you name it. Everyone was getting into the game.
Then the music stopped.
A severe economic recession hit Ontario in the early 1990s. Even a full four years after the recession began Ontario’s employment did not rebound to the pre-recession highs.
Employment in the Greater Toronto Area fell almost an entire 10%.
That was a very big deal.
The NDP party oversaw a period that had Ontario’s debt grow to approximately $60 billion dollars. That was a anohter very big deal.
In 1995 Mike Harris of the Progressive Conservatives came to power and drastically cut social programs to begin control spending.
It was a pretty horrible time and I’m sure many reading this remember it in detail.
When the bottom fell out our family was left “holding the bag” on one propery in particular that would prove to cause us major grief.
And we weren’t alone.
We personally knew people who bought condos in the Mississauga area for $220,000 in the very early 1990′s only to see the prices drop drastically. It took more than ten years for many of them to get back to those same prices.
Our family had purchased a $750,000, three car garage, 4,400 square foot house to “flip for profit” in Mississauga only to have its value fall several hundred thousand dollars within a year.
Interest rates went up multiple percentage points at a time.
We couldn’t sell it and rented it out for a monthly loss.
And that very same time, during that recession, our family construction business went from screaming growth to a dead stop.
Our real education around real estate had begun.
The Lessons…
To read the rest of this post, click here!
In past articles we’ve shared how some of our inner most beliefs on “getting more done”.
OK, we loved this book and still love it.
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