U.S. Real Estate Market Strategy for Canadians
When it comes to cherry picking top investment destinations, Canadian real estate investors in U.S. markets have a lot of options right now. Contrary to popular belief, market selection is not as important as a market strategy. Ultimately, it is your strategy and not your selection that will have the bigger impact on your bottom line. Now, market strategy encompasses at least 2 meanings that you as a U.S. real estate investor need to be aware of: your exit strategy and your market strategy.
An exit strategy applies to your overall business goals and to your U.S. investment property. It’s key for your overall lifestyle that you have considered how you plan to make your exit because that last thing you want to do is get caught in a never-ending cycle that requires YOU to be on the clock 24/7. It’s completely normal to put in lots of time for your starting point, whether that’s 2 or 5 years, but you need to have a plan to cash out if you want to really enjoy the lifestyle that we, as investors, ultimately have the luxury of enjoying. It’s not automatic.
Do investors get passive cash flow income? Yes.
Is the passive cash flow enough to quit your day job? Within 1 year, absolutely.
Does this require continuous work for the investor? YES – unless you plan your exit strategy.
Your overall business exit strategy might be: to establish passive income sources that will supplement your lifestyle with a diversified portfolio. Great.
Now, you go out and you buy a property. Let’s call it a run-down 4-unit property in a hot U.S. market. Now, you will need to develop your exit strategy for that property. Let’s say that you have selected a U.S. market that is experiencing steady job and population growth, so you’re in an emerging market location. Your market strategy in an emerging market may very well be to buy B-class multi-family properties and renovate those for re-sales within 2- 5 years. Your Market Strategy and Exit Strategy align to compliment your particular financial resources, your property and the market you are in.
For example, if you try to establish a vacation rental in an over saturated market, you will face lots of competition. As Canadians, the lure of the sunny Florida beaches or Arizona weather tends to be quite a draw. And it is true, there is opportunities to be had for many – but you need to plan out your market strategy. Do you have a solid timeframe for your renovations that is covered by your budget? Do you have a solid plan to ensure your vacation property will be rented? Do you have a good power team in place (lender, lawyer, accountant, property manager)? These are important considerations because there are people who will take advantage of beginners and it is an expensive life lesson.
Happy Anniversary Goldmine!
This October will be the 5 Year Anniversary of the U.S. Housing Crash. Some people see it as a still-struggling economy, but many have to come to recognize the incredible opportunity. I’ve made a fortune in U.S. real estate, and before I made a fortune I lost a bundle. I was starting from a strong background in real estate to begin with, and I mistakenly assumed that it would be similar. There are important differences in Canadian and U.S. real estate to be aware of, and that’s why my Canadian U.S. real estate training program is such an important project for me. I’ve worked with thousands of Canadians to show them little-known tactics and step-by-step processes to protect investments with secure methods. It is an on-going project to establish financial literacy in a market with what is the biggest money making opportunity of our lives.