I am very excited to interview Liane Eng, a young entrepreneur with serious drive and work ethic. At the age of 24, she bought her first property in Ottawa. She did it by hustling all throughout university carrying two to three jobs and coming out with a small stash of cash! Rather than taking the easy road of having her scholarship pay her tuition and blowing through her parent’s savings, she decided to hustle, save and make her money work harder!
She applied three simple principles of wealth building:
1) Live under her means
2) Generate more income
3) Invest like a pro until she reaches her Financial Nirvana
Four years into her journey with two condos and a mixed-use duplex under her belt, she has decided to launch another fabulous business selling beautiful antiques and upcycled furniture WISEMAN + CROMWELL.
In this interview, Liane tells us how she evaluates deals, her experiences with Air BnB and why her friends call her an ‘old man’.
1. How did you get started in real estate investing?
I think growing up in Vancouver had a big influence on my interest in real estate. You see it happening all around you. My parents bought their house in Burnaby in 1980 for 80K, fast forward 35 years and their property is worth over a million dollars. Those numbers alone would have anyone convinced. However, the booming real estate market means that RE investment for a young, working professional is pretty inaccessible. Many of my friends in Vancouver are either renting, still living in their parents’ basements, or living at least 45 minutes outside of Vancouver. When I moved to Ottawa in 2009, I saw a growing market. I couldn’t believe that I could afford to buy a place, on my own, in central Ottawa. With two universities, a large contingency of federal public servants, and a growing tech industry, Ottawa seemed like the perfect place to start investing. At this time I also met a friend who had moved to Ottawa from Vancouver years before and already owned a number of properties in Ottawa. Having a friend who understands the world of RE investment and who has already done it and is willing to give you tips on how to get started is a lifeline. With the guidance and support I needed, I purchased my first place a year and a half after arriving in Ottawa and then the next condo a year later. My most recent purchase will make it 3 properties in 4 years.
2. What motivated you to invest in real estate? Are you in it for the long haul? What are the pros and cons for you investing in RE?
My number one reason is the investment potential. Its something I understand and feel safe doing and for the most part I enjoy it. I want the ability to make my life and career decisions without always having to factor in how much things cost. Success in real estate is definitely helping me get there. I’m definitely in it for the long haul, that’s where I’ll get the biggest rewards.
Pros: relatively safe investment
Connects me to my interests in real estate, housing, design and Do-It-Yourself
Helps to build my net worth and financial security
Cons: it's like having a second full time job
Managing properties can be unpredictable. You can plan as much as you want, but appliances always seem to break when you’re away traveling or all in the same month.
You must be prepared to let other things in life occasionally take a back seat. I have had difficulty learning to prioritize and dealing with not being able to live up to my own, very high expectations of myself for everything I have going on – investments, job, friends, family, and entrepreneurial aspirations. At some point, you’re not going to be able to be the best at one or all of these things and you have to be able to accept that, and know that you are doing the best of your ability.
3. Could you outline the main obstacles that you faced when investing and how you overcame them?
For my second and third property, financing was not easy. After my first purchase, new rules were enacted to make it more difficult to get mortgages. It seemed like everywhere I went, banks were turning me down because I didn’t have enough cash. I am single and it is even more difficult to qualify on a single income. I had to learn to be patient and build up more cash for my investment but I also developed a good working relationship with my mortgage broker. I went back to my broker from my first deal and started asking her questions about what I needed to do to get qualified. Having already purchased a home with her, we had a positive relationship. She gave me some great tips on how to make myself a good candidate for mortgages and how to prepare myself so that when the right property comes along, I’m in a good position to attain financing. For example, I could ask for one of my parents to co-sign the mortgage or someone in my family could lend me some money to help with the down payment. These tips helped a lot when securing financing for both my 2nd and 3rd property. I try to surround myself with a team of knowledgeable people to help me make informed investment decisions. This includes my broker, my agent, a good lawyer, and knowledgeable friends.
4. Do you have any good or bad stories to share about being a landlord?
My first few years as a landlord were very easy. My philosophy is to keep my properties in better than average condition so that I can attract better than average tenants! So far so good. I will say that it seems like every time I go away on vacation, something breaks. I went to Vancouver and the washer broke, I went to New York and the fridge broke. On another trip to Vancouver, my air conditioner broke. So I guess, I’m never REALLY on vacation.
The last two years I have been using Air Bnb in the summer to rent my condos. I have had wonderful guests from all over the world. Meeting some of these guests is really fun and rewarding. Air Bnb is not easy but if you manage it correctly you can make a lot of money. The higher payout comes with higher risks and more management which is ultimately more time consuming and not always more rewarding. However, I’m in my second summer of using Air Bnb and I will likely continue to use it as an option for increasing my revenue.
5. Which real estate investment strategies do you use and why/how did you choose them?
I have one rule for myself which is only to invest in properties I could see myself in. If I can’t see myself living there, then I can’t justify renting it to anyone else to live there or selling it to the next owner for a large profit.
For the moment I’m holding and renting all of my properties and continue to follow this strategy. I would be interested in flipping houses but I’ve crunched the numbers and flipping has significantly higher risks and lower return. I have good knowledge of renovations, design, and décor so I think I have the skills to be a good flipper, but I don’t think the rewards are big enough for the amount of work required unless you have more capital, which I do not!
6. What do you look for when evaluating a potential deal?
I look for 1. Good cash flow, 2. Investment potential, 3. Manageability, 4. How I feel about it.
I keep a spreadsheet that helps me make rough calculations on income vs expenses to show me monthly cash flow, and resale benefits. I created the spreadsheet myself which is something I would encourage others to do, it teaches you how to calculate mortgage interest, land transfer tax, real estate fees, etc. and shows you where your liabilities are and where you can reduce costs to maximize cash flow.
7. If you could go back in time when you started investing in real estate, what would you have done differently that you recommend the audience to do when starting out? Do you mind sharing that?
I may have saved a bit more between my first and second property and bought a house instead of another condo. I rushed into getting my second property and I could have bought something with better cash flow if I had been more patient and diligent in the number crunching. At the time, it was the best opportunity and offered me what I needed. However, I prefer managing a house over a condo for which you must defer a lot of decisions to the condominium board of directors. This often means you have no control over how your condo fees are spent which can directly affect investment potential. In my case, I have volunteered a lot of my time to be a member of the board of directors so that I can have some say in the way the condo is managed. This requires a lot of time, effort, and responsibility which I believe is beyond the work needed to manage a house. This is one of many things to think about when buying a condo.
8. What is your next plan and long-term goal? How is RE going to help get you there?
I am currently in the process of launching my own business in antiques and upcycled furniture called WISEMAN + CROMWELL. I have long had a passion for refinishing furniture and household goods as well as in interior design, décor, and fashion. This business brings all of those skills together and allows me to work with my hands and interact with people more. I am very excited about this new venture! RE investment is definitely helping me with my business. I have invested in a commercial property which could be a potential place for my store and would allow me to operate my business at a minimum expense while still working a full time job. I’m not a huge risk taker and this is a pretty big risk, my real estate investment is helping me manage that risk and giving me options in case things don’t work out as planned. In the case where it does work out, my RE investments will help support a transition from full time employment to full time entrepreneur, a goal I would like to achieve in the future. I’m going to be a vendor at the Urban Craft Market show on June 20th at the Glebe Community Center and I will be launching an online store shortly afterwards.
9. Why do your friends call you an 'Old Man'?
My friends sometimes describe me as an old man. My hobbies include shopping at Lee valley, woodworking, and drinking whiskey, so I guess they’re not that far off.
Now, back to you! Has this inspired you to take action investing in real estate or find ways to generate more income?
If you like this post as much as I do, please share it with your friends to help them in their real estate journey and reach their financial nirvana:).
And don't be shy, let me know how I can best support you in your journey by emailing me here. I’m here to empower, guide and encourage you to reach your financial nirvana.