Hello FNM Community!
When I first met Simmi Wadhera, I knew I needed to interview her. She had just won ‘Newcomer of the Year’ in 2014 by Canadian Real Estate Wealth Magazine and at the height of her government career, she also decided to take a new direction in life and leave her position. It really resonated with me because I also left my full-time engineering career around the same time.
Simmi inspired me with her courage, and immense determination to make her dream come true using real estate as the means to get there.
If you ever wondered:
How to overcome your fear investing in real estate
What is the best real estate strategy to build wealth
How to quickly evaluate a rent to own deal
If so, you’re going to love this interview from Simmi Wadhera. Join us as we talk about real estate, valuable lessons and what you can do to jump start your real estate journey.
How did you overcome the fear investing in Real Estate?
Before I invested in real estate, I invested in myself and my real estate education. I joined several real estate clubs and worked with mentors to attain my real estate knowledge quickly and avoid costly mistakes. With the knowledge that I gained, I was able to learn strategies and tips that allowed me to confidently take action without any fear. Also, my financial background as an accountant really helped reduce the risk because I was able to analyze numbers easily and ensure I only invested in profitable properties.
You decided to leave your career in the government, which is one of the courageous things you can do in life, how did you come to that decision?
At the height of my career in the government, I realized that I still wasn’t happy. I always wanted to be an entrepreneur but never had the courage to do anything about it. So with the support of my family, I decided to leave my job to start my real estate business full time. Now I finally have the freedom to do what I want and the financial means to do it.
Do you mind sharing your future goals in life now that you’ve taken that big step?
Right now, I partner with other people through joint ventures and help others also achieve financial freedom. My future goals are to diversify my portfolio into large multi-family properties.
What got you into real estate vs other investment strategies?
I have tried other types of investments. I’ve invested in stocks for the past 25 years. Although I made a substantial amount of money in stocks, I also lost a substantial of money in stocks as well. Real estate is different. Although, the market can fluctate, I believe that there is a lot less risk because it is a tangible asset. There are also many different ways to make money in real estate including price appreciation, mortgage paydown, regular monthly cashflow and tax breaks.
Which real estate investment strategies do you use and why/how did you choose them?
There are so many different types of strategies in real estate that it can be overwhelming. I learned to find a strategy, become an expert in that strategy and then move on to another strategy. That is why I first started with single family homes and then moved on to Rent to Own.
The benefits of these strategies are:
Buy and hold for single family homes
The liquidity of this type of investment is stronger than any other type of investment. You can sell these properties to other homeowners as well as to other investors.
It’s much easier to find tenants and this reduces the risk of having an empty investment property.
Rent to Own:
With the Rent to Own strategy, the tenant has the option to purchase the home for a set price in the future.
The Rent to Own strategy provides a very attractive return usually within 1 to 5 years.
The Rent to Own tenants provide a large upfront deposit which decreases an investors initial investment into the property.
This strategy also provides far more reliable tenants because they are purchasing the property at the end of the term.
Since the tenants have pride of ownership, they really take of the property and therefore, there are very few repairs and maintenance. If there are any repairs and maintenance, then the tenants are responsible for repairs upto $500
There are no property management fees.
There is a predetermined return on investment since you know the set price to sell the property to the tenant.
You are helping deserving people achieve their dream of home ownership.
What do you look for when evaluating a potential Rent to Own deal?
I look for the following things when I’m evaluating a potential deal:
Location, location, location! This is extremely important. I do my homework to identify good locations where there are strong economic fundamentals. The location should be affordable, have great amenities, great transportation, a growing population, low vacancy rate, low crime rate and a growing job market. This ensures that there will be good price appreciation. I look for beautiful homes in beautiful neighborhoods so I fill my properties quickly, have good quality tenants and incur very few or no repairs and maintenance.
Tenants- I do a very detailed credit check on tenants and choose tenants that can provide a minimum down payment of $10,000.
Return on investment – I look for properties that provide a ROI of a minimum of 15% annual return.
Have you had any warrior scars as a landlord, could you share that story with us and how you overcame it.
During my real estate journey, I have hired several property managers to help me manage my properties. I have learned some important lessons along the way. The right property manager can make your real estate experience a pleasant and profitable experience whereas the wrong property manager can make it a complete nightmare.
On the first rental property that I purchased, there were some minor repairs and maintenance that needed to be done; cleaning the house, and painting of the deck. The quote from the property manager was $3,500. This quote seemed unreasonably high to me so I decided to get a second opinion. The second quote came out at $600.00. The company that gave me the quote of $600 did an amazing job and I saved $2,900. The lesson I learned was to trust my intuition and verify the numbers.
Also bring out your inner detective and make sure that you review monthly statements as soon as you receive them and discuss any charges that seem excessive or incorrect with you property manager. This is real life and mistakes do happen. To run your real estate business effectively, you must know what repairs should cost (e.g plumbing repairs, annual maintenance for furnace, etc.) so that you don’t overpay for routine maintenance and repairs.
What are two things you would advise the next generation of real estate investors to do in order to have a thriving real estate investment business, career and personal life?
Get a rock solid education, so that you can make good investment choices and ask all the right questions.
Take the time to celebrate successes. Buy something special, go out for dinner, or take a trip.
It makes the journey fun and worthwhile.
What are three things did you do early on that helped in advancing your RE business?
Three things I did to advance my my real estate business was to
Plan – “If you fail to plan then you plan to fail”. I have a 6 month, 1 year, and a 5 year plan so I know where I’m going. I make it a priority and take steps toward my goal everyday.
Join a real estate club – I joined a real estate club to ensure that I’m surrounded by like minded people that support and encourage me.
Get a mentor – I got a mentor to accelerate my learning curve.
What are the two most valuable lessons you have learned in your business so far?
Just start investing in real estate today. Don’t let fear or excuses stop you. As the saying goes, “The best time to plant an oak tree was twenty years ago. The second best time is now”.
Build a good team of professionals including real estate agents, accountants, lawyers and property managers. They will help you make good decisions, save you thousands of dollars and help you build your portfolio faster.
If there's anyone in your life who has pondered over real estate but needs a bit of inspiration, please forward this post. It might be just what they need to move ahead in their journey!
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.
Happy Investing,
