Keyspire Wealth Tour 2015
Date: July 12, 2015
Name: Keyspire Wealth Tour 2015
Presenter: Scott McGillivray
Real estate property is one of ways entrepreneurs can create wealth with their investment. Moreover, many entrepreneurs understand the method but not the concept. Keyspire, a company with a purpose of helping people to create wealth through real estate investing, invites Scott McGillivrary, the executive producer of the show “Income Property”, to reveal his secrets and strategies on real estate investing. In this presentation, entrepreneurs will learn how to utilize real estate property as a financial tool to achieve their financial freedom.
Scott McGillivray is a skilled contractor and an award winning TV host of the show “Income Property”. He has the passion towards helping homeowners to make smart investment decisions on their property. With his industry experience, he manages to own over hundred of properties in United States. Furthermore, McGillivray is also a keynote speaker that inspires many entrepreneurs with his tips and advices on home improvement investments.
Scott McGillivray believes real estate investing is like an invisible business in the market. People need to figure it out in order to understand the concept.
“Real estate has hurtle, not obstacle. People put it there and you just need to jump over”
The beginning of the journey
McGillivray started his business from his undergrad business project. When he was still a undergrad student, he discovered a common problem for students to find a place to live. In his practicum class, he researched that problem and discovered the solution of buy and rent out property. However, nobody supported him except for the data and his partner. McGillivray used his student loan as deposit payment and proceeded his plan. With some strategies of withdraw date planning, the income from all tenants were able to cover all his expense and his current job.
At the end of the school year, McGillivray wanted another property. By using the refinancing strategy on the current mortgage, he managed to receive over $30,000 cheque. McGillivray discovered his passion. He reinvested that cheque for 2 more properties.
McGillivray emphasizes real estate investing can get entrepreneurs rich, but with a slow pace. The process can take time and it will work with the right proven system. People always feel a bit too late to enter the market. McGillivray believes the best time is yesterday, and the worst time is to wait. The timing is important. Therefore, Keyspire is born with the passion to help people understand the right proven framework.
“Love real estate? No, love what real estate can do for you”
McGillivray indicates it is easier to train entrepreneurs the right method instead of fixing what is wrong. Furthermore, it all started with a trigger point called “Instant Gratification”.
Instant gratification must work with a long term growth strategy called “the compounding effect”. The compounding effect will not give entrepreneurs the wealth in short term; however, the long term result will surpass the short term wealth. It starts off slow and painful, but good at the end. Therefore, there is a simple system for real estate investing, but it takes entrepreneurs the dedication and patient to do.
McGillivray explains 4 primary ways to create wealth from owning the real estate
Way #1: Positive cash flow
McGillivray suggests the most effective way to create wealth is to create a passive cash flow, not finding it. The income rental should set to a point to cover the total expense. When entrepreneurs create bigger positive cash flow and minimize the expense, the higher profit it will generate. McGillivray wants entrepreneurs to understand that market interest in real estate is the largest expense. Therefore, entrepreneurs need to seek and take advantage of the market value and the tenants.
Way #2: Mortgage paid off
McGillivray suggests entrepreneurs to set the rent deposit from their tenants relevant to the date of mortgage monthly deadline. It is important for entrepreneurs to keep track of the payment deadline.
Way #3: Forced appreciation
Most people believe the best way to gain profit from real estate is the strategy of flipping. This means entrepreneurs will purchase a property under value, do renovation and sell with a higher value for profit. Many entrepreneurs like this method because it gives instant gratification. However, McGillivray suggests entrepreneurs to keep the property and continue to generate the cash flow. Without selling, entrepreneurs will not need to pay for the capital gain, real estate agency commission, and other associate costs. Other people promote flipping strategy because the seller will pay them first from the gain.
McGillivray shares his “flip to yourself” strategy. This strategy is to buy hold and rent. When entrepreneurs purchase the property, they will use 3 months to renovate. After the renovation, rent will start, which will cover the holding fee. Entrepreneurs need to restructure the debit and pull the equity out to reinvest the next property. Since there is no selling transaction occur, entrepreneurs do not need to pay others. The strategy works with the compounding effect. When entrepreneurs stop the traditional flipping strategy, their income will stop; however, if entrepreneurs use “flip to yourself” strategy, their passive income will continue even they stop flipping.
There are two methods to make money in real estate. The first method is to bring money in and the second method is to save money. Entrepreneurs need to keep as mutes they can and bring in as much as possible.
Way #4: Market growth
Real estate value is growing on the market. Based on the market, the value will continue to go up. However, entrepreneurs cannot control it. McGillivray revels market growth can hurt people. When the market goes up, people will acquire property. When there is nobody lives in there, the bubble will burst and the market will crash. This will force people to sell at lower cost. McGillivray considers them as market spectator. Instead of focusing only on that segment, McGillivray wants entrepreneurs to diversity risk to all 4 ways.
McGillivray reveals the 12 strategies to win in real estate investing
Strategy #1: Effective ways of accessing capital and creative financing
There are many ways to do finance deal, and the most cheapest way is mortgage. When entrepreneurs show they have good credit, they will receive more. In hence, if they have bad credit, they will receive nothing. It is important to start invest when entrepreneurs still have something. When they start to burn out, they will discover the leverage is not on their side anymore. McGillivray suggests entrepreneurs to have tactic to finance the next one.
Strategy #2: The business around real estate
Buy and rent is not the only method to generate wealth. Around real estate investing, there might be other opportunities to invest. McGillivray wants entrepreneurs to keep their eyes open and seek the opportunities.
Strategy #3: Asset evaluation and optimizing leverage
The conventional wisdom can only take at certain level. Since the traditional mortgage from conventional wisdom is not working, entrepreneurs should not use the method. McGillivray suggests entrepreneurs to take risk and discover the new ways to improve their wealth, and not sticking to the old method all the time.
Strategy #4: Multiple investing strategies
McGillivray shows other 6 different investing strategies entrepreneurs can use aside from buy and sell.
- Buy, hold and rent
- Fix and flip
- Flip to yourself
- Rent to own
- Second mortgage
- Development
Strategy #5: The art of getting a great deal and negotiation
Many entrepreneurs are unable to close the deal because they do not know how to negotiate. Entrepreneurs need to know investors will buy if they need it. Based on the weekly market fluctuation statistic, McGillivray demonstrates that people will buy more on weekend and average seller will drop lower value on Monday due to hype on weekend. Entrepreneurs can save over $4,000 with a listing of $598,000 property by shopping on Sunday instead of Friday.
The listing is usually within 80-90 days. When the listing is about to expire, home owner will be desperate to sell. They will ask the agent to lower the price. McGillivray suggests entrepreneurs to research the listing days.
Strategy #6: Rehabs and renovations
It is important to find a good contractor to renovate the property. People is a visual creature, so the first impress is important.
Strategy #7: Securing a great tenant
If entrepreneurs cannot find good tenants, they can create it. Entrepreneurs should create a system in case tenants have problem. McGillivray suggests entrepreneurs to give them a gift when they move in. They will feel they are in debt and this is a good way to create the good relationship foundation.
Strategy #8: Property management
If entrepreneurs are unable to free up time to manage, they should hire someone to do it for them.
Strategy #9: How to leverage a power team and network
Entrepreneurs need to surround a group of individuals who understand them. Find the right people who can find the right solution for entrepreneurs.
Strategy #10: Ownership structure and tax relief
Entrepreneurs should discuss with their accountants to determine if the property should be under their personal or corporation.
Strategy #11: Structuring joint venture partnerships
Entrepreneurs need to figure out the plan first. McGillivray suggests entrepreneurs that business before pleasure.
Strategy #12: Take cheques to the bank
McGillivray suggests entrepreneurs to keep track of the payment and never miss a deadline.
McGillivray believes successful people are successful because they have a specific goal setting. They also have continuous improvement. The continuous improvement can add up over time to help them get out their comfort zone and the flexibility to push their limitation. Lastly, they use optimism and practice positivity. The more they believe in their ability to succeed, the more likely they will.
“If you think you can do it, or you think you cannot do it, you are right”