Sarah Larbi – Build a Network of Successful Role Models to Avoid this Real Estate Investing Mistake
Sarah Larbispecializes in helping take the mystery out of homeownership for Canadians who thought real estate investing was out of reach. She has earned their trust and respect by having the drive and focus to embark, build and grow a seven-figure, 10 property investment portfolio by her early 30’s.
Sarah’s goal is to inspire and train other fellow Canadian’s to realize their property-owning dreams by sharing her 7-step investing process through her online training programs.
Her results-oriented approach has been featured in The Toronto Star, 1010 News Talk Radio, and Canadian Real Estate Wealth Magazine as well as numerous online media. She is an invited speaker at the Canadian Real Estate Wealth Investor Forum and is often a guest on numerous North American finance-focused podcasts.
Sarah is the co-host of two podcasts related to the Canadian real estate market.
“In this real estate game, it is about time in the market, not timing the market. So just do your research, jump in and keep learning along the way.”
Worst investment ever
Desire to be wealthy
Sarah had a great desire to be wealthy and she wanted to find out how she could retire at 40 while still enjoying financial freedom. So she did some research and real estate investing kept coming back over and over and over. While she came across other ways of creating wealth, she was drawn to real estate.
She managed to convince her boyfriend to join her and buy real estate property. She took a second job and cashed in some of her vacation money to be able to have enough downpayment to buy the cheapest house that they could afford.
Mistake no.1: Renting to family
At the time Sarah and her boyfriend were looking to buy their first rental property her sister needed a place to live closer to her daughter's school. So they decided to look for property in that area with plans to rent out the house to her sister.
They didn’t do any kind of research they simply asked the sister what kind of house she wanted and could afford. That’s the only information they worked with to buy their first rental property. They didn’t research the location or make any price and property comparisons.
Mistake no.2: Not using a local realtor
Sarah used the realtor that was originally helping them in a town about an hour away to find their rental property. They kept going back and forth because the realtor didn't know the market and neither did they.
Mistake no.3: Borrowing from the bank instead of a mortgage broker
Once they got a property they went to their bank for financing. The bank wanted 35% downpayment forcing her to look for a mortgage broker but at this point, she’d wasted a lot of time trying to negotiate with the bank.
Making the math work
Luckily, Sarah happened to listen to several real estate investing podcasts and she learned that she needed to figure out how to at least break even or make some cash flow from her real estate property. She worked out that she needed to collect $800 in rent per month to break even. What she didn’t know, because she had done zero market research, was that the actual market rent was about $1100.
While they didn’t lose any money from buying the property, it remains her worst investment because they didn’t make the money that they should have been making had they looked and seen the comparables of what the rent go for in the first place.
Use local agents
Sarah has learned to only use realtors that are local in areas she’s looking to invest in because the local realtors know where the best deals are. They’re also likely to have a team of electricians, plumbers, paralegals, etc. so that you don't have to go and source from scratch.
Don’t be too analytical
Be careful that you don't spend all your time doing research. Do your research but make sure that you're not sitting on your butt five years from now, still doing research. Do enough research, feel comfortable, get the right help, get your right team and then just go ahead and do it and trust that you've done enough research.
There are lots of people complaining that they should have done something 10 years ago, but they’ve just been reading and analyzing nonstop but never dared to do anything.
Don’t jump in blindly
Don't just jump into real estate investing, take a little time to research so that you can do it will all the facts at hand. This makes risk management easier.
Ask for help
You don’t know what’s out there when you’re dealing with an investment property. But the truth is that there's a lot of help available and a lot of people are willing to help as long as you ask for their help to avoid making your next mistake.
Join and attend a networking group that's real estate investing specific and build your circle. Have people that are doing what you want to do. And those that are talking to you and saying, “You're crazy, don't do it”, those are not the people you want to be around. Don't listen to them. Go and network with people that you want to be like, people you want to learn from and create that that circle around you of those like-minded people.
No. 1 goal for the next 12 months
Sarah’s number one goal is to reduce her job hours, either to part-time or to not too many because she’s not working to make money anymore. She’s at the stage where she can start taking some of her time back.
“Learn and take action. Reach out to people that are doing it around you. There are ups and downs, just pick yourself back up and keep going.”