Real Estate Mastery as a Young Investor

After 11 years of real estate investing, Kyle Guthro is now working alongside CEO Patrick Francey and COO Richard Dolan as global partner with the Real Estate Investment Network and Legacy. Since University he’s accumulated properties in Hamilton, Stoney Creek, Paris, Brantford, Toronto and Muskoka to become a leading influencer for young investors on how to strategically approach money management at a young age.  

Kyle Guthro Headshot

Together we identify for you the importance of treating your portfolio like a business, stocks vs real estate investing, and how public speaking has paved the way for better communication in his business, career and family life. 

From the bottom of my heart, this was the most valuable episode we’ve done so far and contains dozens of actionable insights.

 

(If you prefer these tips in video, please click here)

Getting Started in Real Estate Investing

Kyle took a great job right out of University and immediately started saving his hard earned money. Something funny happens when you’re frugal, don’t care about what other people think and don’t buy into the unconscious consumer mentality of the masses, you accumulate capital.

At the age of 22, in the midst of the 2008 recession, Kyle’s dad brought him his first real estate investment opportunity. Because of rational money management, he had the capital to jump on the opportunity when it came knocking on his door.

“That first property,” Kyle said, “was a fix and rent.” Purchasing an older home requires renovations, upkeep and constant maintenance. Unfortunately (or fortunately depending on your perspective), within the first 2 months, his tenants called in panic because of a leak in the basement. That leak, was the first test Kyle faced to see if he was cut out for the real estate business.

A cracked foundation and $8,000 later, he decided from then on to adjust his strategy and work with his family on purchasing new builds only. Since that first home, Kyle and his family have developed significant wealth and a portfolio that would impress even the most sophisticated investors. Here’s his top takeaways from the last 11 years.

Get Your Strategy Right

  1. Treat your investments like a business. Kyle believes this, above all else, will set us up for success, “The first fundamental mindset we need to develop as real estate investors is that this is a business. We need to treat our properties like the cash flowing assets they are and delight our tenants, aka clients, just like you would if you wanted to maintain a long-term customer in business.”
  2. Find high quality clients. Tenants pay off your mortgage. If you have no tenant, or their not paying the rent, you no longer have a business. Therefore we cannot afford to compromise on the quality of our clients, even if that means sacrificing a month or two of cashflow. Nothing will put you out of business faster than a bad tenant who destroys the property, doesn’t pay on time (or never) and adds new layers of unnecessary stress into your life. Instead, do your homework, get high quality clients and subsequently treat them with utmost respect and appreciation. Buy them Christmas gifts or surprise them with a bottle of wine. Do anything you can to delight them and ensure they will help pay off your mortgage for as long as possible.
  3. Appreciation is the icing on top of the cake, not the cake itself. Years ago investors were abandoning their winning buy and hold strategy and buying properties purely on speculation of asset appreciation. Because property value was rising at an unprecedented level, investors bought for the appreciation and not for cash flow. When the market softened they were left with investments they’d paid too much for and were cashflow negative. As seductive as the quick win of value appreciation may look, stick to the cardinal rules of buying for cashflow, filling the business with high quality tenants and playing the long term buy and hold game. It’s a tried and true strategy that will make you and your family wealthy in the long run.

Is Real Estate Investing Worth the Headaches?

I asked Kyle if it wouldn’t just be easier to invest your $100,000 in an index fund or dividend paying stock? A question I’ve been seriously considering as real estate, tenants, and property management comes with many inherent headaches. He believes, no.

In Kyle’s opinion, it’s important to diversify, but real estate has created the worlds most millionaires. In addition, Canada’s immigration is accelerating and guess what people need… A place to live! Someone will be renting out those properties, why not us? And lastly, unlike with investing in the stock market where we’re allowing others to be in control of our finances and investments, with real estate you’re in control. That level of hands on experience helps you cultivate resilience, creativity and the entrepreneurial mindset. While passive stocks may be simple and safe, they will not force you to grow out of your comfort zone. You’ll miss out on invaluable skills and the consistent upgrading of your mindset and operating system.

As I personally learn more about both industries, I’m more inclined today to seek diversification. I know I’ll likely have my hands in a combination of real estate, stocks, bonds and active businesses. All of these investments have their pros and cons and in a rapidly changing economy, I believe hedging our bets will be the most promising strategy for support long-term wealth development.

Kyle’s Do This directives

Although Kyle and I had a deeply enriching conversation that spanned many more topics (you can listen to the entire interview here), his essential and actionable insights are below:

  1. Move your body. Like virtually every high performer I know, Kyle moves his body early in the morning. Wether he’s on his bike or doing a group workout class at 7am, the routine, camaraderie of being surrounded by like minded achievers and discipline it creates is non negotiable. As I’ve come to know personally, Kyle believes that movement and exercise will help you express positive emotions like confidence, gratitude and joy and it’ll give you more energy to fuel your day.
  2. Make communication a conscious practice. Competent communication is more important today than ever. The floodgates of distribution have opened because of social media, while simultaneously our propensity for focus has diminished. Therefore to break through all that noise and limited concentration  we need to be able to tell compelling and provocative stories, succinctly. This will only come as a by-product of conscious practice and Kyle suggests a quick win would be to join a local toastmasters club near your home or workplace.
  3. Network intentionally. Finding quality mentors is the equivalent to fertilizing your garden at the beginning of the planting season with manure. The right fertilizer will feed your seeds and all the hard work your putting in with quality nutrients (ideas) and ultimately speed up and multiply your path to a bountiful harvest (the success you desire). Kyle says the biggest mistake young investors make is listening to the news, their broke neighbour and friends that have never invested before! If we find mentors that have already made mistakes and can guide us to learning our discipline or desired skillset at an accelerated rate, we’ll have a much higher chance of avoiding failure and a dramatically higher rate of reaping a healthy harvest.

Audio Show Time Stamps:

  • 00- who is Kyle Guthro
  • 1:40 being on the everyday millionaire podcast
  • 3:20 starting real estate at 22
  • 7:40 finding your investment style
  • 9:25 most important lessons for new investors
  • 11:40 is it all worth it?
  • 16:00 shift gears to public speaking and how Kyle got started
  • 19:00 biggest feedback he got from Toastmasters
  • 21:00 Richard Dolan
  • 24:30 daily routines
  • 30:00 Kyle sharing from the heart

Till next time stay on offence. Aggressively pursue a better version of yourself. And remember what Jim Rohn said, “you cannot change the destination of your life overnight but you can change the direction.”

Jonathan Andrews

Out.

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