In part 2 of this 3-episode series, Jessilyn and Brian Persson discuss different real estate investment strategies. While many new investors feel excited about the different strategies, Jessilyn and Brian emphasize the importance of starting with one asset class, especially as new investors. They share their preference for suited properties over single-family homes and condos due to higher cash flow and reduced risk.

The Perssons also discuss the challenges of short-term rentals and commercial properties, including high condo fees, special assessments, and tenant occupancy issues. They advise investors to fully leverage real estate income to fund their lifestyle before quitting a job and highlight the importance of making smart, long-term financial decisions.

Jessilyn and Brian also share some of the factors investors need to pay attention to, including market dynamics, including location, economic trends, and market cycles. They use their investment in Sherwood Park as a prime example of these trends, stressing the need to adapt to changing interest rates and shifting economic conditions while leveraging real estate for financial independence and work-life balance. Tune in for valuable insights on how to navigate the world of real estate investing and achieve financial freedom.

Resources discussed in this episode:

• The 3 Mistakes that Keep High Achieving Couples from Building their Wealth, Freedom & Living a Life they Love

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Contact Jessilyn and Brian Persson | Discover Life By Design:

• Website: DiscoverLifeByDesign.ca
• Instagram: DiscoverLifeByDesign
• Facebook: Discover Life By Design
• Linkedin: Discover Life By Design

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Transcript
Jessilyn Persson: [00:00:09] Welcome to the Life by Design podcast. We are your hosts, Jessilyn and Brian Persson. Are you and your partner looking to align your financial goals and build wealth together? Have you ever wondered what might be stopping you from confidently investing in real estate or growing your wealth as a couple? Or why it feels so hard to get on the same page financially?

Brian Persson: [00:00:28] That's exactly why we created this podcast and the 'Riches, Relationships, and Real Estate' program, to help couples like you invest confidently and achieve both your financial and relationship goals. If you're curious to learn more, visit discoverlifebydesign.ca to book your discovery call to build your customized wealth strategy with us. Let's create the life you deserve together.

Jessilyn Persson: [00:00:51] Today's topic, we are going to continue on the possibilities in real estate, this is part two. In the last episode during part one, we discussed understanding your goals, what makes you uncomfortable, and what are you willing to do when it comes to real estate? Now I'm really excited to roll into part two of three. This is going to be a three part series, so stay tuned after this for the next one. Today's takeaways, I know the first one is different real estate asset classes. I know this is a hot topic because it's probably one of the first questions I get asked when people hear that we are real estate investors. Then they start trying to pick our brains on all the different options in real estate, just for me to bring them back down to be like, let's start with one.

Brian Persson: [00:01:39] Sometimes the first time people talk to us, they're trying to decide their entire real estate investment future in that one conversation. It's just not possible because there are too many different types and too much to invest into.

Jessilyn Persson: [00:01:51] Under real estate asset classes, the one we're most familiar with is residential properties. Which of course can run the gamut of single family homes, duplexes, suited properties, condos, townhouses, right into multifamily. Our portfolio has encompassed all of those, with the exception of the larger multifamily. That's where we, at some point, analyzed our portfolio and went, some of these just aren't working for us. We got rid of our single family homes and our condos, but we just found a real sweet spot here with suited houses.

Brian Persson: [00:02:36] It increases the cash flow of your property. You have two rental incomes instead of one from your single family home. As you know, the more units you can have under your portfolio, the less risk you are going to take on, because you're never going to be out of rent entirely. That's why we like the basement suites, it reduces the risk of having a single family home.

Jessilyn Persson: [00:03:01] Probably the main reason we got into residential properties at the time when we first did, is ease and access. To buy a condo or a single family house back then, I think we're paying $100,000, maybe $117,000. To buy a property at 20% down, that was easy compared to a multifamily where now you're looking probably in the millions and then your percent down there is much bigger. It's easier to get into, and that is why we chose that route at that time. Under residential there are other options like short term rentals, some people call them Airbnb, which we have not dabbled in and chose not to after we've done some research. But we have friends who do quite well in it.

Brian Persson: [00:03:49] Primarily it was the work involved in short term rentals. We want it to be passive investing, or as passive as we can get it. That was a big problem with short term rentals, is that when you hire it out, all these services, then you lose all your profits. If you do all the work yourself, you pretty well have a full time job. But for some people, they love condos and they love doing the short term rentals. That's sometimes the only way you can make a condo work. That's quite explicitly why we got out of condos because they worked when we first bought them, but as time went on, condo fees went up. There's a lot of things you can't control about a condo because it's up to the board. Even if you are on the board, sometimes you don't have control, you get vetoed.

Jessilyn Persson: [00:04:40] I still chuckle, when one of our condos got to the point where the condo fees were higher than the mortgage on the property it's like, really? How is this even possible? Also, we've been hit by several special assessments, as have many people who have condos. Our big one that we got hammered with was, I think, $60,000. When I say that to people, they look at me like I've gone mad. They're like, 'like that's even a possibility'. I'm like, it is.

Brian Persson: [00:05:08] I would say we actually got lucky with that $60,000, even though it sucks to get that special assessment. The way I had bought that property, because that was the very first property I had owned and we turned it into a rental eventually, meant that we had enough equity in the property itself that the property was able to pay for itself.

Jessilyn Persson: [00:05:30] To pay for the assessment.

Brian Persson: [00:05:31] None of the money from that assessment had to come out of our own pocket. That was lucky because at that time that was very early on in our real estate career and some of the knowledge that we're passing on right now, we did not have. Condos can be dange...