Financial Freedom: Not as Simple as It Seems

31 January 2024

Whether you’re new to real estate or own multiple properties, we’re all seeking the same thing: financial freedom.

At 19, I was sold this “financial freedom” as something achievable in less than a year. That famous financial freedom… “buy a building and you will (not) be free!” they say.

The reality? It took me 3 years to generate enough income to cover my personal living expenses. Add another two years before I could start generating income exceeding my personal expenses and become financially free through my real estate portfolio.

Becoming financially free involves a combination of factors:

Net Worth

People often think that the focus should be on the “positive cash flow” of our properties. We look on Centris, we analyze the revenues and expenses to see “is the building cash flow positive?” If you’re looking at the same Centris as me, almost no building is profitable.

The secret to my financial freedom? It hides behind a very important concept I learned throughout my journey: financial freedom starts at the top of the pyramid, at the level of your net worth (your assets – your liabilities = your net worth).

Buy a building with “optimization potential,” optimize it to increase its profitability. A building is like a business. The more profitable it is, the more it’s worth. With a good strategy and the right support, you can buy a cash flow negative building and make it cash flow positive so it gains value. Then you can refinance and buy a second one.

You need to use your buildings as leverage to increase your net worth, and then build your positive cash flow one building at a time.

The key is, therefore: to understand how to legally and ethically optimize your buildings. (PS: we can help you through our programs)

CAPEX (Capital Expenditure)

CAPEX (Capital Expenditure) is an essential element to consider in the world of real estate. It encompasses costs related to renovation, repair, and improvement of a building. Often overlooked, CAPEX can significantly impact the positive cash flow of your building in the long term.

It is important from the purchase of your building to identify the renovations that will need to be done in the medium or long term, and to assess the associated costs.

Once you know the costs, it’s important to incorporate them into your cash flow forecasts for your building.

Another key point to ensure that your cash flow is affected as little as possible due to CAPEX is to be proactive when there are daily renovations to be done on your building. By regularly taking good care of your property, you can extend its lifespan and minimize long-term repair costs. Don’t be like the ‘block owners’ in Quebec who don’t do regular maintenance on their property, and then wonder why their building isn’t worth anything anymore…🏡💸

In short, yes it is possible to become financially free through real estate in Canada, but it needs to be well strategized with the right techniques.

If you need help, don’t hesitate to make an appointment with us!

This article was written by Cory Albert.

Cory Albert is an entrepreneur and real estate investor. He owns a real estate portfolio worth several tens of millions.

He has made several famous appearances in interviews and is also the creator of Cory Albert Real Estate Investment, the #1 platform in Canada for real estate coaching and support, helping families to become financially free.

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