Good advice is essential for investment success.
Tony and Jo-Ann Peters were primed for success when they rolled out a brand-new business venture in 2007. Having done all the management, marketing and legal legwork to sell franchises to real estate investors who wanted to sell lease-to-own properties by following the proven systems that Tony and Jo-Ann had pioneered, the couple was justifiably excited about the prospect of helping thousands of Canadians buy their own homes.
Looking back on a business venture they’ve since wound down, Tony is confident they did everything they could to make the idea work. He’s also sure it made sense to adapt to a new business model when the franchise model proved too complicated to pursue, especially given the fact that their own real estate investment portfolio also needed their attention. Sometimes, great ideas can also be great distractions from what is already working.
What’s really important here is that Tony and Jo-Ann set their goals high, did what it took to make those goals happen, and never let anyone steal their dream. The fact they didn’t hit the exact target is moot, since their own investment business is now stronger because of what they did, what they learned and what they now know about where their business is headed.
That sense of direction owes much to the legal and accounting advice they sought along the way. A variety of legal specialists helped them navigate the complicated territory associated with launching a franchise enterprise, and Tony depends on their chartered accountant to help them through the details of what Parts 5 and 6 are all about: the ins and outs of Canadian tax law.
As you read through their story, pay attention to how systems continue to play a major role in helping Tony and Jo-Ann Peters meet their targets. They’ve obviously learned that niche marketing opportunities demand niche systems. So, if you really want to be a creative real estate investor, you’d better be serious about creative systems, too.
Tony and Jo-Ann Peters stopped counting the number of revenue and lease-to-own properties they’d transacted soon after their portfolio passed the 250 mark. But don’t get hung up on their inability to attach a specific number to their portfolio of residential properties on any given day: Tony and Jo-Ann carefully track the numbers that count.
Indeed, Tony is quick to dismiss real estate investors who tell him they don’t want to be bothered by the numbers side of their investment businesses.
“I′ve talked to people who tell me they want to buy real estate but hate the legal, accounting and financial management side of the business. Let me tell you, that’s a side of the business you better get good at if you’re serious about making money,” says Tony, president of Creative Housing Solutions Inc. and a suite of related corporations with a keen focus on the lease-to-own residential real estate market.
Investing in Canadian real estate since 2001, Tony is all about the niche marketand targeted the lease-to-own market from the get-go. But doing things differently, or
″creatively,″ as Tony likes to say, doesn’t mean you can’t learn from the mistakes of others. Indeed, from where Tony sits, that’s the only way to go.
He and Jo-Ann enrolled in their first REIN weekend program in the fall of 2001. Weeks later they were buying property, with Tony headlining the property search and acquisition and Jo-Ann handling the books. By mid- 2007, they had transacted 150 revenue and lease- to-own properties, were holding 60 doors and were pushing ahead with plans to franchise Creative Housing Solutions Canada, a lease-to-own company they started in 2003.
A Canadian version of a successful U.S.-based investment strategy, Creative Housing Solutions Canada was set up to help renters buy their principal residences. By the time they decided to enter the franchise market, Tony and Jo-Ann had already helped more than 50 renters buy their own homes. They were also fielding a growing number of requests from others who wanted to emulate their success by using their approach. Or so they said.
Tony liked the idea of sharing strategies, butwas concerned about quality control. As it turns out, that trepidation was well placed. Even though they spent a year on legal issues and branding and eventually sold seven franchises, Tony faced ongoing problems with franchisees who signed documents saying they would operate the business one way and then did something else their own way. Having worked with tax, copyright, trademark and intellectual property rights lawyers to set the business up, Tony knew that successful franchises couldn’t afford a weak link. “The franchisees wanted to do their own thing and that was not a good thing for us,″ he recalls.
Not prepared to stick by a business model with more frustrations than they were willing to put up with, Tony and Jo-Ann took a tough look at the model and came up with a new approach. They still manage their own portfolio of long-term-hold and lease-to-own properties. But instead of selling (and managing) franchisees, they teach others what they do. “We went from being students to being able to share our experiences with others and it’s been great!” says Tony.
Their new mission, which says they are “committed to educating, motivating and empowering others to take action,″ is a good fit with a corporate philosophy that builds on the age-old wisdom about living life as a journey, not a destination. That implies a willingness to learn as you go and to be prepared to change your route when a new one holds more promise. It doesn’t mean blind change. “You need to seek counsel from the experts and from people who practice what they preach,” says Tony.
That focus on education extends to the professionals who work with them, too. When Tony learned about family trusts, he got excited and went to his chartered accountant for help. The CA tried to talk him out of the idea, but agreed to investigate further by attending a seminar with Jo-Ann. “In the end, he only charged us for an hour of his time instead of two because he learned new information,” notes Tony.
The fact that Tony was willing to pay the CA for two hours of his time sets him apart.
And that’s okay with Tony. He took a similar bring-in-thepros approach to the franchise concept and has no regrets. “You can’t be afraid to spend a little money in those areas because quality information is a wise investment.”
Further to that, his top advice to new and experienced real estate investors warns against free information. “People gravitate towards free information, butwhy?” asks Tony.
“The people with free information are the least qualified and they’re the most eager to provide information because they don’t have to take any responsibility for being wrong.”
Besides that, “free” information and seminars often lead to a sales pitch, so they are really not free.