Last weekend I had a chance to take part of the 9th real estate course that Peeter Pärtel organizes. The 10th, which will take place in autumn is almost sold out, if you happen to want to grab a ticket. It was a very intensive 2-day course that firstly gave me a lot of inspiration for blog posts and secondly it was a very high quality look into what is happening on the real estate market. This is why I wanted to give an overview of how the days went.
The next financial crisis – when?
Understandably the start of the first day after the intro and expectations part (which was a bit slow for me) focused quite heavily on what exactly is happening on the market. Many investors were (surprisingly to me) very worried that a new crisis is literally around the corner, while others (like me) didn’t have such a pessimistic outlook on the situation of the market.
It is clear that there is a crisis on the horizon, because there is always a crisis on the horizon. A lot of people seemed to be slightly too panicked about this topic, and this motivated me to write a series of posts about how to prepare for a crisis that I’ll hopefully publish next week. People are right to be careful when it comes to real estate since the previous boom wiped out the life savings of many people. However, taking sudden action might cause more harm than good.
Taxes – who, how much, when?
Like with other classes of investments, taxes is a very important topic when it comes to maximizing income you get from investments. When it comes to real estate then some things you need to know to not make mistakes, so this part focused heavily on how to operate as a business, what kind of tax cuts are available for you and how to optimize taxes as a business.
I found this part super valuable because people asked a lot of very good questions and I got a chance to take the time to think of a perfect tax strategy for my own apartment for when I sell it at some point in the future. Since I have a company myself, I know how important it is to know how taxes work even if you have an accountant, so I was happy to see this topic get a lot of attention.
Checking real estate for any faults
There are dozens of different ways your purchased piece of real estate could be a “lemon”. This section focused heavily on what to check starting from a visual overview, looking over the documents and all the way to finding big faults in construction.
With my own apartment I’ve experienced some of those issues, so it was a very valuable part. I went to look at an apartment a few days after the course, so there were definitely a few things that I paid more attention to than I would have otherwise. (For example ventilation systems.)
Construction & remodeling
Since a lot of people focus on finding apartments that aren’t in the best order to fix them up and then either rent them out or “flip” them, then this was obviously another important section of the course.
What I learned from this is the fact that unless I have a very trustworthy person next to me, I’m not likely to be the person who is interested in doing flips. While I know at least a reasonable amount about construction I’m not the type of person who finds it all that fascinating.
As we all know, real estate is expensive and trying to make any purchases means that you need thousands or tens of thousands of euros. This is why most people use loan money to be able to make purchases they otherwise wouldn’t be.
There were a few people who talked about what are the conditions to get loans from banks and what you should be prepared for when trying to get a loan to invest into real estate. This part also spent some time on the idea of getting money from FFF – family, friends & fools. A lot of people who had started investing into real estate said that they had gotten their first round of financing from friends.
Summary of first day
Sadly I missed the last section that focused on a different way of analyzing real estate, but since it was based on the book Property Magic, I’ll get around to that at some point. The day ended with a home work assignment to find a project that you’d want to invest into and to be prepared to present it the next morning.
Overall I was quite impressed by the first day. The start was a bit slow, but the topics got very specific and very valuable very quickly. Also, the people who attended the event were impressive in many ways, a lot of them had experience they were very much willing to share, and that added even more on top of the value of the information from the presentations.