Why Every Real Estate Deal Needs a Backup Plan

*]:pointer-events-auto R6Vx5W_threadScrollVars scroll-mb-[calc(var(--scroll-root-safe-area-inset-bottom,0px)+var(--thread-response-height))] scroll-mt-[calc(var(--header-height)+min(200px,max(70px,20svh)))]" dir="auto" data-turn-id= "request-6a4e6bd9-b770-83e8-b730-324004da771f-6" data-turn-id-container= "request-6a4e6bd9-b770-83e8-b730-324004da771f-6" data-testid= "conversation-turn-102" data-turn="assistant"> 🎧 Why Every Real Estate Deal Needs a Backup Plan Real estate investing does not always go according to plan. That is why experienced investors do not just look at the upside—they build backup plans before they ever enter the deal. In today's episode of the Canadian Real Estate Investing Morning Show, Wayne and Gabby share a real-life example from one of their rent-to-own properties where the tenant buyer decided not to move forward with the purchase. For many investors, that could create panic. But because Wayne and Gabby had already planned for that possibility, the deal still worked. Instead of being forced to sell at the wrong time or accept a bad outcome, they were able to pivot, turn the property into a regular rental, increase the monthly rent, improve cash flow and keep the property as a stronger long-term asset. Wayne also explains how this same thinking applies across real estate investing, from flooded basements and insurance claims to rent-to-own agreements, tenant issues, reserve funds and market cycles. The key lesson is simple: before buying any property, investors need to know what they will do if Plan A does not work. 🧠 What You'll Learn Why every real estate deal needs a backup plan Why assuming everything will go perfectly is dangerous How Wayne thinks through multiple outcomes before buying Why systems reduce panic when problems happen How reserve funds protect investors during unexpected events Why the 5% Rule™ helps investors weather storms What Edmonton's heavy rain taught landlords about preparation Why proper cash flow matters during emergencies How rent-to-own deals can go off track Why rent-to-own is an option to purchase, not an obligation What happens when a tenant buyer walks away Why documentation and email paper trails matter How to respond when a tenant buyer wants out Why a rent-to-own property should still work as a regular rental How Wayne and Gabby turned a failed rent-to-own into a stronger rental Why market timing matters when deciding whether to sell or hold How rental demand can change the best exit strategy Why backup plans can sometimes become more profitable than Plan A 🏡 Featured Deal: Rent-to-Own Backup Plan Wayne and Gabby had a rent-to-own property where the tenant buyers were several years into the program. The tenant buyers were good people, made their payments, followed the program and were on track. But eventually, they reached out and asked what would happen if they decided not to continue. Because rent-to-own gives the tenant buyer an option to purchase—not an obligation—they were allowed to walk away. Instead of panicking, Wayne and Gabby reviewed their options: Sell the property Re-list it as another rent-to-own Renovate and sell Rent it for six months and sell later Add it to the long-term rental portfolio Because the property still passed the 5% Rule™ and rental demand had increased, they chose to keep it as a rental property. 📊 Key Lesson From the Episode Wayne explains that when they originally structured the rent-to-own deal, they made sure the property would still work as a rental if the tenant buyer did not purchase. That backup plan became critical. When the tenant buyer walked away, the property had increased in value, the market rent had increased by approximately $300 per month, and the property became a stronger long-term hold. Instead of losing money, the failed rent-to-own created a more profitable outcome. 🌧️ Why Reserves Matter Wayne and Gabby also discuss the recent heavy rain and flooding in Edmonton. Several landlords are dealing with water issues, flooded basements, insurance claims and expensive remediation. Wayne explains that this is exactly why investors need strong cash flow, proper reserves and systems in place before problems happen. You cannot predict every storm—but you can build a portfolio that can survive one. 👥 About Your Hosts Wayne and Gabby Hillier are Canadian real estate investors, entrepreneurs and real estate investing coaches based in Edmonton, Alberta. They have built and self-managed a growing rental property portfolio using strong fundamentals, creative deal structuring, rent-to-own strategies, joint venture partnerships, reserve planning and long-term cash-flow systems. Through REI Masters and the Canadian Real Estate Investing Morning Show, they help investors reduce risk, build profitable portfolios and make smarter real estate decisions. 💡 Resources & Contact Want to be coached personally by Wayne and Gabby? Join the REI Masters Mentorship Program: 🌐 www.reimasters.ca Learn how to analyze cash flow using Wayne's book: The 5% Rule™: A Cash Flow Test for Canadian Real Estate Investors Available on Amazon. Have a real estate investing question you would like answered on the show? 📧 [email protected] The Canadian Real Estate Investing Morning Show broadcasts live every weekday morning on YouTube. 📅 Upcoming Events Edmonton Garden Suites 101 Edmonton, Alberta July 25, 2026 www.reimasters.ca/edmontongardensuites101 REI Masters Edmonton Real Estate Investing Bus Tour August 22, 2026 www.reimasters.ca/edmontonbustour REIcon: The Summit Series September 11–13, 2026 Hosted by Calvin Realty 🌐 https://reiconference.ca/ 🤝 Sponsors Calvin Realty – Edmonton Investor-Focused Realtor Team 🌐 www.calvinrealty.ca Finngo Bookkeeping & Tax Specialized bookkeeping and tax services for Canadian real estate investors. 🌐 www.finngo.com/rei Kirkwood & Brennan Mortgage Group Investor-focused mortgage planning for Canadian real estate investors. 🌐 www.kbmortgages.ca 📧 [email protected]