Saturday, May 30, 2009

Mortgage Solutions

Please contact my mortgage person, Lilianne Eid, for your residential mortgage needs.

Rumours have rates going up a third of a point in the near future, so lock in that rate as soon as possible.

Lilianne Eid

Manager, Residential Mortgages

Mobile Mortgage Specialist

Cell:613 222-2852

Fax:613 526-0635

Pager:866 767 5446


I will be on 580 CFRA on Saturday from 3 to 4 pm. Please feel free to listen and give us a call to discuss your questions.

I am hosting an open house at a fantastic home located at 1237 Collins. This house is in Alta Vista and is a 4 bedroom, 2 full bath, top notch renoed property. Check it out Sunday from 2 to 4.

GST New Residential Rental Property Rebate

For an investment property, an amount equivalent to 35% of the total G.S.T. calculated is payable by the purchaser to the Vendor on final closing. Within a 2 year period the purchaser is entitled to claim this amount in the form of a GST Investor rebate if they meet the government's criteria. These include (but are not limited to) having a minimum one year term residential lease on their property whose tenant was the first occupant of the suite.

Purchaser / Landlord eligible for the "residential rental property rebate" should file GST 524.

Please consult your lawyer and account to discuss these options further.

Ontario's Condominium Act

The act provides strong protection for buyers by setting out information (e.g. whether the developer intends to lease some of the units) to be provided when they buy a unit. It makes sure owners have a say in the way the corporation is run. It also establishes new types of condominiums.

If you want to change your mind and cancel the contract, the legislation gives you a 10-day “cooling-off” period from the time you receive a copy of the signed purchase and sale agreement or the disclosure statement (whichever comes later).

Thursday, May 21, 2009

Where do I put my money?

$250,000 mortgage
5% interest rate
25 year ammortorization
$75,000 annual household income
marginal tax rate - 35% (income tax rate)
interest charges over life of mortgage $186,204.00

When you earn an income in Canada, you are taxed on a graduated system. Your 5% interest rate on your mortgage is in AFTER TAX dollars.

If you paid off your mortgage using your 20/20 program (or similar program at the mortgage lending company), you would earn a 7.69% return on your money. In an RRSP vehicle, you would be happy with a 7.69% return.

Paying off your mortgage is an important step in your financial future. They money borrowed on your primary residence is not tax deductable, so start young, get a home, over pay the mortgage, then once you have the mortgage paid off, investigate RRSPs and other investments. Freedom truly starts with no mortgage!

Tuesday, May 19, 2009

RRSP mortgages

I have been researching RRSPs for a few clients and have found some interesting information on Canadian RRSP accounts. The average management expense ratio (MER) for mutual funds in Canada is 2.87%, more than any other developed country in the world.

This means very little, unless you put it in financial terms. Lets assume you have $100,000 in RRSPs, with a 2.5% MER and an 8% annual return. Let's fast forward 20 years into the future, your total gross investment is $466,100 (the original $100,000 plus $366,100 in growth). Not too bad!

But, alas, do not forget the MER - $89,700 in annual fees. Remember as well that these fees are not generating more monies for your investment portfolio, so that MER becomes $179,800 in actual loss.

This leaves your total return as $186,290, which is 51% of the anticipated return ($366,100). You have earned a total of 5.4% on your money, not the predicted 8%.

Lets assume you lent to $100,000 out as an RRSP mortgage. We assume the same 8% return and the same 20 year time line. You would receive $828.36 per month in return for your money, which over 20 years amounts to $198,806.40. Your money is backed by a hard asset (the property you lent your money on) and is a paid back on a monthly basis.

You will earn an additional $12,516.40 from an RRSP mortgage. Remember though, this RRSP money is guaranted or you can foreclose on the property. You can also reinvest money that is made, meaning you could double dip on your returns, pushing them even higher.

When dealing in second mortgages you can usually charge and even higher interest rate to lend out your money. Rates in the 12% range are not unheard of. To use the previous example, 12% on $100,o00.00 for 20 years is $259,4.35.20. This translates into an additional $73,145.20 in RRSP earnings over the traditional 8% return from the markets.

Saturday, May 9, 2009

The Marnie Philosophy

The Marnie philosophy

Real estate success is 60-per-cent energy, 40-per-cent wanting to learn, then there's the bluster -- don't forget the bluster

By Sheila Brady, The Ottawa CitizenMay 9, 2009

Marnie Bennett, holding grandson, Jameson Daniel (JD) Blok, was recently named Business Woman of the Year, professional category by the Women's Business Network. She is still celebrating with family, who also work in her real estate firm. Son-in-law Greg Blok, left, daughters Kristi Blok and Lynsey Bennett, son, Taylor Bennett and husband, George Bennett.
Photograph by: Bruno Schlumberger, The Ottawa Citizen, The Ottawa Citizen
Twenty-three years ago, Marnie Bennett was complaining about the perversity of the summer heat, yet not slowing down as we sped through a sumptuous home across from the Ottawa River in the west end.
Her flip flops flapped against the thick carpeting of the big model home that surpassed 3,000-square-feet and $300,000. Big numbers, even for Pat Piamonte, a custom builder she signed on with as a sales rep in 1984.
Late last month, Bennett was dancing across the stage as the Women's Business Network recognized top performing women in three categories: professional, corporate and entrepreneur.
It wasn't clear if the reigning queen of real estate sales and marketing was overwhelmed by the recognition of winning the professional category at the annual gala or by the fact her eldest daughter, Kristi Blok, had only moments before given birth to her first child, a son, Jameson Daniel (JD) Blok.
"It doesn't get any better," Bennett said before racing over to the hospital to see her new grandson, daughter, and son-in-law, Greg Blok. "I still can't believe I am a grandmother," she said earlier this week. "Life goes by so quickly. I wanted to be at the awards and wanted to be with my daughter."
So she did both, which is the Marnie way.
"You have to follow your passion," says Bennett who earned her spurs selling homes for the now defunct Canada Permanent Trust between 1980 and '84, before coming to the conclusion, she couldn't manage the long hours and still care for her three young children, Kristi, Lynsey and Taylor.
Selling new homes promised regular hours, so she landed a job with Piamonte selling 36 homes planned for a string of lots behind the Fairlawn Plaza in Ottawa's west end, using family connections, a helping of bluster and claims she knew all about blueprints and home construction.
Sales came easy and her boss, Piamonte, laughed after she fessed up she didn't know a blueprint from an architect's drawing or how to build from scratch.
"You did a pretty good job," said the gregarious owner of Woodlea Homes, who went on to head up the Ottawa-Carleton Home Builder's Association. "Imagine what you could have done if you had know all the stuff from the start."
Bennett went on a learning binge, mastering customer service, designer advice and land purchasing and rising to become an executive vice-president at Woodlea.
The '90s weren't easy years with Bennett often the only woman at the table, aware she couldn't leave a meeting early to pick up a child because others would see it as a weakness.
Piamonte died prematurely from a heart attack in 1993 and Bennett took over leadership of the custom building company for a year, before family took back control and she was fired.
"I now know not to answer the door bell at 7 a.m. if someone in a suit is carrying a white envelop," she says with a laugh. Except there wasn't any laughter in 1994. "I was devastated and thought my life was over at 40."
Instead of giving up, Bennett regrouped, setting up a consulting company, landing developers and builders as clients. She hit it off with Jack Stirling, then general manager of Genstar, a company which was developing Kanata Lakes. "Jack recognized my talent, that I was smart and not only froth," says the ambitious, indefatigable workaholic, who still rises most days at 7:30 a.m., working non-stop until 10 p.m.
"I am never on land. I am always in the air," says Bennett, who recruited new builders to Kanata Lakes, convincing John Doran to build terrace homes overlooking the 18-hole golf course, opening the doors to Chello homes with a mix of innovative town and semi-detached homes and spearheading marketing campaigns for Denis Laporte and his custom homes on the second fairway.
She was always on the search for fresh spins, introducing in 1996 a saucy marketing campaign with fat red lips announcing it was time to "Kiss the Landlord Goodbye" in a series of ads for the Regional Group which was radically renovating tired townhomes in Ottawa's east end to attract first-time buyers.
Kiss the Landlord was a smash hit, with many sleeping in their cars, then standing in frigid weather to be first in line. Within hours, 72 townhomes had sold stickers on their front windows.
Bennett and the Regional Group prospered as the rest of the industry faltered but sales dipped as the federal government laid off employees. So she took the same campaign to London, Brockville and Arnprior, scoring more sales.
"I am always looking for new spins, new ideas," says Bennett, who bases her success on 60-per-cent energy, 40-per-cent wanting to learn and a helping of bluster.
Through the years, there have been many large and small builder clients, ranging from Tartan to John Doran and Domicile's series of condos and townhome projects across the city.
In 2007, she formed an alliance with Keller Williams Ottawa Realty, while running with a team of six sales representatives backed up by three sales assistants and a fat Rolodex of contacts collected over the past three decades.
Last year, when the housing industry struggled, the Bennett team generated 400 sales worth an average of $300,000. "My bank account is OK," says Bennett, who still lives in Old Ottawa South, preferring to renovate than move.
However, she has encouraged her children to invest in real estate. All three, as well as her husband, George Bennett, a retired public servant, are involved in the company.
They have been from the start, pasting sold signs on renovated townhomes or helping organize buyer information sessions Bennett first introduced 13 years ago. That's when she invited mortgage officers, lawyers and experts from Canada Mortgage and Housing Corp. to explain details of buying into her various campaigns.
This mistress of the airwaves is also handing out investment advice every Saturday morning on CFRA and runs monthly seminars for prospective buyers. She's smart because 30 per cent of the 100 or so participants end up buying with her agents.
"Education is everything," says Bennett. "So is one-stop shopping."
Now, Bennett is promoting investment campaigns to buy land and homes in Arizona, earning generous returns.
It's another twist on Bennett's philosophy to improvise and to keep learning. "I find the best experts in town and then offer the information to my clients. It's the only way to survive."
That and a smile on Mother's Day from a certain newborn spells happiness to this high achiever.
Sheila Brady is the Citizen's Homes editor. You can reach her at .
© Copyright (c) The Ottawa Citizen

Thursday, May 7, 2009

From the ground up

Investing in pre-construction condos can be a very lucrative investment strategy if you know what you are doing. Retaining the services of a professional, who knows the market is advisable in this endevour.

Purchase Price - $231,000.00
Deposit - $46,200.00
Financed Amount - $184,800.00

P&I - $798.36
condo fees - $143.23
taxes - $221.00

TOTAL MONTHLY - $1162.59

principal paid down annually - $2566.54

Rental income monthly - $1250

monthly carry - $87.41 (12 months x carry = $1,048.92) – if you add the cash flow plus the principal reduction you are at a $3615.46

Projected sales price, based upon current market figures (assuming little to no growth in the market over the next two years) - $18,600.00

This means a return of $22,215.46 on an investment of $46,200.00 inside of 2 years
(24% per year).

Looking at the attached document, annually the Ottawa market increases by 6%. Factoring this in would put your sales figure much higher in two years.

$53,066.02 return on an investment of $46,200.00 inside of two years (57% return annually)

Please note, this strategy does not work with every building, this is specific to certain properties and certain buildings.

CFRA - Saturday 2pm - Experts on Call

Tune in this week to Experts on Call on 580 CFRA to hear Marnie and I talk about real life success stories of clients we have worked with over the past year.

Looking forward to helping you achieve your goals! Give us a call or visit us on the web at

80% rental offset

One of the very best financing tools that has come available in the investment property financing side is the 80% rental offset financing. In this scenario, 80% of the rental income is subtracted from your PITH (principle, interest, taxes and heat calculation), then the property is assessed to see if you fall under the 42% gross debt ratio. This means that on a property, if you total monthly carry is $1200 and your rent is $1400, the financing company would do the following calculation

$1400 x 80% = $1120
$1200 - $1120 = $80

Inside your gross debt ratio you would have to finance a total of $80/mth to carry the rental property. This is a very unique way of looking at financing a rental property.

The 80% number is used to protect the bank from vacancy, repairs, bad debt, etc. Please let me know if you need further details on this. Check out some excellent investment ideas at -

Wednesday, May 6, 2009

Busy times - Baby JD

I have not been posting as much lately as I have been swamped at home with the birth of our first child, JD (Jameson Daniel) Blok. He was a healthy 7 pounds and 9 ounces, born April 22 2009 at 8:11 pm.

It is a very exciting time and we are

truly blessed to have the little guy here.