Saturday, September 26, 2009


1. An RRSP is mostly aimed at saving
for retirement. A TFSA is for all your
other savings goals.

2. You don’t pay tax on the money you
save in an RRSP until you take it out.
With a TFSA, you must pay any
income tax due on the money you
contribute. You don’t get to deduct
your contribution from the income
you report on your tax return.

3. When you take money out of an RRSP,
the amount is added to your income
and taxed at current rates. With a TFSA,
there’s no tax on any money you take
out – not even the money you made
investing, including capital gains.

4. You have to close an RRSP after age
71. There is no time limit for contributing
to a TFSA.

5. With both plans, you can name your
spouse or common-law partner as a
beneficiary. The money will roll over
to them upon your death. But with an
RRSP, after your partner dies, there will
be taxes due on any money left in the
account. So if your children inherited
the money, they would have to pay
that tax.

Friday, September 25, 2009

Prime Minister Harper - Home renovation tax credit

This is not a post on a commentary on the home renovation tax credit, which coincidentally I have taken advantage of (new bathroom).

Take a closer look at the picture - it is Prime Minister Harper, my wife, son and myself at Rona shopping for new bathroom fixtures. Pretty exciting to have the Prime Minister as my personal shopping buddy!

'Do it!'

There are many things that are important when establishing a new business. Investing in real estate is a business. There is cash flow analysis, making solid connections, building a network, hiring the right people, marketing, accounting, etc. The most essential thing to do is "DO IT".

Watch this video on starting your business and the power of "Do it" -

Thursday, September 24, 2009

Mortgage logic

Sometimes we miss the point. It is so obvious that we overlook it. As an investor, I always put my properties on a line of credit. I was asked yesterday why?

I thought for a moment, then realized that this person is not familiar with the Smith Maneover. They did not know how to make their mortgage tax deductable. Many people do not understand the advantage of tax deductable debt.

I found out tonight this is not that uncommon, as a person approached me with $60,000 in cash to invest. I chatted with them and told them we need to check their mortgage to see if they are on a 20/20 program or a 15/15. Then we pay down their mortgage by the maximum allowable amount. We then set up a line of credit on the property, borrow the money out and invest it in real estate.

This person was puzzled and looked at me kind of funny. "Why do all that stuff, I can just use the $60k".

I agreed, we can, but by doing this more complicated system, you can borrow the money back out of your house and write off the interest charge on this money (as long as it is used for an investment). We are going to buy cash flowing real estate and use the excess cash flow created to us the other part of the 15/15 program, which is 15% over payment per payment.

Back to my original question, why are my investments on lines of credit? I can pay interest only on a line of credit. I use the increased cash flow created to put in a bank account and once a year, I make a lump sum payment on my mortgage. This differential is around $1550 per $100,000 annually. That means you can take off $1550 from your personal residences mortgage (which is not tax deductable), instead of paying down the tax deductable mortgage on your rental property.

One other positive on this - your primary residence, when sold, the profit made is tax free, whereas on an investment property when sold, you pay capital gains.

Property Management Solution

I have come across the most effective property management solution out there. It is a software program that allows you to keep complete control over your business.

Having a computerized system of tracking income, expenses and such items is invaluable for the real estate investor.

Check out Landlordmax, the property management solution of professional investors!

Wednesday, September 23, 2009

Get CASH FLOW with no management, no tenants

Everyday I meet investors who want to have cash flow with no management problems created by tenants. This has been very difficult to find, as tenants are the source of the cash flow, by paying you a monthly rent that exceeds your carry (bills). Most people, lets face it, do not want tenants but what the cash flow and equity growth associated with buy and hold real estate.

Houses in Phoenix Arizona are selling for $85 per square foot. Building costs to build a house in Phoenix is $100 per sqft. I found a company buying houses between $35 and $65 per square foot. Once net migration into Phoenix overtakes the current housing stock, the builders will have to build again and prices will go up. Even if prices went to a minimum of $120 per square foot, these homes will double in value.

I went to Phoenix Arizona this past week to investigate a cash flow/equity real estate investment. What I found was really impressive - a 6% annual bond return and when the assets are liquidated, a 60% share of the net profits.

What does all this mean?

After 5 years, you will likely realize a doubling of your money. So if you put $50,000 into the investment, each year for 5 years you will receive a 6% return ($3,000 annually - total of $15,000 over the 5 years). At the end of the five years, when the project is exited, you will get a lump sum of $35,000. This means a total return of $15,000 + $35,000 = $50,000

The real exciting part is that the 6% is a bond and the back 60% of the net profits is distributed as a dividend, making this extremely tax friendly. If you invest through your RRSP, it gets better, as the 6% bond is paid back into your RRSP (along with your $50,000 invested), but the 60% of the net profits is paid to you in cash (as a dividend). For all the baby boomers in the house, this is a great RRSP meltdown type strategy. Please note, this strategy has been devised by KPMG a top end accouting firm.

Another exciting way to get into this opportunity is using leverage - borrow $50,000 on an unsecured LOC. You will pay prime +1% (3.25% annually). You are creating 6% per year, this means a net positive to you the client of 2.75% annually ($1375 per year) and you would still get that 60% of the net profits. This is an example of good debt!

Tuesday, September 22, 2009

Distressed Real Estate Investing

I found this informative link on investing in distressed real estate. If you are interested in learning even more, please contact me today -

Monday, September 21, 2009

$115,000 house in Arizona

Check out this house, this is what $115,o00 buys you in Arizona. Here is a photo of all the people who went to Arizona on a fact finding mission in front of a 3200 sqft house, with granite, 3 bathrooms and 4 bedrooms on a 60 by 100 lot. Total price ... $115,000!

Pre-construction condos are hot!

Sold two pre-construction condos today, the Ottawa market is very active. Call today to learn how to increase your wealth through real estate!

Land Banking in Action

I had the opportunity to visit the future site of Keystone Business Park, a land banking project that has gone through the process of real estate syndication. It is no longer available as an investment, but it was pretty amazing to see!

The property is across the street from the Crossiron Mills Mall, the largest square footage mall in the world. This mall is huge! I only had a small side trip to the Sunglasses Hut as my travelling partner lost his sunglasses. Thankfully, our tour guide guessed right that the Sunglass Hut was near the food court.

The road that fronts onto the land banking property was a small country road with a huge pot hole and a combine farming the land. The farmer is left there, to use the land for a rental fee, to pay the property taxes on the land. The road that the property fronts onto will be only the second access point to the city of Airdrie, a smaller satilitte community in North Calgary.

Airdrie is a top notch community with lots of big homes and great quality finishing. Hockey players, executives and oil and gas barons live in this community and commute to downtown Calgary daily. There is only one route from Airdrie to Calgary, until the new four lane road is developed in front of the land banking opportunity that has finished syndication.

This piece of land is dripping with possibilities. I was impressed with this idea of land banking and can see some really high returns in the future for the lucky few who bought into this land banking opportunity in Northern Calgary.

Register for our upcoming seminar to learn about hot new opportunities in land banking and a new concept house banking. 613 233 8606 x 1
Increase your wealth through real estate seminar this Wednesday night. Book now, few seats remaining! Call 613.233.8606 x1, learn about RRSP real estate in Arizona and opportunities right here in Ottawa
Real estate syndication is the easiest way to create cash flow and equity growth, using experts, who have a track record!
Phoenix, Arizona has an average of 127,000 people moving there each year (average number over the past 25 years)

Better with Bennett

"I was very pleased with the service I received from the Bennett Team - they were very professional, yet personable and helped me to resolve some difficult circumstances with a potential buyer and dealing with my emotional ties to the property. The Bennett Team by far outshines any realtors I have worked with in the past and I look forward to working with them in the future as a real estate investor."

Monday, September 14, 2009

Penthouse 1205 - 200 Besserer

Welcome home to your penthouse apartment, skying above the Byward Market. This is a lovely 2 bedroom, 2 bathroom condo with great views of the Gatineau Hills and the downtown core. Top of the line finishes highlight this condo.

Art in the sky! Views, views! Enjoy stunning NW views of the Peace Tower and the Gatineaus from the chic corner unit.Lux. Brand New Condo, located in the heart of the City, seconds from the Byward Market. 10ft ceilings, oversized corner windows flood condo with natural light. Brand new condo ft. dark hrdw floors, stylish granite counters, stainless appliances and 2 luxury baths. Building includes a pool.

40 Kempster

I have had the opportunity to list a hot new property located at 40 Kempster in Britania. This is a 3 bedroom, 2 bathroom detached single family home with a huge back yard. It is fully renovated with hardwood, granite and stainless steel.

Check this house out, it will not last long!

Why have two places, when you can live the cottage lifestyle in Ottawa? This home was originally a cottage, then transformed into a fully renovated dreamy New England-style home. 3 bed/2 bath on quiet street mere blocks from river. Granite, hrdwd thru, main floor family rm, s/s appliances, large treed lot, tons of windows allow natural light to flow in, this is a must see!

Saturday, September 12, 2009

Real Estate Syndication

Real Estate syndication is an investment structure that allows groups of like-minded investors to acquire, control, and profit from large and lucrative commercial and residential income properties. In common speak, this means pooling your money with others to buy really large properties.

This week, I am off to Calgary and Arizona this week to visit a real estate syndication that buys homes at $0.40 on the dollar to 2007 prices. They are targetting 175 homes, that cash flow during the hold period, then sell when the prices return to close to the 2007 levels.

I will be doing our radio show this coming weekend, September 19, 2009 from Phoenix, Arizona. I am down studying the market in the Arizona and looking for signs of recovery. My thoughts are we are going to see the US market rebound strongly by mid 2013.

mortgage rates going down ....

The rates have gone down this week:

The 5 year variable is at prime plus 0.30% (2.55%)
The 3 year fixed rate 3.45%
The 5 year fixed 3.89%

Wednesday, September 9, 2009

HST and new condo investments

I called the CRA Excise and GST/HST Rulings and Interpretations Service to speak to the specific sections that were leading to confusion. An individual purchasing a condo unit in a “Residential Complex” (not to be confused with a “Multiple Unit Residential Complex as those do not include condominium complexes) for the purpose of renting it out upon closing – would qualify for the NRRP (New Residential Rental Property Rebate) under Type 6.

However, they say, the type qualifications aren’t necessarily the definitive determination of whether or not one qualifies. Looking at the definitions for “Residential Unit” and “Qualifying Residential Unit” it becomes clearer that, provided the purchaser has a 1 year lease in place and does not sell the unit within the first year, the rebate qualification will hold, subject to the rest of the conditions in that document (RC4231-09E).

Sunday, September 6, 2009

Rate Increases ?

The Bank of Canada Govenor Mark Carney said earlier this year that he is not going to increase interest rates until April 2010 at the earliest. Some reports are now saying that interest rate hikes are likely to be at earliest in 2011. Interest rates are currently at historic lows, but in the future, maybe April or maybe in 2011, rates will go up again.

How do you prepare for coming rate increases? What effects will this have on your cash flow properties?

I have two strategies to follow to help prepare you for the coming rate changes

1 - Stay variable, for now. I am watching the US unemployment rate. Once the US unemployment rate drops, it is likely the US will raise their interest rates and Canada will follow suit thereafter.

By staying variable in the short term you can realize good positive cash flow, then once the indicators start to switch, lock your mortgage into low interest 5 year mortgages. When rates return to between 5 and 7 percent, you will be locked in at 4 percent and reaping the benefits.

2 - Pay down your principle rapidly. By using your bank's pre-payment opportunities you can pay down your principle by an extra 15 to 20 percent per mortgage payment. By following this simple process, you can reduce the principle amount of the mortgage rapidly, all the while still keeping your property in a cash flow positive position.

Once the rates go up and you have locked into a 5 year term, you can stop the pre-payment program and reduce your payment amount each month. This will allow you to remain in a cash flow positive situation for the remaining term of the mortgage. Since you paid an addditional 15 to 20 percent for upwards of 8 months, your principle is greatly reduced and a higher percentage of your monthly payment will now be directed toward principle.

Once the term is up on the mortgage, five years from now, the principle has been reduced and even if rates are at a 5 to 7 percent level, you will have had approximately 6 years of mortgage reduction plus the additional 15 to 20 percent you paid down while rates were at the current levels. This should allow for a very good positive cash flow in the property even at higher rates.

Thursday, September 3, 2009

August resale home sales solid

August (2009) resale home sales solid
Members of the Ottawa Real Estate Board sold 1,216 residential properties in August through the Board’s Multiple Listing Service® system compared with 1,181 in August 2008. This is an increase of 3 per cent.

Of those sales, 259 were in the condominium property class, while 957 were in the residential property class. The condominium property class includes any property, regardless of style (i.e. detached, semi-detached, apartment, etc.) which is registered as a condominium, as well as properties which are co-operatives, life leases and timeshares. The residential property class includes all other residential properties.

“August was another solid month for home sales in Ottawa. With strong sales and a listing inventory that is still very low, the capital remains in a seller’s market position,” said Board President Rick Snell. “Sales year-to-date are now up 2.6% over last year’s sales for the same period, which reflects consumer confidence in the local real estate market.”

The average sale price of residential properties, including condominiums, sold in August in the Ottawa area was $315,074, an increase of 12.3 per cent over August 2008. The average sale price for a condominium-class property was $225,167, an increase of 5.1 per cent over August 2008. The average sale price of a residential-class property was $339,406, an increase of 13 per cent over August 2008.