Sunday, May 30, 2010

Fact based Investing

I have known Greg for quite some time now. During this time I found him extremely helpful, be it informing about potential new investment opportunities or providing any advice related to real estate. What I found educating is his views and opinions were based on sound analysis (backed by numbers) not just wishful thinking. He very well distances the emotional element when it comes to assessing real estate investments and knows well the merits of investments based on cash-flow vs. capital appreciation.

If you pick a good book on real estate investment, he and his team has executed most of the investment strategies – be it buying wholesale and selling retail to identifying and investing in the faster growing locations. I am very impressed by his knowledge and have benefited from his success-driven advice on real estate.

- Anindo

Friday, May 28, 2010

Knowledge and Experience

Greg shared his deep knowledge and vast experience in real estate to help me find just the right property. He was very considerate in all aspects of the transaction and stays remarkably calm in all conditions.

Thanks Greg!


Wednesday, May 19, 2010

My Walmart Theory

Unless you live under a rock somewhere, you have heard of Walmart, the multi-billion dollar retailer.  The largest retailer in the World and of course the World's largest corporation.  I am assuming, mostly since I have never built a billion dollar company, that before Walmart opens a new store, they do oodles of research before building a their new Superstore.  To undertake that size of store, the company must be assuming that there is a potential of profit, if not today, maybe in a few years.  To make that profit, the store must be in a center that is preferrably growing and has a future need for many products.

I do not often find myself in a Walmart, but to be honest, everytime I go there, they seem to be really busy.  The line ups are always long, but they seem to run efficiently.  The structures are massive with huge sales floor square footages.  Retailers, like Walmart, work on a sales/square foot number that illustrates a stores profitability.  For instance, the Loblaws at South Keys is one of the highest grossing stores in the Loblaws empire.  They produce more sales volume per square foot than any other Loblaws store. 

In order for these stores to be successful, you will need huge sales to keep the store open.  A store without sales is closed down and seen as a huge failure.  Lately, if you are paying attention, Walmart has been opening more and more stores in smaller centers.  By contrast, Ikea, has very strict rules on the size of a city that they will put a store in.  Ottawa tried to get a second Ikea in the East End, but were denied because the city is too small.

Walmart has recently completed large stores in smaller towns/cities just outside the city of Ottawa limits.  Carleton Place, Brockville and Rockland have recently completed huge new Walmart stores.  Kempville is now starting construction on their Walmart. 

Each one of these towns are outside the tax boundries of the city of Ottawa.  With a left leaning city council in Ottawa that seemingly has no qualms about raising city taxes by factors of 5 to 10% annually (to pay for "services".  As well as downloading many costs to utilities such as hydro and electricity, many Ottawa residents on fixed incomes will begin to find it too expensive to live in the city. 

These four towns/cities are close enough to drive into Ottawa for the day, but also represent huge savings on monthly living expenses.  Think about the numbers, the average house in Ottawa is $325,000 meaning the average household tax in Ottawa are approximately $4160 annually.  Each year, citizens of Ottawa can look forward to a $208.00 to $416.00 annual increase in taxes.  Couple this with increased water bills, hydro bills and more user fees, the average Ottawa home will likely see an increase in their living expenses of approximately $300 to $700 annually.

These may seem like a small number, but once someone retires, they are now bringing in a fraction of their pre-retirement income.  If you do not have a pension, those small amounts add up quickly.  Earning an annual income of less than $30,000, this increase can represent upto 4% of your disposable annually income.  The comparison, to make this hit home, the average home in Ottawa makes $95,000 meaning a drop of $3800 in after tax dollars to the average Ottawa household.  Yes, I know the cost will only be $300 to $700 per household, per year, but if you compare a low income home to an average home, it gives you a much better picture of the grave effects.
Now think of these smaller towns and cities.  Average house prices are lower, meaning a new retiree could move to those towns, have a nest egg of a $100,000 from the sale of their home and lower their monthly costs.   For the retiree, you could invest this money and easily earn a 5% income, so you would increase your annual income by around $5000 and lower your costs by $700 meaning an extra $475 per month to live on.  This of course does not take into account the lowered cost of living in many of these town, so the effects might be even more drastic.

Ottawa has the highest percentage of babyboomers of any city in Canada.  Second, behind Australia, Canada has the second highest percentage of babyboomer per capita in the World.  In a city that is full of the 45 to 65 demographic, it appears to me that Walmart is banking on a serious percentage of the retiring babyboomer from Ottawa retiring to these satelitte communities. 

Watching Walmarts store development patterns and location choices has peaked my interest as a real estate investor.  If yours if peaked as well, you have to ask yourself one question ... do you feel lucky?

Tuesday, May 18, 2010

How to find deals

I spend a lot of time seeking out the best deals in investment properties.  To increase your odds of finding more deals, I have put together some suggestions below.

I search many different sources to find the best opportunities.  Think about it, who is more likely to get a cheap apartment building?  An investor that looks through the MLS listings and calls it a day, or the one that uses multiple resources?

Here are some additional options:

1. Talk. Let people know you are looking to invest in real estate.  Getting the message out there will produce some surprising results.  Sometimes the properties will come to you, especially when you get a reputation for closing deals.  There are a lot of owners out there who want to sell, but haven't yet listed their property.

2. Use the internet. Go to a search engine and enter the type of real estate you are looking for, along with the city you want to invest in. You never know what you might find.  Sites like Kijiji and Craigslist are great places to start.

3. Drive around looking for "For Sale By Owner" signs. Owners often don't want to pay to keep the ad in the paper every week, so you won't see all properties there.  Sometimes owners want to sell but are not actively pursuing the the sale.

4. Find abandoned properties. That's a pretty clear sign that the owner doesn't want to deal with the property. He might sell cheap.  Be careful though, there might be other problems with the property, make sure these are inspected fully.

5. Find old "For Rent" ads. Call if they are a few weeks old. Landlords are often ready to sell, especially if the haven't yet rented the units out.  This might allow you to do minor updating and raise the rents significantly.

6. Talk to bankers. You might get a foreclosed-on investment property cheaper if you buy it before they list it with a real estate agent. 

7. Target certain properties. Identify the properties that appeal to you and call me to search out the owner and contact them to gauge their interest in selling.

8. Eviction notices. With privacy legislation this gets harder, but you can get the information at the courthouse or the Landlord Tenant Board. A landlord who just went through the procees of evicting tenants is a likely seller.

9. Old FSBO ads. If you call on two-month-old "For sale By Owner" ads, and they haven't sold, they may be ready to deal. Owners often give up the effort, but still would love to sell. Help them out!

10. Put an ad in the paper or on the internet. "Looking for investment properties to buy," might be sufficient to generate a few calls.

Bonus Idea:
11. Drive around looking for rent ads on buildings and chart how long they have been advertising.  The longer the ads are posted, the better, the change the owner will want to sell.

Saturday, May 15, 2010

Ottawa Bungalow Town Home

Ottawa condo bungalow town home for sale

Price - $215,000
Central West Location
New total renovation
2 bedroom plus den
Top notch finishes - granite, hardwood, etc

TWO YEAR lease - $1350 per month plus Hydro
Includes 6 months of professional property management

Projected annual return - $10,535.33 or 18.15% on investment

Email me for further details -

Sunday, May 9, 2010

Investment condos from $65,000 producing $200 per month

I have a limited number of investment condos available priced from $65,000 to $87,500 that produce over $200 per month in positive cash flow.

Email me today if you would like more details -

Saturday, May 8, 2010

Our First Purchase

Hi Greg,

Thanks for meeting up with Tyler and myself back in December.  I did end up buying one unit and will see how that goes.  Thanks for the information I look forward to working with you guys again before too long, hope everything is going well for you, Kristi and JD.  Have fun being a Dad.  I love it!

Thanks again,

Thursday, May 6, 2010

GST Rebates

New housing rebate is only for new houses or substantially renovated houses.

Rebate is based on the price paid for the house. The maximum rebate is $6,300 (36% of the total GST paid subject to maximum GST paid of $17,500). There is a claw back of rebate for houses over $350,000 up to $450,000. There is no rebate for houses over $450,000.

Starting July 1, 2010, there is additional Ontario housing rebate for house purchased on or after July 1, 2010.

Wednesday, May 5, 2010

Hottest April on Record!!!

Members of the Ottawa Real Estate Board sold 1,841 residential properties in April through the Board's Multiple Listing Service® system compared with 1,591 in April 2009, an increase of 15.7 per cent.

Of those sales, 425 were in the condominium property class, while 1,416 were in the residential property class. The condominium property class includes any property, regardless of style (i.e. detached, semi-detached, apartment, stacked 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.

"Last month's sales blew away the record for April, which is always one of the busiest months of the year for our market," said Board President Pierre de Varennes. "The increased sales activity may be partially due to buyers trying to avoid the impending HST and the mortgage changes that came into effect on April 19, but also demonstrates that consumers feel confident about our local economy," he added.

The average sale price of residential properties, including condominiums, sold in April in the Ottawa area was $332,979, an increase of 11.6 per cent over April 2009. The average sale price for a condominium-class property was $254,220, an increase of 17.4 per cent over April 2009. The average sale price of a residential-class property was $356,617, an increase of 11.7 per cent over April 2009.

Tuesday, May 4, 2010

FAQ - If someone buys an investment property (existing) after July 1st is there HST on the value of the property?

Yes if it was subject to GST before July 1st the only thing that changed is the rate from 5% GST in now is 13% HST in Ontario if it was never subject to GST its not subject to HST no difference only the rate changes.