Wednesday, March 30, 2011

Cancer Run

Team Greggybear will be running in the name of Greg Hebert who at the age of 34 was diagnosed with synovial sarcoma of the head and neck. Known for his work as a radio talk show host on 580 CFRA's Business at Night and Lunch Bunch, Greg has spent the past two years enduring difficult surgeries to his face and neck, radiation, chemotherapy and even a bone graft.


One week after his 36th birthday in February of this year, Greg was told that his cancer had returned for a third time and that is unlikely he'll survive to see his 37th birthday. Conventional treatments have not been successful in slowing the growth of the cancer. It has robbed Greg of the voice which he used to make his livelihood, but he remains resolute that he will not be voiceless and that he will continue his battle with every means at his disposal. He's hoping you will help.

Please join us on June 19th and run in support of love, run in support of research and run in support of hope.

*** UPDATE
Today I was proud to be at Ottawa City Hall when mayor Jim Watson declared today "Greg Hebert Day". I am part of the team running in the Alterna Do it for Dad event on Father's Day.  Greg Hebert is using his own story to help do big things for cancer research. After blowing past initial team goals of 25 and 30 thousand dollars, our goal has now been upped to 50 thousand. It would be extraordinary if you could help us make that happen. Please take a moment to look at my page and consider giving if you are able. Thanks so much.


Alterna Do It For Dad! 2011 - Alterna Do It For Dad!

To donate please click here

We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.

As Warren Buffett said, "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."  I look at the USA market right now as many people are feeling fearful, so following the greatest investor in the history of the world, I feel now is the time to be greedy!

In an informal poll conducted on my web site, 62% of respondants feel that now is a good time to invest in real estate in the United States of America, so it appears my readers feel the same way.

Ask me today about investing in USA trust deed properties.

Monday, March 28, 2011

A nail biter ... that worked out in the end!

Hi Greg,


Thank you. I'm glad we went with you guys. I know we didn't get the bidding war that every seller craves but we got a solid bid above our asking price and I believe that was due to the reputation your team has in the rental real estate market. It was a bit of a nail biter towards the end when the bid closing time came and went with only a promise of an offer but it all worked out.

Once this is all completed I'll want to look at other investment options. My wife and I are considering selling our house in the next 12 months and renting so we can invest the money we have in our home.

Thanks
Angus

CCIM training part 1 (of 5) completed

I have received my certificate that I achieved a 90% result on my exam for the first of five parts in achieving my CCIM (Certified Commercial Investment Member).  Hopefully, the next course will be offered this coming December!













A CCIM (Certified Commercial Investment Member) is a recognized expert in the commercial and investment real estate industry. The CCIM lapel pin is earned after successfully completing a designation process that ensures CCIMs are proficient not only in theory, but also in practice. This elite corps of CCIMs includes brokers, leasing professionals, investment counselors, asset managers, appraisers, corporate real estate executives, property managers, developers, institutional investors, commercial lenders, attorneys, bankers, and other allied professionals.  There are only 15,000 CCIM experts in all of the World.

Canadian Real Estate Forum Speakers

Sunday, March 27, 2011

Canadian Real Estate Magazine Investor Forum

I'm back in Ottawa, after spending the weekend in Toronto at the Canadian Real Estate Magazine Investor Forum.  I was speaking on a panel including experts from all areas of the real estate investment spectrum.  I met Don Campbell and Peter Kinch this weekend.  Very interesting fellows. 

It was a great event, the Canadian Real Estate Magazine assembled some of the best minds in the industry and I am honoured that they asked me to contribute and be a part of their expert speaker line up. 

Tuesday, March 22, 2011

Questions to ask before you buy a property

Getting started.



Some questions to ask yourself before you purchase a property:

1 – Does this property fit my overall investment plan (passive income, net worth increase, quick flip)?

2 – Is this real estate for personal use or strictly an investment?

3 – How long do I plan on holding this piece of real estate?

4 – Is the population of the city growing or shrinking?

5 – What is the demographic breakdown of the city?

6 – What is the going vacancy rate in the city?

7 – Does your “sphere of influence” extend to the city for property managers, renovations, etc.

8 – What is the health of the local economy, unemployment rate, etc?

Monday, March 21, 2011

Phoenix investment property conditionally sold!

The people from yesterday who's offer we countered did not respond to our counter offer.  This morning, I received a second offer on my place.  We got $1k over asking, which is a total of $6k more than the first offer.  What good luck!

The offer is only conditional upon appraisal, so it looks like things are going to close smoothly!

Purchase price - $75,100.00
Bid fee - $7,500.00
Closing Fees - $903.00
Renovations - $8,250.00
Utilities/insurance - $151.70 (estimate)
Selling commission - $6,900.00
Accountant - $1000 (estimate)
USA Taxes - $3,798.83

Selling price - $115,000.00

TOTAL PROFIT - $11,396.48 (after taxes, expenses and commissions)

I will have owned the property 88 days

therefore the ROI is 63%

To see how it works check out this link or email me greg@bennettpros.com

Saturday, March 19, 2011

Got an Offer on my Phoenix Flip

Got an Offer on my Phoenix Flip


$109,000, in exactly one week from listing the property.

I have countered it, we are currently about $2500 apart. If I get my counter price of $111,500, I will make approximately $9000 on my flip (after taxes, renovations, commissions and carrying costs). Closing date is April 20, 2011, meaning I will have owned the house for approximately three and a half months.

This equates to an approximately 51% annual return on my money!!!

Tuesday, March 15, 2011

Canadian Real Estate Forum - an honour!

I have been asked (and accepted) to be a panelist at the Canadian Real Estate Forum in Toronto, on March 25, 2011.  I will be discussing the Outlook in 2011 for real estate investors.

Click here for details

Sunday, March 13, 2011

Central West Ottawa Rental Conversion Opportunity

In my search, I have found an exciting development in the Central West part of Ottawa.  It is a rental conversion that is priced from $234,900 (to $279,900).  In this neighbourhood, in the past two years, only 11 properties have sold less than $300,000.

The unit availablity starts at $234,900.  This is for a two storey, 938 sqft loft style apartment.  This property is fully renovated and will rent for an estimated $1500 to $1600 per month.  Currently, the top end units are renting for $1695 per month.

Condo fees are a reasonable $250 monthly.

These units will cash flow approximately $375/month.

For more information please email me today at greg@bennettpros.com

Friday, March 11, 2011

My Arizona Flip Investment

My house has been listed in Phoenix, Arizona today.  Please check it out, all renovated and cleaned up - CLICK HERE

This is very exciting!!!

Thursday, March 10, 2011

Random Real Estate Facts

65% of all subprime mortgages were lent in four states - Nevada, Arizona, California and Florida.

Approximately, 10,000 US Americans and 2,000 Canadians will be turning 65 per day over the next twenty years.

From the recession in the 1990s, until 2007, the Canadian government under Jean Cretien, Paul Martin and Stephen Harper, reduced the Federal deficit from $700 billion to $450 billion.

US Banks are very profitable right now, but are not lending money - REASON? - they are paying back the bad debt from all the foreclosures.

TD Bank in 2010 lent out $220 billion and had total defaults of $9 million - putting that in numbers I can understand, it is like losing $0.09 out of $2,200.00

50% of marriages do not last three years, why choose a 5 year mortgage?

During the financial meltdown, Canada lost 450,000 jobs, the US lost 1.6 million, now in 2011, Canada has gained back all their 450,000 jobs, the US hasn't made any noticeable gain back of jobs.

US interest rates are likely not to increase until after 2012 election, as no politician wants to lose votes because of raising interest rates.

Canada has 25% of the worlds fresh water resources.

40% of Canada's economy is based upon exports and 80% of our exports are to the US.

Immigration - 350,000 people immigrate to Canada each year.  A large majority of these people buy a house within 4 years.

Approximately 70% of housing transactions are initiated by women.

7.8 percent of Canadians are unemployed, 9.3% of US Americans.

Foreign investment in Canada is usually $20 billion per year, in 2010, foreign investment was $110 billion.

Tuesday, March 8, 2011

US Financing

As you many know, I have bought a house in Phoenix, Arizona.  I am planning on flipping the house for a profit, but I started looking around at options for renting the house.  Most single family homes in Phoenix area rent for between $800 and $1200 per month (click here). 

So I began investingating US financing again.  It has been about six months since I last checked into financing.  Things are now loosening up a bit, but only a bit.  It is still very difficult to finance a home in the US.

If you are buying the home for your own personal use, as a second home (vacation home), financing is a bit looser.  I have a great contact at RBC North, a division of the Royal Bank of Canada. 

For investors, it is much more complicated.  I have found a lender in the US that blends between "hard money" and bank money. 

HARD MONEY
The rate is 12% interest only for 1-2 years. One year if you are flipping, and two years if you are renting. Points are 3%, and there is a processing and doc fee that add up to $900.00. Once you give me a prorepty address, I can prepare a terms sheet so you can see how the program lay’s out.

BANK FINANCE
The Bank charges 6-7%, the loan is amortized over a 25 year term with a balloon in 5 years, there is an interest adjustment in year three, with a floor at the beginning rate. There is a doc prep fee to them plus 1 point.  The broker also charges 1 point. The Bank has tighter lending criteria. They have a minimum fico score of 700.  They also spread your income and expenses and put them into ratios, which a private lender does not do.

Ottawa development hold ups

Recently, sites like the Q-West (Westboro convent site) and SoHo Champagne (Carling and Preston site) are being bogged down by the city council and community groups.  This slows the development process and delays projects which add to final costs for consumers. 

Ottawa is a world class city that deserves world class development.  The city needs to work together with developers to build the best products possible.  Developers present projects that focus on maximum density and liveability which are ascertained from leading edge experts and focus group feedback.

If you have an opinion on the direction of development and want to voice it, please see a complete list of city councillor's email addresses.  Voice your opinions to them!

jim.watson@ottawa.ca
Marianne.Wilkinson@ottawa.ca
Doug.Thompson@ottawa.ca
Tim.Tierney@ottawa.ca
 Mark.Taylor@ottawa.ca
Shad.Qadri@ottawa.ca
Bob.Monette@ottawa.ca
Scott.Moffatt@ottawa.ca
Maria.McCrae@ottawa.ca
Peter.Hume@ottawa.ca
Allan.Hubley@ottawa.ca
Diane.Holmes@ottawa.ca
katherine.Hobbs@ottawa.ca
Jan.Harder@ottawa.ca
Mathieu.Fleury@ottawa.ca
Eli.El-Chantiry@ottawa.ca
Ward9@ottawa.ca
Steve.Desroches@ottawa.ca
diane.Deans@ottawa.ca
Peter.Clark@ottawa.ca
Rick.Chiarelli@ottawa.ca
David.Chernushenko@ottawa.ca
Rainer.Bloess@ottawa.ca
Stephen.Blais@ottawa.ca

Monday, March 7, 2011

When to refinance

This is a tough question.  There are all sorts of important things to factor in.  Penalties, timelines to sell, cash flows, lack thereof, etc.  I think I have found a way to simplify things.

Recently, by reviewing my portfolio, and working on my business, not in my business, I have made a number of observations.  A large number of mortgages are between 1.25% to 2.5% higher than today's rates.  That means on a mortgage of $100,000 I am paying an extra $142.26 per month or  $1,707.12 per year. 

Want to really blow your mind ... as much as financing can do that -

A mortgage at
2.25% - Mortgage reduction over 5 years $9,961.83
4.75% - Mortgage reduction over 5 years $6,342.98
*** think about that for a moment, you pay $142,26 per month less and you make $60.31 more in principle reduction payments.  That is a great double dip.

Going a step further, the total savings over 5 years with a 2.25% rate versus a 4.75% rate is $12,154.45

So the next problem is the penalty.  Here is an interesting fact for you, if you stay with the same lender, there is no penalty if you are refinancing for a larger amount.  So, when I do the refinance, I will not being paying any penalties.

Normally, your penalty is three months interest, so on $100,000 mortgage, the three month penalty would be $1000, which over the five year term would be $16.67 per month.  If you are increasing your cash flow by $142.26, the $16.67 penalty means you are still net ahead $125.59 per month.

I am now considering the implications of refinancing 9 to 11 properties and freeing up some equity and actually lowering my monthly payments.

Take a look at your portfolio, if you are paying over 3% right now for your investment properties mortgage, you might want to consider contacting Lilianne Eid at TD Canada Trust to consider refinancing - lilianne.eid@td.com

Spend the time working on your business not in your business and you will see much greater returns. 

Friday, March 4, 2011

looking at the BIG picture

From a real estate perspective, I work with clients to help them gain education, direction and strategy.  The problem for many of us, is understanding how real estate, paper assets, insurance, etc all work together.  For this purpose it is essential to have a knowledgeable financial planner.  They can help coordinate the "other side" or your portfolio.  A planner, who is well versed in Holistic planning with clients is the perfect tool.  They will work with you to review your tax, rrsp, cash account, corporate account investment, and real estate holdings to make sure all these items work together to the best of your advantages.

Benefit: This type of overall planning can often identify opportunities to save significant amount on tax, lower management fees, and allow your clients to purchase more real estate- and that the same time even improve their

monthly cash flow. By reviewing all of the components of their financial profile planning opportunities arise to have one piece (ie. Investment portfolio) benefit another piece (ie.real estate investments) . Most real estate investors do not have their financial advisor working for them on a strategy that looks at all aspects of their financial holdings and as a result their real estate and rrsp or other investments are treated as separate islands. Once we add the layer of tax planning onto the other two pieces it can really make a difference. The holistic planning is essential to maximize purchasing power and minimizing risks.

“Saving on your management fees can result to an extra downpayment for a real estate investment every year!”

The average mutual fund in Canada has a management fee of 2.67% per year (source. Morningstar 2010). This does not include the additional commission the advisor may charge. These commissions can range from 1%-3% on a front end mutual fund at the time of purchase. The costs are high! Moreover, mutual funds are pre-packaged products meaning the investments within the fund and not customizable.

My clients pay as low as 1% for everything! This includes ongoing holistic planning (to include their real estate holdings), all trading costs (no fees when buy or sell), and a customized portfolio that consists of investments that are hand selected and managed for them….no mutual funds.

The result in some cases is savings of upwards of 3% per year and every year. Let’s say the clients have household investment assets totalling $400,000. This means a savings of $12,000 every year + a customized investment portfolio + ongoing holistic planning. There are a lot of ways they can use that $12,000 every year.

Interested in learning how this can benefit you ... ???  Click here, to be connected to a top in their field, financial planner, who can introduce you to holistic planning.

Thursday, March 3, 2011

Nik on the Numbers

The first wave of Nanos research on where Canadians would prefer to invest their money indicated that they were comparatively more likely to want to put their money into real estate rather than other investment options. Mutual funds and Canada Savings Bonds were the preferred potential investment for 27% and 23% of Canadians respectively.

The detailed tables and methodology are posted on our website. You can also register to receive automatic polling updates.


Methodology
Between February 11th and February 14th, 2011, Nanos Research conducted a random telephone survey of 1,016 Canadians 18 years of age and older. A random telephone survey of 1,016 Canadians is accurate plus or minus 3.1 percentage points, 19 times out of 20.

Investments Question: If you were going to invest your own money today, rate each of the following on a scale of 1 to 10 where 1 would be an investment you would NOT put your money into today and 10 would be an investment where you would VERY LIKELY put your money into today. National (n=1,016)


Real estate - Mean score: 6.22
8 to 10 (would very likely put money into today): 38.5%
4 to 7: 40.5%
1 to 3 (would not put money into today): 18.2%
Unsure: 2.9%


Bank savings account - Mean score: 5.76
8 to 10 (would very likely put money into today): 35.6%
4 to 7: 32.9%
1 to 3 (would not put money into today): 28.4%
Unsure: 3.1%


Mutual funds - Mean score: 5.53
8 to 10 (would very likely put money into today): 26.9%
4 to 7: 44.6%
1 to 3 (would not put money into today): 24.2%
Unsure: 4.4%


Canada Savings Bond - Mean score: 5.14
8 to 10 (would very likely put money into today): 23.3%
4 to 7: 40.2
1 to 3 (would not put money into today): 31.9%
Unsure: 4.5%


Stocks - Mean score: 4.85
8 to 10 (would very likely put money into today): 20.1%
4 to 7: 42.0%
1 to 3 (would not put money into today): 33.9%
Unsure: 4.1%

the latest "Nanos Poll"

SO WHY DO ONLY 5% OF CANADIANS INVEST IN REAL ESTATE?

Tuesday, March 1, 2011

2011 Real Estate Outlook

On my recently conducted poll of investors, 88% of those polled are looking to buy a property in 2011, 8% are looking to buy before March 18, 2011 (mortgage rule changes).

Please note, the mortgage rule changes are applicable for mortgages that are CMHC financed.  Most investors will put 25% down on their purchase and will still be eligible for 35 year ammortorizations.

Losing Money on your real estate?

If you are an investor owning properties personally, you can write off any costs incurred related to that property against the income of the property. 

If your property operates at a loss for the year, you can write off that loss against your income.

In either scenario, you pay less in overall taxes or get a tax refund if you have a loss.

http://www.cra-arc.gc.ca/E/pub/tg/t4036/

Please note: I am not an accountant, please consult one.