Saturday, April 30, 2011

Expert Panelist

To whom it may concern:


‘In March of this year, I had the pleasure of being on an Expert Panel with Greg Blok at the Canadian Real Estate Investor Forum. I was extremely impressed with the depth of knowledge that Greg displayed in regards to his area of expertise. Greg is not only a professional realtor, but a sophisticated investor as well. Through my interaction with Greg both on the panel, it became clear to me that Greg has an understanding of his local real estate market that far exceeds the average realtor and, more importantly from my perspective, an understanding of what it takes to be a successful real estate investor. Having worked with thousands of investors across Canada, I can truly say that it is a pleasure to work with someone as professional and diligent as Greg.’

Sincerely,
Peter Kinch
President
P:604-939-8326 ext 24
F:604-939-8307
http://www.peterkinch.com/

The Canadian Real Estate Action Plan: Proven Investment Strategies to Kick Start and Build Your Portfolio Peter Kinch is the author of The Canadian Real Estate Action Plan, THE MORTGAGE MINUTETM and co-author of the Canadian Bestseller - 97 Tips for Canadian Real Estate Investors.

Friday, April 29, 2011


Check out the Shingles on this roof in Barrhaven, following the 90 mph wind storm


More roofs taking a beating in Barrhaven, great day to be a roofer!


Friday, April 22, 2011

Trump for President 2012 ... GENIUS ???

It is a great time honoured tradition for famous people in the United States to run for and ultimately win public office.  Public popularity is leveraged into votes and ultimately into public office.  Former professional wrestler, Jesse "the Body" Ventura, became the Governor of Minnesota, arguably the biggest movie star in the world, Arnold Schwarzenegger, became the California Governator and quite possibly the most famous and successful actor turned politician, former US President Ronald Reagan. 

Donald Trump is rumoured to be following this group into public office.  The Roast of Donald J Trump on the Comedy Network ended by Donald Trump announcing that he would make his decision in June 2011, if he would be running for the big office in 2012.  On face value it seems an ego driven move, by one of the biggest celebrity personalities in today's global media market. 

Currently, at last reported, for the Republican nomination, Mr Trump is in second place.  As of April 11, 2011, for the Republican nomination for President, Mr Trump, the business mogul and TV star has 21% of the vote. Mitt Romney, the former governor of Massachusetts, leads with 27%. Rounding out the field are Mike Huckabee and Newt Gingrich, with 12% each.
What we all know about Mr Trump is that he is a ceaseless self promoter who prides himself on establishing his personal brand which is of the highest quality and prestige.  He is on top of the world, with a net worth in the $2.7 billion range, a brand worth arguably double that, private plans, NY dream penthouses, a hit TV show and a legion of people who twist on his every word.  Why would you risk this image to take over a failing US economy, unprecendented debt levels, a devalued US dollar, Standards and Poors losing confidence in US ability to pay back debt, the Chinese threat and surging oil prices?

Simple.  It is really simple if you think about it.  Donald Trump has trained himself to see a deal.  He sees opportunity where no-one else does.  He sees a chance to really build his brand and image to a level that is unprecedented.  If he becomes president and turns back on the US economic engine, he will go down in history as the man who saved the USA.  He will become a modern day folk hero.  In this, he will achieve immortality.

Donald Trump simply put, doesn't do a deal unless he knows he has won going in.  At this point in life, he has too much to risk on a gamble.  He must know, going in that he has better than a puncher's chance of changing the fortunes of the USA.

So, great, you think, everyone wants to change the US economy, what is different about The Donald?  Donald Trump wants to change the US economy, turn his family into the modern "Kennedys" and "save" Americans.  How will he ever be able to change the seemingly negative downward spiral?  Again, the answer is simple if you think about it.  Donald Trump will go where he always has gone, to REAL ESTATE! 

According to current statistics, foreclosures will end in early 2013.  New home construction levels across the United States are at ridiculously low levels (below sustainability).  Over supply in the market is evaporating quickly and overstock will disappear when foreclosures stop.   

What does all this mean?  The US population (308 million people) grows annually by 0.89% meaning an increase of 2,741,200 people annually.  In the US, there are 2.59 persons per household, so each year the USA needs another 1,058,378 houses per year to keep up with demand.  In some areas of the United States, homes have not been built since 2008, meaning they are currently in need of new homes to be built, but with depressed housing prices, builders are not building, at least not now.

If the US needs another 1,058,378 houses per year, and construction has been at a virtual stand still since 2008, the US should be short about 4,233,512 houses after the foreclosure wave finishes.  Let's assume that  builders had overbuilt and provided an extra 25% of needed house stock, that still means that there is an understock of 3,175,134 houses across the United States. 

Every two new homes built create one new job (NAR).  That means, in the United States, annually there will be another 529,189 jobs created to handle the annual need of new housing stock once the new home building industry gets moving forward.  There will need to be another 1.5 million jobs necessary to build the houses that haven't been built.

Where are these jobs?  2 million plus jobs is a huge number.   

The obvious ones are tradespeople, realtors, financing people, but also there are jobs in the furniture industry, security companies, gas stations, retail sales, landscaping, automotive industry, mini-storage, etc.  That statistic of one job for every two houses might even be a bit low.

The second factor that The Donald will be factoring is the change in US population's demographics.  The US society is demographically older than Canada and is primed to enter into the largest intergenerational wealth transfer in the history of the world.  It is much more common for Americans to marry in their twenties and have children at younger ages than Canadians, so there will be a twenty plus year window of increase child births, which undoubtably will mean a higher than 0.89% increase annually in the US population. 

Donald Trump is well aware of both of these factors which are effecting the US economy in the next 2 to 3 years and for the four years beyond that.  He knows, unlike in 2008, just before the economic meltdown, it is the time to enter the Presidential election.  Don't be surprised, in June, on the finale of the Celebrity Apprentice (when Marlee Matlin wins) that Donald Trump announces to the United States public that he is running for President in 2012 and that Barrack Obama is "FIRED"!

Monday, April 18, 2011

Financial Post - Great Article

Some great wisdom from an ole cow hand in Texas - click here to read what is really happening in US real estate

Great observations and informed commentary based upon "boots on the ground" approach.

Saturday, April 16, 2011

Great Product - TD VIRM mortgage

A lot of people new to investing operate on assumption basis when it comes to financing their properties.  One thing that is very often assumed is the type of mortgage that you are getting.  Investors assume when they say variable rate mortgage, that all of them are the same.  TD Canada Trust has a very unique and different program than all other banks. 

TD Canada Trust's variable rate mortgage payment does not vary.

When you get a variable rate mortgage with other lenders, the amount of the payment varies up or down with the fluctuations of the prime lending rate.  So, every six months your payment amount will change.  With TD, you payment stays the same, it the internal percentage allocated to principle and interest that varies. 

This is a very important point for investors, the payment amount is FIXED, the interest paid inside the payment is what varies.

Get to know your financing products and understand how mortgages work before signing up for a mortgage.  I suggest you contact Lilianne Eid with questions - click here

Friday, April 15, 2011

Numbers at condo launch event

Purchase Price $462,235.00
Down Payment $115,558.75
Mortgage Amount $346,676.25


Cash Flow
Mortgage Payment $1,206.43
Taxes (month) $481.49
Condo Fees $0.00
Insurance $60.00
Total Monthly Expense $1,747.93

Rental Income $2,000.00
less monthly expense $1,747.93
monthly +/- cash flow $252.07

Out of Pocket
down payment $115,558.75
closing costs (approx) $9,244.70
total funds (certified) $124,803.45

Approx Return Summary (in 5 years)
Conservative (4.65%)
Investment - Market Value $607,153.11
Mortgage Balance $312,725.92
Equity in Property $294,427.19
Yearly cash flow $30,248.62
Less - initial investment $124,803.45
Net Return $199,872.36
% Return Annually 32.03%

***2.35 variable rate, 35 year amm.

Ottawa Real Estate Facts

According to CMHC

* employment is up 3% in 2010
* 25 to 30% of public sector employees will retire in the coming 10 to 15 years
* over the next 10 years, single family homes will drop from 40% of the market to 30% of the resale market
* vacancy rate
Ottawa - 1.6% - predicted to drop to 1.25%
Brockville - 2.7%
Kingston - 1%
* 1/3 of homes in Ottawa are rentals
* rents are between 25 and 50% lower in Gatineau versus Ottawa
* 25% of home buyers are under 30 and over 65 - they all confirm condos as their top choice
* approx. 4500 condos in Ottawa are owned by investors, which is 20% of the market
* condo apartments are about 4.5% of the Ottawa rental housing stock
* immigration to Ottawa is jumping from 6,000 people per year to 12,000 plus people per year.
* Ottawa has the highest income per household in Canada at $2,096/week
* 1 out of 9 high density homes built in Ottawa are condos not purpose built apartments

Saturation?

Weird fact

Toronto has 5 times the population of Ottawa

Toronto builds 10 times more condos than Ottawa

Wednesday, April 13, 2011

REIN

Hi Greg,


“Whenever investing in a project you want to know that all the i’s are dotted and the t’s crossed. When I met Greg I could see how detailed oriented he was.”

Sincerely,
Don R. Campbell
President
Real Estate Investment Network™
a division of Cutting Edge Research Inc.

Tuesday, April 12, 2011

Time to make a change?

Is your decore tired?  Looking for a change?

Check out this new web site from a top notch decorating company - http://www.kikiinteriors.com/

Good luck!

Monday, April 11, 2011

The case for URBANIZATION

I was recently talking to some people in the real estate business that were telling me that condos have appreciated by amounts far outpacing the marketplace and that this type of growth was unsustainable.  About two weeks prior to this, I was in Toronto, speaking at the Canadian Real Estate Forum on investing in real estate and all the experts on our panel were saying urbanization is the dominant trend in real estate and will push prices higher at a faster rate in the future. 
I listened to all the comments and decided the best way to solve this mystery is to understand what has actually happened in the condo market in Ottawa and to outline what we know will happen in the Ottawa market in the future.  The results might shock some people, as what you perceive is not always the reality of a situation.

The Ottawa housing market has increased in value by 7% per year since 2002.  This 9 year period is slightly higher than the 50 year annual average increase of 6.33%.  In the condo market, in 2002, a new condo was priced on average at $250/per square foot, meaning a 1,000 sqft condo was $250,000, whereas today new condos are priced at $460/sqft meaning a 1,000 sqft unit is $460,000.  That means the 9 year annual increase in condo price is 9.3%.

That means that condos have really only outpaced the complete housing market by 2.3% annually.  This is not a very significant outpacing, in dollar terms, it means an extra $5750 per year.  That does not seem that significant, but considering the fact that most condos take 3 years to build, that is now a $17,250 increase, a much more significant figure. 

If you were buying a condo today, based upon the pattern over the past 9 years, the condo you buy today at $460,000 would be worth $588,340 upon completion in 3 years.  That appreciate is quite impressive.  Remember though, that in the 1950s a can of Coke was five cents, now you are hard pressed to find a can of coke below $1.13.  Maybe you should just stockpile some cans of Coke for the next 60 years.

The other item that people fail to remember is the ratio of income to housing price is similar to the ratio in the 1980s.  In 1985 a person starting in the government made about $17,500 per year, whereas now, a starting salary is around $50,000.  In housing prices, in 1985, the average price of a home in Ottawa was $107,306 and now it is $327,225.  Incomes have grown by 2.85 times whereas houses have grown by 3.04 times.  Those two numbers are remarkably similar.

The second part of the equation is predicting the future.  Ottawa is a town of approximately 1,000,000 people.  Approximately 30% of those people are Baby Boomers.  That means there are roughly 300,000 baby boomers in Ottawa.  Studies out of the US show that 7 out of 10 retirees will move into the city and 3 out of 10 retirees will move out of the city to country properties.  Lets make a new assumption that 50% of those people want to stay in their current home. 

This data does make sense, because as the kids leave home, there is no need for a pool, land, a four bedroom house, close to schools and soccer fields.  Gladly most give up the commute and welcome the coffee shops, restaurants and bike paths.  It is a major life change they are undergoing.

The first baby boomers are hitting 65 years old this year.  That means for the next 20 years, 15,000 baby boomers in Ottawa will retire annually, so lets assume that 7,500 people per year will be moving out of their homes.  This translates to likely 5,250 baby boomers will move into the city and 2,250 will move into the surrounding rural areas.  A rough estimate of mine would be that since 50% of Canadian marriages end up in divorce, lets say that 25% of these properties are single owners and 75% are couples, so that means there should be a need for 3,125 core properties. This means that there should be dramatic demand for core properties.

Now the second side of this is that Toronto hit 1,000,000 in the early 70s.  Now, 40 years, the population of Toronto is over 5 million people.  There is a strange development that once cities hit 1,000,000 people they tend to grow quicker and reach the second million people faster than the first million, and on and on and on.  It is highly likely that Ottawa will experience vast growth over the next 20 years.  There will be jobs, which is a huge attraction for people moving to a city.

Putting this all together means we should see population growth in the core areas of Ottawa, due to the baby boomer effect.  This should continue to push the condo market higher.  Making the urbanization trend continue to make sense.

Friday, April 8, 2011

Sneak peek opportunity - Westboro pre-construction condo

April 13th, starting at 6pm, there will be a sneak peek, pre-construction opportunity to purchase suites prior to the public.  There will be only 30 suites available with no condo fees for two years and priced 1% below public prices.

Suites start from $220,000 and are closing in 2013 and include amenities - 3 ROOF TOP TERRACES , 3 ROOF TOP HOT TUBS, HOME THEATRE, PRIVATE DINING – 3 GYMS – GAMES ROOM

Demographically, approximately 1 in 3 people from Ottawa are baby boomers.  The first baby boomer are hitting 65 this year.  At this point in life, children have left home and boomers are looking at lifestyle changes.  At the same time, Generation Y, the under 25 generation, are just starting their first careers and are about to hit the marketplace enmass.  This duel effect of both baby boomer and generation Y are predicted to create ongoing demand in the condo market for the next 15 plus years.

Email me today to get on the guest list for this exclusive opportunity to attend the April 13th, one day only, condo sale in Westboro with prices 1% below public and with no condo fees for two years!

To get registered, please email me at greg@bennettpros.com

Wednesday, April 6, 2011

New Bennett Office Open House

This Saturday, April 9th from 12:30pm to 2:30pm we will be having an Open House at our brand New Office.


It's a great chance to come see our gorgeous new office and have a few treats and enjoy Marnie's Live 580 CFRA broadcast.

If your looking for an agent to buy your next home or investment property, our whole team will be there, and I'm sure one of them would be more than happy to sit down with you.

www.bennettpros.com

Real estate: A ‘secret’ tax shelter

Please read the brief piece of an article in the Globe and Mail about real estate.  It was sent to me by a loyal reader (thanks Anindo!).  It talks about the "the result is that rental real estate is a secret tax shelter that few people ever consider."


I agree with Mr Heath, he has drilled to the bottom of this and presented a very well written piece.  I hope you enjoy it!



By Jason Heath


TFSAs have been a welcome addition to the tax shelter landscape in Canada, but they leave something to be desired for those with substantial assets and maxed out RRSP and TFSA room.

Film limited partnerships have disappeared, charitable donation tax shelters were flawed from the start and the investment tax credit for flow-through shares may or may not be extended in the next budget.

Real estate is often overlooked in the quest for tax reduction and deferral, let alone income generation and inflation protection. If real estate is all of these things, why doesn’t everyone own a rental property? The answer is simple – money.

It’s not that investors don’t have the money to get into the rental property market, because this can be easily accomplished with leverage and minimal monthly carrying costs. The problem is there is simply no money to be made by financial professionals when it comes to rental real estate. The result is that rental real estate is a secret tax shelter that few people ever consider.


to read the rest of this article, please click here

Tuesday, April 5, 2011

Hamilton - $100m plan for downtown

Work on a $100 million project that would change the skyline of downtown Hamilton is expected to start as early as June.

The project, conceived by developer Darko Vranich, will bring 628 condo units, two extended stay hotels and 20,000 square feet of retail space to the core.

“Darko is putting his money where his mouth is for this project,” said downtown councillor Jason Farr. “This spring is what they are shooting for to get shovels in the ground.”

For the last decade Vranich has been quietly assembling land downtown and his Vrancor group now owns a large piece of the block bounded by Bay, Hess, King and Main streets. His plan calls for four buildings along George Street, starting with a 134-room extended stay hotel at the west end, adjacent to Hess Street.

The sites slated for development include the former Hamilton Motor Products dealership property at Main and Bay.

Start dates for the other towers, which could run as high as 20 storeys, haven’t been set yet.

“Everyone is excited about this project,” Farr said. “It is massive good news for the downtown.”

Vranich has been talking about some kind of development for the area since 2004 when he bought the former federal building at Caroline and Main streets, but as recently as last year he had said the work would be stalled indefinitely if the West Harbour stadium location didn’t go ahead. That stadium site was seen as a key piece of core momentum.

Now, a spokesman for his company said a new “development friendly” attitude at city hall has made it the right time to move ahead.

In an e-mail exchange, Vrancor chief financial officer Tyler McDiarmid said as long as the football stadium stays within the city, the project is viable, especially with the city’s new attitude toward development.

“With the co-operation that we've received from City staff, the Mayor's office and city council, who have demonstrated themselves to be forward thinking and development friendly, we feel it is the right time to move forward with this project,” he wrote.

The $100 million project has been conceived as a way of reviving a piece of the core and linking the restaurant-bar hub on Hess Village to the rest of downtown. The first building to be raised will house about 3,000 square feet of retail space designed to “compliment and enhance the feel of Hess Village,” McDiarmid said.

While many developers have scorned the core of Hamilton, Vranich takes a different view.

“The downtown core is the heart of the city. We feel there is no other location that would support a development of this size,” McDiarmid wrote. “In addition the city offers many incentives for downtown development that will help offset the $22 million cost of this hotel.”

Steve Robichaud, manager of development planning at City Hall, said so far only “consultation” documents have been filed with the city. Those papers start the process of circulating the plan for comment from various city departments on issues such as landscaping and urban design.

“These are the general, standard conditions we raise,” Robichaud said. “There’s nothing extraordinary here.”

Robichaud added it’s possible Vranich could make his June start date if his company and consultants are “aggressive” about meeting the city’s conditions.

In his e-mails, McDiarmid said consultation applications have been filed for all phases of the project and Vrancor is “working diligently with city staff” to answer the comments that are already coming in. A formal site plan could be submitted as early as this week.

In 2004 Vranich built a Staybridge hotel downtown in the former Canada Post garage on Market Street at Caroline, immediately behind the new Federal building. His later sold his share in the building and it was converted to a seniors’ residence.

Just as the decision to convert the former hotel into seniors’ apartments was a response to a perceived market need, McDiarmid said starting the new project with a hotel is Vrancor’s response to a new market demand for more hotel rooms in the core.

“The former Staybridge … established that there is a strong market for that brand in Hamilton, which is in need of extended stay accommodations,” McDiarmid wrote. “Accordingly we feel it has the greatest economic potential and thus is the most logical place to start.”

That view coincides with what city tourism officials have long been saying – Hamilton’s efforts to attract visitors and conventions are being hampered by a lack of hotel rooms in the core.

The first phase of the project is expected to be completed by June 2012. Completion of the other buildings will depend on “design and planning considerations yet to be finalized” with city staff.

Chief among those issues is the fate of the former federal building at Caroline and Main, including the eight pieces of art work on its front created by Hamilton artist Elizabeth Holbrooke. Vranich currently has a consultant working out how to detach those reliefs from the building, after which he plans to give them to the city for display.

He’s also talking to Ottawa about its contention the 2004 sales agreement for the building prohibits it being torn down – Vranich has a demolition permit from Hamilton to do just that to make way for a 229 unit condo-retail project.

taken from - http://www.thespec.com/

Monday, April 4, 2011