I just saw a foreclosure in northwest Calgary today and while I was waiting for my team to arrive at the house I finally figured out how to get the Nav in my car to stop thinking the car is in the US! I know that has nothing to do with real estate but that item has been on my list of things to do for a long while – nothing better than scratching a long standing item off your list!  The property that we went to see today is an excellent deal and I think that my partners will agree that we should jump on it – there is about 50K to be made in this house in about 3 months of renovations are required.  Foreclosure homes are almost always in need of repairs and a lot of them are very dated but if it has good bones this is a renovators dream project! There was a long period in Calgary that I did not even think about foreclosure properties due to the banks being stubborn on the prices, but there are still deals out there if foreclosures at all times of the real estate cycle.  When considering a foreclosure in Calgary and other markets there are some things that you do need to be careful of for sure.  For instance, when you purchase the home from the time you get the accepted offer until you take possession and get your own insurance the bank will not cover damage to the house such as vandalism but they do cover catastrophic damage such as the house burning down so don’t worry about that.  Some of these homes also have the water shut off and the plumbing cleared of all water and this can cause some issues with pipes leaking and other water related problems.  Just like any other property that is older foreclosures will be rough around the edges with older fixtures, lighting, laminate flooring from the 70’s and sometimes asbestos around pipes or used as insulation.  This type of repair is not the end of the world but does require some special attention to make sure the home is safe for the contractors you are using and your end buyer. Be sure to check your local regulations on how these things need to be remediated, some areas have strict rules on how asbestos and other hazards need to be dealt with.   Being able to look past the dated interior and the fact the roof needs replacing is something that your every day buyer and even a lot of investors are not able to do – if you have the right perspective to see the potential in foreclosures then you could make some large profits on houses that nobody else wants.  The best part about foreclosures (if priced right from the bank) is that you can negotiate a significant discount due to the repairs needed by making a strong offer – no conditions is best but if you have a great renovation team you may not need an home inspection condition or you could use private financing and not need that as a condition.  With lower prices and less competition you might want to consider starting your real estate fortune in foreclosures both in Calgary and Abroad!

To your Success!

Tim

In real estate courses abound they give you the general 1000 foot view of how to do marketing for your real estate business.  Further, there is a lot of advice out there given by American-focused educators that advise you gain access to lists of your target market from public records – which will not work for Canadian investors due to the freedom of information act.  These courses also offer some conflicting information such as shoot-gun marketing as well as laser focusing on a certain target market.  Well using the shotgun approach to marketing in any business is only something that large companies can do with enormous marketing budgets and frankly all this really does is boost their mind share in their potential customers heads.  The simple fact is this does not work very well in real estate (and most other businesses) you need to focus your marketing efforts at your ideal prospects and propel them to your offers through engagement and quality content.  Gone are the days where interruption marketing (commercials, flyers, telemarketing) will get your results you need to get your customer’s  interest first and get them to know, like, and trust your company before you have a fair chance at having them open their wallets no matter how good your offer is.  Think of how many advertizing messages that we see on a daily basis now having smart phones in our pockets – the din of marketing noise is getting louder and louder by the day and you need to stand above that crowd drawing your prospect’s interest to your content first and the offer second, third, or eighth on your list of activities. In real estate planting bandit signs and broadcasting direct mail letters to random parts of your local area will cost you a lot of money/time and likely meet with poor results without first doing some homework into what your clients are really after – this is using the sledge hammer to pound in the marketing nail… when a well placed strike from a standard issue ball-peen hammer would do the trick just fine.

To your success!

Tim R

There are a lot of Canadian and international investors that have bought properties in the US since the downturn of 2007-2008.  However, there is a lot of uneducated money buying up properties in “sexy” markets such as Florida, Phoenix, Las Vegas that are only buying in these areas based on the hope that the properties will appreciate and then they can sell for a profit.  This was certainly the case in phoenix about 2 years ago and those that bought in saw over 30% in appreciation – however this is not something that you can count on, what the market will do and when is something that no one can know for certain.  There are always the fundamentals that can be monitored such as job growth, transit projects, population changes but no one can know for sure when exactly the changes are going to start.  In real estate the speculators are the first to go broke when the tides of the market change, having properties that cash flow very little or not at all hoping for the market to go up.  There is a lot of money to be made in US real estate but you have to pick the right markets where you can get quality properties for a good price such as Atlanta, Texas, and Kansas just to name a few.  These two markets have very strong economic fundamentals which is what you need to ensure your properties cash flow both now and in the future.  Many Canadians are afraid to invest south of the border worrying about taxes and liability issues.  I can tell you for sure that these two things are nowhere near as hard to compensate for as people think, but you do need to have a excellent team on the ground to help you invest from abroad.  Properties in Calgary need a down payment of around 80-90K for investment property and in Houston Texas you can buy a whole house for cash for the same amount! Doesn’t that kind of perspective make you wonder what it could be like to invest in the US? In Houston you can buy tax lien properties for as little as 8000.00 and at that price the property would cash flow around 500-700/month there are not many places in Canada where you can get 1 unit to cash flow that well.  There are places in Canada that make a lot more sense than Calgary and Vancouver for buy and hold – if you are looking in Canada places such as Ontario and Winnipeg and Saskatoon are worth a look for sure.  I highly suggest that if you are afraid of investing in the US for whatever reason give us a call to answer all your questions about how you could get started and put those fears to rest!

To you success!

Tim R

There are a lot of stories about the oil prices tanking, the dollar dropping, and a lot of general doom and gloom over the economy in Calgary and area making a lot of investors fearful of what is to come.  Many would say that now is not the time to invest – that holding off for right now would be a better ideal.  Did you know that more millionaires were created during the great depression than any other time during north American history?  Someone can always think of a lot more reasons to NOT to invest as opposed to reasons to just do it!  The market fundamentals still need to be considered to make sure that your exit strategy (or strategies) is sound, but there are new ways to make money in every part of the real estate cycle.  Fearful people generally make poor decisions, therefore you could capitalize on sellers panicking and selling their properties to you for a huge discount, at a minimum far cheaper than they would could get when they feel optimistic.  Sellers will want out faster so you can get quicker closes, legal fees paid, all sorts of new negotiation tactics are in play when people are afraid.  For those of you that buy and hold there will be an influx of renters when those panicked sellers sell and have to live somewhere possibly driving rents up in areas where rentals are already scarce. I am not sure if those of you outside of Alberta remember the great flood of 2013 but I can tell you that finding trades people for anything in this city and area as almost impossible for about 8 months, and if one could be found many were gouging customer on price making it impossible for some investors to make a profit on their renovation projects.  When the market dips and the housing starts and uneducated investors stop doing renovations due to fear – those trades offer lower prices and faster turn around times because they are now looking for work and need to pay the bills.  There are always advantages to a declining market – you just have to look at things a bit more creatively and compensate for the changes as they happen.

To your success!

Tim R

I recently had a conversation that had me answering a lot of questions about US real estate, normally that would be great because I love talking about real estate in Canada or the US and even abroad.  However, in this case the person asking all these questions had just weeks before told me they wanted to do renovations in Calgary.  I think that a lot of new investors can get excited by an article or by flipping back through their notes from the last seminar they were at and want to change directions or add a new line of business to their current real estate activities.  I was guilty of this at one point in my real estate business for sure – but I got over it and decided to focus more on what I was good at rather than trying to learn something new every few weeks.  There is a different marketing strategy, tools, pitfalls, capital requirement, for each and every strategy that you can use in real estate to make money so constantly changing course is a lot of work and takes a lot of time to re-adjust everything to suit the new line of business.  I got some good advice from my business coach that verified my new pathway of focusing on no more than 3 lines of business at any given time.  Once a certain line of business can be totally (or almost) systemized where it just about runs itself, then you can start looking at what other ways you could make some money.  The things we focus on in life and in business turn into a reality but only if you TRULY FOCUS on that thing.  Real estate investing no matter what the strategy – is hard enough without taking your eyes off the prize and fracturing your efforts.  Imagine that you are doing a renovation project and you have to be on regular calls with trades/suppliers and you constantly have rent to own tenant buyers calling you to get more information about your program – when your marketing stated a 24 hour response time…that could be a bit frustrating both for you and the customer.  Focus in business is just like focus in life, if you are planning to run a marathon you have to train like crazy to get ready and if your trying to learn fly fishing at the same time putting a lot of effort into that then it’s likely that your race may go less than stellar!  Pick a couple strategies and focus on those until successful – you will be happy that you did.

If strategic accountability in your business needs hand-up contact us today for a free consult to see how we could help.

To your success!

Tim R

Today I am going to come right out and say that most people are terrible with their money.  There was a time in my life where I was part of this very large herd of Canadians that spend just about everything that they make.  I have come a long way since then becoming VERY Finicky about my finances.  One of the things that I recommend that people should do is save every receipt for anything you buy no matter how small to see where your money truly goes each month – the results will be surprising.  Often in life when an opportunity comes your way you may look at the price tag associated with that investment whether it be in training, tools, a new rental property and say “I would really like to get involved but I don’t have the money right now” – well there is likely a reason why and that exercise mentioned can shed some light on the path that got you to “no money”.  I read in an article recently that statistically more Americans own cats than they own stocks, that is very telling on how well us north Americans are doing with investing for the future instead of buying TV’s and cars.  I am not a huge believer in paper assets but I think they have a place in a well balanced investment portfolio.  Clearly, there are a lot of Canadians that could be a bit more finicky about where they spend their after tax dollars. Some might want to consider putting a bit more money into tax deferred assets such as RRSP’s.  There are a lot of people that have lost a bunch of money in their RRSP’s in the last few years… and if they were a bit more finicky about how their money was being invested and not just trusting the banks/financial firms they might have considered Arms-length mortgages which are secured by real estate – one of the most common ways the bank makes their money in the first place! If someone is willing to inquire about what their options really are to invest they might realize that they could be just like the banks in a number of ways such as hard money lending for real estate projects.  Real estate provides a lot of opportunities but you need the right education to be successful in it because the profits are high in real estate but the mistakes can cost you big as well – make sure your being finicky with your finances to make sure you can invest in the next opportunity that comes your way.

To your success!

Tim R

There are those that might say you should not be “anal” about things or finicky in life for a variety of reasons, now in some contexts I would agree (and in general) you should not sweat the small stuff.  However, in terms of how you should finance your real estate deals you should be as finicky as possible! There are a number of reasons why – firstly knowing your numbers inside and out on any deal is imperative to be able to mitigate your risk and turn a profit.  Thus, you need to be as meticulous as a spider weaving a web to be able to nail those numbers down so being fussy here is a really good thing.  Also, the rates that you get from the bank, hard money lender, credit union may or may not work for your deal the way you wanted to execute, and if the numbers do not give you enough options to have a plan A and B then you are greatly increasing your risk profile having the 1 exit strategy – which is never a good thing.  In real estate no matter how well you plan and how much you focus on having your first strategy work, things could change in the market/economy that prevent that plan from working out with a good profit margin.  For example: you plan to do a renovation project and sell the home in 6 months for a profit but prices drop by 25% over that 6 months and now you have a house you can’t rent out for enough money to cover its expenses.  The way you could avoid this would be to make sure that the property will cash flow if you had to hold it, there is always more than one way to do a deal and make money you just have to think creatively enough to see all the options. Having the negotiation skills to make sure you are able to get seller financing is also a way where your finicky nature will ensure you realise greater profits than those that just accept their fate and have to constantly spend the full down payment to get into every property that they buy – eventually they will run out of money and a lot sooner than the picky investor! When talking with your mortgage broker (who uses just the bank to buy real estate anyway?) being “anal” over getting an open loan/variable mortgage is essential if you plan to flip any properties, otherwise you could be slapped with an IRD (interest rate differential) and trust me when I say that WILL eat into your profits in a big way.  Those investors who are very finicky about the renovation budget they set not being exceeded will always make more money than those that just say OK and pay the contractor’s bill that was over the quote but within scope.  There are a lot of things you should not worry too much about such as: spilt milk, bad weather, hangnails — but in real estate I am of the opinion that being finicky is just fine!

To your success!

Tim R

Questions arise about obligation to disclose whether property has stigma

original post on http://www.movesmartly.com/

I have seen this question come up a lot around grow-ops, I would disagree with the writer of this article in terms of grow ops that have been properly remediated specifically.  If a home was renovated and certified by a city licensed remediator – then the property is in most cases in better shape than it was before the grow op ever existed.  To have realtors out there needlessly narrowing the pool of buyers for these properties is just not necessary.

To your success,

Tim R

TD predicts the average price of a Calgary home will fall from $459,500 to $439,500 in 2015 (-4.4%) and then to $424,500 in 2016 (-3.4%).    Sales are expected to plummet by -47% this year and -1.9% next year.

The report goes on to say: “Calgary and Edmonton have already experienced a sudden and abrupt turn, and by January, existing home sales had already slumped by 45% and 30% from peak levels reached last year, respectively. Meanwhile, annual average existing-home price growth slid into negative territory.”

It’s too bad TD is focusing entirely on the average price which is a volatile and misleading measure in the context of the following facts:

• The median price was up 1.08% y/y in January
• Benchmark price was up 7.69% y/y in January
• Teranet HPI which tracks repeat home sales was up 7.1% y/y in January
• Luxury sales ($1M+) in January were down -42% y/y

If the Calgary real estate market continues on this path, price declines are obviously expected.  However, I think TD is jumping the gun by stating that prices have already slid into negative annual growth by referencing only the average price.

The above is an excerpt frohttp://calgaryrealestatereview.com/2015/02/12/td-calgary-edmonton-housing-markets-likely-to-correct/

This type of media attention is exactly the kind that can cause panic in the market place.  There have been layoffs in the oil sectors over the last few months with others expected to continue over the next 6 months, this will certainly have an effect on the average sale price in Calgary and the area but what that impact will truly be is yet to be seen.  There are still many people moving to Calgary for work – not just on the oil rigs but in construction and other sectors as well which are still doing well and are not as impacted as the oil patch and related industries.  I think that this correction was on the horizon for a number of months now and was going to happen no matter what the oil prices did, the oversaturation of high priced homes was incongruent with the buying power of your average Albertan.  I am speaking of the true buying power of the average Albertan and not the influx of buyers that are only buying due to the historically low-interest rates and are going to be in trouble in 5-8 years when the rates start to increase.  The media plays a large role in public perception of how a province is doing fiscally and they of course sensationalize the little things to sell advertising – the true fundamentals have not yet to greatly decline in Alberta from what I have seen so far, based on that I say again that it is too soon to tell on whether or not this current market blip will end up resulting in a downward trend.

To your success

Tim R