Uncategorized — Page 2 — Phoenix Real Estate

6 Big Mistakes Buyers Make

August 19, 2021 by admin

Today I wanted to provide a list of common mistakes that home buyers make and more importantly – what do do about them to make your home purchase in Calgary or any area as smooth as possible.

1. Not getting pre-approved for a mortgage before you go shopping. This means that you might lose out on a deal because the bank tells you that you are approved for 50k LESS than you need to buy your dream home

2. Buying too much house and winding up “house poor” winding up with payments that could become unmanageable after “life happens” events such as work hours being reduced or slow times in business can really cause a family a lot of stress if things get tight.

3. Not structuring your mortgage for both short term AND long term goals, being trapped in a mortgage due to a huge payout penalty is no fun at all. In fact, recently I had a client that HAD to keep their rental policy because of this problem.

4. Failing to learn about pre-payment penalties and how they work. What is the penalty if I sell in year 1 of 5 year terms? What is the difference between fixed or variable? Can I port the mortgage? These are all questions that should be asked.

5. Not asking if the mortgage is portable/assumable – not portable you have a penalty for sure, how much is that going to be? Could be 10’s of thousands of dollars if you are not careful.

6. Not working with a mortgage broker and only their bank – the bank wants to make money for their share holders, that is their primary goal. Mortgages are set up to protect the bank’s bottom line not YOURS.

There is a lot that goes into designing a mortgage, it is kind of like building a house from the ground up – there are a lot of things that can go wrong without the proper design/guidance along the way.

Ok great, so now we know what to watch out for…what do do about it?

Here are some solutions and things to think about”

1. ALWAYS get pre-approved when going to shop for a home, investment or to live in. This process involves the bank verifying and checking all your documents (credit score, income, expenses, assets, liabilities just to name a few)

Then they will give you a commitment letter that is an full approval to lend you X dollars with having Y down payment available. This also locks in your interest rate in case rates go up you will get the agreed rate for up to 6 months depending on the bank.

BONUS: this helps you negotiate stronger knowing your max price. Not saying you need to use the whole approval, and generally you shouldn’t to avoid the house poor issue.

2. Biting off more than we can chew is a common trait for North American residents overall. We often feel the need to “keep up with the joneses” and live above our means, in terms of cars, clothes, houses. Real estate is generally the most expensive thing that families will ever buy, so any financial advisor will tell you not to buy more house than you need for your current family dynamic.

When investing in real estate we only think about the numbers: will it cash flow? What is the repairs needed? What is the common expense ratio for this area? (more on these in another article to come) Think of your house as an investment even if you live there, that thing should cash flow if you ever moved out and rented it.

3. Speak to a mortgage broker (or call our team for advice) on how to set up your mortgage for success both today and tomorrow. There are many features of a mortgage to consider past the interest rate – which is all that most buyers think about after watching ads/seeing posters for 0.99% interest rates (there are many strings attached to those!)

4. Dreaded penalties for breaking the mortgage early – which is generally 5 years, but it does not have to be there are 1,2,3,5 year and even 10 year mortgage terms that you can get to suit your goals over the long term. Also lines of credit or HELOC for short that have 0 penalties to pay them off early, and blended mortgages which are a combination of the 2 that are ideal for flipping houses. Also, how many payments you make per month is up to you bi-weekly can save you tones of interest over the life of the mortgage. Talk to the broker about these items

5. Many mortgages are no longer assumable after the regulators changed the rules many years ago, some still are which could be a great option for a home buyer both investors in real estate and retail home buyers alike – you need to ask and confirm. Always ask for a mortgage to be portable, this can save you lots of money in penalties – better to have the option when you need it because it cannot be added to a mortgage after the fact.

6. Bankers work with the tools that they have, and their list might not give you everything that you need to build the mortgage ideal for you. Get a second opinion at the very least – if you were told today you had cancer and only 6 months to live wouldn’t you get a second opinion from another doctor? OF COURSE YOU WOULD! Do the same with your mortgage your making a 5 year deal on terms and a 25-30 year commitment with that bank, for pete’s sake get it right from the start

If you have any questions about real estate financing, private money, how to invest your RRSP’s in mortgages and play the same game the banks do – contact our team to book a discovery call.

To you success,

Tim Reid

-respect the hustle

Filed Under: Uncategorized Tagged With: calgary, Coaching, howtobuyahome, Investing, mistakes, mortgages, Realestate, wealth

Real Estate and Inflation

August 17, 2021 by admin

There is a lot of talk about inflation both in the media and in private conversations. With a Canadian election now looming in the fall of 2021, these are all hot topics for real estate investors, business owners, and what should be a topic of discussion for everyone else…but is it?

The price of most thing that people spend money on goes up slowly, like the analogy of a frog put in a pot of slowly boiling water will not jump out it will just cook because the change is happening so slowly. (that is a myth by the way the frog will actually jump out when it gets too hot!) Inflation can creep up on you devaluing your dollars and you get the same amount of goods for more money.

Real estate values are derived in a number of ways but the primary metric is the value of the land and the replacement cost. Rent naturally may fall when depressions occur however they rebound faster than many other investments once things start to recover. The investment of real estate has been called a “hedge against inflation” because its value keeps pace with inflation due to labor costs for construction and rents keeping up with inflation very closely.

In an uncertain world, which is less certain now than usual real estate has always been the cornerstone of building wealth for Canadians.

Further detail on this concept in this article here from Crew;

http://ow.ly/nqUD50FSUYt

If you would like to learn more about how to add passive real estate to your portfolio or expand your investments without the headaches of day to day management. Contact us for a discovery a call

PS: did you know that you can invest you RRSP’s in real estate to get great returns secured like the banks? Give is a call and we can show you what the banks will never tell you.

To your success

Tim Reid

-Respect The Hustle

Filed Under: Uncategorized Tagged With: calgary, Investing, realtor, rrps, wealth

Calgary Real Estate Market Cooling?

August 16, 2021 by admin

The National Post sure thinks so, inspiration for this article from shenanigans out east.

There has been a sentiment that the market will remain hot forever, now we all know that what goes up must come down. The stats are unfortunately behind the times, some seller’s still optimistic that they will get multiple offers are turning down valid ones to hope for a higher offer down the line…which may never come and some are getting frustrated.

Also, having many buyers who bought homes at the start of the year now those buyers are “out of the market” or have already bought a home and are no longer in the buyers pool.

The pool of fish has been reduced in number and the fish that are in the sea at the moment are more pressed on budget (due to the stress test) so this is creating a trend toward a balanced market in most areas of Canada especially in Calgary where we have depressed economic fundamentals. The following national post article goes into more detail on some unfortunate seller scenarios.

Do you think the market is cooling off in your area? Let us know what you think, contact us to book a discovery call to chat about real estate.

To your success,

Tim Reid

-Respect The Hustle

http://ow.ly/l6SE50FRPya

Filed Under: Uncategorized Tagged With: calgary, sales, wealth

Calgary Real Estate Market Real Deal

August 13, 2021 by admin

What is going on in the market? Is it slowing down? Is it speeding up? Are there still competing offers?

These are the questions that I get often both as a realtor and investor these days. There is no simple answer, but what we are seeing on the ground is what I had predicted for the most part back in April/May with the looming stress test and the opening of the economy (whatever that really means is up to your personal world view!).

Summer generally sees a shift in buying behavior with kids being out of school and vacation mode kicking in. I have a number of deals on the go at the moment which have been heavily impacted by what I call the “vacation factor” -so that happens to residential as well in any given year.

Inventory is up, buyers pool/motivation has shifted, and financing is now harder to get – this will have downward pressure on pricing as well as speed of sales. Reminder that sales are only recorded by the real estate boards once the property closes…so it could have sold 3 months ago and now is just getting reported.

There is now the ability to show properties relatively easily whereas bookings were tough for the first few days of any new listing on the market. There can still be competing offers for aggressively priced properties relative to the competition in a given community.

Investor demand for renovation projects remains strong, as there is a lack of new builds in the closer in amenity rich neighborhoods. Also, certain schools with differing programs with a draw radius draws families to those areas as well.

Properly marketed properties, that show well, and are priced right are selling very well under the 600K mark where more expensive homes have flattened out/slowed down. If you would like to learn more about how to get top dollar for your home or sell privately in the non-traditional way contact us today for a discovery call.

To your success,

Tim Reid

-Respect The Hustle

Filed Under: Uncategorized Tagged With: calgary, Coaching, market, realtor, wealth

Lessons to Learn from a 1.7B business failure

July 27, 2021 by admin

I have read the gory greek tragedy that became of quibi which was an app that raised troves of silicon valley cash before going under. The idea could have had legs, but it all came down to operations and lack of business systems that caused a lot of the grief. The team has to work together as is very well detailed in the book good to great by Jim Collins, not only do you need to get the right people on the bus but make sure they are all in the right seats – which in turn creates a cohesive team that will work together toward the common goal or vision for the company.

The lack of business systems and how important they are you can read more about in the article that inspired this post by rich dad Robert Kioysaki original via this link

https://www.richdad.com/better-business-systems?feed=robert-kim-blogs&fbclid=IwAR0g4ZgB3bxR13PfuEWx_B6PTc_r7ESNRkGG1-Jh9r5gaDVZULsLrrjKoYM

What business systems in real estate do you feel are the most important or you might need help with? Contact us today to book a discovery call and let’s chat real estate.

To you success

Tim Reid

-Respect The Hustle.

Filed Under: Uncategorized Tagged With: business, Coaching, money, Realestate

Real Estate Market stats and trends

July 26, 2021 by admin

Many people have asked where the Calgary real estate market is heading, which is a common question – now not having a crystal ball in my back pocket using data of the past can help with the outlook moving forward.

It is helpful here to state that the age old “past performance is not an indication of future performance” however history tends to repeat itself and real estate goes in cycles. The cycle has been shifted, compressed, and disrupted from the norms the last year due to COVID-19 for sure and what comes next is volatile to say the least.

This article was helpful to average out the stats for canada, here are some highlights

Prices Paid

31% of buyers were involved in a bidding war during their home purchase
66% believe that the bidding process should be more transparent and that all parties should be privy to the bids submitted
45% said if the bidding process was transparent, they’d be less inclined to use a real estate agent
32% of buyers incurred unexpected housing costs, including:
- moving expenses (32%)
- land transfer tax (25%)
- home inspections (24%)
- mortgage application fees (14%)
- mortgage-default insurance (13%)

Down payments

37% of respondents put down more than 20% of their home value
- Of those, 28% wanted to avoid paying mortgage default insurance
- 26% wanted to pay down their mortgage as fast as possible
Of those who put down less than 20%, the top reasons were:
- lack of funds (47%)
- wanting to keep money for other expenses (33%)
- comfortable with their current debt obligations (15%)
Top sources for down payments included:
- savings outside of an RRSP (38%)
- equity from a previous home (25%)
- RRSP savings (11%) – have rrps started to die?
- gift from a family member (8%)
- a new loan (5%)
- a HELOC (4%)

One shocker I was not expecting as a “industry investor” is that 61% of people went to their existing financial institution to get their financing. WOW! The banks may give you the best rates, but there are many more features of a mortgage which is a 5 year deal (in most cases) and a 25-30 year commitment with the bank and let’s face it the banks interest is in making the most money not giving the best deal to the client.

Use a mortgage broker, at least to get a second opinion – they can also explain why there is more to a mortgage than the interest rate: fees, portability, fixed VS variable, blended mortgages and more.

Original article here: https://www.canadianmortgagetrends.com/2021/07/majority-of-canadian-buyers-borrowing-their-maximum-approved-mortgage/

Filed Under: Uncategorized Tagged With: calgary, Investing, money, Realestate, wealth

The Value of Real Estate & Business Coaching

July 19, 2021 by admin

Firstly I recently had a few interesting conversations with clients both coaching and other areas about value. The first point that I want everyone to internalize is that price is only a concern in the absence of VALUE.

Now customers may not fully understand the components that go into any given job, this is very accurately portrayed in the trades professions when some customers feel they could do the job themselves for much less….but can they? My fellow real estate investors are thinking right now that they have seen the horrific results of some real winning DIY renovation jobs.

This story has been around social for a while so I thought it really illustrates this point in business, and serves as a great reminder to respect your value in business and ensure that you convey that value well to your prospects and you will increase your sales, plus convert more A+ customers.

A customer asked me how much it cost to do this job….
I answered him: $ 1500
He said: So expensive for this job?
I asked: How much do you think it would cost you?
He answers me: $ 800 maximum… That’s a pretty simple job right? !”
– For $ 800 I invite you to do it yourself.
– But…. I don’t know how to.
– For $800 I’ll teach you how to. So besides saving you $700, you’ll get the knowledge for the next time you want
– It seemed right to him and he agreed.
– But to get started: you need tools: A welder, grinder, chop saw, drill press, welding hood, gloves etc…
– But I don’t have all these equipment and I can’t buy all of these for one job.
– Well then for another $300 more I’ll rent my stuff to you so you can do it.
– Okay, he says.
– Okay! Tuesday I’m waiting for you to start doing this work
– But I can’t on Tuesday I only have time today.
– I’m sorry, but I’m only available Tuesday to teach you and lend you my stuff. Other days are busy with other customers.
– Okay! That means I’m going to have to sacrifice my Tuesday, give up my tasks.
– I forgot. To do your job yourself, you also have to pay for the nonproductive factors.
– That is? What is this?”
– Bureaucratic, tax, vat, security, insurance, fuel etc.
– Oh no!… But to accomplish these tasks, I’m going to spend more money and waste a lot of time!
– Do you have them? You can do it to me before?”
– Okay!
– I’ll make you all the material you need. Truck loading is done Monday evening or Tuesday morning you’ll have to come by 6 loading the truck. Don’t forget to be on time to avoid traffic jams and be on time
– At 6??? Nope! Too early for me! I used to getting up later.
…
– You know, I’ve been thinking. Y ‘ all better get the job done. I’d rather pay you the $1500. If I had to, it wouldn’t be perfect and it would cost me a lot more.

When you pay for a job, especially handcrafted, you pay not only for the material used, but also:
– Knowledge
– Experience
– Study
– Tools
– Services
– Time to go
– punctuality
– Accountability
– Professionalism
– Accuracy
– Guaranteed
– Patents
– Sacrifices
– Safety and security
– Payment of tax obligations

No one can denigrate other people’s work by judging prices. My prices to do this would be much higher than it says here for that job but its the point not the amount.
Only by knowing all the elements necessary for the production of a certain work can you estimate the actual cost.

When you hire a coach (which gets paid for their experience) you get focused attention, custom guidance, access to their networks, experience and a third party unbiased perspective so that you can get the feedback you need to get results in a fraction of the time.

What about mentoring? Mentoring is fantastic and I have had many over the years which have helped a lot, but the coaches I have invested in (they are an investment not a cost) have drastically moved the needle for my business. Mentors will be there to help but they have their own businesses to run as well so they can’t always be there when that critical deal hits your desk and you need fast targeted advice.

If you have every considered building a real estate BUSINESS, which is different that flipping a house per year as a side hustle contact us today for a discovery call to explore some options.

PS: We help those who want to build that side hustle as well, there are options for that!

To you success,

Tim Reid

-Respect The Hustle

Filed Under: Uncategorized Tagged With: caglary, Coaching, wealth, yyc

Post Covid-19 What Comes Next?

July 9, 2021 by admin

Calgary and most other areas of North America are starting to open up an restrictions are lifting. There has been a unprecedented uptick in sales in Calgary real estate as well as many other markets across the country – many have asked us…why is that?

I have seen recently a number of articles starting to catch up on the trends that industry veterans like us have known for months. The primary reasons this happened in Calgary/Alberta at large was the following

Low supply – builders stopped building due to lock downs and shut downs mandated by the public health orders.
Never before seen Savings in Canadian bank accounts. Without spending money on entertainment, eating out, and frankly just about everything for a year in many cases caused an flood of cash into savings accounts and into the equities markets.
Low interest rates – the central banks across the world dropped interest rates to keep businesses afloat and keep credit accessible to keep the economy moving as much as possible when so much was locked down for many months.

Now, that is what caused the market to move in ways not supported by fundamentals. Let’s face it if you ask anyone in Calgary or Alberta at large if the economy is doing well….you will not get very positive answers. Is it in-migration from other parts of Canada or the US? NOPE We have seen the lowest numbers of net in-migration in years to Alberta.

So I think any industry person would agree that the current state of affairs in real estate would be artificial, (at least in Alberta for certain) some supply and demand factor at play but the above three reasons are the cause.

Now that the world is opening up I have to wonder…what comes next? Will we have a repeat of the roaring 20’s like some have predicted? Which would include a large number of people going back to their old habits, OR will we have a cross section of the population choose to form new habits with a percentage of those savings and INVEST them?

I am not suggesting that anyone not live life and go on vacations (we need those!) or even eat out again and stay cooking at home. What I would suggest is that the families that are eagerly awaiting borders to open up and theme parks to come back online, and all the other discretionary spending that was waiting for the pandemic to end – consider taking a percentage of those funds and invest them using diversification to create wealth.

Creating wealth is a system, and one that the longer you work that system the better the results will be. Real Estate is the most reliable way to create wealth (that is why we love it), but you need diversity in that sector as well as into other sectors such as the equities markets, and business investments that pay you dividend income as well. We have done, and still do, all 3 which is what I like to lovingly call the “3 pillars of wealth”.

Which set of habits will you keep after the world goes back closer to “normal” whatever that means, my hope is that we take the lessons learned during this global event into the future and things are never the same again, in a good way.

Contact us today and let’s book a discovery call to answer any questions you have about real estate, business, or wealth creation – we are here to help.

To your success,

Tim Reid

-Respect The Hustle

Filed Under: Uncategorized Tagged With: calgary, covid19, Investing, Realestate, weatlh, yyc

3 Tricks to buying a new home from a builder.

June 26, 2021 by admin

When buying your first home, you might look at buying new or “resale homes” both are very difference processes. With a re-sale home bought through the original or future owners most choose to work with a Realtor in Calgary or other markets.

Having an agent to navigate you through the process, help with referrals to service providers, really makes the process a lot smoother for many buyers.

When buying a new home, driving up to that shiny sales center with the smiling representative in that gleaming show suite/show home is very exciting! However there are some things that many buyers do not know about the staff working in there.

Firstly, the best way to not get tricked is by being educated about the dynamic.The staff in the sales center work for the Developer, they are paid to maximize profit for their employer – not get the best deal/value for money for the customers that walk through the door. They do the best they can with the scenario they are given, remember that they work for the “man/woman” not really for the customer.

With all new product sales GST is applicable, for all new home sales in Alberta GST will be added to the purchase price and the price of any upgrades made to the property prior to construction. There will need to be disclosures singed to acknowledge that you understand were an how GST will be calculated for the sale.

The most important thing to consider is that the builder will more often than not use THEIR OWN CONTRACT for the purchase. This is often non-negotiable and the builder’s team of lawyers have written this contract in their favor – not the consumers. Like any good business their lawyers wrote that sucker to protect THEM not YOU. Having this reviewed by your real estate agent or your own lawyer is highly recommended. (both would be a best practice)

Buying a brand new-home with new home warranty in a brand new building or a spanky new house in a new community with great amenities and new schools is exciting, make sure you keep that excitement all throughout the process by asking good questions and having a professional help you through the jungle -that way you are protected and often will be able to negotiate a better deal.

As always if you have any questions about this or other real estate topics, contact us today to book a discovery call.

To your success,

Tim Reid

-respect the hustle

Filed Under: Uncategorized Tagged With: calgary, homesale, new, Realestate, realtor, yyc

5 Key Reasons You Need a Power Team in Real Estate Investing

June 24, 2021 by admin

Real Estate is not a solo-sport, you absolutely need a team of professionals to support you in your real estate investing ventures. The first time you have bought a house (or maybe you haven’t yet) you might not have realized how much goes on behind the scene of that transaction.

From the start you likely worked with a realtor, who has a huge list of service providers that could help you out with due diligence, financing, repairs and many other items.

As an investor you will need a much longer list of people to help you out, and here are the Key reasons why:

You will always run out of time to do everything yourself, even if you work in real estate full time – which is also not how most people start, they still work a day job while investing in real estate and many never intend to leave their day job they just want a great return on their investments. Real estate is one of the most reliable ways to build wealth than any other sector.
It does not matter how great you are at finding deals, you can’t possible to do them all with your own resources. Having wholesale connections will save you a lot of time and effort.
Cash/credit are finite and you will need JVP partners to help you grow your portfolio
What about the passive income? Well nothing in business is ever truly passive if you are going to get great returns – therefore you will need property mangers, resident managers, and partners to help you keep the investment running as smoothly as possible. No fluff and fairy tales there will be challenges, just like any other business on earth!
Having fun! Does it really make sense to try and do it all on your own? Even if you had all the money in the world and an unlimited credit capacity, where would be the fun in building an empire if you cannot share that with others? The relationships that you build with your power team members make the challenges less severe, and you can have a great time along the way when you work with others. I believe in the Richard Branson model of business – find a way to have fun while you are at it, work hard and play hard. (he has a thing or 2 figured out in business)

Here are some power team members that you will need to get on board when you are starting out, or even if you have a number of deals under your belt and have gone the solo route – at some point to scale you will need all of these team members.

Realtor
lawyer
mortgage broker
appraiser
home inspector – residential
commercial property mechanical inspector
General contractor
handy men/women
wholesale material suppliers
private lenders
bankers
accountant
book keeper
architect
wholesalers
property managers
resident managers
JVP’s – joint venture partners
RRSP lenders
Trustee companies
Insurance broker
Trades; paint, flooring, roofing, HVAC, carpentry, tile setter, plumbers, drywall, smart home techs.
Moving company
Marketing consultants
Web design
Printing company
Bailiff
Engineers: structural/mechanical
Real Estate/Business Coach

As you can see there are lots of people that make the real estate world keep spinning, if you have any questions or need a connection in Calgary and many other markets in Canada we would be happy to help. Contact us today and book a discovery call.

To your success,

Tim Reid

-Respect The Hustle.

Filed Under: Uncategorized Tagged With: Coaching, Investing, real estate, Realestate, yyc