This story takes place in modern day times! The story is about a real estate investor who has to decide between two properties. One property is in the bustling and over-priced city of Toronto and the other property is in a smaller community to the west known as Kitchener.
The Toronto property is in Guildwood – a sought after area of Scarborough but backs on to a Go Train track. The home is beautiful and offers a main floor with the potential for a basement apartment but it would need renovations to make it happen. The price is $749,000.
The property has been sitting on the market for 31 days in a sought after area because of it’s close proximity to the train tracks. What happens in a few years when my client wants to sell this property – will he have the same issues as the current owner? Even in a seller’s market? Probably!
The Kitchener property is in a sought after area with schools and shopping nearby and also has the potential to add a basement suite but the separate entrance would have to be built-in. The asking price is $325,000.
Seems like a no-brainer right? But let’s look at the numbers to see what makes more sense!
Currently we are dealing with a “seller’s” market not a “buyer’s market so how do you differentiate between the two? How do you navigate the sellers market and still come out a winner? And how do you buy when the market is overheated?
So how do you figure out if it’s a seller’s market or a buyer’s market? The easiest way is to look at unsold inventory. If the inventory on the market is between four and six months you have an even playing field between a sellers and buyers market. Less than that and it is usually a sellers market and beyond that and it is usually a buyers market.
If you are shopping for a home currently you are probably coming up against too many bidding wars – that’s because the inventory is low and houses are selling for thousands over asking and usually in 1-2 days. So how do you navigate this current market and still come out a winner? Continue reading
No Changes to Bank of Canada Rate!
At 10:00 am EST, Wednesday May 25th, 2016, the Bank of Canada maintained their overnight rate, which in essence means no change to the prime interest rate. Remember the prime rate affects your variable rate mortgage, line of credit and/or student loans.
There has been on-going pressure to consider dropping their rate further in order to relieve publics concerns with the current economic conditions. This is still good news for the amount of interest, that you will pay, but we also have to recognize that it is a reflection of the current housing market and ailing economy.
As a real estate investor I dreamed of having a horde of rental properties but with prices where they are, down payment requirements, land-lording issues in some cases and finding good deals, I turned instead to private lending.
I liquidated my last property after completing two Rent-to-Own deals but have kept my Four-Plex as it is a JV deal that is too good to get rid of plus it keeps me in the game so to speak.
At this point in my life, I am looking to put more focus on my retirement goals and initially I thought I could do that by having rentals, however I realized that I like the low-key approach to investing rather than looking for great deals, trying to find partners with money and chasing down tenants for rent.
Private Lending has become a hot topic of late! Due to a variety of reasons, borrowers may need private loans due to insufficient income to qualify for a mortgage, debt consolidation, damaged credit and even people looking to borrow money against their equity. However in many cases the existing lender may not be willing to lend against that equity and therefore people turn to private loans for a solution. But it’s not always that easy or clear on how they work so let’s unravel the private lending world.
In Part 1, I will speak about the borrower and private lender. In Part 2, I will speak about how you as an investor can loan your money in private lending as an alternative to owning property.
At some point in an investors’ real estate investing career or journey, you will quickly run out of funds to keep investing in properties, so what can you do?
There are many ways to move forward but in my opinion one of the best ways is to Joint-Venture with another investor.
Check out a recent podcast I gave on the Joe Fairless show about Joint Ventures http://joefairless.com/blog/jf589-how-she-syndicates-mortgages-through-jv-deals/
What is a Joint Venture – essentially it is a method where partnerships are undertaken for people to pool their funds, their talents, their knowledge and their resources to in this case, purchase a property or grow their portfolio of properties.
I recently had an inquiry about purchasing an ocean-front property in Costa Rica? More and more Canadians are looking at investing in this beautiful country – I myself am very interested but holding off due to the dollar.
Living in Canada and especially in the eastern provinces, where it can get down to minus 40 or below, some of us tend to dream about living near the Ocean, in much warmer climates. I know I do! However, the question becomes is the reality a dream or a nightmare waiting to happen?
Being a real estate investor myself, I tend to be on the conservative side when it comes to my investment properties because the end result comes down to cash flow and protecting my investment.
Depending on whom you speak with there are many ideas of how to build a retirement nest egg. I have a specific plan for retirement that includes real estate. While many people still believe the stock market is the safer way to go, I decided long ago it was not for me.
For one, I did not want to invest and pay fees and for two I did not want to invest in the stock market, where I had relatively no control.
When I started out as a real estate investor, I thought that if I had the money and found “a” property, it would be easy to make money. I soon came to realize that there was so much more to be aware of – like finding the right property and knowing the right time to buy the right property. I thought that if I “timed” the market right that I would find a tenant quickly and life would be easy. Was I completely wrong? Well yes and no – let me explain!
It’s not unusual for Purchasers to get settled in their new home and get a Property Tax reminder stating they owe the whole years worth of taxes. Frightful right?
Just after moving in to her new home, my client received a notice in regards to the property tax adjustment and as a First Time Home Buyer, we had discussed this could happen so she did not freak out –completely!