Welcome to October, I trust your fall is going well - Everyone back to school, and Thanksgiving just around the corner. This is a great time of year to give thanks to those who have helped you accomplish your goals and dreams, plus it is a great time to refocus and review your goals and make the final 'push' for the end of year.
This edition of the Real Estate Insider gives you the latest research numbers we all need to watch, plus some bonus items for you. Please read right to the end, as we have some special bonuses for the action takers You'll uncover all the key research and insights into the Canadian Real Estate Market.
Table of Contents
Exciting News & Discount
The Final ACRE System Live for 2006 is only a few short weeks away, and has been completely updated and improved for 2006. There are newly updated forms and presentations all custom tailored around helping you become the best of the best in the Real Estate Investing arena. Unlike other programs out in the market that sell for upwards of $3,000 - $5,000, the ACRE System live program will set you apart from everyone else in the market. It is designed to produce results and you can still take advantage of the low price to attend this entire weekend (18+ hours). To avoid disappointment you will need to register for this event very quickly as it is already 60% full and has sold out 7 years in a row... To read all the details of this program that guarantees results click here:
1. Housing Bubble Watch
Have you been following the newspaper headlines? Is the market over? Is a bubble forming? Have the prices peaked? Are prices falling? Are there any more opportunities in Canadian Real Estate? Based upon all the Newspaper headlines, it is not a matter whether the U.S. Housing market is going to crash, it is a matter of how much and how quickly? How will this affect the Canadian Real Estate market?
It almost seems that everywhere you turn, these doom and gloom headlines are creeping in, and many people are actually listening to the hype and mis-information in the marketplace and basing their decisions on these headlines without looking 'Behind the Curtain' at the underlying economic fundamentals.
Sophisticated investors have seen headlines like this before and they dig behind them to separate what is real from the manufactured. We are predicting that these doom and gloom headlines (just like they did with Kyoto, and S.A.R.S. for example) will prove to offer some of the best buying opportunities in Canadian Real Estate.
Two excellent unbiased reports you will want to download and review in depth are the following:
a) Housing Affordability Index (RBC): - For full report Click Here:
b) Market Bubble watch (TD Bank) - For full report Click Here:
The Key Steps To Take Right Now Are To:
Separate what is real from what is hype and emotion
Be educated on how the Real Estate markets work, based upon economic fundamentals
Follow a proven system, based upon unbiased fundamentals that have a long term track record of success
Surround yourself with like-minded people, who push you to achieve your goals
Review chapter 5 of 'Real Estate Investing in Canada'
Have the right relationships in place and nurture those relationships
Finally, take focused continuous action; YOU are 100% responsible for your follow-through
2. Population Trends
The Quarterly population estimates from Statistic Canada (ending July 1, 2006) have just been released. Some interesting trends are becoming predominant, and this is something you will want to keep an eye on as time goes on.
Quarter ending July 1, 2006, numbers (in brackets) indicate growth in last quarter
CAN. . . . . . . . 32,623,490... (+.31%)
BC . . . . . . . . 4,310,452 ... (+.36%) *** Above National Growth
AB . . . . . . . . 3,375,763 ... (+.70%) *** Above National Growth
SK . . . . . . . . 985,386 ... (+.04%)
MB . . . . . . . . 1,177,765 ... (+.15%)
ON . . . . . . . . 12,686,952 ... (+.34%) *** Above National Growth
QC . . . . . . . . 7,651,531 ... (+.21%)
NB . . . . . . . . 749,168 ... (-.10%)
NS . . . . . . . . 934,405 ... (-.01%)
PE . . . . . . . . 138,519 ... (+.15%)
NF . . . . . . . . 509,677 ... (-.15%)
In the numbers above there are clearly three regions which are outperforming all others.
From July 2005 to July 2006, Alberta's population increased by 98,181 (almost 269 people/day). This equates to a 2.95% growth, almost 3 times the national average. More than 50% of the people moving to Alberta are coming from other Canadian Provinces.
B.C. saw its population climb by 52,619 people over the same 12 month period, with more than 72% of the people arriving from other countries.
Ontario still experienced the largest net increase with 128,283 new residents, but its growth of 1.02% barely topped the national average. The pattern of growth in BC and Alberta is not new or unexpected; however it is surprising that the two provinces combined now have a greater population than Quebec.
Why is this important to Real Estate Investors? If you follow the trend in population and the future economic indicators, when more people move into a region there is an increased demand upon the housing and rental markets. If the completion of new homes is not keeping up, the demand for housing outpaces the supply of housing, and this causes a drop in the vacancy rate. Based on simple economics, when you have a higher demand and fixed supply, the prices will increase, which is what we are experiencing in those provinces mentioned above.
Use these numbers to focus on the future trends. For example, (just looking at one city) Calgary is forecasting to have, on average, another 25,000 people move into the city each year for the next 10 years. If this is true this will beat all previous records of population growth and Real Estate demand. These are just some of the types of long term economic fundamentals that we are looking for to determine a region's long term viability and predict future price increases.
3. Focus On Real Estate Fundamentals
As the Real Estate markets continue to heat up, it is now more important than ever that you focus on the unbiased economic fundamentals and remove yourself from the hype and emotions that surround the Real Estate market. As well, during this time of hot markets you will need to be better educated and more on top of the economic fundamentals or you risk making a poor investment decision.
As we've continued to predict, price increases are going to CONTINUE for the next few months. Certain Canadian cities have never experienced the kind of appreciation that we are currently seeing -- and the incredible part of all of this is that it's not being driven by speculation -- it is being driven by the fundamentals that are forming a "perfect storm".
When Studying the Real Estate Markets, we focus only on the Fundamentals (for more detailed information you can refer to the Canadian Best Selling Real Estate books, 'Real Estate Investing in Canada' and '97 Tips for Canadian Real Estate Investors' by Don R. Campbell). It's good to see others starting to talk about our fundamentals. In order to get a clear picture of the future of a Real Estate market you need to look at all the fundamentals...
Mortgage Interest Rates
Net Wealth Effect (Disposable Incomes, Median Incomes, Employment Rates, Housing Affordability Index)
Increased Job Growth & In-Migration
Real Estate Doppler Effect
Local Regional & Provincial Political Climate
Critical Infrastructure Expansion
Increased Costs of Labour & Materials
Area Gentrification & Renewal
Maximizing Value and Zoning Opportunities
Renovations And Sweat Equity
Speculation & Rumours
When you follow these fundamentals, predicting the Real Estate market and seeing the Real Estate BOOM markets becomes very easy. You can also easily identify areas where it might be time to sell.
Congratulations to those of you who followed sound fundamental advice and invested in one of the REIN™ recommended areas. In fact, your next opportunity to hear our updated research in the Canadian Real Estate market will be at the ACRE System in Edmonton October 21- 22. Don will be going through each one of the Key Fundamentals in detail that drives the Real Estate market. You will walk out of this weekend with the 'next' hot areas to invest in. Invest in areas with a future not a past. The seats are filling up quickly. Already over 60% sold out. If you are tired of late night TV promises or 'so-called' free events that prove to be a front to sell you stuff, then this event will be a breath of fresh air. To reserve your spot and not miss any of the key research click here:
4. Legal Tips from the Experts (Barry McGuire)
This month's Tale from the Trenches is called "RISK / REWARD ANALYSIS"
In a recent month a Real Estate investor had a line on a foreclosure. The major diligence issue for this investor was that the owner was not living in the home and the gas was turned off. On a previous foreclosure this investor got some nasty surprises because their diligence was inadequate. This time they weren’t going to be fooled.
Therefore, they made the offer conditional on getting the gas turned on and checking the pipes to see they weren’t frozen as well as giving the home a thorough inspection. The seller was to get the gas turned on, but he was not motivated. Getting permission to deal with utility providers took some time. In any event, three weeks passed before diligence could be completed. In the end, everything was fine. The Investor was ready to buy
The foreclosing lawyer had been advised of the offer. However, the redemption period in the foreclosure expired at the end of the month. The foreclosure lawyer said he would not accept a payout from the seller and promptly gave a realtor the Judicial Listing. The realtor listed the property at $50,000 over the investor’s accepted offer.
On reflection, the investor had a number of observations:
a) He should have educated himself on the significance of the redemption period and not let that date pass.
b) His risk/reward analysis was faulty. This two-storey home had an after repair profit of $65,000. Considering that the seller had heaters in the home and that the toilet flushed and the taps seemed to work, in hindsight the investor was far too cautious on the diligence side.
The lesson here is to pay attention to redemption periods, don’t expect extensions and do proper risk/reward analysis. The Bottom line in this hot Real Estate market is "a deal is not a deal unitl you have full possession". so be wary of false claims.
5. Upcoming Events (Alberta, & Ontario)
1. "MEMBERS ONLY" REIN™ WORKSHOPS in ALBERTA
. . . CALGARY New Location - Thursday, October 19th 6:30pm *** NEW LOCATION Red & White Club (north side of McMahon Stadium). Free Parking, beautiful meeting room, serviced by LRT and major roads. Full Details
. . . EDMONTON - Friday October 20th 6:30pm *** Shaw Conference Centre (9797 Jasper Ave.) *** The night before the ACRE System event. Full Details
2. "MEMBERS ONLY" REIN™ WORKSHOPS in ONTARIO
. . . TORONTO - Tuesday October 24th 7:00pm *** Marriott Toronto Airport Hotel *** 901 Dixon Road Full Details
3. FINAL ACRE System FOR 2006
. . . . EDMONTON - Saturday October 21st and 22nd (over 18 hours of Real Estate training that has a proven track record for the past 14+ years). The ACRE System program is completely revamped for 2006. New Banker Strategies, New 11 Fundamentals, New Landlording Secrets and much, much more. Currently more than 31 forms have been revised and updated for 2006 to keep you on the leading edge of the Canadian Real Estate Market. For a special $200 discount click here:
6. Final Thoughts
These are the types of economic times where both fear and greed often take control of a marketplace. It is our job, as real estate investors to ensure that we do NOT get caught up in an uncontrolled feeding frenzy (buying just for the sake of buying)... it is a good time to take a deep breath and review our investment strategies.
In many regions across the country we are witnessing the 'boom mentality' of unsophisticated investors writing ridiculous offers, with no conditions, and this is leading to these unaware investors being caught with some very bad properties. If you have to make an unconditional offer on a property (and you don't already know the property intimately) this is a recipe for disaster. Sure, you might get lucky and grab a winner deal, however, all it takes is an undisclosed ex-grow-op or ex-meth-lab and you can be wiped out financially.
That is why it is so important to review your fundamentals at least once per year. No matter how great the hockey or football player, they go to training camp every single year to re-focus on the basics. This is the same for investors... keep honing the fundamentals and the big stuff takes care of itself.
One final thought, if you have rental properties (especially all across the west and select towns in the east) you are probably under-renting your properties and leaving a lot of money on the table. For example, in Edmonton, townhouses that were renting for $825 in June are now renting easily for $1085. Make sure you stay on top of your market (and on top of your property manager) to ensure you are maximizing the revenue from your real estate business. The longer you stay behind, the lower your property value will be and the less money you'll have to devote to your financial freedom. (check www.bwalk.com as an example)
Real Estate is not a race, it is a business. Make sure you are running it as such, and I look forward to seeing you at the Fundamentally focused ACRE System coming up in a couple of short weeks, be aware and you'll do amazingly well in this marketplace.
Focus on the fundamentals, keep emotions out of your decisions, and enjoy the results in just a few short years.
Your REIN™ Team
P.S. If you are thinking about registering for the last ACRE System of 2006, we encourage you to do this very quickly, as this event WILL sell out as it has for the past seven years. The economic fundamentals are so strong right now and these fundamentals will be the catalyst of one of the strong periods of Real Estate gains. We do not want you to be on the 'outside looking in' and be one of those people saying "If only I would have..." after this boom is over. The first step to taking advantage of this opportunity is to get yourself educated on the fundamentals. The longest running and most successful training program in Canada is the ACRE System program:For a special $200 discount click here:
P.P.S lastly, let me personally thank you for your support of Habitat For Humanity over the last 16 months. We've raised over $80,000 (including 100% of the author royalties from the best selling books Real Estate Investing in Canada and 97 Tips for Canadian Real Estate Investors and contributions by REIN™ members). In fact, your support has allowed Habitat to hand over the keys for new homes for two families. Congratulations on making a difference. (Here is the direct link to Habitat for Humanity's site about this exciting project: