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In This Issue

  1. Real Estate Market Fundamentals Update

    Joint Venture Secrets Series - Part 2

    How To Own A Home If You Have An Affordability Issue

    Tales from the Legal Trenches

    Honesty is the Only Policy

    Final Thoughts

Upcoming Canadian Real Estate Events


August 24th – REIN™ members all- day field trip in Ontario

August 25th
- REIN™ members all-day power workshop in Toronto

August 28th
– REIN™ members workshop in Edmonton

August 29th
– REIN™ members workshop in Calgary

September 18th – REIN™ members workshop in Calgary

September 19th – REIN™ members workshop in Edmonton

September 20th – REIN™ members workshop in Vancouver

September 25th – REIN™ members workshop in Toronto

September 26th – REIN™ members workshop in Ottawa

October 20th & 21st - The15th Annual ACRE System program in Edmonton (The final one for 2007- open to the general public)—
click herefor the details

Make sure you check out the
Events calendar for all the details of the upcoming events.

Our next book 51 Success Stories from Canadian Real Estate Investors is now in pre-release. Receive a
deep pre-release discount by ordering your copies before it’s released.
Click here…"
 

 
Is It Time To Get Out?

Greetings!

Welcome to the August edition of the Canadian Real Estate Insider. This edition of our Newsletter is one of the most detailed editions yet. We have loaded it with tips, strategies and action steps, all designed to ensure you are one of the most well-informed Real Estate investors in the Canadian marketplace, because right now we are finding that knowledge is the key to separating the ‘facts’ from the ‘hype’.

Make sure you read right to the end of this newsletter as you will not want to miss one piece of information… in fact, you will find yourself coming back to this edition many times (it has that much information).

*** SPECIAL NOTICE ***

Before we get to all the details of this newsletter, we wanted to bring to your attention something that can dramatically increase your success rate in creating your Real Estate portfolio. The brand NEW Joint Venture Secrets Program is finally ready for public release after 17 months of development and testing. This system is specifically designed to help you tap into an almost unlimited amount of investment capital for your Real Estate deals.
Click Here for all the details

If you have ever wondered how the Multi-Millionaire Real Estate Investors have created their large Real Estate Portfolios, you’ll want to read this special report and learn all about the details of a brand new system designed to help you become a money-magnet attracting quality investment funds to help build your Real Estate portfolio.
Click Here to find out if you qualify for the special $200 discount.

1) Real Estate Market Fundamentals Update

Don Campbell, Canadian Best Selling Author


As we are now past half way through the summer, I trust your summer is going according to your plans and you are finding time to focus on what you really want out of life and the freedom that real estate can provide you.

As predicted, we are seeing some markets that have been 'white hot' for the past 12-15 months start to 'cool' slightly.

No surprise, there is all of a sudden more listings coming onto the market than we’ve seen in quite a while. And all I can say about this is… FINALLY! We’ve been waiting for this buying opportunity and now it is finally here.

The unsophisticated investors, those who don’t follow the economic fundamentals, are thinking that the market it over and it is time to get out… that means we now finally have some motivated vendors back in the market so that those of us who do understand long term fundamentals can take action and negotiate some better deals.

For the past year, certain markets have been running at an unsustainable pace. Even at this 'cooler' growth rate many of the
REIN™ Top Ten Towns will still SIGNIFICANTLY outperform many Canadian cities. Remember that even as good as Tiger Woods is, he cannot win every golf tournament (or he may take a breather, for example, for the birth of his first daughter), but at the end of the year, he will be the one standing on the top of the PGA tour Money list (sorry for the golf analogy - it is still that time of year).

How many more listings are on the market (and how much of an opportunity is there for you)? Well, lets take a look at one market in Canada- Edmonton, Alberta. Last June 2006 there were only 1,856 homes for sale on the MLS system, and currently (ending July 31) there are 8,183 homes for sale. Let’s look at it from a even more concentrated view: If you take a look at the North East quadrant of Edmonton (a strong economic fundamental region), and only look at Townhouse condominiums for sale, currently there are over 205 townhouse condos available for sale… a great buying opportunity for a long term hold property.

This is a great time for professional Real Estate investors to buy into the market aggressively while the market takes a breath. But of course you’ll have to cut through the fear that always surrounds a market taking a breath. Real Estate markets are living and breathing entities, which take breaks to get caught up, then, if the fundamentals still support it, they move forward… if the fundamentals don’t stimulate the market, then it stays still. It’s that simple and that important to be continually studying the economics behind a market, not the headlines.

The keys to look for are: job creation, in-migration, income increases, affordability based on income, transportation upgrades and areas of renewal. With these on your side the economics prove that demand for property increases. So before you jump into a market, just because it is currently going up, make sure you are reviewing these market drivers along with your Goldmine Scorecard from Real Estate Investing in Canada. We are buying Real Estate for long-term generational wealth creation, and certain markets are looking as strong as they have been for the past years - based upon the economic fundamentals.

The additional good news surrounding more listings is that you will now have more time to confidently complete all your due diligence. Make sure you follow the steps of the ACRE System. Make sure you take advantage of this time, as there might be a few people trying to unload their 'less than desirable' properties.

With a little understanding of what is happening in the market, and taking some strategic actions, you can create long term success for you and your family.

Many people from around the world are coming to Canada to invest because of the strength of the long-term economic fundamentals here, why should you allow yourself to miss out?

Major Investment Announced Bringing Even More Jobs


More good long-term fundamental news was just released in Canada’s oil and gas sector, over and above all the information we have previously heard in the past. Another $27 billion (yes, BILLION) announcement has been made for the Ft. Saskatchewan area.

Shell has decided, on top of their current $6 billion expansion, to build a complete 2nd upgrader on the same property. This is over and above the 6 upgraders already on the books to be completed between now and 2015. The good news for long-term investors is that this new Shell project won't even begin until 2009 and the construction jobs will be required for at least 5 years, thus fueling the boom even further.

The World Discovers Alberta Oil in July 2007

How about the latest findings in a recent government-backed study into the energy industry? "Wow!" is all one can say. In the draft report the conclusion was, "World Oil & Gas supplies from conventional sources are unlikely to keep up with the rising global demand over the next 25 years." Even better news: the study states very clearly, "... the world will need to develop all the supplemental sources of energy it can... to oil extracted by unconventional means from the oils sands of Canada to meet the soaring demand." This was discussed in detail on the front page of the Wall Street Journal World Edition as well as the front page of the Financial Times Europe Edition.

In addition, the Paris-based International Energy Agency also announced in June that they see a supply squeeze hitting in 2012.

Ladies and gentlemen, the world is discovering what you already know. Canada has an amazing long-term future ahead of it - better than ANYONE could have ever predicted just a few short years ago. Economics and demographics always win out in the end over speculation and guessing. There is a lot of guessing and wondering going on in today's markets. Isn't it nice to know that you can ignore these short term swings by having the knowledge of the long-term economics?

Looking at the figures and the research, we still think that people who are condo-converting right now are WAY too early in the game, and are leaving literally millions on the table by focusing on TODAY's cheque. It is also a reason that there are so many units for sale right now… short-term investors looking for a quick buck.

We've seen it occur in every market over the last 15 years and when you talk to those who did sell out too soon, there is always an underlying feeling of "What if I paid more attention?" Many veteran members, as well as the REIN™ Team, are still buying whatever we can get our hands on and makes sense.


2) Joint Venture Secrets Series - Part 2

By Russell Westcott

Last Newsletter we started our series on Joint Venture Secrets, and we outlined

The 7 Steps to successful Joint Ventures

Fundamentals of Successful Joint Ventures


Definition of Joint Ventures

As mentioned earlier in this newsletter the new 750 page REIN™ Joint Venture Secrets Program is ready for public release, and if you want to read all about the details of this system
click here


In this edition of the Canadian Real Estate Insider, we are going to talk about some more of the key fundamentals of Joint Ventures. Most sophisticated and successful multi- millionaire Real Estate investors utilize Joint Ventures to create wealth at an accelerated pace, some of the key foundational principles of creating successful Joint Venture relationships include:

Three Pillars of Real Estate Joint Ventures:

Just like successful Real Estate Investing is based upon 3 key pillars, creating successful Joint Ventures too is built upon these same pillars:

Systems:

You need to follow a proven step-by-step system that works, one that has been tested and proven over the course of time, and make sure this system is complete, giving you all the details.

Relationships:

The backbone of successful Joint Ventures is the relationships that are established. Within your life and with the people you know right now, you potentially have the money required to buy your next piece of real estate, and a great quote around focusing on the importance of building successful relationships is: “The quality of your life is the quality of your relationships.” (Anthony Robbins).

Follow-through:

It is 100 percent your responsibility to follow through, take the action, get the results and move forward. The truly successful people are those who realize that they take accountability for their actions and do something about it. One of the best illustrations of this comes from a quote from Jim Rohn on this: “You can’t hire someone else to do your pushups for you.” You can hire a personal trainer, they can show you step-by-step how to do the push-ups, and they can even do a lot of pushups. It doesn’t help you. The key is that you still have to do them for yourself in order to experience any benefit.

Creating Win/ Win Transaction

If you can master the art of creating win/ win transactions, you are more than half way to your goals: to have an endless supply of Joint Venture money, create Win/ Win deals and make your Joint Venture investors money as a result of their association with you. Quite often you will be putting the needs of your Joint Venture partner’s ahead of yours. Remember if you structure the deal properly, the more money your Joint Venture partner makes the more money you make, a true win/win deal.

Ability To Sell & Negotiate

Selling, to some people is a scary word. A lot of people don’t like to ‘sell’ something. You mention it to some people and they get the feeling of that pushy car salesman. The ability to raise investors’ capital is a form of selling and negotiation. You have to get competent at the art of listening to people’s needs and determining if you can offer something that can help meet those needs.

Selling and negotiating are trainable skills. You need to be very, very proficient at selling, almost becoming a student of sales. Because at the end of the day if you are offering something to someone, and if the deal is win/ win, doesn’t everyone benefit? And if you can show that everyone benefits from the transaction, very little selling is required.

Leverage

“Little Hinges Swing Large Doors”… This famous quote from W. Clement Stone, who built a billion dollar sales organization out of depths of the great depression, is a great illustration of the power of leverage. Already within Real Estate you can utilize the principle of leverage (i.e. you invest 1 dollar, and the bank gives you the remaining 3 dollars for your property purchases). Now when you learn how to complete successful Joint Ventures the power of leverage magnifies even further (you may not even have to come up with the initial 1 dollar investment).

If you learn how to utilize the power of Joint Ventures you can truly open up the vault to assist you in accomplishing your future goals.Some of the things that Joint Ventures will help you do is pick up the pace of your investing, or allow you to get into larger more profitable deals, by having greater access to the additional resources large investors tap into. Joint Ventures will help you move faster than if you were working alone.

It does not have to be only money you attract, you may just need improved access to capital or credit. If you want to take your Real Estate investing up to the next level, learning Joint Ventures and leveraging your assets and abilities will be a critical skill to learn.

Complementary Skills – Build Your Team The Right Way

Great teams are formed when partner’s skills or assets complement each other. Carefully choose your joint venture partners to ensure they are not bringing the same thing to the table as you are. If you are lacking experience or cash – don’t match up with someone in the same boat, it will lead you down the path of inaction and frustration. Identify what you are lacking and then find someone to fill that void. Remember, joint venture partners can provide you with cash or properties or credit worthiness or investing experience.

For instance, someone could be a fantastic property finder and you can give them a percentage of the deal for finding the property for you. Or they may provide you with an ability to qualify for financing, if you can’t qualify on your own. They key thing is to take an inventory of the skills and attributes you bring to the deal and look for JV partners that have complementary items to bring to the table.

These are a few of the key foundational principles when building successful Joint Venture relationships… and this is just the tip of the iceberg. If you would like to discover all the details of creating successful Joint Ventures, providing you with almost unlimited investment capital,
click here

Next month we will discuss some of the Key wealth attraction principles required to become a successful Joint Venture money magnet.


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3) How To Own A Home If You Have An Affordability Issue.

Don Campbell, Special to the Sun Published: Thursday, July 05, 2007


How to own a home… despite the affordability crisis, there are possibilities out there. But first, you have to do some, er, homework

Don Campbell, Special to the Vancouver Sun

Published: Thursday, July 05, 2007

The recent Vancouver Sun headline says it all: It takes "70% of your income to buy a house" in Vancouver.

Affordability deteriorated in the first three months of 2007, and an analysis of real estate trends in major cities across the country confirms that Vancouver's affordability is off the scales -- and there's no letup in sight as long as unemployment stays low and the commodity boom continues.

Looking down the road, the possibility of a housing slowdown (not "collapse," as others predict) in B.C. exists for after the Olympics and given the slowdown in the forestry industry, but how many people can really wait until then?

To read the full article,
click here

4) Tales from the Legal Trenches

By Barry McGuire


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This month's tale is titled:


AVOID THIS MAJOR MISTAKE AND SAVE

YOURSELF MONEY AND HEARTACHE



A number of Canadian Real Estate Investor clients have now told me this same story. They start their real estate investment career and do everything by the book. Particularly, they prepare their ‘Sophisticated Investor Binder' (as you learn in detail from the
REIN™ ACRE System program and use it to develop a solid relationship with a lender.

In all cases, our clients had great success finding a lender (or mortgage broker) who understood their plan and who was willing to help them reach their investment goals.

The lenders followed a typical pattern of taking a lot of detail for the first loan and then making subsequent loans very easy to obtain, with very little additional information. This extremely helpful lender attitude was often accompanied by words like, “Buy all the properties you want, we'll give you the money”. So with those words from your banker, it would be obvious to get out there and buy everything that fits your system, right? Well sadly, that would be a big mistake.

Here’s what typically happens: Everything goes along fine until the loans officer gets transferred or the branch manager changes and the new one interprets the bank’s lending policies differently, (or, in some cases, the lender’s head office tightens or changes credit policies). That’s when the big shock can hit you out of the blue… the rules change with no notice and you are stuck against a friendly yet unhelpful, cold-hearted roadblock. You must immediately start scrambling trying to find alternative (expensive) financing to get the deal done. We’ve seen very good deals lost because of a simple, unannounced, bank policy change.

The big lesson: ALWAYS have a ‘Plan B’ in mind, even if you never have to use it. This plan could take many forms. One very good technique is to contact other lenders while you have a great relationship with your current lender. It's so easy to talk about money when you don't need it. You might want to actually divide your business between two or three lenders. All lenders seem to want all your business until they have it all and you have no other choices. Better to have two or three lenders competing and hoping that they will get all your business.

Other techniques are to have joint-venture money partners waiting in the wings, a relationship with a private lender who will lend money quickly, or your own line of credit large enough to backstop difficult situations.

You always need a Plan ‘B’.

Barry McGuire, is a Real Estate lawyer who has been helping Canadians for the past 35+ years. Barry is one of the co-authors of the Canadian best selling book 97 Tips for Canadian Real Estate Investors, and his expertise can be heard on the brand new release
REIN™ Joint Venture Secrets

5) Honesty is the Only Policy

Don Campbell, Special excerpt from 97 Tips For Canadian Real Estate Investors
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Swim In The Grey Waters And You Will

Eventually Get Bitten By The Sharks.


The great thing about the Canadian real estate market is that it gives people a chance to create long term wealth if they follow a system and have patience. The bad thing about the Canadian real estate market is that many believe that they must make money quickly or they’re not doing their job. Late-night TV and huge ‘get rich’ ads have programmed Canadians to having very little patience in any wealth creation strategy. The reality is, get rich quick is a marketing hook, not real life. The sad part of this equation is that those who are chasing the fast dollar often have to wander into what is politely called the ‘grey water.’ It is called this because that is where all of the real estate sharks hang-out waiting for their next prey.

You can easily stay out of these grey waters by simply being completely honest and above board with all of your transactions.

Novice real estate investors get to meet a lot of people while assembling the team they’ll work with en route to achieving their Personal Belize. You need real estate agents, bankers, mortgage brokers, lawyers, accountants and other investors. However, novice investors are also often prey to the grey-water sharks who teach or advocate strategies that, when looked at in the bright light of day, are either outright fraud or will quickly lead them to bankruptcy.

You need to quickly spot the difference between the ones who are ‘selling you’ and the ones who are supporting you. Often times, because the ‘grey area sharks’ are amazing sales people and have mastered the ‘I’m here to help you’ speech they are difficult to pick out until it is too late. The bottom line is you need to steer clear of anyone who even hints of the illegal or grey water deal.

The warning is not made lightly, and nor should it be ignored. In reality, the rules are pretty simple.

1. Be wary of those who both teach you about real estate and then sell you real estate. The potential of conflict of interest is just too high.

2. If you are told to sign a document that is not true, to get a mortgage or close a deal – then you know you’re already swimming with the sharks and it is time to get out of the water.

3. If you are not able to get a second legal opinion on a deal, no matter how small – this should be a HUGE red warning flag.

4. If you are being taught to not declare every aspect of your real estate transaction to every party involved (i.e withholding information to a banker, lawyer or purchaser) then you have just jumped into the grey waters and can be prepared to get bitten.

5. If someone is recommending a course of action (i.s structuring your corporations, buying in a certain town, arranging for a bunch of new credit cards) make sure you check to see if there is a personal reason (usually money) why they are doing it. For instance, arranging to have 3 corporations set-up before you have even bought your first property may not be a great strategy for the novice investor… however it is a great strategy for lawyers and accountants who make fees every year from these corporations – whether you own property or not.

6. If your ‘gut’ is telling you that something isn’t right – dig deeper before you are pushed into the grey waters. In other words, always ‘Look Behind The Curtain!”


First, always remember the difference between a below-average investor and an over-achieving investor amounts to only a 10 percent increase in effort. In other words: You don’t need to cheat to win.

Second, as you get your system in place, keep these two general business rules front and center:

I will only make commitments I have every intention of fulfilling.
I will never sign a document that isn’t really true.


What do you need to do?

Learn to recognize fraud.


You may, for example, encounter a mortgage broker who says you have to sign a document saying you’re going to move into the property you’re purchasing as a primary residence, even though you plan to use it as investment property. They’ll tell you that ‘other people are doing it’ or “It’s not illegal unless you get caught.”

They’ll tell you this is necessary to:

a) secure a good interest rate or,

b) secure good mortgage terms.

They are wrong… this is bank fraud and it’s illegal.

A great mortgage broker has the ear of the top players in the lending world and they can get you amazing terms and amazing interest rates without you ever having to sign an un-true document. If your mortgage broker or banker tells you differently – get a new mortgage broker who actually understands how it all works.

Take a step back.

The arrangement outlined above, because it’s not based on fact, borders on bank fraud. If the lender decides you have committed a fraud, the bank goes after you, not the broker. And if the deals are worth enough, the RCMP also get involved. Good bye free world after that!

It’s wrong to think mortgage fraud only hurts the bank. Fraud can be used to manipulate housing prices in particular neighborhoods. It can also give organized crime access to property that can be used to grow or manufacture street drugs.

Fraud can cost you your business.

Major financial institutions, Canada Mortgage and Housing Corporation (CMHC) and GMAC have substantially increased their investigations into homeowner loans. They’re looking for people who say they’re moving into a property as a primary residence and who obtained a loan on that basis, even though these borrowers really purchased the property as an investment.

The cost of getting caught runs high. In Edmonton in 2004, 55 people were caught in an investigation. They lost their property, their credit rating and they were sued for punitive damages. In November 2005, 4 more were jailed for transactions such as this.

Be honest.

Ask yourself, “Is this something I can tell my mortgage company?” If the answer is, “No,” don’t do it.

Avoid dishonest people.

Stay away from mortgage brokers who suggest dishonesty as a good policy. You don’t need fraudsters on your team.

Avoid lawyers or accountants who seem to be creating overly complex structures and transactions if you are just starting out. Get a second legal or accounting opinion BEFORE you sign on.

There are wonderful brokers, lawyers and accountants out there who will work hard and find you the right deal – without ever thinking about putting you in harm’s way.

RED FLAG:
Once exposed, a fraudulent deal can trash the only reputation you have. If it’s the same reputation you plan to use to access financing, build a team of professionals and attract joint venture partners, then it’s not one you want to risk!

Key Insight:
Honesty is always the best policy. In fact, sophisticated investors will tell you it’s the only policy. New investors, especially if they have a little nest egg ready to go, may attract the interest of some less-than-scrupulously honest business people. Here, as in life in general, if a deal sounds too good to be true, it probably is.



RED FLAG:
Never become a “Straw Buyer.” One of the ways in which people are attracted to ‘fast money’ in real estate is through the opportunity to be a ‘straw buyer.’ A straw buyer is someone who puts up their name, credit history and signature to arrange for a mortgage on a property – the fraud artist puts up the down payment, assumes payments on the mortgage and then pays the “Straw Buyer” $5,000 for their services. Sounds like a no risk deal to the straw buyer – except that it is bank fraud and it is very likely that in the end, the fraud artist will stop making payments on the property leaving the straw buyer with a very bad situation. NEVER, EVER give up your name or credit for a quick $5,000… unless you like your friends to come and visit you only during visiting hours.

Key Insight:
Steer clear of anyone who tells you a “negative cash flow” property will save you money on taxes! Nicknamed “Alligators” because they eat you alive, negative cash flow properties take money from you each and every month. They also take you farther and farther away from financial freedom. Still not convinced? Ask yourself this question: How many negative cash flow properties can you afford to own before you end up broke?


Final Thoughts
Don R. Campbell


Well the time we have been asking for has finally come our way… a market slowdown (and by slowdown I mean back down to normal… FINALLY!)

Now it is up to you to do what it takes to take advantage of this opportunity so you don’t look back a couple of years from now and say “I can’t believe I let my brother-in-law (uncle, neighbor etc) talk me out of investing!”

The key for you is to focus on what you know is true (not hype and hysteria), what the underlying economics look like in your target area (incredibly strong in some areas and cooler in others) and what you really want to create in your life.

Know that in times of turmoil, most people choose to do NOTHING and justify it with excuses. The sophisticated Real Estate investors always choose action, as through action come results.

Choose results. Choose not to be a part of the wandering herd of sheep… be the quiet leader.

I look forward to meeting you personally at an upcoming REIN™ Workshop or the final ACRE System of the year.

Sincerely,

Don R. Campbell and The REIN™ Team

"Turning Real Estate Dreams Into Realities... One Investor At A Time!"

Copyright 1996-2007 by Real Estate Investment Network. All rights reserved.
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P.S. Make sure you read the special report on how to create successful Joint Venture relationships. If you are planning to build a portfolio of Real Estate investment properties, somewhere along the line you will use Joint Ventures, and you will want to learn how to create the successful ones from the beginning. Click Here to read the special report


 
     

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