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| | | | | |  | Transportation Changes Affect Real Estate Values | Greetings!
Welcome to October. I trust your autumn is going well - everyone's back to school, and Thanksgiving left-overs are still in your fridge. This is a great time of year to give thanks to those who have helped you with your investment portfolio this year. I like to stand out from the crowd by sending 'Thank You' cards during the Thanksgiving period to those who have helped me accomplish my goals and dreams. I recommend you try this out. You'll be amazed at the response you'll receive from a couple of hand written thank cards.
It is also a good time of the year to refocus after a long summer and review your action steps so you can make the final 'push' for the end of year.
This edition of the Canadian Real Estate Insider gives you the latest research to watch, provides you links to new and exciting research by the REIN™ Team as well as other well respected research teams across the country, plus some bonus items for you. Read right to the end (you can view it online at 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.
This is a busy time of the year for investors, and there are major shifts occurring in the marketplace across the country, including a Royalty Review in the Alberta oil patch, uncertainty with Ontario automotive industries and a high dollar. What does it all mean? That's why it is important to stay on top of all the upcoming events from now until the end of the year, as we will be releasing un-biased research through the autumn and winter that will quickly cut through the hype and fear and show you where the opportunities are. Click here for a direct link to the events calendar.. You might want to bookmark this page and check back frequently. As the famous Warren Buffet quote goes, “Risk comes from not knowing what you're doing.” Being a subscriber to the Canadian Real Estate Insider newsletter, you'll be able to stay informed to any upcoming trends and shifts in the Canadian Real Estate marketplace. All this while reducing your risks and taking only the right action during this period of focus.
*** EXCITING NEWS & Deadline Approaching!*** The Final ACRE System Live for 2007 is less than 10 days away, and as anticipated, this event is going to be the largest and most detailed ever. It is also selling out faster than any ACRE System in the past. As of the writing of this newsletter there are more than 778 people registered. This leaves only 22 seats available. Currently we are receiving approximately 14 registrations per day. You can see why the waiting list will be started extremely soon: we'll be full. Unlike other programs out in the market that sell for upwards of $3,000 - $5,000, the ACRE System live program for only $587 is a full 2 days (8:30am - 7:00pm on both Saturday and Sunday). It covers everything you need to become a successful real estate investor. You don't have to buy more books and tapes to get the real secrets. It's all given to you in one weekend. That's why it is so successful and that's why it's in its 15th year. 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 and to ensure you have a guaranteed seat for this event, you will want to register now!Click here to read all the details of this program that guarantees results. As mentioned in the previous newsletter, we have just confirmed a special bonus for all people who pre-register for the ACRE System program upcoming in Edmonton. By registering for the ACRE System weekend, you will be automatically registered to attend the Members Only REIN™ workshop on the Friday evening (October 19th) before the ACRE System weekend. This is typically a closed door meeting, open exclusively to members of REIN™; however, because you are attending ACRE System the next day, you will have the opportunity to see one of these "closed door" workshops. At this Bonus workshop you will hear presentations from two best selling authors: First, REIN™ president Don R. Campbell will be presenting his "What’s Behind the Curtain", an in-depth economic analysis of the Western Canadian economy and the Real Estate Markets. These facts make the difference between investing and speculating. PLUS: In a private members' only presentation you'll hear from world renowned expert Michael Losier, the best selling author of Law of Attraction, The Science of Attracting More of What You Want and Less of What You Don't. Michael will be speaking for over 2 ½ hours, giving attendees the secret to attracting more of what you want into your life. You’ve heard of him on Oprah, and now you’ll be invited to spend an evening with him as you start to create more results in your real estate. Click here for the complete details of this special evening. You can attend this bonus Members Only event FREE by registering for ACRE System before October 15th if there are any seats left by then. So act today! You can read all the details by clicking here. You can still receive your full $200 subscribers discount at this link or by calling 1-888-824-7346. If you would like to read some of the comments from the last ACRE System program, click here. To view photos from the last ACRE System, click here.
1) Real Estate Market Fundamentals
"Long-term amortizations are fuelling price increases." - Don R. Campbell
As Don R. Campbell discussed with Garry Marr in the National Post on September 15th, the new mortgage products, combined with an increasing population and smaller average household sizes are all contributing to the continued demand in Canadian real estate (now entering its 11th year of upward momentum in some markets).
Housing highs still showing
Another Record Set; Longer mortgage terms fuelling cost, industry warns
(Garry Marr, Financial Post. Published: Saturday, September 15, 2007)
House prices hit another record high last month in the country's top 25 markets; a move some commentators say reflects the growing dependency of Canadians on debt to finance purchases.
Real estate author Don Campbell says the latest statistics from the Canadian Real Estate Association are further proof that the newest trend in lending -- long-term amortizations that have increased to 35 and 40 years from 25 years -- is fuelling price increases.
"I would say one-third of the percentage point price increase is due to [longer amortizations]," Mr. Campbell said.
But that's not the most important piece of knowledge for investors...
To read the full article,click here.
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2) How Transportation Changes Affect Real Estate Values - Special Download Report
Don Campbell, Canadian Best Selling Author
The REIN™ research team has just now finished another substantial research report that is ready for public release (REIN™ Members receive the research long in advance of its release to the public). We are working our way across the country, completing in-depth research for investors and homeowners.
Right now our focus is on the major transportation changes occurring in cities across the country and how they will impact on the prices of real estate in select markets. The BC, Calgary, Edmonton (to be released this month), and Ontario (to be released in early spring 2008) reports are covered by the national media, but more importantly, prove an insight into the future hot markets in each city.
There are key neighborhoods that will jump an additional 20% in each of the major cities in the country over and above what the rest of the city will do. This is very technical and in-depth reporting but it is boiled down to tell you exactly the neighborhoods to watch (and to take action in!)
You may have seen this article in many newspapers across the country or in the pages of the Calgary Herald business section (Sept. 18, 2007).
Roads to higher property values
'Selected' Calgary areas forecast to increase by 20%
(Mario Toneguzzi, Calgary Herald. Published: Tuesday, September 18, 2007)
Transportation improvements in Calgary will boost residential property values in "selected" neighborhoods by 10 to 20 per cent one year after completion of those projects, says a report released Monday.
The Calgary Transportation Effect research report, by the Real Estate Investment Network (REIN™), says transportation accessibility is one of several key fundamentals that drive real estate values up or down. The report focused on how the completion of the northern portions of the Ring Road and the expansion of the C-Train into the northeast and the northwest will increase accessibility to the downtown, which in turn will hike the value of real estate for properties in close proximity to these transportation improvements.
To read the full article, click here.
To download your copy of the full research report for no charge, click here.
There is extensive discussion around the transportation improvements occurring across the country right now. You can read all of them, and add your insights and opinions to them at this link: Transportation Improvement Discussions.
3. Creative Mortgage Strategies
Peter Kinch
Your mortgage product should be utilized as a tool that helps you accomplish an end result. As such, it is critical that you learn about all the options available in order to know which tool to pull from the tool belt.
Recycle Your Down Payment
This strategy is designed to take advantage of the CMHC 2nd Home Program. This program is an extremely valuable tool, that when properly utilized can help you stretch your down payment dollars further. So let’s take a look at the program to begin with: CMHC 2nd Home Program Criteria. The CMHC 2nd Home Program allows you to purchase up to a 4-plex and qualify for high ratio financing provided you meet the following criteria:
The home or at least one of the units must be occupied by or have the intention to be occupied by you or a relative, within the next year.
You must qualify based on your verifiable income to service both this new mortgage and your existing principle residence mortgage under CMHC GDS/TDS guidelines.
You cannot use any of the rent garnered from your relative (in fact, they are supposed to be living rent-free) to help qualify for the GDS/TDS, but you can use up to 80% of the rent from the other units in the house.
*** CAUTION: You are in the CMHC sandbox so they will only consider 50% of any rental income from existing properties.
Example:
How to take a $43,000 down payment and use it twice in a market where values are continuing to rise:
Purchase Price: $175,000
Down Payment: $43,750
Mortgage: $131,250 (*USE AN OPEN MORTGAGE)
6 Months Later...Value increases
Refinance to 90% Using CMHC 2nd Home Program
New Value of Home: $195,000 *
New Mortgage: $175,500.
Cash back (less Legal Fees): $44,250.
Effective Down Payment: ZERO!
( * Assuming market appreciation. May require minor renovations.)
Peter Kinch is a Real Estate Mortgage Broker who has been helping Canadians with their mortgage needs. Peter is one of the co-authors of the Canadian best selling book 97 Tips for Canadian Real Estate Investors. He will be a major presenter at the upcoming ACRE System program, teaching you How to Get the Banks to Say YES! Click here to read all the details.
4) Tales from the Legal Trenches Barry McGuire What do you mean, I can’t use title insurance?! A REIN™ member recently purchased some newer condominiums. They were approximately 6 months old and the previous owner/developer had been renting them out. The seller’s lawyer advised our member’s lawyer that title insurance was not available for the properties and that they could not close on protocol. Our member paid cash for these properties and his lawyer advised that, even though he did pay cash, he would still be liable for late payment charges as the monies could not change hands until the properties were registered in his name at Land Titles. The member was advised that it had something to do with Chapter 14 of The Condominium Property Act. Section 14 says that the developer/seller cannot release any of the buyer’s money until title has actually registered in the buyer’s names. When Land Titles was taking two or three days, that was not an issue. Now that Land Titles is taking substantially longer, it is an issue because the developer has to hold the money. Since the obligation to hold the money is statutory, we can’t get around it by using title insurance or protocol. What can you do? Firstly, once you understand the problem you can actually try to do something. Read the contract extremely carefully, especially the part about closing, delay and what interest might be payable. You could try to negotiate with the developer that the completion date is not until the title registers. Tell them you have had this problem and you need an exact explanation of how it really works and what it might cost you under the developer’s normal contract. If the developer does not want to agree that the completion date will be the registration date, then the you should only be paying a reasonable amount of interest especially if you can close for cash. You can tell a developer that you will pay him all the money on the closing date and he should invest with his bank, get whatever interest he can get and that’s all you will pay him. It is not your fault that the Land Titles office is taking so long to register. Or, you can agree to pay a reasonable rate of interest that would be higher than what the developer can get in a daily interest account. One developer here in Edmonton is charging 9% for the amount of time that Land Titles is taking to register and then 12% for any delays after that. That seems like quite a bit. Try and ask for interest payable at your mortgage interest rate on your mortgage amount. Summary Now that you understand the issue, and once you have carefully read the contract, you can try and negotiate a better deal for yourself. 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 at the upcoming ACRE System program in Edmonton..
5) Royalty Review in Alberta
The topic of the day out west is definitely the whole posturing occurring around the Oil Royalty Review process the province has decided to undertake. Funny, isn't it, that no one out west is talking about Kyoto, Sub-Prime mortgages, secondary suites or Rent Controls anymore now that there is the next big 'Scary Monster' on the front of the newspapers.
Although this is a serious subject, it is important to keep perspective. In today's world this is how major political negotiations are run - through a media PR campaign. Everyone takes a stand, everyone sends out threats, every side of the debate tries to get the most column inches or TV minutes with the final goal of winning the public over to their side. Whether this is right or wrong to do isn't part of this column. What is important is that we are all aware that this is exactly what happened with Kyoto, secondary suites and rent controls.
The sad part is that the majority of the populace never get their voice heard in these important debates. In this case you have a choice and a chance to be heard. It only takes two minutes to get your message to those who are making the decisions. For instance new web-sites have been set up to gather comments and to make sure that the populous are heard.Get It Right Alberta! is one such site you can use.
The key here is, no matter what side of the debate you're on, (hopefully it's the side where everyone wins) I urge you to contact your local MLA and get your voice heard BEFORE they start making their decisions. They represent you, but they can't represent you accurately if they don't know your opinion. Make yourself heard or you give up your right to complain when the final decision is made.
There are also a lot of discussions going on My REIN™ Space about this whole Royalty Review situation. There is a very good debate that you can read and participate in (another way to get your voice heard) and a great way to cut through the hype and fear and get to the facts. Here's the link to those discussions:
Royalty Review Discussions
6) Beware Of The Real Estate Pretender
Don R. Campbell
Reprinted with permission from 97 Tips From Canadian Real Estate Investors
As I'm sure you have, we have once again been noticing a flood of Real Estate investing workshops (mostly US-based) popping up across the country (ah yes, another trend driven by our strong dollar and their slowing real estate market). I guess that's why we get the following question on a weekly basis:
"How Do I Evaluate a Real Estate or Business Mentor. How can I begin to tell if they are The Real Deal?"
We thought we would address this very important question for everyone in our inner circle newsletter.
This is the text from 97 Tips For Canadian Real Estate Investors
Beware The Real Estate Pretender
They Come Out Of The Woodwork
Whenever There Is A Hot Real Estate Market.
Hype sells. Your job as a sophisticated Real Estate investor is to play the role of Dorothy in the Wizard of Oz and pull back the curtain to see what’s behind the hype...
Sadly, the real estate market is often manipulated by two key emotions: Hype & Fear. These two emotions are used continually by certain people within the real estate market to get you to take action. Free Seminars (which turn out to be one big sell-fest trying to get you to buy their products) are just one type of these options. I guess the question to ask yourself: what did you think, they were putting on a free event out of the goodness of their heart?
Or how about late-night TV infomercials based in American systems that don't work in our market; or syndicators telling you that a certain city is the best place to buy, and then selling you a property there. These are just a few of the hundreds of ways in which your emotions are taken advantage of in the real estate market. Your job is to cut through the hype and see what is real. Here are the key questions to ask so you can...
Some of those syndications may be good investments, but you’ll only know if you do your COMPLETE due diligence. Some of the package being sold at so called-free seminars may be helpful to you, but don’t get caught up in the ‘there are only 9 packages available baloney. There are always more where they came from – they’re just using fear of missing out.
Do your homework and make sure that what you are about to buy is real, proven over at least 10 years of market ups and downs and actually works in your geographic area! Sometimes a $5,000 investment in a seminar would be better spent investing in real estate. Education is very important so be selective in what you load your head with.
Real Estate investing is not about "get-rich-quick",
so don’t buy into anyone who tells you it is.
The real estate market is constantly changing and the strategies that worked a few years ago might not work today. Similarly, the people you meet may have investment systems that truly do work for them, but won’t work for you.
That’s why it is so important to approach this business with a healthy perspective on what it is you plan to accomplish, served up alongside an equally healthy dose of skepticism. I even encourage you to look behind the curtain on our un-biased research (because we know there is nothing to hide there).
If you come across those who profess to provide research and then in the next breath sell you real estate in the towns they say are great... take a step back and do your own homework as the potential for unbiased research is quite strong.
What do you need to do? Choose a path and stick with it, is the number one rule that the most successful investors will tell you was the most important decision they made.
1. Follow the system, and give it time to work. Eliminate the dreaded "Day Trade" mentality by not responding emotionally.
- Always remember that your goal is to take action and buy real estate that fits YOUR system. In real estate investment, closing a deal represents your Critical Success Event.
2. Keep it real.
- The tips outlined in 97 Tips for Canadian Real Estate Investors and Real Estate Investing in Canada will help you practice the real-world application of that old adage, information is power.
- Never forget that you’re responsible for the decisions you make based on the information you’ve gathered. Make sure the information you use is dependable -- and comes from dependable sources. You don’t want to spend money needlessly and you certainly do not want to lose money. Avoid those who have just decided to call themselves real estate experts because they have done well in a hot market… look for a long term track record.
3. Keep it relevant.
- This is the crux of due diligence. You want to make business decisions based on data that’s relevant to your specific market. You’ll discover that a national average price means NOTHING to you, although it is discussed in detail in the media and on the internet.
4. Ask: What’s behind the curtain?
- Apply the same “what’s behind the curtain?” rationale to every deal you encounter. This is also true of every Joint Venture partner, every mortgage broker, every ‘real estate guru’ and every advisor you listen to. Find out what the truth is, and also find out what their REAL motivation. You may be sadly surprised.
Red Flag: As a novice investor, you’re an obvious target for “experts” who want your money! They will try to sell you systems. They will try to talk you into deals. They will want cash up front – in exchange for information you haven’t yet seen.
Learn the “What’s Behind The Guru's Curtain?” Questions!
Ask yourself:
What is in it for them?
Do they have a financial incentive to get me to take a particular action based on the information they’re giving me?
Do they have experience in the market or are they part of the cult of opinion? (These guys know someone who knows someone who did something somewhere. That’s not good enough for you!)
Are they currently investing in real estate and using the strategies they’re teaching?
Do they have a bare minimum of 20 real estate transactions to their name, thereby giving them the experience of dealing with different buying and selling situations?
Have they been investing for at least five years, preferably 10 years, giving them experience in different market conditions? It’s even better if they’ve been through a full up and down real estate cycle, which often takes a decade or more.
I'm sure you've noticed ads and marketing regarding (or attended) workshops with 16 different speakers, each talking about everything from Real Estate to Internet marketing all in one weekend. These events each talk about get rich quick strategies, and how you can make a bunch of money in a short period of time.
Ironically, these events actually keep you in the 'rat-race' longer by spreading your focus out too thin, and keeping you distracted on the next 'great thing, and never actually becoming a expert at anything. Imagine how confused about your direction you'll be when you sit through something like this. Did you know that in that industry the host of the event gets approximately 50% of every dollar you spend there, just because he put you in that room. No wonder they can spend so much on marketing to get you there. (This does not happen at REIN™ Events, by the way, as you'll discover at the Friday October 19th event before ACRE System).
If you are focused on either real estate, stocks, internet marketing, or currency trading, PERFECT. That is great. The key is that you are focused on one thing and you are following a proven system that works in up and down markets. Learn everything you can about your chosen investment strategy... be the best you can rather than mediocre.
If you are 100% focused upon Real Estate, it is in your best interest to focus 100% on the economic information that drives your Real Estate market and not get distracted by all the other 'shiny objects.' If you do this for only a few years and you let the market take care of you, you will be very successful and can start living the lifestyle you want. Those who are continually chasing the next big thing to get rich are destined to be mediocre in their wealth. Those who focus on the task at hand create long-term wealth. It's really that simple.
There are a few very legitimate teachers and trainers out there, but always keep your eyes open in every transaction because at the end of the day it is you who pays the price at the end of it all. Never be afraid to learn, surround yourself with like-minded people (for instance, at myreinspace.com where you can get un-biased opinions and ideas from investors across the country) and take real life action in the market you choose.
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Final Thoughts
Don R. Campbell
Congratulations on staying on top of the market, keeping your laser beam focus and NOT getting caught up in the two dangerous emotions, fear and greed, that surround Real Estate. Keep your eyes open for economic opportunities in your area, use the detailed research you can download from myreinspace.com and your own investigations so that you see the opportunities long before others do.
We are working on a substantial amount of exclusive research right now. As a matter of fact, this fall will see a huge amount of this research being released. All of our research is designed to help you become a knowledgeable and sophisticated investor who is not looking at the market through rose-colored glasses. We'll tell you the truth about the market, so you no longer GUESS - you KNOW. As this research is coming quickly, please feel free to forward this edition of the newsletter to everyone you know who would find value in having this knowledge. Then they can subscribe to this newsletter (and receive the early-bird notification of this research release) by clicking here and completing the form.
I look forward to seeing you at an upcoming workshop or the final ACRE System of the year in Edmonton.
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.
P.S.Click here for a link to a special audio recording by Don R. Campbell. The recording talks about what you will learn at the upcoming ACRE System weekend.
P.P.S. With the final ACRE System of 2007 well over 92% sold out, it will only be a short time before we have to start a waiting list (if it hasn't started already). Call 1-888-824-7346 to see if any seats are left. Please don't miss out on this opportunity to focus on YOU, register early. Click here to read all about this special event focused around your results. No hype or baloney, just the facts.
P.P.P.S.Click here to read some of the comments from the last ACRE System in June.
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