Monthly Archives: September 2008

Adventures in…Muddy Racing

I’ve been trying to come up with some clever way to tie real estate into our latest little adventure race, but I really can’t! So this post is really just for fun…

We are getting ready for this weekend’s MOMAR race in Cumberland and used the Mud N Bud race on the weekend as a nice little warm up. One of our fellow racers commented that the Mud N Bud race takes less time to finish than the kayak leg of the MOMAR race. So as you’re enjoying your waffles or Cheerios Saturday morning think of us kayking, running, mountain biking and orienteering our way around cumberland. Hopefully, without the assistance of search and rescue!! 🙂 And hopefully not in the pouring rain or gusting winds!

So here’s our Mud N Bud photo gallery. Thanks to Leah’s friend Audrey for taking these great pictures!

Start of 2008 Mud N Bud... Dave's on the Orange Bike in Front

GO!! Dave's on the orange bike

Runners GOOOOOOO!

Runners GOOOOOOO!

It's Called Mud N Bud for a Reason

It's Mud N Bud for a reason

It's all over but the clean up

It's all over but the clean up

This is a picture of our MOMAR team – Team Four Play. Chris, Leah, Dave & Julie. Missing from this photo is our honorary team member Kari who will be taking care of our dogs, taking pictures and cheering us on at Momar this weekend!

Thanks for stopping by and indulging me in this diversion from real estate! But – I did just finish writing a great article for our newsletter that you might not want to miss.

It’s all about the ONE thing you should be doing as a real estate investor. Any idea what that is? You should do it at least annually…If you want to see if you’re right, make sure you’re on the Rev N You newsletter e-mail list! The article will come out on October 1st, 2008.

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Buying a House at the Peak of the Market…a story from 15 years ago

This week was a dramatic week in the markets. And the headlines in every paper are talking about market crashes, soft landings, hard landings, government bail outs and housing value drops. It is easy to let the panic overtake you, but, it makes me reflect back 15+ years ago when I bought my first investment with my parents. **check out the article Julie wrote for our free newsletter – she talks about the recent headlines and the best way to make investments in troubled times)**

It was in the early 90’s and the market (in B.C.) had been steadily climbing for a few years (at a more gradual pace than seen recently). At the time, I just wanted to start buying properties and with a bit of help from my parents (we split the down payment 50/50 and they signed as guarantors on the mortgage), I got into the market.

It wasn’t a perfect real estate investment – the rent didn’t quite cover all of the costs, but it was in a good area and hey, the market was rising so we thought we’d be fine! After a year or so, the market stalled and then the slow, but painful, drop in values began.  The drop continued and continued until the value of our investment had dropped 15% from the high when we bought it.

This sounds like a bad story, and it would have been a bad story if we had given up and sold the property then. But, we didn’t panic. We kept feeding it with a bit of cash each year while our tenant continued paying down the mortgage. After over 10 years of owning it (and when the market was starting to appreciate again), we sold it for a decent profit – even taking into account the money we had supplemented it with over the years.

The moral of the story – even if you buy at the top or near top of the market, if your rent covers most of your expenses and you can keep your rental occupied with decent tenants, over time, you will get your money back and if all goes well, a lot more than you put in. And while it wasn’t our best investment, it taught me how to better assess the peaks and valleys of the market.

We sold a bit too soon in terms of maximizing our return, but I can tell you this, if I had not put my money into that property at that time (I was in University), my money would have just been spent and I wouldn’t have made an investment that put $50,000 in my pocket 10+ years later after selling.

Next blog I’ll tell you about buying (so far) an absolutely gem of a property when no one else wanted it!

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Top 7 Websites and Blogs Read by this Broad

I went on an information diet after reading the book 4 Hour Work Week by Tim Ferriss. I stopped reading the paper – it depressed me anyway. We canceled our cable t.v. – we don’t really watch t.v. anyway so why not save $30/month?

Now, I only get my news from select sources online. But, I’ve discovered that there are SO MANY great websites, blogs and newsletters out there that this Information Diet is not a fast. Instead, it’s like a diet full of fibre, protein and good natural vitamin packed foods. I’ve ditched the sugars and refined carbs (the bear shootings, murders, drug busts and other news that I don’t need to read about in detail), and it’s all about information goodness!!

But I am feeling a little full lately… so many good information sources out there! So many in fact I’ve had to do a information purge and remove some sites from my RSS feeds and cancel some of my newsletter subscriptions. I have about 30 sources left…not all are daily news sources or blogs, so I think it’s probably a good list right now.

Of those 30, here are my first read every day, my Top 7 Sources for News on the Internet:

  1. RENX: It’s a news feed of everything related to Canadian Real Estate. I get their newsletters and have it on my RSS Feeds. I scan it to make sure I never miss an important piece of news from the papers and media.
  2. Early To Rise: I get the daily newsletter in my inbox everyday and often check out their website to comment on the articles or read other comments. There isn’t a better source of health, wealth and motivation tips on the net in my opinion. But I must disclose, I am also biased because they’ve published a few of my articles.
  3. Canadian Mortgage News: This one’s only been on my RSS feeds for a month, but they have great articles for home buyers or anyone that has to refinance. They do a great job of staying relevant and very current.
  4. Move Smartly: A Toronto based blog that has a lot of interesting pieces related to Canadian real estate and Toronto specifically. Everything from University Studies on home prices, to bylaws to other media articles are discussed on this blog.
  5. Discovering the Secrets of Vancouver: This is one of the only Vancouver blogs I actually enjoy these days. So many of the other blogs are written by realtors full of hate for the market and the world. Or even if the blog itself has good content, the commenters that are active on the blog ruin it. This one always has relevant and interesting posts. I just like reading it.
  6. Tim Ferriss’s Blog:Never a dull moment or a lame post on this blog. Crazy ideas and thoughts for making your life better, different and definitely fulfilling. I DARE you to try this idea: Real Mind Control: The 21 Day No Complaint Experiment. We’re only a few weeks away from the Long Course Momar Adventure Race in Cumberland, BC so there’s no way I will take on this experiment now. I couldn’t imagine trying to tough it out through the bike leg…where we’re sure to be hiking the bike up some giant hills…and not be able to complain and curse! But maybe, post race, I will take on the challenge!! If you take it on – please let me know how it goes!
  7. Zillow Blog: I admit – choosing number 7 was tough. It’s almost a tie between Zillow’s blog and the Future of Real Estate Marketing. Both websites have a lot of cool posts about the latest and greatest gadgets or websites where technology meets real estate. Zillow only won because the Future of Real Estate Marketing is very geared towards the real estate web portals of the world – which I find cool and interesting but not super relevant to me in the real estate investing space I’m active in.

AND, I must give special mention to my Mom’s Blog… where I also make some posts! I love her stories and comments about the different guests they have at their Bed and Breakfast. She also has some funny kitchen stories. I enjoy it because it’s my Mom, but her blog is pretty darn popular so I know I am not the only one that likes to read it!

Do you read or write a great blog? Please tell us about it… I just did a fall cleaning of my RSS feeds so I have room!! The more the merrier right?? 🙂

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All Landlords are Greedy, Selfish and Lazy

Real Estate is a fantastic way to make money and build your personal wealth. I invest in real estate to make money. But to say I am greedy is not accurate. To generalize and say all landlords are greedy, selfish, and lazy is like saying every tenant is wonderful and generous. Or every homeowner is kind, thoughtful and a contributing member of society. I know…I know… what am I getting at? Dave just sent me an article from the Edmonton Journal, “Callous’ Landlords Face Record Find of $70,000“.

From the article:

In November 2005, Capital Health inspectors noted that work needed to be done to bring one building, which was constructed in 1969, up to public health standards.

The railings on the balconies in the front suites of both buildings were too low, and gaps between the spindles were too wide, posing hazards.

Inspectors found similar problems with two interior staircases and discovered a bedbug infestation in one suite in the building at 13117 83rd St.

In the same building they saw what appeared to be significant deterioration of the concrete balconies.

The Suetters were advised to fix the deficiencies and hire a structural engineer to examine the stability of the balconies. Over the ensuing months, inspectors returned to the buildings several times, noting each time that none of the work had been done.

It sure sounds bad, but I can’t help but wonder what the real story is. I don’t know any of the people involved in this story, but I know how one sided the news can be. And, I know how easy it is to find yourself in court with fines. It happened to Dave with a multi-unit building he owned in Niagara Falls. He even made the local Niagara Paper with his story… I believe the title was “Absentee Toronto Owner Fined in Crackhouse“. I will try to find the article and put a copy of it on here.

And, trust me, there were more than 2 sides to that whole story! Dave was fixing the property up, and it was never unsafe. And he only received one fire code violation notice…and it was the one marked FINAL NOTICE, COURT DATE SET. I’d rather not publish all the sides and all the explanations, but suffice to say that the story presented in the Niagara Falls paper was not a fair representation of what happened. Nor was Dave really “guilty” of the charges but it was easier to plead guilty, pay the fine and do the repairs then it was to actually hire a lawyer, prove his case and still do the repairs.

I guess I wanted to write this for a few reasons:

  • The masses tend to side with tenants, but the reality is, tenants (in Canada) are very well protected by the laws. In most landlord vs. tenant cases you’ll find courts strongly favour the tenant.
  • I hate generalizations. And the comments in this article were very quick to jump all over landlords in general being greedy.
  • I know, from experience as a first hand witness to a similar (although smaller scale) situation how one sided such stories can be. And how unfair the systems in place can be to landlords.

If you are a landlord, and these stories have you shaking in your boots – take heart, there are lots of things you can do to avoid fines and court appearances as a landlord:

  1. Hire competent and quality property managers,
  2. Address tenant complaints quickly – even if it’s just an explanation as to why work can’t be done right now. Make sure tenants understand what you will do and what you won’t do, and why,
  3. Ensure your property is ALWAYS up to the latest codes,
  4. Keep your neighbours happy. If it’s not a tenant issuing a complaint that triggers an inspection, it will be an unhappy neighbour. Ensure your property is well maintained and your tenants aren’t being too noisy or too intrusive on your neighbours, as much as you can,
  5. Consistently do everything by the law. Act quickly, but make sure you take the steps and jump through the hoops required and keep a paper trail. If you ever do have to stand up in court and defend yourself a history of all of the above will be an enormous asset.

And don’t worry! This story is an extreme one – and maybe these landlords really are greedy, selfish and lazy and are paying for it. I just don’t think it’s fair to tell their story so one-sided. Nor do I like to paint every landlord with the same brush. Dave’s experience was due to a bunch of circumstances all working against him. He could have prevented it…but it also wasn’t because he was greedy, selfish or lazy. He was just inexperienced and in over his head on a property he never should have bought. Ahhh the life lessons!!

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To Anyone Excited by a Housing Market Crash…

HOME OWNERSHIP is NOT a RIGHT! And, a Housing Marketing Crash is not good for any of us. Even if you don’t own a home!!

Phew – it feels good to get that off my chest… you see, I recently read an article by Max Fawcett in the Vancouver Sun talking about the crash of the real estate market. The author was quite gleeful in the fact that finally he (and many others) may finally be able to afford something other than a 500 sq.ft. shoebox condo.

His idea was that Vancouver’s market had gone up for far too long, stating that “The past 15 years have witnessed the longest and largest real estate boom in two generations“. But if you look at the real stats from the Real Estate Board of Greater Vancouver , the average detached home, condo, or townhouse has in fact only really increased over the past 6 years which is a typical cycle in real estate.

This incline has been steep and very dramatic, but if you compare it to the mid 80’s to 1990, prices in that cycle almost TRIPLED!!! In this cycle, prices have basically doubled. Yes, doubling $400,000 is a lot more money than doubling or even tripling $120,000 as was the case in the mid-80’s. But, it’s all relative based on inflation and the value of our dollar.

Vancouver is NOT cheap. Vancouver’s Affordability Index is the worst in the Country at around 60-70% our income (this means that our housing costs – mortgage, property taxes, insurance, etc – make up close to two-thirds of our Gross Income – a stable, balanced market is often noted as around 50%) and our housing values have increased at a very quick pace, but I completely disagree with the attitude that it is “our right to own in Canada”.

Based on all the comments posted after the article, there appears to be a large number of Canadians that are happy about the fact that the market may crash. Why all the animosity? And since when is it our right to own a home? Sure, it’s the ideal, but certainly not a right. Just look to many of the other countries in the world, especially the old countries and cities like London, England, Dublin, Ireland, Berlin, Germany, Shanghai, etc. You just have to look at these countries to see how ridiculously expensive they are. Why should Vancouver be any different? It’s consistently ranked as one of the top places to live IN THE WORLD! (Source: CIBC World Markets Research Study: Consumer Watch Canada March 16, 2007)

If you can’t afford to buy in a city, but you really really feel the need to own, then maybe you have to make some concessions. Move further away from Vancouver, or even move to the interior or the island or try another province! Life is about choices. If your choice is to own your home, and you don’t have the means to do it in your chosen city, maybe its time to move elsewhere or come up with some creative ways of buying.

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