Monthly Archives: December 2008

Top 8 Real Estate Articles of 2008

As we wind down 2008 and get ready for 2009, are you making plans for a better future or are you curled up on your couch hiding under a blanket waiting for the storm to pass?? While you’re contemplating the answer here’s a short list of my favourite blog posts/articles of 2008.

Of course, this is based on my totally biased and selective memory. In other words, these are the articles that stood out in my mind when I thought of the ones I liked the best. I didn’t do extensive research… just an hour of contemplation as I wrote. It shouldn’t surprise you then, that  a couple of them are my own and that most of the articles are from December. 🙂 Hey – I’m not perfect!

In no particular order here are my picks for the Top 8 Real Estate Related Articles of 2008:

1.Year of the Deals – Outlook 2009: Bold buyers will find “screaming deals” as B.C. housing prices crater over the next year

by Frank O’brien for the Western Investor

Great summary of the B.C. housing market, with a variety of sources and perspectives sourced. And, it ends with some good advice “Don’t worry,” Jurock said. “The best deals come in down markets. On the way up, risk increases every day. On the way down, it decreases every day.”

2. What Every Real Estate Investor Should Know About Timing the Market

by Julie Broad for MustKnowInvesting.com

Ok – so it’s my article, but since everyone always asks Dave and I whether now is a good time to buy real estate, I think it’s a good article to refer everyone interested in real estate to! Besides, MustKnowInvesting is a great website for real estate investors.  In fact, my next favourite article of 2008 is also from this same blog.

3. What are Real Estate Market Indicators and How do You Use Them?

by Trevor Mauch of REIBrain

In this post, Trevor hits on many of the key indicators for knowing whether the area you are looking at is going to take good care of your money. Real estate investing really is local. It’s impacted by global, national and local events, but when you buy a property, your biggest concerns should be based on that area, the properties around it, and whether your money will grow there over time. “True investors don’t just make an investment or enter a new area on a hunch… they do it because they see strong indicators for future growth based on hard facts and history.”

4. 5 Things You Do Not Want to Find in Your Home Inspection

by ThinkTomDotCom

This video – and it’s one of my favourites from ThinkTomDotCom – gives a great overview of problems you might find in a home inspection. It’s entertaining and educational. I had never heard of silverfish before this video! Of course, there are other things I would be watching out for in a home inspection, but this was much more fun than reading an article about an inspection.

5. Richard Branson on taking big leaps

From the November 13, 2008 Globe and Mail

Admittedly, I am all about Richard Branson at the moment because I’ve been reading his book Screw it! Let’s Do it! and am absolutely intrigued by this man. He’s crazy and brilliant all at the same time! And, no, this article doesn’t really have anything to do with real estate but I think that real estate investing in 2008 and in 2009 requires a bit of bravery and belief… both things that he has in abundance. From the article he says: “I don’t always know that a great idea will be successful, but one thing I do know is that I’m not afraid to try. ”

6. The Evolving Credit Market

from the blog Mortgage Broker News

I read this blog every day for the latest on interest rates, mortgage trends and lending information in Canada. For Canadian real estate investors, it’s a perfect place to keep up to date in a few seconds on what is happening with the latest mortgage products, the lenders and the mortgage industry in general. This post, in particular, is a very detailed summary of a mortgage brokers conference held here in Vancouver. From the post “On Monday, CAAMP hosted a lender panel that provided some interesting forecasts.  It also explained where Canada’s mortgage industry is at today.”

7. The Real Estate Investing Course You Shouldn’t Take

by Dave Peniuk written for Revnyou.com

Yep – another selection based on my own personal bias – but this article that Dave wrote really summarizes whey we started writing about our real estate investing in the first place AND hopefully acts as a word of warning to anyone thinking of signing up for real estate investing courses. We do not regret the investments we’ve made in our real estate education, but there are things we would have done differently! From the article “So you found a course that meets your objectives, you met some great people and you’re now armed with some tools and tricks to start building your real estate portfolio. Here’s the key to making your course work for you: Get off your butt and use what you learned!”

8. 5 Great Sites to Help You Better Understand the Market

by Joe Burslem for Future of Real Estate Marketing

I saw bigger lists and I saw ones with better tools – but I can’t keep my attention focused on a gigantic list long enough to find what would be useful to me. This simple list of 5 with screen captures and summaries of each website really did the trick for me and it’s bookmarked and I go back to it on a semi-regular basis. Short lists are good… at least for me.

In the spirit of short lists… here also are the articles in our blog that you liked this most this year.

The Top 8 Blog Posts of 2008 from Life as Real Estate Investors:

1. Buying a Timeshare in South Beach – Is it a Good Real Estate Investment?

2. It Doesn’t Matter What You Paid For It – What’s It Worth Today?

3. Looking to the 2010 Olympics: Buying a Condo in Whistler

4. Rent Control – The Landlord’s Enemy

5. 5% Down and 35 Year Amortization Now the Max In Canada

6. Real Estate Renovations

7. Real  Estate Investing in Windsor, Ontario, Canada

8. All Landlord’s are Greedy, Selfish and Lazy

Happy New Year – Wishing you the Best of Success and Happiness in 2009.


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Real Estate Myths

Think you should buy the ugly house on a good street? Or, perhaps, you think that real estate always goes up in value if you wait long enough… Or, maybe you believe the real estate investing guru’s when they say you don’t need any money to invest in real estate?

In my latest guest post, I bust open the seven biggest real estate investing myths, and explain why they are not true. Check it out over at this great Canadian blog Million Dollar Journey by Frugal Trader.

Thanks for stopping by! I hope you are having a safe and wonderful holiday week.

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Current Market Conditions Shouldn’t Stop You From Buying Real Estate

When Dave and I bought our first real estate investment a little over seven years ago, the market on the West Coast of Canada was a mess. Most of the properties we looked at had been on the market for over a year. As new real estate investors, we couldn’t help but think “There must be something wrong with this property if nobody has bought it yet.” But, it was just the market at the time. Nobody was buying anything… and that was a great thing for us!

In this article, Why Current Market Conditions Shouldn’t Stop You From Buying Real Estate, written for Early to Rise’s fantastic daily e-zine I talk about the first property Dave and I bought together in that depressed market, and how it made us $300 positive cashflow within the first 12 months. Today it is paying us nearly triple that every month and is worth twice as much as we paid for it – even with the market dropping recently!

Please check it out and let me know what you think.

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Five Secrets to Successful Real Estate Partnerships

One of the big secrets to our success has been getting good partners to invest in real estate with us. We have bought many properties without partners, but we’ve also found that many deals are much easier to do when you have a little bit more money for a downpayment and another person’s income to qualify for a good mortgage with.

Just because real estate investing with partners can be easier to do, it doesn’t mean just anyone will make a good real estate investing partner. I wrote this article for Moolanomy to explain the five things we’ve found that make real estate investing partnerships work.

While you’re at Moolanomy checking out the article, have a read of this great on building multiple income streams.

Special thanks to Pinyo for sharing our article with the readers of Moolanomy.

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Real Estate Financing Definitions Every Investor Should Know

Real estate financing In our Rev N You with Real Estate newsletters, the last two weeks have been dedicated to the money you need for real estate investing. I talked about how to invest in real estate with no money and how to finance your real estate investments.

I covered a lot of detail in those articles. So much detail, in fact,  the subject is starting to take over our website and this blog. But, getting money for real estate investing is a pretty important subject. It deserves a lot of space!

So, today I want to review a list of critical definitions a real estate investor should know before they look for real estate financing.

Here’s some important real estate financing words to know:

Amortization: The length of time that your mortgage will be paid over. Traditionally it was 25 years but many people opt for 30 year amortization periods now in order to reduce their monthly payments. You can also have a shorter time frame.

Loan to Value (LTV): The value of the property relative to the debt you are proposing or currently have on the property. For example, if you have a house that is worth $400,000 and you have $300,000 outstanding on the mortgage, your LTV is 75%. This means you have 25% equity in that property.

Gross Debt Service Ratio (GDS):This is a number banks use to calculate how much you can afford to spend on a monthly mortgage payment. They will use the principal, interest and property taxes and heating costs to calculate what your total monthly payment will be.

They will compare this to your gross income for the month, and if it exceeds 30-35% they probably will not give you the loan.

Example: Mortgage ($1,100) + Taxes ($150) + Heat ($75) = Monthly Expenses ($1,325)

Annual Income $50,000 divided by 12 months = $4,166

$1,325/$4,166 = 31.8%

You probably can qualify for that size of mortgage with that ratio of expenses to income.

Total Debt Services Ratio (TDS): This is a similar calculation to the one above but the bank will take into consideration other debt you are carrying such as a car loan or student loan payments. Most lenders are looking for a number under 40 – 45% of your gross income (not your after tax income).

Using the same example, let’s assume you also have a student loan and a line of credit.

Monthly Expenses are $1,325 + $325 + $200 = $1,850

$1,850/$4,166 = 44.4%

You may still qualify as long as your credit score is very good, but this is starting to get on the high side of what a bank would like to see for the TDS ratio.

High Ratio Mortgages: In Canada, these are also called insured mortgages. And any mortgage that has an LTV of over 80% will need to be insured by one of the mortgage insurance companies. These are considered high ratio mortgages because the ratio of debt to value of the property is fairly large.

Assumed Mortgage: It’s a good idea to check to see if your mortgage or the mortgage on the property you’re looking to buy, can be assumed, which is essentially passing on the mortgage product (including the rate) to someone else. This will eliminate the issue one may encounter of steep penalties for breaking your mortgage when you sell or buy a property.

Blanket Mortgage: When you have many properties, this is a strategy for taking advantage of the equity within those properties to purchase a new property. You then get one mortgage that covers all of those properties. This is also known as an inter-alia mortgage.

There are plenty of other words to learn when it comes to real estate financing, but these are some important ones that are not as commonly known.

Real Estate Investing Learn the secrets to becoming a millionaire real estate investor…in your spare time. Get the Rev N You with Real Estate Starter Tips Guide free when you sign up for our complimentary Rev N You with Real Estate e-zine.

Get started with real estate investing today.

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How to Time the Market with Real Estate Investing

Everyone always asks Dave and I if now is a good time to invest in real estate. Today, I am pleased to present an answer to that question in my guest post over at Patrick Riddle’s great blog Must Know Investing: What Every Real Estate Investor Should Know About Timing the Market.

Thanks to Patrick for sharing my article with his readers. Please click on over to his blog and check it out.

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More on Stocks vs. Real Estate for Investing

Last week Julie had an article published on the blog My Wife Quit Her Job called “Why Real Estate Made Me a Millionaire and Investing in Stocks Didn’t.”

The article sparked some interesting conversations between us and our friends. The interesting thing that came out of those conversations is that most of our friends think real estate investing is too stressful!

O.k., maybe I have spent too much time telling them the horror stories from the mistakes that I made with a couple of multi-unit properties that I bought in Niagara Falls, Ontario. The thing is – those stories are good enough for a t.v. movie!

Real Estate Vs Stocks

Real Estate Vs Stocks

Julie and I both find it easier to tell people about the dumb things we’ve done while real estate investing, than about the $5,000 in rent cheques we took to the bank yesterday.

When our friends commented on the stress of investing in real estate I had to ask how many times in the last month they have checked on their stock investments? The guys around the office talk about their stocks constantly! And our friends, it turns out, check their stocks at least once a day! And two of my good friends just lost 40% and 50% of the money in their stock portfolio in less than 6 months!

You can’t tell me that watching your stocks ride the crazy market rollercoaster EVERY DAY is less stressful than owning good real estate.

I do follow the residential real estate market and news pretty closely, and I see the average house in Canada has dropped 9% in value since last year, but I don’t worry about it. My tenants paid down about 5% of the mortgage, so I have only “lost” 4%… and in some cases, that property also put cash in my pocket after the expenses were paid. And, of course, I only really “lose” the money when I sell my property.

Real estate investing can be very stressful if you manage your property yourself, but if you hire good property managers, like Julie and I do for most of our investments, you will go days without thinking about your property. And you will often go all year without actually worrying about it.

But there are a lot of reasons to love real estate, and I don’t want to be repetitive with Julie’s article so just click on over to My Wife Quit Her Job and check it out! 313b_bannerrev-n-youlowqual22

Learn the secrets to becoming a millionaire real estate investor…in your spare time. Get the Rev N You with Real Estate Starter Tips Guide free when you sign up for our complimentary Rev N You with Real Estate e-zine.

Get started with real estate investing today.

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