Eagle Quest Properties

Volume #2 Issue #1

2009

Hey, Gung Hei Fat Choy!
The phrase means "wishing you a happy, lucky and prosperous new year", but in fact, it also means "please give me a little red envelope full of money".  All the Chinese kids love this season as they count up their collected lucky money.  Chinese New Year arrives on Monday, January 26 this year.  This year, is the year of the Ox.  We met up with some relatives for dim sum in Toronto and finally found a T&T supermarket in Toronto.  This T&T is jam packed with five times more shoppers than the T&T in Vancouver.  You can imagine the massive Chinese population base in Toronto.

We have taken some time to learn about several cities’ master plans by attending city planning meetings and visiting economic development centres.  We find some cities are willing to give incentives and grants to real estate investors up to 25% of project including the acquisition price of land and building & renovation costs.  The areas the city plans to revitalize are called Economic Development Zones which will give you the greatest return on each dollar invested.

Our Duplex in Indianapolis

As the foreclosure market was so tempting, we recently bought a duplex with a garage for $23,169. U.S. from the bank.  The duplex is 4500 sqft with 3 bedroom and 2 baths on each side.  We received several bids from contractors to know our rehab project should be $35,000. and the market rent was $600. per side.  We thought it was a great deal, so did our real estate field trainer and fellow classmates. The property had been vacant for few years.  Due to the extended period of vacancy, there was many hidden repair costs: damage inside the walls, clogged drainage line, unopen windows.  The whole extent of the termite damage could not be determined by our inspector.  We ended up spending much more money on rehab than we originally budgeted.  We found a lot of anchors near the property, and we knew the city had a urban renewal plan.  We thought it was a decent neighborhood for blue collar tenants.  We didn’t make money from equity but the monthly rent supports the 1% unit rule ($100,000. house you should collect at least $1,000./month or more).  Most of all, we learned a number of valuable lessons to be shared in the next issue, please stay tuned.

Emerging Real Estate Markets

We love David Lindahl’s most recent book.  It hit #1 worldwide best-seller status on Amazon.  It shows you how to define and invest in each phase of the real estate market: Seller’s market I, II and Buyer’s market I, II.

Does the recession really matter to a real estate investor now?  Let’s stop for a minute and think about what a powerful concept an emerging market can be to real estate.  We live in a huge country, with 33 million people (with 300 million people if you are in the U.S.).   At any given time, there are factories, new highways and bridges being built, young industries taking off and people can make a fortune.

Windsor, ON is in a slump, but oil companies are having their best years ever.  The bottom line: The only real estate trends that count are local ones.  The best emerging market shows and maintains strong leadership from the city’s leaders.  These leaders are aggressive and thoughtful to develop a master plan and they show courage and strength to implement it over a span of several years.

Investing in Southern Ontario

As we search for apartment buildings in Southern Ontario, we avoid cities that are not at least moderately diversified.  For instance:  Windsor, Chatham and Oshawa are dependent on the automotive industry.  We focus on cities with a well-diversified group of jobs coming in.  We want to see a city with some type of barrier to entry and the best barrier to entry is lack of land on which to build – a key to significant increase in property values as land gets exhausted by new constructions.

What system do we use to analyze apartment buildings?  We look for buildings with fixable holes that we can patch through our efforts by means of forcing the appreciation.  Some fixable holes can be any one of the following: some form of vacancy up to 30%; disrepair of building due to mismanagement; high expense ratio; under market rent.  We are not paying full price for these type of buildings as commercial properties are priced based on the income it generates.  The other key is to avoid fully priced, fully leased, newly constructed properties.

Julia’s Invitation To You

We are seeking additional investors as we are currently analyzing a few 20+ unit apartment buildings.  If you are interested, please e-mail julia@eaglequestproperties.com and you will be sent a copy of the NI45-106 accredited investor form, fax it back to 519-752-6155.  If we determine that you qualify as an accredited investor, we will add you to our newsletter list for the latest deals we’re working on.  Invitation for Accredited investors Only

A Tip To Write A Newsletter

We’ve received some nice compliments about our newsletter, thank you.  A newsletter is the best way to stay connected with family, friends and associates, and the best part is it keeps us in focus and accountable on achieving our goals.  We’ve had some readers ask about what software we use to produce our newsletters, and what the price was for it.  The software we use is called PHP List.  It is written in a web scripting language called PHP, which will run on any web server with PHP extensions installed.  It is completely free, but you can purchase paid support from Tin Can Software, the UK-based company that wrote the software.  There are also third party support companies for it.  It is open source software, and is probably just as good as some of the more popular commercial newsletter services.  On another note we’d like to announce the Feb 6, 2009 launch of July Ono’s new book, ‘Your Million Dollar Network’.  Help her make #1 that week on Amazon’s list!

Daniel and Julia Lynes

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