Eagle Quest Properties

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<td class=”news_heading_left”><span class=”news_heading”>Volume #2 Issue #12</span></td>
<td class=”news_heading_right”><span class=”news_heading”>2009</span></td>
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<p class=”news_intro”><img border=”0″ align=”left” width=”118″ height=”102″ alt=”Julia and Daniel” src=”http://eaglequestproperties.com/lists/images/newsletter-wedding2.png” />Merry Christmas and Happy 2010 New Year, everyone.&nbsp; We sincerely wish you a new year filled with great things to celebrate in the world, in your life and in you.&nbsp; As the snow is falling clear and white, we are sending this issue out a bit early before some of you go on Christmas holidays.<br />
We are so incredibly grateful that you have been staying connected with us by reading our newsletters.&nbsp; The compliments we received from your e-mails have given us so much encouragement and strength to stay on track.&nbsp; Thank you a million!&nbsp; <img border=”0″ align=”right” width=”250″ vspace=”5″ hspace=”2″ height=”420″ valign=”middle” src=”http://eaglequestproperties.com/lists/images/2009_christmas_tree.jpg” alt=”" />This year has been a bit of roller coaster for us: a brand new environment to live in and to invest, lots of learning curves, and many road blocks to overcome.&nbsp; We are confident to say that we are now more equipped with strategies and an understanding of the marketplace than we had a year ago.&nbsp; We are finally settling down in Southern Ontario after moving from Vancouver a year ago, replacing the rain with the snow!&nbsp; We feel happy to discover a niche market for us to tap into besides commercial properties.&nbsp; We have also discovered the emerging markets for us to focus on.&nbsp; We regret that we haven’t bought a commercial property yet, but we would rather be poor than buy the wrong property.&nbsp; We also missed a couple of deals because our private money base is currently too small to support larger investment properties.&nbsp; Well, we now know that our new priority is to grow our pool of private investors.&nbsp; We love the quote from a highly successful marketer, ‘it is not about how much you are receiving, it is about how strong you are becoming.’&nbsp; Let’s all look forward to year 2010.&nbsp; We are moving on!</p>
<h2 class=”news_subheading”>Discovery Tour of Hamilton</h2>
<p class=”news_article”><a href=”http://www.investinhamilton.ca/”>Hamilton</a>, Ontario (Canada) has long been called &quot;Steeltown&quot; with the associated stigma and perception of it being a hardcore blue-collar city due to the prevalence of the steel plants located on <img border=”0″ align=”left” width=”338″ vspace=”5″ hspace=”2″ height=”220″ alt=”The Hammer’s Skyline at Night” src=”http://eaglequestproperties.com/lists/images/TheHammerNightSkyline.png” />the shores of Lake Ontario.&nbsp; The ongoing development, advancement of transportation systems, growing student population and affordable real estate market in Hamilton make for great investment opportunities yielding strong rental returns.&nbsp; It has been suggested that Hamilton is becoming a bio-tech town.&nbsp; Average Price: $260,000; vacancy rate: 3.2%.&nbsp; We feel fortunate to be able to invite Mary Flynn, a <a href=”http://www.ontariorein.com/”>REIN</a> member to give us a tour of Hamilton.&nbsp; Mary was very gracious to show us her investment properties; identified a few hot spots for us to consider, and shared her priceless words of wisdom with us.&nbsp; An incredible woman with a big heart.&nbsp; Mary was born in Hamilton, lived in Hamilton, is investing in Hamilton and she knows her market.&nbsp; To book a tour of Hamilton with Mary and pick her brain, call her at 416-259-8116.</p>
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<h2 class=”news_subheading”>Does Any Of This Interest You?</h2>
<p class=”news_article”>Here’s a for sale by owner deal, a residential property we have found:</p>
<p class=”news_article”>Asking Price:&nbsp; $319,500.</p>
<p class=”news_article”>- Total Income:&nbsp; $41,800 minus 29% expense = $29,820 NOI<br />
- Down Payment 25%:&nbsp; $79,875<br />
- Financing: $239,625 Variable Interest Rate 2.25% 25 Year Amortization<br />
- $1,045/month X 12 = $12,540/year<br />
- Cash flow: $29,820 – $12,540 = $17,280/year<br />
- COCR (<em>Cash on Cash Return</em>): 22%<br />
- DCR (Debt Coverage Ratio): 2.38<br />
- Cap Rate: 9.33%</p>
<p class=”news_article”>In addition to cash flow, we gain multiple profits such as the following:</p>
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<li style=”font-size: 14px; font-family: Arial,Helvetica,Swiss,sans-serif; font-weight: normal;”><em>principal reduction</em> as your tenants pay down your mortgage (the total principal paydown is $7,234 after Year 1)</li>
<li style=”font-size: 14px; font-family: Arial,Helvetica,Swiss,sans-serif; font-weight: normal;”><em>appreciation of the property</em> (the properties in the area have appreciated by 30% over the last 3 year period, let’s be conservative to use 3%, the value of the property then goes up by $9,585 after Year 1)</li>
<li style=”font-size: 14px; font-family: Arial,Helvetica,Swiss,sans-serif; font-weight: normal;”><em>tax benefits</em> from equity depreciation (building, mechanical systems, roofs, driveway, parking lot, …&nbsp; your accountant can explain how this works).</li>
<li style=”font-size: 14px; font-family: Arial,Helvetica,Swiss,sans-serif; font-weight: normal;”>the <em>power of leverage</em> by using the bank’s money (we put 25% down to gain access to 100% of the profits from 100% of the property when property value goes up)</li>
<li style=”font-size: 14px; font-family: Arial,Helvetica,Swiss,sans-serif; font-weight: normal;”><em>equity investment</em> (if we buy the property below market value, we obtained equity from day 1)</li>
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<p class=”news_article”>Based on the numbers shown, if we add up the cash flow, the principal paydown, the projected property appreciation: $17,280 + $7,234 + $9,585 = $34,099.&nbsp; Then $34,099 / $79,875 = 43% ROI (return on investment in Year 1).&nbsp; Does any of this interest you?</p>
<p class=”news_article”>This deal has been posted to the <em>Lynes’ Inner Circle</em>, but we haven’t received a committed response yet.&nbsp; <strong>Anyone interested to know more about this deal, please e-mail our <a href=”mailto:acquisitions@eaglequestproperties.com?subject=December%202009%20Deal&amp;body=Please%20provide%20me%20with%20more%20information%20about%20this%20deal.”>acquisitions</a> department.&nbsp; Anyone interested to receive immediate e-mail notification of our potential deals, please <a href=”mailto:julia@eaglequestproperties.com?subject=The%20Lynes’%20Inner%20Circle&amp;body=Please%20subscribe%20me.”>sign up</a> to <em>the Lynes’ Inner Circle</em> by e-mailing us.&nbsp; Any referrals you can give us to help us grow our real estate community is forever appreciated.</strong></p>
<h2 class=”news_subheading”>Variable Rate Mortgages Can Save You Thousands!</h2>
<p class=”news_article”>We started paying attention to variable rates when we first heard Don Campbell talk about it at the A.C.R.E. workshop back in April of this year.&nbsp; Don seems to prefer variable rate as he said 85% of the time you win by using variable rate.&nbsp; His statement is based on the last 80 years track record.&nbsp; To win 100% of the time, we presume you would have to lock in to fixed rate with perfect timing.&nbsp; However, that would imply that you knew when the perfect timing was, and your bank doesn’t impose a penalty for locking in.&nbsp; Mary Flynn also strategically uses variable rate mortgages for generating incredible COCR on her investments.&nbsp; From 1990 to 2004, interest rates decreased to a low of 3.5% from a high of 12%.&nbsp; Since 2004, rates moved higher to 6.25%, only to fall again the following year!&nbsp; The fact is that the prime rate in Canada has maintained a 3% band for the past 9 years.&nbsp; When inflation is low, we can maintain low interest rates; government encourage consumers to spend which, in turn, should stimulate the overall economy.&nbsp; Julia is excited to see that she can save $30,000 interest even though she has to pay a few thousand dollar penalty.&nbsp; Well, do your own homework and seek advise from qualified mortgage specialists.&nbsp; Does a 4.25% five-year fixed rate look tantalizing?&nbsp; How about the prevailing 2.25% variable rate?&nbsp; Now is your opportunity to start contributing to your bottom line and not your bank’s.</p>
<p class=”news_article”>Links for your research: <a dcc1b66fa3=”true” href=”http://www.canequity.com/mortgage_rate_history.stm” b69f97a976cfca=”true”>mortgage rate history</a>; <a dcc1b66fa3=”true” href=”http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2008/04/fixed-or-variab.html” b69f97a976cfca=”true”>Canadian mortgage trends:&nbsp; fixed or variable</a>?</p>
<p class=”news_quote”>&quot;Our blessing to you all for abundant health and abundant wealth.&nbsp; See you in 2010!&quot;</p>
<p class=”news_quote_source”>- Daniel &amp; Julia</p>
<span class=”news_signature”>Daniel Lynes and Julia Lee</span></td>
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