 Canada is not the glimmering oasis in a sea of chaos, that Prime Minister Stephen Harper would have you believe: “We have avoided the extreme of the unregulated, or barely regulated, financial and mortgage industries that has caused such grief around the world.” In 2006, Benjamin Tal, an economist with CIBC World Markets estimated that more than 85,000 Canadians had subprime loans. On March 14, 2009, the Globe and Mail reported that they were investigating more than 10,000 foreclosure proceedings in Canada, and in the process uncovered the burgeoning subprime mortgage problem that Mr. Tal had alluded to. These problems are a manifestation of key legislation that passed in 2006. In 2006, the feds made 40 year amortizations legal for the first time, extended from 25 years. In 2006, requirements for down payments were also lowered, significantly. The Globe and Mail has also reported that foreclosures in Alberta are expected to double from two years ago to 5,300 in the first 11 months of 2008-9 from 2,510 in 2006-7. Subprime lenders initiated about half of the foreclosures in Western Canada in 2008, even though they only held 5-7% of the market share. Statistics in Ontario are not available, because most foreclosures in Ontario are power of sale, and as such do not go through the courts. You’re probably thinking that Canada will end up being just as bad off as the US. However, the creative forms of financing weren’t allowed to happen in Canada until 2006, they only took up 5-7% of the market share, and now the major banks have tightened the reigns even further. Canada, by and large is still a much safer place to invest in real estate than the US. However, with less risk comes lower returns. On the other hand, most Canadians are happy with that, as long as it’s safe. This attitude has helped keep Canada from feeling the brunt of the effect. What do you think?
A Fun Day at Epcot
Jack Canfield suggests we should keep a good balance between the 3 P’s: Preparation, Production, Play. While we were in Orlando we enjoyed a hot, sunny day at Epcot Center. It really helped to revitalize ourselves.
We love the World Showcase where you are dropped into absolute gorgeous sceneries of France, Canada or China in 360 degree movies. We then decided to top it off with a German schmorgasbord while enjoying live German polka in the German area of the World Showcase. To feel an exhilarating free-flying gliding adventure, you have to ride the Soarin’. It is by far our favorite ride in Epcot. You also don’t want to miss the breathtaking fireworks showing Reflections of Earth. If you want to play, just empty your mind, play like a kid in Disney at Epcot Center.
Good to See You Again in Orlando, FL
We had an impromptu flight down to Orlando, FL to reattend Scott Scheel’s Commercial Property Academy, owing to a last minute invitation. Scott is an excellent instructor and is an extremely knowledgeable and successful investor. Scott shared his analyses and in-depth strategies on the current market for us to avoid any unforeseeable pitfalls. The strategies we used 12 months ago might not apply to today’s market conditions. We need to consider market changes such as supply and demand, legislation, global economy, stock markets, construction industry, interest rates, job growth, and other dynamics affecting the market. The current market conditions are making it difficult for a lot of people to feel good about buying a house.  Appropriately, the banks have tightened their purse strings to developers that want to build high rises and new townhouse developments. A lot of people that would normally be buying a house are now instead looking at renting for a bit longer because they’re afraid of either losing their job, or of houses prices dropping even further. The retail market is also dwindling. As we have heard, a lot of retailers struggled through their best shopping season, Christmas. There are big box retailers closing up locations, declaring bankruptcy, breaking leases, … If you can find a 50 cent on the dollar deal, you should consider analyzing it further. We learned a lot more this time. We cherish the great learning experience we get from Scott Scheel. We felt great to see many familiar faces from the previous workshop. We cherish meeting many new like-minded students from Southern Ontario in addition to many others from the USA. More importantly, we gained some interesting perspective into a deal we were looking at. Thank you to Roger K. Your insight and expertise was truly appreciated. |
“Where to Get The Money” Boot Camp
We are privileged to have taken Alan Cowgill’s boot camp in San Antonio, TX this month. Thank you all that joined our newsletter from this bootcamp. We would like to extend special thanks to Michael H., Tom, and Mike L for offering some valuable insight on the deal we were analyzing. We have included a picture of the beautiful San Antonio River Walk, also known as the Paseo Del Rio.
For those of you who have been contemplating real estate with limited source of capital, Alan will give you an excellent overview of what is legally required for you to acquire and utilize other people’s money. Since 1995, Alan has legally and ethically raised millions of dollars on his real estate investments to achieve a “win-win” situation for him and his private money lenders. After a private lender sends money to a closing attorney on a property, he securitizes the loan by providing the lender a promissory note, a copy of title  insurance, mortgage document, and a hazard insurance policy. He offers his lenders a high rate of interest on their money. We love Alan’s system. We feel excited to bring aboard a team of investors who want to enjoy a source of passive income from real estate, but who don’t have much time or knowledge to own and manage properties. Investors do not purely rely on appreciation to increase their net worth as it might be considered risky. We rely on equity day one, cash flow, principal reduction, leveraging debt and making use of tax advantages. The value of an apartment building is not based on inflation or the price of the building. It is based on the income it generates. This is why apartment buildings are attractive to banks and investors. It is also why we prefer hard real estate assets over paper assets any day. If you are interested to know more about our upcoming projects, please e-mail julia@eaglequestproperties.com
Upcoming REIN’s ACRE Program – Apr 18-19
We feel excited that we are going to attend REIN’s Authentic Canadian Real Estate (ACRE) Program by Don R. Campbell. We couldn’t resist signing up for Don’s program when we saw that he is going to review the April 2009 update to top Ontario investment towns research. He will also teach three creative ways to buy real estate from today until 2013 as well as the Joint Venture secret nobody talks about. His statement of “No Hype, All Facts” really turns us on. Well, this is our first time attending, we will let you know how it goes in the next issue. Hope to see you there!
A Little Travel Tip
We started taking some serious training and coaching boot camps in real estate investing two years ago. Consequently, we have had to fly to quite a few U.S. cities like Indianapolis, Chicago, Irvine, Orlando, Boston, Las Vegas, and St. Antonio. When flying so much, we always try to budget our expenses with discounted flights and hotel rates. We try to avoid paying the block rate of $129-$149/night for the hotels where the conference is being held.
We stayed in a 2.5 star rating hotel in Boston, MA in October last year for $49/night and it included a fully equipped kitchen and free Internet. We recently booked the Hyatt Place in Atlanta, GA, which is a 3 star hotel for $40/night. It includes free Internet and continental breakfast. How can we save up to 65% off on hotels? One of our secrets is Hotwire.com. Our other secret is Priceline.com, which gives us the option to name our own price for up to 50% off the standard hotel rates. We can also save up to 40% on flights and 30% on rental cars. The key is to know the zip code or the exact area for Priceline to search and match the hotel that is the closest to your point of destination. Most importantly, you need to know that your reservation is non-refundable, non-transferable and non-changable as that is the restriction Priceline and Hotwire can use to keep the deep discounts available. Please read the fine print to understand the systems before you book. Enjoy your travel with some savings in your pocket!
“You can have anything that you want in your life…Just help enough other people achieve what they want.”
Daniel and Julia Lynes |
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.
ller 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. 
