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Why Real Estate
Investing into our retirement has become necessary! Great, how? Well, RRSPs, of course, stocks, and mutual funds. That is by far what the majority of us are doing. That’s what our banks and financial advisors are trained to sell us. So, what is wrong with that? Are stocks and mutual funds so bad? That depends. If the alternative is to do nothing, or put your hard earned money into a savings account then, YES! Stock and mutual funds are a better option. Although mutual funds are advertised as a safe investment, there are factors that make them less than ideal. If you have a $100,000.00 placed into a mutual fund and in the first year it goes up by 100%, you then have $200,000.00. Then on the second year the market goes down by 50% your investments are now at $100,000.00 again. You have made no headway. However it would be advertised as 100% less 50% divided in two years. That mutual fund is performing at an average of 25% a year. That’s misleading. Notice they also do not factor in all of the cost, trading fees and commissions. And as for RRSPs, most of us are in the dark about how well those investments are really doing. We simply keep contributing and hope there will be enough there to carry us through our retirement. Is there a better solution? We believe so. Real estate investing. Why not have an investment that will clearly work for you. Why not know and control what we can yield with our hard-earned money? Why not own a producing asset that will provide us with a steady monthly income to support us through our retirement without ever having to worry about the money running out? Because most of us don’t know how. It’s not enough to know that real estate investing is a great investment strategy; you need to know how to safely invest into real estate so that a dip in the housing market doesn’t leave you financially crippled. This is where we come in. Let us help.
Cash Flow Now
We focus in three areas: Buy-Rent-Hold properties, Lease Options (Rent-To-Own) and Wholesaling. Buy-Rent-Hold is in our mind, the ultimate real estate investment goal. This will be the money producing assets that will carry you through retirement. These are the multi-unit rental properties that you will want to hold in your portfolio long term. We have a strict list of criteria to make multi-unit properties candidates for becoming a Buy-Rent-Hold property. The ratio between the price of the property and the rent of the units need to be just right in order to make it a suitable cash flowing property. With this strategy we concentrate on immediate sustainable cash flow, not on anticipated appreciation. We want properties that will continue to perform even in a housing market dip; appreciation is just an added bonus. Due to those criteria, we find most of our Buy-Rent-Hold properties in the eastern provinces. Lease Option or Rent-To-Own provides both cash flow and capital gain. Lease Options are set up for 1, 2, or 3 to sometimes 5-year terms. The main advantage of a Lease Option is that the property is not rented to a tenant but to a tenant/buyer who is investing a portion of the down payment up front and will treat this house as their home. It is also an investment you can feel good about. Not only will you be getting a monthly cash flow and return on your investment when selling the property at the end of the term but you will also be helping a new buyer into their home. This is truly a Win-Win investment. Wholesaling is a strategy we use to pass on an investment opportunity. Unfortunately, we have limited resources that we can use toward purchasing real estate. We work a lot with investors who want to make a good return on their money or RRSP until they are bought out of the deal. We also work in creating partnerships (joint ventures) in obtaining various real estate investments. Many times we work with investors that are interested in getting a good real estate investment, with all the work done and ready to go into their own portfolio. That is when we would wholesale the opportunity to such investors.
Is a large portion of your investment money in RRSPs? Do you feel that you may have shot yourself in the foot by investing your RRSP into mutual funds? You shouldn’t. RRSPs, as well as RESP and Tax Free Savings Accounts can be great tools for investing. Better still, they can be used toward Real Estate investments. Really? Why have you never been told of this? There are many reasons, the main one being that your bank or financial advisor will no longer be getting a commission from your money. Therefore, it is not widely advertised. The truth is, that most bankers and financial advisors are sales people. They make money by selling you a product, Mutual Funds. They receive commissions whether you make or lose money. To facilitate a good return on your investment, transfer your RRSP into one that is self-managed. This will give you the option of using it toward holding mortgages secured by real estate. Then you will not suffer tax penalties from cashing in your RRSPs and you can continue to contribute and enjoy the tax deduction. Not all self managed RRSP are created equally, and only a specific few will allow you to hold real estate investment mortgages. These are called an Arms Length Mortgage. This means you cannot use them for a property you are personally purchasing, or that a close family member is purchasing. That aside, when used properly, an Arms Length Mortgage can bring you a great secure return on your investments.
We run our business very much the same way we run our lives, with the same set of values. Being ethical is very important to us and put special care in making sure that all of our business proceedings are done legally and with everyone’s best interest protected. We employ knowledgeable lawyers to carefully construct our contracts and agreements.
Are We A Good Match?