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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.
RRSP
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.
Legal Stuff
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.
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