1. What’s the deal?
Each deal is unique, but here’s the short scoop:
- Flips: This is short-term (less than 1 year), higher risk. Typically investors earn interest (eg 10% ROI) or a flat fee (eg $10,000 for lending $100,000). Either way we do the deal, it is likely to be INCOME at your tax time
- Buy & Hold: This is long-term (3-5 year minimum), lower risk. Typically investors go on title, and on the mortgage for maximum security for your investment. This is likely to be a capital gain at your tax time, based on current tax rules.
- Creative deals: Sometimes we find deals with seller financing. Sometimes we do Rent-to-Own deals.
- Do-it-Yourself?: If you want to be in charge of your property and are just looking for a good deal, we offer real estate “bird-dog” assignments. Ask us to learn more.
2. How do I get into the deal?
- Decide WHY you want to invest in real estate. See our investor questionnaire to help clarify what you want and need to get out of the deal(s).
- Talk to your life-partners.
- Talk to a mortgage broker and/or your financial planner. What needs to happen for you to be ready for that great deal to come along? Pre-positioning with your financing makes the entire process run smoothly.
- Talk to your accountant. PLAN for your taxes in advance.
- Call us at any time and we’ll help you work through the process to be ready for action
3. What is the upside of the deal?
- We will specify the expected cashflow and the expected mortgage paydown. We will also approximate a property appreciation rate.
- What if rent rates increase? Better cashflow.
- What if properties appreciate at a faster rate? Better ROI when exiting the deal.
- What if Calgary is successful with the Olympics’ Bid? Rents and property values are likely to increase, depending on location within the city.
- What if a new Alberta government starts to attract even more investment capital into the province? More investment, would mean more jobs. More jobs means more tenants—and the law of supply and demand would suggest rent rates would increase.
- What if the pipelines finally start to be built? Again, more jobs is more customers for our rental properties.
- What if the Green Line moves forward, and the south Calgary Ring Road is completed? Efficient transportation attracts people and businesses (more customers for us!)
4. What is the downside of the deal?
- What if rent rates go down with all the new condo’s coming onto the market? It is always possible that rents and property values may go down. However, we are creating quality properties in good neighbourhoods that will compete very well in the rental market. Also, we do not specialize in condo rentals; I am happy to provide an excellent referral if that is your property of choice.
- What if “They” tear up NAFTA? Great question. At this point, there is a lot of doom and gloom about the implications for North America, but the truth is that no one is certain how this will impact our economy.
- What if real estate prices go down? Again this is possible. Over the long term, we will still make money with positive cashflow and mortgage paydown. Also, we are currently investing in properties that are 10-20% below TODAY’s market value, to provide a buffer and a plan in case property values continue to decline in Calgary in the short term.
- What if the tenant damages the place? We have great property insurance, specific to rental properties. We also have systems in place to legally and efficiently evict tenants if this becomes necessary.
- What if I need to get out early? We will work with you to figure out all possible solutions, but we encourage all of our partners to let their investment grow to its full potential.
5. How do we exit the deal?
- At the end of the deal, we sell the property
- Or, at the end of the deal one person buys out the other person, at the appraised value on that day
- Or, another investor buys out one party in the deal
- Or, we sign a new deal for another 2-5 years
- Or, we Rent-to-Own the Property (to a Tenant Buyer)
- There are a lot of options, as you can see!
- If life happens, we have contract provisions to deal with a variety of other scenarios
