When I started my real estate career in 1979 I worked for a man named Glenn Buchwald. He always talked about how when changes occur in the economy (like interest rate increases or new mortgage rules) realtors freak out and think no one is ever going to buy anything and they are going to starve to death! In other words, "the sky is falling, the sky is falling"!

He said that back in the day when people didn't have a lot of money, realtors actually took chickens on trade to barter for real estate services. That's one of my favourite sayings to this day, "I'll even take chickens on trade".
He said that one time when interest rates went up a whole percent (to 6%) a realtor walked in to his office and slapped down his keys and said "I quit! People will never buy houses at these interest rates."

In the 80's, interest rates went from there to 12.5% and stayed there for a very long time. They went as high as 22% and people kept buying houses! Sometimes you just have to relax and go with the flow. The only thing constant in life is change. Hang in there… The sky is not falling! #HTBAR

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Penny/Bryce Kander

Realty Executives Red Deer

403-896-7331

https://www.facebook.com/teamkander/

Crazy ideas that worked. (sold trees for Down payment)

Years ago I had a client who had always wanted to own a quarter section. He wanted it in a quiet, secluded, location with lots of trees and a big shop. One day we found the perfect place for him but there was one small problem...they didn't have enough money for the down payment. I looked around and saw that on this quarter section probably 120 of the 160 acres was tall spruce trees. I thought, "you could hire the guy with the mules and they could do selective logging of the trees".
The trees were worth about $1000 each and he needed $40,000 for the down payment. We had the owner carry financing for a few weeks while we had the trees logged and got enough money for the down payment. They actually used the property to buy the property and ended up with their dream! Sometimes you have to get really creative in this business.

You know the saying, "You can't see the forest for the trees"?
Well, that day I was fortunate enough to see the forest and the trees.

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Penny/Bryce Kander

Realty Executives Red Deer

403-896-7331

https://www.facebook.com/teamkander/

The 5 foot rule!

The Five Foot Rule...

One day when I was out with my son we got into an elevator. Mere seconds passed before I started chatting with the strangers inside. When they got out of the elevator my boy looked up at me and said, "Mommy, do you have to talk to everybody?!"
I thought for a minute and then I said, "You know honey, I do."

I call it the 5-foot rule. Anyone who gets within 5 feet of me has to talk to me. Whether it's in a restaurant, standing in line at the grocery store, in the pool, or on the airplane, it makes no difference to me. I truly like talking to people but it's also a key to success in real estate and in life.

When I was in grade 12 they had a career seminar at our school and the President of the real estate board was there.
My question for him was "how do you be a realtor and how do you get business?"
He said, "just ask everyone you know and everybody you meet if they want to buy or sell a house". So that's literally what I did! When I started out, I would go shopping and I would hand out my card to the teller, to the guy at the gas station, to everybody that I met.
Over here in Hawaii I strike up conversations continuously and I make new friends or I find people that want to buy real estate here and I refer them to other realtors. I can make money just by visiting with people! So stretch yourself this week and talk to some people that get within 5 feet of you. You never know who you might meet. You might find your new spouse, your new employee/employer, or just a new friend.
Have some fun with the
5-foot rule and I'd love to hear stories back of who you meet!

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Penny/Bryce Kander

Realty Executives Red Deer

403-896-7331

https://www.facebook.com/teamkander/

How to buy houses with the new rules and what you should be buying/looking for.

Since the new mortgage qualification rules came in to effect in October 2016 it makes it more difficult for you to qualify for a mortgage. This is because you now have to qualify for your house at a higher interest rate. Your payments are still lower but it just makes it tougher to get a mortgage so here are three tips as to how to get around those qualification limitations.
1. You could get someone to co-sign for you (mom,dad, aunt, uncle, or grandparent). That just allows you to buy a home that you can still afford but can't necessarily qualify for under the new rules.

2. Buy a home with a basement suite. You can actually afford to spend more on the purchase price of a home if it has a basement suite for additional income so that would help you get into the market as well.

3. Buy a smaller starter house; maybe one that needs fixing up that you could fix up. Improve it and then maybe sell in six months. Take the extra money and put it down on the home that you actually want.

Those are just three options as to how to qualify in this tough money market.

Don't buy a car, buy a house and it will pay for the car!

They say that this generation will inherit more money than any of the previous generations to date.

So what should you do in case you inherit some money...even $10-$50K?

In the past 7 or 8 years we have interacted with a couple different young people who both inherited $40,000.

In one scenario, someone convinced them to lend all the money for an investment that was unproven and sadly they lost it all.

Bryce sat down to have a financial discussion with the second one. As is the case with the majority of young people who come into money, this person wanted to go out and buy a new car.

Bryce explained that instead of buying a car that will just depreciate, they could buy a house with a basement suite and a garage and rent them out and the house would pay for the car. They said emphatically, "Bryce it just doesn't work like that!"

But it actually IT DOES...

Cole and Bryce actually both bought houses that did just that.

This is how it works...

They bought a house then for $245,000 and put down $12,500 as downpayment. Then they rented it out for $1200 up and $800 down and that's not even including the garage! Their rental income less payment, (including principal, interest, taxes, insurance) worked out that they would have cash flow of $363 a month. There is the car payment!
Over the seven years since then, they have paid down their mortgage from $232,500 to $155,200. Therefore they had $363 a month cash flow each and every month for seven years. They would have had some improvements here or there but they have also paid down an average of $1100 a month over those seven years.

So instead of buying a car for $10,000-$15,000 that would have been worth nothing 7 years later, they bought a house that appreciated $80,000 and they have paid off $77,300 PLUS have cash flow of $30,492 over the seven years.

Summary:
If those that inherit money had bought a car for $10,000 and just let it depreciate, in seven years they would have zero to show for it and probably be needing another new car.

BUT If they bought the house and invested $12,500, they would've had a total gain of $187,792.
What would you rather have... $0 or $187,792?

This just goes to show that you don't need to start with a lot of money to create wealth very quickly.
The younger you start, the better and you're not getting any younger so lets get you started!

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Penny/Bryce Kander

Realty Executives Alberta Elite

403-896-7331

If you can buy a house for $10,000 down just do it!

MY MAMA ALWAYS SAID...

"If you can buy a house for $10,000 down payment or lower, buy it."

I am going to cover 3 points in this Blog...

Point 1: A rent to own means you skip the bank.

The way you buy a house with $10,000 is commonly known as a Rent to Own. There are 101 ways to do a rent to own but I'm going to be explaining the one Penny Kander taught me.

Basically, a rent to own means you skip the bank & the Seller plays banker for you. If you went to get a loan from a bank they typically require 5% down whereas a Seller may only need $5,000- $10,000 down to act as your banker. 

#Example

On a $300,000 house you'd normally need to put a $15,000 down payment (5%). 

On Rent to owns you give the $5,000- $10,000 as your down payment and the seller agrees to give you "ownership" of the house for 2-3 years and instead of making mortgage payments to the bank you make monthly payments to the owner. Now, this means over those 2-3 years you get the benefits of home ownership. 

•You get the principal pay down credited to you. 

On a $300,000 house you are paying off almost $800 a month on that mortgage which totals  $14,200 over 2 years which will be credited to you towards your down payment. 

•At the end of 2-3 years you have to get your own mortgage and pay out the Seller but you will have put $5,000-$10,000 towards your down payment initially plus the $14,200 that you have paid down the mortgage. You only need 5% down so you'll have your down payment at the end of the rent to own. 

•At the end of 2 years when you go to the bank, you will have a record for 2 years to show the bank you have been consistently making the payments. Also, you can show them your rent credits and show them how much you have into the property and they will give you a mortgage. 

Second Point: What happens if you don't think you'll be able to get a mortgage at the end of the contract? 

If you aren't going to be able to close at the end of 2-3 years the first thing to do is ask the seller for an extension on your contract. Do this a few months in advance of its end date. IF the Seller doesn't want to extend the contract you typically forfeit your down payment and rent credits. 

BUT KEEP IN MIND...

During the rent to own contract you have the rights of ownership of that property and at any point you can sell it, take your profits, and move on. Towards the end of your contract you will have almost $25,000 worth of equity. 

Also in the  2-3 years, maybe the value has gone up and you can sell it for more. 

You get the appreciation if the house goes up in value! 

Third Point:

If you bought a $200,000 townhouse on a rent to own and you put $5,000 down for the Seller to carry the mortgage for you at the end you will have paid down the mortgage over 2 years by $11,000. That amount is credited to you! The Return On Investment is 220% on your $5,000. That's a 110% per year Return On Investment! 

You'll have a $16,000 down payment in 2 years. 

Bonus tip! You can do a rent to own on a suited property and rent it out and make cash flow! 

If you've read my last blogs... you'll see why this is amazing. 

TLDR (too long didn't read) 

Rent to owns mean you now are a home "owner" for an initial investment of only $5,000 down! At the end of 2 years you now have $16,000 equity or you own a house. Rent to owns are great if you need time to qualify for a mortgage but want to start being a home owner and making money right away! 

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Bryce Kander

Realty Executives Red Deer

403-896-7331

https://www.facebook.com/teamkander/