Changes in 38 years of real estate.

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!

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!

Walking on the beach is definitely more exciting than shovelling snow! Easier on the back as well.
I don't know if you've ever heard of wholesaling deals so let me explain.

Let's say that you were checking out the market and you ran across this house that was a fantastic price and you were able to make an offer (subject to financing and due diligence).
Then, you turned around and found someone else that would buy that property from you without you actually "buying" it. This is called assigning a contract.

For example: If you found a house that's worth 400,000 but you were able to secure it under contract for 380,000...
You could turn around and sell that contract to somebody else for 390,000. They're still getting it for 10,000 less than it's worth but they would give you $10,000 for finding that house for them.
This is the way you could have an extra $10,000 and go to Hawaii and you would not have to shovel snow. Just a thought…

Red Deer’s real estate tax lien auction

A lot of you have heard about tax lien sales and probably think that this is just something that happens in the United States but on April 11, 2018 Red Deer will be having a tax lien auction. The tax lien auctions here are a bit different from the ones in the United States. In the USA, you can literally buy the house for the outstanding tax balance. In Red Deer, the minimum bid posted has been established by an appraiser. We have attached a link to the City website so that you can view the different properties that are for sale. There is a wide range of properties; everything from mobile homes & 4-Plexes to commercial land. We have also included a link to previous listing information on the properties that we could find on MLS. It will give you a reference point as to whether you think these are great deals or not. There’s also a link as to how you go about purchasing a house at auction and what you need to know before you go and attempt to do that. We hope you find this interesting maybe one of you will get a great deal.

Here is a list of the houses that will be for sale on April 11th at the court house.
http://bit.ly/taxlienreddeer (some of the properties for sale have never been on MLS so I was unable to find a listing for them) There is a 4 plex for sale! 

Here is a list of houses on the Red Deer website.http://www.reddeer.ca/media/reddeerca/city-services/property-assessment-and-taxes/Public-Auction-Listing.pdf

Here is how to purchase a tax lien property.http://www.reddeer.ca/city-services/property-assessment-and-taxes/your-property-tax/property-tax-sale/

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$10k down? Just buy it!

One of the things I've always said to my kids is "if you can find a house for $10,000 down, just buy it".
I had a client wishing to sell and that was all the equity he had in the house so I told Bryce and Cole that they should buy the house and take over the mortgage.
It was a rent to own which I can explain to you if you're interested but basically they put down $10,000, assumed the sellers payments, rented it out, and made cash flow.

The funny part of this was that neither of the boys actually saw the house. They both just took my word for it and they got a great house with great terms at a great price!

Now, you should probably find a house that actually breaks even. That's the best way to do it but I would probably still buy a house with $10,000 down even if I had to subsidize it a bit because every month on that mortgage you're probably paying down $600 a month off in principle.
All you need is a $10,000 line of credit even if you don't have the cash.
Keep your eyes open for an opportunity and be prepared to shop!

#investing
#thinkingoutsidethebox

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Penny/Bryce Kander

Realty Executives Alberta Elite

403-896-7331

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"It's too late to buy a house. I've missed my opportunity."

I hear this a lot from people but is it really true???
Years ago, I bought a piece of lakefront property at Sylvan lake for $169,000. I believe I borrowed the money at 14.5 %. That seems like an outrageous interest rate but at that time it was cheap because interest rates were as high as 22%!!

Now, that same property can be purchased for around
$1 million but you can borrow $1 million at 2.3%. It does cost more per month but it's not five times more because the interest rates are so cheap right now.
So...don't ever think that you've missed the boat. It's never too late.
There's always another boat. Grab an oar and let's get going!
#GeneralRealEstate
#StartToday
#NeverTooLate

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Penny/Bryce Kander

Realty Executives Alberta Elite

403-896-7331

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Buy, Flip, with only a little $!

The other day, after one of my Real Estate coaching sessions with a young investor, I was thinking ...

I could probably make more money buying properties, if I had the owner carry the financing while I fix them up and flip them, than I could selling houses.
All you need is a little bit of cash and some chutzpa.

It gives sellers who are in a tough position the opportunity to sell their properties. All they have to do is carry the financing for a short amount of time so you can fix them up and flip them and sell them and make a profit. It's a win-win!
No full-time job needed!!

This makes it sound simple but it will only work if you have an agent who knows how to present the opportunity properly to the seller and also help you find a house that will actually work.
Send us a message or give us a call and we would love to help you get started.
#thatsus
#realestateinvesting


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Penny/Bryce Kander

Realty Executives Alberta Elite

403-896-7331

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