REITs and Inspirational Tax Policies

Everything is on the Table in Tax Time Review…

 REITs are an attractive way to look at real estate and to derive your cash flow from real estate – a big driver for the vast majority of investors with REITs is the tax strategy or rather the exemption they currently enjoy. They give you the shareholder 90% of their profits and you pay the taxes – without this tax burden, their yields look larger relative to other publicly listed corporations who distribute after tax monies to the shareholder and then you pay taxes again although at a lower marginal rate.

A regular and timely review of the tax code, citizen’s and investor’s charter of rights and the spirit and philosophy of taxation is a good thing. Change for the sake of change or simply to appear to have blocked an exemption from income taxes could well create some very real unintended consequences which would really hurt the real estate industry and take away any incentive investors currently have to put money into REITs. This would hurt all and benefit none.

“Since they were established in 1960, REITs haven’t had to pay corporate taxes on their income as long as at least 90% of their taxable income is paid as dividends. The tax savings from this exemption, which have allowed them to pay more in dividends, has been one of their main selling points.

Industry officials and analysts say it is unlikely that REITs will lose their tax exemption because it doesn’t result in a major loss of revenue to the Treasury. They point out that REIT dividends are taxed at a higher rate than other corporate dividends, 39.6% versus 20%.

REITs paid $29 billion in dividends to shareholders in 2012, according to the National Association of Real Estate Investment Trusts. If the 195 REITs lost the tax exemption and dividends were taxed at the same lower rate as other corporations, the amount gained would largely be offset by the amount lost from the lower tax rate on dividends, industry officials say.

Industry officials also note that the first REITs were established to give individuals an easy way to invest in income-producing real estate. If they lost their tax exemption, they would likely pay lower dividends and act more like other companies. “REITs are a creation of the tax code, so it’s no surprise that all parts of the tax code would subject to a review,” said Tony Edwards, general counsel of Nareit.” (Wall Street Journal, A.D.Pruitt April 2013)

More private REITs should be encouraged in Canada, with the appropriate policies, small investors can come together uniting their dollars and skills to build better communities.

To move the economy, government should consider allowing people to create and build new more efficient structures – using new technology and greener building approaches. This is expensive and therefore there should be a different approach to the taxation in this area. More levels and more marginal rates should be considered and  added to the code to differentiate different activities. Yes it may complicate things a bit more, but using a good accountant with a degree of competence in tax and tax strategy will also help your investments and businesses.

Increase the percentages for depreciation (CCA), altering and allowing more capital gains on newer projects built say after 2013/14 would also inspire the creative juices of the small investor – business category [ say under the ten million dollar capital range].

The infrastructure spending which is required for any new project should spread the burden over a longer amortization and this should be picked up by provincial and local government (they should control it, own it and yes pay for it).

New policies should be introduced that inspire and motivate, not policies that penalize spending money for the betterment of our communities and employment of our citizens.

These policies should also inspire the upgrading of our current inventory of buildings with upgrades of electrical systems, heating systems, windows and doors, etc… in commercial buildings. This could even be funded with  borrowed  money  from local government with a modest interest rate and yes with a lien on the  property until paid off, conveniently added to your local property tax bill (because the city is so efficient in this area of taxing and billing).

These improvements to the property should not be immediately assessed and taxed via MPAC, there should be an exemption say for a period of five years.

These upgrades should target Canadian made products so that our manufacturing sector gets a helping hand along the way again a part of the exemption from the improvement tax.

There are many things we could do better and work from a vantage point of motivating, inspiring and incentivizing our small business sector and investors to succeed and hire just one more person to learn the craft of the businesses in the community – keeping it local.

Focusing on the positive, helps all succeed.

Envoy Capitol Realty Inc., Brokerage would like to help you get inspired with real estate, developments , investing and managing it all. We can help you start and build your own real estate portfolio and set up your  management systems. Contact us for an initial meeting to review and discuss your real estate goals.

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Toronto , Ontario  Canada

Scandalous and Tragic

Scandalous and Outrageous               

It’s really tragic when someone or a group of individuals plays with the good faith in people’s hearts and minds and takes away their life savings leaving an emptiness and mistrust of everything and everyone.

There was an article this weekend in the Financial Post entitled “Cleaned Out” where

gentlemen after retiring from his business built up over a lifetime took the proceeds of

nearly two million dollars and invested it in a real estate and tax syndicate called

“First Leaside Group of Companies”. Lawsuit(s) have been filed against the founder David Phillips and his wife, along with allegations against David Phillips and John Wilson (former senior salesman) accused of misleading, misrepresentation of risk and putting their own interests ahead of those of clients and allegations of securities fraud.

 

Mr. Tim Morris (64 at the time) was not the only one who lost money.

More than 1,000 other investors were also there for the ride into a deep dark pit of losses.

 

“Regulators [OSC] were concerned about how funds were being used at the firm, which by then had $370 million in assets under management, and First Leaside agreed to stop trading units in all its funds and limited partnerships while it attempted to satisfy regulatory concerns.” (wrote Barbara Shecter)

 

Grant Thornton Ltd. the court appointed receiver dealing with the sale of the real estate and other assets and determining how to deal with all the claims and costs – suggests little will be left for the investors – somewhere in the neighborhood of approximately $25 million or about seven cents on the dollar.

 

Sad and tragic for all these investors who believed they were investing in a safe and conservative real estate projects with a Uxbridge, Ontario company and with the

added safety of ; “the firm boasted of oversight by the (Canada’s) largest capital markets and investment industry watchdogs – and added protection against financial disaster through the” Canadian Investor Protection Fund – that investors felt protected and assured.

 

The assets through the wind-down according to documents filed with the Ontario Superior Court of Justice show $125 million of value based on market sale of these assets – however there were close to $100 million of mortgages and other obligations that must be paid out first so only $25 million remains for the investor’s claims according to the article.

 

A very expensive lesson not to put all your assets into one fund with one company – we saw this same type of behavior played out with investors in the Bernie Madoff – Ponzi scheme – scandal…investors taking their hard-earned money, millions and giving it all to one company, one fund, one management, one guy.

 

Don’t misunderstand, not blaming the individual investor who has put their money and their hope into an investment after doing their due diligence. However we need to protect ourselves as investors from these events – by diversifying, by not going all in. All investments are risky – understand this and deal with it accordingly.

 

Make Envoy Capitol Realty Inc., Brokerage a part of your team in your real estate investing, we can assist in any review of your income producing properties, consult on any purchase in real estate or orchestrate your due diligence in the Greater Toronto Area.

 

Envoy Capitol Realty Inc.,Brokerage           Toronto , Canada

 

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Email :  capitalmoves@gmail.com

 

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Money For A Real Estate Project Needed

Equity for A Real Estate Project Needed!

Where do you find money for your real estate investment(s)?

 

“Well how much do you need?”

 

As much as we can get for our project, the more equity the less the risk because

we will have a lower leverage ratio. It would reduce our obligations to the bank and

leave more for our partners/shareholders to enjoy.

“Is there a property or a plan to work this equity in the real estate acquisition?”

“How much will the investors stand to make – profit, in this venture?”

“When will the investors be repaid their money; over the next 3 to 5 to 10 years?”

 

Those are lots of good questions and we intend to answer each one of them.

First, yes there is a property that we have secured conditionally and we intend to do some due diligence to see if the property is within the scope of our investment criteria and determine if there is any upside to the investment beyond a simple hold for rental income and therefore some hope of making money for our investors. There has to be a hope of making money this profit thing is what motivates our investors and partners to come into the opportunity in the first place.

There is no other kind of motivation for the small investor (with a minimum buy in of $175,000), and if we can’t find the appropriate trigger to make it exciting, the deal will die.

The plan is to make money — a profit. We need to make enough money over our initial investment

that will excite the accredited/ sophisticated investors to come in with their minimum investment of $175,000 and up. Our target are income producing commercial properties; industrial, retail or office.

We are limited in that only a few investors are allowed into any one group, we are investing in Greater Toronto Area real estate and we are hoping that the project becomes accretive in short order.

So that we can pay out quarterly or monthly distributions to all. Each project will be limited to a maximum of fifteen investors, with approximately $2.5 million dollars of equity towards any acquisition. So we are keeping it to small groups, small enough so that everyone could know each other. Small enough so that the invest remains simple and straightforward, understandable by the average investor and they can see all the moving parts of the investment.

The investments will range from $5 million to $7.5 million with the balance of needed funds to be financed with conventional mortgages with the most competitive rates.

As for the timeframe, we are considering using a timeline of five years from point of entry to exit, or alternatively a timeline of 2 to 3 years for any development projects undertaken. This means a smaller project relative to the mega projects all around the GTA which could take 5 plus years.

If anyone of the original investors wishes to remain or buy out the balance of the investors they get first right of refusal based upon either an appraised valued of the project or bettering the best market price obtained – whichever is fair to all concerned. And if you wish to exit before the five-year time line of the investment – then anyone in the group or collectively the group can decide to buy you out.

That’s the plan.

Answer all your questions?

“Just one more question needs to be addressed …”

“How much will the investors stand to make – profit, in this venture?”

This is a harder question to answer definitively, however we could explore a variety of options

based on the acquisition criteria and establish a range of possibilities from a low to a high.

So you can’t tell me a precise number?

“We can tell you any number, however you do realize we will not be as precise as a GIC and in any event there is no guarantee. So if we said 8% return on investment and it works out to be 7.5%or 9% – we are not guaranteeing 8%.”

 

“Whatever number is said, you should ask ; How was it arrived at and ask them the assumptions made to calculate the results? Show me!”

I guess that is why all these investment advisors and wealth management companies out there keep on telling everyone ; “ Past performance is No guarantee of Future Results!!!”

You can read all the annual reports and financial pro forma / forecasts — read them but understand they are simply a best educated guess of what they (both the financial marketing guys think you will be motivated by – to Buy!)…. Caution always. And yes go seek professional advise and they may tell you the exact same thing as was said, seek it anyway.

Have responsible and good management in place, or arrange for it.

And keep it simple, because real estate should not be a complicated business.

Make sure everyone in your group is in a healthy financial situation, otherwise there will be stress!

“So do you want to invest?”      

 

We would love to help you assess, strategize and analyze any of your real estate investment

opportunities in the GTA and give you and your company a third-party perspective.

 

Envoy Capitol Realty Inc.,Brokerage

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Word on the Street in Toronto…

Word on the Street … What Realtors are thinking and what some are saying.

 It Can’t Happen Here, Ever — Right?

 

A lot of small investors and some who have become bigger players in real estate will tell you – to put your money into real estate. It’s your best investment period.

You don’t even need to worry about it, just buy and hold and keep for a long time.

And after many years – miracles happen, the value goes up and Wow you’re rich.

Don’t think about it too much, don’t read the papers or listen to the news it will only confuse and confound you – and you will be paralyzed to do anything.

 

Action equals results, so think only about the ability to carry the property, that is cover your costs of ownership of the asset. And oh yes – don’t forget to borrow as much as they (the banks) will lend you – take ever last dime they give you and put it all into your real estate investment. This will insure you are on the fast track to wealth, quick or quicker riches while we are young.

 

So leverage to the max young man (or woman) and invest. This is the biggest secret to getting rich – using the magic of opium ; rather OPM (other people’s money – and make it all on the spread between your cost of capital and what you can earn from the opportunity. The greater the spread the richer you will be…

The Wall Street Journal reported recently that the U.S. and Canadian border services are stopping a lot of Chinese carrying undeclared cash into the country…(would you rather have the government print the money? – just a side question) this can’t help the economy because it can’t be spent buying things here right?  True there maybe legal and ethical considerations that are being addressed here. But that money will simply go elsewhere.

 

Money they say flows towards the least point of resistance. Why are we putting up a resistance? Some other country or region of the world will get it or like the supply of drugs into North America it will enter using increasingly creative methods.

The word on the street in Toronto real estate is that since the introduction of the federal anti-money laundering legislation (FINTRAC) a lot of Eastern European, Russian and South American money that use to flow here and into real estate has stopped. “And these people use to buy and buy a lot of real estate here” say a few central Toronto realtors.

 

We lost the Americans a few years ago when our Canadian dollar started to soar because of our great supply of petroleum and our productive economy. The American dollar would be able to purchase about $1.45 Canada and as of today

the American dollar would get less than $0.99 (below par) (less exchange rate fees). This is huge. So the American investor is less likely to bring dollars here and buy real estate.

 

A similar but more dramatic currency problem is the currency crisis of Iran – their monetary crisis and horrific devaluation has negatively impacted both the buying and building active of a lot of investors in Toronto real estate. As it has temporarily taken out another player in the market – who use to fund their purchases and projects with their resources and assets in Iran.

 

These are just some highlights of the various purchasing, investing and developing group that have been helping fuel the growth and robustness of the Toronto real estate market place.

 

There isn’t any hard data regarding the volume and dollar value these investors have been bring into Toronto,Canada some real estate professionals have suggested they represent approximately a third of the market place however a significant catalyst for the market place flooding it with liquidity, driving prices and the competition up for the rest of us. We may have escape the last potential recession because of it – thankfully.

So it could hurt and hurt a lot when the currency flow is no longer there.

 

The Federal guidelines with respect to borrowing money for real estate have also tightened over the last 18 months with shorter amortization periods (25 years), more equity requirements (20% min) which will drive up the monthly cost of carrying a residential purchase. With GDS and TDS ratios of 39% and 44% respectively will be applied to application for mortgages along with a ban on mortgage insurance for properties over one million dollars. You are going to need a mortgage adviser to help you understand what money may be available for a loan to you and your family for your real estate purchase. And don’t assume you will get the needed money – make your offer conditional upon appropriate and satisfactory financing or you could get into trouble.

Hard times ahead for first time  buyers and move up buyers of Toronto real estate ahead.

Hick up ? Or the new normal? We will have to wait and see…

 

These moves say real estate practitioners affects mostly first time purchasers who would enter the pipeline and push everyone else forward and up, through it to the top. It just slows things down. All this being done without increasing interest rates at this time – because the economy could not handle that – a soft landing for housing being engineered by the Federal government? Trying to keep real estate affordable in the country for everyone?

 

Others from the local economy will have to step up and step in, into the void and a possible re-evaluation may take place of the real estate assets that come to market, get appraised or refinanced. However things are projected to remain steady in the short-term say the Banks’ economic forecast for the Canadian real estate market. Do you get the feeling there is less money and investors/buyers on the streets these days? Is that why some developers and developments have slowed down or put some of their projects on hold?

 

Those that are here and deep into projects/investments with no turning back may soon run short of funds and may get desperate for liquidity and so may have to get creative…watch out – say business people and financiers – interesting things could happen.

 

Toronto is still shining like a diamond with the steady inflow of immigration and job creation – Canada reported 40,000 new jobs last month. And these people need a place to live and work. They also bring money and ideas with them to help the economy’s momentum forward. Supply and demand seem to be holding steady at this time with no great inventory. Things are working well at this time in Toronto and things appear healthy. With the right measure of concern and care the government appears to be trying to keep a steady hand on the overall economic health of the country. However the worry by some is whether the best efforts will breed unintended consequences –which may be painful in the short-term as we try to achieve a good and healthy re-set for the longer term.

There are reasons why some believe housing wouldn’t crash in 2013 I hope they are right…

Steady as she goes…

We would love to talk to you about your real estate investment(s). We can also assist with asset/property management of your property in the Greater Toronto Area. Let’s connect over a coffee to discuss needs and strategies – call us when its most convenient and we will make ourselves available for you.

Envoy Capitol Realty Inc., Brokerage      Toronto , Canada

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Money Laundering and Terrorist Financing Rules

Money Laundering and Terrorist Financing

Caution you have a duty to help protect the nation from the criminal acts

of Money Laundering and Terrorist Financing and as a licensed real estate

practitioner in the province of Ontario in Canada, we must go through a number

of steps and verification and documentation.

We do not want criminals buying here in Canada, and especially with

their Large Cash deposits (all cash offers)

realtors must report them to the authorities when and if discovered.

There are two points above, point one deals with FINTRAC and the second deals

with Large Cash Transactions.

Both must be reported through your brokerages compliance officer who will

prepare the appropriate paperwork and forward to the Federal government

authorities.

Realtors are trained and understand the guidelines to follow to conclude a

successful transaction which are subject to routine government audits to

determine compliance. There is a lot of paper work in real estate today and

your clients need to understand this and make sure everything is completed

accurately. Photocopies of identifications presented should be placed in your file

for the deal, all this needs to be done at the initial meeting(s) with the client(s)

and certainly prior to any offer being presented.

Every real estate transaction ( subject to a few exceptions) requires a “Receipt of

Funds” to be completed Form 635 OREA.

If a large cash transaction (over $10,000) is involved and an appropriate record

is prepared … ( this is one of the exceptions of receipt of funds) … However

a Large Cash Transaction Report is required when funds received exceed

$10,000. More details are available and the report on the FINTRAC website.

Large cash transactions must be reported within 15 days of the cash being

offered by the client or potential client.

The better brokerage policy would be to accept No Cash – which is a problem on many levels, from security and heightened responsibility – keep a good paper trail as required and complete a Receipt of Funds report.

Back to the initial discussion of money laundering  and terrorist financing, so every real estate brokerage must have a compliance officer.

The brokerage must provide on going training, have policies and make them routinely known to their sales force.

Suspicious Transactions, Large Cash Transactions (as above) must be reported.

Terrorist Property ; “Every real estate brokerage must report property in their possession or control that is owned or controlled by ( or on behalf of ) a terrorist organization. A list of known terrorist groups and individuals is available on the FINTRAC website.” (OREA course 3 general real estate, p.284)

Verification ;  “ Every brokerage must verify that the names of their clients are NOT on the Canadian or United Nations list of known terrorists or terrorist organizations.” ( OREA course 3 general real estate, p.284)

“The new requirements concerning identification verification and receipt of funds were effective June 23, 2008.”

You could check the Department of Justice website :

 http:// laws-lois.justice.gc.ca/eng/regulations/SOR-2001-360/page-6.html#h-12 ,

“Regulations Implementing United Nations Resolutions on the Suppression of Terrorism” SOR/2001-360 as pf October 17,2012…

Thank God there are many realtors out there keeping the Watch against terrorist real estate and financial activities. O Canada, We stand on guard for thy.

In the event real estate brokerages fall short of the requirements of FINTRAC there could be thousands of dollars of fines and penalties levied.

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Investing Your Money In Real Estate to Make Money

Earlier today I had a meeting with an older gentlemen

investor who I usually have a telephone conversation with, however today was a coffee meeting.

“Anything new out there that’s interesting.

Anything worth investing in, he asked?”

“Well nothing screaming Buy Me,” I said.

“However I was driving down a street in the east end yesterday which seems under-appreciated

and some properties appeared to be available. They were in an industrial area with a real mixed

bag of uses and the buildings were of all sizes, shapes and vintages. But the location was

good and I saw potential.”

“What are the sizes of the buildings and the lands/lots they are situated upon?

What are they asking for them?” he asked

Let me quickly check my computer and see I replied.

This property is situated upon about an acre and has a building of approximately 20,500 square feet.

The building is about 40 to 50 years old and has a sixteen feet clear floor to ceiling (joists).

“What are they asking?”

“They want about $2 million, about $100 per square foot” – I said.

“Will they take  $1,250,000, he offers within seconds. It’s worth that to me and no more.”

The comparable sales are averaging approximately $85 per square foot, which would

give it a rough value (subject to a lot of things which we would discover only after a good

due diligence and an honest discussion with the current owner of the property via the

listing brokerage I commented. That would give it a value in the range of say ; $1,742,500.

“That’s too much, I would not be interested in it at that number.”

Well let me see, the building is 20,500 sf at a market rent of say $5 net psf that would give an

income of $102,500 at a 100% occupancy with say a 5% adjustment for vacancy and credit losses.

We arrive at $97,375 net to the landlord.

Playing a quick what if game of a range of cap rates, say from 8% to 4%;

the value range estimates based on a direct capitalization would be as follows;

Net income / cap rate = Value (estimate)

$97,375 / 8% = $ 1,217,188

$97,375 / 7% = $ 1,391,071

$97,375 / 6% = $ 1,622,917

$97,375 / 5% = $ 1,947,500

$97,375 / 4% = $ 2,434,375

This is a simple direct capitalization based upon one year’s potential revenues which

results in a value range estimate for this property.

The investor needs to worry about his cost of capital and factoring in the closing costs

(legal fees, land transfer taxes, reports, appraisals, survey, lender’s fees, etc).

The investor also needs to factor in RISK, as a safety margin over his cost of capital.

Is it really worthwhile doing this exercise of purchasing for the anticipated future profits — cash flows.

Is there enough here to motivate him or  keep him motivated?

The investor has to worry about how long it will take him to lease the property out and the challenges

of working with a tenant over the term of the lease.

For my real estate investor today, this was not an opportunity that was priced right for the level of risk

and the return expectations. It’s always a good exercise to know your investor(s), know their

investment criteria before you start going to far down the road and invest volumes of time and

energy with little results but experience.

What are your thoughts?

Share with us your comments and experiences we would love to know and grow with you.

Envoy Capitol Realty Inc.,Brokerage    Toronto  / Canada

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Improve Cash Flow

This is the ongoing challenge of all businesses and professionals, the object of the game is to improve performance

increase efficiencies so that we can improve the bottom line – cash flow.

The ongoing dialogue in business circles deals with these discussions and exploration of ideas, concepts

paradigms to consider and test to achieve our magnificent results we seek.

As the forever improving performance of our technologies that either pulls or pushes us to greater heights, some may ask Why?.

Why?

Why ,Is not the question we shall explore today – although it may well be a good question to ask from

a Life – Work balance and the purpose of it all. Again great philosophical questions, but our focus today is CASH FLOW.

Today we shall explore the areas where we may consider improving to enhance our cash flow.

Which can be brought about in a number of interesting and some obvious ways such as the overall

increase in income or the reduction of expenses/costs. Cutting out waste when you find it seems good.

Asking why we spend what we spend and what we pay for what we buy should always be questioned.

The  two main categories where most of the ideas fall into either increase Income or Reduce Costs catch most of the discussion;

Income/revenue or Costs/expenses or Creating New Profit Centers or Change how we do things.

Every change with small or incremental improvements in either area could have an

impact, which may translate  into a larger bottom line; cash flow improvement.

The old expression ” It’s not what you make that counts, it’s what you keep.”

Very true. Further one should consider the tax considerations and consequences of their business decision(s)

as this action will affect your cash flow after tax situation.

Time is money and collecting your accounts receivable faster or in a timely manner is always a good first start.

Regularly reviewing your performance and checking your marketing plan and associated costs, for refinement should also

be one of the first steps to undertake.

If something is not working,refine it, change it , fix it or Sell it – ASAP.

Don’t let your corporation bleed (remember you are not  the government…)

Review your expenses with a critical eye – ask yourself do we really need it  to succeed in business today?

Reducing costs/expenses could be a case of buying right – terms and conditions of purchase and

possibly renegotiating everything every year. Yes it is a bit of work to get this done.

Ask if your supplies and trades can do better? “Where’s my loyalty discount?”

Talk to the supplier’s competition and get quotes to confirm you indeed have the best of terms/conditions and pricing.

This should help keep everyone sharp and provide you with their best at their best price.

Competition is supposed to bring out the best in each of us.

Collecting more income by better marketing of vacant units or extra capacity, collecting rents in a more timely manner.

Increasing your prices closer to market place rents or adjusting it to retain tenants and customers.

You could discover other sources of income/ profit centres from you current business/property with collaborative

marketing, advertising – signage, roof top antenna leases, roof top solar panels leases for energy income from the grid,

leasing out your extra parking for short-term users…etc.

Idea exploration;

Why not hire a couple of first year marketing students to brian storm with your company marketing ideas/concepts?

They will bring with them, their cohorts/demographic’s perspectives on value, service and needs from your

products and service delivery. Reach out into the community you are in or serve and get feedback on their needs and

wants vis-a vis your company. Get expert advice on your side – to protect your interests along the way.

On the management side, review your operation and consider now new(er) technology and software may help you

become more efficient, reduce errors/lost files, best practices and therefore improve cash flow through major time-saving.

A suggestion is to send out digital invoices to clients and customers, and thereby reducing postage and envelopes and paper.

And requesting electronic or Visa payments (for spend of cash into your Bank; although at a cost unfortunately).

Just make sure your clients are catching and expect your email invoices – so it does not go into the Spam folder and forgotten.

Which then wastes time and money to follow-up along with frustration and a lesser result then expected.

When a problem is discovered, fix it quickly.

Pay your taxes and utility bills on time so that you do not incur  penalties and interest charges.

Keep Cash flow top of mind and think how can I do this better always…and the cash should follow.

Think Smart and Act Smart.

Good luck with it.

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Stop Wasting My Time!

Please Don’t waste my time, or I will hate you and your company!

Promoters of any kind need to worry about how and what they are doing today more than ever

when they decide to put on an event, call it a FREE event where people/prospects sign up and

put aside their valuable time to come out to your Event.

You must give them Value for their Time or you could lose a customer for life and

they will tell their friends and maybe even write a Blog about it to spread the word.

If you are going to put on a free introductory seminar to promote your real mission

(your Agenda, prospecting for new clients) – to sell your

future seminar(s), books/CDs , coaching/mentoring/consulting/training activity  then you must

do certain things correctly and very well.

Otherwise you will be creating a bigger problem for yourself and your organization.

In this high-tech,fast paced, rich content universe we live in – we expect more,

much more from people and professionals.

People that wish to do business with us, must educate and entertain profoundly.

The world is smarter now. Don’t waste my time with a weak or out dated presentation

which you have been delivering since 2008 and have not changed a story or a word.

Learn new material, try new things – stretch the envelope because the old world of marketing

the slap stick gimmick style of sales or the simple elementary education approach is gone.

The audience today will get up and leave because you have bored them, you have disrespected their intelligence

and worst of all you have wasted their valuable personal time. 

They came out to your presentation tonight, leaving other activities that give them pleasure and they sacrificed

themselves to spend time with you – honour them, respect them, give them a valuable gift of awesome entertainment,

profound information, a gift – something of value (your book, a CD,a free one hour session). Give them rich content.

They spent money and risked travelling to your seminar – you must do better.

The audience has a higher expectation today, don’t deliver content to the lowest common denominator.

Be Awesome!!! Blow them away, it must be a wow!

Time is Money!

Don’t insult them and their clients and future clients by robbing their valuable preparation

time to give them a 3 hour presentation with 45 minutes(or less) of content they can get on the internet

and do a comparison of you and your competitors as well as pricing of the services.

This is not earning their Trust. This is not delivering when it matters most.

Don’t waste people’s time, it’s their most precious commodity they have today.

Because if you waste my time if you throw it away, I will hate you and your organization forever.

We, you and I can not afford to be hated by our future potential clients – because then they will

never be – a client of  ours and they will tell their friends and anyone willing to listen – how bad you

and your company are and you are a waste of Time.

Whatever you do, make sure it is purposeful and of value.

Continuously improve your presentation with current technologies,new information and innovative concepts.

The audience is getting smarter and they do expect much more than before, your seminar must be fresh and honest.

Let’s deliver it in the best possible way.

Gage your audience’s appreciation and request comments, feedback and criticism for improvement.

Speak and test your material with a good cross-section of the people in your city – to determine

that the material is relevant and considered valuable.

Give your audience a gift upon arriving – a book , CD, a good pen and a nice pad with your logo on it,

that they will  take home and keep around for a while.

Win their hearts first and then their minds.

What are your thoughts about the seminars you have attended lately?

Have they been awesome, did they rock your world, did they compel you to action?

Share your thoughts, tell us what you would like to see at a future presentation or receive as a gift ?

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Are You In Compliance?

How do you know whether the property you are looking at purchasing and investing your

hard-earned money is in compliance with all the rules?

What work or rather due diligence should be considered as a minimum short of purchase title insurance

and obtaining an up to date survey of the property and doing a full title search by your lawyer?

Getting a Building compliance report, along with checking the zoning bylaw dealing with the

permitted uses of the property and checking the Official Plan designation for the property.

Mr. S.Ronald Haber of the law firm Daoust Vukovich LLP writes…

“In the ordinary course, solicitors submit

inquiries to the local municipality requesting confirmation of compliance with zoning.

For the most part, municipalities, including the City of Toronto, will not

review a survey submitted in connection with such an inquiry. The

response is likely to merely indicate the zoning designation of the

property. Therefore, it will be up to the purchaser’s solicitor to review

the zoning. In the absence of an up-to-date survey, compliance of any

building on the property with coverage and setback requirements

cannot be verified. Further, given the increasing complexity of zoning

in Toronto some solicitors may be reluctant to provide zoning advice.

In addition, while Teraview has allowed solicitors to search titles and

close transactions throughout Ontario, they may not be familiar with

the zoning issues they encounter in all such jurisdictions. Therefore,

depending on the nature of the property, it may be prudent to engage a

land use planner to conduct a zoning review and report on matters

such as density, parking and use conformity. An alternative may be

title insurance for non-compliance with zoning by-laws affecting

existing uses. However, title insurance does not cover future proposed

uses.” 

You or your consultant/lawyer will have to “confirm compliance with registered

municipal agreements – subdivision agreements, development agreements,

restrictive covenants…confirm compliance with registered third party agreements –

reciprocal agreements, cost-sharing agreements.”

And don’t over look the need to check and verify information

regarding “Airport Zoning Regulations”

For example, ” because of its proximity to the Toronto Pearson Airport,

much of Brampton is subject to regulation by the Greater Toronto

Airports Authority (“GTAA”). Therefore, should development of a site

within the regulated area be considered, detailed plans must be

forwarded to GTAA for review. Similarly, it may be necessary to

engage a land use planner to determine whether an existing building

complies with the regulations.”

And with respect to beautifully maintained older properties beware and check

Properties listed/designated for Heritage Preservation and or designated Historical.

Buying real estate may be smart but make sure the proper due diligence is thoroughly done

with the appropriate professionals on your team so that in the end it will be a smart investment.

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Empire Rises Again, New York City

Nightline of the Empire State courtesy of Getty Images …

What’s good for the Empire State Building is good for New York and could be a good sign of things to come to the City’s properties.

The Income of  the Empire State Building is” poised to double within four years and more than triple by 2026,

according to a new securities filing related to the proposed public sale of the building”

wrote Craig Karmin in the Wall Street Journal.

The  increase in  income comes during a $550 million upgrade to the building.

The Malkins, the New York real estate family that manages “the skyscraper and is

spearheading the initial public offering, has been combining the more than 850 office spaces

in the building in an effort to attract larger and higher-paying tenants.”

New Tenants like Skanska ( a Swedish construction company) and Air China who are enjoying

the upgrading of the 1930’s property into a more energy-efficient building helping mitigate the

acceptance of the rising rents.

The  net operating income is” projected to rise to $160.6 million in June 2015, up from $76.8 million

in June 2012, according to Securities and Exchange documents filed on Monday. Income is seen rising

to $248.5 million by 2026, and balloons to $422 million by 2041.”

If all works out as planned and contracted then the valuation will goose step in

an upward direction over this period.

The rental income of the property has been disappointingly flat for the past several years although

it is said that the observation deck was profitable.

“This long-anticipated rise in the building’s income has caused some of the 2,800 current investors in

the Empire State building to wonder if they would be better off from an IPO or by voting against it.

The proposed plan requires 80% of the shares to approve it.”

The projections are based on a discounted cash-flow analysis conducted by Duff & Phelps,

which has issued its opinion that these valuations are fair to investors, according to the securities filings.

The new public company, which will be known as Empire State Realty Trust, would roll up the iconic

building with 17 other Malkin properties. These buildings are also projected to see rising rents over this period of time.

The Empire State Building has been valued at $2.52 billion of the new company’s $4 billion valuation,

according to securities filings.

Why you may ask is the Iconic property coming to the market now?

Well according to Craig Karmin’s article it seems the catalyst to move now is “Leona Helmsley’s estate which

has a stake valued at $1 billion, needs to cash out its position in the building’s operating company.”

There are a number of good learning points in the above article…from the idea of an organized exit plan

for a syndicated joint venture arrangement and the requirement of the consent required from the shareholders.

The requirements of professional valuation estimates, the organized filings – what

was omitted was the associated costs estimates

with this organization cashing out and potentially inflow cash from investors.

Also the number of hours spent by lawyers to put it all together and orchestrated it in proper legal fashion.

The tax consequences of the above arrangement will require good tax advise from skilled tax lawyers and accountants.

It is interesting to stand back a bit and see all the moving parts in the

above organization, sale of the asset – as a new package individual purchasers should have all

the material reviewed so that their capital is

protected and they understand what they are purchasing.

New York is an amazing City and you will be more amazed when you visit the City – a mecca of commercial real estate.

Fifth Avenue retail properties with its absolutely fabulous rental rates and the volume of traffic gives stability to the prized valuations.

New York has many jewels and great properties in its variety of real estate categories.

The Empire State building remains one of  the significant icons of the City and with its

continuing upgrade will remain a good to great building representing the spirit and strength of the City…

What are your thoughts about the continuing strength of New York City?

Leave a comment below…

 

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Envoy Capitol Realty Inc., Brokerage           Toronto   / Canada