Action is Best

Just completed another audio book; The Lean Startup by Eric Ries.

There are many lessons in this book that would be helpful to realtors

and especially those just starting out or refreshing their careers.

“Reading is Good. Action is Better.” concludes Eric Ries.

You can explore his website at the following link;

www.theleanstartup.com

Good luck with your exploration, your reading and taking Action!

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How do I start challenge?

My spouse (who is a realtor) and I want to get in to real estate investing/ income producing properties.

Where should we start? How should we start?

What should we buy ? How should we hold the real estate?

Should we set up a corporation? A simple partnership? Or is there some sort of middle ground where we can enjoy the benefits of both. Should we worry about taxes right now or just make the money first – then worry about taxes after should money starts coming in? Who should we call and meet with first?

One of my friends told me that depends on the number of properties I intend to buy – own over time. He said putting them in my own name first would make most sense, be the cheapest way and may well be most tax efficient.

 It will initially be a low-cost, lean way of going into to owning real estate. Professionals cost money, and little start-ups are trying to use each dollar in a maximum way. We can always hire all the professionals we need later when we have the money to pay them.

Do you want the headaches of being a landlord? Are you really ready for this activity, it does take time to do this management work and tenant will want your attention to their needs – as problems/ breakdowns/repairs will be inevitable. You have to be on top of this or the hills of problems will become mountains of challenge and may follow-up with law suits. Where more and more money will be required to solve the problems/ issues.

Many small investors have started with a single property and managed it themselves and as they learned with one and felt comfortable they have it under control ; physically, financially and mentally, then they have moved into the second property.

You may want to start your exploration/ research by connecting with a commercial – investment sales realtor with experience working with small investors. Who should be able to spend 20 minutes with you and discuss the advantages and disadvantages of your plans of investing in real estate. Do a quick assessment of your equity, risk tolerance and return on investment expectations? This could nicely happen over a coffee or lunch.

Discuss management, areas/regions of interest  to you the investor and timeline to investing your money. And determining your exit plan?

How do you plan to hold the asset; personally or a corporation, limited partnership formats? A simple discussion can happen with your realtor, however you must also discuss this topic with your accountant and lawyer prior to final selection.

You want to protect your capital either through insurance or holding structure, or a combination of  both.

Including key man insurance against the mortgage risk and future management.

What ever is chosen will impact operations, costs, taxes and returns.

It will also effect getting funding for your investment.

How are you going to divide / split the income among your family’s members or shareholders? (i.e. employment income through a service company, dividend income,..)

The good news is you have many options. Yes research and discussions with the appropriate professionals should be undertaken.

Decisions must be made, analysis and the draft plan.

With flexibility built in to deal with new information flows and properties available.

Then the investment journey begins with the first step, like every journey.

It’s time for action, and so the small investor must do the next important thing.

Just Do it . Start !

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Envoy Capitol Realty Inc., brokerage         Toronto , Canada

Dream Big

Dream Big each and everyday!

Dreaming is a healthy mental exercise and the starting point to innovation.

Dreaming Big can be magical.

Sad is when Your memories out number Your Dreams.

Dream Big and prosper.

Motivational and inspirational words gives us courage to move forward and change our world.

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Industrial Portfolio Sold and Bought

Each of us are on our own journey, different goals – different strategies and in different cycles of growth as we progress along our path to achieve our planned success.

Trimming and pruning usually leads to a better looking and healthier garden. Sometimes you out grow certain investments or they are no longer a meaningful part of your portfolio. So there are good reasons at times to sell off certain assets, other than the need for money or a failing/weak property ( in an area/category that is not your organization’s strength). Many reasons why companies do the things they do may not be readily apparent. Accordingly while some are selling others are buying for reasons that work to achieve their business/investment goals.

Having a plan with a timeline as a tool you can bench mark against your progress and  will help  you refine your journey – being flexible, to adjust to new information/challenges and results. And being lean enough to be able to manoeuvre your company and investments around the challenges you may face.

“AEW Capital Management LP, a leading real estate investment advisor, has acquired the 4.2 million-square-foot, 33-property Flagler Station industrial park in Miami and Medley, FL from Flagler, Florida’s largest full-service commercial real estate firm, for approximately $340 million; a price that equates to roughly $81 per square foot. AEW took ownership with its first open-end core real estate fund, AEW Core Property Trust (US).

Flagler Station is South Florida’s largest business park, located within Miami-Dade County’s Airport West Industrial submarket. The class-A office and industrial spaceopened in a master-planned campus starting in 2001, and is leased to numerous tenants including Ryder Systems, Lagasse, FedEx and BrightStar, along with recent leases signed with Betty Dain Creations and Crowley.” (costar)

AEW has retained Flagler, a subsidiary of Fortress Investment Group, to continue to manage and lease the portfolio. Flagler will also retain ownership of close to 150 acres of undeveloped land in and around the park for future development, which could top roughly 2.4 million square feet.

“Flagler owns, manages, leases or has under development roughly 22 million square feet of office and industrial space throughout Florida. In addition, the firm owns 5,000 acres across the state, of which 1,650 acres is entitled for future development that could raise to 35 million square feet of development, with several sites marketed by Colliers International. As of December 31, 2011, AEW manages or advises owners with $33 billion in capital invested in $47 billion in property and securities around the globe.” (costar)

“AEW has a long history of investing in Southeast Florida, and this latest acquisition illustrates our belief in the strength of the Miami/Medley market, which services the Port of Miami, Miami International Airport and Port Everglades,” said Dan Bradley, senior portfolio manager for the AEW Core Property Trust. “Moreover, it is an added benefit that Flagler will stay on to manage and lease these properties and help grow the value of these assets.”

Both parties were represented in-house in this sale, which closed.

Investing for income / cash flow, investing for capital growth – appreciation, or investing to position

one’s self in an area, street for development purposes or for a future flip/leveraged opportunity.

Or simply buy and hold for a long long time. Whatever your plan and program to build your real estate empire.

What are your thoughts, share your comments?

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Envoy Capitol Realty Inc.,brokerage    Toronto, Canada

 

How much Due Diligence is Enough?

Now with the advent of Homeproof on the horizon and other competitors to follow with

selling property histories to potential buyers of properties to give them a level of comfort.

The question which may arise is ; How much due diligence is enough? 

And , Will this help reduce the liability exposure of both the seller and the realtors involved in the transaction?

AND ; Who should pay for it and when should you request it /get it?

“Ottawa-based Homeproof.com is now offering this sort of information for $99. They will prepare a home history report, which company president Alexandre Morin says is similar to the vehicle history report you get when you buy a resale car. Morin says he has access to numerous databases, including most of the major police forces across Canada and those used by insurance companies, in compiling their report.

He uses Freedom of Information requests and voluntary disclosures by police forces to generate information about former grow houses in the report. He also uses similar companies that have been compiling the vehicle history information reports for the insurance industry.

These databases will disclose claims for:

•Past sewer backup(s)
•Past floods
•Past fires
•Earthquake damage
•Hail and wind damage
•Electrical fires
•Burglary and theft
•Such things as grow ops

The information in the report can go back between 10 and 25 years depending on the location. The catch is that to satisfy any privacy issues, the homeowner must give permission for the release of the information. The report could be given to the buyer’s home inspector, to help in making sure that anything noted on the report, such as a prior sewage backup claim, is checked to make sure that the problem was properly repaired.” (Toronto Star)

Sellers could probably ask for a report from their insurer directly, at little to no cost…

What are your thoughts on this new addition? Should it be come law that all home sellers need to provide this to any new purchasers?

When do we have all the information, before we can make a decision to proceed?

In a competitive sellers market, what hope does a buyer have to demand this report from a seller?

When you as buyer typically go into the deal – all cash with no conditions to get the deal…

Share your insights and recommendations below.

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Envoy Capitol Realty Inc., brokerage       Toronto , Canada

Going After the Money

Soon we are going to have it all – it seems.

Everyone is interested in Toronto and Everyone is eventually coming here.

“It’s an amazing market, it’s an amazing city.” Alan Feldman said.

They are coming for the Money.

We currently have anywhere from 175 to 190 construction cranes filling the skyline of the GTA.

Developing the luxury condominiums that have been over 70% pre-sold and should be delivered over

the next twenty-four months.

On Monday April 16,2012 Donald Trump along with others did the official ribbon cutting to

the Trump Tower in Toronto – official opening of the Hotel and the Condos.

Toronto is a great city, it’s an amazing place said Mr. Trump.

Now the giant gambling operation MGM is said to be eyeing Toronto for a Casino and Resort complex.

They have had informal meetings with the Mayor’s office and Toronto’s Economic Development and

have hired a lobby group , Sussex Strategy, says the Globe and Mail (4/7/2012).

“We’d be prepared to invest an awful lot in the development of the concept.” MGM’s inquiries are in the early stages.

Alan Feldman (MGM’s senior vice president of public affairs), ” MGM is exploring a $2 billion to $6 billion

investment in the city, one that could go well beyond slot machines and roulette wheels to include hotels,

restaurants, spas and convention facilities.”

The office vacancy rate in the Greater Toronto Area dropped in the first quarter of 2012

from 5.5%  ( to 5.1% ) in the last quarter of 2011 according to Colliers.

Toronto’s downtown office vacancy rate dropped in the first quarter of 2012 from 4.4% (to 4.1%) in

the last quarter of 201. ( Globeinvestor, Property Report)

The average house price in Toronto is approximately $502,000 according to TREB and

having increased 11% for the same month over 2011.

However it is still said to be affordable based upon the average household income level, at the current mortgage rates.

It’s an amazing place, Toronto. With great opportunities it seems — they are all coming here.

What do you think? Leave a comment below and share your thoughts.

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Envoy Capitol Realty Inc.,brokerage    Toronto , Canada

Prices Climb Higher in GTA

With the average selling price in the Toronto Real Estate Board market place was

approximately $502,000 in February 2012 up 11% compared to the previous year.

Market conditions are tight, and if this continues may result in higher than expected price growth…

What about affordability?

Is the local real estate buyer being pushed out and locked out?

Jason Mercer TREB’s market analysis said; “While price growth remains strong,the average selling price

remains affordable from a mortgage lending perspective for a household earning the average income”

in the Greater Toronto Area (GTA).

Upwards and onwards, under these market conditions go prices…

What are your thoughts and concerns?

Are you buying now or selling?

Leave a comment below and share your thoughts, thanks in advance.

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Envoy Capitol Realty Inc.,brokerage        Toronto, Canada 

Money for Nothing?

You Get What You Pay For ?

You have heard the expression, “you only get what you pay for”.

And we as a society pay money for things that matter – right?

You will be rewarded for all your hard work, luck has nothing to do with it – right?

We don’t pay our teachers much to educate our children, and we laugh at some teachers – because

we have said, ” Those that can’t do – teach. And those that can’t teach, teach Gym.” Jack Black ( School of Rock).

Professor Mike Moffat from the Richard Ivey School of Business, University of Western Ontario was recently

quoted as saying;

” There are more NHL players making more than $6 million a year than there are Canadian managers and CEOs”

Wow, and we thought we were over compensating our CEOs in this country.

The amount of money someone makes today seems to be completely

disconnected from the degree and difficulty of  the work.

 Is it really how society values these jobs and the worth we

place on these individuals or is it the amount of Cash that is generated in that industry – where the employees get to

share or get compensated in a more dramatic and interest way. (equitable)

Basically is it the value society places on the work versus

the more equitable sharing of the revenues earned by the industry?

The Average CEO is paid close to 300 times the average worker in Canada,

is there a disconnect here as well or are the shareholders getting riped off by this

arrangement.

Have we as a society really screwed things up on the pay front? And thereby created

more unhappiness among all in society – ” why do they get so much more money for

their effort?”

Who is taking the risk?  How is this being shared? Who is working longer hours?

Or is this just how the capitalist economy works?

Are realtors fairly compensated for the effort, risk/challenges they face each day/ week in business?

What are your thoughts on this and what recommendations would you suggest if any?

Share your thoughts and comments with us by leaving a comment below…

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Envoy Capitol Realty Inc.,brokerage      Toronto, Canada

What is the Next Frontier of lead Generation?

What is the Next new thing for lead generation and client retention?

I was in two seminars this week and was surprised by the number of realtors NOT using any social media.

Over 75% were not involved in any form of social media.

Over Over 90% did not BLog or see any direct benefit/ money generation link to Blogging.

Virtually none had heard of Active Rain or what it was all about.

All this was Not happening in some back woods townships in some corner of the province of Ontario, Canada.

It was right here in Toronto, the largest City in Canada and we believe a World Class City.

Yes they all have computers and technology.

However they collectively said we are busy connecting and working with cients and we do not have extra time to play.

Their playing time is reserved for family and friends.

Is Social Media all play? Is Blogging meaningful to all?

Have you monetized your on line experiences yet?

What are your thoughts on this, what actions do you take to keep the pipeline fully and promising?

There was only one person in the two real estate sessions even contemplating You Tube.

 

The new way to put out listings and tours of properties, where people can see and hear your presentation at their convenience….

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Envoy Capitol Realty Inc., brokerage        Toronto , Canada

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You Tube … under construction — coming this summer 2012

 

Fraud is Crime, Beware!

Mortgage fraud is a criminal offence and continues to be an issue for the real estate industry. In 2010-2011, the Real Estate Council of Ontario (RECO) conducted 23 investigations related to allegations of mortgage fraud.

Mortgage fraud can affect anyone involved in a real estate transaction, whether everyone is aware of it or not. It  hurts financial institutions that lend money. Similarly, title fraud (another form of mortgage fraud) affects property owners. This type of fraud involves using stolen identifies or forged documents to transfer a registered owner’s title to another person, who then obtains a mortgage on the property.

Once the funds are advanced, that person(s) disappears.

If you suspect that something does not quite seem right, a suspicious transaction – these should be reported to RECO. With their investigative powers, RECO can pursue the allegations of fraud and report(s) the fraudulent activity to police. (REBBA 2002)

Protecting Your Clients

“Advise homebuyers /property buyers–clients to purchase title insurance through a real estate lawyer. Under the Land Titles Act, defrauded homeowners/property owners, with title insurance can recover title or be compensated.

Protecting Yourselves

Collect and verify personal information from clients.

Track the source of funds received during a transaction.

Ask for proof of identification of all buyers and sellers in a transaction (including corporate clients).

Keep documentation on all funds received for five years.

Know your client and be alert for signs of fraud.

RECO noted the following “red flags”:

Seller wants to meet somewhere other than the property he/she plans to sell.

Seller insists the property be listed at a price over any reasonable market value.

Seller just purchased the property and wants it listed again at a significantly increased value.

Seller from another area wants a property listed.

Seller finds his own buyer.

Principle of Mortgage Financing (elective articling course) also identified warning signs:

Inconsistent personal details.

Buyer who has a significant down payment but no tangible assets.

Buyer not wishing to see the property personally.

Client who can only be contacted by cell phone.

Lawyer acting for both the buyer and seller in a transaction.

Salesperson repeatedly involved with multiple representation in transactions involving a particular buyer.

Salesperson doing the majority of business with few clients and refers buyers/sellers to the same lawyer, appraiser, etc..

Listing information does not align with the facts.

Client requests that the deposit be held by a party other than the listing brokerage for no apparent reason.

Several transactions involving the same property within a short timeframe.

Listing/sale price history that doesn’t make sense based on market trends.

For More Information

For more information about mortgage and other types of real estate fraud:

RECO – http://www.reco.on.ca/spage-publications/detail-8.html

OREA – REALTOR® Edge – http://www.orea.com/Members/EDGE-Newsletters/EDGE-Newsletter-Archives/2010/February

OREA Real Estate College – Principles of Mortgage Financing –http://www.orea.com/en/OREA-Real-Estate-College/Become-a-Real-Estate-Salesperson/Articling-Segment/Principles-of-Mortgage-Financing

Government of Ontario –http://www.ontario.ca/en/information_bundle/land_registration/content/STEL02_164320.html?openNav=real_estate_fraud ”    (OREA Real Estate College , source of above info )

What are your thoughts about fraud activity and your role as a realtor?

Any ideas to help us observe this activity in a transaction would be great, send/leave  a comment below.

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