REAL ESTATE INVESTORS
This week I came across an article from the Vancouver Sun talking about investing in Real Estate and comparing it to other investments like stock markets. What got my attention was how precisely Fabio Campanella described the difference between a novice and an experienced investor.Keep reading for the article below...
Novice investors tend to follow market momentum and stretch themselves thin. They see prices increasing year over year then go out and take massive amounts of leverage to get in on the action "before it's too late."
What often happens is they buy more than they can handle, they don't do proper due diligence on their tenants, and they get caught with a dud investment that they can't support with their personal cash flow. This frequently leads to panic selling in order to raise funds to pay off large amounts of debt
consequently resulting in losses.
Smart investors take their time. They seek out properties in desirable neighborhoods, scrutinize their tenant's ability to make rent payments before they take them on, manage the property with a keen eye, but, most importantly, they do not over-extend their leverage. Smart investors realize there may be times when tenants can't make rent or that markets may temporarily turn south.
Even if the original intention for a real estate investment is a short-term flip, the smart invest-or will not purchase a property they aren't able to hold over a long period of time should price momentum not go their way in the short run.
Direct investment in real estate is not like buying a passive investment such as a mutual fund. It requires a time commitment, experience, and patience but the long-term results can be superb when done properly.
Fabio Campanella, CA, CFP, CIM, is a partner at Campanella McDonald LLP. Fabio@CampanellaMcDonald.com © Copyright (c) The Vancouver Sun
Well Said Fabio!
Tibor Bogdan
Read more:
http://www.vancouversun.com/business/Rental+property+still+good+investors/6670401/story.html#ixzz1vp1DXpCT
Abbotsford Market Watch
 What is a pre-sale? Example scenario: When the developer intends to build an apartment building and applies for financing, the bank will grant financing under certain conditions. One of them will likely be a certain percentage of pre-sales the developer will need to secure before receiving the funds.
It is common practice for a developer to approach several real estate investors and offer them an opportunity to purchase units of the non-existent building at a discounted price, and on good terms. Once the number of pre-sales is accomplished, the developer goes ahead with the construction, which will likely take two years or longer to complete. During construction, their marketing team offers the remainder of the units for sale at market value to the public. If you are a RE investor, you know that it is preferable to be buying at the pre-sale prices, not market value prices. The question is, how do you get the invitation to buy a pre-sale? In the past many years, investors have made substantial income by buying at wholesale prices and selling at retail prices even before they needed to complete their purchase. I saw many of them lining up and sometimes even camping overnight in front of the sales center to get a chance to buy at lower prices, but not everyone was lucky enough. You needed to be well-connected to get an opportunity, and you had to act fast. Today is a bit of a different story. Several projects in the Lower Mainland and Fraser Valley offer really good prices and incentives to secure a unit now and complete the purchase two or three years later. The list of incentives varies from one project to the next. Besides attractive prices, you can get low deposit amounts (5-15%), low or no assignment fees, free updates, a mortgage rate buy-down program, extra parking and more. A month ago, I helped a few of my clients purchase a presale in Surrey that sold out in 2 days, and I know of another good developer that will be offering a few units for sale as well. If you would like to know more about these opportunities, I would encourage you to call or email me, and I’ll be happy to send you details on those projects. Kind regards,
Tibor Bogdan
Century 21 Creekside Realty Ltd. 45428 Luckakuck Way #190, Chilliwack, BC V2R 3S9 cell: 604-855-2521 |
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