Nanaimo Real Estate Investors Club
May 2009
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Layth Matthews
250-591-3333
layth@ratemiser.ca
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Hi Folks!
As my friend Chuck's voicemail message used to say "Spring
has sprung and the grass has riz, there's no tellin' where I is".
I got the new/used Husqvarna lawn mower going at our Hillcrest
property last week. That little machine just works, goes in the ditch,
bag empties easily, no fuss. It's nice when things work like they're supposed
to.
I replaced my first timer in a fridge that same day as well (two successes
in one day!). After a short conversation with the appliance tech guy at
Westcoast Appliances I was qualified. $16 and 20 minutes. Nice!
Denise put some Melamine paint on two countertops in another suite last
week. Not bulletproof yet simple to apply, looks great, low cost, ugly
scratched surface has disappeared. Leaning against the edge after painting is
NOT a good idea.
We've done our own property management for four years now. I've learned
a lot of neat stuff (most guys love that quick-fix stuff), acquired great
relationships with service folks, become a fast worker and generally felt in
control of our properties. One of my dreams as a young man was to become an
auto mechanic. Managing property feels a bit like I'm manifesting that. Denise
thinks I waste time doing it myself and yet I feel on purpose while using the
tools.
Property management's not for everybody. Neither is dealing with
sellers, buyers and realtors. One can farm out all that stuff. WHAT IF you have
a "natural" urge to take those tasks on, even if it's a bit
"inefficient"? I think you should go for it! When we do tasks that
align with our inner dreams/urges/hearts we experience "quality time"
and in my opinion that's time well spent.
Join us on Tuesday May 5, 2009 for our monthly meeting. This time we're going to PLAY games to increase our awareness of our attitutes and habits around RE investing. This will be a great time to learn how to take it to the next level.
See below for details on the NEXT Las Vegas buying trip, out on by Jon Murray. His April trip was successful so why not go again!
A couple of opportunities WAY down there.
How do Canadians and Americans calculate mortage payments? See the last article.
Take Care!
Gord Knox
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| May 5, 2009 Meeting
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This month we have a Special Event!.
Come prepared to PLAY with your beliefs about how your RE investing is going. Lots of fun, lots of prizes!
There's plenty of education too!
Tuesday, May 5, 2009
Beban Park Rec Centre
2300 Bowen Road
Room 8 (enter off the breezeway on the right)
$10 at the door
7 - 9 pm
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| Las Vegas Buying Trip AGAIN in MAY!
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Las Vegas Spring Tour May 25 - 27
Sunday 24th 4:10pm Flight leaves Bellingham
6:40pm Flight arrives in Las Vegas
7:30 pm Arrive at The Paris Luxury Hotel
8:30 - 10:30 Meet & Greet @ Jimmy Buffets Margaritaville Rest.
Monday 25th 9:30 - 10:00 Group Breakfast
10:00 - 10:15 Opening Jon Murray
10:15 - 10:45 Vegas Overview - JC Melvin
10:45 - 11:30 Speaker #1 - Corporation Setup Lawyer
11:30 - 12:15 Speaker #2 - Mortgage Broker
12:15 - 12:30 Property Tour Overview - Tour Host Realtor
12:30 - 4:00 Bank Owned Property Tour - Under $150k
4:30 - 6:30 Dinner @ Mirage
7:00 - 9:00 LOVE - Cirque du Soleil
http://www.bestofvegas.com/Shows-Tickets/LOVE/
Tuesday 26th 9:30 - 10:00 Group Breakfast
10:00 - 10:15 Jon Murray - Monday Discussion
10:15 - 10:45 Vegas Overview - Realtor
10:45 - 11:30 Speaker #1 - Home Inspection Company
11:30 - 12:15 Speaker #2 - Escrow Company
12:15 - 12:30 Property Tour Overview - Tour Host Realtor
12:30 - 4:00 Bank Owned Property Tour - $150k - $300k
4:30 - 6:30 Dinner @ Venetian (Delmonico Steakhouse)
7:00 - 9:00 Blue Man Group Show
http://www.bestofvegas.com/Shows-Tickets/Blue-Man-Group/
Wednesday 27th 9:00 - 3:00 Tuscany/Lake Las Vegas Property Tour
3:00 - 5:30 Free Time
6:00pm latest!! Arrive at Airport
7:40pm Flight home
10:20pm Arrive in Bellingham
· Includes return flights including all applicable taxes
· Includes accommodation at the Mirage Hotel including all applicable taxes
· Includes shuttle bus transportation for property tours
· Includes luncheon meetings with local real estate professionals as guest speakers
· Includes 2 afternoon tours of HOT investment properties by a local real estate agent
· Includes deluxe ticket to Cirque du Soleil love
· Includes deluxe ticket to Blue Man group show
· All food is included except the two dinners as meal preferences may vary
· Jon will be with you and hosting this event so you will be able to tap into valuable information
All inclusive price of only $1950 (Must book by Monday May 11th)
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Jon
Murray
Cell: 604 703 5758
Office: 604 846 HELP (4357)
Fax: 604 846 EFAX (3329)
Email: jon@jowen.ca
Web: www.jowen.ca
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| OPPORTUNITIES
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Even though I know and trust these two, I HIGHLY recommend you do LOTS of diligent research before handing your money to these folks! Gord
Cheri Crause says:
Investment Condo for Sale,
103-1342 Hillside Ave, Offered privately for $235,000 or will list on May 8 for
$245,000
2 bed, 1 bath, Insuite laundry, Ground floor with patio, Easy central location,
On major bus route
853 sq ft, Storage locker, Parking stall, Rentals allowed, No age restrictions,
No pets
Laminate flooring in entry, hall, dining and living rooms, Freshly painted in
July 2008
New hot water tanks (2 small ones), New toilet in 2007
Currently rented for $900.00 plus utilities, Very well run/managed building
Insurance per year is $189.00, Taxes in 2008 were $1093.73 (gross), Strata fee
is $183.47
Contact Cheri Crause at 250-213-6014
Cornell says:
I just thought I'd touch base with you all on my recent real estate trip
to Ecuador.
We (myself & 3 American partners) have almost completed our due
diligence on the purchase of our 1-acre oceanfront lot (price is only US$45K!)
in the cute little fishing village of Puerto Cayo and expect to close on it
next month.
Our lawyer, Roberto Moreno, is investigating the title and the
municipality to see if there are any issues with future development on our
lot. We are getting an engineer to measure the lot and have it fenced so
that we can ensure we know what we are buying. Although foreigners can
own land freehold in Ecuador (just like in Canada), the buying process is
somewhat different and you must *always* use a good real estate lawyer to
protect your ass!
Our plan is to build a few condos on the property and use them as
rentals and to live in for several months a year. Building costs in
Ecuador are very low. You can get very nice construction with beautiful
trim for about US$35 per square foot. And a huge swimming pool costs
about $15,000 complete! Landscaping costs are ridiculously low - the cost
of landscaping a one-acre parcel from a complete desert to amazing tropical
paradise is well under $5,000!
Check out: www.ecuadorliving.com
<http://www.ecuadorliving.com/>
I will be going back to Ecuador in 6 - 12 months and scouting for a very
large property (50 - 200 acres) near the ocean in this area, for a group
purchase by us Canadian real estate investors!
I have 5 or 6 interested friends & investors so far and we are
looking for a few more.
The object is to buy a large parcel in "bulk" with all-cash
(cash is King there) and thus negotiate a very low price, then sell off about
half of it in smaller parcels to recoup all our money and make an immediate
profit within a year or 2.
And we keep the other half for free, for our future enjoyment &
potential development!
If this is the kind of opportunity you are interested in, please let me
know and if so, how much cash you would be interested in investing.
Thanks!
Cheers, Cornell
www.webuyhomesbc.com
4 Pillars Consulting Group, Vancouver Island Office
Suite #230, 1-5765 Turner Road, Nanaimo, B.C. V9T 6M4
Tel: 1-866-756-9239 Fax: 1-866-756-0150
Cell: 250-616-9053 cornellp@4pillars.ca
www.4pillars.ca
Cornell also says:
PS: I am
heading to Belize from April 21 - 28 to check out a preconstruction condo deal
on Ambergris Caye.
I put down $1,000 and the developer is offering 100% financing
on the balance, with a price of $99K for the small 1-BR units...we'll see if
they are worth it...
PPS: Opportunity to make money by "lending your good
qualifications":
I have several 4 Pillars clients in the mid-island area who are
in the unfortunate position of not being able to remortgage their homes due to
poor ratings and excessive unsecured debt.
These clients love their homes and wish to live in them but
cannot afford to pay both their credit cards and the high-interest mortgages
the are currently paying.
Well, I can eliminate their unsecured debt (that's what I do!)
but can't help them keep their homes.
However, their homes do have equity....and these clients are
willing to pay an investor well (cash lump sum, ongoing monthly payments AND
equity) for the priviledge of becoming a co-owner of their property, as long as
the investor can provide their good eligibility so that they can qualify for a
nice new mortgage with low monthly payments. This is a great opportunity
to own an interest in a rental property and get paid for it!
If you are able to qualify for a nice mortgage and are
interested in a long-term investment, please contact me.
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How to Calculate US and Canadian Mortgages
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The major difference between how mortgages are
calculated in the US and Canada rests solely on the way compound
interest is calculated.
To understand the difference between US and Canadian mortgages, however, we should start at the beginning.
Compound Interest
The
underlying assumption of compound interest is that interest is earned
on interest. Therefore, with compound interest you apply the interest
rate to the original principal as well as to all accumulated interest.
This is different from simple interest, where the interest rate is
applied only to the original principal amount.
Hence,
the higher the compounding rate and the more frequent the compounding
(known as the compound period), the larger the resulting mortgage
payment.
For example, assume a loan amount
of $100,000 at 7.00% interest rate amortized over 25 years. The monthly
mortgage payment is $706.78 when compounded monthly and $700.42 when
compounded semi-annually. As you can see, the payment is higher when
the compound period is monthly rather than semi-annually because
monthly compounding is clearly more frequent than semi-annual
compounding.
Okay, let's consider the difference between US and Canadian mortgages.
Mortgages
in the United States are compounded monthly whereas mortgages in Canada
are compounded semi-annually. This means that monthly mortgage payments
on identical loans are higher in the United States than they are in
Canada because the number of compounding periods per year is higher (as
our example above reveals).
The Formula
To
calculate the mortgage payment in either country correctly, you must
first calculate the interest rate per payment. Here's the formula:
((1+interest rate/compound period)^(compound period/periods per year))-1
For
example, assume an annual interest rate of 7.0%, and twelve periods per
year. The calculation for the interest rate per payment for semi-annual
compounding (as in Canada) is:
((1+0.07/2)^(2/12))-1 = 0.575%
The calculation for the interest rate per payment for monthly compounding (as in the USA) is:
((1+0.07/12)^(12/12))-1 = 0.583%
Are
you able to see the difference? With semi-annual compounding, the
compound period is 2 (twice annually) whereas with monthly compounding
the compound period is 12 (twelve times annually).
Okay, now let's calculate each country's loan payment where:
rate
= interest rate per month (0.575% or 0.583%) loan amount = $100,000
nper = total number of payments for the loan (300, or 25x12)
Formula: -PMT(rate,nper,loan amount)
Canada: -PMT(.00575,300,100000) = $700.42
USA: -PMT(.00583,300,100000) = $706.78
How to Make the Calculation
There
are several ways to compute mortgage payment. You can use a mortgage
calculator, a spreadsheet program like Excel, or in some cases, real
estate investment software. Whatever method you use, though, hopefully
by knowing the difference between how mortgages are treated here in the
United States versus those in Canada, as well as how to compute them,
you will get the results you desire.
Thanks to my friends at Canada REIC for providing this article
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