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HOLMES
CONSTRUCTION
250-508-7032
250-588-4684
New Constr, Renovations,
Retrofit Old Windows with Thermal Units,
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Serving the Island since 1982 |
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Cheri Crause
Royal LePage Coast Capital Realty
1933
OAK BAY
,
Victoria,
BC
250.592.4422
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Victoria Real Estate Investors Club Newsletter
 Hi Folks!
The new year has begun on both high and low notes. The excitement of the upcoming winter Olympics has been tempered by the earthquake disaster in Haiti. Property prices are rising nicely yet the HST looms later in the year.
Celebration and growth vs death and taxes. We are in a dyadic universe. I'm accepting (most days) that this is the way it will always be and so life is becoming way less stressful for me. The vacancy rate is still high and we're not getting many calls for our suite in Nanaimo, yet, I no longer lose sleep about it. We've attracted great tenants for our condo downtown! So it goes.
Here's a short list of places to donate for Haiti relief:
http://www.worldvision.ca/give-a-gift/Pages/EarthquakeinHaiti.aspx
text to 45678 the message HAITI, $5 added to your cell phone
bill
http://salvationarmy.ca
http://www.redcross.ca/helpnow
http://www.humanitariancoalition.ca
http://www.msf.ca
http://www.plancanada.ca
The meeting on Tuesday Jan 26 is kinda different. The speaker is going to demonstrate how to get onto the path to becoming the RE investor you really want to be. His method is simple and works! For all the skeptics out there I gotta ask - do you want to reach your goals or do you want to be right about what you believe?
A small toot of my own horn, I was quoted in the article "Victoria:
A Private Affair" in the November 2009 issue of Canadian Real Estate
Magazine. The gist of what I said - great investor properties are found
privately, not on MLS.
In the news, economists have lots to say about the big picture. I suggest that if you're looking for an investment property that you FARM a specific area. No, that doesn't mean scratch rows in peoples' lawns and throw seeds in them. Farming an area is getting in contact with the occupants/owners of properties in a defined residential area and letting them know you're an investor who's interested in solving people's real estate problems. Yes, you want their property at a steeply discounted price... Before that though, I suggest you have an attitude of being in service to others. You have the ability to buy someone's property quickly and privately so how can you use that to serve others?
Farming is touching others with your message of being in service. How do you do that? Here's where your creativity come in! Any way you want that works! By works I mean you don't annoy people off, you demonstrate that you authentically care and can help and you keep it up until harvesting happens. That may take a couple of years AND it's worth it. Ask me about some ways to effectively touch the folks in your field.
Take Care,
Gord Knox
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JANUARY 26 MEETING
TOPIC: WHY WE DON'T INVEST - WHEN WE WANT TO
For years you have thought about real estate investing. You've read
Rich Dad - Poor Dad and every other motivational book under the sun.
You've gone to seminars, joined clubs, scoured the MLS website, and
yet, still, you are no further ahead at building you dream portfolio.
What's going on? Is there something fundamentally wrong with you? In a
word, "no". So how are you to explain the fact that you want what you
want, and you keep wanting it but your action seem to indicate
otherwise? Is it finally time for you to leave the Real Estate
Investing Twilight Zone episode you've found yourself in?
On January 26th, 2010, the reason or reasons why
you haven't amased your portfolio yet will be revealed. Our speaker is
someone who has been battling to find his way out of his own maze and
finally got so fed up that he found the magic key. Thankfully, it's a
key that will work for anybody and everybody. After this seminar you
will have a simple, and concise menu by which you can and will become
the investor you want to be. No more inner struggles. No more false
starts. No more beating yourself up because you're not doing what you
should. I know, I've used it. It works! Even Denise, my wife, is
astounded by the results. You do NOT want to miss this session.
Gord Knox, Founder, VREIC
Tuesday January 26, 2010
7 - 9 pm
Comfort Hotel & Suites
3020 Blanshard St
$15 at the door (annual members no charge)
After-meeting meeting down the hall at Redd's
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USING INTERNET MARKETING FOR YOUR REAL ESTATE INVESTMENTS
By Jennifer Minge
Using internet marketing can be a great addition to your real estate investment lead generation. Often real estate investors rely solely on a few methods of generating leads, such as bandit signs, fliers, car signs, and good old driving around, but forget to expand their systems as technology races ahead.
Motivated sellers, especially those heading for foreclosure are desperate for help, and many times, they turn to the internet to search for their answers. Most of your competitors may be ignoring this potential source of leads, and it may be time to step ahead of the pack.
One of the first places to start can be with popular classified sites, such as Craigslist, OLX, and Backpage. You can list your ads for free. Also, don't ignore searching for motivated sellers on these sites. If they are strapped for cash, they may be trying these free outlets.
The majority of internet searching today is done on Google, and they offer a Pay Per Click advertising method calls Adwords. You may want to check into the price of having an Adwords advertisement targeting your city, with keywords for foreclosure, or mortgage assistance. Often ads targeted for a local market can be purchased at very reasonable prices.
Don't ignore the possibility of having a webpage, which is optimized for your local market. You may be the only investor optimizing their site, and you could be the number one entry on Google for foreclosure assistance or other important phrases in your local market.
One often overlooked method of using the internet for finding leads is watching what people are talking about on Twitter, and other social networks. People in trouble may be spilling their hearts out to their friends online, wishing desperately for help. With some creative searching, you could be solving this persons financial problems, and getting yourself a great investment property.
Just because the internet offers great opportunity, don't get sucked into it consuming all of your time. Your best investment could be using the internet to find great resources to help you find leads in more traditional means. Spend a few minutes searching for people who help real estate investors. Find local real estate investment groups in your area. Even make contacts with more real estate agents and brokers online, to expand your circle of influence. The internet gives you great opportunities to expand your reach.
Is anyone in your surrounding counties, and communities, compiling a list of homes being listed for the intent of foreclosure, which is posted by mortgage holders? Grabbing this list every week could keep you busy knocking on doors, making phone calls, and closing deals. Sometimes internet marketing is best used for communicating quickly and efficiently with your leads, to close your deals fast.
Having a well rounded strategy for lead generation should include many avenues. Consider adding internet marketing as one more method of finding your next great property. You will probably be just as happy finding your next big lead in an email, or with the phone ringing. Expanding your options, can increase your opportunities to close more successful deals.
There are many ways to make a fortune investing in real estate. For more information about real estate investing visit my website at InvestInRealEstate101.
For access to three of the greatest books every written on personal development visit Your Free Gifts.
Article Source: Using Internet Marketing For Your Real Estate Investments
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THE DIFFERENCES BETWEEN COMMERCIAL AND RESDENTIAL PROPERTY INVESTMENT
By Barbara Goldsmith
When you invest in residential property you are essentially dealing with people. When the rent is late, you have to deal with a person - the tenant. If you feel the property is not being looked after properly, you will have to deal with people who may have a different opinion from you.
With commercial property, you are essentially dealing with contracts. If the rent is not paid on time, then the contract (lease agreement) stipulates a series of remedies that the landlord can take. If the property is not kept up to a certain standard, then the contract may stipulate that you can send in a commercial cleaner and send the bill to the tenant.
Generally, governments around the world have countless rules governing the renting of property to residential tenants, which override anything that you may put in your rental agreement. For example, in the UK, if a tenant is behind in their rent, you cannot just evict them. There are all sort of protections in place so that the tenants will not be exploited. You have to allow them to fall behind in rent for at least 30 days before you can start eviction proceedings.
With commercial property, what is in the lease contract is generally what goes. Many commercial leases have a clause in them that stipulates that if the rent if late by more than a week, then penalty interest will be applied to the amount of rent outstanding. If the tenant still has not paid the rent a certain period of time thereafter, then you have the right not only to change the locks and take your premises back, but also to seize all the tenant's fittings, furniture and equipment on the premises, and to sell them to recover the rent owing. Your rights as a commercial landlord are far stronger than those as a residential landlord.
With commercial property, the tenants usually derive their income at your premises. Therefore they have a vested interest in keeping your property in good condition. With residential tenants, there is not the same drive to maintain your property, let alone improve it. With my commercial property, I spent thousands of pounds changing the business from a men's hairdressers (which it had been for the previous 30 years) - into a real estate business. In fact, for the first couple of years, we often had men coming to the property and looking inside expecting to have their haircut.
With a commercial lease, the tenants often paint their premises every couple of years so that it will be attractive to customers. In fact, in a commercial property, the tenant is responsible for whatever maintenance repairs occur. So if there is a plumbing problem in a commercial property, it is up to the tenant to bring in his own plumber and to be responsible for whatever bills are presented to him. In a residential property, the tenant is entitled to call the landlord or the management company - they are compelled by law to fix whatever repairs are necessary.
Another fundamental difference between residential and commercial property concerns the typical length of the lease. With residential properties it can be on a month-to-month basis, but is rarely longer than one year. Commercial properties, on the other hand, are generally leased for many years at a time. From the tenant's perspective, it gives their company or business the security of the same premises to work out of. Banks like long-term leases as well: the longer and stronger the lease, the more willing they are to lend money on the property.
In some countries a tenant cannot rent the premises with a lease that is under 5 years. There is an upside to this and a downside to this. The upside is that his business is secure in that location for at least 5 years. He cannot be asked to move. The downside is that if times are bad, he might be able to pay his rent and he has no wiggle room to get out of that lease. So in the end he possibly could lose everything. He could lose whatever deposits he has put down, he could lose his furnishings, his equipment. He could theoretically lose the essence of his business.
So far, you can see there are a lot of advantages of commercial properties over residential ones.
To summarise the main categories of commercial property:
1. Retail: shops or any building where passing trade or the general public are invited
2. Office: commonly found with retail or alone, and often above the retail areas on the ground floor
3. Industrial: places where things are manufactured or services provided - but not necessarily where the general public are walking past.
Commercial property is much more specialised than residential and it may be more difficult to find a tenant in the area of specialisation catered to by your building.
Typically banks will lend you up to 80% of the value of the property on a residential investment. However, with commercial property usually the maximum is about 60%.
The biggest advantage of residential property over commercial comes when your property is empty. If you have a house where the tenants have just left, if you have bought it in a good location and the market is reasonably active, then you should be able to find tenants quite quickly. Generally even in a slow market, the only reason why a residential property sits empty for a long time is because of the rental price. If you drop your rent by 10% or more, you will usually get a tenant. However, this downturn economy has vastly affected both residential and commercial properties. Workers who have been made redundant find that they cannot pay the rent. Many commercial properties are suffering because their tenants have been forced out of business.
With residential property, if your tenant has been laid off or fired, it may take you months to be able to evict him let alone find another tenant. In a commercial property, you are entitled to keep his deposits, fittings, equipment and furnishings, but that still doesn't give you an income for that property. And right now there are many commercial properties that are going bankrupt. So my best advice is that in this downturn economy, that while there may be numerous opportunities for investment, be aware that there are just as many situations where you could lose a great deal of money.
Let's look at commercial property that has been empty for 3 months or 3 years, then the problem may not be because the rent is too high. Even if you were to slash it in half you still may not find a tenant.
The reason for this is simple. Just about any residential property on the market has all that is required for someone to live in it. However, when it comes to commercial property, the requirements vary hugely from tenant to tenant. For example, when a dog food cannery becomes vacant, it may not be simply a matter of reducing the rent to find a tenant. No matter how much you drop the rent, no photographer looking for a studio is likely to settle for the dog food cannery. No shoe shop that relies on passing foot trade will want the top floor in an office tower, no matter how good the view or how reasonable the rental.
To summarise the differences between residential and commercial property:
Residential
Tenants have little interest in maintaining or improving your property
Leases tend to be short
Tenants contact the landlord for minor problems
Governments tend to legislate to protect tenants rights
Banks lend up to 80% of the value
If the property is empty, it is usually easy to find a new tenant
You deal with people
Commercial
Tenants have a strong vested interest in the upkeep of your property
Leases tend to be long
Tenants tend to fix minor problems
Governments tend to leave you alone
Banks will lend only 50-60%
The appraised value when tenanted may be 2 or 3 times the value when empty
If the property is empty, it may be difficult to find a new tenant
You deal with contracts, not people
If you were coming to me for property investment advice and you didn't know which would be better for you: to buy a house or to buy a piece of commercial property. The first thing I would say to you is: research, research, research commercial property. Find out everything you possibly can about being a landlord, about tenancy agreements, about your areas of responsibility, the tenant's areas of responsibility, and when you have spoken to a number of commercial property landlords, and gotten to understand the business really really well, then I would look for a group of investors who would go in on a building with you.
I would also look for a syndicate - you would be just a small part of that syndicate. Your financial obligation would be very small in comparison if you had just gone into it yourself or with one or two other people. A syndicate usually implies a large group of investors. The upside is that you don't have to have much of a cash outlay if you invest with a syndicate. The downside is that you don't make as much money if you invest with a syndicate. But your risks are greatly reduced, which is why people have a tendency to look for syndicates. When you have a syndicate investing in residential property, a lot has been written about landlords - that the landlord or landlords plural, are just soulless people out to gouge as much money out of their tenants as possible, making the fewest number of repairs they can get away with. The laws governing commercial property makes that condition less likely - mainly because most of what we are talking about is the tenant's responsibility.
Article Source: The Differences Between Commercial and Residential Property Investment
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ARTICLE HEADLINE
Know your target audience. Who are your most important customers, clients or prospects, and why? Know what is important to them and address their needs in your newsletter each month. Include a photo to make your newsletter even more appealing. Add a "Find out more..." link to additional information on your website.
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