November 2006

2nd Carnival of Real Estate Investing

November 20, 2006 by Benjamin Bach · Leave a Comment

This current Carnival of Real Estate Investing (CoREI) is now up at Fliperati.

There is some awesome content this week. TheLandLordBlog.com took top honours, and this blog earned honours as the first runner up (just ignore the words that precede the link: ‘in no particular order’) for this post on the cost of $70,000. Also highlighted is a great piece from Real Estate Investing For Real on some potential pitfalls when starting an investment partnership with family and friends.

If you’re interested in Real Estate investment, click through to the carnival. Lot’s of great content!

Submissions are open for CoREI 3, which will be published on December 4 on Landlord Shmandlord. The deadline to submit your post is December 3 at noon pacific time.

Benjamin Bach is a Real Estate Consultant with Keller Williams Golden Triangle Realty in Kitchener Waterloo dedicated to building wealth for his clients through smart Real Estate investments, and helping people achieve success. If you are interested in how you can start your Real Estate portfolio, or have any questions and buying or selling a home, you can email Benjamin (benjamin AT benjaminbach.com) or reach him at 519 772 4376.

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How much does $70,000 cost?

November 18, 2006 by Benjamin Bach · 2 Comments

Investment real estate is all about the numbers. A property is valued based on it’s revenue and expenses, and how much it will cost to buy the property. Some factors in this are renovation costs, deferred maintenance, legal fees, inspection (structural, engineering etc) fees etc. Since you are most likely using a fairly substantial amount (usually 50-90%) of someone else’s money (usually a bank or mortgage underwriter) to make the purchase, the cost of borrowing the money needs to be examined.

Right now I’m working with clients who are starting their investment portfolio. They bought a 4- plex last year and are looking to acquire another one this month.

We’ve put in offers on two properties, both of similar size, near each other. One has been beautiful redone in the past six months, and has exposed hardwood floors, 12 foot ceilings, crown mouldings etc. It’s listed at $285,000 and generates approximately $30,000 in gross rental income annually. The second property needs ~~cosmetic~~ work (new flooring, paint, cosmetic exterior work, kitchens and baths could use an update etc), generates approximately the same $30,000 in gross rental income annually, but is listed at $215,000 (and will likely sell for a few thousand less).

**UPDATE: Property 2 may need a new driveway as well, a $10,000 job, and we have yet to see the interior. Our counter offer is going in tomorrow…

For an investor who is looking to buy a property in tip top shape, the first property would be an attractive buy. You can get a mortgage on the 1st property that will allow it to carry with positive cash flow; you don’t need to be work to the property before renting, and you don’t have any deferred maintenance.

But if you are willing to do some work on a property, or contract it out, you don’t have to pay a premium for the property. You also avoid paying profit to the previous owner for having the work done.

How much does the $70,000 difference in asking price actually cost?

There are two ways to look at it. Option (a) says that the cost to borrow the extra $70K is only $408 a month. This rational is often used in residential real estate, where buyers are trying to justify spending a little too much on a home. ‘It’s only an extra $300 a month. We’ll eat out less!’ In an investment setting, I’d be cautious with this approach since it will eat up money you could put aside each month for reserves and improvements (let alone profit!).

Option (b) says that borrowing the extra $70K is $408 per month drain on cash flow, every month for 30 years ($4896 a year, $146,880 for 30). When you look at how much it costs over the time you plan to own the investment (and continue to have a mortgage on it), you may want to do the work yourself, and pay upfront rather than over 30 years.

My clients decided to do just that, and are going to do the work on the property themselves, with the help of some family and friends.

Remember, buying property for long term appreciation is great, but if it doesn’t make money each month, or at least doesn’t break even, it will be a drain on your bank account for a very long time, rather than a stream of passive income.

When faced with two properties, with a substantial (~15% ) difference in monthly cash flow, you’ll often find that it’s worth it to buckle down and do the work improving the property yourself.

You’ll keep, and put, more money into your pocket.

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10 Questions to Ask Your Realtor about Selling a House

November 17, 2006 by Benjamin Bach · 1 Comment

1. Are you a full-time professional real estate agent? How long have you worked full time in real estate? How long have you been representing buyers? What professional designations do you have?
Knowing whether or not your agent practices full time can help you determine potential scheduling conflicts and his or her commitment to your transaction. As with any profession, the number of years a person has been in the business does not necessarily reflect the level of service you can expect, but it is a good starting point for your discussion. The same issue can apply to professional designations.

2. Do you have a personal assistant, team or staff to handle different parts of the purchase? What are their names and how will each of them help me in my transaction? How do I communicate with them?
It is not uncommon for agents who sell a lot of houses to hire people to work with them. As their businesses grow, they must be able to deliver the same or higher quality service to more people.

You may want to know who on the team will take part in your transaction, and what role each person will play. You may even want to meet the other team members before you decide to work with the team. If you have a question about fees on your closing statement, who would handle that? Who will show up to your closing?
3. Do you have a Website that will list my home? Can I have your URL address? Who responds to emails and how quickly? What’s your email address?
Many buyers prefer to search online for homes because it’s available 24 hours a day and can be done at home. So you want to make sure your home is listed online, either on the agent’s Website or on their company’s site. By searching your agent’s Website you will get a clear picture of how much information is available online.

4. How will you keep in contact with me during the selling process, and how often?
Some agents may email, fax or call you daily to tell you that visitors have toured your home, while others will keep in touch weekly. Asking this question can help you to reconcile your needs with your agent’s systems.

5. What do you do that other agents don’t that ensures I’m getting top dollar for my home? What is your average market time versus other agents’ average market time?
Marketing skills are learned, and sometimes a real estate professional’s unique method of research and delivery make the difference between whether or not a home sells quickly. For example, an agent might research the demographics of your neighborhood and present you a target market list for direct marketing purposes.

6. Will you give me names of past clients?
Interviewing an agent can be similar to interviewing someone to work in your office. Contacting references can be a reliable way for you to understand how he or she works, and whether or not this style is compatible with your own.

7. Do you have a performance guarantee? If I am not satisfied with your performance, can I terminate our listing agreement?
In the heavily regulated world of real estate, it can be difficult for an agent to offer a performance guarantee. If your agent does not have a guarantee, it does not mean they are not committed to high standards. Typically, he or she will verbally outline what you can expect from their performance. Keller Williams® Realty understands the importance of win-win business relationships: the agent does not benefit if the client does not also benefit.

8. How will you get paid? How are your fees structured? May I have that in writing?
In many areas, the seller pays all agent commissions. Sometimes, agents will have other small fees, such as administrative or special service fees, that are charged to clients, regardless of whether they are buying or selling. Be aware of the big picture before you sign any agreements. Ask for an estimate of costs from any agent you contemplate employing.

9. How would you develop pricing strategies for our home?
Although location and condition affect the selling process, price is the primary factor in determining if a home sells quickly, or at all. Access to current property information is essential, and sometimes a pre-appraisal will help. Ask your agent how they created the market analysis, and whether your agent included For Sale by Owner homes, foreclosed homes and bank-owned sales in that list.

10. What will you do to sell my home? Who determines where and when my home is marketed/ promoted? Who pays for your advertising?
Ask your real estate agent to present to you a clear plan of how marketing and advertising dollars will be spent. If there are other forms of marketing available but not specified in the plan ask who pays for those. Request samples or case studies of the types of marketing strategies that your agent proposes (such as Internet Websites, print magazines, open houses, and local publications).

BONUS: Will you guarantee that you’ll sell my home? What are you prepared to do to help our family move?
At Benjamin Bach & Associates, we’re so confident that we can sell your home for you, we’ll guarantee our work! If we can’t sell your home in 90 days, we’ll buy it for cash! Some conditions apply, please contact us for full details. For more information, please visit www.KWCashoffer.com.

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Preparing your home to sell fast and for top dollar

November 17, 2006 by Benjamin Bach · Leave a Comment

In preparing your house to sell, ask yourself over and over if your house looks like someone else’s dream house. Houses in move-in condition tend to be inviting to buyers; houses that are like new typically sell the fastest and procure the best price.

With that in mind, here are a few things to consider when getting ready to sell:

Exterior
Remember the 60-second rule: that’s all the time you have to create a good first impression! Mow the lawn, rake leaves, trim trees and shrubs that keep light out of the house and remove dead plants. Pick up tools, garbage cans, hoses, toys, and building materials and store them neatly in a storage area. Replace broken or missing roof shingles and straighten and clean the gutters and downspouts. Clean all windows and mend torn screens. Painting your house helps improve curb appeal more than any other fix-up! If you decide against painting the entire house, consider painting the front door, window frames and shutters. Seal or resurface the driveway and repair broken steps and walkways. Paint or replace your mailbox and post. Dress up the front yard with some simple landscaping.

Clean, Clean, Clean
Step back for a moment and look at your home as if you were seeing it for the first time. Every room should be spotlessly clean, dusted and uncluttered. Steam clean the carpets and wax the floors. Wash the walls, windows and light fixtures. Tighten loose stair railings and clean all woodwork. In the event that you feel a project of this magnitude is better left to a professional, ask your real estate agent to recommend a cleaning service.

Entryway
Use bright light bulbs in the foyer and throughout the house. Fill the house with a pleasant aroma, such as berries in the summer or cinnamon in the winter.

Living Room
Replace the carpet if it’s worn. It costs money, but you may find that you will more than recoup that cost when the home sells. Patch cracks and nail holes in the walls, and repaint walls in neutral colors, such as white or ivory. Nail down creaking boards and stair treads. Lubricate any sticking or squeaking doors. Open all curtains, and replace them if they are getting old. Add lamps and lighting if the house is dark. Set out fresh flowers.

Furniture
Rearrange or remove furniture to make your rooms look more spacious. Too much furniture and too many knick-knacks make rooms look cluttered and small. One or two decorative items per surface are plenty, so pack the rest away.

Kitchen and Baths
These rooms should sparkle! Clear off counters, and clean all appliances and fixtures. Scrub the floors and walls. Re-caulk tubs and showers. Clean these rooms thoroughly, and be sure they smell fresh.

Closets
Take those things to Goodwill that you’ll have to discard anyway when you move. Organize shelves and straighten shoes. Be sure that sliding doors operate smoothly and knobs on drawers are secure.

Utility Room
Dust and wash the washer, dryer and water heater.

Light and Bright
Do everything you can to brighten the interior. Replace wallpaper with white or off-white paint, and repaint shabby or dark walls. Open the blinds, and replace broken windows and window seals. Always maintain a comfortable temperature inside the house, even if you are away for an extended period of time.

If you’re looking to sell your home in the greater Kitchener Waterloo area , you should check out our guaranteed sale program – we’ll sell your home, or buy it for cash! If you’re looking for more info on selling your home, check out the Seller Resouce section of my site.

(article originally appeared at my other Real Estate site)

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Sweet Marketing

November 15, 2006 by Benjamin Bach · Leave a Comment

Always on the look out for excellence in branding, Scott Ginsberg endulges his sweet tooth:

I recently sat down to dinner with my girlfirend at the famous Forest Park Boathouse. As usual, we checked out the design of the sugar packets on the table.

<——And this is what we saw

Ladies and gentlemen, I’m about to say something I never thought would end up in my blog: these are the coolest sugar packets I’ve ever seen!

Our sweet friends at Equal have created a perfect example of EVERYTHING I’ve been writing about in the past year:

Mundane into Memorable: it’s a damn sugar packet! Doesn’t get more mundane than that. But Equal decided to transform an ordinary confection into brand-breathing brilliance!

When was the last time you took home your sugar packet and showed it to your friends? Or blogged about it?

Yup, it’s a first for me too.

This morning I celebrated another first – I won the Silver Tounge award for Best Speech at my local Toastmasters club !

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Spotlight on Kitchener Waterloo

November 11, 2006 by Benjamin Bach · 1 Comment

Turning our attention to local issues for a moment, I’m in the paper again! This time I appear with Brynn Varey, local entrepreneur extraordinaire. Brynn is the owner of Seniors Move and is an operating principle behind the newly formed corporation Age Wise Solutions Inc. Brynn and I were down at Conestoga College, Kitchener Waterloo third major post secondary institution, promoting the Kicthener Waterloo Chamber of Commerce’s Chamber Young Professionals, a dynamic group for any professionals, entrepreneurs or business people under 35 (or young at heart).

The Chamber Young Professionals has a couple of AWESOME programs coming up, including Do You Have A Personal Brand? and Speed Mentoring. Here is the info for the branding event, I’ll be blogging about Speed Mentoring (Nov 22) later on this week!

Have you ever been to an event where you were asked to make a lasting impression on a particular person, client or speaker? Did you achieve this by accidentally spilling your drink on yourself? Perhaps you mispronounced their last name. Avoid being remembered in a negative or unprofessional manner by making a positive and lasting impression with those around you.

Whether you are conscious of it or not, people everyday blend in with one another, so take a lesson and employ some of these essential techniques offered by Shirley Lichti, Founding Partner, Marketing Magic.

Personal branding is not about applying a thin layer of veneer. It’s about getting in touch with your authentic self – what’s true and real and genuine about you. It’s about harnessing the values you live by and the passions that drive you and presenting the real you to others.

Following the event, employ your newly acquired skills at the Chamber’s November Business After 5, located in the same building, Centre for International Governance (CIGI).

Contact Jason Kipfer at 519-749-6044 or visit the Greater Kitchener Waterloo Chamber of Commerce to find out how you can take advantage of this great networking opportunity!

PRE-REGISTRATION IS REQUIRED.

Chamber Young Professional / Chamber Members: $10
Future Members: $15

Date: Tuesday, November 14, 2006
Registration/Networking: 3:45 – 4:00 pm
Programme: 4:00 – 5:00 pm
Location:
Centre for International Governance Innovation
Seagram Room
57 Erb Street West
Waterloo, ON N2L 6C2

I just remembered that I forgot to wish Brynn a ‘happy birthday’ on Wednesday. Brynn, next time the shiraz is on me!

Now this is important. I’m representing clients who are looking to buy space (5500 sq ft – 10,000 sq ft) for a restaurant on King Street in Waterloo between Union and Columbia . They’re in a position to buy quickly, for cash! If you own such space, or know of someone who does, get in touch with me (benjamin AT benjaminbach.com or 519 772 4376)!

In other news, I’ve discovered a wonderful new blog today, Sapphire Martini. They “are constanly on a quest for good food. Since we live in Waterloo, it’s quite obvious that most of the reviews will be about restaurants in the tri-city area.”

The most recent review is on ultra posh local spot Janet Lynn’s Bistro.

For my main dish I had one of the specials, Thai marinated ribs with asian pasta and julienned vegetables. As expected, everything was cooked perfectly – the ribs were meaty, moist and tender. The Asian pasta was a little heavy on the vinegary dressing which made it a bit of a struggle to make it through the generous portions. G had the roasted garlic and fennel seeds marinated rack of lamb with herb tomato vinaigrette gnocchi. Rack of lamb is G’s litmus test of a decent restaurant, as we know from first hand experience that it can be difficult to tone back the harsh lamb taste while finding some interesting flavours which do not include rosemary or mint. Janet Lynn’s passed with flying colours here – no complaints. The gnocchi was also very good, making us appreciate proper cooking techniques with this item. The portion size was very generous with 7 ribs arranged in a little tepee over the gnocchi. A real bargain compared to the 3-4 ribs you’d normally be served. We skipped dessert since there was nothing that caught our eye amongst the cheesecake, creme brulee and cakes.

What I’ve come to appreciate most from Janet Lynn’s is the professional level of service. For business lunches, they are prompt and unobtrusive. For dinners the servers have always been able to find the appropriate level of engagement, whether you’re on a casual dinner or an eye-gazing romantic affair. I’ll never forget one of our first dates when we were seated at a corner table. We were obviously out together for the evening, and when it came time for dessert we ordered two separate ones. The kitchen sent it out on a single plate together with a couple of heart shaped cookies. It was at that time we knew we were in love.

The Bistro is located at 92 King St. South, Waterloo, Ontario, and can be reached at 519.725.3440, according to the site.

Don’t miss Uptown Waterloo Cheap Lunch Roundup, or Uptown Waterloo Cheap Lunch Roundup (II)!

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What true Chutzpah looks like

November 11, 2006 by Benjamin Bach · Leave a Comment

I’ve always wanted a Porsche, since I was a little kid. I always thought that my first car would be a 911 or 928s, but alas today I drive one of these Swedish beauties

I still have grand ambitions to acquire a Porsche, and I even have a friendly competition with Josiah Mackenzie and Jesse Lear, both of whom are also young entrepreneurs who I know through my involvement with Young Wealth Weekly, as to who will get a Porsche first.

As a bit of inspiration, I sent them both off an email today when I came across this link on Luxist today. NameYourPorsche.com will “put your name on your car in the same font as usual type designation. Texts can me made for all the 911 models – Cayenne – Boxster and Cayman. The service costs $450 for 5 letters in the original colors, gray or black. Extra letters are $60 each and a chrome or gold name or text costs an additional $90.”

Pretty cool, right?

I went to check out their website, and I stumbled across this picture, which is priceless. (warning: gratouitous chutzpah ahead)

Yes, it says ‘thanks daddy.’

I wonder if That Guy with the Nametag Scott Ginsberg knows about this yet? He can write off the 911 if it’s a nametag, can’t he?
UPDATE: After checking out my blog Scott told me on meebo that this is indeed ‘pretty fun.’ Scott, do you want to join our little competition re: the Porsche ?

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Always Remember

November 11, 2006 by Benjamin Bach · Leave a Comment

Poppy

Today is Remembrance Day. I defer to my old friend Mark Graham, who reminds us why we remember:

There is much for us to be proud of. During the First World War, Canadian soldiers were exemplary members of the Allied Forces. Having given lives loyally in the battle at the Somme and elsewhere, Canada came into its own on the world stage at Vimy Ridge. 150 000 British and French soldiers had died in entirely unsuccessful efforts to retake the strategic position from the Germans. In the first Canadian-planned, Canadian-led attack of the campaign, 100 000 Canadian soldiers took the Ridge in a matter of days, advancing methodically behind an enormous artillery barrage. They paid with nearly 4000 lives, but our Army turned the tide in the war, repelling the German aggressors and protecting our British family. Our nation was and is justly proud.

During the Second World War the sons and daughters of many of those fighters, along with newer Canadians and others, rose to the great challenge history had thrust upon the world. Having suffered through the depression, these were folks who dreamt of providing for their families and living quitely and in peace. They recognized, however, the threat posed to the decent and free life they hoped to lead, and they enlisted in enormous numbers to fight a battle on behalf of common humanity half a world away. 10% of the Canadian population joined the Armed Forces during the Second World War and again our heroes distinguished themselves in battle: at the invasion of Normandy the Canadian Forces overcame some of the heaviest enemy resistance and advanced further than the forces of any other nation. Our allies, and not least the beleaguered and oppressed peoples of Europe, knew they could rely on Canada.

Our soldiers continue to make us proud today, serving loyally and with distinction whenever their nation calls upon them.

God bless those who have given their lives for our freedom, and pray for our soldiers still in harm’s way.

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It’s Not About You!

November 10, 2006 by Benjamin Bach · Leave a Comment

Scott Ginsberg aka That Guy with the Name Tag of www.hellomynameisscott.com is the world’s foremost expert on nametags. He has worn one for 2200 days straight, and even has a nametag tattooed on his chest (true story). Today he pontificates on a few excuses people give for not wearing a nametag. I’m definately guilty of at least one of them:

nametags are not about you.

Nametags are about everyone in the world BUT you.

Nametags are about making someone else feel comfortable; maybe because they’re shy, or maybe because they’re bad with names.

And yet, so many people still complain about wearing them:

“I feel silly wearing this thing.”

“My nametag doesn’t match my outfit.”

“Everybody at this meeting knows me already.”

That may be true, but the problem with these (common) objections to wearing a nametag is this: they’re all about you.

If you’re attending a meeting or event – especially if you’re an existing member – one of your duties is to make guests and newbies feel comfortable. So whether you’re extroverted or shy; friendly or caustic; aloof or gregarious, at least some part of that goal can be easily accomplished by one simple act: wear your nametag!

Check out the full post.

Why don’t you wear a nametag?

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5 (x2) awesome ways to be GREAT!

November 9, 2006 by Benjamin Bach · Leave a Comment

Josiah Mackenzie, a young tycoon and good friend of mine, sent me an email this morning with some insights he gained in the past month

* Make a conscious effort to keep in touch with your core group of
friends and colleagues. It’s far too easy to let an important
relationship fade away by being lazy in this area.

* Set aside a time each morning to read, reflect, and focus. It’s
the best way to start off your day.

* Audiobooks are essential if you want to be continually learning.
You can’t always set aside an hour for reading, but it’s easy to
fit in one hour of audiobooks while you’re jogging, standing in
line, or doing errands.

* Don’t be afraid to regularly take time off. Some of my best
inspirations have come when I tore up my to-do list and just spent
the day quietly alone.

* Put money on your goals if you’re serious about accomplishing
them. See the ‘Best Sites’ section of this email for a great
resource I’m using to do this.

Josiah just launched a GREAT networking tool (still waiting on my account buddy!) PalPad which I recommend everyone check out ASAFP. He’s also the brains behind an awesome site I write for, Young Wealth Weekly.

That Guy With the Nametag Scott Ginsberg has some fantastic thoughts (big surprise eh?) on how to effectively set goals. Here are my favorite five:

2. Whatever your present goals are, they’re too low.

6. Make a list of 101 goals. It’s tough, but this exercise will change your life.

11. Each year, have one major, HUGE goal. Let’s say it’s: “I will make 1 million dollars this year.” Write the term “one million” on a bunch of post it notes. Put them all around your office.

14. Put a little card by your desk that says, “Is what you’re doing RIGHT NOW consistent with your #1 goal?” I did this a few years ago and it absolutely kicked my goat setting into high gear.

24. Jack Canfield and Mark Victor Hansen, authors of Chicken Soup for the Soul talk about setting one BHAG, or “Big Harry Audacious Goal.” What’s yours?

Check out the rest.
What advice would YOU give US? Leave your ideas in the comments!