September 2007

Kitchener Waterloo’s Favourite Real Estate Agent and Brokerage …

Thank You !

I am humbled to to tell you that I have been awarded Gold in the Kitchener Waterloo Record’s 4th annual Reader’s Select Awards for Favourite Real Estate Agent, 2007-2008, and my brokerage Keller Williams Golden Triangle Realty has been voted the favourite Real Estate Brokerage in town for 2007-2008!

Thanks to all my clients and friends that nominated and voted for me, and for helping me grow my business. I can’t do it alone, and I can’t do it without YOU!

Shout out to my friends who won, in no particular order:

Morty’s (favourite sports bar, wings, & pub) , Lois Raats (favourite coach), Bonnie Toggs (favourite children’s wear store), and Gascho Motors (favourite used car dealership)

WARNING: If you think an RESP will pay for your baby’s college education, you’re wrong

Last week at Toastmasters, our club president gave a speech about Registered Education Savings Plans (RESP).

He determined that the cost of a 4 year post secondary degree, away from home, will be well over $100,000 in 15 years (he estimated as high as $180,000, but that may have been a US statistic). The RESP he was ’selling’ would cover less than half of that cost. How can this be?

While the RESP is billed as “a clear choice for families wishing to save for their children’s future education costs,” the reality is that the lifetime contribution is maxed out at $42,000, and annual contributions are maxed at $4000 a year – hardly enough to grow to a six figure sum by the time little Josh goes to university.

What is the alternative ? Invest in real estate, and benefit from leverage and having someone else paying off the loan .

Imagine you did this: Take $12,500 (from savings, home equity, stocks etc), and use that as a down payment on a real estate investment property. In this case, we’ll purchase a 2 bedroom 2 bath condominium in Kitchener for $125,000.

Since you have a $12,500 downpayment, you now need a mortgage for $112,500. We’re going to use a 20 year amortization period, and we’re going to make payments on the mortgage every two weeks – making the effective amortization 17.2 years. At a 6% interest rate, the bi-weekly accelerated payments would be $400.50 every two weeks, or $801 per month. Condo fees are $200 a month, and municipal tax are about $100/month.

Assuming the unit is rented for $950 a month + hydro, there is a negative month to month cash flow of about $150 a month. When you compare this $1800 a year against the $4000 you would be contributing to an RESP, it is a much smaller figure. In fact…

Your annual contribution is 55% less than it would be under a traditional RESP plan

If the condominium does not appreciate one penny between now and 17 years from now – which is when you’ll need the money for Junior’s college tuition – it will be completely paid off and worth $125,000. Great return on your investment !

That will cover most of the cost of tuition, and it’s about double what the value of the RESP will be.

The condominium market has appreciated ~8% in the past year, and if it continues to appreciate, even at 5% a year, your Real Estate Investment will be worth north of $150,000.

The smart choice is to buy an asset with borrowed money, and have someone else pay off most of the loan. That’s the opportunity real estate offers you.

Call me for a free consultation. We will look at your needs – retirement, education, a second home – and develop a plan to get you where you need to be.

Are you interested in how you can start investing in real estate, but not sure where to start ?  Do you want access to proven systems from millionaire real estate investors? Come out on September 20th to a FREE workshop.  All the details are at http://www.kwinvestments.com

How Real Estate Can Make You Rich – FREE Workshop

Real Estate has created more millionaires than any other investment vehicle in history. Are you ready to join them ?

Join me for a look at investing in real estate. We will explore proven models for building wealth and acquiring a large real estate portfolio that will generate passive income – allowing you to pursue all of your dreams.

You will learn how Millionaire Real Estate Investors have built wealth; how you can exceed your retirement goals; see the long term difference between investing in stocks and real estate; learn how to maximize your profits in the condo market; and yes, we’ll talk about flips!

When: Thursday September 20th 7-8:30pm,

Where: 9-871 Victoria Street North, Kitchener

Cost: FREE if you RSVP to me at benjamin@benjaminbach.com or 519 505 1310

When investing in real estate, use professionals !

An interesting situation came up recently while I was pursuing an investment property for a client in Kitchener Waterloo, Ontario.

Sally is from out of town, but she has recently started to move her equity into the Kitchener Waterloo area in the form of real estate investment property.

She had a mortgage broker she used when she bought her house a few years ago, and she wanted to use the same broker.

I have a ‘rule of 1.’  If my clients have a preferred vendor (like a lawyer or a mortgage broker) that I haven’t worked with, and my client’s are completely confident in that person’s ability to close the transaction, I’ll let them work with them.

The ‘rule of 1′ refers to the number of strikes they get – one.  If they mess up a deal for my clients – and if it happen it’s usually because they don’t deal in investment real estate but figure, what the heck, it can’t be that hard – that’s the last time I’ll participate in a transaction they’re involved in.

Usually, even when their is a problem, I’m able to have one of my Wealth Building Team members step in and help resolve the situation (as I did last month when my client’s lawyer decided a week prior to closing not to handle the transaction).  This time, I wasn’t able to save it in time.

Sally’s mortgage broker had gotten her an ‘OK’ loan for the first property she bought this month, but when she went to invest in a second property,  the mortgage broker was unsure if both loans could be approved.  She couldn’t say yes, she couldn’t say no. She kepy saying ‘who knows.’

Finally I had to step in and have the owner of a local mortgage brokerage contact my client.  With only a few days to go, the deal was almost saved, but in the end we would have needed an extra day or two to make the arrangements necessary to go with the new loans.

Sally sent me an email after this happened.

“Lesson learned…  Go with the pro’s from the get go.  If I handed this of to Jeff earlier, I’m sure this would have worked.”

Next month when we go shopping for property, she will be using a mortgage broker who has experience dealing with investment real estate.

When you invest in real estate, make sure the professionals you’re dealing with are specialists in investment real estate.  Ask them if they invest in real estate personally.  If they don’t, why would you take advice from them on investments ?

The lawyer I use owns investment property. The mortgage brokers I use are investors. My inspectors have a real estate investment portfolio.

This means that you’re getting advice from professionals who actually know a thing or two about investing in real estate.

Call me at 519 570 4447  for a free half hour Wealth Building consultation.  We’ll take a look at how your plan is working so far, and if it’s getting you to the sunny, warm retirement you’d like.  If your current plan isn’t, let me show you how to get where you want to be.

Benjamin Bach is passionate about helping people build wealth for an abundant retirement. He works with investors from across North America, helping them Retire Rich, and earlier than they thought possible!

Call or email Benjamin today to learn how you can start your Real Estate Investment portfolio. Benjamin is a Sales Representative with Keller Williams Golden Triangle Realty in Kitchener Waterloo and would love to answer any questions about buying or selling a rental, income or investment property in the Greater Waterloo Region

You can reach Benjamin at benjamin(AT)benjaminbach.com or call him at 519 570 4447