November 2007

Why are Canadians investing in American Real Estate?

I was talking with a client of mine recently who is looking to invest some of her equity into the US Real Estate market.

This begs two questions:

1) Why would a Canadian invest in American Real Estate?

2) How can a Canadian start investing in American Real Estate?

Lets look at the first question:

The glaring answer is the strength of the Canadian dollar relative to the US dollar. The Loonie has been flirting with $1.10 recently, and as of this morning sits just slightly above par with the US dollar (so $1 Canadian is worth $1.0093 USD). The graph on our right shows a 5 year rise of the Canadian Loonie relative to the US greenback.

Many people, myself included, don’t think that in long term the Loonie is worth more than the US dollar. If you buy into that notion, there is an opportunity to acquire US real estate at a nice discount.

The second factor working in your favour is the ’slump’ some US markets seem to be in right now. Some markets have seen prices recede from where they were a few years ago, and if you think that real estate is a perpetual Bull market (as I do), then this represents another opportunity.

An example:

If you bought a condo in Phoenix for $200,000 in 2005, it would cost you approximately $250,000 CAD (using a Canadian dollar worth $0.80 US). That same condo today is on the market in Phoenix at $180,000, which in today’s Canadian dollars will cost you . . . . . $180,000.

You have the chance to buy cheaper property with a strengthened dollar - a perfect storm in some people’s eyes.

Now, the first question is just theory, until you have a team in place on the ground that can help you buy real estate in a foreign country. Luckily for you, I happen to know some great professionals down south in the US that can help you build your wealth.

For starters, you’ll need an American mortgage broker to lend you some $$, and I happen to know a great one. Then, you’ll need to find some investment real estate professionals who specialize in this sort of thing - again, whom I happen to know.

When you’re buying real estate in a different province or country, you’re a “property owner” not a “landlord,” so you’ll need a property management firm you can rely on to take care of the property and the tenants.

If this sounds like a lot of work, that’s because it is!

Let me plug you into my network so you don’t have to spend costly time recreating the wheel through trial and error! You can profit from investing in American real estate, but unless you have a solid team on the ground, it may be more headache than profit.

Call or email me today to find out how you can start investing in US Real Estate with a team of professionals on both sides of the border.

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Kitchener Waterloo’s Favourite Real Estate Agent (Gold Award, Kitchener Waterloo Record Readers Select Awards 2007 - 2008) wants to show you how Real Estate Investing can make you wealthy. Benjamin works with people from across Ontario, Canada, and North America helping them build wealth through smart real estate investments.

Benjamin is hosting a FREE Millionaire Real Estate Investor workshop December 6th, 2007 from 7-8:30PM. Registration is free in advance. $5 at the door. Call or email Benjamin Bach today to register, and 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.

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

Free Real Estate Investing Workshop in Kitchener Waterloo

I’m happy to announce that I am opening registration of my upcoming Millionaire Real Estate Investment workshop to the general public. There are only 20 spots, and a little under half of the seats are spoken for already (translation: ACT NOW, SEATS GOING FAST).

If you’ve ever wondered about how you can get started investing in real estate, or wanted to know the best practices of Millionaire Real Estate Investors, you need to register for the workshop.

I will be talking about what you need to do to start your portfolio, the professionals you’ll need to grow your investments, as well as some specific opportunities in the Kitchener Waterloo region.

Anyone can do it, not everyone will.

WHEN: Thursday December 6th, 7:00-8:30pm

WHERE: Keller Williams offices, 871 Victoria Street North, Kitchener Ontario. You can email me for directions.

You must register to attend, and there is no cost for registration. You can register by calling me at 519 570 4447 or emailing me at Benjamin(AT)BenjaminBach.com

A $5 charge at the door will apply, but the workshop is free with registration.

See what others are saying about building wealth through real estate investing:

“Benjamin is an expert in the field of investment real estate. He is highly knowledgeable and a great speaker on this topic. He does an excellent job going through the process one on one and has worked very patiently with me. It doesn’t take long before you realize that he truly works hard to help make other people wealthy and successful…stays true to his life mantra. I strongly recommend Benjamin if you’re looking for person to help you build your wealth!”

Every time I hold a workshop, I help someone change the way they think about building and accumulating wealth. I’d love to help educate you on how you can become a millionaire and retire rich. Call or email me today and register for the workshop.

Kitchener Waterloo’s Favourite Real Estate Agent (Gold Award, Kitchener Waterloo Record Readers Select Awards 2007 - 2008) wants to show you how Real Estate Investing can make you wealthy. Benjamin works with people from across Ontario and Canada, helping them build wealth through smart real estate investments.

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.

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

Keep your eye on the BIG prize

Yesterday, I sat down with two investors and my mortgage broker (also an investor - read this to see why it’s so important that your professionals are also real estate investors!) to discuss their goals, and how we can help them get there.

What was really cool about these guys is that they get it; they’re investing to grow their equity, not for cash flow.  Their goals are BIG, and 10 years out.  I’m a big fan of long term thinking, since most people overestimate what they can do in the short term and underestimate what they can do in the long term.

Regular readers of this blog will know that many people who come through my office door are focused strictly on cash flow - they want investment property that will put an extra few hundred bucks (pre-tax and ‘murphy’s law expense’) into their pockets, even (no, especially) if they have limited funds to invest in the first place.  My job is to educate them no why this may not be the path to an abundant retirement.

My personal investment strategy, which is awfully popular amongst my clients and colleagues, is to buy single family real estate (houses, townhouses, semi detached homes, condominiums etc) for the long term, and watch the capital growth occur from appreciation and principle pay down of your debt (mortgage) by your tenant (thanks buddy!).

When you’re buying single family properties, typically they won’t produce the same sort of cash flow that a multi family or student-geared property could acheive.  The associated management fees and ‘headaches’ are usually reduced (at least compared to student properties), and it’s easier to find good long term tenants when you’re renting a nice home in a mostly ‘owner-occupied’ area versus one that is mainly renters (i.e. a nice condo unit vs units in a rented apartment complex).  The big bonus is that residential properties tend to appreciate quicker than a multi family property, since it is not valued based on it’s income, but rather the supply and demand in the residential market at the time.

If you buy your property for $200,000 and in a few years a comparable home on the street sells for $270,000, it is likely you can now get access to the extra capital, and leverage that to buy even more real estate.  If you keep doing this, eventually you have a multi million dollar real estate portfolio that produces all the cash flow you need.

The irony is that pursuing capital growth leaves you with lots of cash flow when you need it (i.e. when you don’t go into your job anymore), while pursuing cash flow while you work (and therefore have a good source of income already) may ensure you don’t have enough capital to live off of in retirement (translation: you’ll spend your golden winters in Toronto instead of the Bahamas). 

I would love to talk to you about what real estate investment strategy you’re using.  If you’re not using one, or are just getting started with your portfolio, I can help you put together a Financial Future Focus and a plan to help you reach your dreams.

Please call me at 519 772 4376 or 519 570 4447 and we can arrange a free, no obligation wealth building consultation.  You owe it to yourself and your family to find out how you can secure your future.

Kitchener Waterloo’s Favourite Real Estate Agent (Gold Award, Kitchener Waterloo Record Readers Select Awards 2007 - 2008) wants to show you how Real Estate Investing can make you wealthy. Benjamin works with people from across Ontario and Canada, helping them build wealth through smart real estate investments.

Benjamin is hosting a FREE Millionaire Real Estate Investor workshop December 6th, 2007 from 7-8:30PM.  Registration is free in advance. $5 at the door.  Call or email Benjamin Bach today to register, and 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.

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

Seperated at Birth?

US Sub Prime ‘Meltdown’: How will it affect Kitchener Waterloo?

Last week I had the pleasure of speaking to this year’s MBET class from the University of Waterloo. The MBET program fascinates me - it’s a Masters in Business, Entrepreneurship and Technology - very cool and very applicable; graduates have been known to start companies while they are still in the program.

One of the students asked me a great question. He asked how I felt the ‘credit crunch’ and sub prime mortgage ‘meltdown’ was going to affect prices here in Kitchener Waterloo. Specifically, he asked if I felt prices would drop in response to what was happening in the states.

I started with my standard disclaimer, borrowed from Jeff Brown, that my crystal ball is as cracked as everyone else’s, but in my opinion, the growth in our region was being driven by solid fundamentals, not creative financing and serial refinancing (which has led to some issues south of the border).

Kitchener Waterloo has solid job growth, positive net population migration, great companies (anyone heard of RIM?), two great universities and Canada’s top college (Wilfirid Laurier University, University of Waterloo and Conestoga College), central location on the 401, within a day’s driving distance of 60% of Canada’s population, and 40% of the US population, etc. Kitchener Waterloo is also the World’s Most Intelligent Community.

When I got home from the event, I read a release from the Canadian Real Estate Association (CREA) issued to Realtors that was saying much the same thing (from a national perspective). Here’s a sampling of the report:

Q: What is a sub-prime mortgage?
A: It’s a mortgage given to a home buyer with less than perfect credit, or a home buyer who lacks the paperwork to prove an income that can support the mortgage payments. While these mortgages may not seem like a good idea to begin with, lenders in the United States with liquid assets, or investment money were making loans to almost anyone who asked, and charging a little more interest for these “riskier” loans. The assumption was that constantly rising house prices in the U.S. would compensate for any lending mistakes.

By June 2007, more than 21% of U.S. mortgages were sub-prime compared with only 5% in Canada. According to the Canadian Bankers Association a record low number (0.24%) of Canadian mortgages were in arrears by July 31/07.

Q: How is all this affecting the U.S. housing market now?
A: Consumers in the United States are finding mortgages have become more expensive and tougher to get, and that has had an impact on housing sales. The number of sub-prime mortgage lending has all but disappeared, so that has eliminated a level or layer of consumer who was previously active in the real estate market. In essence, tougher credit terms are slowing purchases and that’s slowing the economy and hurting the stocks of companies involved in lending, or in housing. That includes home renovation, builders, and furniture retailers – the impact reaches into various aspects of the economy.

The bottom line:
Unlike the U.S., the Canadian housing market has not been artificially driven by bad lending practices. Our long-term fundamentals are solid. Canada has a growing population. Our energy and commodities are in high demand, and job creation is strong. Consumer confidence remains high.

CREA has some great research on their website www.crea.ca

Kitchener Waterloo’s Favourite Real Estate Agent (Gold Award, Kitchener Waterloo Record Readers Select Awards 2007 - 2008) wants to show you how Real Estate Investing can make you wealthy. Benjamin works with people from across Ontario and Canada, helping them build wealth through smart real estate investments.

Call or email Benjamin Bach 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.

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

New Report Released About Kitchener Waterloo Real Estate

This afternoon, CMHC sent me their newest report about the Kitchener Waterloo and Guelph (they have added Guelph into the Kitchener Waterloo report this quarter) real estate market (”Kitchener and Guelph CMA Housing Market Outlook“).

There is a wealth of research and statistical knowledge contained in it, including information on new housing starts, sales volume, sales prices, and economic trends.

Here is a sample of what CMHC has to say about the residential real estate market:

Relatively more affordable existing home prices, a high level of new listings, low mortgage carrying costs through diverse home financing options, limited choice in the new home market and continued population growth will contribute to the record sales in 2007 and only a slight pullback [in volume] for sales in 2008.

The supply of new listings has been trending higher since 2000. As house prices continued to rise, homeowners have been encouraged to list their homes for sale.

New listings will remain high in 2008, but virtually unchanged from 2007 levels.

The ample choice will encourage potential homebuyers to begin their search for a home in the resale home market.

Despite the high level of new listings, demand has outpaced supply.

You can read the entire report here courtesy of CMHC.

Benjamin Bach wants to show you how Real Estate Investing can make you wealthy. He works with investors from across Ontario and Canada, helping them build wealth through smart real estate investments.

Call or email Kitchener Waterloo’s Favourite Real Estate Agent (Gold Award, Kitchener Waterloo Record Readers Select Awards 2007 - 2008) 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.

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

5 things to read if this is your first time here

This morning my good friend Phil Gerbyshak published an interview we did together. I highly recommend you check it out at Phil’s site.

If you clicked over here from Phil’s site, or you’re a new reader to the Kitchener Waterloo Real Estate Investment blog, here are a few articles I recommend you read:

My interview with best selling author of Never Eat Alone, Keith Ferrazzi

Do you have enough money to retire the way you want to ?

Bob Burg, relationship guru and best selling author, shares tips on building lots of great relationships
Top 10 Reasons to Invest in Kitchener Waterloo Real Estate
The 5 Skills That Will Make You Rich

Leave a comment, browse around the other articles, and send me an email to say hi !

Benjamin Bach wants to show you how Real Estate Investing can make you wealthy. He works with investors from across Ontario and Canada, helping them build wealth through smart real estate investments.

Call or email Kitchener Waterloo’s Favourite Real Estate Agent (Gold Award, Kitchener Waterloo Record Readers Select Awards 2007 - 2008) 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.

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

Great Real Estate Investment Opportunity

Looking for a great investment property in a growth region? A two bedroom condominium in Kitchener Waterloo, Ontario came across my desk this morning, listed for a shade under $110,000.

The last unit listed in the building sold conditionally in one day, and was listed at $119,000. The condominium complex is well managed and centrally located in an established area (Stanley Park) of Kitchener Waterloo; most of the neighborhood is family homes.

If you are interested, contact me now at 519 570 4447.

Benjamin Bach wants to show you how Real Estate Investing can make you wealthy. He works with investors from across Ontario and Canada, helping them build wealth through smart real estate investments.

Call or emailKitchener Waterloo’s Favourite Real Estate Agent (Gold Award, Kitchener Waterloo Record Readers Select Awards 2007 - 2008) 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.

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