Tuesday, October 30, 2007

Skeletons In My Closet

What ‘skeletons’ do you have hidden away that may come out to haunt you? Sounds scary doesn’t it? And it could very well be….

I was recently negotiating on a fairly large character conversion/reno project for an associate of mine. He had considerable experience with rezoning and land utilization but not so much with actual conversation and restructure of the buildings. He was so ‘pumped up’ about the potential project that I wondered how much in depth research he had conducted, as there seemed to be some sizable obstacles to overcome before getting the project to the final stage.

I felt an icy hand on my shoulder and heard a deathly whisper in my ear ‘Do the due diligence now, run the costs and speak with your team, get the written quotes…’ What was going on? The voice was just my ‘friendly’ skeleton reminding me of the lessons learned 5 years ago.

See, I had been doing a sizable reno deal where the costs and time frame kept on extending. I had done the usual groundwork, quote gathering and cost analysis for the property, but it still was taking longer and costing more than planned. In the end the deal was completed and all went relatively well, but there had been a few months worth of stress and grey hairs from this seemingly simple deal. What happened next was I spent a period of about 6 months feeling rather reluctant to enter into another reno job.

My skeleton was keeping me out of the market. My repair job didn’t go exactly as planned, but still ended up being profitable, although not nearly as much as I had hoped. What I realized was that I needed a better system and a better team to rely on. I then went out and spoke with several of my colleagues that specialized in these sorts of projects. I then saw how I could ‘bomb proof’ my next deal, maximize my time, money and create more profit- all with fewer grey hairs.

The funny thing is how much my skeleton continues to teach me.

If I had chosen to ignore the initial ‘fear’ I had, I would have been reluctant to go on to other successful projects as I have. That kind of education is priceless and so is the use of a knowledgeable team to consult with.

As the details got clearer, my associate and I learned that this project was not as good as first anticipated, but this is what we did….

“I’ve had other skeletons that have been down right nasty. Skeletons that have tried to wreck my life. Do you have something unresolved, lurking in the back of your mind that keeps hurting you? It could be a financial kind of pain or a personal one.”

We sent in our surveyor to assess the best usage of the land and height restrictions on the Character conversion. We enlisted three separate contactors that we had a history with and asked for a lock in quote including materials (there is a big construction/labour shortage now so you need to get firm numbers.). We then rounded everything up by 12% and extended the project time frame by 6 weeks. We learned that due to inherent foundation flaws the project would cost much more time and money than initially thought. Our solution lay in the ability to scrap the conversion idea and turn the units into commercial storage space, and rent out making a better profit.

My point is that without first trying and failing on some levels I would never have been able to take the chance and learn what I needed to do.

We’ve all been held back by skeletons before. Until we learn from, and destroy them, they will keep dominating us. I’m sure that you’ve met people that are so afraid to make a choice for fear of being wrong or getting ‘burned again’. I cringe to think about all the other ‘little voices’, apprehensions and fears that we let hold us back.

I always try to examine any excuses I may have and check them for validity.

Move forward with knowledge and seize the opportunity.

Haunted Alberta - Spooky Real Estate

Who could resist? I should write about ROI's or the two great new properties we have picked up recently but all work and no play makes people axe murders! With help from two great sites, The Shadowlands and Zuko - Weird And Spooky Places, I was able to compile a few Albertan haunted houses.

From Zuko:

1.Banff Springs Hotel - "One very sad and tragic tale involves a young bride and her elegant wedding party in the hotel's grand ballroom. It seems that on the day of the young woman's wedding, she was descending the ornate marble staircase in her beautiful flowing white wedding gown. And, as the story goes, an unexpected breeze (presumably from an open door or window) twisted the gown's flowing train into her path, causing her to stumble. Attempts by the groom to catch-hold of his young wife were in vain, and she fell to her death on the polished marble tiles below. To this day, there are recurring reports of a fleeting vision of a beautiful girl in a long flowing white dress dancing in the ballroom or descending the staircase. At other times, people have commented on brief but chilling breezes brushing past them on the grand staircase." Read About Sam - The Helpful Dead Doorman

From The Shadowlands

2.Brooks - Community Cultural Centre - "This was an old hospital in the 1940's, and many people died here. There are repeated sightings of an older janitor of the building going from room to room to clean, a young boy with a back pack wandering the halls, and many kids have heard an elderly woman read them stories. Through the use of a Ouija board, staff members have communicated with the young boy, who is 9 years old, and afraid of being there. He often plays with the toys in the daycare in the basement, and has told the staff members that there are a total of 75 ghosts in the building"

3.Calgary - Abbydale SE - "In a blue and white two story house lies a family of four with an incident involving a black figure like blur. Before all this there was a cold chill by the basement cellar. Even though the heat was on the beds where always ice cold and the moaning coming from the cellar sounded like a man with a deep voice. From there on in this sound was like a confession of some sort or a plea to god. Still today the family doesn’t know what the mumbling is trying to say because it is in a foreign language that hasn't been heard before. The sightings of the black blur was seen on a regular daily bases but only to have come so far to a person then suddenly vanish."

4.Calgary - Grace Hospital - "A woman was seen cradling a child in her arms in a delivery room. She would bang pipes and open windows, but wasn't much of a threat to anyone. However, she did make it so that a woman in labor who was placed in that room would have a long and difficult labor, often ending in a caesarean section. The ghost is that of a woman named Maudine Riley. The Riley's owned the land, which the hospital is built on. Maudine Riley died in childbirth in one of the rooms of her house. The room she died in was almost in the exact position where the haunted delivery room is now located. Her child perished with her. It seems that she is afraid of letting women give birth in that room, because she thinks they might suffer her fate. Across the street from the hospital is Riley Park. There's a monument erected there in memory of Maudine and her child."

The Creepiest For Last...

5.Edmonton - La'Boheme Bed and Breakfast - "Old Gibbard Block in northeast Edmonton. Built in 1912. It was an upscale apartment building. Woman employee was murdered and dragged down three flights of stairs to basement where she was dismembered and fed into furnace. The sound of her head bouncing off each stair can be heard at night. The original furnace is still in use."

Loonie At A 33 Year Peak

"Canada's dollar touched the highest since 1974 on surging demand for the nation's commodity exports, with oil reaching an all-time high.

The Canadian currency strengthened as the U.S. dollar fell against 11 of 16 most-actively traded currencies. The Federal Reserve is forecast to cut borrowing costs on Oct. 31 to prevent the world's largest economy from slipping into a recession, which would eliminate the U.S.'s interest-rate advantage over Canada."

Read Full Article

One U.S dollar buys 96.02 Canadian cents. Look out for the snowbirds!

Sunday, October 28, 2007

Call Of The West

"The booming Alberta economy has maxed out the labour pool here," "It means employers here have to go somewhere else and with the manufacturing industry in Ontario facing massive layoffs there is an opportunity there." Ray Edwardson Organizer of the Workwest Career Caravan

Alberta's labour shortage has over 30 companies including Greyhound, Lafarge and Century 21 setting up a job fair in Toronto November 3rd and 4th. Police, fire and transit services are also trawling for career minded people to pick up and move west.

Royalties or no increased labour needs mean more people moving out west that will require quality, affordable housing.

Friday, October 26, 2007

Royalties- What Changes Are In Store?

Ed Stelmach's proposal includes:


*Introduce price-sensitive formulas before and after capital costs are paid out. The payments will slide between 1 percent and 9 percent of revenues with increases starting at an oil price of $55 a barrel and a cap set at $120 a barrel. Post-payout, royalties will be 25 to 40 percent of net profits.


*Gas royalties will be set on a formula using price and production volume. New royalty rates will range from 5 percent to 50 percent with rate caps at C$17.50 per million British thermal units.

*Royalties for natural gas liquids will be set at 40 percent for pentanes and 30 percent for butanes and propane.


*Royalties will be linked to well production and price with the government's take rising as high as 50 percent. Rates to be capped if the oil price hits $120 per barrel.

Source: Government of Alberta

Read Factbox Uk Reuters Article Here

Royalties - Doom And Gloom or...?

I would be off my game if I didn't at least mention the very important, some would say shocking, announcement Ed Stelmach made announcing that, yes, Alberta will increase oil sands royalties by January 1, 2009.

The increases mean that the money Alberta collects from the energy business could be a staggering 20% higher than the original forecast for 2010, which would equate to a $1.4-billion increase into the province's treasury.

What started it all?

A report by Alberta's provincial panel said royalties had not kept pace with world energy markets, that all projects in the booming oil rich region should be paying more.

"Albertans do not receive their fair share from energy development."

"The energy industry has been a phenomenal driver," "It not only affects Alberta ... It's going to set the direction for where this industry goes and where Alberta goes the next five to 10 years." Greg Stringham, vice president of the Canadian Association of Petroleum Producers

Alberta has been negatively compared to Venezuela where President Hugo Chavez ran out foreign oil companies first by incredible royalty increases followed by nationalization.

Many oil companies have threatened to stop and or delay future work in Alberta if the panels recommendations were followed to a tee. However, they may have already taken the increase in royalties into account as this is not a new phenomena but something that has been happening in all oil rich countries over the past 5 years.

"Our first reaction to the Alberta government's recent royalty review panel report was that it was authored by a visiting delegation of Venezuelans," Deutsche Bank North America analyst Paul Sankey

However, Ed Stelmach is generally seen as being modest on the panel's recommendations and perhaps he has come to a decision that is both balanced and fair for our province.

Though there may be some layoffs in the oil sands there is still enough boom out there that in a year this will all be forgotten. Only time will tell how much of an impact this will have for the oil companies and exactly what there reaction will be.

"We will adjust to any royalty changes and we can do so with the confidence that we have an array of very good investment opportunities that will allow us to continue adding shareholder value over time," Petro Canada CEO Ron Brenneman

Some Articles of Interest:

A Quagmire in Alberta over Royalties
- Interview with Dr. Brownsey a political science professor at Calgary's Mount Royal College

Alberta increases royalties charged to energy companies
- "We recognize energy is a volatile industry. There is risk and there is reward. So when oil prices go up, the royalty goes up,"Ed Stelmach

Is Alberta out of step with the world? -"You would think from the anguished cries of the oil companies that the Alberta government's decision to increase royalties was a bolt from the blue. Far from it."

What Have You Done?

Time flies when you’re having fun, right? Well it also flies when you’re just getting by and that’s why it’s essential that you stop, take inventory and adjust accordingly.

News flash: It’s already November! You have just 2 months ahead before 2008. Forget about the proverbial glass being half empty, make sure it’s overflowing.

Have you ever thought about your own mortality? As hard as it is to get your head around, you may not be here forever, at least not in body.

How we choose to live each day is critical. I have to admit; sometimes I’m dreadful at this. I allow myself to get sucked into a current of work, doing deals and so forth. I must be careful not to neglect my family and friends. Don’t let something all encompassing come into your life, be the wake up call you need to slow down. As cliché as it sounds- stop and smell the roses. Take the time to nurture relationships and maybe even enjoy a few days relaxing in the sun. Preparation and continuous evaluation can help you keep on track. I find creating 90-Day Action steps and monitoring results to be key.

As important as scheduling your days and planning your meetings are, you must remember to schedule in fun time or downtime too. Napoleon Hill used to spend long hours sitting and doing nothing but thinking. Bill Gates takes a trip to the mountains twice a year to compose his thoughts too. Of course I’ve presupposed that you’re busy getting things done and moving ahead. If you’re still not reaching and exceeding your targets then now is a good time to figure out why and correct your course. Keep raising the bar too. It’s easy to get complacent when things are going well. Perhaps now is the time you can look at making a big leap forward and streamlining even further.
One day, an expert in time management was speaking to a group of business students and, to drive home a point, used an illustration those students will never forget.

As he stood in front of the group of high-powered over-achievers he said, "Okay, time for a quiz" and he pulled out a one-gallon, wide-mouth mason jar and set it on the table in front of him. He also produced about a dozen fist-sized rocks and carefully placed them, one at a time, into the jar.

When the jar was filled to the top and no more rocks would fit inside, he asked, "Is this jar full?" Everyone in the class yelled, "Yes." The time management expert replied, "Really?" He reached under the table and pulled out a bucket of gravel. He dumped some gravel in and shook the jar causing pieces of gravel to work themselves down into the spaces between the big rocks. He then asked the group once more, "Is the jar full?" By this time the class was on to him. "Probably not," one of them answered. "Good!" he replied.

He reached under the table and brought out a bucket of sand. He started dumping the sand in the jar and it went into all of the spaces left between the rocks and the gravel. Once more he asked the question, "Is this jar full?" "No!" the class shouted. Once again he said, "Good." Then he grabbed a pitcher of water and began to pour it in until the jar was filled to the brim. Then he looked at the class and asked,

"What is the point of this illustration?"

One eager beaver raised his hand and said, "The point is, no matter how full your schedule is, if you try really hard you can always fit some more things in it!" "No," the speaker replied, that's not the point. The truth this illustration teaches us is; if you don't put the big rocks in first, you'll never get them in at all. What are the 'big rocks' in your life, time with loved ones, your faith, your education, your dreams, a worthy cause, teaching or mentoring others? Remember to put these BIG ROCKS in first or you'll never get them in at all.” So, tonight, or in the morning, when you are reflecting on this short story, ask yourself this question, "What are the 'big rocks' in my life?" Then, put those in your jar first.

Jungle Lessons

When I was younger I used to live wildly impulsively, within a set course plan. For example… I had an idea to travel to Indonesia and live in the jungle with an untouched, un-jaded ‘tribe’. I did so for six and a half weeks. I spent these days near starving, eating grubs and trying to hunt monkeys with poison darts. I kid you not. I trekked through the wettest jungle in the world to befriend not-so-long ago headhunters. I ran for my life while nearly being gored to death by wild boar…

My hired guides and I trekked through the mud, took dug out canoes up and down the muddy, leech ridden rivers. I remember wading across a deep creek while freezing cold rain pulverized my scalp. I held up my pack, throwing it repeatedly against the slippery clay slope all the while clawing my way along, trying to get a grip. After making it out onto the bank I looked at my body, covered in what appeared to be fat, black welts that were visibly growing into gluttonous banana slugs. Leeches. I would never have had the patience to burn them off. I furiously tore them away with my bare hands…. But, I digress. I was looking for something on my journey.

Some kind of proof that a 20-year-old kid had in his mind about the way things should be, about what I wanted to find. Looking back on that adventure I learned a lot, but at the time I hated it, not because of the sheer torture of it, but because of what I was looking for I didn’t think I found. That was until later, anyways…

I realized (years later) that I DID find something on that trip and it was…

Never continue trekking when you’ve got infected feet! Don’t push the river- it flows by itself; if you’re starving and haven’t eaten for days and someone walks out of the bush and offers you a basket full of mushrooms…Be grateful, but don’t eat them all in one sitting.

Some finer points can be translated and applied to life and real estate:

Don’t climb a 40 foot Rambutan tree if you’ve never even tasted the fruit
; Watch and learn what is going on in your market and what constitutes a ‘sweet deal’. If you don’t know what one looks like, how can you find it?

Leaky canoes; canoes with holes in them don’t float well. Neither will your real estate team if it’s not put together right. You need to continually check and evaluate the performance and results of your group.

Have the right bartering chips; I traded tobacco for passage on my journey. I quickly learned the value of this commodity. Many investors throw away great deals over a little negative cash flow.

Running a $3K loss to make a $50K gain in one year is a good example. A very common and shortsighted mistake that rookies make is failing to understand what to negotiate.

Know what you’re buying
; be it price or terms and how to negotiate it.

Make sure that your guides aren’t a bunch of yahoos! Whether you buy one property or a hundred, you need an exceptional team in place to help guide and protect you along the rocky paths. Make sure that you have a map and a team that knows how to navigate.

Lastly, don’t seek adventure in your real estate! Keep your business as simple and boring as possible. Sure, you can have fun, but get your excitement in elsewhere. The last thing you want is a gut full of pinworms and a few digits missing at your next business meeting.

Todd Millar

Shuck Alberta

Alberta is one big sandy irritant, well at least that’s what Al Gore would have you believe. I’ve been hearing a lot from Mr. Gore recently about the oil sands and their role in contributing to global warming.

First and foremost I think we as Canadians care about the environment and have always taken the steps needed to protect our beautiful country. Secondly, in my opinion the off shoot of the economic world growth, especially in China and India, will ultimately help improve living conditions around the world and over time, better equip us as a global community to deal with climate changes as well as decrease global warming.

Alberta is an irritant, just not the kind Mr. Gore implies.

As a kid I remember going to Hawaii and on every street corner there were Hawaiians selling oysters from big icy barrels. They were something like 3 for $5, maybe more I can’t remember exactly. You had a chance to grab an oyster with a pearl in it. Every tourist bought them. Sure enough, every time, you got at least one with a pearl in it.

How did they do it? It was a surprise, I mean you weren’t guaranteed to find a pearl, but it was pretty likely.

Long ago, pearls were important financial assets, comparable in price to real estate, as thousands of oysters had to be searched for just one pearl. They were rare because they were created only by chance.

Natural pearls form in oysters living in the sea without human intervention. When any irritant or parasite enters inside an oyster or mollusk the process of natural coating begins. However, natural pearls are rarely found nowadays.

On the other hand cultured pearls are formed with human help when a nucleus is implanted inside the oyster. It takes about 2-5 years to form a complete pearl depending upon techniques, where it is grown and other natural conditions. The pearls grow best when in a favorable environment. They need to have: clean, fresh or salt water, correct temperature and years to coat the grit in them to sheen of perfection.

It’s ironic that the pearl is actually an irritant to the oyster that’s trying to expel it, but one that we look upon so favorably. The Alberta Oil Sands may be an irritant to some, but a rare and beautiful jewel to others.

And just like pearls that thrive in the right conditions, your real estate continues to grow and flourish into a fine treasure.

For the time being Al Gore may continue to think the oil sands an irritant to the environment, but it takes time to grow a pearl, just as it does to make changes that will improve the environment and well being of many.

Thursday, October 25, 2007

Can't Wait To See This

The Discovery Channel's Worst Handyman 3 is coming to Edmonton!

The huge boom in Edmonton, Alberta has attracted the show because apparently booms and clumsy carpentry go hand in hand.

"With the boom there's lots of properties on the market, lots of movement in the market and lots of ham-fisted DIYs (do-it-yourselfers) messing it up," Canada's Worst Handyman 3 executive producer Guy O'Sullivan.

Edmonton's worst handyman will compete on the Canadian show, they will have a chance to renovate a home in Toronto over a two-week span in January with the person who nominated them for this ignoble award.

Tuesday, October 23, 2007

Alberta Real Estate Investment - Hot New Deal

Hello Friends and Partners,

I'm sure you know how important it is to buy during the 'slow time'.

And I'm here to prove it to you with this great deal...

Check out the details:

*1956 Built 4 bedroom home, complete with in-law suite AND double detached garage.

*Newly reformed throughout with top-notch touches and design: demands high rent and easy resale.

*Listed at $378,000 and we have an accepted offer for $365,000. ($13K off list price and into your pocket!)
(Next door is listed at $410K and isn't as nice)

*Great mature area of Sherbrooke in West Central Edmonton. Desirable for resale and rapid appreciation (capital gains)

*Highly Rentable area near transportation improvments, access to Oil refineries and Downtown.

The Deal:

*ALL financing FULLY ARRANGED, No need to qualify. You can leverage your money further.

*Total estimated investment required: $84,133.00

*Your Profit is estimated at: 23% annually

*Approximately 23% of PURCHASE price. Now that includes all legal, closing costs and reserve funds.

*Partnership deadline before Friday 11/02/07 (Closing date 11/23/07)

Wondering what to do?

It's simple. I've done all the work. Now all you have to do is pick up the phone and give me a call because this deal will not sit around and wait.

Thank you and have an EXCELLENT weekend.

To your success,

Todd and Danielle Millar-

-Please remember: All investments carry RISK. Be sure to seek your own independent legal advice-


Sunday, October 21, 2007

Inspiration For Investors

Richard Homburg of Homburg Invest Inc. owns 136 investment properties, including residential and office complexes in Alberta and Montreal. He dropped at a school at 12 went to work in a bakery and through the power of his dreams became Canada's Donald Trump.

"I believe you have to have a plan in life, you have to have a dream. You have to be a dreamer, almost, to succeed in where you want to go.

As a kid, I dreamt about what I wanted to do. I dreamt about going to America, I dreamt about going to Australia or Canada, so I had my mind set that that's what I was going to do, and I had my mind set that I was going to be in business, I had my mind set that I was going to be successful. I had my mind set about what car I wanted to drive and all the things I wanted to do.

You follow your dreams."

His latest procurement is the $355 Million 17-storey Montreal Central Station Complex which sports a CN train station at the bottom.

Read The Full Interview

Friday, October 19, 2007

Slow and Steady

For many Canadian cities 2007 was incredible year of real estate price gains. Real Estate markets cooled with the weather and the four biggest Canadian markets have slowed since August.

Saskatoon, Calgary and Edmonton all saw big increases over the last year and thanks to the slight cooling in these cities, buyers have a lot more choices to pick and choose from.

"Buyers in [Alberta] will likely take more time to shop and remove some of the steam from price increases," CREA chief economist Gregory Klump.

This shift to a buyers market is a "long time no see" event in the Edmonton market; CREA records show that the last sellers market was in 1997.

Sellers wanting to cash out are flooding the Edmonton market with their "investment" properties, giving investors who know and understand the economic fundamentals of the area a chance to pick up great deals.

For those who are looking to invest, getting your price or terms is more likely than it was five or six months ago.

Tuesday, October 16, 2007

Edmonton Housing Market - Balance Shifts

As we all have seen, the Edmonton housing market went from a frenzy of multiple offers to large amount of product sitting on the market. The shift in the market leaves sellers having to reduce their listing price or offer buyer bait in the form of assumables.

CREA's third quarter report puts Edmonton at a middle ground between a buyer's and seller's market. With increased listings on the market at 21% to 41% higher than last year buyers are taking their time before purchasing.

“I think it's quite remarkable how quickly those markets have shifted from sellers' to balanced. This is a good thing. I believe buyers will take their time and shop around, and that should take some of the steam out of price increases,” said Gregory Klump, chief economist at CREA.

Read Full Article Here

Reduce Your Sale Time

P.J Wade of Realty Times interviewedDr. Paul Anglin, currently a University of Guelph's Associate Professor of Real Estate and Housing in the Department of Marketing and Consumer Studies in the newly-created College of Management and Economics.

His three year study used listing information provided by the Windsor Real Estate Board. With data from more than 20,000 houses, including those that did not sell, Dr. Anglin's resulting study, entitled "House Prices and Time-till-sale in Windsor," attempts to quantify the trade-off between time on the market and sale price as a reflection of selected list price

The study revealed (on average)over a 3-year period:

* Smaller houses sold faster while increased time-til-sale (TTS) was the case for properties with 5 or more bedrooms.

* Bungalows and side-splits sold at the same pace, but condominiums, ranch-style and "rental" properties took more time.

* TTS differed significantly by location while properties outside the City of Windsor consistently had longer TTS.

* Descriptive remarks on the listing form had the following effects:

* The words "beautiful" or "gorgeous" reduced TTS by 15 percent and "beautiful" houses sold for more. "Landscaping" reduced TTS by 20 percent and "move-in" condition did so by 12 percent. However, "must see" and "vacant" houses apparently had no statistically significant effect.

* Houses identified as "Starter" homes sold in 9 percent less time, however, "Handyman Specials" sold approximately 50 percent faster. "Rental" properties were on the market 60 percent longer.

* Seller intent described as "motivated" or "must sell" were associated with a 30 percent increase in the average TTS while "moving" had no statistically significant effect.

* Following the research statistic "Degree of Over Pricing" (DOP), which measures the difference between the list price chosen by the seller and the average list price for that type of house, the DOP of unsold houses was roughly 4.5 per cent higher than those which sold."

Read P.J Wades Article Here

This and That

Albertans - Grumpiest In Canada?- "It seems money can’t buy happiness as a new poll says Albertans are the grumpiest in western Canada" After the incredible rise in their investments they should feel a little happy.

The Sky isn't Falling on Canadian Homeowners - "household wealth has reached unprecedented highs, thanks to years of solid, uninterrupted economic growth accompanied by falling unemployment and rising home and stock prices." Scotiabank Group economist Adrienne Warren. Canada's overall economy is in excellent shape and the most prosperous, though grumpy, province is Alberta.

Rich Man, Poor Man: Two Sides of Canadian Housing
- "A new report by Royal LePage says sales of luxury homes are "skyrocketing" across Canada.

Another report from Statistics Canada looks at the other end of the housing market, reporting that 14 per cent of Canadian households (1.7 million) are facing affordability issues because of high shelter costs." A large percent of those facing affordability issues are young families starting out. Hopefully with the new lower downpayments for mortgages and special first time buyer plans they can find affordable housing.

Home resale activity slips due to high prices but overall picture remains strong - "In both Calgary and Edmonton....the rapid increase in prices has resulted in sales activity declining from record peaks. "They used to be very strong sellers markets and they've returned to balanced territory,". This is a buying opportunity for investors.

Renting vs. Owning - Who Hits Paydirt.

A quick excerpt on the R.O.I of renting versus buying.

"The results of this research show that only renters who are highly disciplined, savvy investors are able to match the wealth that owners can accumulate simply by making their mortgage payments," says the study. "If they meet these criteria, in the best scenario for renters, they can accumulate over 24 per cent more wealth than owners in Edmonton, Halifax, Montreal and Regina, and they can accumulate at least as much wealth as owners in Ottawa, Vancouver and Winnipeg. In Calgary and Toronto, renters cannot on average over our study period match the wealth achievable through home ownership."

Click Here To Read Article

Friday, October 12, 2007

The Blind Men and the Elephant

A community of blind men once heard that an extraordinary beast called an elephant had been brought into the country. Since they did not know what it looked like and had never heard its name, they resolved to obtain a picture, and the knowledge they desired, by feeling the beast - the only possibility that was open to them! They went in search of the elephant, and when they had found it, they felt its body.

One touched its leg, the other a tusk, the third an ear, and in the belief that they now knew the elephant, they returned home. But when the other blind men questioned them, their answers differed.

The one who had felt the leg maintained that the elephant was nothing other than a pillar, extremely rough to the touch, and yet strangely soft. The one who had caught hold of the tusk denied this and described the elephant as, hard and smooth, with nothing soft or rough about it, more over the beast was by no means as stout as a pillar, but rather had the shape of a post. The third, which had held the ear in his hands, spoke: "By my faith, it is both soft and rough." Thus he agreed with one of the others, but went on to say: Nevertheless, it is neither like a post nor a pillar, but like a broad, thick piece of leather." Each was right in a certain sense, since each of them communicated that part of the elephant he had comprehended, but none was able to describe the elephant as it really was: For all three of them were unable to comprehend the entire form of the elephant.

This Buddhist parable demonstrates that people tend to understand only a portion of an idea and then extrapolate all manner of dogmas from that; each claiming only his one is the correct version~

It’s important to look at the market in numerous ways. To truly understand it you need to dig deeper and explore the underlying factors that drive it. Like a good doctor treats a patient; by examining all symptoms, the holistic relationship can be understood and treated.

Getting a clear, well-rounded view is essential. That’s how you can invest with confidence and knowledge.

Or as my mentor would say ‘What’s behind the curtain?

Look at the whole Elephant!

Thursday, October 11, 2007

From Comment To Post

I got this comment on my blog a few days ago.

"....That aside, I don't know how you can suggest that Edmonton is going to have massive price increases. Considering there is already loads of inventory, concerns about low gas prices, lack of affordability, wages have not kept up with house price increase, rent vs. buy economics are in favour of renting and brutal investor rental property P/E ratios. Really, why should someone buy? Come on and quit lying to us about further price increases.

By the way, Calgary house prices have NOT lifted out of a plateau. They have declined for past three months losing about $33,000 from their peak. Stats are at www.bobtruman.com

This is more like 1984 than 2004 with real estate agents STILL claiming massive price gains. The economic climate has changed as mentioned in my previous post. So quit equivocating what happened in 2004 to what is going to happen in the next year."

I think it is a common question/fear people have. My reply turned into a 4 page simple outlook of the Edmonton and Calgary's real estate markets and Alberta's economy.

Hello Dustin,

Thanks for sharing. In summary what I'd say is that, without a doubt the Edmonton and Calgary markets will continue to rise steadily overall in the next 5 years plus. Yes, there may be months when the prices dip and months when they climb quickly up. A healthy market has these peaks and valleys.

Look at the graph for Calgary below, it's not a straight line up... nor is it a straight line down. With over $173B+ of projects already underway or committed for the next decade- you bet the growth will continue, Alberta has a population of only has 3.4 Million people and the highest growth rate, youngest population in Canada. Did you know that Alberta is estimated to grow by 80,000 people per year for the next decade?

Check out this link at the UOA regarding population.


Are people leaving Alberta for sunnier shores? Yes, well you got me there... A whopping 800 people left Alberta for Saskatchewan this year. (At least those Saskatchewan billboards paid off)

The housing market it strong and that strength is based on the economy: the long-term view of it.

Alberta Job & Economic Fundamentals Updates:

The construction jobs are a coming!
The forecast for construction jobs in 2010 for proposed capital projects are 37,000.
Current project construction jobs now are at approximately 17,000. This is an increase of more than
100%, over the next 3- 5 years, and currently the Alberta labor market is already the tightest in Canada.
This is a good indication of the housing demand, as more people are coming to Alberta for work. Each
of these people will require a place to live and rent.
To top things off Alberta still has the lowest unemployment rate in the country.

Alberta Industrial Heartland:

o Alberta has the 2nd highest reserves of recoverable oil in the world.
o Currently $173 Billion of capital projects are scheduled for Alberta.
o The proposed peak expenditure is scheduled for 2010 – 2012, and this timeline is potentially moving
out further, due to the current shortages of labor.
o Pipeline and Oil upgrader projects are numerous and will attract multi billion dollar investments.
o Currently there are at least 7 oil upgraders proposed on the books and each one of these is forecasted
to have at least 3,000 – 5,000 jobs. To put this in perspective, building the Hoover Dam in Nevada
required approximately 4,500 construction jobs. Currently there are over 7 ‘Hoover Dam sized’
projects forecasted to be built just outside of Edmonton.

US Subprime Mortgage Collapse

In the news you have been hearing a lot about the US sub-prime mortgage collapse and how that is affecting
the stock market.

Comparing the US and Canada mortgage markets are like comparing apples to oranges, for

US- sub-prime (high risk) market represents over 20% of all mortgages.
US- interest only mortgages (high risk)are a high percent of subprime mortgages.
Canada’s Subprime mortgages are still below 4% of all mortgages.
Canada’s interest only mortgages are below 2% of total mortgages.

All of these economic fundamentals (just a few of many I could have included) indicate that people
are coming to Alberta and the fundamentals are all pointing towards strong long term demand for
Real Estate.

Hope this helps!

Calgary Real Estate Market Overview


Calgary’s total MLS® month end inventory for the month of August 2007 was 9,634, showing the highest level recorded this year, according to figures released by the Calgary Real Estate Board (CREB®).

Single family Calgary metro new listings added for the month of August totaled, 2,837, a 9.75 per cent increase over the 2,585 new listings added in August 2006. This is an increase of 11.34 per cent over the 2,548 new listings added in July 2007.

Single family Calgary metro properties changing hands in August were 1,314, a decrease of 2.01 per cent from the 1,341 recorded in August 2006 and a decrease of 12.10 per cent from the 1,495 sales recorded last month.

The median price of a single family Calgary metro home in August 2007 was $430,000 showing an 11.40 per cent increase over August 2006, when the median price was $386,000 and showing a 1.15 per cent decrease from last month when the median price was $435,000. All Calgary Metro MLS® statistics include properties listed and sold only within Calgary’s City limits.

The Calgary metro condominium market showed a slight decline in August with new listings added totaling 1,186, an increase of 22.65 per cent from August 2006, when the new listings added were 967. This is a 6.18 per cent increase from last month when new listings added were 1,117. Calgary metro condominium sales in August 2007 were 598; a decrease of 11.93 per cent from August 2006, when the sales were recorded as 679 and a 0.83 per cent decrease form last month’s sales of 603.

“Our inventory has remained high through August; however, total MLS® sales have stayed fairly constant with a drop of only 4.2% from July. The market has shifted slightly to out of town properties and although the average sale price of single family homes in Calgary has dropped by about 3.9% from July, the median price has eased only 1.1% from July. Together it’s an excellent market for buyers and sellers, with sellers getting good prices for their homes and buyers having an excellent selection to choose from”, says Ron Stanners, President of the Calgary Real Estate Board.

The average price of a single family Calgary metro home in August 2007 was $485,914, and the average price of a metro condominium was $320,790. Average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differentials between geographical areas.

Source: Calgary Real Estate Board

Calgary real estate price increases:

Average Calgary Real Estate Prices for last 13 months

Average Calgary Real Estate Yearly Prices for 1985 to 2007 YTD

Please note - statistics reporting changed in May 2007 - comparing present data to data from before May 2007 is not accurate for the 2 graphs directly above.

Do You Know The Alberta Advantage?

A marketing term, "branding" if you will, of a province by the genius that is Ralph Klein.

The Alberta Advantage was used to promote, well, Alberta's advantages to the world. From giving Alberta shaped cheques (can't find proof of this but I heard it on a podcast -urban legend?? folklore??) to charities to opening Alberta offices in countries around the world; Klein started a highly successful marketing campaign for a province like it was the hottest new product around.

And do you know what? It is.

"Entrepreneurial-ism" and business are what Klein promoted; one look at Alberta's blockbuster economy shows that he was more than successful.

This is the Alberta Advantage from Wikipedia :

"The Alberta Advantage illustrates, using widely accepted performance indicators, that Alberta is leading the way in these areas and is progressing toward its vision by capitalizing on the exciting opportunities that are available…

* a strong and vibrant economy
* a young, skilled and productive workforce
* affordable living costs
* a strong commitment to innovation and knowledge-based progress
* a highly entrepreneurial and competitive business community
* a business-friendly province committed to responsible regulation
* the lowest overall tax load of any province in Canada, including no retail sales tax
* a modern and efficient infrastructure
* an abundance of natural resources
* a beautiful natural environment
* a fiscally responsible provincial government

The Alberta Advantage is organized around the following categories: the economy, people, taxes, operating costs, quality of life and sound financial management. It shows that Alberta is "the place to be.""

Wednesday, October 10, 2007

Alberta's Environmental Strategy

The oil sands are striking when you see them. It is hard to imagine this area was once pristine prairie land and will ever be that way again. Many environmentalists worry that Alberta's environment will not be protected with the incredible growth in the province.

The government has laid out clear targets for air quality, water management framework - to ensure water quality and quantity are protected, and has established guidelines to protect the land in the region. Some effective immediately or within the next few months to years.

"As we face unprecedented growth in our province, with development on a scale we have not seen before, we must be assured we balance that growth with the protection of the environment,"

"Albertans must know that their government is looking at the big picture and preserving our environmental heritage for future generations."

Alberta Premier Ed Stelmach

The actions include:
- all large industrial facilities within the industrial heartland will be subject to a cumulative airshed target of 25,000 tonnes per year of nitrous oxide (NOx) emissions and 28,000 tonnes per year of sulphur dioxide (SO2);
- using science-based thresholds, baseline data and limits on 100 different parameters to ensure water quality and quantity outcomes are achieved; and,
- protecting the regional wetlands and groundwater, ensuring that land is reclaimed and mitigating any potential harmful changes to wildlife or habitat by implementing minimum setbacks from the North Saskatchewan River.

Tuesday, October 09, 2007

The Gauntlet Has Been Thrown

Contender 1 - West Edmonton Mall Edmonton,Alberta

-Largest mall in Canada
-Third largest mall in the world
-covers a gross area of 570,000 m² (5.3 million ft²)[1]
- cost C$1.2 billion to build
- over 800 stores and services[3]
-parking for more than 20,000 vehicles
-more than 23,000 people are employed at the property
-receives 28.2 million visitors per year
-between 60,000 and 150,000 shoppers daily (varies by day and season)
-currently valued at $926 million

Contender 2 - Lac Mirabel North of Montreal, Quebec

-grand opening is scheduled for 2009
-(when finished)the mega-mall will cover an area twice the size of West Edmonton Mall, with 14 million square feet of retail, residential and commercial space
-total investment is expected to top $1.2-billion
-three-hundred retail outlets are planned
-a food emporium
-border a man-made lake and a river stocked with trout
-A $100-million, million-square-foot sports complex will house an 8,000-seat arena for major junior hockey
-also planned are an indoor soccer field, aquarium and go-cart track
-a 70,000-square-foot educational centre.

Lac Mirabel is well situated in a growing northern suburb of Montreal. As young families buy homes around and in Mirabel, where property is cheaper. Also the region is on the doorstep of the Saint-Sauveur Valley with its cluster of ski villages and factory outlets perfect to garner tourist dollars. READ MORE

Here are some fun facts on West Edmonton Mall from Wikipedia:

* Before 1998, the mall owned more submarines than the Canadian Navy. The mall had a submarine ride that went to depths of 6 metres.

* The mall's ice rink is host to an annual cheerleading competition held by the ACA.

* WEM was the official title sponsor of Edmonton's Champ Car World Series race. Until 2007 the race was officially billed as The West Edmonton Mall Grand Prix Presented by The Brick until they were out bid for the Sponsor title by Rexall.

* The mall is home to the world's largest parking lot, with over 20,000 available spots free of charge

* Mononc' Serge composed a song about the West Edmonton Mall.

* The movie "Christmas In Wonderland" was shot at the mall. This resulted in holiday decorations being left up well into the summer.

* The mall was originally chosen as the set location of the movie The Running Man, but was relocated to Los Angeles

* Paper Marriage, with Sammo Hung and Maggie Cheung, had its climactic finale filmed at the West Edmonton Mall; the water slides and the Santa Maria replica were prominently featured.

* The film Good Luck Chuck used West Edmonton Mall's penguins. However, the film did not shoot in the mall.

Monday, October 08, 2007

It's A Bird! It's A Plane! It's LRT - maybe

Albertan are interested in Light Rail Transit and most, nearly 75%, say they would use it- in a recent poll done by The Calgary Herald.

"A new poll done exclusively for the Herald shows 70 per cent of Albertans would ride high-speed rail if it were to become a reasonably priced reality in the supercharged corridor from Calgary to Edmonton.

While the province awaits a feasibility study on high-speed rail, this Leger Marketing survey also reveals two-thirds of Albertans support investing taxpayers' dollars in a bullet train."

The Edmonton Calgary corrider is an economic power unto itself, any transportation between the two cities would allow commuters more choices than flying or a 3 hour drive.

"The continued population boom in the corridor, already home to about 2.3 million people, along with technological advances in transportation systems around the globe have spurred Albertans to back the project..."

Read Article

Growing Ring Road Will Grow Profits

Tired but true is the "Location" aspect of real estate. The hottest areas can usually be found near growing road ways that make commuting to work and pleasure areas convenient and fast.

Bidding on Anthony Henday Ring Road north section has started; the 21km leg from Yellowhead Trail on the west side of Edmonton to the Manning Drive Freeway will improve traffic conditions and reduce the commute to the city center and upgraders.

Savvy investors know that housing prices in this area will rise, although the road is only in the bidding stage now is the time to pick up properties in this area.

Giving Back - On Thanksgiving

Edmonton's Boyle Street Co-op gave back to hundreds with a hot traditional turkey dinner. Students and volunteers prepared for about a week for the massive dinner and hoped to feed 1800 people.

"This may be the only meal that these people get that is warm," student Corey Wren told CTV Edmonton.

"I couldn't take food away from someone who needs it," he said. "I have more than enough food at home."

This year marked the 16th Thanksgiving Dinner event held by the Boyle Street Co-op.

Once Again - Edmonton Best In The West

It's not just my opinion. Edmonton and Alberta have won a slew of awards for being cost competitive, amount of corporate projects and expansions.

"Edmonton has been named the Number 1 metro area in Western Canada for business investment based on the number of capital projects and expansions taking place in the region...." Edmonton Economic Development Corp

To Read The Full Article Click Here

Edmonton attracts business and projects from all around the world and with these projects come workers who need housing.

In September alone Edmonton gained 1300 jobs with Alberta's unemployment rate the lowest in Canada and investments into the city growing we can expect big things for this northern diamond especially if you are in Real Estate.

More To Be Thankful For Than Usual

Canada's stellar economy, low un-employment rates and strong dollar leave Canadians a lot to be thankful for on this Thanksgiving Day.

"We live in a time of plenty. Our country is experiencing an exceptional period of harmony. Our governments in Ottawa and Quebec are in minority postures, which are notionally unstable but surprisingly functional most of the time.

On Friday, StatsCan put out the best labour-market report in 33 years, which is to say in nearly two generations. Unemployment fell to 5.9 per cent in a country in which six per cent, because of our generous social safety net, is considered full employment. In September alone, the economy grew by 51,000 jobs."

Of Canada's rising star has more than any province to be thankful for,

"And Alberta, well, what can you say about an economy with a jobless rate of only 3.6 per cent, while fast-food restaurants continue to close because they can't find people to flip burgers? Let the good times roll." READ ARTICLE

So at the dinner table give thanks for your health, family and friends but also squeeze a thanks in there for being Canadian at probably the biggest economic boom we have seen for a long time.

Wednesday, October 03, 2007

Some Worry.... Some Profit

Prices in Alberta have rising so much in the last few years. These are a few of the properties and profits we have brought to our clients. These numbers are based on appreciation and equity pay down. They do not include taxes paid at sale.

If you would like to see more deals like this please visit our website www.glennsimoninc.com or contact us at info@glennsimoninc.com for more information.

Deals like this come up all the time and with the market we are in now is a great time to pick up an investment property.

Find Edmonton Investment Properties Here.

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Gloom And Boom!

I’ve thought of the ultimate Halloween costume this year. Imagine dressing up as a ‘sub-prime mortgage meltdown’ and banging on doors trick or treating throughout the U.S. I’m sure that this would be one of the scariest costumes folks have seen in awhile.

Like many fears, once exposed, explained and understood they lose their bite…. Well in Canada anyway.

The sub-prime mortgage situation definitely has a wide arc and the ripple that it affects include; U.S. borrowers resulting in higher foreclosures, tighter lending criteria and potentially higher rates for commercial property buyers, credit card debtors, home builders, discount and luxury retailers, stock markets, industries such as metals and mining, hedge and mutual funds, currencies, Northern Rock in the U.K. and....You get the point.
But this is the result of damage control instigated over a year ago.

Despite all of the media gloom, there are many regional real estate markets in the U.S. that continue to perform well and about 75% of homeowners in the USA have conventional mortgages that weren’t exposed to the ‘melt-down’ directly.
But the question remains: “How does the sub-prime market affect my Canadian real estate?” And the short answer is…

I t doesn’t. Don Campbell wrote an excellent article entitled ‘What Subprime Crisis?’ where he explains the impact on our local market (and there isn’t much of one) cut and paste here for the full story: http://www.glennsimoninc.com/alberta_in_the_news.html

What will affect us in the short-term is lending criteria tightening; hopefully in a year or two that will ease up.

The gloomy outlook in the U.S. market and a cyclical slow down in Edmonton brings a welcome cooling to investors.

I wrote at the end of 2004 that we were entering into a great buying opportunity and, as you’ve seen, the market proved it with stellar returns.

Edmonton’s market follows about 18 months behind Calgary’s, meaning that we are easing into a plateau, which creates an excellent buying opportunity for you.

Calgary’s breather has lifted out of the plateau and into steady increases, a trend Edmonton will follow. In fact the economy is stronger now than ever before, with huge multi-billion dollar projects being added daily.

Between now and spring, get ready to buy, this is it before the next big ride up!