Wednesday, January 14, 2015

Oil Woes

Alberta Oil Sands Investment Real Estate News®
Glenn Simon Inc., Suite 1217, 5328 Calgary Trail NW, Edmonton, Alberta, Canada. Tel 1-888-780-5940 Fax 1-888-276-4517   email:

January 14th., 2015
Volume 18, Issue 1

Dear Friends and Partners,

2014 feels like a blur to me. The exception was where unforgettable memories were made; truly engaging conversations, planned adventures and the spontaneous ones that happened in between.

So, I have my business goals, my health goals, my financial goals and now I’m working on my ‘crazy fun and memorable goals’. It's just too hard to plan spontaneous. What about you? Do you have a list of FUN things to do in addition to the serious goals, have you found a way to make the serious goals fun? Share them in an email, post to our blog or a link to yours.

Did you notice the falling oil prices? Yeah, I meant that sarcastically.

It’s a peculiar shift to go back and read the news from a few months/years ago when oil prices were up. The general worry was how BAD the oil sands are and how we collectively ‘must' slow, correct, stop, monitor, penalize, cancel (to various degrees) oil production. As soon as oil starts to tank, the same reporters sing a song of woe about how the goose is dying, heck you’re in the kitchen sharpening the knives or at least across the road badmouthing how bad that goose is…

Nonetheless, we’ve seen a sharp downfall in crude prices. My take is that barring a series of major geopolitical events, such as what happened last week in Paris, economic downturn in U.S.A and/or China. We will see a rebound sometime later this year. Not to where it was, but hopefully over $60/b. The biggest factor is emotional, what will WE, the global community,  feel like in 2015? Scared, Rebellious, United? This will play a big role in where oil goes.

Softer housing prices for 2015 in areas that rely on oil and gas production is very likely. That can mean a good buying opportunity for long-term investors. Flatter prices will inevitably frustrate those that wish to sell. Looking at the current situation and economic fundamentals in Edmonton, AB, the housing market should remain stable - but no one can ever forecast 100% accuracy. Alberta, specifically Edmonton, remains the best spot in Canada to invest; however it goes without saying that risk is consistent everywhere.

Building a portfolio than can weather up and down cycles is key when buying.

Do some reading:
RBC’s well laid-out Housing Report PDF
CMHC’s report

South East Central Edmonton: King Edward Park 2-Unit Cash flow 

Turbo charge your portfolio. This 1969 built Side X Side Bungalow with fully finished basements is located a few blocks off Whyte Ave. in King Edward Park. Easy access to Downtown, UOA and Wayne Gretzky as well as many parks and schools to enjoy in this neighbourhood. This property has front entrances to each side of the 2 X 5BD halves.  This property was built as a legal duplex and has substantial renovations done throughout, finishing the basement with bedrooms and kitchenettes. No repairs are needed; this is a turn-key deal. The property has a double car garage and driveway. Excellent access to downtown, transit and Mill Creek Ravine.

Comes complete with great tenants making this a totally turn-key property for you. King Edward Park is a great mature area that is a desirable for tenants working in the city or attending U.O.A.. HUGE upside potential due to the quality of the building, great purchase price, strong economic fundamentals and the proximity of this property in relation to Edmonton's desirable growing core.

Purchase price: $685K
Total Investment: $158,330K.
Your Estimated 5 Year Profit $88,418.56K.
Your pre-tax Total ROI is 55 % or 11% per year

These 2 suites rent for top dollar and have everything arranged, including financing structure and incredible tenants.

Your investment includes: impeccable tenant selection, financial analysis, professional inspection, insurance, financing set-up, legal fees, basic accounting, reserve fund, CMA, bi-annual statements, strategic market planning to ensure successful entry and exit, plus much more!

Energy economist Peter Terzakian takes a bullish view on Alberta oil

By Gary Mason, Globe and Mail, December 25th., 2014

In your travels around the world, what do you hear most often about Canada?
“It’s cold in Canada, isn’t it?” is the universal conversation opener. Responding to the stereotype becomes annoying after countless meetings abroad, but I don’t mind when put in a global context. At least I don’t have to answer to questions about civil war, corruption, political instability or other domestic nastiness that is so prevalent in other countries. People see us as a very safe place with a lot of integrity. Yet from a business point of view, those who sit on the other side of the table view Canada as an unknown expanse. They always want to know about Canada in the context of the United States – a free-market point of reference they understand.  FOLLOW THIS ARTICLE

Ewart: Oil price rout dominates energy sector

By Stephan Ewart, Calgary Herald, December 27th, 2014

"The chill of winter hasn’t saved Canada’s booming oil and gas industry from “a good sweating” as the year comes to an end.

The top story in the Canadian oil and gas industry in 2014 wasn’t even on the radar in mid-June when West Texas Intermediate crude was trading for more than $107 US a barrel. Then, with little warning, the price of oil plunged nearly 50 per cent in six months.

The far-reaching implications of the oil price decline — from spending in the oilpatch and the falling price of gasoline to the value of the dollar and the performance of the stock market — shows up repeatedly in my choices for Top 10 stories in the energy sector in Canada from the past year."   READ MORE HERE

Calm before the storm in Alberta?

By Mario Toneguzzi, Calgary Herald, January 9th, 2015

Is this the calm before the storm for Alberta’s labour market?
One national economist was speculating that on Friday as Statistics Canada reported that both the Calgary region and Alberta saw employment growth in December while the rest of the country shed jobs.

In fact, Alberta’s 2.9 per cent hike in employment from a year ago was the best in the country.

Robert Kavcic, senior economist with BMO Capital Markets, said the employment situation is “likely to change in the coming months as the steep slide in oil triggers a wave of cost cutting across the energy sector.”

He said it will take some time for unemployment rates in Calgary and Edmonton to rise in response to the oil price shock.  READ MORE HERE

I appreciate all your calls and emails. I'm looking forward to helping you with your next step towards building real wealth.
Your success continues EVERYDAY, let me help you build for tomorrow.

“Adversity causes some men to break; others to break records."  - William Arthur Ward

Warm Regards,
Todd and Danielle Millar


P.S. Stay ahead by checking out Danielle's blog at Edmonton Real Estate Investor for all your cutting edge market news and information.

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