Love Thy Neighbour

Who can be everywhere at the same time? Little do you know that every rental property you own has a secret legion of protectors just waiting to help you maintain, improve and manage your investment. Who are they? Neighbours.

Your neighbours are your allies. Go talk to them ask them how the property is doing. Are the tenants noisy? Are they having parties? What's going on? Everyone living around your investment has a vested interest in your rental doing well.

Why? Because it's their home, maybe 10, 20 or 30 years of care, mortgage payments and dreams are being affected by yahoo tenants or equity building ones. For them it's serious.

I've experienced this a few times a concerned call often gives me ammo to correct a problem I might not see until the next 4 month inspection. Don't underestimate the power of those extra eyes.

However, make sure you're not asking the neighbour with the mattress and half rebuilt cars on the lawn!

I wish we had StreetAdvisor in Canada....

Don't miss your last chance!

This weekend is the REIN ACRE weekend. Don't miss this incredible workshop that will change your life and how you look at the real estate investment market in your area and in Canada.

Best selling author Don R. Campbell, mortgage wizard Peter Kinch and many other industry leaders will be there to help you see the opportunity that lies in the ups and downs of the current real estate market.

Peter Kinch says:
"Where will the market go from here? Is it too late to make money in real estate? What will happen with interest rates? How will the new rule changes affect me? Asking the question is the easy part - getting unbiased answers is the hard part. If you want to know how to get the straight goods without a hidden agenda, then the REIN ACRE weekend with Don R. Campbell is a must attend event. This is NOT a 'get rich quick - 'How to buy with Nothing Down 'free' seminar' - that will end up costing you thousands down the road. Don and his team will teach real estate fundamentals that will educate you on how to buy real estate in any market."

Sign up now for the ACRE Live March 13th and 14th

It's a little preachy but he has a good point

This article from the Hamilton Spectator (my hometown) is about blame. How it's being dished out everywhere. I can see the writer's point....

It's amazing how many times I hear "somebody made me do it", or "it's Mr. X's fault" and this isn't in the schoolyard.

In my business working as the buffer between the investor and the real estate investment, the buck has to stop with us. If there is no rent the excuse doesn't matter. There either is rent or there isn't. We have to explain why we didn't manage the property manager or the tenant.

Being accountable for our actions and how we view and think about things is the first step to controlling our life and being more successful because every time it isn't your fault you miss a golden learning opportunity.

The best quote I've heard about this recently is:

"When you point the finger at somebody there are four pointing back at you."

Try it - it's true!

The Motivated Seller

After a recent conversation with a potential client, I thought this topic was good to post here. He mentioned that his mentor told him to only buy 3-D (death, divorce, debt) motivated properties.

Many of the properties we buy are undervalue and most of the reasons fall under the 3-Ds as it is a broad blanket. In real estate you call it the 'grave dancers' people who only target sellers in hardship. I'm not a grave dancer but I do look to help sellers in hard times out of their situation with dignity and yes, that sometimes means that properties are purchased under value.

Not all seller's initially jump out and say 'Hey, I'm getting a divorce and I'm totally broke- take this property now!' Some Realtors may put that spin on things, but it is not always the case.

When you train your team to ask the right questions you'll uncover these and other opportunities.

As an investor you must be active in finding your deal, not waiting passively for it to come to you. If you are only hunting the 3-Ds you miss other opportunities or pass over what appears not to be a 3-D deal only to realize later it was.

For example, a mortgage broker I know has a property that he's been trying to sell for a few months on MLS. It's priced right, but there is a lot of competition for that product.

When I spoke to him about it he told me the listing was his, he's knock the price down $15K as he was just diagnosed with a serious health condition and wants to simplify his life. He doesn't want to blast his personal life out there to anyone and let the vultures set in.

One last and important point, being active in finding your deal means that you look at 100-50-25-10 properties in your target zone. You cull the numbers down to say 10 properties based on your investment criteria (profitability). Out of that 10 you may have 1 motivated 3-D seller and 2 regular solid deals. You then work the deals by priority. If you were only targeting 3-Ds you might have missed the other 2 viable opportunities. See, you still get the 3-D deal AND you get 2 more from being active.

It's really a chicken or egg situation as you could lump most motivated sellers in the market today, as motivated by debt. Either current or impending. The first two Ds usually cause the last one.

Alberta employment will improve.

Since Imperial Oil Ltd. and Suncor Energy Inc. have given the green light to previously shelved projects employment in Alberta is looking to pick up in 2010. It won't be the crazed hiring when there was a labour shortage but there will be jobs for skilled individuals.

What this means is that more highly skilled workers will be coming to Alberta to get jobs. They will subsequently be looking for a place to rent or live. For landlords that means houses to be rented or houses to be sold.

"What growth might happen in 2010 will be in the second half as a result of a recovery from the recession, whatever that might be," Roger Soucy, president of the Petroleum Services Association of Canada (PSAC)

How far is the.....? Walk Score is too cool!

There's gotta be a grocery store around here right? Famous last words. The house is perfect and matches all you criteria. You can' t wait to move but where is everything?

or

How many times are you asked by a prospective buyer or tenant what amenities a neighbourhood (Canadian spelling!) has? A lot. I admit sometimes when I fill out online forms for our rental properties that I use my judgment on what is near and far.

Sometimes that is ok but if you don't have a car....

To Walk Score, this website is so cool! Simply put in an address and you will get a rating on the neighbourhood's "walk-ability"(whether you need a car or not) and the proximity of all amenities down to the last tenth of a kilometer.

"Picture a walkable neighborhood. You lose weight each time you walk to the grocery store. You stumble home from last call without waiting for a cab. You spend less money on your car—or you don't own a car. When you shop, you support your local economy. You talk to your neighbors."

Ah the last call dilemma.... haven't been bothered by that in years!

Anyway it's an amazing resource for all real estate professionals.

Easter in December

Last week, actually about 10 days ago I went shopping. I was looking for a gift for my friend's daughter's birthday. I walked into this very stylish downtown mall and was greeted by... Christmas music!

Throughout the shops you could hear the jing-jing-jingling of the coming festive season. For a second, I was lost in thought thinking"Wow where did November go?" only to be brought back to reality when I spotted all the Halloween decorations.

That's right, Xmas music - Halloween decorations.

It pays to be prepared. I read an article today about the increasing rate of business bankruptcies in the USA. Many commercial leases were being broken as the companies went under and were unable to fulfill their contracts. But at the same time there are temporary businesses looking for quick profits during the holiday booms. One such costume rental company in Edmonton is open for 2 weeks before Halloween and for a few days after.

Savvy commercial landlords offered short term leases to opportunistic business folk who only intend on riding the seasonal wave. What a sweet marriage for the two businesses. Many seasonal companies have trouble finding space to lease for the short term and these landlords were able to solve their problems and at the same time recoup some loses.

Here are the two lessons that I gleaned from my trip to the mall.

#1 It pays to prepare. Work your plan solidly. If that means buying an investment property, get out there and start your research now. The added knowledge will give you power when you are ready to buy.

#2 Look for solutions in would-be problems. The commercial property owners weren't happy about losing leases to bankrupt clients - but they looked at the challenge and rose to the occasion by meeting new client's needs.


In a world that is always two holidays ahead, make sure your business solutions aren't Easter in December.

"Take time to deliberate; but when the time for action arrives, stop thinking and go in." Napoleon Bonaparte I appreciate all your calls and emails. I'm looking forward to helping you put together your next deal.

Thank You,
Todd and Danielle Millar

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Keep investment real estate cash flow positive.

In a recession it's easy to see that buying for cash flow is the only way to go. In a hot market everyone banks on equity. Which can be a very tenuous thing.

The most important thing is how much cash flow you are getting at different rates. We are seeing the lowest interest rates in history but when they rise how will your investment perform. Will it still cash flow at 6% interest? How about when vacancy rates increase and you get a drop in rents?

This is called stress testing your property. Although many people see cash flow at one point only - today's rates and today's rents the income will fluctuate leading to some unfortunate surprises.

What to do:

1. Do your property's income and expense numbers at a range of rates and of rents
2. Know the scenario your property will and won't cash flow
3. Have a good reserve fund to cover the skinny times.

You don't retire or get rich by owning property that takes money out of your pocket every month.

Edmonton 2009 House Prices

Want to see how house prices across major Canadian cities have fared over the the last 2 years?
Take a look at this interactive map of real estate statistics from across the country, including home sales, average prices, apartment rents and vacancy rates.

Edmonton's stats are as follows in October 2008:
Vacancy rate - 2.4%
Average monthly rent for 2 bedroom apartment - $1035
Average resale home price (Dec 2008) - $310,000

Home prices dropped 1% in 2008 and are expected to drop another 10% until 2010 when they will start to pick up again.

As an investor house values are only important when you sell. Therefore timing when to sell is crucial. The best thing to do is not sell now unless you absolutely have to. Take steps to reduce your costs and make your properties positively cash-flowing.

How do you do that?
Keep your property manager productive
Keep your property a rock solid money making fortress
Avoid fear and keep your head about your investment goals


Best of all now the buying signals are phenomenal! It's a buyer's market with incredibly low mortgage rates.

Anyone who has made a lot of money in real estate will tell you that buying when markets are low, during times of crisis is the smart man's game.

We Can't See It.....But Others Can

People in other countries are lining up to get into Canada. While their economies are suffering and unemployment is rising, Canada is begging for workers at immigration trade shows in the UK.

Sure the Canadian economy is feeling the effects of the global economic crisis but when compared to countries like Iceland, America and Scotland we are a beacon in the darkness.

Alberta especially is attractive due to its low taxes and high than average salaries.

"Canada welcomed 8,128 British immigrants last year, up 25 per cent over the previous year and making Britain the sixth-biggest source of immigrants to Canada." Read More

This is a win-win situation for real estate investors because when the long-term migrants first come they rent properties and when they decide they love Canada/Alberta they buy real estate.