We have so much to share at this Member Event we don’t even know where to start.  

Facebook Advertising, Economic Updates, Member Hot Seats, Accountant Updates around Corporations, Trust Agreements and Joint Venture Agreements and CRA Updates plus three brand new announcements for members.  Hold on…this is going to be fun.  

If you’re a member of ours and have not registered yet (it’s included with your membership) email or call our office today!

And you know what makes these so special…YOU!  Can’t wait for it…see you there!

 What if you are better, more creative, more accomplished, more talented than you ever thought you were?

I know there are some great quotes about this type of thing out there.  I was just reading one of them the other day that likely sparked this whole thought process.

So seriously,

What if you have the power within you to be the creative spark that brings new hope to someone?

What if you have the power to change the course of an entire family, community, generation?

What if you have more energy, more ingenuity, more skill, more poise than you ever thought possible?

What if you are much more cool than you think you are?

Well….

You are.

Seriously, you are a super star.

How do we know this?

Let me explain…

This week I asked my seven year-old son what he got on his science test last week.

He answered, “B+”

“Great job”, I said.

Then he said this, “There’s a girl in my class who cries when she doesn’t get an A – so she cried today.”

Holy @#!%!

Here we go, the day has come where I have to explain to my son how the world really works.

“Aidan, you know, tests are important, they’re very important.  But you know what’s more important?  Much more important?”

“What Dad?” … with a little hesitation in his voice.

“It’s how hard you try.  How much effort you give.  How much you commit to getting something done that really makes you who you are.”

“What do you mean, who I am?”, he says.

Oh boy, it hit me that I had “a lot a splaining to do”.

From what I can tell, grade school is grading my son using tests that mostly verify his memorization abilities.

You get an A and you’re good.

You don’t – you cry.

And I find myself falling into the trap of going along with that nonsense.

In the real world tests are only one small part of the battle.

Sure, we have to do our driver’s test and different professions have their “weed out the people who can’t memorize” tests….accounting, real estate, law, doctors etc.

But that’s only a tiny part of the battle.

The other part is how hard you try.

How much you commit.

How much focus and discipline and creativity you have.

Let me share a story from my childhood…

In Senior Kindergarten (yes, I’m going way way back!) I was appointed into the “gifted” group of kids that got to colour the super advanced drawings of Farm Animals instead of just the simple ones.

I don’t what’s more hilarious, the fact that I still remember that or that there really was a gifted program in SK.

In grade one I was removed from that group, apparently my colouring wasn’t up to snuff.

I have been forever scarred and don’t play with crayons to this day.

But a few kids stayed in that program all the way through grade school.

On tests, A’s came easy to them, real easy.

As far as I could tell they didn’t really even need to study for very much, if at all.

They just sat down and wrote the test.

This continued through high school.  

They just aced everything.

Even in University….same thing.  Almost unbelievable.

But then something happened.

At about the age of 24 through the door walks in “the real world”.

And the real world doesn’t give a rats tail how well you can write a test.

The real world wants results.

The real world spits out people who can only write tests.

The real world doesn’t care about theory.

The real world cares about implementation.

I’m sure we all know a “genius” lawyer, accountant, real estate agent who is just “so smart” but has all kinds of struggles.  Financial and/or otherwise.

The real world doesn’t acknowledge their “A” status.  

And that’s what I want my son to know.

He’s two scoops of awesomesauce because he tries hard.  He really gives it his best.

Sure, the marks are important but the effort is more so.

I love him a lot.  A real lot.

And I want him to know this.

And you know how I know you’re two scoops of awesomesauce too?

Because you’re a real estate investor.

Why does that give you “awesomesauce” status?

Let’s walk through a day in your world…

Financing changes and challenges – CHECK

Unruly sellers to negotiate property purchases with – CHECK

Advertising that just isn’t pulling like it should – CHECK

The odd tenants with a nutty and unreasonable demand - CHECK

In-laws who think you’re taking too much risk - CHECK

Friends who think you’re crazy and behind your back may smile if you fail - CHECK

Deals that fall apart b/c banks change their requirements after initial approval and you have to find a Joint Venture partner in 12 hours - CHECK and CHECK

Massive downpours that cause flooding, wet carpets, insurance claims and unbudgeted expenses - CHECK

Mortgage Insurance curve balls, Joint Venture agreements, having the pressure of silent investors on your shoulders - CHECK, CHECK and CHECK

Real estate agents that don’t present offers to their own clients - CHECK

Having co-workers roll their eyes whenever you talk “cap rates, cash flow and appreciation” - CHECK

Handling all of this while managing your 9-5 life, your family and maintaining a social life - CHECK

Dealing with stress, time limits and complaints - CHECK

Creating cash flow, building equity, gaining invaluable skills and creating a future that will provide more freedom and a greater lifestyle choice - CHECK, CHECK, CHECK and CHECK

Let us ask you this….

Where is the test that can prepare you for that stuff?

Real life is about creatively solving problems.

When a curve ball comes your way you adjust your swing and go for it.

Having faith when no one else does.

Acting when you have 80% of the knowledge instead of 100%.

Making mistakes, correcting them and then moving on.

Real life has lots of failing grades.  But when you follow-up on those challenging experiences like only you can with double the focus, double the effort and double the creativity that only you can bring to the table – then the F becomes an A.

Your unique advantage?

Your awesomesauce?

It’s the uniqueness you have inside of you.

It’s the way you look at a problem and find a solution that only you could.

It’s carrying the weight of others on your shoulders and getting the job done.

It’s flying in the face of the naysayers who sit still, gossip and talk behind your back.

It’s even surprising yourself with your own ability sometimes.

It’s the amount of time, effort and energy you dedicate to your cause.

Here’s my fear, my biggest worry…

That through social norms my son will have a sense of entitlement because he got an “A” on a piece of paper.

That things will be served up to him on a silver platter.

That he won’t have to get his hands dirty.

Don’t get me wrong, subjects like English, Math, History are all important.

And there’s some great teachers in the system.  I was fortunate to have a few myself.  It’s just that the “overall” system is designed in a way that ignores subtle but extremely valuable experiences in youth.

Things like conflict resolution at recess and talking things out inside of getting frustrated and conquering your fears?

The last time I checked there weren’t categories on his report card that read:

Overcame impossible odds and stretched himself/herself this semester.  A/B/C/D/E/F

Scared beyond belief of the deep end of the pool but jumped in anyway.  A/B/C/D/E/F

Had no idea how to get something done, researched it overnight, implemented something and failed to accomplish goal but learned how to get things done.  A/B/C/D/E/F

Didn’t let peer pressure to stop him/her from wearing that cool shirt that he/she designed by himself/herself.  A/B/C/D/E/F

Believes in himself/herself.  A/B/C/D/E/F

Got a C+ but worked hours on end, with integrity and helped his classmate gain a sense of confidence.  A/B/C/D/E/F

Helped the community in three different ways.  A/B/C/D/E/F

Here’s my question to you and I already know the answer:

What if you are more creative and more powerful than you ever dreamed?

Because you are.

You and I both know it.  

Here’s the bottom line.

I am proud to be associated with real estate investors and the community of them (us).

Thank you for having me.  You have given me more than you know.

And as for my son…

I will work hard to ensure he continues his journey without getting discouraged at meaningless milestones.

Or at least trying to instill the proper perspective about them in him.

I don’t want him crying when he gets a B+.

He’s two scoops of awesomesauce.

And so are you.

Until next time … be a Renegade!

This post is not about “student rentals”, it’s about the day I realized that making assumptions using the most obvious observations or appearances can cost you money…enjoy!  Oh yeah, it was cold and Nick had a close call with a car that was driving by!

 How fun is this?

The Government changes some mortgage rules, the newspapers have fresh “meat” for their headlines and Canada gets whipped up into a frenzy.

I’m sure it sells newspapers.  It definitely drives visits to our websites, we noticed quite a spike on Tuesday!

And it sure does create a bit of excitement doesn’t it!

We’ll spare you the details of the announcement as we’re sure you’ve read about the different mortgage changes announced earlier this week – several times.

We’d rather make a few observations about the reaction to it all.

As always, we fundamentally believe if everyone is panicking about something there’s opportunity knocking for those who choose to find it.

And we believe that Canadians were VERY VERY lucky with the announcements made and we’ll explain why a little further down.  

Stage 1:   The most common first reaction to ANY news of almost ANY kind, but especially to something they perceive as negative, is pure panic.  Sky is falling kind of stuff.  And that’s what is happening right about now, sheer panic by some.

Some will even blame the Government for everything from their own situations to the state of the single-family home rental market in Canada.

We’re definitely past that.  Recently we actually found ourselves getting our hopes up for the power of government when the Conservatives kinda/sorta promised the end of capital gains taxes if you re-invested within a set time – but we were quickly brought back down to earth when it didn’t materialize.

Stage 2:  In about a week you’ll start to hear things like this, “Wow, it was sure nice is those old days when you could get that easy financing.  I guess we’ll have get a little more imaginative in how we secure financing, maybe we’ll finally have to get serious about those Joint Ventures.”

Stage 3:  The world moves on as it always has.  Alternative financing options pop-up because of the vacuum created.  The economy hates vacuums and when there is a need apparent someone will fill it.  Mark these words.

1. It was not that long ago that investors had to put 25% down for investment property.  Shocking we know, but 100% true.  And this was less than three years ago if memory serves correctly.  There was one mortgage program for small investment property that we knew of offered by GMAC that allowed 15% down payments.  There were likely others, as there always are, that we weren’t aware of at the time.
2. After some time Genworth decided to offer a 10% down investment program.  Then some B-players, like Xceed Financial, offered 5% down on an investment property.  Then CMHC announced similar products and ate their lunch.  Now that CMHC is gone will other mortgage products begin to pop-up again? Likely.
3. No one will want to hear this but putting more money down on property does increase the cash flow.  Your ROI is less, but your cash flow is higher and we like cash flow.
4. Investors who already own property and plan to grow their portfolio of cash flowing assets will have less competition.  In other words, the amateurs get shaken out of the market.  Harsh but true.

For many Canadian investors this news really doesn’t change much at all.  At some point in everyone’s investing career you’re faced with having to put down 20% on your next investment.

That’s been the reality for as long as we can remember.  And it was 25% down before it was 20%.

This doesn’t change.

And investors with a few properties under their belt have had to raise at least 20% for some time and likely began their investing careers by investing with 25% or 20% down.

What does change is the investor who was just starting out now has to get creative like the rest of us!

The three most common ways that investors have been financing have been:

A. Saving up enough money to put the down payment together themselves.

B. Finding Joint Venture partners.  Either active partners or silent money partners.

C. Searching high and low for the one off bank and/or credit union that allows 10% down payments with a 10% second.  These actually still exist today.

OK, you want the upside to all of this?

Here’s the news that the government does not want to admit to…

They really haven’t cooled the real estate market with this at all.

They’ve actually almost done nothing.

ZERO.

They have put a dent in condo speculation for sure.  We actually know some investors who purchased 45 brand new pre-construction condo units in a single building in Toronto.  

Forty-Five!

But everyone with property right now will likely see some continued appreciation right across the country because interest rates are still at ALL TIME record LOWS.

This will drive the market and raise prices.

So all those speculators out there are lucky because they won’t get creamed like they did in the early 1990’s when the Bank of Canada raised rates aggressively … we’re talking multiple percentage points in a single month.

All those property owners that were buying to “flip for cash” for quick cash got very very lucky.

If the Bank of Canada raised interest rates or the government raised CMHC down payment minimums to 10% these speculators would have had heart attacks.

All those buyers that they were going to “flip” to would suddenly have gone bye-bye.

That’s what happens when you don’t buy for cash flow.

Ask us how we know!

And that’s what happens when you buy starter condos for prices that really aren’t that “starter”.  $400,000 for a few hundred square feet on the second floor sounds a little bit off, no?

So by not making any real structural changes to the mortgage market they have allowed it (rightly or wrongly) to plow ahead.

And the reality is that they CAN’T raise interest rates right now.  

The Bank of Canada has their hands tied.

It’s really an amazing situation.

(Aside: We’re going to be explaining this in details at our upcoming Quarterly Income for Life Member’s Event, if you’re an Income for Life Member register now by contacting our office!)

So they come up with these types of small mortgage announcement to try and put some psychological brakes on the market.

Our first reaction to the announcement on Tuesday was, “Wow, they sure left a lot of meat on the bone.”

Meaning that the government didn’t raise down payment amounts, they didn’t shorten amortization periods and they didn’t raise interest rates.

They actually did next to nothing to cool the market.

Even the announcements they made this week don’t take effect until mid-April (with some banks likely acting sooner).

Want some more good news?

Well, we could have what our friends in the U.S. have right now.

As one U.S. investor shared on our Rock Star VIP Member call earlier this month, “There’s blood on the streets down here.”

30% depreciation across the board.

And 30% required as the minimum down payment for almost any property.  And some banks are asking for all cash offers.

Appreciation not expected in his market for another 24 months.

So much government paper work that to even buy good deals you have to fight the bureaucratic machine.

He even went on to say that he himself is not buying properties in his area of Florida and wouldn’t recommend any to us.

And it was recently reported that 60% of the rising personal bankruptcy trend in the U.S. is due to medical bills.  (Source: CNN Money)

How’s that for fun?

It kinda makes 20% down payments, with super low interest rates, in an appreciating market, where you and your tenants have health care seem like a dream.

Things may not be perfect but perspective is everything.

And remember, when everyone around you is running around screaming the sky is falling then there’s an opportunity to sell umbrellas.

What’s the opportunity in this for you?

Look for it, it’s there.

Until next time … be a Renegade!

Mike and Ruben share the latest developments at the Rock Star Mansion build…