Uncategorized – Page 3 – The Evans Real Estate Group Blog

How to: Increase net worth by $700/month w/bonus cash of $600/month for 5 years with a few thousand dollars start up.

Let’s say you are renting a townhouse. In Ottawa a nice townhouse can fetch 1450-1600 a month rent, so let’s just say $1500 for arguments sake.

That same townhouse is likely going to be about 305-325 to purchase, so let’s go with $315,000.

5% down is 15, 750. Budget a few thousand for closing costs as well.

On a 5 year, 30 year ammo, 3.5% your payment is $1343 – CHEAPER than rent.

It get’s better.

Remember that rent you were wasting? All $1500 of it? Well when you are paying a mortgage – this one specifically – $480 of the payment is going towards the loan itself, and the only the balance of $1020 is being wasted away! With a scenario like this you are saving about $500 a month when compared to renting. The money being paid against the loan is similar to being put in a bank account called “equity”. Think of it as a bank account in the walls of your home, and you get to cash it out when you sell. Now if you only put 5% down you will have to pay CMHC Insurance, which will get added to the mortgage and cost you about $30-$40 extra per month. Property Taxes and Insurance will also cost you about $300 a month as well. So you’re extra $480 per month becomes about $150 per month of a net savings.

It get’s better.

Some banks are offering Cash Back incentives of up to 5% of the purchase price of the home you buy, so while you are spending 5% plus closing costs to GET the house, you are getting back 5% cashed back, meaning you are only out of pocket a few thousand bucks!

Not too bad!

It gets better.

Let’s say that townhouse appreciates at a conservative 2% per year, and you hold onto it for 5 years. That’s about $6600 per year in appreciation, or $550/month NET (since you can realize this amount in a lump sum when you sell, tax free as long as CRA determines it was your principle residence).

Summary:

TOTAL CASH OUTFLOW of owning this townhouse of ($1343 mortgage plus $330 taxes and insurance = ) $1637 per month.

Net Worth Increase of ($150 paid against loan + $550 gain in appreciation = ) $700 per month.

Do you see how people make some good money by buying a home and selling it after (about) 5 years? That’s 60 months of increasing net worth by $700 which is $42,000!! MONEY YOU WOULDN’T GET RENTING!

BONUS: Rent out a room to a good friend for $600/month and put that money directly against your mortgage and realize ANOTHER $40,000 of equity from paying down that loan faster. That’s up to $82,000 of a gain in 5 years!

As I always say – don’t go running amok spending your money on a townhouse now… consult with your trusted sales and lending professionals to make sure this scenario is right for you, and to go over all the intricate details and risks. Email me at mevans@evanselattar.com to look into it if you would like.

Uncategorized

A Good Plan Today is Better Than a Perfect Plan Tomorrow

Interest rates are more than likely to start going up in then next 6 months….very slowly I’m sure.

Are you fully taking advantage of the historic low rates?

Have you thought about refinancing your home?

Maybe pulling out some equity to invest in something?

Straight out buying an investment?

It’s the time to start thinking about it and even to explore opportunities. A lot of times people don’t think they could ever get involved for one reason or another. Some believe they don’t have enough money, some think it’s too risky. Well…There are ways to get in for relatively cheap and even FREE, and when it comes to risk, well…driving can be risky too…but that doesn’t mean you have to be a risky driver.

Remember that Ottawa is a slow and steady market, so the bread and butter to long term wealth here is buying and holding. There are plenty of opportunities out there right now.

I myself am looking to upgrade my personal residence this year and have a secondary dwelling in the walk out lower level to subsidize my mortgage. If rates weren’t where they are I would be staying put for another few years until I completely outgrew my home and had more equity – but instead I’m taking advantage of a good buying environment and upping the ante.

Are you making any moves?

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Investing in Real Estate with Little to No Money Down

2 ways to do this:

First one: “100% Financing” from lending institutions. Now I have this in quotations because TECHNICALLY it’s not 100% financing, but PRACTICALLY it is. Many banks are offering a loan at 95% value, and if you qualify for the program they will CASH BACK 5% on closing. There are a couple hoops to jump through with this program but it IS available for those who qualify. This would only apply to a principle residence (strategy to get into other projects is below) but there are strategies to make the best investment use of your home as well (see a few blogs ago). If you want a contact name for a lender that I trust that offers this program email me at mevans@evanselattar.com.

Second way to get involved is called a Joint Venture. Essentially what this strategy entails is you getting someone else to pay for an investment with you as their equal partner. Now why on earth would someone do that? Well if you had a solid team with a Realtor, Lawyer, Developer, Lender, Appraiser and Property Management company AND you had the ability to find great deals before anyone else did and acquire them for a stellar price, offering them an opportunity and return they can’t match anywhere else – why WOULDN’T they be a silent partner? You disclose that you are expecting X amount of money from this project, and their return is Y. The difference is yours to keep. Again- if they get to be a silent partner and get the money they want, AND are satisfied with the risk involved – then giddy up.

Don Campbell wrote a fantastic book on this subject. I believe it’s simply called Joint Ventures in Canada. You should get it.

My team offers projects like these, and we have partners that are always interested in expanding their investor/partner base.

There you have it – 2 ways to get in the game.

Be safe and consult your professional Salesperson before jumping in.

Cheers

Renters, Uncategorized

Making Money with a Townhouse

Here’s another one for you.

Buy a townhouse within walking distance to a major public transportation route. 97, 95, 96, O-train, and if you’re feeling confident in the Lightrail project – along it’s proposed path. Walking distance means a distance that you wouldn’t mind walking in bad weather.

Ideally the property is no more than a few years old so you can hold it for a solid 10 years without having to replace or repair anything.

Advertise the property for rent as a 4 bed townhouse perfect for mature students (3 beds upstairs and a lower level as a bedroom). The going rate of a student bedroom for something like this is about $550 a room, so you can try to push for 600 for the basement and master, and 500 for the other smaller rooms – $2200/month and advertised as such (no room by room leases – just one big lease). You should be able to make some great cash month over month. Now more money also means more risk – as I’m assuming you first thought when you read the word “student” – so do a thorough check on them and use your gut instincts. Get their parents all to co-sign as well. I also tell my student tenants that I’ll gladly give them references once they leave and do my best to help them get great rents on their next place. That usually keeps them wanting to be in my good graces. Finding and keeping good tenants is a topic for another blog.

Now what’s great about this strategy is that if you do this right, not only will you be able to make some fantastic cash month over month, but in the event you need to sell this asset at the 10 year mark or sooner – according to a recent CMHC study, townhouses are set to appreciate a little more than all other property types due to the amount of further aging baby boomers and influx of immigrants that want a home but not too much to maintain for their own reasons.

A nice cash flowing asset and a good looking exit strategy with a serious chunk of equity at the end.

Now don’t get ahead of yourself and go running out there thinking this will all work out without some serious diligence and a little risk taking. Consult your trusted professional salesperson.

If you would like some of the finer details of how this could work and a personal step by step walk through, complete with examples of what could work – send me an email at mevans@evanselattar.com

Uncategorized

One Way To Make Money In Real Estate

The Ottawa market has a lot of ways to make money in Real Estate, and there ARE ways to get in on an entry level. A very good way any people have made sizeable chunks of cash have been to use their principle residence as the tool. Now some people have simply bought and held, some have built and held, some buy and reno and hold. Notice HOLD is always there? You can’t just buy and sell right away or CRA will ding you for their cut sooner than later.

The big idea I want to explore to is to find/build a nice home where you can live for a few years that has some potential to use some of the space as a rental suite or a “secondary dwelling” as the City defines it. Either you can have a nice good sized home that has a walk out basement and you use a significant chunk of the lower level as a suite – complete with 1 or 2 bedrooms, at least 1 bath, laundry and a kitchen and all. Keep a part of the basement for your own use- maybe a home theater or rec room for the kids. The walk out basement lends itself to nice big windows, a full and proper entrance. Now you can do this in a regular basement but be weary of the window size restrictions, and the entry can’t be on the front or in the home. The link to the City’s restrictions will be at the bottom.

The other good way would be to buy/build a nice big bungalow and use up to 40% of the gross floor area as a secondary dwelling unit. You could buy a big old 5 bed bungalow and do some remodeling which gives you 3 and quality in the basement with more room to use, and the other side could be a 2 bed with a great sized basement.

Now in our market we have 2 huge demographics. Baby boomers/empty nesters/snow birds and their kids – Gen X’ers (me…and maybe you too). Think about it….The former group needs a smaller space, likely wants to sell their principle residence for tax free money and live off it/invest it, pay a modest rental fee around home and spend some good time wearing white belts and golfing in Florida. Great tenants!

Many people my age are in relationships and still working very hard at their careers, not necessarily starting families yet. This group of young professionals need a place to live for a few years to keep immediate costs down where they can focus on building that foundation. Great tenants!

Both groups also want a quality space they can be proud of, and are willing to pay a fair market rent for it.

This rent pays down your mortgage faster, and you get to sell your home down the road and pocket tax free money, OR you could keep it and pull out some money to use as a down payment for another new home and KEEP this place and rent out BOTH sides.

Now you’re cooking with gas.

Where do you start? How do you go about financing a project like this? How do you develop a project like this?

Email me at mevans@evanselattar.com and I’ll tell you. I also have a FREE investment seminar coming up in a few weeks with featured lenders and developers.

For rules that will likely apply visit http://ottawa.ca/en/residents/laws-licenses-and-permits/laws/city-ottawa-zoning-law/zoning-law-2008-250-consolidation-60  and http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/rsdnc/menu-eng.html

For ideas on how to make money buying pre-construction, developing other entry levels of real estate or even converting residences to multi unit buildings – keep an eye on the blog.

Real Estate - ANALYSIS, Real Estate Sales, Thought Process - THOUGHT PROVOKING, Uncategorized

Is More Really Better?

I haven’t posted a blog in over 2.5 years. I’ve been busy building my brand and my business and it’s been going pretty well.

One thing I was originally challenged with was – How do I compete with the BIG BOYS? After all – they advertise homes on radio, they have billboards all over town, etc. That’s A LOT of money that I simply don’t have.

I thought about it long and hard… and I asked myself this one very powerful question: Is having MORE marketing tools the answer? I mean.. what if there are a key 3-5 things that a Realtor does to effectively sell homes, and everything else was just show and bragging rights?

For example.. if I have a 5 point marketing plan, and the other guy has a 10 point marketing plan – what’s the difference if those extra 5 things don’t cause the home to sell? Wouldn’t that even mean that a Realtor’s resources are being diverted into marketing avenues that are distracting and robbing the focus of what really matters?

I believed it did.

So I looked into it.

I started meeting with some of the most respected Realtors in my neighbourhood, reading all about marketing strategies and tactics etc.. and I asked the TOUGH questions – “How often does X marketing tactic sell a house?” You know what I found? BY FAR.. all the extra marketing strategies were just ‘Listing Tools’. In other words – things that made you look good an impressed a seller so it helped you get the listing. That’s it!

This didn’t make sense.

So what did?

Well – there’s been another school of thought lately. It’s been one that says the Realtor that does the best job should get the job – not the one with the largest marketing plan. This school of thought is complemented (at least now in my business it is) by another that believes a large marketing plan is proof that a Realtor DOESN’T have buyers since they are investing so much into finding them.

So we’ve done a few things. First – we tracked out results and our numbers and compared that to the average agent in our marketplace. We’ve been able to compare our performance against the average Realtor and have relied on that information to prove our worth. After all – if you were to get some serious work done.. let’s say knee surgery, you would want to know how often the surgeon performs the operation and what the recover rate is, right? I would think that’s a good place to start.

The other thing we did is invest in marketing 2 ways. First – Targeted Marketing ( a real no-brainer for anyone with a marketing background). Marketing 101 is ‘Know your Target Market”, and everything flows from there. So for every listing we identify who the target market is, and we sell the home to that specific demographic. We put our marketing materials in places they go and where they will see it.

The next thing we did is market FOR BUYERS. In other words – marketing that offered what they wanted: Access to the best deals before others could get to them. You know what? THEY LOVE THIS. People thinking of buying homes just want that – homes. They don’t want a Realtor. Think of it this way: If you were going to buy a car, do you immediately ask yourself where you can find a car salesman and start evaluating which is the best? Of course not! You want CARS. So our mentality is the same with Real Estate. The vast majority of people- 99% of them, couldn’t care less who I am.. they want what I have – access to the best deals in Real Estate – so I provide it for FREE and with NO Obligation. IT’s only natural that through the course of interested buyers getting these homes that they learn that the best way to ACQUIRE these deals is also through me, and the vast majority then ask me to do that for them. What this does it allows my team to have a HUGE queue of buyers just waiting for good deals. Quite often they will sit and wait for months and months for the right house.

Think of that… we get to go to a Sellers home and tell them that we have hundreds of people in our database looking for homes, and IN THE EVENT that our targeted marketing can’t get that perfect buyer for you asap, there is a good chance we have someone looking to be in your neighbourhood in a home like yours.

Let’s see how quick we can put 2 and 2 together.

Oh – and here is what our results look like time and time again, with testimonials, references etc.

(sarcastic) Small side note: If we can’t sell it, we will buy it as well (see evanselattar.com for terms and conditions).

Makes sense right?

🙂

Uncategorized

Cardel Apartment Building in Notting Hill

Have you seen the behemoth of an apartment building that Cardel is building in Orleans’ newest and ever-growing neighbourhood of Notting Hill? They are nearly complete the 1st phase of the apartments, and the release of the showrooms is just around the corner!

The building has slightly over 40 units, range from 625 s.f. to just under 1,000 s.f., include six appliances, underground heated parking, elevators and storage – not to mention Cardel’s trademark rich and luxurious styles and finishes throughout. The condos start at just under $200,000, and the largest units on the top floor can be purchased for just under $300,000.

Now I’ve had the opportunity to step inside the building before the showrooms were launched, and I took some great pictures that I will share with you! I’ve got to say – their layouts are incredibly functional. They have wide open floor plans, master bedrooms with large walk in closets and ensuite washrooms, 2nd bedrooms on the other side of the apartment for privacy, beautiful kitchens conventiently tucked away in the corners with oversized islands for entertaining, formal entrances and the two larger models even have a defined dining space.

I must admit, having an apartment building in the centre of townhomes, which are themselves surrounded by singles, does seem a bit odd; not to mention the sheer size of the building makes it stand out. After some good consideration however, the building is really a blessing to Orleans and to Notting Hill alike. Let me explain.

There are a few apartment buildings in Orleans – the Brigil complexes at Briargate (Trim and Innes), and some very old buildings down on Jeanne D’Arc near St.Matt’s (note: Terrace homes, while mistaken for apartment buildings, are not. These are what we see in Avalon and Convent Glen). Every apartment building so far has seem to pose certain challenges that become the next developer’s strong suit. For example – the building near St.Matts is a quite practical concept, however it is buried right smack dab in the middle of the suburb. Having so much density at the heart of a suburb somewhat congests everything. Enter Briargate – Brigils endeavor to introduce an apartment complex to Orleans, this time being situated right off Trim Rd (transportation and congestion solved!). This development caught on quite fast, however some people have remarked that it is still not quite perfect – the lack of elevators being the main disadvantage, with others commenting on the commercial neighbours and high traffic making the complex seem a little more like a piece of downtown than they had bargained for. Finally, parking outside, and having to bring groceries up trip after trip, in Canadian weather mind you, can be tiresome.

Now let’s look at the Cardel apartments. Larger building, newer building, rich finishes – so the quality is clearly there. But look at the location – still off of Trim Rd (Pinnacle then Fieldfair to be exact, but about 20m from Trim Rd.), and is gently set back into the suburb and separated from the main road by a single row of towns. This allows for the building to have as little impact on traffic congestion as possible, gives the residents of the building fantastic access to the highway, and all the while helps them feel less ‘industrialized’ if you will. They get their own piece of the suburb, without infringing on the lifestyles of those around them that want to enjoy a little elbow room. As for the elevators – leave it up to Cardel to install them from the top floor, all the way down to the underground heated parking and to have storage lockers directly in front of the parking spots as well.

Having this building in the mix with townhomes and singles allows for a great diversity of lifestyles, allowing the young couples to mix with their single friends, empty nesters, and relatives with large and growing families. Throw in some MASSIVE road improvements (Trim expansion, Brian Coburn rd aka Blackburn Bypass, roundabouts and OC Transpo plans at Millenium park n ride), you have a recipe for a functional and vibrant community that will be taking care of families for decades. Did I mention that Bradley’s and Lavergne’s Western Beef are just around the corner?

If you would like to view the Cardel apartments, give me a call at (613)868-4383, or email me at marcevans@remax.net, and let’s get out to see them!

Post Script: I forgot to mention – they are building an identical building beside the existing one, and prices WILL go up!

Uncategorized

March Sales back to normal after HST fueled 2010

Members of the Ottawa Real Estate Board sold 1,232 residential properties in March through the Board’s Multiple Listing Service® system compared with 1,495 in March 2010, a decrease of 17.6 per cent. The five-year average for home sales in March is 1,256.

Of those sales, 296 were in the condominium property class, while 936 were in the residential property class. The condominium property class includes any property, regardless of style (i.e. detached, semi-detached, apartment, stacked etc.) which is registered as a condominium, as well as properties which are co-operatives, life leases and timeshares. The residential property class includes all other residential properties.

“As you can see, last month we experienced a typical average March in terms of resale home sales. That certainly was not so last year for the same period. The effects of the introduction of the Harmonized Sales Tax in July were already being felt last March as more buyers leapt into the market to try to avoid taxes on the services associated with a real estate transaction,” said Board President Joanne Tibbles.

“Years in which there are unusual market forces, such as the HST in 2010, tend to create skewed comparisons with subsequent years. Despite the lower volume of units sold, the average price continues to rise slightly, indicating that we are still in a healthy balanced market. Ottawa’s housing market is actively moving along as it typically does in early spring,” Tibbles added.

The average sale price of residential properties, including condominiums, sold in March in the Ottawa area was $346,148, an increase of 4.9 per cent over March 2010. The average sale price for a condominium-class property was $253,763, an increase of 6.5 per cent over March 2010. The average sale price of a residential-class property was $375,364, an increase of 5.6 per cent over March 2010. The Board cautions that average sale price information can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The average sale price is calculated based on the total dollar volume of all properties sold.

Uncategorized

Resale homes sold more quickly in February

Members of the Ottawa Real Estate Board sold 936 residential properties in February through the Board’s Multiple Listing Service® system compared with 1,030 in February 2010, a decrease of 9.1 per cent.

Of those sales, 213 were in the condominium property class, while 723 were in the residential property class. The condominium property class includes any property, regardless of style (i.e. detached, semi-detached, apartment, stacked etc.) which is registered as a condominium, as well as properties which are co-operatives, life leases and timeshares. The residential property class includes all other residential properties.

“Once again we’re seeing sales numbers very close to the five-year average for February, which is 962 sales. It’s important to note that the homes that sold last month did so far more quickly than in January, spending an average of just 33 days on the market. As well, prices rose slightly more than they had in the previous two months which indicate we still have a very steady market here in Ottawa,” said Board President Joanne Tibbles. “This tells us that there is a demand for resale homes in Ottawa, and that when buyers see the home they want, they’re going after it, perhaps even going up against other bidders,” Tibbles added.

The average sale price of residential properties, including condominiums, sold in February in the Ottawa area was $338,408, an increase of 6.7 per cent over February 2010. The average sale price for a condominium-class property was $260,112, an increase of 6 per cent over February 2010. The average sale price of a residential-class property was $361,475, an increase of 6.9 per cent over February 2010. The Board cautions that average sale price information can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The average sale price is calculated based on the total dollar volume of all properties sold.

The Ottawa Real Estate Board is an industry association of 2,600 sales representatives and brokers in the Ottawa area. Members of the Board are also members of the Canadian Real Estate Association.

The MLS® system is a member based service, paid for by the REALTOR® members of the Ottawa Real Estate Board. The MLS® mark symbolizes the cooperation among REALTORS® to effect the purchase and sale of real estate through real estate services provided by REALTORS®. MLS® commercial and residential listings are available for viewing on the Board’s internet site at http://www.OttawaRealEstate.org and on the national websites of The Canadian Real Estate Association at http://www.REALTOR.ca and http://www.ICX.ca.

source: Ottawa Real Estate Board

Uncategorized

1745 Stoneboat – Here and Gone!

Here is a glimpse into the execution of a quick sale I just made:
– Figure out what the active comparable sales are
– Figure out what the sold comparable sales are
– Determine what the house should sell for, and the highest we can ask while still making the property appear to be the best value
– Determine what kind of people live in the area and pay most for it (cross reference Cencus info, postal info and sales info)
– Make some home enhancements (touchups or renos, staging suggestions, adjustments to curb appeal)
– Capture the home in it’s best light (Professional photography and marketing pieces)
– Put together an info package that appeals to the target market identified above
– Make description of area, street, and home appeal to the target market
– Same with the imagery in your marketing
– Market the home on the lifestyle the target market will have in this home – sell on emotion!
– Submit property to MLS, private website, and 35 others to hit major search engines
– Distribute info packages to realtors that just sold similar properties and that may have leftover buyers
– Clear the home for a good dozen showings on first day
– Receive the offer (easy at this point)
– Negotiate with the agents to get your full price and all the terms you need (you need to know your stuff for this)
– COOPERATE with the agent and help them sell the property to their clients
– Let all the other agents that showed the property know there is an offer, which makes them all jump and drives competition for your clients
– Negotiate until you have the strongest offer on the table that your clients are willing to take
– Accept it
– Manage the conditions and help the other realtor do so (to make it easier)
– Negotiate to not “rock the boat” throughout the conditional dilligence
– Close it!

The keys to this one were:
– Targetted Marketing which attracted those buyers that were willing to pay the MOST for the property.
– Pricing the home correctly, so that it appears to be the best value in the marketplace and will still net your clients the most possible. Any higher helps sell the competition.
– Professional marketing to showcase the quality
– Strong negotiating to get and keep as much money on the table as possible
– a great cooperating brokerage with competent agents
– burning the candle at both ends to communicate with ALL realtors to drive competition for your client

Result? Everything my clients wanted be end of the same day it was listed.

Note: These results often make our job look easy i.e.” I can put a sign up and sell for full price in one day too!”, or ” I can’t justify paying a realtor for 1 day’s work”. What they dont see is a great deal of intelligent work and strategic planning that was put into it, to pull the trigger and hit the target as quickly and as accurately as possible.

I would argue that these results are actually a TESTAMENT to the excellent work performed by some agents.
What more could you ask for?

In the end, I’m happy that my long hours and hard work paid off, my clients are shocked it went exaclty as planned, and we are all happy.

Special thanks to the fantastic Realtor’s on the other end in this one – LOCKE Real Estate. They hustled to get this deal for their buyers, and it was well deserved. Bravo.

Marc

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