Real Estate Quotes

The number of listings of properties for sale tends to peak in comparison to sales volumes during the end of the slump phase as the supply of property exceeds demand. It reaches a statistical through during the boom when properties are selling rapidly. In the GTA's case, listings have not followed this typical pattern; in fact, they have moved the opposite way during the slump phase, due mainly to the strong demand brought on by the market influencers. It is important to note that, before a true sustained recovery begins, it is likely that listings will begin an upward trend. [2011] - Don R. Campbell

The strategic real estate investor may buy property in a slump because he has a business plan to hold that property until a sustained recovery arrives. The bottom line is that strategic investors will exercise caution in a slump. Strategic real estate investors diligently stress-test their portfolios to measure the potential impact of rising interest rates. [2011] - Don R. Campbell

The ABC Strategy: Adjust for the Slump - Build for the Recovery - Capitalize on the Boom [2011] - Don R. Campbell

The Golden Rule: Always Make Money on the Buy. Finding undervalued properties gives investors more tactical options to choose from to further their profits and achieve their goals. Motivated Vendors: If a vendor is getting transferred due to employment, they may be motivated to sell at a reduced rate. A vendor who is downsizing may take a reduced rate if he or she believes the buyer will take care of the property. Distress Sales: Couples who want to quickly divest themselves of shared property as a result of marital discord may sell for a lower-than-average price. Estate Sales: Sometimes family beneficiaries are inclined to make a quick sale, in lieu of holding out for fair market value, so they can realize their share of the cash faster. [2011] - Don R. Campbell

Assuming positive equity in the property, a vendor is likely to be more lenient on price to prevent further credit issues BEFORE the property goes into foreclosure. If the property is in Canada and is already in foreclosure, be cautious and understand the Canadian foreclosure process, as it is much different to the U.S. model of deep discounts. [2011] - Don R. Campbell

The end of the slump proves to be the best and generally the most profitable time in the cycle to execute the buy-and-hold tactic. Values are at their lowest and confidence in the market is at an all-time low. The end of the slump phase is considered a buyer's market and there is a lot of inventory to choose from. Vendors are highly motivated and investors who want to capitalize on the end of the slump bargains will continue to look for quality properties that are undervalued or underutilized. The beginning of the recovery phase will still be offering great buy-and-hold deals. There are still many motivated vendors, and strategic investors will likely enjoy a steady appreciation for the remainder of the recovery. [2011] - Don R. Campbell

Market influencers impact the immediate levels of supply and demand in the real estate market. Their effect is temporary but real. Market influencers have little to do with the fundamental key drivers of the real estate cycle, but that does not mean that market influencers are insignificant! In the Vancouver and Toronto markets from the middle of 2009 to the middle of 2011, a "false boom" occurred. Fuelled by market influencers rather than an actual shift in the real estate cycle. The low interest rates and impending HST worked as market influencers and stimulated real-world, but short-term, demand, thus creating a false perception of a real estate boom. [2011] - Don R. Campbell

Many financial gurus would caution you not to pay off your home early —— because of lower historical returns and tax deductibility. But several people we interviewed went against that conventional wisdom, not because it was the best way to accumulate great wealth, but because it gave them the daily satisfaction and comfort of not being in debt. When a wealth-accumulation strategy creates daily stress, it's not worth the potential return. If a major purchase such as a home or a car creates a burden of debt that makes you uncomfortable, it's likely to do more damage than good for your overall wellbeing. [2010] - Tom Rath

A special commendation should go to the small cities and towns that are actively promoting themselves to the world. These include towns such as Barrie, Orillia, Hamilton and the Tri-Cities areas of Ontario; Fort Saskatchewan, Grand Prairie, Red Deer and Devon in Alberta; and Abbotsford, Cranbrook and Fort St. John in British Columbia. Although these may or may not be great places in which to invest, these towns have decided that their future is in their hands and they are promoting the influx of investment to their towns. [2009] - Don R. Campbell

Areas like Forest Lawn in Calgary, the Junction in Toronto and Queen Mary Park in Edmonton are all in different levels of transition, providing investors with some major opportunities. [2009] - Don R. Campbell

As an investor, you may begin to feel frustrated when you haven't written any offers in a while. However, that simply says you are following your system and waiting until you find a property that does fit your system. [2009] - Don R. Campbell

A positive cash-flow property is a property where, at the end of the month, the rent you take in exceeds the expenses of operating and owning the property. These expenses can include utilities, maintenance, management and insurance, in addition to the more obvious mortgage and tax payments. [2009] - Don R. Campbell

(Gross Annual Rent / Purchase Price) x 100 = Cash Flow Zone%. The key number is 10%. If the gross annual rent is 10% or more, you have a very good chance that the property will provide you with good positive cash flow. If the gross annual rent of the property is 8% or more of the purchase price, then the property is still worth further investigation as it sits within the Cash Flow Zone. The majority of properties for sale in any given marketplace will not fit the Cash Flow Zone rule. Your job as a sophisticated investor is to have the patience to uncover the ones that do. If none in your area fits the system, then you will want to change your target area. [2009] - Don R. Campbell

Once the property fits the Cash Flow Zone, the next step is to determine the motivation of the vendor. Unmotivated vendors will waste a ton of your time. The best way to determine the vendor's motivation is to provide your realtor with a list of questions. 1. Why are you selling? 2. How long have you owned the property? 3. When do you have to move? The answers you get will reveal the vendor's motivation level and, as an added bonus, you'll discover whether the most critical motivating factor is time or money. You should also note that a vendor's motivation level often increases when the property has been listed for sale for some time. [2009] - Don R. Campbell

Writing offers is the difference between successful investors and excuse-laden pretenders. If the offer is rejected outright, then you know you haven't found the motivated vendor you're looking for; remember, dealing only with motivated vendors is absolutely critical. By receiving an outright rejection, you have just saved yourself substantial time, energy and money because there is no use putting any further effort into this property until the vendor is motivated. You may return in a few months when the vendor's motivation level has increased, but today is not the day for a deal, so move on to the next one. [2009] - Don R. Campbell

The deposit should be made out to your lawyer's trust account whenever possible or, failing that, to your realtor's trust account. I like to provide the deposit in two steps. I provide an initial deposit with the offer, to show that I'm serious, and then the rest of the deposit upon the removal of any of my conditions in the contract (for instance, following an inspection and approval for financing). [2009] - Don R. Campbell

If you need to arrange financing in order to buy the property, you will want to include a conditional clause such as "Subject to buyer obtaining financing satisfactory to the buyer on or before (insert number) of days from acceptance of offer." Be sure to include "satisfactory to the buyer" in this clause to ensure that not just any financing will force you to remove your condition. If you can get financing but it doesn't fit your system, you will want to have the option of not accepting it. On most small properties, such as single-family homes, condos and duplexes, 21 days is sufficient. [2009] - Don R. Campbell

Sophisticated investors avoid placing specific dates on their contract conditions, Instead, they use a specific number of days after acceptance. For example, rather than "Subject to buyer's lawyer's approval by May 11, 2010", the statement should read, "Subject to buyer's lawyer's approval within 14 days of acceptance." That way, if the negotiations go back and forth for a while and the vendor finally agrees, to the contract two weeks after you started the process, you are not under any additional time constraints. [2009] - Don R. Campbell

Multiple Offer Strategy - You will create two clear and distinct offers, for example: one that focuses on a higher price with a longer closing date, and a second one that focuses on a shorter timeline, yet with a lower price. Another example would be: one offer at a lower price and no vendor take back (VTB) mortgage and another at a higher price with a VTB. [2009] - Don R. Campbell

The most effective way to get your offer accepted is to attach a cover letter to every Offer to Purchase you submit. The job of this letter is to clearly communicate to the vendors why he or she should accept your offer; it points out the highlights of the offer and any additional information that the vendor would find comforting, ,such as your experience and maybe even a testimonial or two from previous vendors from whom you have purchased. Keep the letter short and to the point. Sign it in blue ink, so it doesn't look like a photocopy. [2009] - Don R. Campbell