Real Estate Quotes

Private money is made available through Mortgage Investment Corporations (MICs). Put together through a Mortgage Broker Office, they represent an amalgamation of private investors' funds. MICs tend to lend on the strength of the property versus the borrower. Most private lenders will go as high as 85% financing, and a few may even push that to 90. This can be expensive money. However, it can also be a lifeline you can use as you buy a property that is extremely undervalued or under-rented. [2009] - Don R. Campbell

As an investor, you must find a broker who has substantial experience in investment property financing, completely different from an average broker whose focus is on home buyers. Make sure they are an accredited member of the Canadian Association of Accredited Mortgage Professionals (CAAMP) and come with extensive references from fellow investors. Search the discussion forum at www. myREINspace.com to find the best one for you. [2009] - Don R. Campbell

Many investors have had the experience of being turned down by a banker at one branch, only to get a mortgage at another branch of the same bank. The relationship you create with a person counts for a lot more than most of us realize. Choose a banker who's very experienced in residential real estate investing. [2009] - Don R. Campbell

Almost any bank will give you 1/4 percent to 3/4 percent rate reduction just for asking; a quality mortgage broker will be negotiating on your behalf to get these reduced rates. You can even get more in some circumstances. With personal lines of credit, it's not unheard of to receive below the bank's prime rate if it is secured on a piece of property. [2009] - Don R. Campbell

Unlike the purchase of a personal residence, it is impossible to get "pre-approved" for an investment property. The property, and the cash flow it creates, plays a major part in the final approval from the bank...not just your credit score and history. [2009] - Don R. Campbell

There are a few banks out there that offer PLCs (personal line of credit) you may choose to avoid. Here's what to watch out for: a. The bank requires a minimum monthly payment on a secured PLC, made up of a combination of the interest and some principal. A common amount for these payments is 3% of the outstanding balance (as opposed to interest only, which is usually less than 1% per month) . b. The PLC has an annual or monthly fee. c. The bank makes you re-apply for the PLC or package service each year. d. The bank places the PLC interest rate on their "personal loan base rate" (or some other fancy name) which is 0.5% or more above prime. You may think you're getting a prime plus 2% rate, when in fact you're being charged prime plus 2.5%, or even more. [2009] - Don R. Campbell

A standard rule of thumb is to invest no more than a three- or four-hour drive from where you live. This allows you to visit the property if something requires your immediate attention. [2009] - Douglas Gray

A furnished apartment typically commands a higher rent than a non-furnished suite, sometimes as much as 10-15% more. An apartment building that attracts younger tenants in a college or university town is an ideal opportunity for providing this kind of accommodation, at a higher fee. [2009] - Douglas Gray

In real estate, many investors love triple net leases (NNN). With NNNs investors receive income without the expenses of taxes, repairs, and insurances. The tenant covers those costs. The trouble is finding a good property with a good tenant willing to pay a high return. Today, most properties are only paying about a 5 percent to 6 percent return. Not that exciting. [2008] - Robert T. Kiyosaki

Whenever you see construction cranes, you know the boom is about to bust. It means that the cycle has peaked, and, generally, there is nowhere to go but down. The next time you see more than two construction cranes on the skyline, start selling any piece of real estate you do not want. [2008] - Robert T. Kiyosaki

Most real estate is not a good investment. A great exercise, regardless if you have money, is to look at a number of properties and analyze their intrinsic value. Use creative financing, creative improvements, or creative ways to increase the value of the property. [2008] - Robert T. Kiyosaki

Condominiums generally sell more slowly than single-family houses. [2006] - Douglas Gray

If you are considering investing in a condominium, it is important to consider the advantages and disadvantages of the different types of condominiums, for example, apartment, conversion, or townhouse. You must ascertain whether rental units are permitted in a development and you should know the mix of tenants and owner/occupiers. [2006] - Douglas Gray

Finding an occupant for a condominium apartment is relatively easy in many major Canadian cities because of low vacancy rates. [2006] - Douglas Gray

If you are looking for higher appreciation (resale value), the purchase of the least expensive unit in a luxury condominium/townhouse complex generally offers a more financially attractive return than the purchase of the largest unit in a modestly priced development, assuming the price is the same. A townhouse condominium generally appreciates faster than an apartment condominium. [2006] - Douglas Gray

Issues that are important to you need to be clarified before you buy your condo, for example, whether you can keep a pet, rent your condo, or operate a home business. Age restrictions may also be in place, since some communities do not allow children to reside there. [2006] - Douglas Gray

If you are buying an older condominium, you should check to see what percentage of the monthly payment is being allocated toward Contingency Reserve Fund, as there is a higher risk of needing to use the fund in older buildings than in new developments. In older buildings, the fund should likely be 25% or more, depending on the circumstances. In most cases you are not entitled to a refund of your contribution to the reserve fund when you sell your unit, or have it calculated on the purchase and sale statement of adjustments. [2006] - Douglas Gray

When you are getting a mortgage, for example, you may wish to have a six-month open mortgage if you think interest rates are decreasing, and then convert it into a three- or five-year closed mortgage when you see that interest rates are heading up. [2006] - Douglas Gray

In general terms, conventional lenders (e.g., banks, trust companies, and credit unions) tend to be fairly competitive in the rates they charge for mortgages. A private mortgage lender generally wants a greater profit and therefore will charge more. [2006] - Douglas Gray

The lowest risk/no risk customer could receive the prime rate of interest (lowest) from a loan. Higher-risk businesses (a borrower who has few assets, has only recently become employed or is self-employed, or has a spotty credit record) could be paying prime +1% to prime +8%, if they can get any funds at all. [2006] - Douglas Gray