Real Estate Quotes

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

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