Edmonton Real Estate Investor: October 2008

The scariest story I've heard this year isn't about any kind of freaky paranormal event. Instead it revolves around the perverse collapse of a global market. Like every good ghost story it's well told and rich with emotion, sprinkled with a bit of fact and generously topped with a crown of fear.

If you Google 'scary global situation' (scary economy, horror, nightmare, etc..) you'll come up with a long list of articles and comments lamenting how downright 'scary' the situation is. That in itself is alarming. The choice of words we're using now is bad for the psyche, bad for our self esteem.

There are many real problems and I'm not "Pollyanna-ing" the reality of certain markets. Warren Buffet wrote an optimistic op-ed piece, 'Buy American' for the NY Times. He's arguably one of the greatest investors of our time - but it's still a strange article to pen. Maybe he's trying to calm the turbulent emotions that are helping fuel the fire? Whatever the motive, things will pass and eventually get better. Sadly, many nest eggs lay underfoot, cracked and leaking.

However, time permitting the nests can be rebuilt. As for us in Alberta? Still holding on and doing well despite the pessimism. At risk of sounding like a broken record.... If you're not actively buying now in Edmonton, you're missing one heck of a good deal. Remember, you've got to put your cash somewhere and it makes sense to have it in cash flowing hard assets in economically sound Canada. (Canada is set to lead the 2009 G7 as well)

Let the "doomsayers" scare the pants off of your neighbors, not you. You're informed, in action and right on track. If you're in Edmonton next week, surround yourself with like-minded people at REIN's Quick Start. Details below.

Last but not least, PLEASE REMEMBER that November 7th and 8th in Edmonton is REIN's Quickstart LIVE Program. Learn the need to know basics about real estate investing at this awesome event. It sells out every year. Click here for the discounted price.

We're looking forward to speaking with you soon.

Thank you

Todd and Danielle Millar

I'm "reblogging" a blog that I read on NuWire Investor. This Realtor/investor looks like he lives an ideal life and seemingly knows what to do in a real estate market. His advice is for the American foreclosure market but basically his idea is to:

*not sell unless you have to
*put every dime towards paying off debt
*do market timing to reap the best return

Sounds good in all markets!

InvestorCentric: King Of Foreclosures Says Be Ready To Buy In 2010

Enjoying the stock market ride these past few weeks? Didn't think so.

I want to tell you about what I did today. I went to the bank and made another Lloyds bank transfer to move my YEN into Canadian dollars.

At 4:00 PM today 10/28/08 ¥100 bought $1.36 CAN. As you know I'm not a currency trader and don't spend too much time worrying about the transfers when I buy real estate, but in this market it makes a BIG difference.

I'd say that the Yen probably won't stay up this high for long. And I'd bet that the Canadian dollar's sudden drop won't stay this low either, as it is way too undervalued.

My unsolicited 0.02¢ says put your Yen into Canadian dollars. Of course, even better than that is to put your Yen into Canadian revenue properties. It's a safe and profitable place for your money - with less volatility and a decent return.
Remember: you have to put your cash somewhere.

I don't know about you, but my RRSP, mutual fund and stocks really suck. In fact my RRSP has been sucking for a long time. I am shocked that I allowed the wool to be pulled over my eyes and be "smooth-talked" by financial planners who mesmerized me into thinking that government investments were a good idea.

If you're feeling this way too, then fixed rate 2nd mortgages might be the answer for you.

If you are interested in hearing more about how you can take control of your finances, create a steady stream of income and put cash back into your retirement nest egg, then visit www.glennsimoninc.com and feel free to give me a call at 1-888-780-5940.

I'm signed up with Financial Partners for their email updates, although I don't know how much stock I put in their viewpoint today's email was interesting.

The part that really hit home was the amount of time a needed to recoup losses after the ups and downs of the market recently:

"A 50% capital loss requires a 100% gain to recover monies. In order to make 100% returns an investor targeting 7% p.a. needs more than 10 continuous years of 7% p.a. returns. Or over 16 years at 4.5% p.a."

If your retirement fund is in stocks that means a minimum of 10 years to make back your nest egg. Not a pretty thought. Certainly makes hard assets with less volatility very appealing.

To read the entire report (it's long) click here

Today I was sitting in my rocking chair trying vainly to put Ronan to sleep. Luckily he is a very uncomplicated baby and only cries for three reasons. After repeatedly checking for the obvious culprits I realized how much his needs reflected those of the world.

Food - Is he hungry?
Fuel - (bear with me here) Does he have gas?
Fertilizer - Is his diaper dirty?

Don R. Campbell sites "F3" - Food, Fuel and Fertilizer as the backbone of western Canada's economic stability and wealth. Alberta, British Columbia and Saskatchewan are rich in these three crucial resources and have impressive supplies in a time of rising food and fuel prices.

The picture is so much bigger than quarter to quarter real estate prices or the state of the stock market day to day. Alberta and western Canada will have a strong economy as long as the world has these three basic needs.

During my 6 day relaxing stay in the hospital after the birth of my son I listened to lots of BBC pod casts, read a lot of Smithsonian magazines and listened to one fantastic audio book called Change Or Die.

Full of compelling stories the book illustrates that the biggest hurdles facing organizations and people is avoiding change. Among the examples: simple lifestyle changes that would save lives of heart patients, innovative ways of reforming criminals and of course our own personal beliefs and ideals that we find very hard to part with.

I left the hospital not only a mother but also with a new perspective on what I need to change in my life to reach the goals I have set for myself and to be a better role model to my son.

The book works as an excellent catalyst; even if your changes aren't earth moving you will enjoy the read.

I can't believe how quickly this year has gone. It seems incredible there are only two months left to Christmas and that 2008 has for the most part over. What an incredible year with all the ups and downs of the markets both in real estate and stocks.

If you were hoping to get into the real estate market this year but still haven't had a chance to take action or just don't know where the market is going (reading the newspapers would make anyone afraid to do anything), there still is time to at least learn about the market and reduce the fear that seems to permeate the market recently.

REIN Alberta is holding Quickstart Canadian specific real estate training program in Edmonton November 7th and 8th.

"Yes, today’s real estate market has changed dramatically, especially when you compare it to 2006 and 2007. Housing starts are down, listings are up, prices are flat (and have even dropped in some regions). Do you sell? Do you buy? Do you just stay on the sidelines? … all legitimate questions. For investors and homeowners who are making the 2nd most common mistake… there are more questions than there are answers. Those who are not making the mistake are enjoying tremendous strength in their investments, despite the turmoil… and you can too." Reserve your spot now

Housing moves to sellers market - "After hovering in buyers' territory for much of this summer, home resale markets in Alberta's two largest cities are on the verge of slipping back to a sellers' market, thanks to pronounced drops in new listings."

I wouldn't rush out tomorrow and put your house on the market there are still a lot of listings out there. Wait till mid to late 2009 then if you must list then. Personally I'm holding for the long term.

Real estate a time tested investment - "Well, if you ever wanted to know what it was like to be a yo-yo, with a tight string around your neck and someone else in complete control of your destiny, now you know.

The dizzying ups and downs of stock markets in have choked trillions of dollars out of personal and corporate assets and no one is sure if the worst is over.

It brings to mind an adage from Mark Twain: Buy land, they're not making it anymore."

A perfect follow-up to the last article, after the horrendous last few weeks of the stock roller coaster real estate is an appealing tangible asset. There are so many people with funds to invest yet no idea where to put there money. The only answer is real estate and specifically real estate in Edmonton, Alberta.

Edmonton-Based Real Estate Agent Review Site Cuts Through Clutter - "What-Customers-Say.com, a newly launched site developed by four Edmontonians, is changing the game for real estate agents and home-sellers by providing a new way to find great agents: with customer ratings and reviews."

I haven't tried the service myself but it sounds like a good idea. A rate your agent service would certainly reward the ethical agents and reveal the duds.

Is the Stock market giving you ulcers? Or is it time to take your money off the table and put it into a more tangible asset? Tired of the average financial options; mutual funds, land banking, bonds, etc..?

Is it time to think about planning for your children’s future? Are you saving to build a house or are you seeking better returns than what the bank or your current investments have to offer?

Would you like to invest in something hands free and safe, but still reap a decent return? Well, if you are looking to take control of your finances, put your hard earned cash into something more secure and you answered YES to any of the questions above read on…

Investing with us at GSI allows you the confidence and freedom to get into the secure and fundamentally solid, Canadian Real Estate market. This is not speculative buying. We use a proven system to purchase our properties in areas that are stable, not over inflated or emotion based. GSI partners with you. That means that you’ll be investing between 20%-35% of the property purchase price and receiving all your initial investment back plus 50% of the profits on residential investments. We think that you’ll agree that’s a pretty good deal.

Put your hard earned cash into the most effective property investment you can find. At Glenn Simon Inc., we address your needs as an investor with knowledge and experience. Prepare for your retirement, put your capital to work or turn your savings into a down payment for the dream house you want, wherever that may be.

Alberta real estate can help meet your investment needs Click Here To Find Out How

The latest economic forecasts from the government of Alberta proves the province is an economic rock in Canada.

Some highlights include:

Alberta's population growth continues to outpace the rest of the nation

Increased crop production expected in 2008

Drilling activity picking up

Canadian Real GDP rises for the second straight month

Latest string of data paints a gloomy U.S. economic outlooks

Download your copy here

I felt worried about our personal losses in the stock market until I read this.

"Falling stock prices have sliced roughly $1 billion from the value of Alberta's rainy-day savings account, the Heritage Savings Trust Fund.

Finance Minister Iris Evans told the legislature Tuesday that the value of the Heritage Fund has been reduced to $16 billion since June, a drop of roughly six per cent. But she's downplaying the loss."

We celebrate many things in life. The greatest to date for us has been the healthy birth of our first child, our son Ronan .

He was born 4:25PM, 10/7 after a long labour by his amazing Mom, Danielle!

Through all the hard work, joys and successes in life and to come, we found Ronan's birth to be a wonderful experience to bond and connect on a different, higher level.

Ronan's baptismal name is Jason (Saint Jason) after a very dear friend of ours. This way he can be remembered and also share in a 'rebirth' of sorts.

To all of you who are parents, I now understand what you feel in many complicated ways.

Thanks for all your help and support.

Todd, Danielle and Ronan

Last year at tax time there were some mumblings that our property taxes may increase as much as 9% by the next tax year. Now there are louder grumblings of up to double digit increases. I would bank on the higher and hope for the lower.

"Council will begin debate next week on a draft budget expected to contain a whopping tax hike of about 9%, though some speculate it could be in the double digits.

Mandel said he wants the city to develop a strategy now to explain to homeowners why property values are going down while taxes are expected to soar." edmontonsun.com

I am waiting with bated breath to hear the strategy that convinces me my lower property values warrant higher taxes. It will have to be pretty good.

Of course you can contest your assessment, this works especially well if similar properties in your area are selling for less than you were assessed at. If you aren't will to file a complaint or feel the values are pretty accurate then you must start putting a larger percent of your rental income into a tax file to prepare for the ding.

My friend Ryan forwarded me an email from his financial planner last week. I wonder if you've received messages like this one I too? I'll paraphrase:

"Dear Ryan, as you know it's really hit the fan down there in the U.S.. The economy has taken such a beating we don't ever know when it'll be sorted out. Many of the stocks and funds that we've invested in have crashed. It's worse than pretty bad, it's downright awful. Every night I look at the bottle of Scotch on my bedside table and wonder if tonight it will hold the answers I need to know...

The only thing I can tell you for sure is not to panic. (He's panicking now and you can feel it in the letter, almost see the swollen streams of ink where the tears fell)

Keep your money invested in these funds even if they go to zero, because I have to eat too. And remember, everything will be ok one day. The markets can't stay down forever, right? Right?"

You could really hear the fear and uncertainty come through in his letter. I agree that the markets won't stay in the gutter forever. But, hey I'm not going to live forever either and I don't want to spend the next couple of years floating around in the toilet of discontent waiting for another big flush.

The truth is that time heals most wounds. However, when it comes to investing you sometimes have timelines to meet, like retirement for one. You don't want to be tossing good money after bad as things balance out. I also got a letter like Ryan's from my planner. I've actually been watching one of my stocks go from ~~$26.00~~ a share down to today's new low of $1.44. So, I'm not making light of real losses.

Obviously I prefer hard assets and have 90% of my wealth invested into them. The simple reason is that time and time again a well purchased revenue property repeatedly proves it can survive and thrive a dip in the market and bloom during the peaks.

You know some people will worry and others will take action. That's just the way we are. Those that can brave the miasma of uncertainty today are the same few that will savour the smell of sweet, sweet roses tomorrow.

Edmonton has got a bargain sale going on. Investing in tangible cash-flowing assets will not only protect your wealth but also increase it exponentially over time.