Edmonton Real Estate Investor: August 2009

Over my summer holiday I once again came to the realization that constant management, improvement and measurement are critical to ongoing success. Even when we reach a point in our lives and businesses that allows us to delegate certain jobs we must continue to look for ways to improve upon them.

It may sound counter-intuitive to delegate a job and then invest time in managing it, but it's not and here's why. When we have delegated our jobs it gives us a chance to step back from them and see how the system, person and team perform without you in the active (say physical) role of doing it. You can test this by measuring their performance against your earlier benchmark.

You'll be listening for their input on how to do the job better, faster and of a higher quality as well as looking at their productivity from the eyes of an employer. If you monitor these 'jobs' every 90 days with an eye to improvement, this helps give you the edge and brings your business game to a new level.

South East Edmonton: Cash-flowing 5 BR Millwood's Bi-level In High Growth Area

Turbo charge your portfolio. 1979 built functional, upgraded 5 bedroom 2 bathroom suited home has over 1085 sq ft of rental space on the upper and another 1000 sq ft. in the 2 bedroom lower suite. You can see the attention to detail and care that went into upgrading this home.

Comes complete with a great mortgage structure in place, you only need to qualify. This a totally turn-key property for you. Convenient area with nearby access to the new South Ring Road and walking distance to transit. Excellent neighborhood and HUGE upside potential due to the great purchase price, strong economic fundamentals and the fantastic location of this mature, desirable SE area of Edmonton.

Produces $205 positive cash flow per month using at current interest rate. Total investment less than 24% of purchase price.

Poised for massive growth. This home rents for top dollar and has everything arranged, including financing structure and incredible tenants. Your investment includes: financial analysis, professional inspection, insurance, financing set-up, legal fees, basic accounting, reserve fund, CMA, bi-annual statements, strategic market planning to ensure successful entry and exit, plus much more!

Purchase price: $319K Total Investment: $75K. Your Estimated 5 Year Profit $57K.
Your pre-tax Total ROI is 76% or 15% per year. + $205 Cash Flow in Your Pocket Every Month

“Get into action and realize secure, long-term profits”

Already producing a great RETURN. Visit HERE for the full FEATURE sheet and call 1-888-780-5940 to get started.

-Please remember: All investments carry RISK. Be sure to seek your own independent legal advice-

Don R. Campbell warns the Canadian snowbirds to get the sun out of their eyes and rent a place in the states don't buy! It's better to buy in Canada make your money here then go rent in the states.

Could the focus on climate change take away from other pressing environmental issues?

I know one thing this summer in Canada global warming wasn't prevalent at all. With Edmonton having 5C nights in the middle of August, I had to wonder if it wasn't a bit of global cooling at work.

"The BBC's environment correspondent Richard Black investigates if climate change is diverting attention away from other environmental problems such as air pollution, acid oceans and species extinction.

Talk about climate change is everywhere, from the classroom to the UN. It is undoubtedly an important issue, but has our enthusiasm for tackling climate change led us to neglect other pressing and arguably more immediate environmental concerns, such as poor air quality in our major cities?

Why has climate change attracted so much political attention and the loss of plant and animal species so little?

Far from being an 'inconvenient truth', could the climate change debate actually be rather politically convenient?"

Listen here

Alberta still better off than others - "The state of the province’s economy one quarter into the 2009-10 fiscal year shows a sharper period of recession than expected, Evans said, but the province still expects a stronger recovery next year.

“It’s still a better news story in Alberta than anywhere else in the country,” she said.

The finance minister said interpreting the economic picture in “doom and gloom” terms would be “belittling the entrepreneurship of Albertans.”

So far, there is no sign of how the province plans to head off an economy that’s running red; the $6.9 billion deficit means the Sustainability Fund will be tapped, leaving it with a projected $9.3 billion by the end of the year."

The message is that Alberta needs to correct it's course and there really is no need to over-react. In the last 7 years Alberta spent $140 Billion on infrastructure and virtually wiped out provincial debt and there still is the Sustainability Fund to dip into if need be.

Environment Carbon Crapshoot - "This year, the Alberta and federal governments are setting aside billions of dollars for subsidies that will go to some of the nation’s largest energy companies. The money represents a down payment on a grand experiment. The idea is to collect carbon dioxide generated by industry before it goes up the stack into the atmosphere, and cloister it underground for eternity. It’s called carbon capture and storage (CCS). It’s fearfully expensive, and there’s no guarantee it will work. Yet work it must. Because Canada has no Plan B for reducing the impact of its energy industry on the Earth’s climate."

U.S State Department OKs Pipeline From Canada's Oilsands -The U.S. State Department has issued a permit for a multibillion-dollar pipeline to carry crude oil from Canadian oil sands to refineries south of the border, triggering a court challenge from environmental and native groups. The State Department issued a Presidential Permit to Enbridge Energy, Ltd. for the Alberta Clipper - a 1,000-mile/1,607-kilometer crude oil pipeline that will run between Hardisty, Alberta, and Superior, Wisconsin.

With supply of crude oil from Western Canada oil sands developments expected to grow by as much as 1.8 million barrels per day by 2015, the industry has asked for more ...

So how long do you think the deficit will last?

The coolest properties I've seen recently started life as a shipping container. The containers are cheap innovative and very very green. What started as a cheap source of housing in developing countries is now a cost efficient way to build a luxurious house at a fraction of the price.

You can get a 3,000-square-foot container home for about $175,000 or add an extension onto your home.
Maison Idekit.

We went to Canada for two great weeks. It was Ronan's first international flight and he was fantastic. Slept the whole way there (hint to traveling new parents make sure you get the bassinet seat) on the way back it was a bit rougher and jet lag seems to have affected him more but overall we've got a little traveler here. We're excited to take him to Malaysia this winter.

Our family was ecstatic to see him and he was a hit all round. I totally relaxed as everyone wanted to hold him!

Edmonton is a fantastic city, it's certainly grown since the last time we've visited. Vancouver has become so chic. I don't know if it's changed for the coming 2010 Olympics or if it's just a huge gentrification but the city is outstanding ~ house prices and affordability reflect that too.

We also made a quick trip to look at Pender Island. What a paradise. We met some great realtors and stayed at a fantastic B&B.

A snapshot look at Canada's economy major economists taken from The London Free Press

"The downward trend among private sector employees persisted in July, with large losses for this group partially offset by continued gains in self-employment."

Statistics Canada July employment report.

"These are difficult times. It's going to be a difficult year. I've been saying that, to sort of calm the euphoria about, you know, 'We're out of a recession.' We are stabilized, and there are some good signs. But it's still the recession and we still have to work our way out of it."

Finance Minister Jim Flaherty told CTV News.

"No one said it was going to be a smooth recovery, and especially not for employment. If there is any positive spin here for the broader economy, it's that the job losses were almost entirely concentrated among summer students (though try telling your teenager that's good news)."

BMO Capital Markets economist Doug Porter

"Even though the Canadian economy is likely to resume positive growth sometime in the third quarter, we are likely to continue to see the unemployment rate climb for up to six months after the recession has come to a close."

TD Bank economist Diana Petramala

"Sadly, today was not a happy day for the Canadian job market. It's critical when we see these disappearing jobs that we have an effective fiscal stimulus to create or to save jobs. And that means getting the money out the door because, no matter how many billions in commitments, you won't save one job if you don't get the money out the door.''

Liberal MP John McCallum, the party's finance critic

"Some people say that the recession is over, but try telling that to the unemployed and their families. Unemployment is going to get worse in the months ahead and the Harper government is leaving people to fend for themselves."

Ken Georgetti, president of the Canadian Labour Congress.

This is from Wade Graham's newsletter posted on the REIN forum.

The Top 5 Real Estate Investment Mistakes

How to lose $50K in no particular order

1. You pay too much for the property. This one sounds obvious but 9 times out of 10 this is the one that catches most people. You get excited about the property and forget that this is a numbers game and not a paint colour game. Your agent is focused on making a deal happen so he forgets this is about dollars and not the carpet stain. All of your friends are making big cash (or so you think) and you want in! Who cares about the rent or who is going to pay it! Values go up and that is all you need to know........right?!?

I am not one to negotiate hard for a rock bottom price as there are definitely other considerations in every transaction but unless your rent covers ALL of you costs and makes you money each month you have paid too much. Personally my cut off is $500. If I can't make that much each month on the investment I don't invest.

2. Inspections are for rookies! You have done a few renos and owned a couple of houses. You don't need to pay someone $500 to tell you that this house is in great shape! I have looked at a lot of homes and many of them I thought were in good shape until the inspector came through. My last inspection saved me and my investor roughly $65,000! Was it worth the $500? Unless you have very large pockets (that you are willing to part with) or have extensive knowledge you need an inspection.

3. What is your exit strategy....How do you get out of the investment? Unless you have two very good exit strategies don't put a dime into Real Estate. Getting out isn't as easy or cheap as you think! What are all of my costs on exit? Real Estate fees, legal, renos, lost rent, mortgage pay out penalties and the big one (hopefully) taxes! When can I exit? Do I need to wait five years or can I sell this contract to another investor tomorrow? Is refinancing an option? You need to have clear answers to all of these questions or your investment may not be everything you hoped!

4. Who is going to rent my property? Most investments forecast a future value but the problem is that you need to get to the future to get that value. This is where the true asset comes in.....that is right....your tenant!

"A tenant is...a partner in business who will open up the shop each morning and lock it up at night. They will look after security and inform you of potential problems in the business. They will cut the grass, rake the leaves, shovel the snow, pay all the utilities. They will even pay all your mortgage payments and taxes. Then, in the end, they will relinquish all monetary interest in the business and walk away, leaving you with the profits." ~Tim Johnson

So at the end of the day who is it that is willing to pay the rent you need to get to the future!

5. After I buy the property I don't need to do anything right? Well, as great as that sounds the fun part is now over and reality is about to set in. For those that think that you just collect a cheque at the end of each month, I have some news for you. Not a day goes by that I am not dealing with one of our investments. Most of the things are positive but not all of them. Even if you have just one investment property you had better have some expertise in the following: Property Management, Repairs and Maintenance, Accounting, and Legal. These are things that will come up regularly and they don't care if you have a job or are sleeping or are on vacation.

Alberta firms rank third in Western Canada for positive outlook. The poll indicated that businesses in Alberta are very optimistic about economic turnaround.

Saskatchewan topped the charts while Quebec business owners apparently can't see the light at the end of the tunnel coming in at the bottom

As they say if you believe it you'll see it!

While the oil sands produce a larger chunk of the Canada's greenhouse gases the pros outweigh the cons. Canada as a whole benefits and will benefit from jobs for up to 5.4 million Canadians by 2020. Imagine the housing needs then. Everyone knows that the oil sands' pros far outweigh the cons and would be foolish to say no to their significant contribution to Canada's economy.

The Alberta government has taken A LOT of flak for the environment in Northern Alberta. Yet it seems to be doing so much to right the environment.

Recently the province announced plans to more than triple the amount of protected land in the controversial northeast. Forests rebuilt from reclaimed ground are soon to become a reality as researchers work to bring back the boreal forests.

Check out how Faster Forests come into play here.

Alberta's economy was hit by the recession as was the rest of the country. The province saw record job losses, debt and housing prices declines but when it comes to rejuvenating the countries economy it will be oil that gets things going again.

Oil prices have yet to rebound to the anticipated figures for this period so Alberta's deficit will get that much bigger. The stability that is necessary for the province to rebound is still not happening and may not happen till 2010. Alberta may be diversified but it is still a resource based economy.

We're all waiting for the upturn in international economic activity that starts to drive oil and natural gas prices upward when that happens let the good times roll again. For now the long term view, late 2010, is the best bet before we see the boom years again.

When they go, and they will, oil will save the country:

"The oilsands production would result in $1.7 trillion in incremental GDP growth for Canada, $78.1 billion alone for Ontario and Quebec, the study concludes, adding it translates into 700,000 jobs being created across the country and additional tax revenues for Canada of over $306 billion.

When conventional gas and oil developments, plus LNG (liquid natural gas) development, pipelines and offshore facilities are added in, the industry will boost Canada's GDP by $3.6 trillion ($144 billion in Ontario alone)and will create 980,000 new jobs, contributing additional tax revenue of $429 billion in Canada."

Where do you think you should put your money for best growth?

Thirty floors of luxury all to yourself doesn't sound too shabby at first but a new jersey family can tell you differently. They are all alone in a 200 unit condo building because everyone else failed to close on their unit or moved next door.

Shining-esque surprises like knocks on their door at 11pm, lounge chairs in the pool and a sign in sheet where the last entry was made over 6 months ago just up the creep factor for the poor family of five.

This is one of the stranger unintended consequences of the housing bust that I have read about. Not everyone goes into foreclosure and many people keep their commitments but when a whole building remains vacant it's both economically and psychologically frightening.

Read more

Thirty-five degrees hot and humid. The pool sure looks inviting. I hope that you're as ready as I am for some well earned rest and relaxation this month. Every August we take time off to reconnect with family, friends, focus on the good things, play in the ocean, eat Nanaimo bars and get a little trip in somewhere - I hope that you're doing the same.

Sharpen your saw..

Taking time completely away from your 'game' gives you a super efficient boost when you come back. It's like that extra hit of light green organic wheat grass at the juice bar or a couple shots of fine grade 1 hand picked chocolate roasted Arabica whose aroma seduces and invigorates you...

Just before you take your vacation write down your top three challenges that you're facing at the moment. The really hard ones where the solutions don't seem to come easily.

Then when you come back after your rest grab a pen and go through your 'challenge list'. Sit and write down 5 (or more) potential solutions for each challenge. Don't worry if they seem absurd or like they won't work, just go with it. Chances are there'll be some gold in the pan that you can work on to get your problems fixed.