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I recently had the privilege of taking Barry McGuire’s course on starting a real estate business outside of traditional buy-and-hold. As you are probably aware, I am a huge proponent of buy-and-hold, my portfolio ATM is buy-and-hold. Starting down this path 7 years ago is what is allowing me to leave a secure job to follow my desire of being a “present parent”(Mr Mom). Anyway, I used to shun anything not buy-and-hold as risky, ironically following Barry’s advice I had heard in my early years of investing. I knew people were making money in other ways, but I wasn’t ready to explore anything else until Barry started talking about alternative real estate investment deals coming through his law practice. When I saw this course being taught by Barry(who I hold in very high esteem), I knew I had to check it out. Although I could never reproduce the depth of information from 3 days of instruction in this short blog post, here are some of the gems I learned:
Like most good courses, there was an element of personal development. Without a good enough reason to move off the couch, I truthfully would prefer to watch Netflix all day. Way more than getting up to doing any extra work(paint a fence, advertise an upcoming vacancy, look for new deals, write a blog post etc…) I think most people are like this. To overcome this common obstacle Barry got Russell Westcott to host most of the event, and he started by asking us “In the next six months, what has to happen for this event to be a success for you.” My answers were as follows:
Once everyone was done, Russell used the principals from The One Thing by Garry Keller to help us narrow things down. “What’s the ONE Thing you can do such that by doing it everything else will be easier or unnecessary?” My One Thing is as follows(be prepared, it sounds a bit flaky, but truely resonates with me). My One Thing is #3, and it means I will have a rock solid family: emotionally, spiritually and financially. Once you figure out your “One Thing”, it will drive you to do whatever it takes to complete it. I know mine does for me.
Briefly on JVs Afterward, there was an introduction to Joint Ventures. I was a bit disappointed on the amount of time spent here because I thought this was an advance course. JVs are explored in depth in this home study course – which was free bonus as part of this course! In any event, it was a good refresher. The best thing was a script that was shared by Sherilynn Milsom to justify a 50/50 split. Believe it or not, people who have money think that entitles them to more of the deal, your job is to educate them that your TIME is as valuable or MORE than their money. It’s all about context, check this script: “YOU are not the one going to court. YOU are not the one dealing with the crazy person at the courthouse. YOU are not the one spending your time, brain power and emotional energy fixing a problem. While you get to simply write a check, I’m working my butt off to fix it.” and “I gave up time, money, family to become and expert in this. That’s why I’m worth 50%. I don’t make any money unless you make a bunch of money, and although I’m a nice guy I don’t work for free.” Another good piece of advice was to check out Greg Head’s “JV Matrix.”
There are many ways to get in and out of a property. A key insight to this entire course is that there are MANY ways to buy a property with very little money, here are a few and what situations they are best suited to:
Build It, Own It, Work It I loved hearing from Andrea Warkentin and Sherilynn about the day to day operations of a “Quick Turn” business. Unlike buy-and-hold, this is a VERY active business that needs CONSTANT work to turn a profit. Although being the managing partner of a buy-and-hold business is time consuming, it can be run off the side of your desk(I did for 6 years). A Quick Turn business will quickly bog you down without the proper time commitment to implement and follow SYSTEMS like these: Build it.
Own it.
Work it.
In all, the course was a great investment and I have already worked 2 deals(one before the course and one that thus far has failed), and am looking for another one before the end of 2015. If you are interested in becoming a quick turn/rapid cash operator, I strongly recommend a course like this. Nothing beats immersing yourself in training from people who know the secrets to making money at your desired strategy.
I paid $3K and spent three days to learn what I shared with you above, I hope you enjoyed!
Until next time!
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
I’ve made a submission to be in the newest installment of “51 Success Stories.” As my readers I thought you might be interested in an advance read. Enjoy!
On my way home after a long night shift, I realized that working as a beat-cop in a small city was leaving me beat! The adrenaline that had flowed for the first few years on the job was dwindling, and it seemed like more of the same, shift after shift. It’s a front row seat to the part of society where reality is often stranger(and more tragic) than fiction. I looked at the business card of a witness on an impaired driving file. Pete was a retired RCMP Inspector and I was thrilled he accepted my coffee invitation. After his interview and a bit of small talk I learned he was into real estate, and I wanted to know more. By this time I had had been a REIN member for about a year. My wife and I had purchased our primary residence and an up/down duplex. We had used up our savings and I made excuses to myself for why other REIN members had great results while I couldn’t get any more property. “I work night shifts and I’m too tired, CMHC just changed mortgage rules, I have no time for real estate investment, who would want to JV with my limited experience.” My mental dialogue was not helpful!
Inspiration Strikes The next day Pete talked about his career path, and how his wife had dutifully followed him all over Canada. Thanks to frequent moves he still had a mortgage upon retirement, although an officer’s pension ensured a comfortable income – so he thought. Pete’s health started to fail, and he was faced with the reality that his wife might outlive him by many years. The government pension they had both worked and sacrificed so much for would be cut in half upon his death, leaving his wife barely enough to get by. Pete shared how he took matters into his own hands, turning a borrowed $250K into $1M equity that will secure his wife’s income when he was gone. After talking to Pete, who had no prior real estate experience, I was inspired. I want my family to enjoy the fruits of my labour, even when I am gone, and Pete reaffirmed that real estate was the way to do it.
My First Win A colleague’s divorce forced the sale of the property right after the 2009 downturn. It sat vacant on the market for a year, and even reducing the price $45k didn’t help. Ouch! We made an agreement and I sprang into action, using REIN training to craft a JV agreement, installed a basement suite, and quickly rented it out as two units. For $7K and without using my mortgage space I became part owner of another property with good cash flow, and the deal gave me the credibility and confidence I needed to attract further JV partners.
Chasing Too Many Rabbits Don Campbell has uses a “rabbit” metaphor at many ACRE weekends: the moral is that too many projects means limited success at any of them. My rabbit happened when I ran out of money. Instead of following the REIN system(the next step was to refine money attraction using the JV secrets program), I bought a couple trailers and started hauling junk with hopes of earning more down payment money. After undercutting the competition for a while, 800-got-junk had left Kamloops and I had a monopoly. I was so busy between full time policing, trying to acquire more properties, and hauling junk that I abdicated as much as I could. Incorporating the company, bringing on employees, getting a second truck and bigger trailer, using a call centre, and marketing campaigns accumulated so much overhead that I needed $5000/mo sales just to break even. Soon I found myself with a business I was feeding out of pocket on a regular basis. By the time I shut everything down, I had netted over $20,000 loss and “wasted” three years that should have been focused on real estate. Ironically, my mortgage paydown and cash-flowing properties has helped absorb much of the loss I sustained. I have since implemented the JV systems taught by REIN and have found like minded JV partners who could fund all the real estate I will ever need, as of my 30th birthday in April 2015, I have a share in 14 units.
The Golden Circle: Start With WHY People go searching for wealth for lots of reasons. Mine was emotional woundedness, which is also the reason I got into policing. More than just a how-to course, REIN membership helped me to reconcile conflicting motivations: work hard to help those you love, and money is evil. (You can learn the full story on how I got into, then out of my mental mess at www.SamPerren.com.) REIN members like Scott and Laurie Lewis from “51 Success Stories” helped me give myself permission to make money. Richard Dolan’s addition to the REIN faculty, and his sharing of his former hangups around money, also helped me break out of my flawed mental conditioning. Now my “WHY” is directly supported by real estate: one JV partner is using the profits from our purchase to support kids going to school in Guatemala; I copied Russell Westcott’s example and gifted a share of our property to our nephews, and best of all my wife and I just adopted two beautiful kids(Lavinia is 2.5, Landen is 1.5). Our properties allow us the option to take time away from work without financial stress, knowing our future is secure.
Advice to my younger self. 1. Measure what you want to improve. Need more time? Measure where you spend it! Need better fitness/faith life/finances? Measure, measure, measure! Start a journal and write down where you lack, then start to measure it.
2. Join REIN! Implement REIN systems at other networking groups, and you will have access to all the money you will ever need. There are a lot of B.S. gurus out there(visit my blog InvestKamloops.com and type “scam” in the search bar to see what I mean). They will take your money and leave you discouraged. REIN membership is a huge bargain, with solid real estate and personal development training, and the best I’ve found in the English speaking world!
Hope you enjoyed the “advance screening” of my chapter submission. Make a comment below and I will buy you a copy if I’m published!Until next time,Stay SAFE !
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Brief Update It’s been a while since I’ve written, thanks to all of you who reached out curious about what I’ve been up to. My last 6 weeks were like this: – back to work full time, juggling childcare till Marcy is off for the summer(my job is still interesting but I don’t miss the nightshifts!). Thank Grammie for providing relief during this busy time!! – Turned 30 – Closed on a townhouse(college fund for the kids) – Caught up on training(ran the PARE at 3:02, for a reminder of what that is like click here) – accepted offer on a house downtown closes this Canada Day – multiple tenant turnover – visited family in AB for a week Anyway, at the REIN meeting tonight I realized that I was becoming overwhelmed, and thanks to the support of this great community I am back on track. Here are the theames and great content REIN put together: Lending The night started with a mortgage update: TD is no longer an investor friendly bank, and interest rates may inch up but will remain at record lows for a long time. Economic Updates “What’s behind the curtain” had lots of interesting articles: – Overcrowding is becoming more common in many cities as rents are rising. Overcrowding is defined as more than 2 people per bedroom according to the National Occupancy Standards. – BC markets are up yr/yr in all 12 real estate boards, except Northern BC and Kootnay which are down slightly
Inspiration The youngest REIN Member is 13 year old Neville Ram who shared his story this evening about the purchase of his first investment property…saving money collecting bottles and banking his b-day money for a down payment. This inspired and inspiring young man was deserving of the standing ovation his fellow Members gave him after he spoke!! Advice There was a breakout session with three areas of focus: stuck/starting, financing, raising money. I opted for the stuck/staring group because I feel like I’m juggling many balls(work, kids, RE, etc…) There were some real gems tonight, many of them I had heard before, but needed to hear again now: When stuck, write it down. It frees up your hard drive and stops you from having the same fruitless conversation with yourself over and over. Don’t chase the deal. Be the deal. Focus on the highest/best use of your time.(80/20 rule) Bread money VS investment money: don’t confuse them. Get your financial house in order: clean up your messes. This is not a race. The one thing: A book about “juggling” and making sure the fragile glass ball(family) is never dropped. Many of the other balls(work) can be dropped and they will simply bounce back. Hire out mundane tasks. Your goals and you move toward one another when you write it down. Be careful how you talk to yourself. In all tons of great advice and insights. Thomas Beyer A great talk by Thomas Beyer, a man who started with $100,000 in 1997 to buy 1 condo for $80k. Now his portfolio is worth $100M, 18 years later. I won’t dilute his sage advice here, but strongly urge you to pick up his book 80 Lessons Learned – the path from $80,000 to $80,000,000. It was a great meeting and certainly good to get back to where it all began in 2009, timely advice from those who have been through my current struggles. If you want to succeed at your goals, joining an incubator group like this is a must!
Until next time, happy investing!
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
I got an email from Stats Can this morning detailing how the consumer price index “basket of goods” (used to measure inflation) has changed again. I am not a conspiracy theorist, but I have found it interesting that conventional wisdom traps people in mediocrity. Check out this recent release from Stats Canada.
We would be led to believe that inflation has averaged 3.2% per year for the past 100 years. If a basket of goods cost $1000 in 1914, today it would cost 319.7% more, or $4,197. This “basket of goods” gets changed all the time, so this is not the most accurate measure of inflation.
Real inflation is much higher. For instance, “a loaf of bread that cost 6 cents in 1914 now goes for $2.92″ (Source), a 4866% increase. Much higher than the CPI of 319.7% we would be led to believe. It’s hard to know what is acctually happening when they keep moving the bar. In any event, whether you believe the CPI to be accurate or not, inflation is the obvious trend over the past 100 years and will continue for the next 100 years.
I don’t want to leave you feeling depressed, so here is the answer to this problem: 1. Buy income producing assets that rise in value with inflation 2. Use as much cheap money as you can get your hands on 3. Enjoy the fruits of your smart move after someone else paid for it(your tenants).
Till next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
The Real Estate Action monthly meeting was a great time, plus there was tons of awesome information. Here is a brief summary of what you missed:
Depreciation report:Marc Jurock gave a great presentation on the importance of following your building’s depreciation report – for strata owners this is of great interest and I will be elaborating on this in the future and giving a similar presentation at this year’s Annual General Meeting.
Lead with the truth:Conversation guru Eamonn Percy gave an insightful talk about the importance of conversations within a real estate business. There are 10 things to remember when engaging in a critial conversation.
Work on smiling:A German study from the 1980s found that people who forced a smile actually became happier. Try it yourself: hold a pencil in your lips(it forces you to frown), then hold the pencil in your teeth(forces you to smile). Besides lifting your mood, it will make others more receptive to you and this will in turn lift your mood even further. A useful lesson because people only want to do business with people they like and respect, so smiling goes a long way(even the fake kind).
The deflation myth:Ozzie Jurock spoke about how the media has over the years been featuring pundits who speak at length about deflation. He showed slides of books and headlines released for the past 50 years talking about another great depression, and how time and again these pundits have been wrong, there has been the opposite inflation(good for real estate).
I wholeheartedly agree. Check out this recent release from Stats Canada.
As you can see, the Consumer Price Index has increased on average 3.197 per year for 100 years. So if a basket of goods cost $1000 in 1914, today it would cost 319.7% more, or $4,197. This “basket of goods” gets changed all the time, so this is not the most accurate measure of inflation, real inflation is much higher For instance, “a loaf of bread that cost 6 cents in 1914 now goes for $2.92” (Source), a 4866% increase and much higher than the CPI of 319.7% we would be led to believe. In any event, whether you believe CPI to be accurate or not, inflation is the obvious trend over the past 100 years and will continue for the next 100 years.
18 ways to get more done:Ralph Case made a presentation of 18 ways to get more done and here they are: 1. Have goals written down 2. Get enough sleep 3. Get fit 4. make steps toward a deadline 5. use a prioritized checklist 6. say no – A LOT – if you over commit you will not succeed 7. close social media 8. forget multitasking 9. 20% of tasks get 80% of results so focus on those 10. use time blocks 11. use a timer 12. create routine 13. change your environment – leave your office/home and try working in a coffee shop 14. work out at mid day 15. capture fleeting thought – carry a notepad to ensure you don’t miss any stokes of genious 16. if struggling, take a break 17. handle all paper and email ONCE 18. eat healthy snacks All very good tips, and tip #2 is why my newsletter will be out late this week, I am focusing on getting enough sleep!
My presentation:I got a good response to my presentation. I was practicing for the Landrush conference on February 28th where I will have a booth featuring Kamloops as a top investment town.
And that was it! A great monthly meeting, I came away with some action steps – specifically to print and distribute fliers in my target neighborhood to find more properties – learned some great things I can’t wait to implement into my life and business, and good prep work to find more investment partners.
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Watch this two minute video to see how I select my properties. There is select criteria they must meet before I will put in an offer.
I’m putting offers on three properties today and one will be featured on my “Deal of the Week” email, so make sure you are signed up to receive them.
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
It was New Year's Eve, and the last thing on my mind was my business. As a busy dad of 3 under six we were headed to a friend's place for dinner, making sure we had everthig, that the kids were clean and well dressed, and lecturing them to be on their bes behaviour. Normal parentling stuff. Then I get a text:
My mind goes into panic mode, worrying about all the work there is to do when a tenant turns over, wondering what deffered maintence needs to be done, and thinking that February is a terrible time to find new tenants. I then remembered that I have a process that has sucessfully dealt with hundreds of vacancies over the years, and this time was no different. I put the matter out of my head and enjoyed a nice evening with friends ringing in the new year.
When I got back to work, I review my process, and crafted a carefully worded email that went something like this: Hi XXXX, Thanks for letting me know you intend to leave at the end of January. For your info, a text message doesn’t constitute proper notice under the Act. You can look up proper notice and other info at this link: Myself and Stacy will certainly work hard to find someone suitable to rent the place for Feb 1, 2019. Since you are leaving before the fixed term tenancy is up, you will incur some liquidated damages as per your tenancy agreement which I’ve attached for your reference. Stacy’s fee to rent a place is $300, and we will do our best to keep other costs down and avoid charging you any more than this. Given the current rental demand, finding a replacement for you should work out, but in the event a suitable tenant isn’t found, you are responsible for the rent for the rest of your fixed term agreement, up to August 2019. Thanks in advance for your cooperation with Stacy while she arranged viewings, and congratulations on the purchase of your new home. Sam
If you're curious how the story ended, I'm happy to share at a future networking meeting, just ask me :). If you want a copy of the Flowchart to Filling Vacancies that I use, please reach out!
About the author: Sam Perren has helped dozens of investment partners acquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Greetings! I hope you have a great weekend because after it’s over, so is January! Here is what I’ve been up to this week:– went shooting handguns with my brothers(exploding targets from the Powder Keg are so fun!)
– wrote up a JV agreement for my newest partner, I’m sure they will be very happy with the decision to invest in Kamloops! – saw an ugly foreclosure yesterday. When the previous owners lost the house they turned on the water, it was so damp in there that the drywall on the celings fell and the insulation was all over the house. I was interested when I heard of a 2500sqft house going to court for $160,000, but after looking at it with my builder it would be better to start with an empty lot! Someone might make some money with sweat equity, but holding costs could quickly eat away any profit, so I am going to pass on it
– created a slide presentation I will be presenting in front of live audiences(you can view a video of me practicing below for a chance to win tickets to Landrush 2015!) Here is this week’s newsletter:
AJAX EXPENDITURES TO DATEWhile doing research on an upcoming presentation, I was surprised to learn that “KGHM AJAX INC” has already spent… INVEST KAMLOOPS TVCheck out this video for a chance to win $200 tickets to the upcoming landrush conference! KAMLOOPS REAL ESTATE INVESTMENT CLUBTonight’s meeting was very informative. Flynn Mirtle Moran is an appraisal firm who have been in Kamloops 55 years. Carey and Brett were very candid and I learned a bunch of new stuff about the appraisal industry:– In 2008 in response to the financial crisis a 3rd party entity was created to be a buffer between lenders and appraisers in an effort to avoid “collusion”. This third party assigns inspection contracts based on price and many residential appraisers have been underbidding and driven the market price of a full appraisal to below subsistence levels for major firms. The end result is these individuals working from “their basements” are turning out an inferior product/report because they are not in a competent firm, so quality of appraisals is lowered.– Many in the room agreed, some even advised that the banks have charged them for appraisals, but no one stepped foot in the property.– It’s a data mining industry now on the residential level(an a very cutthroat business from the sounds of it), where in the past detailed measurements were taken of EVERYTHING and the cost approach was used to value properties.– Flynn Mirtle Moran is primarily in the commercial appraisal side of things, but is doing residential appraisals as a training tool for their staff. Commercial appraisal certification requires a great deal more industry training and substantial residential experience to become qualified.– the prevailing cap rate in Kamloops is 6.5%, but for an older beat up building it could go as high as 7%. A brand new building might be 5%– there are so many factors in determining cap rate: type/use of property, suite mix, age, adherence to a maintenace schedule, etc.– cap rate is basically a measure of risk, the lower the cap rate the lower the risk of income loss– cap rate is net income➗ purchase price(or market value as determined by an appraisal)– it takes longer to become a certified commercial appraiser than to become a doctor– I asked “how can I maximize my appraised value?” The answer I got was to spend money on bathrooms/kitchens and other high ROI renovations, but trying and hype your property up to the appraiser will likely just annoy him/her. It’s common for the owner to “be in the ear” of the appraiser and it doesn’t influence anything much.– There are lots of commercial properties transacting in the interior. Storage facilities are being bought up/built in Kamloops, there used to be a shortage of supply for mini storage but it’s now catching up. Overall it was a great meeting and nice to talk to some knowledgeable professionals! Be sure to visit next months’ KREIC meeting where I will be presenting “The Polar Bear Path to Wealth” and some deals. See you there Feb 26th!
DO YOU NEED REAL ESTATE ADVICE?
Due to an overwhelming demand for consulting services, I am limiting new clients. Are you… – trying to decide if Real Estate investing is right for you?– struggling with a nightmare tenant?– thinking about selling? If you have a real estate problem, advice from a third party can be invaluable. I have a solid consulting track record and has dealt with evictions, filling vacancies, and every tenant situation imaginable. Since services are in high demand, consulting rates start at $100/hr. Book a FREE, no obligation, 30 minute phone call with me to learn if we can work well together. Call 1.888.532.7660 or email sam@investkamloops.com.* – Sam *When requesting a phone call, please provide as much information as possible. A detailed message or email complete circumstances will ensure I can best help you quickly. DEAL OF THE WEEKThis week’s deal is a slam dunk! This is a 3 bedroom townhouse in a complex where I own 2 units and am on strata council. I am currently getting $1877 incl utilities and $1677 not incl utilities so these places cashflow great for a much smaller investment. Here are the numbers:
There are simply too many good deals in Kamloops for me to capitalize on all of them. As result, I will be publishing my proforma reports and the plans I would carry out on these properties to produce the double digit returns I talk about on this website. Since I am doing deal analysis on an ongoing basis anyway, I may as well help anyone who is searching for their next property in Kamloops. The value of these analysis? Well, if I could purchase them all, each one would be worth $1000/mo(the REAL cashflow of my most recent deal). Since I cannot at the moment purchase them all, you can have them for $7 each. Why only seven dollars when I spend at least two hours per week on my initial due diligence? Because I want to make sure the opportunities I find benefit you, my loyal readers. If you can make money with a property I find, that makes me happy.
Invest Kamloops Interview Series
The Invest Kamloops monthly interview series features successful business owners and investors who are benefiting from the Kamloops economy. You will learn the secrets to their success, and specific strategies to implement.
Whether you are just starting out, or have been investing for a while, the stories here will inform and inspire. These interviews will show you what small changes in your life will produce big results.
ABOUT
Sam Perren is a Real Estate Investment Advisor, Family Man, Published Author, and works as a Police Officer. Sam has purchased over 2 Million dollars in residential real estate, and is a member of Mastermind Networks who’s members have purchased over $5B of real estate. Sam’s education and experience includes two years of sciences at UBCO, two years of carpentry, and more than seven years law enforcement. Sam successfully completed the Canadian Securities Course in 2011, a credential required for all financial advisers.
Sam is growing his portfolio using the S.A.F.E. principles he developed, and has been creating double digit returns using Real Estate since to the delight of his partners since 2009. Sam is seeking more investment partners, however due to time constraints, opportunities to work with Sam are limited. Minimum capital required to work with Sam is $150,000 unless you wish to buy part of an existing deal, I currently have one for sale for $40,000. Your ability to qualify for mortgages would also be an asset. Your investment is RRSP eligible.
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Tonight’s meeting was very informative. Flynn Mirtle Moran is an appraisal firm who have been in Kamloops 55 years. Carey and Brett were very candid and I learned a bunch of new stuff about the appraisal industry:– In 2008 in response to the financial crisis a 3rd party entity was created to be a buffer between lenders and appraisers in an effort to avoid “collusion”. This third party assigns inspection contracts based on price and many residential appraisers have been underbidding and driven the market price of a full appraisal to below subsistence levels for major firms. The end result is these individuals working from “their basements” are turning out an inferior product/report because they are not in a competent firm, so quality of appraisals is lowered.– Many in the room agreed, some even advised that the banks have charged them for appraisals, but no one stepped foot in the property.– It’s a data mining industry now on the residential level(an a very cutthroat business from the sounds of it), where in the past detailed measurements were taken of EVERYTHING and the cost approach was used to value properties.– Flynn Mirtle Moran is primarily in the commercial appraisal side of things, but is doing residential appraisals as a training tool for their staff. Commercial appraisal certification requires a great deal more industry training and substantial residential experience to become qualified.– the prevailing cap rate in Kamloops is 6.5%, but for an older beat up building it could go as high as 7%. A brand new building might be 5%– there are so many factors in determining cap rate: type/use of property, suite mix, age, adherence to a maintenace schedule, etc.– cap rate is basically a measure of risk, the lower the cap rate the lower the risk of income loss– cap rate is net income➗ purchase price(or market value as determined by an appraisal)– it takes longer to become a certified commercial appraiser than to become a doctor– I asked “how can I maximize my appraised value?” The answer I got was to spend money on bathrooms/kitchens and other high ROI renovations, but trying and hype your property up to the appraiser will likely just annoy him/her. It’s common for the owner to “be in the ear” of the appraiser and it doesn’t influence anything much.– There are lots of commercial properties transacting in the interior. Storage facilities are being bought up/built in Kamloops, there used to be a shortage of supply for mini storage but it’s now catching up. Overall it was a great meeting and nice to talk to some knowledgeable professionals! Be sure to visit next months’ KREIC meeting where I will be presenting “The Polar Bear Path to Wealth” and some deals. See you there Feb 26th!
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
While doing research on an upcoming presentation, I was surprised to learn that “KGHM AJAX INC” has already spent $27 million since the company was formed in June 2010. Try to follow the breadcrumbs, it took me a while to get it figured out. Abacus formed KGHM Ajax and transferred all it’s mineral rights to the project for 49% share of the company. KGHM International bought 51% of KGHM Ajax for $37M, this money was paid to KGHM Ajax. (Page 8 of the following report) As of Sept 30, 2014 KGHM Ajax has $10M cash left, but also $9M in liabilities That means that more than $27M has already been spent! But that is just a drop in the bucket of the money that will be spent. According to this document there will be almost $800M required as an initial investment, and according to this document 37% of that will be spent in Kamloops.
In summary $296M spent in Kamloops will certainly bolster the economy, and $40M/year thereafter in wages paid will support a sustained increase in house prices and rents, both good for Kamloops real estate investors.
I thought this was an interesting fact, and wanted to share it.
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
I read Ozzie Jurock’s book “Real Estate in Canada” last week.
The book poses the journalistic questions “W.W.W.W.W. and H.”, then walks the reader through the logical answers.
“I keep six honest serving-men, (They taught me all I knew);Their names are What and Why and When, And How and Where and Who” – Rudyard Kipling
Who: YOU! This book is about your real estate investments.
What: Page 244 has the best types of property to purchase: Your own home; single family homes with basement suites, waterfront property, newer condos in major cities, apartment buildings, select commercial property, and most importantly BUY FOR CASHFLOW.
Where: Sometimes the best place to put your money to work is in your community, and sometimes it is thousands of KMs away. Good options include Casino Towns, major markets(during a downturn), or small towns in Ontario, Alberta or BC that have the following: a) better than average population growth(Kamloops growth is 6.6% compared to BC 5%) b) vacancy rates at or below 4%(Kamloops is 3.5% or lower) c) a new highway, employment, or some other reason to grow(Kamloops has a mine and construction of a new inland port(a rail yard) in it’s future) d) good prices(meaning you can buy with a low downpayment and still cashflow) Kamloops Prices are about 40% of similar property in Greater Vancouver, and yet median incomes are the almost identical. e) competent property management (I self manage for myself and my investors, because property management companies in Kamloops do an average job for the price.) f) more than one industry(Kamloops is home to many companies of over 100 people. There are 12 major employers covering 9 distinct sectors, employing over 10,000 people) g) university or college with character(Kamloops opened Canada’s first new law school in over 33 years, and TRU has 13,170 students on campus.)
Where to Avoid: – time shares– limited partnerships that you can’t break– property near or on native land, as protests/blockades have made some resort owner suffer 50% depreciation
Of interest is that many Kamloops properties fit the above recommended criteria, and many of the other recommended features found on pages 29-34 and 42- 48 of Ozzie Jurock’s book:“Superstore index” meaning when Costco/Walmart open in an area it stands to reason that future growth in that area will be strong. These companies spend a lot of money on research and they will only open in communities that their research shows will thrive. in recent years Kamloops Walmart expanded to a super-centre, Costco added a gas bar, Canadian Tire added 10,000 sqft floorspace, and 73,000 sqft of retail and industrial space under construction in 2014“Casinos:” House prices in Windsor and the Niagara Peninsula rose 20% after casinos entered the area.(Kamloops is expanding it’s Casino and this will also add 200 jobs) “Resort Opportunities:” Sun Peaks in Kamloops is a top rated resort town by Jurock Publishing.“Mini Storage Boom:” When the book was written, mini storage was predicted to be a money maker. The number of mini storage buildings in Kamloops is staggering, and from what I’ve seen in other cities its the same all over.(I guess not all the stuff we buy can go to the landfill.)“Technology:” Big changes to the real estate industry during this information age is predicted as consumers become more savvy. In fact, technology companies and the need for cloud computing have made data centres in high demand. Because of some of the lowest costs for electricity in North America, and the seismic stability of the region, Kamloops attracted a $75 Million investment by Telus in a new data centrethat was completed in 2014, and the Q9 data centre that was completed in 2011 as part of a $100M deal with the province..When: Timing is more important than location(p247). Timing your purchase means seeing the following changes in your market(don’t worry, they happen slowly enough to have lots of reaction time): – inward migration to your target area, meaning people are attracted by economic factors(jobs) or sociological factors ie casinos. – affordability, meaning the end user must be able to afford rents/mortgage payments, if property sells for less than replacement costs prices will likely rise, low vacancy and property prices same as replacement costs means prices will like rise – inventory, if there is very few desired properties, those properties will increase in value. It’s supply and demand. – inflation, the trend has been inflation since the 1940s – environment of growth, values grow where people and jobs go – demographics, this is more of a long term concern to be considered within context of the other factors Why: This book is less of a motivator than a how-to. I know you have your own reason for wanting to build wealth, whether to retire early, leave a legacy, support a charity, or perhaps just for the thrill of the deal. Whatever your “why”, if you own it you can achieve your dreams by following advice in this book.
How: There are many strategies within real estate to achieve your dreams. Once familiar with them, it’s up to you to choose your favorite based on your goals and appetite for risk.
This book was a good read, and a fresh perspective for me. Key insights include:– For new homes you must purchase for at least 12% under market. Because of GST, realtor fees and land transfer taxes, purchasing a $400,000 property would mean to break even you would need to sell for $447,000.– You make money when you buy.– Sharks are grave dancers and profit from other people’s misery, Flippers are always looking to sell in an up market to the “greater fool”(someone who will pay more than they did) so both these businesses can raise many moral questions. Both Sharks and Flippers do short term deals, in and out in 3-6 months. Investors on the other hand are primarily concerned with finding low downpayment, cash-flowing properties that will attract quality tenants, and use the principals discussed above to do so.
If you want to learn more, I encourage you to pickup a copy of Ozzie’s book! Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Greetings! This week was busy for me with conferences(more on that later) but I also enjoyed some family time – even if it was a shopping trip to Home Depot for some odds and ends for a property.
I’ve been conducting business as usual:– 1 of the 2 vacancies I learned about last week is filled so I’m marketing & showing only 1 of the units – Learned the market is starting to heat up. There were multiple offers on the fourplex I tried to tie up last week. – Took in some great info at a Reno to Rent event in Calgary. Here is this week’s newsletter:
BOOK REVIEWI read Ozzie Jurock’s book “Real Estate in Canada” last week. The book poses the journalistic questions “W.W.W.W.W. and H.”, then walks the reader through the logical answers. "I keep six honest serving-men, (They taught me all I knew);Their names are What and Why and When, And How and Where and Who” – Rudyard Kipling
Who: YOU! This book is about your real estate investments. What: Page 244 has the best types of property to purchase: Your own home; single family homes with basement suites, waterfront property, newer condos in major cities, apartment buildings, select commercial property, and most importantly BUY FOR CASHFLOW. Where: Sometimes the best place to put your money to work is in your community, and sometimes it is thousands of KMs away. Good options include Casino Towns, major markets(during a downturn), or small towns in Ontario, Alberta or BC that have the following: Calgary REIN event REVIEW – tips to maximize profits on renovations.There were only 3 jackknifed semis on the drive from Kamloops to Calgary yesterday… Why on earth was I on this highway instead of being with my family? DO YOU NEED REAL ESTATE ADVICE?Due to an overwhelming demand for consulting services, I am limiting new clients. Are you… – trying to decide if Real Estate investing is right for you?– struggling with a nightmare tenant?– thinking about selling? If you have a real estate problem, advice from a third party can be invaluable. I have a solid consulting track record and has dealt with evictions, filling vacancies, and every tenant situation imaginable. Since services are in high demand, consulting rates start at $100/hr. Book a FREE, no obligation, 30 minute phone call with me to learn if we can work well together. Call 1.888.532.7660 or email sam@investkamloops.com.* – Sam *When requesting a phone call, please provide as much information as possible. A detailed message or email complete circumstances will ensure I can best help you quickly. DEAL OF THE WEEKThis week’s deal is ready to go! Someone did a great job setting up a high income student rental, although I’m disappointed in the low basement rent. There is an opportunity to increase revenue in this already huge cash flowing property with the addition of another bedroom downstairs. Here are the numbers:
There are simply too many good deals in Kamloops for me to capitalize on all of them. As result, I will be publishing my proforma reports and the plans I would carry out on these properties to produce the double digit returns I talk about on this website. Since I am doing deal analysis on an ongoing basis anyway, I may as well help anyone who is searching for their next property in Kamloops. The value of these analysis? Well, if I could purchase them all, each one would be worth $1000/mo(the REAL cashflow of my most recent deal). Since I cannot at the moment purchase them all, you can have them for $7 each. Why only seven dollars when I spend at least two hours per week on my initial due diligence? Because I want to make sure the opportunities I find benefit you, my loyal readers. If you can make money with a property I find, that makes me happy. If you would like to access to the password protected site area “Deal of the Week”, Invest Kamloops Interview SeriesThe Invest Kamloops monthly interview series features successful business owners and investors who are benefiting from the Kamloops economy. You will learn the secrets to their success, and specific strategies to implement. Whether you are just starting out, or have been investing for a while, the stories here will inform and inspire. These interviews will show you what small changes in your life will produce big results.
ABOUTSam Perren is a Real Estate Investment Advisor, Family Man, Published Author, and works as a Police Officer. Sam has purchased over 1 Million dollars in residential real estate, and is a member of Mastermind Networks who’s members have purchased over $5B of real estate. Sam’s education and experience includes two years of university sciences at UBCO, two years of carpentry, and more than seven years law enforcement. Sam successfully completed the Canadian Securities Course in 2011, a credential required for all financial advisers.
Sam is growing his portfolio using the S.A.F.E. principles he developed, and has been creating double digit returns using Real Estate since to the delight of his partners since 2009. Sam is seeking more investment partners, however due to time constraints, opportunities to work with Sam are limited. Minimum capital required to work with Sam is $150,000 unless you wish to buy part of an existing deal.
Sam lives and invests in Kamloops BC, and can be reached at 1.888.532.7660 or sam@investkamloops.com.
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
There were only 3 jackknifed semis on the drive from Kamloops to Calgary yesterday… Why on earth was I on this highway instead of being with my family? Well, I was fortunate enough to get my wife’s permission to attend today’s REIN event in Calgary! After a harrowing journey, I was well rested after a great night in Airdrie, so thank you to my cousin Cody and his lovely wife Lissa for the awesome hospitality ��
EVENT SUMMARY:The day consisted of an economic update(macro economics) with a focus on oil, then a detailed how-to for the rest of the day. Topics included finding property, determining after-reno value, determine reno cost, presenting offers, financing, an expert panel, renovation contractor presentation, a case study(successful investor talking about their deals), and reno work in detail.
REFLECTING ON OILThe event started off with Don Campbell giving his “What’s behind the curtain” and his take on recent low oil prices. Basically this is a cycle that has happened before, this will hurt if a $50/barrel price is SUSTAINED, and Alberta will be a buying opportunity for a strategic real estate investor. Don plans to buy light industrial and residential near LRT in 2015. He points to Jan Stuart’s prediction that oil will recover($70 range) in 4th quarter of this year.
JARED HOPE’S WAY FOR RENOVATION The main presenter was Jared Hope. He is conducting a massive expansion of his portfolio and has incorporated “flipping” into his business model. Jared’s impressive resume:– $1.7M in recent renovation expenses-managing 400 doors(Landlord Resource Centre)-owns 140 doors with partners– writes an offer a week and closes on a property every three weeks The first segment was about choosing a business model. You need to decide: 1. Reno then flip: great quick cash injection.(common on TV) You need to know who you are selling to. 2. Reno then rent: less common, can get into rental properties for less(due to refinance from improving the property) and less maintenance costs during your holding period. 3. What city will you do your flips in? It’s easier to do flips when you live there to stay on top of the trades. 4. What type of property? The numbers will dictate this.“PLAN B” IF YOUR FLIP DOESNT SELL… Spend more money(slush fund), rent it out, change your target buyer, change marketing efforts, etc. There are lots of plan B’s, and most are covered in REIN’s monthly meetings and extensive ACRE event so I won’t go into a great amount of detail here. The rest of the event was information that runs parallel to traditional buy-and-hold, but it was a nice refresh of best practices.“AH HA MOMENTS” Some cool tips from this event that will improve my business include: -Present deals in person, this will create emotion and allow you “humanize” the transaction. If the seller refuses, go find another deal. “Give people what they need, not what they want.”– submit 2 offers: lower price + quick close OR higher price and long close(seller must choose ONE) – when renovating, do showings as soon as the paint dries. You don’t need your flooring installed, but have samples of it on site. If you do showings before the walls are painted, tenants have a poor imagination and will think the place will not be finished.– there is a substantial amount of risks doing “flips” so make sure there is at least $50,000 profit before proceeding(single family residential homes)In conclusion This was a great event jampacked with information from people who are actually doing flips now. With the checklists provided and systems that were taught, a significant amount of risk can be eliminated. This course makes flips a palatable business model, and the contents of today’s workshop would easily be worth $1000 as a home study course. Just by using these checklists, I will avoid some of the mistakes from my last renovation, and my next one will be more profitable. As usual, REIN put on another great event and I am so fortunate to have this included as part of my membership. Now I can’t wait to get home to my wife and kids, I will be sure to drive slowly �� Until next time, About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
I hope you had a good Christmas and New Year! We got very sick with a flu(all our guests too) so I hope yours was better than mine! Anyway, we are now recovered and it’s back to business as usual. So far in the new year my real estate world has been busy:– 2 tenants gave notice so I’m marketing & showing the units – 3 houses needed the insulation in the attics upgraded – I made an offer to purchase a fourplex – attending a networking REAG meeting yesterday in Vancouver(got home at 4am this morning) and will be headed to one at the end of the week in Calgary(REIN) – removed some loose tile in the kids bathroom during bath times(if you’ve had little kids you know life revolves around nap times so you do projects a little at a time whenever you can fit them in) Here is this week’s newsletter:
CHRISTMAS GIFT FOR YOUSince most of my readers did not take advantage of this fabulous resource, I am offering it again in case you were too busy to see it on Dec 24th! I will send you my most recent interview with a successful investor/business owner Tyler Getzen. This guy is literally flying high and living his dream, so if you want some inspiration you are going to want to check this out! Please send me an email(sam@investkamloops.com) with “Merry Christmas” in the subject line and it’s yours FREE(I normally charge $77). Merry(belated) Christmas!
INVEST KAMLOOPS TV
People have asked me “what are you up to with all this real estate stuff anyway?” My answer is best put in what the industry dubs an “elevator speech”. It’s basically a “canned response” that helps the listener quickly decide if they want to know more, you can listen to mine in this segment of InvestKamloops TV. Also a key insight for getting things done.
DO YOU NEED REAL ESTATE ADVICE?
Due to an overwhelming demand for consulting services, I am limiting new clients.
Are you…
– trying to decide if Real Estate investing is right for you?– struggling with a nightmare tenant?– thinking about selling?
If you have a real estate problem, advice from a third party can be invaluable. I have a solid consulting track record and has dealt with evictions, filling vacancies, and every tenant situation imaginable. Since services are in high demand, consulting rates start at $100/hr.
Book a FREE, no obligation, 30 minute phone call with me to learn if we can work well together. Call 1.888.532.7660 or email sam@investkamloops.com.*
– Sam
*When requesting a phone call, please provide as much information as possible. A detailed message or email complete circumstances will ensure I can best help you quickly.
DEAL OF THE WEEKThis week’s deal is a great one, it’s the one I presented to REAG members yesterday. I first saw it in November on the MLS and frankly I can’t believe it’s still on the market. Here are the numbers:
Purchase: $289,900 Reno(add basement unit): $55,000 Rents: $2900 Cashflow: $800/mo Working Capital needed: $113,000 Total Investment After Refinance: $66,500 ROI: about 14% per year in Cashflow alone on year 1(with 30yr 2.6% mortgage).
To get full pro forma with the address and detailed numbers, you must either be on my investors list by clicking here, or be a paid subscriber(I am practically giving these away.)
There are simply too many good deals in Kamloops for me to capitalize on all of them. As result, I will be publishing my proforma reports and the plans I would carry out on these properties to produce the double digit returns I talk about on this website. Since I am doing deal analysis on an ongoing basis anyway, I may as well help anyone who is searching for their next property in Kamloops. The value of these analysis? Well, if I could purchase them all, each one would be worth $1000/mo(the REAL cashflow of my most recent deal). Since I cannot at the moment purchase them all, you can have them for $7 each. Why only seven dollars when I spend at least two hours per week on my initial due diligence? Because I want to make sure the opportunities I find benefit you, my loyal readers. If you can make money with a property I find, that makes me happy. If you would like to access to the password protected site area “Deal of the Week”, Invest Kamloops Interview SeriesThe Invest Kamloops monthly interview series features successful business owners and investors who are benefiting from the Kamloops economy. You will learn the secrets to their success, and specific strategies to implement. Whether you are just starting out, or have been investing for a while, the stories here will inform and inspire. These interviews will show you what small changes in your life will produce big results.
ABOUTSam Perren is a Real Estate Investment Advisor, Family Man, Published Author, and works as a Police Officer. Sam has purchased over 1 Million dollars in residential real estate, and is a member of Mastermind Networks who’s members have purchased over $5B of real estate. Sam’s education and experience includes two years of university sciences at UBCO, two years of carpentry, and more than seven years law enforcement. Sam successfully completed the Canadian Securities Course in 2011, a credential required for all financial advisers. Sam is growing his portfolio using the S.A.F.E. principles he developed, and has been creating double digit returns using Real Estate since to the delight of his partners since 2009. Sam is seeking more investment partners, however due to time constraints, opportunities to work with Sam are limited. Minimum capital required to work with Sam is $150,000 unless you wish to buy part of an existing deal. To learn more about the S.A.F.E. business model, and see opportunities available right now. Sam lives and invests in Kamloops BC, and can be reached at 1.888.532.7660 or sam@investkamloops.com.
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Invest Kamloops Newsletter | Dec 24, 2014 | Vol 1 | Issue 15
I’m sure you are rushing to get your last minute stuff done(I know I am), so I will keep this short. ��
I’ve been really enjoying this time of year, and although I’ve not been as active in the past couple weeks with the business and this newsletter, the family time has been well worth it!
Merry Christmas from my family to yours! Here is this week’s newsletter:
FEATURE BLOG POST
Your fence fell on my car“It’s on my car and I can’t lift if off.” That’s the call I got from a tenant late one windy night in early December. What would you do? This was actually the third bizarre complaint in the same week: – A tenant swore and yelled at his upstairs neighbor and smashed at the drywall because he thought it was too noisy when they came home. The upstairs neighbor was very frustrated as this has been an ongoing issue that finally culminated into a situation where they feel threatened.– A tenant gave notice to leave 2 months into a 1 year lease because they changed their mind about living downtown. This is a big deal because a tenant turnover typically involves 20 hours of additional work for me(I self manage for myself and my partner’s), and I had just finished scrambling to fill an unexpected vacancy the month before so I was still recovering from that. This is on top of the work I do managing routine maintenance, keeping books, and building the business. (hardly leave time for full time work, sleep, and enjoying family time, so turnovers can be a challenge) Stories like this can really freak out prospective property investors. The potential for problems can be very stressful for the uninitiated, and prevents many would be investors from taking action. At times like this I sometimes wonder why I bother with property investing at all. Then I remember some sage advice from a mentor in my day job in crisis management:
CHRISTMAS GIFT FOR YOUPlease send me an email(sam@investkamloops.com) with “Merry Christmas” in the subject line and I will send you my most recent interview with a successful investor/business owner Tyler Getzen. This guy is literally flying high and living his dream, so if you want some inspiration for Christmas you are going to want to check this out! Have a great Christmas!
DECEMBER ECONOMIC FUNDAMENTALS
The coming boom in Kamloops(and how we are in the middle of the Recovery Phase of the real estate cycle)
Invest Kamloops Economic FundamentalsLow Oil Prices a Boon to Kamloops Residents and Transportation Industry– Dec 19:
DO YOU NEED REAL ESTATE ADVICE?
Due to an overwhelming demand for consulting services, I am limiting new clients.
Are you…
– trying to decide if Real Estate investing is right for you?– struggling with a nightmare tenant?– thinking about selling?
If you have a real estate problem, advice from a third party can be invaluable. I have a solid consulting track record and has dealt with evictions, filling vacancies, and every tenant situation imaginable. Since services are in high demand, consulting rates start at $100/hr.
Book a FREE, no obligation, 30 minute phone call with me to learn if we can work well together. Call 1.888.532.7660 or email sam@investkamloops.com.*
– Sam
*When requesting a phone call, please provide as much information as possible. A detailed message or email complete circumstances will ensure I can best help you quickly.
DEAL OF THE WEEK
This week’s deal is a longer term project(10 years would be ideal), but offers a solid cashflow and is in an area undergoing gentrification, so long term appreciation potential is phenomenal, here are the numbers:
Purchase: $410,000 Initial Cash Invested: $114,300
The mortgage has been pre approved! All we need is the funds, and your cashflow needs could be negotiated, it is possible to make your investment RSP eligible.
Rents: $900 x 4 = $3600 Return On Investment: 5% percent per year in Cashflow alone on year 1(with 30yr/ 3% mortgage), so a bit low, however this property is across the street from riverfront new construction and is in a neighborhood undergoing gentrification, so appreciation will be higher than normal. Sale on year 10 could result in average of 24% ROI/yr. There are simply too many good deals in Kamloops for me to capitalize on all of them. As result, I am publishing my proforma reports(including one for the above property) and the plans I would carry out on these properties. With these properties, the double digit returns I talk about on this website are easily within reach. Since I am doing deal analysis on an ongoing basis anyway, I may as well help anyone who is searching for their next property in Kamloops.
The value of my pro forma analysis? Well, if I could purchase them all, each one could be worth $1000/mo(the cashflow of my most recent deal). Since I cannot at the moment purchase them all, you can have them for $7 each. Why only seven dollars? Especially when I spend at least two hours per week on my initial due diligence? Because I want to make sure the opportunities I find benefit you, my loyal readers. If you can make money with a property I find, that makes me happy.
Invest Kamloops Interview SeriesThe Invest Kamloops monthly interview seriesfeatures successful business owners and investors who are benefiting from the Kamloops economy. You will learn the secrets to their success, and specific strategies to implement. Whether you are just starting out, or have been investing for a while, the stories here will inform and inspire. These interviews will show you what small changes in your life will produce big results.
ABOUTSam Perren is a Real Estate Investment Advisor, Family Man, Published Author, and a Police Officer. Sam has purchased over 1 Million dollars in residential real estate, and is a member of Mastermind Networks who’s members have purchased over $5B of real estate. Sam’s education and experience includes two years of university sciences at UBCO, two years of carpentry, and more than seven years law enforcement. Sam successfully completed the Canadian Securities Course in 2011, a credential required for all financial advisers. Sam is growing his portfolio using the S.A.F.E. principles he developed, and has been creating double digit returns using Real Estate since to the delight of his partners since 2009. Sam is seeking more investment partners, however due to time constraints, opportunities to work with Sam are limited. To learn more about the S.A.F.E. business model, and see opportunities available right now Sam lives and invests in Kamloops BC, and can be reached at 1.888.532.7660 or sam@investkamloops.com.
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
I detail the coming boom in Kamloops(and why we are in the middle of the Recovery Phase of the real estate cycle) I will be publishing economic news here and putting it in context on at least a monthly basis, so if you have not yet subscribed, please do so and keep up to date on the Kamloops markets. You will be glad you did! Invest Kamloops Economic FundamentalsLow Oil Prices a Boon to Kamloops Residents and Transportation Industry– Dec 19: With fuel under $1, both consumers and transportation companies benefit. Since Kamloops is a transportation hub with many related companies, low oil/gas is actually helpful to many. Pipeline twinning may have massive impact on housing – Dec 17: 270 workers will be in Kamloops for the duration of the Kinder Morgan pipeline twinning construction, with a peak of 800 possible. This will put a big strain on the hotels/temporary housing and may present an opportunity for landlords to drive already high rents even higher by offering shorter term leases or furnished suites. BC Housing Construction up 10% in October BC is the 2nd fastest growing place for investment in Canada. 2015 will see $3.8 million upgrade to Columbia Street – Nov 25 “The project will add turning lanes at 3 Avenue, 4 Avenue, 5 Avenue and 6 Avenue as well as a new raised centre medians. A sidewalk will be added on the south side connecting 3 Avenue and 4 Avenue (in front of the hospital), a bus pullout will be added and traffic and pedestrian signals will be improved. Repaving, street light improvements and enhanced landscaping is also planned. One of the biggest concerns, turning left on 2 Avenue, will be eliminated with the addition of the raised centre medians, which will eliminate left hand turns on or off of the street. All driveways from 3 Avenue to 6 Avenue will also become right-in right-out only.” Kamloops Thompson Rivers University gets lions share of funding – 43 more student medical training spaces opened, TRU just keeps growing! Kamloops to spend $10M upgrading water supply: There is a second water intake being planned as a prudent(and needed) redundancy system is being integrated into What some call waste, I call investment The Canadian Federation of Taxpayers is crying foul because Kamloops’ Thompson Rivers University president spent $11,898.89 on airfare to Austria, $9,342.85 on airfare to China, and thousands in airfares from Kamloops to Vancouver. I agree that first class travel may be unnecessary, but if being well rested and comfortable allowed the president to perform well in meetings that will bring more students to Kamloops, this is fine by me! Each student spends at least $1000/mo on rent and food, and over $1400 per course. To qualify as full time(3 course per semester), this equals $8400/yr. One additional student would pay for his expenses($20,400). Since TRU has over 1750 existing international students that represent $35M of revenue for TRU and Kamloops businesses, even spending that money maintaining relationships with host countries would be worthwhile. 1750% return on investment is just good business. As you read these news articles, try to piece together the big picture for Real Estate Investors and why it matters to you! Use this REIN GDP Graph to try and see what these headlines mean to the price of housing and rental rates.
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
“It’s on my car and I can’t lift if off.” That’s the call I got from a tenant late one windy night in early December. What would you do? This was actually the third bizarre complaint in the same week: – A tenant swore and yelled at his upstairs neighbor and smashed at the drywall because he thought it was too noisy when they came home. The upstairs neighbor was very frustrated as this has been an ongoing issue that finally culminated into a situation where they feel threatened.– A tenant gave notice to leave 2 months into a 1 year lease because they changed their mind about living downtown. This is a big deal because a tenant turnover typically involves 20 hours of additional work for me(I self manage for myself and my partner’s), and I had just finished scrambling to fill an unexpected vacancy the month before so I was still recovering from that. This is on top of the work I do managing routine maintenance, keeping books, and building the business. (hardly leave time for full time work, sleep, and enjoying family time, so turnovers can be a challenge)
Stories like this can really freak out prospective property investors.
The potential for problems can be very stressful for the uninitiated, and prevents many would be investors from taking action. At times like this I sometimes wonder why I bother with property investing at all. Then I remember some sage advice from a mentor in my day job in crisis management: "Time solves everything."
When starting to feel stressed or overwhelmed, ask yourself: will this matter in 5 weeks, 5 months, or 5 years from now? Chances are that this too shall pass, and 5 years from now no one will remember the stressful event. Magic happens when you take a long term view, and you see the big picture. As 2014 comes to a close, I look at my modest portfolio and compare to one of my mentors. Since 2003 he has amassed enough property to collect $2M/yr in rent, and of that rent his mortgages are paid down roughly $200,000/yr. That’s $200k that someone else deposits in his account every year! I would need to grow my business 10x to get to that level, but even with my small portfolio I know that by taking a long term view there is a large reward waiting for me. I only need to weather the storms, and I will have control of assets that someone else paid for, my tenants.
So when the tenants fight, or give notice to leave right after moving in, or a fence falls on their car, I know that none of this will matter in the short term. I just need to solve these temporary problems on the road to lasting wealth, because solving problems is where the money is made. In the words of a very wise woman(Melanie R): “I work hard now on what few are willing to do, so that later I will live as few are able.”
So what was the extra work I had to do that week? Fence situation: I told my tenant I would look at it in the morning and told her to take lots of photos. I hauled the fence panels to the dump, I gave my tenant my autobody guy’s number and told her I would pay for the damage, then I got my neighbor to agree to pay for half. Tenant fight: I drafted a letter reminding them that they live in the same house and to adjust sensitivity to noise, and that profanity/threats/damage to property are not acceptable/are grounds for eviction, and promptly inspected the unit for damage. 2 weeks later and no further complaints, so far so good. Early breaking of the lease: I reminded the tenant that I require written notice, at least 2 full months as per our lease. I immediately contacted some prior applicants who indicated they are still interested, and after Christmas I will follow my turnover flowchart. This includes putting up the for-rent lawn sign and biweekly online ads in both Craigslist and Kijiji with a huge amount of descriptive text copy that elicits emotion, staging, showings with multiple people at the same time to create, and extensive background checks.
Situations like this are routine, so a thick skin(or a partner with one) is necessary to get through these types of road bumps, and get to that pot of gold at the end of the rainbow. Next time you feel overwhelmed, remember “time solves everything” so just put your head down and take action: do what needs to be done(or hire someone who will)!
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
My son turned 1 and we had a fun party ��
It’s hard not to feel happy watching a baby dig into a cake for the first time, sometimes I wish I could do that! We had a good week and I hope yours was too, here is this week’s newsletter:
FEATURE BLOG POST
How to Make $16k in 2 HoursThis article got a ton of views and comments on Facebook so you might be interested too: Big money made in Kamloops at a recent 2 hour event. Here’s how it happened.There was a call at suppertime from an unknown number. Usually I ignore these calls but for some reason I answered. I was about to tell the caller to add me to the do not call list, when I heard “free event to learn about wholesaling right in Kamloops.” “Sure, sign me up.” I replied. After all, I didn’t know that wholesale deals existed in Kamloops, and I didn’t know much about this Real Estate strategy so I was intrigued. Plus I thought it would be a great chance to meet other like minded investors. Before hanging up, I gave my email address, and the caller referenced “Scott Yancey from Flipping Vegas” many times. Before now I did not know about that TV show or who Scott was, but I was interested to meet him and in his model of investing. INVEST KAMLOOPS TV
Oil Prices Don’t Affect Kamloops
Investing in single industry towns is risky, no matter what the potential upside.I’ve spoken with numerous investors in recent months who are looking for a good return on investment(ROI) of their money using real estate. There have been new build projects in Alberta and Northern BC that had booths at many Real Estate events I frequent, all looking for investment dollars from people like you and me. After growing up in a boom-bust town, I know how the volatility of the market can catch people off guard. Put a $10k down payment, or worse purchase a pre-build for cash, the market turns and your money can be tied up forever. A recent example is the huge drop in oil prices this week and what this means to real estate investors.
DO YOU NEED REAL ESTATE ADVICE?Due to an overwhelming demand for consulting services, I am limiting new clients. Are you… – trying to decide if Real Estate investing is right for you?– struggling with a nightmare tenant?– thinking about selling? If you have a real estate problem, advice from a third party can be invaluable. I have a solid consulting track record and has dealt with evictions, filling vacancies, and every tenant situation imaginable. Since services are in high demand, consulting rates start at $100/hr. Book a FREE, no obligation, 30 minute phone call with me to learn if we can work well together. Call 1.888.532.7660 or email sam@investkamloops.com.* – Sam *When requesting a phone call, please provide as much information as possible. A detailed message or email complete circumstances will ensure I can best help you quickly. DEAL OF THE WEEKThis week’s deal is another with great potential, here are the numbers:
Purchase: $190,000 Downpayment: $38,000($152,000 mortgage) Closing Costs: $6,300 Reno(add 1 more basement unit): $27,000 Working Capital needed: ~$72,000 Refinance value :$240,000 New mortgage: $192,000 – $152,000(old mortgage) = $40,000 recaptured Total Investment After Refinance: $32,000 Rents: $897 x 2 and $1399 = $2296 ROI: almost 17% per year in Cashflow alone on year 1(with 30yr 2.6% mortgage). There are simply too many good deals in Kamloops for me to capitalize on all of them. As result, I am publishing my proforma reports(like the one for the above property) and the plans I would carry out on these properties. With these properties, the double digit returns I talk about on this website are easily within reach. Since I am doing deal analysis on an ongoing basis anyway, I may as well help anyone who is searching for their next property in Kamloops. To get a full pro forma with the address and detailed numbers, you must either be on my investors list by clicking here, or be a paid subscriber(I am practically giving these away.) You can see what a full proforma looks like here: 724 Battle Street. The value of my pro forma analysis? Well, if I could purchase them all, each one could be worth $1000/mo(the cashflow of my most recent deal). Since I cannot at the moment purchase them all, you can have them for $7 each. Why only seven dollars? Especially when I spend at least two hours per week on my initial due diligence? Because I want to make sure the opportunities I find benefit you, my loyal readers. If you can make money with a property I find, that makes me happy. Invest Kamloops Interview SeriesThe Invest Kamloops monthly interview series features successful business owners and investors who are benefiting from the Kamloops economy. You will learn the secrets to their success, and specific strategies to implement. Whether you are just starting out, or have been investing for a while, the stories here will inform and inspire. These interviews will show you what small changes in your life will produce big results.
ABOUTSam Perren is a Real Estate Investment Advisor, Family Man, Published Author, and a Police Officer. Sam has purchased over 1 Million dollars in residential real estate, and is a member of Mastermind Networks who’s members have purchased over $5B of real estate. Sam’s education and experience includes two years of university sciences at UBCO, two years of carpentry, and more than seven years law enforcement. Sam successfully completed the Canadian Securities Course in 2011, a credential required for all financial advisers. Sam is growing his portfolio using the S.A.F.E. principles he developed, and has been creating double digit returns using Real Estate since to the delight of his partners since 2009. Sam is seeking more investment partners, however due to time constraints, opportunities to work with Sam are limited. To learn more about the S.A.F.E. business model, and see opportunities available right now. Sam lives and invests in Kamloops BC, and can be reached at 1.888.532.7660 or sam@investkamloops.com.
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
SummaryInvesting in single industry towns is risky, no matter what the potential upside. I’ve spoken with numerous investors in recent months who are looking for a good return on investment(ROI) of their money using real estate. There have been new build projects in Alberta and Northern BC that had booths at many Real Estate events I frequent, all looking for investment dollars from people like you and me. After growing up in a boom-bust town, I know how the volatility of the market can catch people off guard. Put a $10k down payment, or worse purchase a pre-build for cash, the market turns and your money can be tied up forever. A recent example is the huge drop in oil prices this week and what this means to real estate investors. Here is what is happening: 1. OPEC is not reducing oil supply(they are profitable with oil at $40/barrel range) in an effort to squeeze out the newer more expensive oil projects(Canada’s Oil Sands start to lose profitability at $60/barrel). 2. Cheap oil means there is less demand for alternative fuel like LNG. As result, the final investment decision of the proposed $36B LNG plant in the Fort St John/Dawson Creek area and the Northern Gateway Pipeline have been postponed indefinitely because the costs of these projects are not attractive enough when oil is under $70/barrel. We could see oil under $70 until late 2017.
3. Alberta’s Real Estate Prices are vulnerable to oil, shown yet again in this Dec 2 article . “When growth is on par, or lags the rest of the country, workers don’t flood in Builders, Kavcic says, haven’t been able to put homes up fast enough to meet the recent demand. And if migration does plunge, there’ll be a lot of homes coming to market out of the current building cycle.” What this means for you. Look carefully at the projections offered by the salesman of new construction projects. For companies to make money on the build, projects frequently sell at market value(or slightly above). You may find an inflated projection of appreciation to make ROI look better than realistic forecasts.(I heard one salesman point to 4% appreciation – aggressive in my view – and say “this could be 10%”) An inflated appreciation can make a dramatic difference on your ROI. Try the numbers with a realistic 2% appreciation(on par with inflation) and see if it is still an attractive investment. I use 2% appreciation in my calculations, and highlight the Cash-on-Cash ROI – meaning how much cashflow(money is left after expenses each year) is there / total money invested in the deal. Because rents in Kamloops are so high compared to prices, it is not unusual to receive $10k/yr cashflow for an investment of $100k or less! Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Big money made in Kamloops at a recent 2 hour event. Here’s how it happened.There was a call at suppertime from an unknown number. Usually I ignore these calls but for some reason I answered. I was about to tell the caller to add me to the do not call list, when I heard “free event to learn about wholesaling right in Kamloops.” “Sure, sign me up.” I replied. After all, I didn’t know that wholesale deals existed in Kamloops, and I didn’t know much about this Real Estate strategy so I was intrigued. Plus I thought it would be a great chance to meet other like minded investors. Before hanging up, I gave my email address, and the caller referenced “Scott Yancey from Flipping Vegas” many times. Before now I did not know about that TV show or who Scott was, but I was interested to meet him and in his model of investing. Flash forward three weeks. I get a reminder phone call, and am asked to dress in business casual. I’m promised just for showing up I will get a free book, digital camera, and a real estate resource CD. Wednesday night at 6 PM, I arrive. There is a video playing with a guy talking, I learn this is Scott Yancey. So, he is not going to be here tonight… I think “Great, another US guru pitching his programs. Oh well, I’m here anyway so I may as well see what he has to say.”
The event then played out exactly like the CBC Marketplace episode that covered the Rich Dad Poor Dad seminars that toured Canada a while back. If you don’t know about that story, check out the link above or just keep reading.
You can read lots of blog reviews of Scott Yancey events online, but this one is spot on accurate to what I observed. The execution at the event here in Kamloops was fascinating. It was tough not to get sucked into the charm of the speakers, and the use of psychological triggers was genius. Here are a couple that impressed me: – The seminar was scheduled for a weekday at 6pm, normal dinner time for most people. That means you ate early, or showed up hungry. Since hunger is a “hot state” of emotion, and hot states increase impulsivity, the chance of making a buying decision is increased. – A chocolate granola bar was placed on the seat. The law of reciprocity is a sales technique where “if I give you somethings, you will give me something in return.” In this case it was 2 hours of our attention, and some bought the program. Since there are thousands of real estate gurus that do the same thing and share best practices, no doubt these triggers have been tested over time. i.e. 8pm meeting time vs 6pm results in bigger sales. Anyway, on a whole the audience did not stand a chance, I detail the rest of the meeting below. The contentThe speaker spoke about how much money the audience could make with various strategies: Wholesaling – buying distressed properties cheap and selling for a small profit to another investor who will flip or rent it Buy and hold investing – buy a cheap US property and rent it out Flips – buy a cheap house, fix it up and sell it
People asked some questions: Q: “Where will I get the money to invest?” A: We lend money to our students without need for income, credit checks, and no upfront fees. Q: “Where do we find properties?” A: There is too much content to go over here, but we have a course coming up.
The tone was a soft pitch the entire time, many times the speaker said “we are a training company and make money by training you, but if you make money isn’t it ok that we make money too”. They even had a “real Canadian” named Myrtle Antao there who had completed 9 deals since May. She stood up in front of the group and gave a brief speech about how great the company is and how much she had learned. The speaker closed Myrtle’s testimonial by asking a leading question that sounded like “are we as awesome as we say we are” or maybe it was more like “have we delivered on everything we promised to you.” Myrtle of course answered “yes.” Before she was ushered away by the speaker who asked for a round of applause, I yelled out “How much money have you made?” The speaker quickly answered: “We are not allowed to make earning claims in front of the group, you can ask her in private afterwards.” The sale pitch for the course now began in earnest.“There is way too much to know, and I cannot possibly teach you everything here tonight. We do however have a $1997 course that is three days long. Who wants to make money?” Most hands go up. “Common, if your hand is not up your a liar.” All hands go up. “Who thinks program will make you money?” A few hands go up. “Who is going to make the commitment right now to their financial future?” 6 people raise their hands and two assistants ushered them to the back of the room where they fill out forms and put down their credit card. I’m thinking “wow, they just made $12,000.” Meanwhile, the other 40 people in attendance are told not to go anywhere because a second speaker is going to give them another opportunity in case the last offer was not for them.
The real testimonialI took this time to get up and I asked Myrtle about her experience with the Yancey group. She told me: – her husband did not want to invest in the US but she convinced him with the help of the company – she is glad she found this company – she has not done any wholesaling yet, she needs to pay for that course and wants to do it soon – the company helped her sell her rental property in Toronto and invest the money($300,000) in 9 US rental houses – the company helped her set up a three tier corporation to hold her US real estate – her accountant did not understand what she was doing and neither did she, so she asked the company to call her accountant to explain it – after the 3 day training she was sold more courses
The second pitchThe second speaker spent a lot of time getting us to like him. He showed photos of his family, then talked about getting a family home for cheap through a U.S. tax lien, but because he is a nice guy he didn’t kick out the family, he rented their own house back to them. He then discussed buying US tax liens and that 18-25% returns on your money is guaranteed by the government. This time the course being offered was $1500, but you could take the course online through their website instead of attending a 3 day seminar. But wait! That’s not all! The course is only $1000 for those who already purchased the three day training! I watched in amazement as half the previous buyers, and new buyers, lined up at the back of the room. There was least $4000 of additional training sold.
In summarySo there you have it. $16,000 in sales(probably more) in 2 hours. However, the event was not a complete waste of time. I was inspired to learn the truth about tax liens(I never would have looked into them otherwise) and that they are an advanced strategy, certainly not for inexperienced investors like the speakers pitched, and there is a real risk of losing money. I also got the opportunity to meet a very nice woman from Vancouver, Jackie. She works in charity law, with some education in interior design. She had driven all the way to Kamloops just for this event(that’s how good the marketing was), but also saw through the overpriced training programs. We will likely talk about investing and staging in the future, so I’m glad I went just for the opportunity meet her. To be clear, there were no outright false statements made, however on a whole the presentation was misleading to say the least. Here is a story to illustrate the point: A man’s house burnt down while he was on holidays. When returned, he talked to his lawyer about handling the insurance claim. The lawyer asked “are you covered for this terrible disaster?” The man replied “yes of course, I have a policy for fire and theft.” The lawyer said “that is too bad.” The man was puzzled and asked why. The lawyer said “you should have been insured for fire or theft.”
The distinction is subtle to most people, so although the salesmen at this event did not tell any overt lies, the content and promises were misleading. This is indeed a dishonest scheme, and the Scott Yancey event I attended meets the following definition.
I wish I had read online reviews before attending, and I really wish the buyers of the programs Wednesday night had as well! Please share this article with as many people as you can.
Perhaps some of those headed to Vancouver for the December 12,13 and 14th Scott Yancey event will see this article and be warned against spending an additional $20K-$60K on the further training that will be pitched to them!
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
It’s starting to feel like Christmas – I know, I know, I’m way early… But this year I am very excited! It’s our first Christmas with our kids, and Livy is old enough to understand what’s going on so we are going to have a ton of fun. Anyway, I’ve got my business Christmas shopping done: chocolates for tenants(and welcome basket for my newest – Welcome Ashley and Jen!), and Bailey’s for my JV partners ��
It’s important to show appreciation to those who make life better, and as much as I help my tenants and JV partners by working very hard, I feel blessed to have them in my life and contributing to my family’s future. Anyway here is what is in this week’s newsletter:
FEATURE BLOG POSTKamloops sits between Million dollar marketsThe average single family home in Vancouver has been $1M for years, but now Calgary homes are reaching this price in record numbers. Investors have been struggling in Vancouver’s Lower Mainland(LMD) and Calgary to get real estate to cashflow(pay for itself as a feasible investment). Investors in these markets must use strategies like Rent To Own, super suites(furnished rentals), or building houses. All these strategies are fine, but they add a layer of complexity to real estate investing(and more opportunity for things to go wrong) that require a real expert to navigate. The potential pitfalls are simply not worth it, especially when the same(or better) Return On Investment is available. BOOK REVIEWMONEY, Master the gameI recently finished 21 hours of a neat audiobook, Tony Robbins’ latest work. This was a great reminder and summary of most of the books I’ve read about money and prosperity. In fact, if I could only give my younger self a single book, it would be this one. The dry financial information is nicely sandwiched between abundance, gratitude, and positive thinking. This book could give you a “paradigm shift” toward accumulating wealth if you get through it with an open mind. Here is a summary of the key points: “the 7 simple steps to financial freedom”: DO YOU NEED REAL ESTATE ADVICE?Due to an overwhelming demand for consulting services, I am limiting new clients. Are you… – trying to decide if Real Estate investing is right for you?– struggling with a nightmare tenant?– thinking about selling? If you have a real estate problem, advice from a third party can be invaluable. I have a solid consulting track record and has dealt with evictions, filling vacancies, and every tenant situation imaginable. Since services are in high demand, consulting rates start at $100/hr. Book a FREE, no obligation, 30 minute phone call with me to learn if we can work well together. Call 1.888.532.7660 or email sam@investkamloops.com.* – Sam *When requesting a phone call, please provide as much information as possible. A detailed message or email complete circumstances will ensure I can best help you quickly. DEAL OF THE WEEKThis week’s deal is another with great potential, here are the numbers:
Purchase: $314,900 Downpayment: $63,000($252,000 mortgage) Reno(add 1 more basement unit): $30,000 Working Capital needed: $93,000 Refinance value :$360,000 New mortgage: $288,000 – $252,000(old mortgage) = $36,000 recaptured Total Investment After Refinance: $57,000 Rents: $850 x 2 and $1400 = $3100 ROI: almost 15% per year in Cashflow alone on year 1(with 30yr 2.6% mortgage). There are simply too many good deals in Kamloops for me to capitalize on all of them. As result, I am publishing my proforma reports(like the one for the above property) and the plans I would carry out on these properties. With these properties, the double digit returns I talk about on this website are easily within reach. Since I am doing deal analysis on an ongoing basis anyway, I may as well help anyone who is searching for their next property in Kamloops. To get a full pro forma with the address and detailed numbers, you must either be on my investors list by clicking here, or be a paid subscriber(I am practically giving these away.) You can see what a full proforma looks like here: 724 Battle Street. The value of my pro forma analysis? Well, if I could purchase them all, each one could be worth $1000/mo(the cashflow of my most recent deal). Since I cannot at the moment purchase them all, you can have them for $7 each. Why only seven dollars? Especially when I spend at least two hours per week on my initial due diligence? Because I want to make sure the opportunities I find benefit you, my loyal readers. If you can make money with a property I find, that makes me happy.
Invest Kamloops Interview SeriesThe Invest Kamloops monthly interview series features successful business owners and investors who are benefiting from the Kamloops economy. You will learn the secrets to their success, and specific strategies to implement. Whether you are just starting out, or have been investing for a while, the stories here will inform and inspire. These interviews will show you what small changes in your life will produce big results. ABOUTSam Perren has purchased over 1 Million dollars in residential real estate, and is a member of Mastermind Networks who’s members have purchased over $5B of real estate. Sam’s education and experience includes two years of university sciences at UBCO, two years of carpentry, and more than seven years law enforcement. Sam successfully completed the Canadian Securities Course in 2011, a credential required for all financial advisers. Sam is growing his portfolio using the S.A.F.E. principles he developed, and has been creating double digit returns using Real Estate since to the delight of his partners since 2009. Sam is seeking more investment partners, however due to time constraints, opportunities to work with Sam are limited.
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
I recently finished 21 hours of a neat audiobook, Tony Robbins’ latest work. This was a great reminder and summary of most of the books I’ve read about money and prosperity. In fact, if I could only give my younger self a single book, it would be this one. The dry financial information is nicely sandwiched between abundance, gratitude, and positive thinking. This book could give you a “paradigm shift” toward accumulating wealth if you get through it with an open mind. Here is a summary of the key points: “the 7 simple steps to financial freedom”:Step 1. “Make the most important financial decisions of your life.”“Live beneath your means. Make more, invest the difference. Pay yourself first.” The whole idea here is to get the most powerful tool any of us have working ASAP. Here is how. Automate saving: get 10%, 20%, even 50% – as much as you possibly can – AUTOMATICALLY withheld from your income and save it in a place you can’t easily access. Compounded interest is VERY powerful, so you must make use of it. Another automatic strategy that is useful is dollar cost averaging, to be combined with step #4. Finally, become tax efficient – while “reading” this book, I spoke with my friend and investment partner Mel. He told me a recommendation he heard that people should spend 15% of their time tax planning. You have to pay taxes, but you don’t have to leave a tip. Taxes are likely to increase in the future. Especially because your income is likely to increase in the future, not decrease. Instruments like a registered retirement savings plan will likely be a disservice to you. Step 2. “Get educated.”You need to know the rules of the game to win.When a man with experience meets a man with money, the man with the experience gets the money, and the man with the money gets experience. Tony speaks about his mentor Jim Rohn and a goldmine of advice: "Learn to work harder on yourself than you do on your job. Earn more by becoming more valuable. Become more valuable by adding more value to other people’s lives." This book covers the financial world in detail, and much is applicable to Canada if you substitute the following words:USA 401K = Canada RRSPUSA Roth IRA = Canada TFSA At the very least, after reading this section you will get a working knowledge of the financial industry casino, and be better able to spot gambles with the highest odds, if you choose to continue participating in “the game”. Step 3. Set goals. Fail to plan and you plan to fail.Spend time figuring what you want and what it will cost(it will likely be much less than you think you need). Ideas to stretch your dollars further:– move to cheaper places– purchase investments that produce an income stream and then rent rather than spend capital on large purchases(vacation home, fancy vehicles, etc).– Tony speak at length about the benefits of renting a private jet over owning one… very applicable to me �� 4. Asset allocation. This step is “the most important investment principal”, but 90% of North Americans have no idea what this is. Investments fit into buckets: dream bucket, risk/growth bucket, security bucket. The “all weather portfolio” has the following percentage of assets allocation:30% stock ie. s&p 500 or other index15% intermediate term gov bonds ie. 7-10yr treasuries40% long term gov bonds ie. 20-25yr treasuries (all these bonds counter the risk of the stock indexes)7.5% gold7.5% commoditiesIf you use this asset mix you must rebalance at least annually. 5. Upside without downside.This step is about some products and strategies Tony endorses. Here are some examples: Fees will kill you, portfolio managers fees will decimate your long-term investments. Most Mutual funds are bad because of high fees, plus managers consistently beating the market is statically impossible. “Financial advisors” are frequently commission based brokers.Brokers are butchers. Fiduciaries are great, like a dietician. They are fee based financial advisors. The advice they give may also be tax-deductible. Some Annuities are good. Fixed annuities are great, but variable annuities are a terrible variation of this 2000-year-old product. 6. Invest like a billionaire. No one beats the market, except some unicorns [people who don’t statistically exist: the likes of Warren Buffett]. This step is about interviews with 12 “unicorns” and how they invest. Interesting, but perhaps less useful to middle class people like me than the rest of the book. It is interesting who a motivational speaker(for all you Tony fans, I know he is much more than that) can rub shoulders with. 7. Do it, enjoy it, share it. The future is better than you think. Technology is increasing all our productivity, increased productivity is what grows the economy, and creates a better quality of life for everyone. Motivational quotes are scattered throughout the book, but here is one that stuck with me:“We make a living by what we get. We make a life by what we give.” – Winston Churchill Tony points out that true wealth is not about money: citing studies that show when people make $75,000/yr, earning more doesn’t add any happiness to life. To increase happiness(LIFE WEALTH), money is best spent on these three things.1. Invest in experiences: travel, courses(unleash the power within -hint hint), etc…2. Buy time for yourself: hire out mundane tasks and use time saved to work/focus on your passions.3. Invest in others: give your money/time/talents away. Another principal: gratitude is a must for a wealthy and prosperous life. Tony closes by pitching his charities and gives lots of inspiring stories in this section. It’s hard not to have hope for the future after this part of the book. Summary If you can look past the obvious pitching of certain financial companies/products that Tony Robbins is affiliated with, this book will infuse you with a deeper understanding of the financial world, and how to create wealth in general. To be fair, Tony’s pitches for his courses and affiliate financial products are subtle, and this is by no means a book solely designed to sell these things. There is great value here! Especially since I got my copy free by trying out Audible on my iPhone(you can too). I highly recommend this book for financial beginners and as a great refresher for veterans. You may be prompted to reevaluate your investment strategies – I know I did! And after looking at all the investment options for my family, income producing real estate is still my #1 pick!
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
The average single family home in Vancouver has been $1M for years, but now Calgary homes are reaching this price in record numbers. Investors have been struggling in Vancouver’s Lower Mainland(LMD) and Calgary to get real estate to cashflow(pay for itself as a feasible investment). Investors in these markets must use strategies like Rent To Own, super suites(furnished rentals), or building houses. All these strategies are fine, but they add a layer of complexity to real estate investing(and more opportunity for things to go wrong) that require a real expert to navigate(like the links I provided above). The added risk of complex strategies is simply not needed in real estate investing, because there are plenty of simple buy-and-hold deals outside the hot LMD and Calgary markets. Kamloops rent($3000/mo) to purchase($345k) ratio for a typical suited home frequently offers a higher Return on Investment(ROI) than even advanced strategies in other markets. Also Kamloops incomes(and rents) have risen above the average of many neighbouring communities, so housing affordability is much better. With house prices substantially below the LMD and Calgary, it’s inevitable Kamloops prices will increase closer to those of it’s neighbours in the near future. Perhaps when shopping for your next deal, you will consider Kamloops: the “dark horse” of the real estate world. Until next time, About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Well, that was fast! It seems like I was just writing last week’s newsletter. Here is what is new with us:
There was playing outside while planting last minute bulbs(my job since the ground was frozen).
Marcy and Livy cleaning the first snowfall. This week I also filled a basement vacancy and increased rents by $175(18%). This is lower than the $250(26%) increase I had previously announced, but 2 sets of prospects had backed out after paying a deposit upfront, so when the perfect candidates came along I jumped at the opportunity and gave them a deal to get a commitment. Not a bad increase for December 1st move in, and truly a win/win. They get a great place to live at a mid market rent, and I get great tenants who signed a six month lease. Tip: always get your leases to end in the summer month, there is more demand and rents can be priced higher. The reason I had to fill this vacancy in the winter is that my long term tenant gave notice to move in with her boyfriend. Here is what is in this week’s newsletter:
FEATURE BLOG POST7 Reasons the CSC Will Make You Run to Real EstateIn the pursuit of wealth, most are naturally drawn to the financial industry. After all, financial product advertisements and financial news can be seen everywhere!There are magazines, blog posts, and 24/7 TV shows(I confess I used to watch the “Lang and O’Leary Exchange” daily, and was excited when Kevin came to Kamloops). The business section of newspapers are dedicated to the financial industry. The amount of content out there is overwhelming, with more opinions on finances than options! After mucking around with the noise in the media for a while, I decided to get educated. I frequently say the Canadian Securities Course(CSC) is the best $1000 I have ever spent. I’ve learned what the financial industry is, how it works, and most importantly, how it affects middle class working people like me. INVEST KAMLOOPS ECONOMIC FUNDAMENTALSI detail the coming boom in Kamloops(and why we are in the middle of the Recovery Phase of the real estate cycle) I will be publishing economic news here and putting it in context on at least a monthly basis, so if you have not yet subscribed, please do so and keep up to date on the Kamloops markets. You will be glad you did! Some samples from the Nov 2014 issue: The Interior Health Authority spends $10M per year on laundry!Besides the ongoing cost of laundry, IHA is facing a $10M equipment upgrade, so is looking to contract out laundry services, potentially phasing out 175 union jobs throughout the region(15 of these jobs are in Kamloops). If this happens it will be sad for the employees, however Kamloops will likely see MORE jobs as result since any contractors would likely set up home base in the transportation hub of the interior: Kamloops. I will watch with interest and keep you posted. 171-million dollars in building permits in Kamloops so far this yearThis is a 23-percent jump over the same time period last year. Canada’s smartest person is from KamloopsOk this is more for fun than anything, I promise Canada’s smartest person is not me, just click the link to read all about Kamloops’ newest claim to fame.
ARTICLE: HEADLINES DISCOURAGING YOU FROM INVESTING?“Inflation projected to be 0.6% – CMHC Forecast” After a friend of mine (who also happens to be a successful Kamloops Realtor) shared this bit of news that he had heard on the radio, I was perplexed. I found the news opposite to what my 5+ years of research was saying, so I asked for the link to dig deeper. I got the link last week,(thanks Aaron) and got to dig into the media statements a bit. The ClaimsThe actual headline is Kamloops Real Estate Remains Flat – “Numbers provided by Kamloops and District Real Estate Association and Central 1 Credit Union show sales growth in the Tournament Capital is flat, with housing prices largely unchanged since 2010.” The FactsThis article is talking about short term sales growth, not the long term picture that sophisticated investors look at. I detail the coming boom in Kamloops(and why we are in the middle of the Recovery Phase of the real estate cycle) Highlights that prove we are in the recovery: DO YOU NEED REAL ESTATE ADVICE?Due to an overwhelming demand for consulting services, I am limiting new clients. Are you… – trying to decide if Real Estate investing is right for you?– struggling with a nightmare tenant?– thinking about selling? If you have a real estate problem, advice from a third party can be invaluable. I have a solid consulting track record and has dealt with evictions, filling vacancies, and every tenant situation imaginable. Since services are in high demand, consulting rates start at $100/hr. Book a FREE, no obligation, 30 minute phone call with me to learn if we can work well together. Call 1.888.532.7660 or email sam@investkamloops.com.* – Sam *When requesting a phone call, please provide as much information as possible. A detailed message or email complete circumstances will ensure I can best help you quickly. DEAL OF THE WEEKThis week’s deal is a great one, here are the numbers:
Purchase: $289,900 Reno(add basement unit): $55,000 Rents: $2900 Cashflow: $800/mo Working Capital needed: $113,000 Total Investment After Refinance: $66,500 ROI: about 14% per year in Cashflow alone on year 1(with 30yr 2.6% mortgage). To get full pro forma with the address and detailed numbers, you must either be on my investors list by clicking here, or be a paid subscriber(I am practically giving these away.) You can see what a full proforma looks like here: 724 Battle Street. There are simply too many good deals in Kamloops for me to capitalize on all of them. As result, I will be publishing my proforma reports and the plans I would carry out on these properties to produce the double digit returns I talk about on this website. Now, since I am doing deal analysis on an ongoing basis anyway, I may as well help anyone who is searching for their next property in Kamloops. The value of these analysis? Well, if I could purchase them all, each one would be worth $1000/mo(the cashflow of my most recent deal). Since I cannot at the moment purchase them all, you can have them for $7 each. Why only seven dollars when I spend at least two hours per week on my initial due diligence? Because I want to make sure the opportunities I find benefit you, my loyal readers. If you can make money with a property I find, that makes me happy. If you would like to subscribe to the password protected site area “Deal of the Week”, INTRODUCING: Invest Kamloops Interview SeriesThe Invest Kamloops monthly interview series features successful business owners and investors who are benefiting from the Kamloops economy. You will learn the secrets to their success, and specific strategies to implement. Whether you are just starting out, or have been investing for a while, the stories here will inform and inspire. These interviews will show you what small changes in your life will produce big results. Here is the October Mastermind call as a sample: Mel Johnson Interview
ABOUTSam Perren has purchased over 1 Million dollars in residential real estate, and is a member of Mastermind Networks who’s members have purchased over $5B of real estate. Sam’s education and experience includes two years of university sciences at UBCO, two years of carpentry, and more than seven years law enforcement. Sam successfully completed the Canadian Securities Course in 2011, a credential required for all financial advisers. Sam is growing his portfolio using the S.A.F.E. principles he developed, and has been creating double digit returns using Real Estate since to the delight of his partners since 2009. Sam is seeking more investment partners, however due to time constraints, opportunities to work with Sam are limited. To learn more about the S.A.F.E. business model, and see opportunities available right now. Sam lives and invests in Kamloops BC, and can be reached at 1.888.532.7660 or at sam@investkamloops.com.
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
In the pursuit of wealth, most are naturally drawn to the financial industry. After all, financial product advertisements and financial news can be seen everywhere! There are magazines, blog posts, and 24/7 TV shows(I confess I used to watch the “Lang and O’Leary Exchange” daily, and was excited when Kevin came to Kamloops). The business section of newspapers are dedicated to the financial industry. The amount of content out there is overwhelming, with more opinions on finances than options! After mucking around with the noise in the media for a while, I decided to get educated. I frequently say the Canadian Securities Course(CSC) is the best $1000 I have ever spent. I’ve learned what the financial industry is, how it works, and most importantly, how it affects middle class working people like me. About the CSCFrom the Canadian Securities Institute website: “In Canada, individuals who sell financial products […] OR have specific duties within a financial services company […] are required to meet educational, employment and work experience criteria in order to be licensed.” In other words, the CSC is the entry level course for all licensed financial professionals. The CSC is an intense program if your discipline isn’t in finance. Few aspiring advisors pass CSC exams on the first try with a 30-60% pass rate depending on the year. There are over 705 pages of content(I bought the audio book to help me through it, about 30 hours of audio that I listened to multiple times), lots of formulas to know, and many practice tests to complete for a good chance at passing the final exams. Here is a picture of the table of contents:
As I was writing this post, I reviewed my study material and found my old notes/formulas. I had condensed them into a single sheet, and practiced copying the sheet until I could reproduce it from memory. When I started the exams, the first thing I would do is reproduce my cheat sheet. Here is what the various versions looked like:
In 2011, I completed the course on the first try. I am proud of that, although I cannot find my certificate, it must be in a box somewhere waiting to be framed and hung.
7 Revelations After Completing the CSCOnce I completed this course, I could see the big picture of the financial world. Here are some insights I learned that will help you protect your money.
1. The financial industry deliberately complicates simple concepts. I learned that the financial industry uses an alphabet-soup of acronyms(MER, GIC, REIT, RRSP, HFT) and other jargon to complicate what should be very simple. Financial markets can be summed up as follows: – You can buy shares in companies(stocks) to participate in growth of those companies, – You can loan money to government or companies(bonds) to collect interest on the debt, or – You can spend money betting a financial instrument will rise or fall in value (Derivatives) such as Puts/Calls/Warrants. Most securities that are not equity or debt are called derivatives. Derivatives are frankly a mess of different types of wagers. It’s like a group of gambling addicts have decided to bet on anything they could think of, then sell the bets to investors. Investors, not understanding what they are getting into, buy these derivatives on the advice of advisorssalesmen(more on this later so keep reading) who are seeking a commission. Soon, not even the architects of these products understand what it is exactly they are selling.
2. The house always wins. When complicated financial products are invented, typically only the inventor of that product makes any money. For example, Goldman Sachs sold investors risky mortgages in ’06/’07, while at the same time betting on a housing crash. So they made money both ways. That is like if I bet on a horse race, then sold you my ticket after I learn the horse is lame, and then place a bet on the competition. The party who sets the stakes is also rigging the game. Take High Frequency Trading(HFT) as another example. When you click your mouse to purchase a stock in your self directed trading account there is a lag time, known as latency, between when the order is placed and when it is filled(the stock becomes part of your portfolio). Your fiber optic internet connection is 30% slower than the speed of light, but HFT companies often use microwave technology(with large antennae or even high flying drones and satellites) which is only 1% slower then the speed of light. So, when your order is detected by a high frequency trader(a computer program), they purchase the stock ahead of you, then sell it to you at a higher price, pocketing the difference. Complex products(derivatives) or strategies(HFT) seem to serve no purpose other than to separate investors from their hard earned money, and are very common in the financial industry. This becomes even more evident in the next revelation.
3. There are more funds(a mixed bag of companies) than real companies on the stocks market.
There are almost 4000 companies on Canadian Exchanges….
But there are 35,323 Canadian “funds and clones.” For every 1 actual company that is making something or servicing someone, there are about 9 mutual funds, with each manager trying to find a mix that will “beat the market”.
There are $1.12T of mutual funds, to put that in perspective the TSX had a value of $3.5T June 2014. Over 1/4 of Canadian wealth is held in mutual funds. What is the problem with this? It’s called Management Expense Ratio: The financial industry’s name for a fee, aka MER. Why not just call it a “fee” rather than confuse the matter… Anyway, the average MER is over 2.5%, representing $30 Billion in fees paid, funneled away from investors. With average stock market returns of 8.5%, that means your average return within a mutual fund is more like 6%. But that’s if you’re lucky….
4. Portfolio managers cannot consistently beat the market. Do you think paying fees to an expert will get you a better result than just tracking an index? Think again. This article make the point quite succinctly: "How common is it for investors to pay fees – maybe even rising fees – for indifferent or worse returns[than an index]? “Out of all the mutual funds I cover, I would say 25 per cent are pretty decent,” said analyst Dave Paterson of D.A. Paterson & Associates. “You’ve got another 50 per cent that are acceptable, but you might as well be in an ETF, and 25 per cent that probably shouldn’t be sold.” So, should you should just buy an index product, or ask your investment advisor to help you find the best mutual funds? Not so fast, keep reading.
5. The financial industry is largely devoid of ethics. The financial industry is structured to take care of it’s own interests first, not yours. Let me elaborate. Pretend advisors actually want to help you(some do). They are frequently tied to the financial products of the bank/brokerage they are employed with. They may not be able to offer you the best option for your situation because they are simply not aware it exists, and are just acting as sales representatives. And that’s if the advisor wants to help you! Of the 705 pages of content in the CSC, only 27 pages(3.8%) deal with how to best service the client. Only 9 pages(1.3%) are devoted to ethics. So, when dealing with any financial advisor, keep in mind that the entry level licencing course material contains LESS THAN 4% on what’s in the best interest of the client(YOU). These are the people who influence major decisions of Canadians just like me and you. Decisions that will affect your family, your retirement, your child’s university fund, your ability to contribute to the world and leave a legacy. These are profound and intimate hopes, dreams and goals. The financial life of millions of Canadians is in the hands of someone who may have spent less than 1.3% of their formal training learning about ethics. This leads to the most disturbing revelation…
6. The financial industry is rife with fraud. More than 1/3 of Canadian organizations report being victimized by white collar crime, and an estimated 7% of publicly traded firms are affected by fraud. Canada has a reputation for being a haven for white collar criminals. The reason: Each province/territory has its own regulator(in BC we have the BC Securities Commission). The result: Lax enforcement of securities legislation between jurisdictions. How this affects you and me: Products are frequently sold that are not in the best interest of the client, only the advisor sales person. This is unethical, and at times unlawful. For example, financial companies who’s business models involve pyramid selling thrive(the ethics of this business model are best reserved for another post). These companies recruit a host of unsophisticated “associates” with promises of riches. The “sales associates” are encouraged to sell the company’s financial products to friends/family, and to recruit them into the network as well. The only people who end up rich are the founders of the company, everyone else is lucky to break even. Pyramid selling results are predictable:
A crook gets banned from scamming people in one province, using what was learned from others who had used the same tactics and were disciplined in the past, and the fraud is repeated over and over. IMET, Canada’s market enforcement team since 2003, have a dismal track record due to different regulatory bodies jurisdictions, and other structural weaknesses in Canadian securities law. It is for this reason there so much fraud in Canada appears to go unpunished: take the Nortel acquittals for example.
So, are there options to find a good investment for the middle class? Yes but they require more active involvement than a 1/2 hour meeting with an investment advisor mutual fund salesmen. Do this: – Get educated(read – Warren Buffett etc…, take courses, study). – Pay fee-for-service advisors(non commission) for advice. – Seek another type of investment that is not often in the limelight but consistently performs very well. Taking control of your finances may involve the oldest and simplest wealth creation strategy that is often overlooked.
7. Real Estate is the Best Alternative to the Financial Industry Residential real estate is difficult to scale, in fact many have pointed out it is not investment grade(meaning it’s tough to place millions in houses quickly) due to the difficulty in managing a large portfolio of property. It’s for this reason that this investment class has not been corrupted by large players. Direct ownership of income producing real estate is the best alternative to the trappings of the financial industry for a bunch of reasons: – someone else is paying for most of your investment(the tenant) – real estate by definition is REAL, it exists outside of computers and safely away from the imaginations of market manipulators – REAL things retain value, that is why people also buy gold(plus it is easier to carry around than a house) – prices of real estate rise with inflation, and faster if you buy in the right areas – thanks abundant and inexpensive leverage, double digit ROI is common, and 3% growth can equal 15% ROI
Summary The one thing I learned from the CSC that I actively use in my real estate business is this: the concept of Fiduciary Duty. This means only doing what is in the best interest of my client. The way I ensure this happens is by structuring my loans or JV deals so my partner wins first, and wins big. I then get to participate in the win once all the initial capital is returned. If things go badly, I am right there with my client working my butt off to make things right. But more importantly I mitigate risk every step of the way, minimizing any downside to such an extent, it almost doesn’t exist. No other financial product or structure I have seen holds the advisor to such a high standard. For instance:
After hundreds of hours of studying financial markets and after obtaining insider knowledge about our financial system, I could condense all I learned into the following statement. The BEST instrument readily available to the middle class for building wealth is income producing real estate.
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
I detail the coming boom in Kamloops(and why we are in the middle of the Recovery Phase of the real estate cycle) I will be publishing economic news here and putting it in context on at least a monthly basis, so if you have not yet subscribed, please do so and keep up to date on the Kamloops markets. You will be glad you did!
Invest Kamloops Economic Fundamentals
Canada’s smartest person is from Kamloops
Ok this is more for fun than anything, I promise Canada’s smartest person is not me, just click the link above to read all about Kamloops’ newest claim to fame. Another Pro Business Initiative
The Thompson-Nicola Regional District (TNRD) and the City of Kamloops have teamed up to offer training sessions to the general public and business community of Kamloops and surrounding areas on using interactive mapping and accessing local government data stored in a geographic information system (GIS). Working with CityMap and myRegionView, you can create maps, explore and analyze the data behind the maps, create a property report, measure, draw, and locate features of interest such as parks, zoning and library locations. Click link above for details.
Flights to Kamloops were up 7% from 2011-2013
Recent data shows Kamloops passenger numbers up 9% Aug 2014 from the previous year.Also, a local aircraft maintenance company just purchased a competitor in Calgary,so even more aircraft will be serviced at the Kamloops Fulton Field. Stauffer Aero was no small operation, with 6000 square feet of shop and office space, so the purchase by Kamloops’ Pro Aero Aviation will mean more work for locals. Kamloops Mayor and Council largely unchanged.This is great news as they have been pro-business, and this continued stance will attract more investment and jobs to Kamloops.
Kamloops boasts the only longboard park in the world, attracts international attention.Students from Illinois are using crowd funding to get to Kamloops to try out the only longboard park in the world. Just another example of a forward thinking city council attracting attention to Kamloops.
The Interior Health Authority spends $10M per year on laundry!Besides the ongoing cost of laundry, IHA is facing a $10M equipment upgrade, so is looking to contract out laundry services, potentially phasing out 175 union jobs throughout the region(15 of these jobs are in Kamloops). If this happens it will be sad for the employees, however Kamloops will likely see MORE jobs as result since any contractors would likely set up home base in the transportation hub of the interior: Kamloops. I will watch with interest and keep you posted. Venture Kamloops is receiving $100,000 from the province to conduct a five-year forecast of job trends.“The Research Universities’ Council of B.C. published a report last year forecasting 100,000 job openings in the Thompson-Okanagan in the 10 years between 2010 and 2020. The same report called for hundreds of millions in project dollars. Similarly, a local survey conducted two years ago “clearly identified a labour shortage, skilled and unskilled — posting of jobs that were just going unfilled,” Anderson said.” The province wants to be sure of the predictions before big expenditures to support the influx of new workers needed in the area. I for one can’t wait to read that report! Kamloops looking to reduce waste by halfAt a recent waste audit put on for public to view, staff found that Kamloops has a long way to go to reach the goal of 0.3 tonnes per person/yr from the current 0.7 tonnes. At the current rate, the Mission Flats landfill will be full in 50 years!
The Industry Training Authority (ITA) has introduced Apprenticeship AdvisorsKamloops is one of three cities in the province with an Apprenticeship Advisor who specifically will work on initiatives to support Aboriginal Peoples throughout the province.
BC GDP experiences growthBC GDP is at 1.9%, lagging some provinces but in line with the Canadian Average.
171-million dollars in building permits in Kamloops so far this yearThis is a 23-percent jump over the same time period last year.
Other communities complain about Kamloops cheep gas pricesThanks to Kamloops being a distribution center for fuel across the interior, we enjoy gas that is 12 cents a liter cheaper than Kelowna, a major consideration for trucking companies and other small businesses looking for a home base.
Domtar pulp mill positions itself for the futureAn agreement between Unifor Local 10B and Domtar sets the stage for an expanded commitment to apprenticeship training that will help to keep good jobs in Kamloops. The agreement resolves outstanding issues related to the closure of the A-Line in 2013, recognizes the valuable contribution made by senior employees and sets a framework for apprenticeship training at the mill. It also establishes scholarships and bursaries that Unifor and Domtar will administer in pursuit of supporting local trades training schools in Kamloops. Read the full press release at the link above.
Western Railway Traffic Data ReleasedStats Can released data on the products transported by rail for Q1 and Q2. Most of this product moves through Kamloops via both CP and CN to reach the ports in Vancouver. The volume of rail freight carried in Canada totalled 29.5 million tonnes in August, up 3.3% from the same month last year.
Multi family developments on the riseRequests to build more than 90 housing units were before council this week(Oct 24) as developers look to move forward on projects around the city. Projects for the industrial area of McGill Road, on Tranquille Road in Brocklehurst, downtown Battle Street and Qu’Appelle Boulevard in Juniper Ridge were all up for discussion Tuesday. Read entire article at link above.
Kinder Morgan Pipeline twinningEarlier this month(Oct) Kamloops City Council expressed their position on the preferred route for the twinning of the Kinder Morgan pipeline. They unanimously supported the proposal to divert the project through the Lac Du Bois Provincial Park rather than be built along its current path through Westsyde.
Kamloops Budget Meetings in advance of elections
Kamloops praised by envious Prince George ResidentsKamloops is bustling with a vibrant beautiful downtown complete with nightclubs, well-kept buildings, tall towers, busy homegrown men’s store and shoe store, coffee shops, and bakeries. The city’s downtown core is busy even on civic holidays and Sundays unlike the ghost town Prince George is on these days. – See more at the link above.
Population Growth Evidenced by increasing school enrollmentEnrolment at the Kindergarten level accounts for nearly 80 per cent of the increase at the elementary level (which includes students up through Grade 7) and de Bruijn expects the increase will continue at that age in coming years as well. Read full article at the link above. Also: Nearly $150 million in upgrades, additions and new builds are identified in the Kamloops-Thompson School District five year capital plan, including a brand new school in the Pineview Valley area.
Kamloops received $151,156 from 2014 Tim Hortons BrierTourism in Kamloops accounts for a good chunk of local GDP. Events like the Brier, Senior Games, and BC Lions Training Camps all help to make this “Canada’s Tournament Capital”.
$38.5 million dollars upgrade to Kamloops waster water plantThe upgraded wastewater treatment plant in Kamloops is now fully functioning. It cost $38.5 million dollars to transform the facility into using the latest techniques in removing the waste from the water. The operation has shifted from relying heavily on chemical treatment to more of a biological process. This depends mainly on bacteria to filter the water before it gets pumped into the Thompson River.
As you read these news articles, try to piece together the big picture for Real Estate Investors and why it matters to you! Use this REIN GDP Graph to try and see what these headlines mean to the price of housing and rental rates.
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
“Inflation projected to be 0.6% – CMHC Forecast” After a friend of mine (who also happens to be a successful Kamloops Realtor) shared this bit of news that he had heard on the radio, I was perplexed. I found the news opposite to what my 5+ years of research was saying, so I asked for the link to dig deeper. I got the link last week,(thanks Aaron) and got to dig into the media statements a bit. The ClaimsKamloops Real Estate Remains Flat – “Numbers provided by Kamloops and District Real Estate Association and Central 1 Credit Union show sales growth in the Tournament Capital is flat, with housing prices largely unchanged since 2010.”
The FactsThis article is talking about short term sales growth, not the long term picture that sophisticated investors look at. I detail the coming boom in Kamloops(and why we are in the middle of the Recovery Phase of the real estate cycle). Highlights that prove we are in the recovery:– Kamloops affordability index is in the “hot zone” between 25-33%(monthly housing costs a a percentage of income)– strong returns($800/mo Cashflow on $67,000 invested!)– population increase– rent increases(I increased rent by 23% upon turnover in one of my places this month)– Continued decline in vacancy rate– increased construction levels(over $150 million in Kamloops in 24 months, not including housing)– mini boom for building companies(try to get a good contractor these days)– neighbourhoods change as previously differed maintenace takes priority(lots of reno projects are everywhere)– media clues include: confusion about if RE is a good investment and lots of people pointing to value deteriorating in the preceeding years The headline “Real Estate remains flat” highlights this confusion, and let’s the masses think that real estate is a poor investment.
SummaryThe article in question quotes someone about how prices are 5% lower now(in the fall) than they were in mid summer, my response is OF COURSE! Real estate activity is always higher in the summer, the weather is better and people don’t want to move in the winter when kids are in school! Also stated in the article was that housing inventory is slowly creeping up, and we have the beginnings of a buyers market. That great! This is an incredible buying opportunity, and I always get my best deals in the winter months!
The coming boomLike Aaron told me when we were discussing this, it doesn’t matter what the media says, vacancy rates on the ground are near zero and rents are rising each year, so its a great time to be a landlord, and certainly acquisition time in Kamloops! So instead of freezing when you see a scary headline, read the article to see what the details are. Although the individual statements made might be true, in context of the big picture you may find the truth is quite the opposite of what is inferred. Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
This week has been great! Spending time with my new kids(although it feels like it’s been forever) and building the business I love.
I met a ton of great people at the REIN meeting, and even got a chance to speak on stage! It was a bit scary but I have nothing but positive reviews, so even though it was my first time public speaking to more than a few people, I will chalk it up as a success. Here is what is in this week’s newsletter:
FEATURE BLOG POSTIs there a Kamloops BOOM on the way?Where is Kamloops in the Real Estate cycle? The answer can be found in “The Secrets of the Canadian Real From the rear cover: With full-on analysis and exacting detail, this book addresses the fundamentals of the real estate cycle. Investment experts Don R. Campbell, Kieran Trass and Greg Head have collaborated with Christine Ruptash to produce this comprehensive guide to understanding the market cycle in your target area and which investment tactics to use to maximize profit in your current investments and strategically invest for portfolio growth. After I read the book, I found that Kamloops is in the Recovery Phase of the Cycle. Read this detailed analysis and see if you agree!
REIN ACRE WEEKEND HIGHLIGHTSBesides all the great training and content REIN provides, the ACRE weekend is a great time to network! I had the opportunity to network with a lot of people, but there never seems enough time to meet with everyone. I was especially busy after I spoke to 300 people for the first time!
You can read/watch my first try at public speaking at the link above, and please let me know what you think.
I also took notes on an issue that directly affects the bottom line of all real estate investors: who is paying the rent and how can I get more? The answer lies with Millennials. INVEST KAMLOOPS TV
To keep in line with my theme of “How stuff works”, I took a video of my truck decals being made. My daughter helped me film it, and the process is cool to watch!
DO YOU NEED REAL ESTATE ADVICE?Due to an overwhelming demand for consulting services, I am limiting new clients. Are you… – trying to decide if Real Estate investing is right for you?– struggling with a nightmare tenant?– thinking about selling? If you have a real estate problem, advice from a third party can be invaluable. I have a solid consulting track record and has dealt with evictions, filling vacancies, and every tenant situation imaginable. Since services are in high demand, consulting rates start at $100/hr. Book a FREE, no obligation, 30 minute phone call with me to learn if we can work well together. Call 1.888.532.7660 or email sam@investkamloops.com.* – Sam *When requesting a phone call, please provide as much information as possible. A detailed message or email complete circumstances will ensure I can best help you quickly.
DEAL OF THE WEEKThis week’s deal is a great one, here are the numbers:
Purchase: $325,000 Reno: $15,000 Rents: $3275 Cashflow: $833/mo Total Investment: $91,512 ROI: about 11% per year in Cashflow alone. To get full pro forma with the address and detailed numbers, you must either be on my investors list by clicking here, or be a paid subscriber(I am practically giving these away.) You can see what a full proforma looks like here: 724 Battle Street. There are simply too many good deals in Kamloops for me to capitalize on all of them. As result, I will be publishing my proforma reports and the plans I would carry out on these properties to produce the double digit returns I talk about on this website. Now, since I am doing deal analysis on an ongoing basis anyway, I may as well help anyone who is searching for their next property in Kamloops. The value of these analysis? Well, if I could purchase them all, each one would be worth $1000/mo(the cashflow of my most recent deal). Since I cannot at the moment purchase them all, you can have them for $7 each. Why only seven dollars when I spend at least two hours per week on my initial due diligence? Because I want to make sure the opportunities I find benefit you, my loyal readers. If you can make money with a property I find, that makes me happy.
If you would like to subscribe to the password protected site area “Deal of the Week”, please
INTRODUCING: Invest Kamloops Interview SeriesThe Invest Kamloops monthly interview series features successful business owners and investors who are benefiting from the Kamloops economy. You will learn the secrets to their success, and specific strategies to implement. Whether you are just starting out, or have been investing for a while, the stories here will inform and inspire. These interviews will show you what small changes in your life will produce big results. ABOUTSam Perren has purchased over 1 Million dollars in residential real estate, and is a member of Mastermind Networks who’s members have purchased over $5B of real estate. Sam’s education and experience includes two years of university sciences at UBCO, two years of carpentry, and more than seven years law enforcement. Sam successfully completed the Canadian Securities Course in 2011, a credential required for all financial advisers. Sam is growing his portfolio using the S.A.F.E. principles he developed, and has been creating double digit returns using Real Estate since to the delight of his partners since 2009. Sam is seeking more investment partners, however due to time constraints, opportunities to work with Sam are limited. Sam lives and invests in Kamloops BC, and can be reached at 1.888.532.7660 or at sam@investkamloops.com.
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
There was a great presentation by REIN analyst Melanie REUTER this weekend, and provided some good insight in to who landlords should be targeting and how to run the business in the most profitable way. Here are my notes of the presentation: -Talks about who the new tenant profile is in Canada-Millennials(ages 20-33) are the renters now so what do they want?-Provide Millennials with what they want for good ROI – they have more spending power than their modest incomes(parents, use of credit) – they want to live in social areas: bar, parks, shopping, entertainment, museum, etc…. for example in Downtown Kamloops– they have the best education but not best job prospects– this generation wants the best, doesn’t care about owning a home, doesn’t care about size but wants location, fast internet, common space– are interested in energy efficiency– they will buy in the area where they last rented(like Downtown Kamloops)– they like core of the city, near transit– landlords will be renting to many senior (27% of renters) tenant profile or to a millennial(27% of renters) – for profits: think of student rentals, or super suites for seniors(like what Derek Peever is doing)
So there you have it, target Millennials(people my age :P) for a great ROI!
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Where is Kamloops in the Real Estate cycle? The answer can be found in “The Secrets of the Canadian Real Estate Cycle.” The credibility of the authors is without question, Don Campbell has led the Real Estate Investment Network to be the most accurate predictor of which towns will perform well for the past 22 years! From the rear cover: "With full-on analysis and exacting detail, this book addresses the fundamentals of the real estate cycle. Investment experts Don R. Campbell, Kieran Trass and Greg Head have collaborated with Christine Ruptash to produce this comprehensive guide to understanding the market cycle in your target area and which investment tactics to use to maximize profit in your current investments and strategically invest for portfolio growth." After I read the book, I found that Kamloops is in the Recovery Phase of the Cycle. Read this detailed analysis and see if you agree! The Recovery Phase precedes the Boom Phase, and starts on chapter 8(page 91) of Don Campbell’s Book, The Secrets of the Canadian Real Estate Cycle. Recovery BeginsYou know that a market is in the midst of the Recovery Phase when: Ability to purchase real estate is within reach for many people.The Real Estate Investment Network (REIN) suggests looking for areas that score in the “Hot Zone” of 25-39% on the housing affordability index, so Kamloops falls nicely in the middle of that range. The Kamloops affordability indexThe cost of running a starter home(house with a suite, $350K value) is between $20-26K/yr and the median household income is about $78,000*.
26K/78,000 = 33% for a home with a suite @ $350k 20K/78,000 = 25% for a three bedroom townhouse @ $200k In Middle of RecoveryThis stage is evidenced by strong returns. My last purchase has cashflow of $800/mo on a $67,000 investment, so 14% per year on cash-on-cash alone. This excellent Return on Investment(ROI) doesn’t include the profit centers of appreciation and mortgage paydown. Because prices are low compared to rents, there are strong returns.
Key Drivers are– population increases: I see the population growth all around me, there are lineups at the coffee shops. new construction everywhere, and tons of leads for my rental ads. The table below from Stats Can shows slow population growth(1.4% increase in taxfilers) from 2008-2012, and it will be interesting to see what the data shows from the past 2 years, I suspect it will rise sharply from based on what I have seen on the street.
– rent increases: I just raised my rents in a 2 bedroom basement from $975 to $1200(not including utilities), a $225(23%)increase from 2012 ago. – continued decline in vacancy rates I had 40 phone calls from 1 lead for a 2 bedroom in the North Shore(less desirable area) I had advertised for $1000 2 months ago. I raised the rents to $1111 and had it rented the next day. I closed on a 3 bedroom townhouse this spring(March 27) and had it rented for April 1st for $1877. CMHC vacancy rates show higher than zero, but with my marketing/staging/reno systems, my vacancy rates are zero, and other landlord I know have no trouble renting out their properties. – increase in construction levels The $80M Kamloops hospital(current with 2015 completion date), two brand new Sandman hotels(completed 2014), new Faculty of Law at TRU(the first in 33 years in all of Canada) lots of houses starts, 73,000 sqft comercial space, and 2 huge projects forthcoming(Ajax mine and Kinder Morgan twinning pipeline with base in Kamloops) demonstrate increase in construction levels. In my economic fundamentals update in last month’s newletter, I point out $74 million of infrastructure spending that was recently completed, announced, or is ongoing. – increased affordability As detailed above, REIN suggests looking for areas that score in the “Hot Zone” of 25-39% on the housing affordability index, so Kamloops falls nicely in the middle of that range with 25-33% affordability. From the book: These drivers revitalize Real Estate in neighborhoods that transition to higher value neighborhoods, previously deffered maintence now takes priority. This is exactly what is happening in downtown Kamloops where you can buy a house, reno, and have the value increased by $40-80K over the cost of the renovation. From the book: Building service companies experience a mini boom. My brother in law(soon I hope) is in construction and is run-off-his feet busy. In fact, if it were not for him and a great handy man I recently found I would be scrambling to find good tradesmen. Two of my project were left unfinished last month by a contractor who abandoned my job sites without notice and without payment(the importance of holding back most of the money on a project)!
Media Clues– article that its more cost effective to own than to rent– confusion about if RE is a good investment– lots of people pointing to value deteriorating in the preceeding years I found this article includes most of these sentiments, and I will be keeping this website up to date every week with more media headlines �� Based on what I have observed, Kamloops is just entering the “Middle of the Recovery Phase”.
Here is what is going to happen next.
End of recovery phase:This is tough to identify because shifts in key drivers are moving, but not in an overt negative way.– investors start to get reduced returns on new investments as prices start to outpace rental increases– the number of people per household will increase as rising rents begin to impact the affordability of renting(I am already seeing this with some tenant applicants trying to put more than 2 persons per bedroom). From the book:The impact of the drivers can be disguised because they come into play. this is because RE starts looks like an attractive investment vehicle to more people, the increase in investment interest happens as values are naturally increasing, so all of a sudden there is an upward surge in real estate prices. Media Clues:– there will be headlines about RE value increases, some will think this is now the boom time, and cite real estate value increases: realtors will do this– others will question if a boom exists, saying that the increase is temporary due to influencers and speculators(such as when Ajax Mine and Kinder Morgan pipeline are under construction) This is often the shortest phase of the real estate cycle. Therefore, at this time there is a window of opportunity, the perpetual “bottom of the market”. A few options for real estate investors at this time: raise rents on your portfolio, keep buying the deals(there will be less than earlier in the cycle), refinance, or wait and sell into the upcoming boom cycle! – To learn everything I know about the Secrets of the Canadian Real Estate Cycle, pickup your copy now. This is a great book I have referenced over and over again while I learn where the place to invest is. – The cool thing about Kamloops is that there is not a lot of data on it so this place is a hidden gem. Kamloops is no longer a REIN darling in the last couple annual reports(it used to be the #3 top town), likely because the predictions a few years back that it would do well have not come into fruition yet.
The housing market has stayed flat for a while, but the changes are finally here so now is the time to take action.
I know I am!
*Part of the challenge of researching a market like Kamloops is that data such as the Housing Affordability Index is not readily available, and data that exists can be dated. I source the most current data and make inferences from related reports to get the information needed to make an informed investment decision. This difficulty in finding data on Kamloops is part of the reason many people are unaware how great the economic fundamentals are in this market. Since I am the only person I know measuring Kamloops Economic Fundamentals at this level.
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
I got a phone call by the REIN office Thursday afternoon to speak about why I am investing in Kamloops. I’ve never done public speaking before, especially in front of 300 people, so of course I said yes! I wrote a quick speech and must have practiced it 50 times! Here it is, please don’t judge too harshly �� :
Kamloops now has a REIN Score! 31/50, so not great, perhaps I should be singing Kamloops praises way more and drum up more publicity! Maybe this will help!
Here is my transcript of the speech, enjoy �� ✔️TRANSCRIPT✔️ Hi, I’m Sam Perren I live and invest in Kamloops through sheer luck. In 2009 the RCMP posted me to Kamloops prior to me joining REIN. I learned about economic fundamentals at an ACRE event, and like Barry McGuire said, small towns can be goldmines, literally – Kamloops has 2! WITH A 3rd ON THE WAY! Now my entire portfolio is REIN buy-and-hold-model properties in Kamloops. Before I start I want to publicly thank some REIN members: Mike, Michelle and Candice, thanks so much for supporting my Cops for Kids bike ride fundraising! 800km ride over 10 days was tough but with your help I’ve personally raised $5000 for sick kids. Ok, I am buying in Kamloops for a few reasons: Cashflow: my last purchase was $290k, I rent it now for $3100/no and after the refi I’m getting $1000/mo cashflow. First point: property is cheap compared to other towns.You can find a three bedroom house with a two bedroom basement suite for under $350,000, or a three-bedroom townhouse for under $200,000. Second, rents are high.In the downtown, Sahali, batch, Aberdeen and Pineview neighbourhoods I’m getting 1850 a month for three bedroom units. This means traditional buy-and-hold cash flows very well without the need for more complex strategies like rent to owns or student/furnished rentals. The third reason I invest in Kamloops is because of stability.There are more than 10 major employers in Kamloops. what this means is if one struggles, the others prop up the economy. For example in spring of 2013 the pulpmill closed down it’s A line and 125 jobs were lost. I ve actually seen slight increases in property prices and rents since then because of things like The University starting a faculty of Law(the first in Canada in 33 years), and the hospital undergoing an $80 million expansion to service the growing Finally,I’ve used Dons book ” secrets of the Canadian real estate cycle” to learn that Kamloops is now in the recovery phase of the cycle. This means the boom phase is coming. I get into tons of details about that in my 35 page report on kamloops for real estate investors. You can get that report at my website Invest Kamloops dot com Hope you liked my speech, I did not freeze for my first time on stage! Heck it was only 300 people so no sweat ��
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
I am headed to several Real Estate Conferences in the near future to share my message that Kamloops streets are paved in gold(you just need to bend over to pick it up). The most common question I get is “can you tell me about the coming boom in Kamloops?” This is probably because I have it screen printed on all the shirts I wear �� I bring attention to “the boom” because, unfortunately, appreciation is the profit center of real estate that gets the most attention. – Although my recent purchase July 2014 produces cashflow of $667/mo on a $67,000 investment(Deal of the Week), and 12% ROI on cashflow alone is nothing to sneeze at! Since this entire website is about economic fundamentals that are leading to an increase in property values, I will condense ALL the content on this subject to the most compelling points: 1. Real estate cycles are predictable.Because of this, I know Kamloops is in the Recovery Phase. “Secrets of the Canadian Real Estate Cycle” is a good read to learn for yourself how to predict the Boom, Slump and Recovery. Identifying where a town is in the cycle involves analyzing media headlines and key drivers, while ignoring market influencers. I won’t get into this in detail here, but in future posts I will outline why Kamloops is in the Recovery.
2. Real Estate value increases are preceded by clear indicators.Nothing sums these up better than REIN’s GDP graph:
Kamloops is sitting at the “decreased vacancy” and “increased rents” points on this graph.(I just had a turnover in a 2 bedroom basement unit and increased rents from $925 to $1200 – in November!) Also of note is Kamloops’ score on the REIN Property Goldmine Scorecard. Here is the one I completed for my last purchase downtown Kamloops.
Read about these Economic Influencers at the Report on Kamloops for Real Estate Investors available for download at InvestKamloops.com
3. Population growth and property value correlationHere is a local example of the GDP graph in action.
As population has been growing, there have been massive increases in property values. As population growth(estimates) have slowed, housing price growth also has slowed. However, I believe the population at the 2016 census will be far greater than the estimates from Stats BC. I say that because my rents and demand for rentals has skyrocketed in the past 2 years, and new tenants are rarely relocating from another part of Kamloops. So why have house prices not climbed high yet?A: There is a pent up demand for housing being created thank to a Market Influencer: tougher mortgage qualification. First time homeowners are forced to save a bigger downpayment to avoid 25yr amortizations, or must earn more to service the debt. Kamloops remains a Buyer’s Market – for now. Rents are high but houses still cheap, so taking action now results in massive cashflow! 12% cash-on-cash ROI is achievable! Besides all the economic data that supports a real estate boom coming soon to Kamloops, locals I have met have anecdotal evidence: the trend for prices in Kamloops appears to be 7 years of flat prices, followed by a sharp rise in a short time. One person blames the geography: since the only suitable building lots are to tear down existing homes or build on the hillsides, new home construction in Kamloops is expensive. Builders wait until there is a sharp demand to ensure they can make a profit. This graph sums up this idea and appears to support the trend:
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
As usual, I ‘ve been busy. Except for the month October, because I was mostly just enjoying the kids. Thanksgiving, Halloween, and everyday fun sure makes me a happy new parent. But in the words of a fellow investor/parent whom I had the pleasure of talking business with last week, “Parent and property investor equals busy !”- Tom R The kids are coming into their own, changing so fast. We had lots of firsts, here are some photos to give you an idea:
Besides all the fun family time, I have also been working on a few projects. 1. Here is a sneak peek at how I am branding myself and attracting more business.
I will share what it looks like once completed, this is just a concept for now. 2. I am also happy to announce that with my new found time(see my article below on FOCUS) I have been taking two online courses to better build my business and develop some skills I am lacking(read – effective time management). Ongoing training is vital for anyone wanting change, and is one of the reasons I am launching a monthly mastermind via the “Invest Kamloops Sucess Secrets Interview Series.” The stories of successful local business owners and investors will inspire change as we all strive to better outselves- Read and listen to a sample below. 3. I will be also publishing this Newsletter on a weekly basis, mostly so I can deliver deal analysis to you on all the great deals I see, but cannot complete – I am only one person unfortunately and due to time constraints cannot buy them all �� See a sample below FEATURE BLOG POSTThe importance of FOCUS What I’ve noticed since getting kids is there is no longer time to work on all the projects I used to have. At one time I was way too busy:– a wife and 2 dogs(they are part of the family) whom I love to spend time with;– a full time job as a police officer(2 long days, 2 long nights, 1 sleep day, 3 off, repeat);– running Haul Guys(marketing, answering calls, doing the odd haul job, handling/hiring/firing employees, dealing with equipment breakdowns, complying with monthly reporting to Worksafe BC/payroll, collecting delinquent accounts, paying bills);– and a real estate portfolio with 9 units to manage(feels like in a constant state of filling vacancies, repairs/renos, working to attract JV partners for more deals). I still found time to be on Facebook, volunteer with Big Brothers, watch a couple movies per week, read a couple books a month, and a couple reality TV shows with my wife(I’m embarrassed to say Survivor is one of them, I used to make fun of my room mates for watching it!) Then the kids arrived
GENERAL RICK HILLIER – Thoughts for Remembrance Day
I’ve been listening to a speech by Retired General Rick Hillier from the Alberta REIN meeting last month. General Hillier has years of experience leading troops in times of turmoil. He shared his experiences with facing and overcoming adversity and offered some profound insights: -Talked about things in life that are fundamentally powerful – We are all leaders and change the way the world interacts around us – Leaders have a powerful tool at their disposal: Perpetual Optimism
– This is a tool that leaders need to harness: if you walk on the sidewalk and smile at 10 people coming at you, chances are that 9 of them will smile back; but if you look like you are beaten down and have the weight of the world on your shoulders, all those people coming at you will look the same way. – We have every reason to exude optimism and fill those around us with inspiration and “piss and vinegar” to go out and change the world: if we in Canada couldn’t do it, who could? – Life is very good in our awesome country, Canada is the best country in the world, we live a lifestyle that is a fantasy for 95% of the world , we can get educated, earn a living and raise a family; Canadians have won the lottery. – Soldiers see how good it is in Canada better than anyone, and for that reason soldier are among the most optimistic people. – In 41 of the 63 countries Gen. Hillier served in, something so basic as Rule of Law did not exist. There is no guarantee of personal security, security of businesses and corporations. -While Canada was in Afghanistan, troops saw how Corruption without Rule of Law tainted and contaminated every aspect of the society. 50% of the economy is an illegal economy based on drugs: cannabis and poppy(98% 0f world’s heroin). – Police officers were corrupted, so police forces were inefficient at very best. Government officials were corrupted, this crowded out the legal economy. – Canada has the Rule of Law, because of this we don’t have to worry about drugs, the illegal economy. Because of the best police and judicial system in the world(ask a soldier if you disagree) its not a threat to our society or the stability of our country. – 55% of Afghans are less than 14 years old and are craving education, kids would ask for pens and papers from soldiers so they could go to school. People saw education as a way out of the violence and poverty that existed in Afghanistan for the past four decades. With our education systems, another example of how we are in the best country in the world. – Public executions would occur at halftime of the soccer games: one woman was shot in the middle of the field because she was caught walking with a man who was not an immediate relative of her. The game carried on afterward. – Women wore full burkas – the effect was to make them a non-person. Women had to be in a head-to-toe burka(including face covering) anytime outside the family home. If she wore nail polish(all of them did) and were unfortunate enough to move her hand into view of the Taliban religious police, they would be beaten. If their heels clicked as they walked, they would be whipped. – A little trigger to remind you to be optimistic: Next time you are outside, click your heels and listen to the noise and think about living in the best country in the world. – As a leader, give credit to those who make you successful, and take responsibly when things go wrong and help everyone learn from it. That is how you inspire. Opposite of “Success has many fathers but failure is an orphan.” -“You get my body because you pay for it, but you want my mind to be at work.” How do you inspire someone to do difficult things: a soldier in Afghanistan was wearing or carrying 110lbs for 12-24hrs in 52*C. If these young men and women are not inspired, they simply cannot perform. – Canadians lost many good soldiers to Afghanistan, but were encouraged by constant support from dedicated people back home: grannies who write letters “to any Canadian Soldier”, Tim Horton’s set up a franchise at Kandahar, bringing the Stanley Cup on tour, stories of loved ones back home supporting. – Many horrific injuries and deaths, however many inspirational stories of valor, and loved ones unbelievable support. Story of a soldier who saved another’s life: 2 years later they were married. “If that don’t light your fire, your wood is all wet.” – Soldiers and families were wounded physically, psychologically, and spiritually. There are no atheists in foxholes. When you are under fire, you believe in something. Leadership seeks to address the woundedness of the troops.
Lots of wise words from a man who’s life experience dwarfs that of most of us. Soldiers bear a heavy burden on our behalf! I have never heard it put better than as follows: “We sleep safely in our beds because rough men stand ready in the night to visit violence on those who would harm us.”
God bless our soldiers!
INVEST KAMLOOPS TV
I am very happy to announce the release of my book “Your Life. Your Terms.” Now that I have the copies from the printers, I am busy fulfilling orders. Those of you who preordered should have it arrive in the mail soon!!
I am happy to pickup my books
The black mark on my thumb is where I caught myself with the drill in the summer at the basement addition
I am signing and shipping books
While the Kids Sleep I used a printer in Vancouver, it’s a cool process if you’ve never seen it before. I shot a quick video at East Van Graphics:
DO YOU NEED REAL ESTATE ADVICE?Due to an overwhelming demand for consulting services, I am limiting new clients. Are you… – trying to decide if Real Estate investing is right for you?– struggling with a nightmare tenant?– thinking about selling? If you have a real estate problem, advice from a third party can be invaluable. I have a solid consulting track record and has dealt with evictions, filling vacancies, and every tenant situation imaginable. Since services are in high demand, consulting rates start at $100/hr. Book a FREE, no obligation, 30 minute phone call with me to learn if we can work well together. Call 1.888.532.7660 or email sam@investkamloops.com.* – Sam *When requesting a phone call, please provide as much information as possible. A detailed message or email complete circumstances will ensure I can best help you quickly.
FIRST TIME HOME BUYERS – Don’t Miss This TipOn Thursday I checked out the local real estate club meeting and was pleased to be among local investors who are taking action. One woman had purchased FIVE properties so far this year! We got a chance to practice our “elevator pitch”, network with realtors, people with money to invest, and other investors seeking deals. The highlight of the evening was a presentation by mortgage broker TEAGUE BRINKWORTH. Teague is very knowledgeable about the ever changing lending environment(I learned lots about my personal situation) and he is based right here in Kamloops. A few tips to make getting mortgages easier:
INTRODUCING: DEAL OF THE WEEKThere are simply too many good deals in Kamloops for me to capitalize on all of them. As result, I will be publishing my proforma reports and the plans I would carry out on these properties to produce the double digit returns I talk about on this website. Here is an example of a “Deal of the Week”, the final numbers of my purchase in July. I am now ready for another purchase, but was not until this property was normalized. 724 Battle Street Now, since I am doing deal analysis on an ongoing basis anyway(viewed 2 suitable houses last week, and one tomorrow evening), I may as well help anyone who is searching for their next property in Kamloops. The value of these analysis? Well, if I could purchase them all, each one would be worth $1000/mo(the cashflow of my most recent deal). Since I cannot at the moment purchase them all, you can have them for $7 each. Why only seven dollars when I spend at least two hours per week on my initial due diligence? Because I want to make sure the opportunities I find benefit you, my loyal readers. If you can make money with a property I find, that makes me happy.
If you would like to subscribe to the password protected site area “Deal of the Week”, please
INTRODUCING: Invest Kamloops Interview SeriesThe Invest Kamloops monthly interview series features successful business owners and investors who are benefiting from the Kamloops economy. You will learn the secrets to their success, and specific strategies to implement. Whether you are just starting out, or have been investing for a while, the stories here will inform and inspire. These interviews will show you what small changes in your life will produce big results. ABOUTSam Perren has purchased over 1 Million dollars in residential real estate, and is a member of Mastermind Networks who’s members have purchased over $5B of real estate. Sam’s education and experience includes two years of university sciences at UBCO, two years of carpentry, and more than seven years law enforcement. Sam successfully completed the Canadian Securities Course in 2011, a credential required for all financial advisers. Sam is growing his portfolio using the S.A.F.E. principles he developed, and has been creating double digit returns using Real Estate since to the delight of his partners since 2009. Sam is seeking more investment partners, however due to time constraints, opportunities to work with Sam are limited. Sam lives and invests in Kamloops BC, and can be reached at 1.888.532.7660 or at sam@investkamloops.com.
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
I recently attended the "Create Your Future" event at Lake Las Vegas, with over 25 hours of quiet time to work on myself, and it was so good I've already signed up for 2020. There were many impactful exercises during this fabulous introspective weekend, and one of them was to update and clarify a personal mission statement. Now, I've done this type of exercise before, but it's been a long time since it's been updated. No doubly my mission statement will evolve as I do, but after several hours of work and reflection, I believe I have an accurate and impactful mission statement that will carry me while I pursue my life's work. I live in contribution to others. I know that people are problem solving machines, and my mission is to unleash their potential, so that together we change the world into a better place. I fight poverty (spiritual and physical) by using my curiosity, humor and intelligence to research solutions, and I share these solutions with others in a memorable way. I take time every day for quiet reflection, and find new ways to enrich the lives of myself and those around me. I look after my health, exercise every day, and avoid excess food and alcohol. I am known for my enthusiasm. I am diligent and proactive in my work, not reactive. I practice self-control and self-discipline, and I know that I am responsible for my outcomes, good or bad. I use good manners and refrain from using bad language. I am warm and loving with my friends and family, and I dedicate focused time to being completely present with them without allowing distraction to diminish our time together, and they know how much I love them. I live in fascination (not frustration), and I make good use of the "gifts of time" that unexpectedly arise. I've worked hard to protect life and uphold justice, and will continue to do so for all of my life.
About the author: Sam Perren has helped dozens of investment partners acquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
On Thursday I checked out the local real estate club meeting and was pleased to be among local investors who are taking action. One woman had purchased FIVE properties so far this year! We got a chance to practice our “elevator pitch”, network with realtors, people with money to invest, and other investors seeking deals. The highlight of the evening was a presentation by TEAGUE BRINKWORTH. Teague is very knowledgeable about the ever changing lending environment(I learned lots about my personal situation) and he is based right here in Kamloops. A few tips to make getting mortgages easier:– your credit scores will be higher is you keep your credit balances below 50% of your maximum– some lenders will debt servicing even on zero balance credit products you have, so that $100,000 unsecured LOC you never use might in fact disqualify you from a mortgage– One tip that was particularly valuable was for people purchasing a home with less than 20% DOWNPAYMENT and a basement suite: if the suite is non-conforming(most are), try to ensure your mortgage insurer is Genworth, not CMHC. The reason is that CMHC does not count rental income from non conforming suites, so future borrowing may be negatively impacted. Now, buying a home with a basement suite is wise(I share how I am $60,000 richer thanks to a basement suite in my book), but when shopping for a mortgage it is certainly wise to get an expert like Teague on side who knows the rules and can help make the best long term plans. I will certainly be calling him to discuss options when my mortgages come up for renewal! Anyway I’m looking forward to the next KREIC netting and will keep you all updated.
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
What I’ve noticed since getting kids is there is no longer time to work on all the projects I used to have. At one time I was way too busy:– a wife and 2 dogs(they are part of the family) whom I love to spend time with;– a full time job as a police officer(2 long days, 2 long nights, 1 sleep day, 3 off, repeat);– running Haul Guys(marketing, answering calls, doing the odd haul job, handling/hiring/firing employees, dealing with equipment breakdowns, complying with monthly reporting to Worksafe BC/payroll, collecting delinquent accounts, paying bills);– and a real estate portfolio with 9 units to manage(feels like in a constant state of filling vacancies, repairs/renos, working to attract JV partners for more deals). I still found time to be on Facebook, volunteer with Big Brothers, watch a couple movies per week, read a couple books a month, and a couple reality TV shows with my wife(I’m embarrassed to say Survivor is one of them, I used to make fun of my room mates for watching it!) Then the kids arrived. Our kids are the answers to our hopes and dreams(and prayer), and we waited for them for over 3 years so we are overjoyed to be parents! But, what it forced me to do was prune down my activity and eliminate the least fruitful activities in my life. Since I am committed to pouring myself into my kids to give them the love and attention they deserve, this meant making some hard choices:– liquidate Haul Guys(at a financial loss, although I learned lots from building and running that business);– severely reduce my movie watching(now I understand why my friends with kids seemed 5 years behind what movies were in theaters)– delete my Facebook from my phone;– implement more systems for property management and filling vacancies(virtual secretary, better software);– I was fortunate enough to get some leave from work while we are adjusting to kids, but going back to work will require more changes;– take further training in time management(my weakness) and training in focus(I have been listening to audio programs by people like Les Hewitt who teach on the subject). The time I have freed up allows me to focus on my family, and my real estate business(it’s nice things move slowly in Real Estate), and it’s crazy what even a small amount of focus business has produced so far! Here are what I am striving for my days to look like for the next few months: 9-10pm to bed 4-5am awake and 2 hours to work online(looking for deals, blogging, researching the economic fundamentals, taking a training course) 630-830am kids are up, breakfast, play, housework 10-11am naps, I get another block of time to do some work(maybe an hour) 1200 lunch, play, go out shopping, walk dogs 3pm afternoon nap – another chance for me to do some work for an hour 5pm supper 7pm kids to bath/bedtime stories 8-9pm a chance to catch up with Marcy about the day, maybe do a bit more work, or some reading Although I am not able to work on a project all day without interruption like I used to(unless I allowed it – Facebook or surfing online), I am now using short focused blocks of time to make slow progress on my goals. The result: – I feel much better about spending time with the kids, not feeling like I have other things to do. The kids know when I’m being not present to them and get cranky, so its impossible to do work with them awake anyway. – I am able to build my real estate business at a steady rate, it is slower than I like but growing none-the-less. – I can spend quality time with my wife and doing family things. We go swimming once a week, and things like pumpkin hunting at a farm, a corn maze, go to the par, and have dinner together every day.
Since everyone has the same amount of time every day(billionaires and regular Joes like me) the answer to getting more done is FOCUS on the proper things. I just need to keep tweaking my focus to keep getting the results I want in my life, and I hope you do too!
I hear the kids waking up, so I have to go! We are probably going to go do something fun ��
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
I hope you had a Happy Thanksgiving! I have so much to be thankful for: my growing family, living in the best country in the world, gainful employment, and wonderful business partners. In fact, gratitude and thankfulness(even when things are hard or going bad) have been linked to improved quality of life in medical studies, including better stress management and stronger immunity. David Steindl-Rast gives a powerful TED talk and explains gratitude in a way I have not seen anywhere else, I highly recommend viewing it! Anyway, Happy(belated) Thanksgiving (it will be happy if you are grateful!) On to business… FEATURE BLOG POSTLow interest rates and inflation here to stay? It’s been several years now that the Bank of Canada has warned that interest rates will rise, in a bid to prevent Canadians from taking on debt. Well it looks like they have given up.
MORE DOWNTOWN DEVELOPMENT – TRUE OPPORTUNITYTRU is opening a campus downtown Kamloops, further spurring demand for rental housing in the area. Yet great deals still abound. INVEST KAMLOOPS TVMost people caught behind a long train get angry about being delayed, but I take a different view. I was inspired to revisit a blog post I did that mentioned a local major employer after shooting this video…
DO YOU NEED REAL ESTATE ADVICE?Due to an overwhelming demand for consulting services, I am limiting new clients. Are you… – trying to decide if Real Estate investing is right for you?– struggling with a nightmare tenant?– thinking about selling? If you have a real estate problem, advice from a third party can be invaluable. I have a solid consulting track record and has dealt with evictions, filling vacancies, and every tenant situation imaginable. Since services are in high demand, consulting rates start at $100/hr. Book a FREE, no obligation, 30 minute phone call with me to learn if we can work well together. Call 1.888.532.7660 or email sam@investkamloops.com.* – Sam *When requesting a phone call, please provide as much information as possible. A detailed message or email complete circumstances will ensure I can best help you quickly.
BOOK REVIEWI am excited to announce my new book, it has been released and I have received a couple samples, however I am waiting to get my shipment from the printers for all those of you who did a pre order.
While you wait, visit www.SamPerren.com to get some bonuses I am giving away to everyone who gets a copy.
HOW ARE DOUBLE DIGIT RETURNS POSSIBLE?September 2014 prices are up almost 12% from 2013! The $40,000 median price increase blows away the conservative 2% appreciation I use in my pro forma to estimate future property values.I use 2% because I know real estate prices will at least keep pace with inflation, but this increase plainly demonstrates the Kamloops market is outpacing the 2% Bank of Canada target. In fact, my neighbour just sold for $417k. 20 years ago homes in my neighbourhood sold new for less than $180k new. Do the math and the average annual appreciation has been 12%! ECONOMIC FUNDAMENTALSHere are some stories of interest and how they affect Kamloops real estate investors:
– Ongoing infrastructure improvement/maintenance – $1.9M road improvement at 12th Street Kamloops. My first rental property is on 12th Street, so it is interesting to see the city spending money here, as well as my neighbor tearing down the house to build a brand new duplex. I think this older neighborhood is starting to see the beginnings of “gentrification”, so although I made mistakes with this property early in my investment career I may see accelerated appreciation to make up for them.
– More infrastructure improvements – to the tune of $$62M, a local highway is widening from 2 lanes to 4.
– Even more infrastructure improvements – The city of Kamloops will borrow $9.3M to upgrade Overlander bridge deck and walkway. Also of interest at the web link: electric car owners be happy –Tesla adding a “supercharging” station to Kamloops Information Centre; and a developer is trying to get 2 downtown city lots rezoned to allow an 18 unit apartment building. Infrastructure improvement is needed to ensure population growth is able to continue unfettered, and the Kamloops area sees constant improvement projects like this one
– Kinder Morgan one step close to twinning pipeline in Kamloops. – This billion dollar project means lots of construction jobs and is an opportunity for landlords to provide furnished rentals during the massive Kamloops phase of the project.
– Kamloops is recreation focused like this article states – A ski resort only 1 hour from Kamloops is buidling North America’s first mountain-cross cart course. There are nice other courses in the world, so this project is yet another unique feature of Kamloops. (Before you bring your kids, know that you need a valid driver’s licence to participate.) The more exposure Kamloops gets, the better for the economy!
– Aviation numbers up 9% – 20,000 more travellers came through Kamloops airport so far this year than last. Airport Managing Director Fred Legace says the increased numbers are due to a large international athletics tournament as well as the movement of university students. He thinks the number of people visiting friends and relatives continues to grow as well. An increase in courier service in the Kamloops area also led to an increase in airport activity.
– Local Construction Boom – 73,000 sqft of commercial real estate is under construction: 45,000 square feet of industrial space and 28,000 sq. ft. of retail space is under construction in the city of Kamloops. What do these companies know that is causing so much investment?
ABOUT SAMSam Perren has purchased over 1 Million dollars in residential real estate in Kamloops since 2009. Sam’s education and experience includes two years of university sciences at UBCO, two years of carpentry, and more than seven years law enforcement. Sam successfully completed the Canadian Securities Course in 2011, a credential required for all financial advisors. Sam is expanding his business and portfolio using the S.A.F.E. principles he developed, and has been creating double digit returns using Real Estate to the delight of his partners. Sam is seeking more investment partners, however due to time constraints, opportunities are limited to 4 deals per year. Sam lives and invests in Kamloops BC, and can be reached at 1.888.532.7660 or at sam@investkamloops.com. For more information about Sam, Kamloops real estate opportunities and market updates, check out www.investkamloops.com
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
It’s been several years now that the Bank of Canada has warned that interest rates will rise, in a bid to prevent Canadians from taking on debt. Well it looks like they have given up. My guess is that after talking down spending for so long, the BoC realizes it isn’t working anyway so why bother continuing to discredit itself. Instead they will just make rate announcements as normal without much other commentary. 10 Year History of Rates The overnight rate has averaged 2.05% for the past 10 years. Banks take a ~2% spread, so Prime at most banks(the rate for consumers like you and me) has been under 4% for over 10 years!
Current State of Interest Rates With mortgage rates commonly under Prime now, we are in a prolonged record-low interest rate environment. “Low rates” are the new normal. Since residential rental property in strong economies like Kamloops can provide 20%/yr Return on Investment, it’s no wonder borrowing hasn’t slowed. In the debt based economy of the world, NO ONE can afford to service debts if interest rates rise to previous levels, and large scale default is bad for everyone!
Inflation Even with low interest rates, governments cannot afford to service their debt, so they print money to pay the bills. I wish I could do the same, but since I can’t I will do the next best thing(buy income producing assets). Printing money accompanies inflation. This means that property values(along with the cost of everything else) are guaranteed to rise given enough time. It is a simple fact of our economic system that the money supply will always grow, becoming worth less with every dollar printed. As I have pointed out before, the inflation target is plainly stated by those who control our money, as outlined in this chart I pulled from the BoC website:
With an average inflation of 2%/yr any REAL assests (like property) will automaticly rise in value by 20% over 10 years,! Proof of Inflation This brand new chart is from Stats Canada Daily Reports that I subscribe to. It show how the price of new Canadian homes has been increasing.
When the king of retail is increasing prices, it is wise to take notice. From the article: “In 2013 Canadian food retail prices rose 1.2%, according to Statistics Canada, with fish and vegetables seeing the biggest price hikes, with respective growth of 4.1% and 5.2%.” The article also points out a prediction, “the University of Guelph’s 2014 Food Price Index Report predicts retail food prices will increase between 0.3% and 2.6% in 2014, faster than the consumer price index.”
In Summary What should a savvy investor do in the face of inflation eroding hard earned savings ? My answer is to make sure my income grows faster than increases in prices. I am growing income with rental properties because of high demand for housing, rents are increasing each year, prices of houses will rise faster in my market than inflation, and the cost of owning property in this low interest rate environment is very appealing.
Make no mistake, Canadian interest rates will rise.
But it will be slow, and not until the U.S. does so.
I don’t see that happening for a long time, perhaps another 10 years ��
Happy investing,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
37 fewer houses were sold Sept 2014 than the previous September, but prices are up almost 12% year/year!
The $40,000 median price increase blows away the conservative 2% appreciation I use in my pro forma to estimate future property values. I use 2% because I know real estate prices will at least keep pace with inflation, but this increase plainly demonstrates the Kamloops market is outpacing the 2% Bank of Canada target. Conservative estimates are prudent, but it is nice to get this type of surprise! July house prices were up 2.5%, so I am curious to see what the entire year of 2014 median price increase will be. What this means for investors A 2% appreciation means a $350k house is worth $7000 more. 3% is $10,500, and 12%(like last month) is $42k! In fact, my neighbour just sold for $417k. 20 years ago homes in my neighbourhood sold new for less than $180k new. Do the math and the average annual appreciation over 20 years has been 12%! Whatever the 2014 appreciation number is, I am happy with only 2%, because with my rental properties, 2% appreciation = 10% Return On Investment! $350k house with 80%LTV means $70k invested. 2% appreciation is $7000. $7k / $70k is 10% ROI ! 12% appreciation is $42k. $42k/ $70k = 60% ROI!
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
An elementary school in downtown Kamloops has closed, but the local university will likely occupy the space. The Kamloops based university is growing quickly, in large part due to international students. This is yet another indication that downtown Kamloops is a great place town own rental property, and one of the reasons I am now focused on the downtown core. There are still plenty of cheap houses that can be converted into high cashflow properties, like this one(purchase for $20K less, rent basement for $200 more, rent upstairs for $1300, rent shop for $200 and you are easily making 20%/yr). I intend to buy more! Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Here we are in October already! As usual I’m up to a lot of stuff: – I was busy last month publishing an entire website documenting my 10 day 800km bike ride to raise money for sick kids, read about it here. Thanks to all my supporters, I raised almost $4000, and Cops for Kids totalled almost $300,000! – My signed book will be shipped to my generous donors next week, I’m excited to share my story of origin and for my first time being published!
Copies will be available for purchase through Amazon, so stay tuned for the official launch. – My aunt was visiting and inspired me to get my first(and last) body alteration: a tattoo! – In the midst of all this, I have completed three simultaneous renovations:
my Downtown, Sahali, and Northshore properties.1. Northshore: I added a bathroom, replaced carpets and paint for cheap thanks to a great deal I worked out with my tenants: they provided labour for free in exchange for no rental increases for two years. The materials will be paid for in equal payments for 2 years with no interest thanks to a Home Depot, so that renovation cost me nothing out of pocket. Truly win-win!Also new tenants moved in the basement Oct 1st, so I am now again at 0% vacant.2. Downtown: the basement was completed and is now rented for $1333, I will let you know how things progressed there in part 2 of my “Buy, reno, rent” post once the refinance is completed. This is a great deal for my investment partner and I :)…I can’t wait to share the detailed numbers and to repeat this over and over!3. Sahali: A new shower was installed in my one of Sahali townhouses. This was done while it was rented, making the tenants happy for a new shower, and me too because I don’t have to be vacant during the work! – “How to raise rents in BC” is progressing, my next online session is tomorrow. I had some great questions last week, and look forward to another round of stimulating training. – And finally, since Marcy has gone back to work teaching, I am now firmly embracing my role as Mr Mom. I have a lot of respect now for those that juggle kids, jobs and whatever else they do. There is hardly time for anything else! Any advice on meal planning or sleep schedules from you experienced parents would be appreciated �� But, enough about me, on to business… FEATURE BLOG POSTAjax Mine – Fact vs Fiction There has been a lot of controversy ever since the Ajax mine project was announced in Kamloops a few years back. This project could bring a few hundred high paying jobs to the area and be a healthy source of tax revenue for the city for 20+ years. As the environmental review, a PR campaign and red tape is navigated by the company(KGHM International), the people of Kamloops are forming opinions. INVEST KAMLOOPS TV
I will be documenting phase 2 of the downtown renovation/rental project once we get the refinance results. In the meantime, here is a video of the finished product. I use these videos to market to potential tenants and it works very well. I am always amazed that I put more effort into renting a home than most people do to sell one… DO YOU NEED REAL ESTATE ADVICE?Due to an overwhelming demand for my consulting services, I am limiting new clients. If you need my help I need as much information as possible, so when contacting me please leave a detailed message or email complete circumstances so I can best help you. Are you…– trying to decide if Real Estate investing is right for you?– struggling with a nightmare tenant?– thinking about selling? If you have a real estate problem, advice from a third party can be invaluable. I have a solid consulting track record and have dealt with evictions, filling vacancies, and every tenant situation imaginable. Since my services are in high demand, consulting rates start at $100/hr. To book a FREE, no obligation, one hour phone call with me to see if we can work well together, call 1.888.532.7660 or email sam@investkamloops.com.
BOOK REVIEWThe Ultimate Wealth Strategy
I discovered that people have been executing the strategy I used on my latest real estate purchase(downtown), and three successful investors in Ontario wrote a book on the subject.
ECONOMIC FUNDAMENTALSHere are some stories of interest and how they affect Kamloops real estate investors:– Kamloops is a hidden gemKamloops has been mentioned in numerous online polls. The increased exposure attracts businesses, investment, and people. All these are good for property prices and rents. – Kamloops churches getting into residential real estate. With very little housing in Kamloops and no “affordable” housing, charities are taking advantage of low interest rates. The city of Kamloops is more than happy to cooperate, consolidating church property with surrounding land in a bid to encourage densification. Mixed use buildings such as these will be residential development above commercial development in areas that are both transit and pedestrian friendly. For investors like me, this means any change of use plans(the most profitable way to invest in a property) will be supported. – Ongoing infrastructure improvement/maintenance – $7.8M roadwork in Kamloops. Infrastructure improvement is needed to ensure population growth is able to continue unfettered, and the Kamloops area sees constant improvement projects like this one. – Kamloops lives up the name Canada’s Tournament Capital – 2016 World Hockey Championship Announced and BC Lions to hold training camp in Kamloops for the next 3 years through to 2017. As the “Hidden Gem” article above states, the more exposure Kamloops gets, the better for the economy! – UPS expands to BC with Kamloops as hub. Kamloops is a natural base for transportation companies, right in the middle of BC. Any expansion requires an office, and jobs, right here in Kamloops. When most people see these headlines, they take little notice and carry on to the comics section, or flip the channel/hit PVR to watch their favourite reality TV shows. I see the opportunity in these “boring” news announcements, and am happy to share how this information can impact you and me in real life. For example, I already had a UPS driver applicant at one of my rental properties! ABOUT SAMI have been investing in Real Estate in Kamloops B.C. since 2009. The experience has been both eye opening and profitable with over 1 Million dollars in Real Estate purchased so far. Although this “magic” number in today’s dollars is less than when I was a boy, it’s a milestone I am proud of. Other real estate investors are now expanding their portfolio using my S.A.F.E. investment principles. I have been creating double digit returns using Real Estate for my partners and look forward to helping new clients achieve the same.
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
There has been a lot of controversy ever since the Ajax mine project was announced in Kamloops a few years back. This project could bring a few hundred high paying jobs to the area and be a healthy source of tax revenue for the city for 20+ years. As the environmental review, a PR campaign and red tape is navigated by the company(KGHM International), the people of Kamloops are forming opinions.
Bumper stickers are popping up: “I support AJAX”(mostly on large jacked up trucks) by those who would like a mine job or “Stop AJAX” are now a common sight. The opponents of the mine have long decried the health and development cost of a mine being close to the city. Now there are numbers to back up the claims, in a report by a retired doctor and a retired university professor released last week. In the press conferences, both authors acknowledged the data they present is not facts, but “estimates”. The news coverage has been entertaining to say the least.
Photos like this accompany articles that quote the authors making conflicting statements: “We’re dealing with absolute hard science,” he notes, adding: “Some of the minor conclusions are perspective… “. (Read the article for a link to the report and see for yourself.) The report has false and misleading statements as outlined in this article:– KGHM is the worst polluter in Europe– international students enrollment will drop(When asked who “suggested” there would be a five per cent decline, Blawatt said the figure was arrived at by discussions with various people — but not with Thompson Rivers University itself.) No wonder the comment sections are speaking about dementia, NIMBY attitude, the authors enjoying government pensions/hating private industry, and bias. In fact, the authors freely admit they “were seeking was information to support their belief Ajax will be bad for Kamloops.” “Not In My Back Yard” has been the reaction of a small group who are very vocal opponents of the mine, and this latest report has unfortunately further discredited their position. This vocal position however has resulting in a least one good thing: AJAX plans have been changed to lessen the environmental impact and Kamloops will get a second public hearing before the government makes a decision on development. KGHM is heavily invested in the project now, with millions spent so far, and with 80% equity in the project, and they are unlikely to give up easily. Whatever the outcome, from a real estate investment standpoint, why should you or I care? What does this mean for Kamloops real estate investors? 1. If the mine is approved, there will be thousands of construction jobs, then ~500 high paying jobs for 20 years. The inflow of people to Kamloops will accelerate the upward pressure on rents and prices. It would be wise to purchase investment property before construction starts. 2. If the mine is NOT approved, will the economy stagnate? Nope. As detailed extensively on this blog, Kamloops has many major employers, increasing population, and all the economic fundamentals for an increase in rents/property values. My most recent purchase produces cashflow over $10,000/year for a $70,000 investment. That’s 14% ROI, not including mortgage pay down or and future increase in value! If you have found a way to make over 14% on your money, please let me know! If not, then now is the time to buy Kamloops Real Estate �� Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Many of you know that I lost my wedding ring on the recent Cops for Kids bike ride. For those of you that did not hear about it, I jumped off a dock and it slipped off in 10 feet of muddy water somewhere near Wynndel. – read about it here – There was no hope of finding it… Well, since this is the second time I have lost that ring, I decided it was time to do something about it. My aunt Lucy was in town visiting and came with me for emotional support to the Blue Orchid Tattoo. Turns out I was ok under the expert care of Jessica. This is my first(and last) tattoo, but it is a symbol of my undying love for my wife, and now is one that I will never lose.
This is also a symbol of me living “my life on my terms.” As cliche as that sounds, it is the theme of my life as I strive to become the best version of myself. That’s one more thing off the bucket list �� This tattoo is also a small celebration of my first venture as a published author! Look out for the release of my book later this month: Your Life. Your Terms. The steps ordinary Canadians are taking to improve their lives.
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
I just finished a great read –The Ultimate Wealth Strategy by Jeff Woods, Quentin D’Souza and Andrew Brennan. It goes into detail about how to recycle most, if not all, of a downpayment to purchase multiple properties. The idea is to purchase under market, fix it up, refinance to get back as much investment capital back as possible, then rent long term. The main difference from the traditional buy-and-hold business model is to target properties that are significantly under market value and increase the value with renovations or change of use(for example add a basement suite). This book is a good read for those with at least one investment property because the concepts and strategies discussed are advanced. The buy-fix-refinance-rent strategy is basically what my current project is. I don’t have the final numbers yet(waiting on the appraiser), but I have lots of interest in the basement suite at $1333/mo. If you are interested in what the place looks like now, take a peak.
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
I am WAY overdue in releasing this newsletter, but thanks to everyone who has been reminding me I’m overdue. The kids are settling in, they have been home for about 5 weeks now. The dogs are used to them and we are getting a semblance of a routine in place. Marcy and I have been adjusting as new parents, at times we cry out of frustration, but many other times there are tears of Joy �� My main excuse for not publishing this until late(9:50pm is late for me now…) is that I have been scrambling to train/raise money for the Cops for Kids fundraising bike ride I signed up for in the spring(when I had too much time on my hands). I have been working hard getting some real estate focused gifts together for my sponsors, and publishing this website(click here to support Cops for Kids). The results have been spectacular! My friends and family really came through with over $2000 raised since Aug 15th for this great cause! Thank you everyone!! But, enough about me, on to business…
FEATURE BLOG POSTMy $9000 mistake – and 3 ways you can avoid it I recently decided to scale back my side business. Junk removal was good to me. I learned lots about running a business: like about managing employees, payroll, EI/WCB/GST remittances, corporations, marketing, web sites, and found some cool goodies(one man’s junk is another mans treasure). DO YOU NEED REAL ESTATE ADVICE?Due to an overwhelming demand for my consulting services, I am limiting new clients. If you need my help I need as much information as possible, so when contacting me please leave a detailed message or email complete circumstances so I can best help you. Are you…– trying to decide if Real Estate investing is right for you?– struggling with a nightmare tenant?– thinking about selling? If you have a real estate problem, advice from a third party can be invaluable. I have a solid consulting track record and have dealt with evictions, filling vacancies, and every tenant situation imaginable. Since my services are in high demand, once you have engaged my services consulting rates start at $100/hr. To book a FREE, no obligation, one hour phone consultation, call 1.888.532.7660 or email sam@investkamloops.com.
KAMLOOPS FEATURE EMPLOYERThompson Rivers University TRU is an established university with enormous growth potential. Already in 14 years it has grown from a small college to a large university with 24,145 students. 1693 staff are employed at TRU, plus 425 faculty. That is a large tenant pool! Also, a recent announcement of 52 new seats funded with possibly over 1000 more coming soon!
ECONOMIC FUNDAMENTALSEvidence of a coming RE boom The amount of money being spent in this growing city is unprecedented. Here are a few examples of the economic indicators that are making a 20%+ /yr ROI common in Kamloops today…
ABOUT SAMI have been investing in Real Estate in Kamloops B.C. since 2009. The experience has been both eye opening and profitable with over 1 Million dollars in Real Estate purchased so far. Although this “magic” number in today’s dollars is less than when I was a boy, it’s a milestone I am proud of. I now help other investors expand their portfolio using the S.A.F.E. investment principles I have developed. I have been creating double digit returns using Real Estate for my partners and look forward to helping new clients achieve the same.
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
I recently decided to scale back my side business. Junk removal was good to me. I learned lots about running a business: like about managing employees, payroll, EI/WCB/GST remittances, corporations, marketing, web sites, and found some cool goodies(one man’s junk is another mans treasure). However with the kids here now and my main business truck now out of service, I am too busy to continue. Rather than invest more time and money in another vehicle, I have decided that the opportunity cost is too high to keep running a junk removal business. My time is better spent growing my real estate portfolio or with my growing family. It’s a tough decision to make, because I grew the business from nothing to respectable gross annual sales, so I am emotionally attached in a way. I feel like one of those monks that labour away making intricate art patterns in the sand… and now it’s time to rake it all away. I certainly appreciate the exercise of will required to do that. Letting go is hard! But, it is the right thing to do. On to my $9000 mistake: I had incorporated the business June 13, 2013. I was advised this was prudent to limit the liability I might face once I hired employes. Along with hiring part time employes I also invested heavily in the business: equipment, advertising, communications, ect… Now that the corporation is dissolving, I will now be unable to recoup my investment. I just learned from my accountant that over $9000 I had invested is a loss captured inside the company. As a shareholder of my company, I am only able to claim 1/2 as an investment loss against my personal taxes, where the years I ran the business as a sole proprietor I could claim 100% of any loss against my personal income. Also the accounting bill to learn this lesson and do my corporate taxes was $2500. Double ouch … Lessons learned:1. Don’t incorporate unless you are sure you need to. It’s not as cool as it sounds, is only a tax benefit if you are a high income active business(corporations that own RE have no tax advantage), and is only useful for limiting liability.2. Make sure the business you engage on has big enough margins to survive problems like equipment breakdown and inefficient employees (no employee is as efficient as you are, but that’s a topic for another time ). If it doesn’t have big enough profit margins, it will be very difficult to expand. You will find that you don’t own a business, you own a job for yourself(well paying job perhaps, but still trading time for dollars).3. Stick to what is working, even if you are bored. I knew real estate worked well when I was growing my junk removal company. In fact, although I made a $15,000 mistake on my first property(a tenant I selected trashed the place), it has still produced 25%/yr ROI. I got bored and tried to “do it all” thinking a big success in one aspect of my life must mean I can succeed in everything I try, not realizing the opportunity cost was so high… I bet I would have a couple more houses if not for all the junk hauling!
Until next time,
PS – Haul Guys is now operating as a sole proprietor again, and my brother is now running things and making some good money. So although that $9000 would have been a nice holiday somewhere, this story is not all bad ��
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
TRU is an established university with enormous growth potential. Already in 14 years it has grown from a small college to a large university. On Campus: 13,170 Open Learning: 11,794 Dual Enrolled: 819 Unique Total: 24,145 These numbers include 1,570 international students from more than 80 countries, who all need a place to live in Kamloops. The number of international students grows each year as TRU gains reputation and markets more aggressively on the world stage. TRU has recently opened the first new lawschool in Canada in 33 years, and as result 100 more students are admitted each year. Renovations to the law building to the tune of $20M were completed this summer, and this is project has won several awards. 52 more seats were recently added with the announcement of new trade program funding, with many more trade school spots to come. Builders have recognize the demand and are rushing to complete new student housing. In fact, 88 new student focused condos are currently under construction. 44 are already leased and phase 2 is almost done. The good news for current landlords is the new units are being rented at top of market.
If landlords/investors keep their units in great shape, students offer yet another tenant profile to market to for huge cashflow. Besides over 13,000 students who live in Kamloops, TRU boasts impressive employee numbers too. 1693 staff are employed at TRU, plus 425 faculty who each earn around $100,000/ yr. In fact, 148 staff make over $100k/yr! This is a university focused on growth, so even though already one sixth of Kamloops’ population is a student or employee at TRU, there are going to be more people coming to the area. TRU is yet another economic driver in Kamloops, and is helping spur the rental and housing markets to new highs.
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Kamloops Infrastructure Improvements Many Millions are being spent in Kamloops upgrading infrastructure, and this is one of the key indicators a housing boom is coming. Here are some examples: Westsyde Road rehab to be complete by fall – $1.6 millionhttp://infotel.ca/newsitem/westsyde-road-rehab-to-be-complete-by-fall/it11852
Overlanders Bridge update moving forward – $9.3 millionhttp://infotel.ca/newsitem/overlanders-bridge-update-moving-forward/it11873
Downtown intersection set to reopen- $2.2 millionhttp://infotel.ca/newsitem/downtown-intersection-set-to-reopen/it11894
In other cities this may be a common sight, but in Kamloops, a large crane is a novelty.
These images are the fruition of plans that were announced in 2011, and represents an $80 Million expenditure on hospital upgrades to meet the population growth for the next 15 years. ————— The city spent $100,000 to install the worlds first longboard park. This facility will attract people from all over the US and Canada to train and compete. Yet another example of forward thinking mayor and council who are investing heavily on infrastructure. ————————- House prices are up 2.5% over last year!
A $400k home last year is now worth $410,000. If you purchased that house with 20% down($80k), your ROI is 12.5% this year alone: $10k/$80k x 100% is 12.5% ! Add the $6k mortgage paydown your tenants made for you and that’s 20%: $16k/$80k x 100% is 20% !! Now if you had cashflow of at least $200/mo (I do on all my properties), you got 23% ROI last year !!! Compare that to your other investments, perhaps it’s time to add some cash flowing real estate to YOUR financial plan…————————- 150 more permanent jobs, and millions spent on construction: new casino to open in Oct 2015. That means only 1 more year before yet another upward pressure on rents and house prices – buy now while it’s still cheap! Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
My current real estate investment project started on June 13, 2014 when my parter Mel and I closed on a great property downtown Kamloops. The plan was to purchase, renovate, then refinance to withdraw the new equity we created. We then plan to rent the place out to create a nice income. The coolest thing about this project is that the a portion of the profits will be supporting children in a developing country, creating a fabulous legacy for Mel and his wife. Here are the steps we took to make phase 1 a success: A) Due Diligence B) Purchase C) Renovate D) Marketing and Tenant Screening E) Collect Rent
A) Due Diligence My partner and I viewed multiple properties. One of the most interesting was a townhouse in the Brocklehurst area that looked like it was perfect for inserting a basement suite, very unusual for a townhouse. Another interesting property was fourplex in an area undergoing “gentrification” in the center of the North Shore. A very tough tenant profile, large money needed to fix it up, along with inflated property values for anything resembling a multi family building made this project just outside my parameters for a desirable investment. After crunching the numbers we decided to place an offer on a detached house downtown with potential for a secondary suite.
B) PurchaseWe made an offer and had one accepted that I believe was below market value. I think the seller believed so as well, because they tried hard to make the deal fall through! I think there was some other buyers lined up because the seller applied huge pressure to close early, restricted our access to the property, and was in general not very nice. This was my first experience with a seller who was so difficult to deal with, I think they had “seller’s remorse” for accepting our offer once they had the opportunity to shop the deal around. Here is photos of what it looked like before we started any work, we closed on June 13th:
C) Renovate Having a deep rolodex of tradesmen you can trust is very important and can make or break a deal. Getting the job done at a fair price and on time is difficult unless you have experience and have built relationships with the trades. Here are a couple photos from June 16, three days after we closed so you can see how quickly we moved:
After we ripped the kitchen out, we decided to make it a bit bigger so we closed off one of the doors to the kitchen. We were surprised to find a window in the middle of the house. This home was built in 1913 and has had two additions, one to the front of the house, and one to the rear. This window that was hidden in the wall used to be above the exterior door. June 17 my wife finished designing the kitchens, here is the plan for the basement:
The result of a 5 hour shopping trip June 18, the cabinets took a long time to pick out:
Here is a couple video from June 18 detailing the demo work done an the beginings of putting everything back together:
D) Marketing and Tenant Screening I had been marketing the house since before we closed using the listing photos and created a bit of buzz. I had many applicants at my price point and a few showings during the renovation, so I was certain the rent I was asking was attainable. By July 4 we had the house getting put back together. I was happy in this video because I had a prospect tenant who said he would rent the place for $1850. Here is the video tour.
I was away for much of July for EXCITING PERSONAL REASONS, but when I got back to it, the tenant I had lined up started to display some red flags:
I told him to put his stuff in storage, and gave him the name of a nice inexpensive motel, and that I would be happy to use my trailer and help him move his things AFTER the full first month rent and damage deposit was paid.
The guy was very persuasive, and it was hard not to feel bad for his story, but by sticking to my system I believe I dodged a bullet.
The deal fell through and I soon had emails demanding the $50 I took to complete a credit check be refunded, and I am sure he has taken some other landlord for a ride. I don’t believe he was acting in malice, but this prospect’s disorganization and poor money management skills would have spelled problems down the road. Although it was hard to “walk away from two grand” because it meant more work marketing, the systems I have in place(pre written ads that blow away the competition, a website with tons of information where people can apply online, etc) got me new prospects fast. Here are some July 20th photos my partner Mel took when the reno was not quite done, but he did a great job making it look complete by hiding the incomplete work with creative photo angles and pushing in the appliances(they were not hooked up yet).
I even shot this video for some great prospects who were out of town, you might enjoy the background music ��
I set up a showing date for Monday July 28th. I wanted everyone to show up at the same time to create some incentive for my prospects to make a decision. Mel and I scrambled with the last minute unfinished project and runs to Home Depot and I staged the place with a welcome basket to make it feel like home as I always do. I had a list of over 10 people invited but in the end only my best prospects showed up, they filled out application forms on the spot. I wish I had a photo of the showings because Mel and I had a great setup. Mel brought a cooler with cold drinks for prospects as they arrived, we sat in the shade at the front of the house under a rare(in Kamloops anyway) mulberry tree, a table and chairs with application forms and a sign in sheet was ready, a professionally made lawn sign was in place, it was a hot day and we had the portable A/C units blasting inside the house so prospects got that feeling of relief when you walk into a cool place from the heat. It was truly a great showing.
E) Collect Rent In a couple hours I had approved a group of workers from a nearby newly renovated hotel who loved the place because it was only a 5 minute walk to work. We received $1850 first month rent plus the damage deposit in cash the next day. Here is a video of the finished product:
So far the project is moving according to plan, I will update you when the basement is completed.
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Thanks to a new industry in BC, and in addition to existing economic fundamentals, Thompson Rivers University’s growth seems to have no end in sight. The BC government has recognized the impact that liquid natural gas will have, and has funded an additional 52 seats for trades associated to this new industry, announced recently by local MLAs.
With 100,000 LNG jobs in BC that will need skilled workers in coming years, Kamloops MLA Terry Lake says this 1/4 million funding is just the beginning.
What does this mean for Kamloops real estate investors?
Here is some quick math to extrapolate:0.265/6.8 million = 0.039 x 100 is: 3.9% of the province’s funding went to Kamloops for 52 job training positions for a new industry that will need 100,000 skilled workers. If 52 training spots is ~4%, this round of funding provides for 1300 skilled workers after completing the 4 year program, or on average 325 workers per year.
At this rate, it would take over 300 YEARS to get the workforce trained for LNG! So, when the MLA says these training positions is just the start, I believe him! Even to get this number of LNG skilled workers trained in 10 years, there would need to be an immediate 30 fold increase of investment in training programs, and based on current allocations, Kamloops’ share of training spots would be 1560(52 x 30). To get into the nitty gritty of the skilled workers needed(over one million jobs in the coming years!), check out the BC skills and training plan. 1560 new students added to the local 100,000 population means a 1.5% population growth in Kamloops thanks to LNG job training alone.Besides the prospect of 1560 university spots, there is also the employees of the LNG industry who would no doubt call Kamloops home. These employees frequently work 2 weeks on, 1 week off, and the oil and gas companies provide them a travel allowance. Instead of living where they work, they call Kamloops home to take advantage of the nearby lakes and great weather on days off. I have had three applicants for my most recent rental purchase who are in this exact situation, and my current tenants profile is about 8% oil and gas workers. Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Wow! July is half over, and 2014 is entering the second half too! I only have a fraction of my goals from January completed, but I received a gift much better instead! I must apologize to all those who messaged me, I know this newsletter is 2 weeks late, but for good reason… My personal life has changed big time! Marcy and I are overjoyed to welcome Lavinia(23 months) and Landen(7 months) to our family! We are still in the midst of bonding as a family, but already our two little angels are such a blessing! Thanks to all our friends and family for the support while we waited for our kids, and for all the awesome hand-me-downs! Reluctantly(I could talk all day about my kids), on to business… FEATURE BLOG POST What if interest rates rise? I recently described my business model to a friend, including my use of mortgages to finance rental property. He was intrigued but was worried about one thing: Q: What if interest rates go up like they did in the 1980′s? Won’t you go bankrupt? INVEST KAMLOOPS TV My JV partner Mel and I have been busy renovating our newest purchase, downtown Kamloops. It is not even done yet and already the upstairs unit is rented for $1850! I have posted a couple videos of work in progress. DO YOU NEED REAL ESTATE ADVICE? Due to an overwhelming demand for my consulting services, I am limiting new clients. If you need my help I need as much information as possible, so when contacting me please leave a detailed message or email complete circumstances so I can best help you. Are you…– trying to decide if Real Estate investing is right for you?– struggling with a nightmare tenant?– thinking about selling? If you have a real estate problem, advice from a third party can be invaluable. I have a solid consulting track record and have dealt with evictions, filling vacancies, and every tenant situation imaginable. Since my services are in high demand, consulting rates start at $100/hr. To book a FREE, no obligation, one hour phone consultation, call 1.888.532.7660 or email sam@investkamloops.com. KAMLOOPS FEATURE EMPLOYER Kamloops airport is indeed an Economic Engine! For all my accountant and engineer readers, here are some numbers that might make you drool in excitement: As of 2013 there is– 610 jobs at YKA– $27M/yr in wages– 250 more spinoff jobs in food/accommodations– the airport contributes $38.9M to Kamloops GDP Kamloops’ Fulton Field turned 75 in 2014, and has recently undergone some major expansion. The runway was extended, and the terminal was expanded in 2009 to the tune of $25M. This year is shaping up to a record breaking 300,000 people traveling through Kamloops airport. Already travel numbers are up 9% over last year. The increased passenger traffic has resulted in the the following updates: ECONOMIC FUNDAMENTALSThis month’s economic news was so information rich, I was inspired to component it in a short read: “How to get ahead of a real estate boom.”
ABOUT SAMI have been investing in Real Estate in Kamloops B.C. since 2009. The experience has been both eye opening and profitable. I have purchased over 1 Million dollars in Real Estate. Although this “magic” number in today’s dollars is less than when I was a boy, it’s a milestone I am proud of. My goal now is to expand my business and portfolio using the S.A.F.E. investment principles I have developed. I have been creating double digit returns using Real Estate for myself and my partners. I am looking forward to continued success and growth with new investment partners. Like all things worthwhile, Real Estate Investing takes hard work. Much like a garden, a real estate portfolio requires constant attention, care, weeding and upkeep. If well cared for, the fruits from years of labor are very rewarding. To date I have dealt with evictions, tenant turnover, dozens of tenants, major renovations, won arbitration hearings, made some mistakes and learned lessons along the way. I am looking for the right partners to join me in making money with Kamloops Real Estate.
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Kamloops airport is indeed an Economic Engine!
(Source) For all my accountant and engineer readers, here are some numbers that might make you drool in excitement: As of 2013 there is– 610 jobs at YKA– $27M/yr in wages– 250 more spinoff jobs in food/accommodations– the airport contributes $38.9M to Kamloops GDP Kamloops’ Fulton Field turned 75 in 2014, and has recently undergone some major expansion. The runway was extended, and the terminal was expanded in 2009 to the tune of $25M. This year is shaping up to a record breaking 300,000 people traveling through Kamloops airport. Already travel numbers are up 9% over last year. (Source) The increased passenger traffic has resulted in the the following updates:– a competitor to the Shell station is currently under construction to service increased charter and corporate travellers(private planes)– 80 new parking stalls with 100 more in the next couple years– over $200,000 will be spent upgrading the bathrooms this year because "Like any public facility you are typically judged by your bathrooms, it’s what people remember" This article cites the cause of growth to increased tourism and out of town workers. Many passengers are northern/Albertan oil and gas workers living in Kamloops with their families, commuting through the airport for the rotating 21days of work and 7 days off. Three of my tenants are in this exact situation, they are paying higher than market rents(not price sensitive) and very easy to please. Since Kamloops is such a great place to live for families, this situation makes sense to these hard working folks. The family gets to live it up in the great weather with lots to do while dad is away at work, and days off are like going away on holidays! Although the oil and gas segment of tenants is the minority in Kamloops, they do drive up the rental market and help with some amazing cashflow! Kamloops own industries are diverse and robust. The added demand for housing from outside forces such as oil and gas commuters builds the already rising pressure on the price of rents and housing. This is great news for owners like me and other real estate investors in the Kamloops market! If you have any questions for me about my blog or Kamloops, please comment below!! Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Don’t you wish you could have bought a bunch of property in the 1990s before prices doubled?! What if you knew for sure that a fortune could be made if you found a way to buy just one more house? How would that money impact your life ? Or the lives of your loved ones? My guess is that the extra wealth would provide security and more options for you to live fully. But, it is impossible to know what the future holds…. Or is it? With a basic knowledge base in economics and the workings of our financial system, we can accurately predict the future. Don’t get me wrong. I have no idea the exact date when real estate prices will surge upward again. But I do know prices will rise rapidly, and one day we will be lamenting “if only I bought more in the 2010s.” I know another boom is coming by following this proven formula:
1. Signs of Kamloops GDP growth include tourism numbers up 19% in March Also TRU’s growth from Caribou College now has it contributing $355M to the Kamloops Economy 2. There is 2 years of construction jobs during 2015-2017 for the Kinder Morgan Pipeline Twining. At the same time the Ajax mine will likely begin construction(source). Both these projects will lead to big demands for rental housing. 3. The Kamloops younger population is growing fast – future renters and buyers. (Source) This is over and above those moving here for jobs. 4. Kamloops Rents are already rising(proof: read this article, and I just re-rented a unit for $75 more/mo without any renovations). Another article: More rental available but at higher cost 5. Existing economic fundamentals are already influencing prices. House Prices have inched up 5% over last year(source) so imagine what will happen to this town when 2 large construction projects start simultaneously!
As you can see, by following the news and recognizing the signs, we can position ourselves in front of the next boom in Kamloops! Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
I recently described my business model to a friend, including my use of mortgages to finance rental property. He was intrigued but was worried about one thing: Q: What if interest rates go up like they did in the 1980’s? Won’t you go bankrupt?
To quote a mentor of mine(Thomas Beyer): “Complex questions have simple, easy to understand, WRONG answers!” Keeping this principle in mind, to correctly answer the above question, we need to have an understanding of how our economy works, and the differences in the world of the 1980’s and now. (The differences are HUGE!)
Brief History of Money As we go about our day to day business, it’s easy to forget that the world is changing now much faster than it ever has in human history. Many changes are recent and we don’t know the full effects of them yet, but here are some of the reasons we are in our current financial situation: 1. The USA became the sole superpower after the WWII, and one of the many things the USA did was take control of the global economy. In 1944 at Bretton Woods, New Hampshire USA, world leaders met and established the gold standard money system. 1Oz. of gold was worth 35 US dollars, and all countries’ currencies were tied to actual gold in a vault somewhere. 2. August 15, 1971, for various reasons detailed here, Richard Nixon abolished the gold standard. The USA could now influence the money supply at will and the economy became dependant on fiat money which is still the basis of our economy today. 3. The fiat money has freely floating exchange rates between the major currencies. 4. Freely floating exchange rates lead to economic peaks and troughs, and various theories have been implemented to control the effects of these changes. One such theory that ultimately failed was a the USA’s contractionary monetary policy that caused the 1980s recession. 5. The USA is Canada’s largest trading partner (about 75% of our exports) and has the largest economy in the world($16Trillion GDP), still ahead of China($9 Trillion GDP). (Because of #5, The Bank of Canada must act the same as what the USA does. “If the USA sneezes, Canada catches a cold.” To determine what Canada’s fiscal policy will be, we only need to look south.)
Current State of Economy 1. The USA is ~$18 Trillion in debt, and spending about $1 Trillion more than it collects in taxes each year.
2. The USA printed $85 Billion each MONTH in 2013. To help put that into context, here is what One Billion in $100 bills looks like:
3. $40 Trillion was printed as part of the Quantitative Easing designed to stimulate a recovery after the 2008 subprime crisis. Printing money has temporarily stopped(as of 2014), but the latest economic crisis has proven one thing: “A floating currency results in chronic inflation, punctuated by bubbles.” – David Frum
4. Our financial system depends on perpetual growth of debt and the money supply. There will always be inflation. The more money is created, the less money is worth. That is why gold used to be $35/oz and now it is over $1000/oz. Anything “real” will always “grow” in value as money becomes less valuable.
So what does this have to do with the question “what if interest rates increase like they did in the 1980’s?” First of all, we need to understand what caused interest rates to rise dramatically in the 1980s. The recession in the 1980s was caused by government reaction to “stagflation” – a nasty combination of high inflation and negative growth – you can read about the 1980’s recession here. The government response to stagflation in the 1980’s: stop/slowed printing money, and; increased overnight lending rates to the ~20% highs that still creates a fear of debt in some people today.
This isn’t the 1980’s and here is the proof: 1. USA has printed money, and lots! $40 Trillion in fact(as above). 2. USA GDP Growth Rate has been positive(in March 2014 was 3.72%), and USA Inflation is currently low at 2.1%. 3. Canadian Inflation is currently at 2%, right on target for the Bank of Canada, and hardly high. 4. Canadian GDP has grown ~12% since 2009.
Source – Stats Can My friend is very thoughtful and would no doubt have a follow up question to my explanation: Q: Ok, I get your point, the situation is opposite that of the 1980’s and governments react differently now than they did then… So 20% interest rates aren’t likely… But won’t interest increases hurt your business anyway? Interest rates on mortgages are a neutral factor to a real estate investor like me, and here is why:
1. If interest rates decrease, first time homebuyers can more easily afford my product, causing the demand and price to rise. Also, if rates decrease, I don’t pay as much on each mortgage payment and my bank account grows faster.
2. If interest rates increase, this will price some homebuyers out of the market for longer, leaving me with a larger tenant pool, because they will still need to live somewhere. In fact, currently investors have the most favorable scenario! Interest rates are low and this creates incredible cash flow, and a change in Canadian mortgage rules has restricted home ownership to people who can qualify for a 25 year amortization, or who have a 20% down payment. Due to these Macro market factors, Kamloops has an abundance of quality tenants with stable jobs who in years past would be homeowners, causing the local rental business to become very lucrative and low risk.
3. I stress test my portfolio all the time and recommend all investors do so as well. The Bank of Canada announces rate changes 8 times a year, here is an example of some previous announcements:
There has been no change in the low rates for a while, but when there is it is usually by 25 basis points(0.25%). For each $100,000 of mortgage debt(with 25yr amortization) that receives an interest rate increase of 25 basis points a ~$13 increase in monthly payments will result. If the investment property you purchase doesn’t cashflow enough to handle a couple large increases in interest rates, you should have never bought that property in the first place! And since interest rate announcements are so far apart, investors have plenty of time to sell if the interest rate causes the property to stop being cash flow positive.
In Summary Mortgage interest rates will not rise to the ~20% range we saw in the 1980’s. Any increases that do occur are more than offset by the cashflow of the properties I select for myself and my partner’s portfolios.
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello!
Someone recently asked about my signature at the end of my blog posts and newsletters “Until next time, Stay S.A.F.E. ” Besides the link to my business model for investing(Starter homes, Attractive to families, Fairly priced, Economic fundamentals), this salutation has a very personal meaning to me.
When I first began my job as a police officer, my wife and I were apprehensive about the dangers I might face. I was taught in basic training that there was someone around every corner trying to kill me, or at least thinking about it. Looking for an opportunity. A moment of weakness. My troup was shown video of officers being killed on duty, and many near misses. PDT(police defensive tactics) was practiced daily, and I spent every spare moment in the library researching whatever other tactics I could find. Anything that would give an edge. Verbal judo, piecing the pie, vehicle stops, active shooters, edged weapons defence, disarming suspects, obscure search powers, case law, threat cues, body language, and anything I could get my hands on. Stuff like Lieut. Grossman’s work, and many others. Hyper vigilance set in with me big time. After graduation, I would avoid standing in front of open windows, always be looking over my shoulder, never relaxing. This transition from civilian life, to being responsible for my safety and those around me, significantly impacted me. My wife and closest friends said I had changed, big time. My former easy-to-get-along-with, humorous attitude was buried under my enormous new responsibility. A lot of the time I acted like a complete jerk! “Complacency kills cops” and “you are allowed to hit back first” and “you never know what you are walking into” became the themes I lived by. My field trainer Svend caught on, and helped me to lighten up. I started to see that I did not need to fear everything that moved. Being vigilant without constantly operating in the “red zone” was possible. I caught on to the steep learning curve of law enforcement without burning out, or mistakenly hurting anyone who didn’t deserve it thanks to this great mentor’s guidance. Svend was a someone who had been through the transition and was a resource on how to get home alive without being a “jerk.” How to exercise proper judgement. Yet another example of how important it is to surround oneself with mentors in all aspects of life! As my wife and I adjusted to this new life, we adopted a tradition from Svend’s family: every time I leave to go on shift, Marcy tells me “stay safe.” I must have heard that phrase over a thousand times by now. Now that I have become confidant in my role as a police officer, I can more accurately read situations I am walking into. I know when it’s safe to relax and demonstrate a softer side to a client who is in crisis and needs reassurance. At this point in my service, when I am getting comfortable in the job, this is the point where the danger of complacency is greatest. Every time I hear “stay safe” I am reminded my #1 goal is to get home to my family. We recognize the risks involved and the sacrifice that might be required of me. But this simple phrase is a constant reminder for me to find the safest way possible to get the job done. It keeps the danger of complacency at bay. It was natural for me to transition this mindset to my next passion, real estate investment. In same way I keep neighbourhoods safe at my full time job, my real estate investments are kept “S.A.F.E.” through conservative analysis, prudent business practices, and by following proven systems. Thanks to my readers for the questions, and please keep them coming �� Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
As a student of real estate investing since 2008, I have seen almost every way to make money in real estate. I have spent thousands of dollars and just as many hours taking courses, reading books, speaking with other investors, and trying methods I learned. Here are a few examples of how to make money with real estate, keep in mind this list is not exhaustive: Rent to Own(tenant first or traditional)Sandwich Lease/ Agreement For SaleFurnished Rentals(ie High Street)Bird Dogging/Assignments(Sourcing deals and selling them to other investors)Reno/Rehab/FlippingStudent RentalsDevelopment/Building NewSelling Real Estate(Realtors)Multifamily/Apartment buildingsCommercial BuildingsForeign Real Estate(ie US)Joint VenturesBuy-and-HoldREITs (stock market)Mortgage InvestingSingle Family/CondosProperty Management For each vehicle and strategy to invest in real estate, a risk/reward analysis should be made, assessing your strengths, assets, capabilities, and your willingness to invest the time needed for each. Of all possible options to make money in real estate, I believe one is BEST and here is why…
The Buy-and-Hold real estate investment strategy trumps others because: it is treated the most favourably by the tax man; it offers the lowest risk; it is repeatable and scalable; it is proven; and it is simple.
Tax Considerations There is a saying: it’s not what you make, it’s what you keep that matters. When calculating returns on investment, it is the after tax net profits that count. In Canadian tax law there are three categories real estate may fall into. From most favorable to worst these are:
When it comes to taxes, intention is everything, so for every real estate purchase my intention for the property is to create income. That is why I have not engaged in flips, or in buying land to develop, or other methods of making money. My goal is INCOME! If someone offers me a ridiculous sum of money for my real estate after a big spike in property values, I might sell. However, since my intention was to create income rather than sell at a profit, only half the profit is taxable. My preferred method is to pay the least amount of tax whenever possible, and the Buy-and-Hold method of real estate investing provides for this nicely.
Aside: Flips, real estate development, and brokering(ie Realtors) are not investing in real estate per se. These activities are running an active business, and this transactional real estate can appear profitable because of big numbers possible when you do things right. The potential for a big paycheck at the end of a project is tempting for many would-be investors. However, these profits are Earning Before Interest, Taxes, Depreciation and Amortization(EBITDA is an accounting term you can read more about here). AFTER these expenses, many investors find meager profits in exchange for many hours managing the “investment”. Mistakes can be very costly; renovations go over budget, sales slow down causing holding costs to rise, etc. I have seen investors who would have made more money taking a second job for minimum wage, and at the same time putting their capital at unnecessary risk. For example, I looked at a doing a flip in the Brocklehurst area at the beginning of 2013. It looked great because the sale price was projected to be $150,000 more than the purchase price. After almost $1000 in due diligence and many hours of research, I ultimately recognized I was out of my comfort zone. I sold my due diligence reports and recaptured some of my costs, and a year later caught up with the investor. I was informed that after one year and putting over $250,000 at risk, the profit BEFORE taxes was less than $20,000. Hardly impressive. And this was an experienced investor who had completed many such projects, and developed many properties in Kamloops. The main reason was that the city would not approve a zoning change which could have extracted $100,000 more from the deal, a perfect example of an unforeseen circumstance that can wipe out projected profits. I think he is lucky he did not lose any money! Instead of the flip, in 2013 I purchased two rental properties to add to my Buy-and-Hold portfolio, these properties generate $4250/ month in rents. The properties were purchased a little under market value, with about $20,000 equity to start things off. This was a much better use of my time, as I was able to do this while working my full time job, running my small business, and traveling to Italy for a week! If Buy-and-Hold investing in conducted properly, using the formulas that have been tested for thousands of years(see below), Return On Investment(ROI) is consistently better after all expenses are accounted for.
Buy-and-Hold Real Estate Offers Lowest Risk/ Highest Reward Possible In Canada’s free market economy, there is a risk-return tradeoff. Lenders and Investors alike expect that the higher the risk they take on, the higher the potential reward. The lower the risk, the lower the potential reward. We see this in action when borrowing money to invest with Risk Based Pricing. Loans for stocks/securities, developing property, business start ups, and other such investments have higher interest rates. Such loans are also offered at lower Loan To Value(LTV) than Buy-and-Hold real estate.
In contrast, Buy-and-Hold real estate loans(mortgages) remain the lowest cost and highest LTV investment available. Here is this concept in greater detail: 1. Residential real estate has the lowest cost of financing. Residential Mortgages are among the lowest interest rates available. 3% or less is common these days for a mortgage, for assets that are worth hundreds of thousands of dollars. Your first credit card limit was for $500 or maybe $1000, and yet you had to pay close to 20% if you carried a balance. That is almost 7X the interest rate on a much smaller amount of money! Why the disparity? Because conventional real estate investing is a very low risk business. Business startups, credit cards, vehicle loans, and other ventures are a higher credit risk. Therefore the market prices this risk into the loans available for these ventures, and the interest rates are higher. What about stocks? Surely a mechanism designed to create wealth for shareholders would have lenders tripping over themselves to finance? Go to your securities brokerage and see what interest rate is on a margin account. It will be much more than 2.99%, the 5yr fixed mortgage rate at time of writing. 2. Of all investment options, residential real estate is the lowest risk. We know this because the highest loan to value(LTV) ratio available for investment loans is within real estate. You can borrow 80% or more of the value of your real estate investment. ie. With a 20% down payment, you may purchase a $200,000 for only $40,000. Compare to Margin accounts: 50% LTV if you borrow $500,000(higher than the cost of a decent Real Estate investment) or a maximum of 30% LTV if you borrow $1 million or more.
Proven Investment System Successful Buy-and-Hold investors I have met who are “self made” and did not inherit a large sum of money all did it the same way. Buy 1, rent, hold for a couple years. Buy 1 more, rent, hold for a couple years. Buy 2 more, rent, hold on for a couple years. Buy 4 more, hold for a couple years. Never sell. Etc.. 15-25 years later, they have one or two million dollars in their portfolio, or perhaps much more. For example: 1. Kelson Group owns many of the multifamily buildings downtown Kamloops. It is one of the largest private owners of apartment buildings in Western Canada, and is currently operated by the sons of the founder. 2. The majority of the student housing near the university was purchased over time by the same man, who unfortunately recently passed away, but he left his children and grandchildren a large portfolio, providing a legacy for them few could even dream of. 3. A friend of mine has been investing in Kamloops for many years in houses, and more recently multifamily buildings. His first multi unit building was purchased 15 years ago, and he was just informed by his accountant that his after tax profits if sold would be over $700,000.
Repeatable and Scalable As these investors grew, they took on management staff, accountants, and other professionals(a good realtor who can find great deals is worth her weight in gold!) and the business grew, with the properties paying for everything along the way, and the investor kept working a day jobs.
Simplicity A mentor of mine says that your investments should be BORING. Then you can use the money you make to fund your FUN!!! When you find excitement outside of your investments, you will never lose money.
With Buy-and-Hold investing in a stable economy such as Kamloops, the worst case scenario is that tenants will pay off your mortgage, leaving you to live off the cashflow, or perhaps sell and go on a multi year trip around the world.
There is much more that could be said about investing in real estate, please share your experiences with me, and join the conversation !
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello!
I got this angry message the other day.
Apparently “I charge too much rent.” Some people think I’m greedy, or call me a “slumlord” or say it’s evil because I work hard to earn a little extra money. Here is the truth of the matter:1. The renovation on this property employed a local renovator for a week to the tune of $3500. 2. The tenant who moved in loves the place and is grateful and proud to have a well kept home in a nice neighbourhood. 3. Before I bought this place it sat empty for over a year, benefiting no one and hurting the prior owners. Property is very expensive with big bills. Almost all the rent collected pays expenses and the mortgage. Don’t believe me? Try it yourself! 4. All 9 tenants I currently serve call me the best landlord they have ever had because I spend so much money and time making sure their home is perfect. I have thank you notes, testimonials and lots of phone numbers of previous tenants who called me the best landlord. So I’m not arrogant, just advertising the truth. 5. I give generously of my time and money. I volunteer with Big Brothers and Sisters, and am working toward giving away 10% of what I earn(I am still under 5% but my goal is to increase by 1% a year). The more I earn the more influence I have to make the world a better place. I HIGHLY recommend this book. 6. My investors don’t think I am greedy, they know how hard I work to get them a decent return on every dollar they entrust to my care. A better return than can be found anywhere else! 7. Pathetic indeed… That energy spent trying to squash others is not used to try and better yourself…
A Pipl search showed me that this is likely my accuser :
If I found the wrong person, I apologize, and I will remove your plenty-of-fish profile from my blog, just send me a nice emailed request �� To the author of that email that must have been intended to hurt my feelings, or perhaps pick a fight: 1. Your negativity and hatred unfortunately did bother me and shake my confidence a bit, even though you are a complete stranger. Imagine how that attitude affects those who are close to you, or even worse, yourself. 2. I get emailed alerts daily for what rental stock there is , and who is looking. Today’s email there was NO rentals available, just people in need. I do my best to province a great service to people who need it. Like these three families who can’t find a place to live.
3. I’m sorry my business venture offended you so much.
But I’m not sorry about this:
Dear knitanpurl,
In your face!
P.S.To learn more on this topic and about why cheap rent is a disservice to EVERYONE, read “Am I a mean landlord?” Best regards, Sam About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Last month Forestry took the limelight, and before that, Mining. This month’s feature employer is Health Care. Interior Health Authority is the largest single employer in Kamloops. Here are some numbers of what things look like now:– IHA have 19,203 staff (as of February 2014)– 1,504 physicians with privilegesin IH’s acute facilities (as of February 2014)– 1356 IHA acute beds– approximately 3000 IHA staff work in Kamloops (Venture Kamloops)– Royal Inland Hospital has 216 inpatient beds As Kamloops’ largest employer, it is important to understand how IHA job prospects look. Will existing IHA jobs remain stable? Will we see shrinking jobs, or growth?
The IHA website has detailed population data of the Kamloops region, which needs to be accurate to ensure proper planning of health service delivery. As real estate investors, we benefit from a disinterested party doing detailed population analysis. This cross reference can prevent us from developing confirmation bias :
The Kamloops Local Health Area is about 112,000 people and has an average age similar to the national average, with a larger portion of people in early-mid 20s.
The average age in Kamloops is also getting younger with more births than deaths.
Increasing RIH occupancy year after year could mean people are getting sicker, and that would not be good. However, if we dig a little deeper, we see that many of these beds are taken by births. This indicates steady population growth. – births are the most common type of acute care and inpatient care
– about 850 birth procedures were at RIH in the 2012/2013 fiscal year, approximately 20% of all care visits Revisiting the question: what are job prospects for Kamloops’ largest employer? IHA is responding to the population growth in Kamloops by investing heavily in the area. Completed expansions:-$27.5 million – Royal Inland Hospital in Kamloops for expanded emergency and medical imaging departments-$11 million – Royal Inland Hospital’s new Intensive Care Unit Planned expansions:– the first phase of the RIH redevelopment is the Clinical Services Building, currently under construction(spring 2014)– currently under construction photos– $80M in construction for 350 parking stalls, UBC Medical School teaching space/ lecture theatre, and outpatient service centre– 51 more acute beds to be added to RIH by 2022(24% capacity increase, Interior Health Capital Strategy 2013 – 2023) With expanded medical services needed, there will be job growth in Kamloops Health Care. ConclusionIHA is not in the business of real estate, so this data can be relied on without fear of bias. IHA’s projected population growth for Kamloops is for growth, especially for the younger segment.
As I have said before, population growth = future real estate value growth. By watching this major employer we see yet another indicator of the coming boom in Kamloops! Until next time ,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
The first three months of 2014 are come and gone. A pause in the hard work completed so far this year, today marks the celebration of the fool. Like many informal holidays, April 1 was developed over centuries and by mixing cultures and traditions:– March 25 was a roman festival Hilaria, borrowed from the Greeks to mark the end of winter gloom and celebrate a better season– a copying error in Chaucer’s Canterbury Tales (1392) may have refined the date to April 1st. A story where a vain cock was tricked by a fox was set “Syn March bigan thritty dayes and two. “ This was a typo during copying and should have been Syn March was gon. – many middle age French towns celebrated New Year’s Day on March 25th and celebrations lasted a week, ending April 1. Those who celebrated New Years on January 1 made fun of those who celebrated April 1.– Iran has the oldest prank-tradition documented, Sizdah Bedar was celebrated as far back as 536 BC on April 1 or 2.– In 1957, the BBC pulled a prank, known as the Swiss Spaghetti Harvest prank, where they broadcast a fake film of Swiss farmers picking freshly-grown spaghetti. The BBC were later flooded with requests to purchase a spaghetti plant, forcing them to declare the film a prank on the news the next day. A list of other pranks can be found here It is an interesting commentary on human nature that we celebrate mischievous pranks every year. It’s a reminder not to take ourselves too seriously. Life is too short not to have some fun! Until next time, Stay SILLY ��
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Last month, I talked about the mining sector in Kamloops and what it contributes in jobs for the region. Jobs are critical to Real Estate values because of the following formula:
This month the feature employer is Forestry. British Columbia is the leading exporter of forest products in Canada at more than $10 billion/yr. Recent years have shown a marked increase in exports.
2013 yielded 37 million cubic meters of BC forest product exported to the USA, Japan, China and other nations. 4 million cubic meters come from the Kamloops Forest District, representing about $1B in exports coming from the Kamloops District.
Fibre Flow “Fibre flow” is the term used to describe the movement of fibre (logs) from the point of harvesting the trees to processing facilities.
Kamloops is the 7th largest forestry district in BCs Southern Interior for volume of logs harvested and/or scaled.
Domtar Pulp Mill produces various paper products and employs about 300 people, and at least that many contractors. Numerous new efficiency upgrades ($120M since 2011) will extend the mill’s life another 20 years. Domtar’s Kamloops mill is one of few that can process pine beetle kill and keep up quality. Despite a recent closure of a small “A” line, the Domtar mill has good prospects.
Tolko operates the Heffley Creek Plywood Plant which employs about 200 people. Most live in Kamloops as it is a short 20km by highway. There are also numerous Tolko lumber, plywood and manufacturing plants in the central interior. There is even a nursery in Armstrong. These plants all rely on the trucking industry, and support this major employer in Kamloops. Kamloops is at the cross roads of BCs major highways and many Tolko/Domtar products must pass through Kamloops for use in large markets such as the lower mainland or to be shipped to other countries.
Domtar and Tolko each have survived the volatility of the 2009 USA housing crash that forced many mills to close. As such, they will be poised to take advantage of the lumber super cycle projected to start in 2015.
Manufacturing Many manufacturing and fabrication companies (over 125) are based in Kamloops, like Loewen Equipment Manufacturing, a builder of heavy equipment used in logging. Small business like this employ hundreds of people in support of the forestry industry and do much to support the Kamloops economy.
Summary Global demand for wood products has been steadily increasing since the low of 2009, and Kamloops is well positioned to reap the rewards of a comeback in the global housing market, especially in the USA. Changes in the economic cycle are coming soon, and the fact that both mills in Kamloops remain in service means it will be much easier for them to increase production in response to higher demand. Several industry observers are predicting an upcoming boom, and although the Forestry sector is “boring” there is money to be made. The Kamloops Forestry District is responsible for $1B in exports, about 1500 jobs, and is a driver of the local economy that is here to stay. Next month’s feature employer will be Health Care Until next time, About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
… If you are looking for financial advice, be very careful who you listen to. Make sure the advice is in YOUR best interest, and not in the advisor’s. Case in point: BMO bank advised everyone to lock in mortgage rates two weeks ago, see the feature photo. Now, big banks are well organized businesses that post billion dollar profits every year. Planning departments are well educated and well informed. These corporations are involved in the minutiae of our financial system.
As industry experts, big banks inherently appear to be trustworthy. (Before I studied finances, anything I was told about money seemed very smart.) As such large players, big banks are not only experts, they are in the position to influence markets. If you were about to drastically lower your prices in two weeks, how would you increase your profits beforehand? BMO did so by telling everyone to lock in fast, before prices go up. Look what they did next:
For the people who locked in at 3.49% in the past two weeks, this move is a slap in the face. How much did this bad advice hurt families who were conned by it? Here is a $300,000 mortgage payment at 3.49%. Payments are $1,489/mo. Balance at the end of 5yr period is $258,792.
The same mortgage at 2.99% has payments of $1,418/mo. Balance at the end of term is $256,374. That’s $2,418 more that a family had to come up with in 5 years. Enough for a nice holiday or news shoes and clothing for the kids, or 8 new high quality tires for the family car. In this example, biased advise would cost $23,409 over 25 years. Tuition for 1st year college perhaps?
What is the lesson from all this? Before you take the advice that is given, find out what’s in it for the advice giver! Trust, but verify. That way news like this will not shock you after you did what you thought was the right thing…
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Here is a new promotional video from AJAX Some call it promotional, some call it propaganda. I call it opportunity. Here is an in depth look at the mining industry in Kamloops and what we can expect if when further mining comes to the area. Also a new report shows a big jump in GDP(which mean a jump in housing prices) when the AJAX project starts. That date could be sooner than later. A modified application could be as soon as March 2015 with construction beginning soon after. I am keeping a close eye on this project and Kamloops economic fundaments as a whole. Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Venture Kamloops commissioned a $30,000 report estimating the impact of several projects in Kamloops’ 10 year future.
Some highlights:
*The report projected a complete closure of the mill, however this is highly unlikely. If anything, the Domtar mill will be sold to another company, similar to what happened in 2007 when Domtar acquired the Weyerhaeuser pulp mill operation. Further the report states “RKA has no information regarding the likelihood of such a major decision.” How does this affect Kamloops Real Estate Investors like me?
The above GDP graph shows what happens when GDP grows in a region. If When the above mentioned projects are implemented, we will see a significant increase in property values a short time later, just like what happened in 2006:
I am betting that there will be a big jump in real estate values in Kamloops with a medium term view(within 5-10 years). In the meantime, rents are so high that purchasing in this market results in great annual returns, even with NO increase in house prices. Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
The value of real estate, as both an income source and as a vehicle for growth, is dependant on people! People need food, clothing, and housing. The nice thing about providing for people’s needs is that you are making sales as soon as people enter your area, and you are still being paid if there is a temporary slowdown. Needs are always purchased before wants, before fun, and before luxuries. As a provider of needs I have an easy formula: Follow the people and profit will follow.
People move and stay where there are jobs. Kamloops has many opportunities for employment at many income levels. This is the first in a series of articles I am preparing on Kamloops’ employers, and this month’s feature employer in Kamloops is Mining.
Quick Facts:
Materials Mined Near Kamloops: Copper Copper is in almost everything, from electronics to food. The major applications of copper are in electrical wires (60%), roofing and plumbing (20%) and industrial machinery (15%). – Wikipedia There has been an ever increasing demand for copper for over 100 years.
With this ever increasing demand for copper has come a huge increase in prices. This makes projects in the Kamloops area more viable, because mining the lower grade deposits is now profitable. Reopening old mine sites, and building new sites that were previously not economically viable becoming more common.
Gold Gold is highly sought after as a hedge against inflation(although it produces no income, it does hedge off inflation just like real estate), as a metal used in industry, and for centuries as a decorative material.
For the same reasons as copper, higher demand for gold is leading to mining lower grade deposits, and there are many in the Kamloops area. Molybdenum The ability of molybdenum to withstand extreme temperatures without significantly expanding or softening makes it useful in applications that involve intense heat, including the manufacture of armor, aircraft parts, electrical contacts, industrial motors and filaments. – Wikipedia
The world production of molybdenum has been increasing in response to demand. Employees at Highland Valley tell me that the molybdenum pays for the operations of the mine, and the copper is the profit.
Future Projects: Galaxy Property
The Galaxy Property is within Kamloops City Limits, 7km east-southeast of the New Gold Mine, and 4km northwest of the KGHM Ajax Project. There has been significant exploration in this region, and according to this Oct 2013 report there will be $250,000 in further exploration soon.
Many Other Projects: There are many other mining projects in the region that are poised for development, and mining will be a major employer in the central interior and Kamloops area for many years to come. For a detailed map, click here.
Ajax/KGHM Gold and Copper Mine on the Cusp of Approval: There has been some local controversy surrounding the Ajax project due to the proximity to Kamloops and health concerns(ground water, dust). This doesn’t change the fact that several major players who have a vested interest in the project proceeding are likely to get their way. Here is a news article from yesterday that illustrates the determination of the federal government to proceed in an expedient manner.
City council has made numerous requests for a “panel review”(at the bidding of a vocal minority who oppose the mine) and have repeatedly been told no, a faster “comprehensive review” is sufficient. My opinions on Ajax do not matter. Whether I like Ajax or not, just like the perpetual inflation/government of printing money, the fact is it is coming. The question is: Q: What can I do within my sphere of influence to benefit from the facts? With a current labour shortage in the mining industry of~500 people, and a further injection to the Kamloops workforce of 692 upon approval of the Ajax mine, there are a lot of people on their way to Kamloops in the near future who will need housing. These mining workers earn on average $98,200/year, and can afford to pay a premium for housing, first as renters, then later as buyers. This will help drive the prices of rents and homes up. There is a building pressure for housing in Kamloops. Rents are high and more than support current market prices. Current job and population grown within the mining industry alone are enough to influence rents and real estate price. Given the facts, I will benefit most from the facts by continuing to: A: Purchase as many rental units as possible before the next big increase.
I hope you join me next month to learn about next month’s feature employer – forestry. Forestry is an industry that has been hard hit in recent times
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello!
Although taxes are not due for almost 2 months, completing tax returns before the deadline is top of mind for me and many other real estate investors. We recently completed most of our tax work needed, and sent if off to our accountant. I’m only waiting on a T4 slip from my employer. It has been a learning curve to get to this point, and here are some tips I have used along the way that make tax time much easier: 1. Each Property Has Own Bank AccountThis is key to understanding how each property is performing. This also makes it easy to do your bookkeeping, in fact your bookkeeping is almost completely done for you. We ensure that every expense and all income for a property is only in and out of that property’s bank account. When you start paying for things personally, then reimbursing yourself from the property, it turns into a bookkeeping nightmare. 2. Know Your Deductions and Credits: Use a ChecklistCommon deductions for a real estate business:– interest paid on the mortgage– utilities– property taxes– repairs to property– gifts to tenants(ie welcome basket)– market research Less common deductions:– interest on loans incurred to invest in real estate(line of credit used for downpayment for example)– Capital Cost Allowance is more common with larger buildings(multi family and commercial) than single family homes. That being said, CCA can be worthwhile once your rental income exceeds your expenses by a large amount to offset taxes payable. Keep in mind you will likely need to repay these saved taxes upon sale/deemed disposition of the property, so please consult your tax advisor to see what’s best in your situation. 3. Stay OrganizedI am not a very organized person, so thank God for my wife. She keeps close track of the receipts(I must remember to write on the receipts what each expense was for), and reconciles them with the bank accounts using spreadsheets. The only thing I need to remember to do is use the proper bank card for the proper expense. It’s wonderful that she has even put labels on the bankcard telling me which one can be used for which property/business.
If you are well organized, congratulations! If not, hire or marry someone who is �� 4. Make Sure Your Advisor is a Real Estate Expert There are many good accountants and advisors out there. In my experience however, there are very few who are real estate experts. I get my advice from accountants who own real estate. They know what works best for them, and can translate that into what will work best for me. My accountant, like all advisors that I lean on, are real estate investors. Mine even wrote the book on real estate taxes in Canada!
5. Repair or Improvement?This is a common question I get from other owners of rental property. Repairs can be immediately deducted from income. Improvements must be capitalized over time (see CCA above) , this is usually less desirable. If you are bringing something in your property back to original condition, this is generally a repair expense. If you are adding something new(a pool or theatre room, finish a basement) or making an improvement(replace ordinary counter with better one like granite), this will need to be capitalized, deducted over time. Something that has become my mantra is “I am bringing it back to original condition.” 6. Review Last Year and Make Your Next Tax Plan the Year BeforeIt’s good to step back from the busyness of life and look over an annual “report card.” Since the rewards of real estate are slow, annual taxes provides an opportune time to review the fruits of the hard work. The nice thing about investing in real estate is improvements/net worth becomes markedly better year after year. This information can revitalize you and helps reinforce that all the hard work IS worthwhile! Your goals and circumstances change often(mine do anyway). It’s important to review your taxes to make sure that your tax plan is helping to get you closer to your goals. "If you fail to plan, you plan to fail" 7. Know Your DeadlinesPersonal Taxes must be filed April 30th.Business Taxes must be filed June 15th. Taxes for both must be paid by April 30th. A tax Callander can be found here. Taxes are just one component of real estate investing that requires an intimate knowledge. To succeed you must educate yourself, or hire someone like me to do it for you �� Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello!
The Olympics have much overshadowed the normal economic chatter that occurs when the Loonie drops. It’s a nice distraction from much of the uninformed hype typical of mainstream media. A Google search even ranked a Canadian bronze medalist burying a lucky Loonie higher than much fear mongering.
It’s funny, because many of the same commentators who bemoaned the rising loonie years ago, now propose gloom and doom for the Canadian economy during this recent currency drop. This blog is focused on Kamloops, so what does this have to do with local real estate? As sophisticated long term real estate investors, we care about one thing: good paying jobs. Kamloops is largely a transportation economy, with mining, forestry and tourism major employers as well.
What a falling Loonie means for Kamloops:– exports are in higher demand because they are cheaper(many are priced in US dollars)– increased truck and rail traffic– higher profits for mines, the mill, ranchers, other manufacturers. These industries are major employers in Kamloops.– potential for increased tourism as it’s cheaper to visit In summary: 1. A cheaper Loonie for a time will likely encourage more investment locally, bring more jobs, increase housing demand, and eventually increase prices. 2. Another benefit of a declining Loonie is the Bank of Canada is likely to leave the overnight interest rate low for a long time. Cheap money is great when 75% of investment costs are within a mortgage! What are your thoughts? How does a changing Loonie make you feel and why? Until next time, About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello!
I was at Chapters with my wife enjoying a coffee a couple days ago, and this book jumped out at me. In the spirit of taking control of my time this year, this seemed to be a great opportunity to focus on what I know is a struggle for me. I was pleasantly surprised, this is a quick read that is packed full of great strategies to be more productive. The secrets within are simple and easy to implement. Here are the 4.2 most important concepts. Why 4.2 ? Read to the end and find out !
"Eat a live frog first thing in the morning, and nothing worse will happen to you for the rest of the day." – Mark Twain “Eat That Frog” is based on the premise that if you do your most difficult task first, all other tasks become easy or unnecessary. This is important because
Here are the 4.2 critical strategies to implement the strategy of Eat That Frog. 1. Think on paper. I was happy to read this because I have unknowingly been applying this principle in my daily life for a while now.
You may recognize this note book that I have been carrying around most places I go. I am constantly writing down my do lists and refining them every day. Given the strategies in this book, my daily “thinking on paper” will be far more efficient. There is real power in the written word, and having your ideas on paper enables you to move on to other things and let the creative part of your brain work freely. 2. Use the 80/20 rule. Once you have written down every possible task for your day, you can be sure that 2 out of 10 are the “frogs that need to be eaten. ” All other tasks are not important enough to concern yourself with at the moment, or given enough time will become unnecessary. 3. Use ABCDE model. This is a further method to select the frogs in your life. “A tasks”: something very important, something you must do, it will have serious positive or negative consequences if you do it or failed to do it. This is a task only you can complete, one that no one else can do for you. “B tasks”: something you should do, but it only has mild consequences. Someone may be unhappy or inconvenienced if you don’t do one of these tasks but it is nowhere as near important as an “A” task “C tasks”: something that would be nice to do but there is no consequence at all to not doing it. This includes phoning a friend, having coffee or lunch with a coworker, or completing some personal business during work hours. “D tasks”: something you can delegate to someone else. These tasks should be delegated, so that you can focus on the “A” tasks that only you can do. “E tasks”: something that you can eliminate altogether, and it won’t make any real difference, this may be a task that was important at one time but it is no longer relevant to you or anyone else. This is something that you might do out of habit or because you enjoy it, but every minute you spend on an “E” task is time taken away from the tasks that can make a real difference in your life. 4. The law of three. If you had 30 seconds to write down three of your most important goals in life what would they be? Many people have the three most important goals that pop out of their head in common: first, a financial and career goal; second, a family or personal relationship goal; and third, the health or a fitness goal. If you expand this to all aspects of your life, you have an in depth exercise for finding out what is truly important for you to spend your time on.
4.2 Guard your energy levels. The bonus sections of this book have some strategies to schedule your time, eliminate technology detractions, get adequate sleep, get adequate exercise, spend time with family, take one day off per week, avoid working longer than 10 hours at a time, and other ways to recharge your batteries. These are all very important to ensure that you are running at peak efficiency while you are eating those frogs. Thanks for reading to the end, I’m sure you figured out by now, but 4.2 equals 20% of the 21 listed items. These “frogs” are the ones that I choose to eat to get the results I need in my life. What are yours?
Until next time, About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello!
I am often asked about the real estate market in Kamloops compared to other cities. Here is my answer. "I am an area expert in Kamloops and do extensive research here, so I know which properties in Kamloops are a sure thing." When I hear someone tell me “I hear Edmonton is climbing like crazy” or “Fort St John and Dawson Creek are getting the site C dam and a pipeline!” I usually just nod and smile. Sometimes if the other person is an area expert, I will ask them questions about their investment model to learn how they select a property and plan to manage it. While the promise of appreciation is nice, waiting for it can be hard – the money is in the management. I want my money invested where it will work the hardest. For me, that means Kamloops.
I am making great returns here in Kamloops. For me, my family members, and my investment partners. This is great news, because the more money I make my partners, the more money I will eventually get to take home. It will be a nice surprise when I get to give my investors more than they bargained for. I have overcome the extra transaction costs in BC(Property Transfer Tax) and can withstand the delay of a major project by finding motivated vendors(ie private sales) and consistently commanding much higher than market rents. Both are difficult to do in a market I am not an expert in. The potential for a mistake in a market I do not know, in a place I am far away from, cranks up the risk too high. In an unfamiliar market, I am not certain money I manage is safe. I had a meeting with a potential money partner today(a fellow who has made a LOT of money with property), I was told my projections are very conservative, and I command a very high rent. I am proud of both these statements and that my strengths are recognized by such a seasoned investor. My conservative projections on properties I own and those I plan to purchase match or exceed those I have seen in other hot markets(where appreciation is calculated too high in my opinion). Don’t get me wrong. I don’t doubt there is plenty of opportunity in other markets. There is lots of money to be made when proper due diligence is completed, and here are 4 of my secret steps I have taken to ensure Kamloops is the best place for my investment dollars: 1. Right Market: Do Macroeconomics support the local economy? This is what will bring(and keep) jobs in the region- and keep tenants paying your bills. For example, the boom and bust cycle of the oil/natural gas industry nearly crippled investors I know who had heavily invested in Grand Prairie in 2009. They burnt through a reserve fund of $400,000 in a matter of months when all the workers left during the last recession. In a recent video announcement of REIN’s updated Top Investment Town Report Kamloops is once again a top 5 BC investment city(has been for many years). Prospective/future projects include the Ajax mine and twinning the Kinder Morgan Pipeline. There are also a dozen major employers already based in Kamloops, as such we are not susceptible to a failure in any single industry. 2. Realistic Projections: Are the numbers you see in your pro-forma real? You can fool yourself into thinking you have a great opportunity and pay too much for the property. Are the rents real market value for the neighborhood, is appreciation calculated appropriately, are taxes/strata appropriate, is vacancy allowance enough, are utility costs a factor, is building maintence budgeted for…. There are lots of places a salesman can monkey with the numbers to make a return look better. Once the property closes, YOU ALONE will be holding the bag. It will take many years to recover your original investment, let alone make any returns. Ask me how I know this :). I slightly overpaid for my first property by calculating the rents higher than I should have – not realising that existing tenants ARE IN NO HURRY to leave or have their rent raised to market. I made this mistake with my own money, and you can read about the fallout in my post “Am I a mean Landlord?” Things have worked out now, but it took a year to fix. It was a huge hassle/stress, not to mention the opportunity cost because my money could have worked harder elsewhere. 3. Reliable Data Source: Is this an established investment property(real numbers) or based on promises? If based on promises, can you trust the source? Are there at least comparables(rents, recent sales) available for you to see? What is the track record of the source of the information? What are their motivations? Will they earn money no matter what(like advisors in the stock market), or are their returns tied to yours? Perhaps they are not malicious, but are they biased because of the structure of their business? How many people get paid before you do? In other words, are they sharing the risk? I subscribe to daily Kamloops news alerts, I watch the classifieds like a hawk to make sure my rents are top of the market, I speak with everyone I meet about Kamloops real estate, so I am VERY CERTAIN my data is reliable. I also ensure to eliminate any bias by structuring things so my partners receive all of their money back FIRST. I don’t see a dime of profit until my partner makes a great return. I am a nice guy, but I don’t work for 5-10 years for free, so you can be sure I am certain the investments I select are top performers. 4. New Build/Pre Construction Alure VS an Existing Property: Existing properties have no GST. Will the GST on the New Build diminish your returns? Is the builder’s final product going to be completed on time, or will your deposit be tied up? If you have a reputable builder and there are deficiencies(there always are), the work will be completed on the builder’s schedule, not yours. Here is a cautionary story about a builder in Kamloops who had lots of projects and many years experience hurt both pre-construction investors and contractors. He blames the economy, but high leverage(common for builders) is what brought him down. I invest in existing properties only, with modest leverage. Rent starts coming in as soon as the place closes, and income covers all costs and more RIGHT AWAY. There is no guessing when the project will be completed, no builders to research, and no GST.
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello!
I used to think I wanted to be rich.
As I have matured, and experienced many things that “riches” bring I learned that being rich is not all it’s cracked up to be. Trips, vehicles, new clothing, the newest electronics, vacations, eating out, are as a whole unsatisfying to me. Not worth striving for. Not a big enough reason to work as hard as I have been. Sound familiar?
A course I took last year helped me learn that I don’t want to be rich at all! What I want need is a wealthy life. For me a wealthy life means control of my time, the ability to help others, and a strong reason to the question – why bother?
Consider these principles I have adopted for building REAL life wealth: "Faith" – belief in Christianity and the promises of Christ(salvation history is fascinating if you take the time to study). God’s revelation of himself to humanity.– in the systems I am employed to protect: Democracy(the worst form of government, except all others), and Capitalism(every person is free to make a million, or free to starve – Andrew Carnegie) "Hope" – for the future – in humanity(check out TED for examples) – by cherishing a desire with anticipation
"Charity"
– in practice by giving freely of time and financial resources (benefits are that it feels good, and is an investment in the future as well: the more you give, the more is given back)– the virtue embodied by showing love and kindness, showing other you care– in principal by interpreting other’s statements in the most rational, best and strongest interpretation
In summary, for REAL Life Wealth, I am striving to adhere to the above principals to become the best version of myself in all ways: financially(as a responsible steward of wealth), spiritually, in education, in relationships with others, in fitness, in business, and as a husband/father. I encourage you to do the same!
Until next time, About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello!
This is Sam from investkamloops.com. Yesterday my truck was in the shop for warantee work. The courtesy driver picked me up when it was done, and then another passenger was picked up. The new passenger and the driver knew each other well(I guess he had a lot of problems with his new car and had to keep bringing it in) and the conversation turned to the economy. The conversation was negative on the job market(although they were hopeful that the Ajax mine would go through) and they shared thier opinions that the Domtar pulp mill, a major employer(about 1000 people including contractors), would shut down soon in the next couple years. That was news to me! When I got home I saw the paper was delivered. The front page article was about a new and efficient upgrade to the pulp mill, a new conveyor system that increased efficiency 16 times! The article further states that this is a 20 year investment to be competitive in a global economy, and only part of $120 Million invested in the mill since 2011. You can read the full article here. There is no facts to support the mill is closing soon, it is just an opinion.
The take away is to remain critical of opinions, and do research and make you decisions based on facts �� The truth is often different than conventional wisdom.
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello!
Well, it was an interesting nightshift.
While most people were doing the countdown and singing Auld Lang Syne, I was running through a field after a 15 year old who I had just caught with some pot. He got scared and jumped a fence and then booked it through a field.
I jumped the fence after him, and after I got over being mad at myself for bring so complacent and letting him get out of arms reach, I realized more than ever that I have let my fitness slide too far. After a short sprint in the snow, and yelling at him something about stopping right now, I was winded! Lucky for me he fell in some bushes in the dark and decided to lay there and try to hide. I followed his footsteps in the snow, and we got back to the cruiser just in time for the clock to tick into 2014. This experience further enforces the need for my fitness goal in the new year: lose 40lbs to get back to the 215lbs I was when I started this job 6 years ago. This goal is more complex and multi faceted than it seems. A lot of action steps are required: stop overrating, drink more water, get appropriate sleep(7.5hrs/day is what I need), exercise at least 20min a day, plan healthier meals, and control my sweet tooth. You may be wondering, since I already know how to be at my healthy weight, why am I still struggling? My weight gain is a symptom of a bigger, hidden problem: time management. I lead an incredibly busy lifestyle. With a full time job, two side businesses, a wonderful wife with whom I want to spend as much time as possible, and family commitments, there is lots of important things competing for my time. As result the most important tasks for sustaining a healthy life are put off: enough sleep, exercise, prayer, healthy meals, and drinking water. The more these are neglected, the worse they get. ie. Too busy for enough sleep = sleep in and miss workout = groggy when wake up= drink coffee = get dehydrated = overeat sugary foods = get fat = lower energy etc… It’s a vicious cycle. Being fat and tired is killing me. It’s in the way of my life’s purpose: my income, fitness, and spiritual goals. "fatigue makes cowards of us all – Vince Lombardi" I don’t have time to be a coward. My goals require bold behaviour. That is why in 2014 I am committed to making healthy choices a habit. I got the book “Daily Rituals” as a gift and will be studying the daily habits of successful people. With that in mind, here are my goals for 2014: 1. I will learn and implement strategies to incorporate healthy daily tasks into my life, and my old excuse about shift-work making routine impossible will no longer be acceptable. 2. I will jealously guard my time and schedule everything around my daily rituals. 3. I will not consume anything from a drivethru window. 4. A 15yr old will never outrun me again! What are your goals for 2014? Please share, and until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello!
Thank you to all first responders who are working today so the rest of us can enjoy our family in peace ! And a special thank you to all Canadians working out of country, especially our armed forces. Here is a special gift Marcy made for our newest nephew! They were both born in August so Marcy titled this painting “Leo’s Pride.”
Great Job Marcy!
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
A recent article announced 3.9 million dollars in upgrades at two apartment buildings(they used to house a cesspool of criminal activity) to complete the transition into 70 affordable housing units. This announcement made me realize there has been a huge amount of positive change in Kamloops in a very short time. Kamloops has seen a significant decrease in street crime since 2006(theft from vehicles, break and enters, assaults , robbery, drugs). In fact, I moved here from my previous post in hopes of finding the exciting work my colleagues talked about who had recently moved from Kamloops. From car chases, to kicking down doors at drug houses, to investigating major crime, it all sounded like great fun. Much to my surprise, when I arrived in 2009, the work was far more tame than I expected. Statistically, and my subjective experience are clear: crime is far less prominent in Kamloops than it used to be. In part, this is thanks to a concerted effort by the Kamloops RCMP in a Crime Reduction Initiative. Kamloops was among the first in the country to adopt this strategy which targets known crime hot spots, the root causes of crime and Prolific Offenders.
"Prolific Offenders are the 10% of offenders who commit 80% of the crimes." Besides police efforts, there has been a massive growth in outreach services and affordable housing units. I am convinced this has had as much of an impact on reducing crime as police efforts, if not more. Here is a timeline of the recent housing projects that have been battling homelessness and addiction:
In total, there are over 1,800 units of social and supportive housing in Kamloops. A list(not exhaustive )can be found here. It is $18,000 cheaper per year to house a homeless person than to leave him homeless. When the city of Kamloops saves this money, it can keep taxes lower The link between crime and housing in Kamloops is clear. Why does any of this matter to a Real Estate Investor? 1. When people are housed, they are stable, can access resources(ie to kick a drug habit) and less likely to be engaged in crimes(many theft from vehicles are by addicts). 2. An area with lower crime is a safer place to do business, more attractive to families, both these are positive influencers on rent and housing prices. 3. Lower taxes(less services used by homeless people) puts more money in the pocket of the investor(you and me). 4. There is an opportunity in Kamloops for the savvy investor who wants to work within the affordable housing segment of the market. There is currently a demand for 1632 private market rental units ($400-600 rent per person). This demand is expected to grow to almost 2000 units by 2025. Not to mention, in light of the Christmas season being upon us, housing the homeless is just the right thing to do :). Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Numbers like this are interesting to know, but what does it mean?
Housing construction is a lagging indicator of real estate demand because of the significant lead time required to build. Since housing construction is up from last year, this is an encouraging indicator that demand for housing is up. Housing construction is not up significantly(18% up), but this is a good sign because very high construction numbers signify the end of a boom. Check out this graphic that illustrates the point:
Source: Kamloops Stats 2008 What is the lesson here? Don’t wait until the media headlines are bullish to invest! At that point you will be investing during the peak of the boom or just before, and may have to hold onto your property for a long time [10+ years] to make any money in appreciation. "– If the media says the economy is booming, they are commonly the last to know." This is why I am confident that now is the best time to buy in Kamloops. We are at a sweet spot in the market now, where rents are high but prices are flat. There are lots of deals to be found now that cash flow, and a great set up for the appreciation that will inevitably happen in the next five years. The best part? No one is paying attention! The purpose of this blog is to help show you this window of opportunity now in Kamloops, and how to get a big head start on your financial goals with a built in equity climb just around the corner. Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello!
Just read a fascinating post by Robert Ringer, a “mentor from a distance” I have been following for the past month. This is not exactly directly related with real estate, it is more of a matter philosophy.
But, property owners are wise to understand why we have property rights, and a duty to be responsible stewards of wealth. I hope this gets you thinking as much as it did for me. Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello!
I recently answered some questions for an investor who is looking at buying a property with an illegal(non conforming) suite.
Basically, these types of properties offer higher Cashflow and they can be purchased for similar prices as normal single family homes. Risks include, if caught, big renovation cost to make legal, or ripping out the suite and losing Cashflow. Solutions if caught include: have a bigger than normal reserve fund, rent as whole house for less Cashflow, make applications to city and complete proper renovations, sell property traditionally, rip out kitchen and rent to students by the room to replace Cashflow , sell as rent-to-own. Until next time, About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello loyal readers! The above photo was what I found when I Googled “nightmare tenant” and if you click the photo you will see that poor landlord’s story. But the real inspiration for this post is from a recent conversation I had at the great REIN event 2 weeks ago. A fellow investor shared a Nightmare Tenant story with me he just finished going through, and unfortunately when you invest long enough, mistakes can happen. This particular tenant had not payed rent for 2 months, blasted the heat(doubled the utility bills from 300/mo to 600/mo!) so the downstairs tenant had to open the windows in winter to keep from suffocating, was harboring a criminal family member so the police had to be called, and trying to file grievances with the RTB with blatant lies about the condition of the property in an effort to get a decision from an arbitrator that supported her with holding rent until the “issues” were fixed. Keep reading to learn more about how this investor dealt with the problem.
This investor is a seasoned business owner, and his only mistake in getting this terrible tenant was that he is terribly busy, and he trusted his long term basement tenant to rent the upstairs. The basement tenant had no experienced in screening people properly, and unwittingly rented the unit to this professional tenant who undoubtedly moves from place to place and lives largely rent free thanks to her schemes, using landlords as a revolving line of credit. The application was full of red flags “$100,000 income, self employed, no previous references” that should have merited more scrutiny, however on the surface this nightmare tenant looked great, smiled nicely and was nicely dressed and presented herself like a “young grandmother.” The investor I spoke with was quick to act when things went wrong, a credit to his resolution and character. Instead of hiding away and curling in a little ball, he immediately served eviction notice for non payment of rent, which she disputed on the grounds of the “repairs that needed to be done” in a 40 page document, 30 of the pages were photos. She went so far as to take a photo of a tree “that will one day grow over the eves and plug them, and we will get water on us as we walk to the door.” The arguments were ridiculous, and full of lies, such as verbal promises that were never made, however this nightmare tenant knew that if she put up a bit of a fight, she might be able to stall things and live for free a bit longer. She even included a bill for her time to make up these lies, and a receipt for photocopies, expecting to be paid for these “expenses.” The investor prepared a professional response, disproving each allegation methodically, and served the nightmare tenant as required, via the complex timeline and method the RTB requires. A phone hearing was scheduled for about a month later. The hearing date came, and the investor held his ground and got an RTB decision in his favor to have her removed, however not before losing 2 months rent, and an expensive renovation as the nightmare tenant left the place in an absolute mess, destroying the carpet throughout, and leaving garbage everywhere. This preventable mess will cost $6-10 thousand, wiping out the profits for a good portion of the year. Even the most seasoned investors can make the mistake of letting a bad tenant in, unless they methodically follow a proven system, every time. I have since shared my best practices and forms with this investor, and he said he plans to use them once the renovations are completed and its time for a new tenant. If you have any comments or stories about your experiences with tenants, I would love to hear them. One day I will share my Nightmare Tenant story. I learned some valuable lessons, and if you ask me nice I will be happy to share them in a future post ��
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello!
With all of the fiscal uncertainty throughout the world, it seems that there are many people pitching investment opportunities. I have been asked how my investment strategies are safer than others. Here are the answers.
Firstly, real estate is a hard asset. Your money is secured by the physical structure you can go look at and touch. It is simple, in that people need to live somewhere, and almost everyone has experience in renting. From a Hotel room, to a one year lease, Real Estate renting is a concept countless people have experienced since the beginning of time. "Step 1: you invest in a building. Step 2: people rent from you. Step 3: you get a return on your investment" Seems simple. It is. But, when comparing real estate investment opportunities, things get more complicated when variables are introduced: ie. Rent increases or decreases, Mortgage rates, tenant pool, vacancy rate, and Appreciation. Secondly, I am a proponent of conservative projections. Many Real Estate projections can be deceiving due to the countless combinations of ways that salesmen can manipulate a prospectus. A higher looking projected return is desirable for salesmen who want your investment money. One of the most misunderstood pieces around Real Estate projections is Appreciation. Rents for an area can easily be verified, interest rates are common knowledge, but the Appreciation variable is largely a mystery. Appreciation can also make a dismal investment a home run, as a loss in value can turn an otherwise great investment sour. My investment methods support my S.A.F.E. business model, and I prefer conservative estimates, especially with Appreciation. On Appreciation:I find when doing real estate projections, some investors use high Appreciation numbers, perhaps because of their belief in the strength of their local economy. Perhaps they do it for less honest reasons like the the salesmen I mentioned before, who are prone to be overly optimistic just to make a sale. While the most conservative projections would not include Appreciation at all, it is not simple enough to disregard Appreciation when looking at real estate projections. Appreciation must be accounted for in a long term hold, such as a holding period of 5 years or more. In some years real estate prices may go up, and some years down. Indeed, throughout even in a single year prices and sale volume are generally lower in winter than in the spring. The long term trend for Real Estate is to increase in value. There is lots of evidence to back this up. Ask anyone who owned a property in the last 30 years what happened to their value long term! The fact is, comparing buy-and-hold real estate to another investment simply would not be accurate without accounting for appreciation. "What is a fair target for appreciation?" Because I like to do my numbers in a conservative manner, I peg appreciation in my projections to the Bank of Canada’s target for inflation. Here is why I calculate Appreciation as a function of inflation. Inflation is fact of life in a capitalist, democratic society, and governments do their best to control inflation to make sure the economy grows in a healthy way. In making the rate of inflation my target for appreciation, my projections conservatively account for appreciation of real estate, without being overly optimistic. Since Real Estate is a hard asset, all things being equal it will increase in value at at the same rate money decreases in value. This reasoning does not take into account the laws of supply and demand, however when buying in town such as Kamloops with strong economic fundamentals, and using this method to predict appreciation is the most conservative way possible without discounting appreciation altogether.
The above graph shows inflation rates for the major economies of the world since 2000. As you can see, the Bank of Canada’s current target rate of 2% is below what appears to be the average inflation rate throughout the world. Of interest to my readers who watch China closely, you can also see how China’s inflation rate is all over the map, and to me this indicates that China is artificially influencing its currency, inflation rate and other factors of its economy. Notice how the Democratic Economies have a much more stable inflation curve :). Where do you think Canadian inflation is headed? If you are an investor who is searching for cash partners, how do you calculate Appreciation for your local market? I would love to hear from you.
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
WestJet typically inserts itself into growing markets. The fact that WestJet is increasing Kamloops to Vancouver routes, speaks for their confidence of increasing demand. Read the full story here. When big companies start investing big money in an area, it’s worth taking notice!
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Kamloops enjoys a lower municipal tax then many other BC cities.
Among similar sized cities, Kamloops ranks near the bottom for the amount of taxes paid per person($609/year). Lower taxes makes things more attractive for new businesses and new people to move here. More people means more housing demand, which means higher rent and strong Real Estate prices. Yet another reason to Invest Kamloops!
Until next time, About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello!
I just returned from a thought provoking talk by Kevin O’Leary at Thompson Rivers University.
Kevin is best known for his sharp tongue in TV programs like Dragons Den, Shark Tank and the Lang and O’Leary Exchange. Kevin had partnered with DW Page Wealth Management to bring together a crowd of 400 people at TRU to talk investments(mostly why O’Leary Funds are awesome), and all proceeds($8000) from the event were donated to the Kamloops SPCA. Kevin’s controversial style came through a couple times, like when he was talking about emerging markets (lots of babies pooping in India, so lots of diapers to sell, etc… ), and the security of Senior Floating Rate Loans(if it was legal I would take your children as collateral too). Despite his abrasive style that did get some laughs, this multimillionaire(net worth estimated at $600 million) had some gems of wisdom:
– he now follows his mom’s advice: don’t spend the principal, only spend the interest(ie only invest in yield)– there is no way to know the value of Facebook, Twitter, RIM and other stocks that don’t pay dividends , so he doesn’t buy them– people these days are very risk adverse compared to 2007– people want preservation of capital and then some yield– people are not as demanding for growth and are risk adverse
"Capitol preservation and income is more important to many people than the expectation of growth."
Investment Principals Kevin shared a story and his three guiding principals. He spoke about his mom who died 6 years ago and he was the executor of her estate. She had a secret account that she kept from both her husbands. It was a 50yr old portfolio: 50% bonds and 50% dividend paying stocks. Her 50yr old portfolio beat everything(all other financial products). Take away: don’t buy anything that doesn’t pay dividends. Also three main rules for financial products: 1. don’t have more than 5% of your portfolio in any one stock/investment(including O’Leary Funds)2. don’t have more than 20% of your portfolio in any one sector3. 50% bonds and 50% stocks is a good portfolio mix
The Pitch: Promises A great deal of time was spent describing a little known financial product called Senior Floating Rate Loans. There was a great deal of technical information and jargon in this part of the presentation as Kevin sped along. I have passed the Canadian Securities Course, and am an avid student of financial markets, and I must admit I had a hard time following the presentation. I even audio recorded some of it to review later(although I did not get the whole thing), and the information was certainly NOT in layman’s terms. Basically, Senior Floating Rate Loans are difficult to find/invest in, always offer the same yield regardless of interest rates, and people who hold these loans are first in line to get paid if anything goes wrong with the borrower. Kevin spoke about O’Leary Funds and described them as: 1/3 Senior Floating Rate Loans 1/3 Canadian Corporate Bonds 1/3 Dividend paying stocks Stated yield over 2.8 years was 5.8%.(neglected to state upfront 3% advisor fee and dismal performance pre-2011).
At 5.8% yield it would take 12 years to double your money! The Pitch: ProblemsKevin O’Leary’s advice was definitely slanted toward selling his product, and included several plugs for Manulife Financial, his host for the evening(who will gladly sell you O’Leary Funds). The presentation was geared exactly toward whom it was marketed to: people with $100,000 to invest who are 10 years or closer to retirement. He predicted interest rates will go up 2% in the next two years and reminded the audience “if rates go up, bond prices go down.” A nice injection of fear to an audience who likely hold a lot of bonds due to their demographic. There was promises of “safe” yield without any growth, and 5% annual ROI this was presented as acceptable. Between the advisor upfront 3% fee and 2% inflation, you make nothing with a 5% yield! And how “safe” do you feel when your advisor is getting paid before you! No matter how well(or poorly) your investments do?!? Kevin on Real EstateI asked Kevin what he thought about cash flowing real estate. He answered that if you have some, great, hold onto it. If you are looking to get in, be cautious. Real Estate transaction costs can be up to 12%, and it will take a long time to make this back. He said real estate will stay flat for the next 5 years, but conceded that he could be wrong. He used the example of a first time homebuyer in Toronto getting into a condo and barely breaking even five years later because there may be no appreciation, and it would take that long to overcome the realtor fees/taxes lost upon a sale. This is hardly an example of cash flowing real estate with a tenant paying the mortgage, and was basically a weak attempt to make O’Leary Funds look better than direct ownership of rental property. Furthermore, advice to avoid real estate contradicts some of his own statements to Real Estate Wealth Magazine in August 2013.
Conclusion I agree with Kevin’s presentation on a few points: – Invest only for yield(spend the interest, not the principal). -Gold is useless but fun to look at and set on your table. It doesn’t produce anything. -Worry about yourself, don’t count on the government to take care of you. – Ignore celebrity, focus on the numbers.
Kevin closed his presentation by saying “If you can come up with a better way to make 5.8% I will give you my money. ” I propose direct ownership in Real Estate as far safer with higher yields(easy over 5.8% per year), AND a great chance at capital growth. So Kevin, give me your money! You will be happy with the ROI I promise you.
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello!
I was recently speaking with a potential joint venture partner. When I showed him the expected returns, he said 10% ROI sounds too good to be true! Have to admit, I was unprepared to answer him. I guess as a real estate investor, and doing this for several years, double-digit ROI has become the norm for me. I have spent some time thinking of an example to best illustrate this, and the best example comes from real life.
Consider your own home if you are a homeowner. You likely purchased it with 25% down or less, and used a mortgage for the rest.
DOWN PAYMENT + 25 YEAR MORTGAGE PAYMENTS(average length of a mortgage) = FREE AND CLEAR HOME So; 25%(down) + 75%(principal)+ 50%(bank interest) = 100% free and clear To calculate ROI:
ROI = 100% free and clear – (25%down + 75%principal+ 50%interest) (25%down + 75%principal+ 50%interest) = -33%
Assuming home values did not change in 25 years, purchasing a home and living in it costs far more than what it is worth. NOT a good investment. Now consider the formula for an investment home: 25%(down) + 0%(principal and interest thanks to tenant) = 100% free and clear So ROI formula: ROI = 100% free and clear – (25%down + 0%principal+ 0%interest) (25%down + 0%principal+ 0%interest) = 300% On this rental property, you made %300 ROI. Divide by 25 years to pay off mortgage and you have 12% ROI per year. So there you have it. "With real estate investing, double digit returns are not only possible, they are INEVITABLE." This formula gets far more powerful when you start to consider appreciation, positive cashflow, and forced appreciation(renovations that add value). If you want double digit returns to become a normal part of your life as well, please give me a call, private message, or leave a comment below :). Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello!
"British Columbia appears to be reaching the end of its pricing correction and housing starts will stop declining. Housing starts will post moderate and sustainable growth beginning in 2014." Genworth Canada recently commissioned the Autumn Metropolitan Housing Outlook report. This report basically says Canada’s housing sector is in recovery and will be posting modest growth. Genworth is a private mortgage insurer, like it’s public counterpart CMHC. Just like all insurance companies Genworth wants to collect premiums without paying out any losses. To that end, Genworth spends lots of money on research of the markets where it is insuring, including this 72 page detailed report. The following graph is the report’s estimated future value of average property by city.
Average prices are expected to hit the peaks experienced prior to the 2008 Global Financial Crisis by 2017. Kamloops was not featured as this report focused only large cities, however we can infer that since prices in the rest of the country is forecast to rise, Kamloops will as well. Bottom line: there will be no “housing crash” in Canada, BC, or Kamloops. Instead we will witness a steady growth in prices. If you have any questions or comments, please message me or comment below! Until next time, About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello!
. As you can see I had a great time with REIN this weekend in Coquitlam. I even got a photo with Don Campbell, the founder of REIN and author of eight awesome books, all of which I have read. Click here for a you tube video where I briefly explain why Kamloops will see appreciation in the near future. Until next time, About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello!
My business cards are printed, my shirts have been made, time for a great weekend of raising capital. If you know anyone looking for a secure return on investment, please check out InvestKamloops.com.
here is a great shot of my favorite JV partner Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello!
If you can’t tell who is up on stage, it’s because I was an hour late(Coquihalla was very snowy) and had to sit at the back of the room tonight. I did however get there in time for the keynote speaker. There was some very powerful words from this man, thought provoking and inspiring.
This speaker was W. Brett Wilson. If you haven’t heard of him, he became famous from CBCs Dragons Den, but he was a success far before then. Brett talked about his time on the show, but also of his impressive career as an investment banker in Calgary, and of his many investments including oil, gas, coal, power, a recent purchase of EIT Income Fund, and many Real Estate projects. He spoke at length about land development and income producing buildings in Vancouver, Saskatchewan, Whitehorse, Kelowna and Calgary areas. Brett said he is stuck with offloading his development properties, and is focused on acquiring 8 income producing properties(must be impressive sized properties for a guy worth $1.5B) and finding good managing partners to take care of them. I wasn’t able to get a close up photo because Brett was swarmed right after his talk, then quickly ushered out before I could corner him, but here is a great shot of his book.
I have already read my copy from cover to cover, so this one will make a great Christmas gift! One of Brett Wilson’s most profound statements tonight was: "Words Have Meaning" Brett went on to explain that he is not a cancer “survivor” but a cancer graduate. He said that he has his Bachelors degree in cancer and he does not want his Masters, and words to the effect of “but if that bastard comes, I will graduate again.” Very inspiring since my own father is now working on his Bachelors degree as we speak(keep it up dad)! Brett offered three takeaway Core Life Courses that should be part of every high school student’s curriculum:
I won’t spoil the content of Brett’s book by elaborating, but suffice to say there is plenty of wisdom here. However, on philanthropy, there was a couple important take away messages. Again stressing that Words Have Meaning, Brett said that the common idea of corporate social responsibility is mislabeled. Corporate Social Opportunity is the correct term, and he has found that the relationships cultivated through generous giving gave him a bigger ROI than any other investment in his lifetime. One last message was a great marketing tip: Donate money wherever your biggest competition donates. The value of blending brands by having your name beside theirs is immeasurable. One thing I know for sure. When a billionaire speaks, you listen. Thanks Brett for giving your time at this REIN meeting, and I will be digesting your talk for a long time! Until next time, About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Is it “mean” to raise rent? I would like to share a story with you to help frame the answer to this question. I purchased my first stand-alone rental property in early 2010. I still hold it, and it is an up/down duplex home in an older part of town called Brocklehurst. The existing upstairs tenants have been there for over two years. The basement tenants had been there for over three years. Combined, they were paying approximately $500 under market rent. ($900 and $700 respectively, should have been $1250 and $850). When we purchased the place, I planned to quickly raise the rents so the property would Cashflow as per the nice calculations I had projected. Using Market rents instead of current rents was a rookie mistake, and boy was I in for a lesson…. Each set of tenants had nice vehicles parked outside, had pictures inside their homes units of nice destination holidays, and had other toys: downhill bikes(worth thousands), downhill ski equipment, more(and better) power tools than me, RVs, and boats. It appeared to me they were living a very comfortable life. When I had a meeting with them upon purchasing this investment, I stated my intention to raise the rent to market. There was shock and resistance, as if I was insulting them. This is understandable as no one likes to pay more, however I encouraged them to purchase some property and build equity for themselves rather than fritter away their money on depreciating toys and holidays. My intentions were well received by the upstairs tenants and we compromised on a rent of $1100, until they moved out within a few months to a newly purchased, beautiful piece of property out in the country. I was however met with a large amount of resistance by the downstairs tenants, who after three years of subsidised living, were not very keen to let go of their extravagant lifestyle. Shortly after we discussed raising the rents, they even purchased a brand new Toyota car! I eventually had to take the downstairs tenants to court, and I was granted my rental increase in gradual increments up to $950 over almost a year, $25 increase per month. The downstairs tenants waited out the rental increased, then purchased a beautiful home in the well established neighborhood of Dufferin. They even purchased a home with a basement suite, a very smart thing to do, as now their cost of housing is less than the subsidised $700 they were paying me to begin with! Fast forward to Nov 2013 – for a few thousand dollars in renovations/updating(and many hours work), I now rent the upstairs of this duplex home for $1460, the downstairs for $1110, an RV spot for $30/mo, and a business space rented for $100/mo. In the end, the rents were raised, and the existing tenants went out and purchased their own houses. Although at the time it may have been uncomfortable scenario (both for me putting pressure on my tenants, and them dealing with the landlord raising the rents), bringing the rents to market afforded me a phenomenal cash flowing investment(eventually), and my tenants were able to purchase homes themselves. The pressure that I applied helped my tenants move out of their rut of subsidized living, which was absent of building any equity due to frittering away their money on indulgences. I know what you must be thinking.What if these tenants couldn’t afford rental increases? My answer is that there are many government programs that exist to support low income tenants, as well as robust tenancy laws to protect tenants from predatory landlords. Is it mean to raise rents? I say NO, it is not possible to be mean in Canada. Until next time, SamSam@PerrenProperties.com
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
I visited the tenants from my newest purchase earlier this summer for the first time since they moved in. I was there to remind them about the strata Bylaws (Neighbors weren’t happy about a car repair that left a fluid stain running down the parking lot).
I expected an unpleasant meeting, and it turned out….
…to my surprise, very positive. They told me the stain would be corrected/cleaned within 24 hours. They also proudly showed me a kitchen tap they replaced, the back yard all cleaned up, and a broken kitchen drawer they would take care of. They had also dealt with getting new blinds, an ant problem, and cleaned out basement reno leftovers I had left behind this summer. Issues like this are normal after a purchase until the property is “normalized,” and it was sure a nice surprise to learn that I did not have to deal with it. This led my thinking into a gratitude rant of ways you know you have great tenants:
Before
After This situation proves to me how important proper screening and relationship building are at the beginning of a tenancy. It just makes all the rest soooo much better. I will talk more about screening and relationship building in a future post, if you remind me! Until next time, About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
"200 jobs coming to Kamloops at end of 2013" Here are some recent photos of the progress.It looks like they will meet this targeted opening date , but it might be tight.
Sandman is also building one of it’s less luxurious hotels near the W Trans Can Hwy.
When there are holes in the ground popping up all over the place, you know there is big money being invested. Big money can also be smart money, so it is worth paying attention. Until next time, About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Average Price of homes sold last month are flat(-$4,500) compared to the same time last year. Volume of sales is up and number of listings are down, my wager is that this will lead to an upward pressure in prices.
I will be monitoring the market to see what happens but it looks like business as usual, slow and steady/flat market with signs of upward pressure. Here is hoping the equity spike will be here soon �� Thanks to Scott for providing me these monthly stats! Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
For the 6th year in a row, TRU will receive funding for skilled trades positions. 85 seats for Kamloops’ TRU college campus was announced for this school year by Advanced Education Minister Amrik Virk today. That means at least 85 more renters ��
Students make up a large part of the Kamloops tenant pool, and with the university and college perpetually expanding, I always have a few students in at least one of my rentals. Students can be great tenants if property managed, and student housing can be very profitably if done correctly. Make a mistake and rent to the wrong group however, and you could find yourself in quite a mess. Stay posted to learn strategies of renting to students in a future post. I will also include great tips for renting to international students(hint: it’s not as difficult as it sounds ). Until next time, About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
"Kamloops is poised to access new markets within the next 18-24 month thanks to the new Free Trade agreement with the EU." New markets = more exports = more jobs = more housing needed.
Kamloops’ economy has a large representation in all trade to the EU represented in this graph. More demand for Kamloops’ products is a good thing; it will lead to more jobs which leads to higher rent and home prices. Housing is already in high demand. Kamloops rents are very high(similar to LMD averages) but home prices are 1/3 of some LMD averages. More jobs to the region will put more pressure on the supply, and builders will not be able to keep up, even if they can find the room to build within Kamloops’ challenging landscape. Higher rents are a foreshadowing impending higher prices. What I know for certain is this amazing buying opportunity will not last forever. I am preparing for the next equity spike that is just around the corner. Are you? Until next time , About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello!
– Coast Hotel -This $9M renovation is one of many recent Hotel projects in Kamloops. This project hits home for me because one of my tenant works as a server for banquets. She says it is very busy with tons of overtime, and she is proud of making great money. Other recent/ongoing hotel projects include the construction of 2 new Sandman brand hotels, the downtown hotel upgrades , the new North Shore Holiday Inn, and many other projects. Maybe these major chains know a secret the rest of us don’t?
I don’t believe there are any secrets, if you know where to look. These hotel chains are simply doing what makes good financial sense, by using the information at their disposal. Hotel chains have entire teams of analysts working to decide where best to invest, and have chosen Kamloops as a place to grow their money. What does that tell you about Kamloops’ economy? It tells me:
To learn what opportunities exist for you, browse my blog for tons of FREE information on how Kamloops is growing, and how YOU can benefit. Think of this as your own personal team of analysts, without the huge bill �� Until next time, P.S. Don’t forget to subscribe to get the latest updates on Kamloops’ economic fundamentals.
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello! I just got back from mom and dad’s place in northern Alberta where my brother and I continued to work on installing their basement suite. The recent oil boom caused such a shortage of skilled labour that I had to install the cabinets. Usually I hire a pro to do this kind of work, but everyone we called said we would have to wait until after Christmas!
I put in the cabinets in 2 days, a lot longer than the 1/2 day we budgeted for, but they look pretty good I think, and mom is happy so that’s all that matters �� The labour shortage here made me sure glad to live and invest in Kamloops! The huge trades program at TRU is pumping out skilled labour, ensuring there will be affordable trades people to get my investment property rent-ready whenever I need. I will never sit vacant waiting for a contractor, or take forever doing the physical work myself. Of course working with my family on this project was a pleasure, but it would get old fast if my rental properties were in the middle of the oil boom. Plentiful skilled trades is yet another reason to Invest Kamloops! Until next time , About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
What do you do when your tenant doesn’t pay rent for reasons beyond their control, reasons which are heartbreaking? This is a difficult problem for many landlords who feel they must choose between what appears to be conflicting interests: compassion and sound business practices.
For landlords who wish to make a difference in their communities, it can be challenging to find ways to be socially responsible without compromising business interests. After all, as an investor I have a fiduciary duty to my joint venture partners. They and their families depend on the returns I generate so I cannot stop efforts to maximize profits. While it is necessary as a landlord to protect business interests, as a human being I find it difficult evicting someone who is going through tough times, further compounding their hardship. The only other option it seems is to lose income by letting the tenant stay despite non payment of the full rent. In the distant past, a landlord who wanted to help their tenants through a financial hardship (ie. a job loss or illness) was forced to take the burden of the financial shortfall on their own shoulders. This option was not good for anyone as it would create financial dependency for the tenant (the landlord is a nice guy, so I don’t have to try and improve my situation), and would negatively impact cash flow and drive down ROI. I have found two programs that may solve this heart vs head problem, and they were not well-known to me before today. You may find them interesting as well:
This was established in 2006, and provides low income working families and seniors a rental subsidy. Landlords can encourage tenants to apply, and are able to provide quality housing to low income people while still maintaining market rents.
Here is yet another way that I as a landlord can ensure win-win situations with tenants, even when tenants cannot fulfill their fiscal responsibility through no fault of their own. Tenants can obtain funds for rent in the event of an emergency. The funds are provided on the basis of a low interest loan that is repayable. This Kamloops program is perfect for those good tenants who get in financial trouble, but who if given some time, will recover.
In Summary: If you think that by keeping rents low or ignoring a missed rent payment that you’re helping the community, think again. You’re in fact only “helping” one person. You may in fact be enabling ongoing financial mistakes! It is more prudent and effective to keep rents paid in full and on time at market rates. This creates higher returns, and funds the maintenance required to keep properties and neighborhoods vibrant. Profits can also be donated to worthy causes such as the United Way or Habitat for Humanity. When funding is funneled to worthy programs such as these, there is a much larger positive impact than subsidizing only one tenant. Plus you get a tax receipt! This is a true win-win scenario! Real estate appeals to me as an ethical wealth creating business, and the Rent Bank and Rental Assistance programs are yet another example of how landlords can be socially responsible business owners. If you have any comments or questions I would love to hear them, so please post below �� Until next time, Sam About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Last week, we finished a walked through the answers to the questions:
The next few weeks will be dedicated to answering the question: Why Kamloops? After a thorough examination of the economic fundamentals of this city, I think you will agree this is a prudent place to have your money work for you. To start, here is a quick introduction of this city:
A Brief Introduction to Kamloops
Due to strong economic fundamentals, Kamloops has been recognized as the NUMBER THREE city in B.C. for Real Estate Investing by Don R. Campbell from the Real Estate Investment Network (R.E.I.N.). R.E.I.N. is often regarded as “the” source in Canada for unbiased real estate information. Mild Winter, Hot Summer
tubers on South Thompson River
Tourism and Sports Hub Thanks to the climate and geography, Kamloops has naturally become an outdoor enthusiast’s paradise. There are over 200 lakes within 40 miles of downtown, and world class hiking, mountain biking and skiing are readily available. Kamloops is a golf mecca, and has become the hottest market in Canadian golf, with 7 unique and award winning courses within a 1/2 hour drive. A member of the Austrian ski team at Sun Peaks resort in Kamloops .
The city of Kamloops has branded itself as Canada’s Tournament Capital, and in 2011 hosted 109 tournaments. Kamloops offers athletes and spectators over 200 restaurants, 3000 hotel rooms and world class sports facilities. Kamloops has successfully hosted hundreds of Provincial, Western Canadian, National and International events for 20 years, including the B.C. Lions training camp (2010, 2011, 2012), the Chinese Olympic team speed skating practices since 2009, and the Austrian ski team since 2003.
KAMLOOPS RECREATION
Various tournaments, along with Rocky Mountain Vacations, bring in over $26 Million/year to the local economy. Thanks to the city’s appeal, Kamloops also hosts large conferences, and the hospitality industry employs 9% of the workforce( about 7,325 people) Hub of Major Transportation & Utilities Infrastructure
Kamloops is nestled in the Thompson Valley, surrounded by hillsides formed during the Ice Age. Due to the naturally occurring path along the valley bottom, and seismic stability, Kamloops is host to major provincial transportation routes and infrastructure including pipeline, highways, rail, and electrical routes. Pipeline: The Kinder Morgan Trans Mountain Pipeline System has a distribution centre in Kamloops that routes refined products from Edmonton for local distribution. This contributes to some of the lowest gas prices in B.C. A proposed twinning of the Kinder Morgan pipeline would further benefit Kamloops’ economy. Rail: The most cost effective way to move a large volume of goods is still by rail, and over 50 C.N. and C.P. Rail trains pass through Kamloops everyday, employing about 540 residents, 1% of the Kamloops workforce. Both railways service Kamloops, one of only two cities in Canada with this distinction. Electrical Utility Route: In 2005, B.C. Hydro identified Kamloops as an area where growth and increased electrical demand may pose a challenge. B.C. Hydro rose to the occasion through several strategies, including the recently implemented Smart Meter initiative and this has resulted in some favorable market conditions. Because of some of the lowest costs for electricity in North America, and the seismic stability of the region, Kamloops attracted a $75 Million investment by Telus in a new data centre.
This centre will be completed in 2013, is creating 200 construction jobs, and will support 75 full time jobs. The Telus project joins the existing Q9 data centre, which was completed in 2010. Kamloops is an attractive place for further high tech investment, especially with Thompson Rivers University representing a source of skilled workers, and the city’s appeal as a place to raise a family.
Highways: The Kinder Morgan distribution centre contributes to lower fuel prices, a boon to the constant flow of traffic that travel the highways. Transportation costs have been further reduced by the removal of the Coquihalla toll in 2008, saving trucker who make weekly round trips $4,800/year. Further benefiting highway traffic, $700 Million has been spent on the Trans-Canada Hwy between Kamloops and the Alberta border since 2001. Highways that intersect at Kamloops include Coquihalla Highway 5, Yellowhead Highway 5, and Trans-Canada Highway E and W.
A typical weeknight at the Kamloops Travel Centre, there was 26 Semi trucks parked while drivers ate and rested
As the third largest city in B.C. outside the Lower Mainland, Kamloops offers companies competitive development and business costs. Easily moving goods between customers and suppliers is a competitive advantage, and there was 5,512 businesses registered in 2011.” In ClosingIf you recall: Prosperity = Wealth + Fulfillment If “wealth” is what’s missing from your formula, signup for weekly updates. Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Last week we saw how Canada will out preform the rest of the world economically for the next 50 years. This week I will explain why I believe BC is the best place on earth(for Real Estate Investment).
Firstly, British Columbia’s is one of Canada’s top performers in terms of G.D.P. growth since 1989. Remember that G.D.P. growth is the first signal of future real estate growth. Second, since 1989, B.C. has been one of Canada’s “winners,” helping increase Canadian average G.D.P. growth.
According to Stats Canada Nov 19, 2012 publication “The Daily,” G.D.P. growth in B.C. increased 2.8% in 2011: Economic output advanced 2.8% in British Columbia in 2011, following 3.2% growth the previous year. Business investment increased 9.3%, driven by outlays on non-residential structures and machinery and equipment. Business investment in residential structures was up 3.4%, more than double the pace in 2010. Exports rose 4.9% and imports 6.6%.
Just watch the “news” category of my website where I will detail all the benefits coming to B.C. as they unfold. Next post I will be unveiling my research into the Kamloops economy and detailing the many reasons I invest here.
Until next time, About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
This is a meaty topic, but one that deserves close attention. Economic fundamental can be boring, until you learn how they will effect you and your family. The following economic fundamentals help answer the question posed last week: Where should I invest in Real Estate?
Consider in selecting a country, that Canada is poised for sustainable growth, is a pillar of financial stability among uncertainty, and has what the world needs, namely; food, fuel, fertilizer, forestry and precious metals. There are abundant opportunities in our own backyard, and as residents we have a distinct advantage over outside investors.
Canadian house prices have increased for 30 years. Also of note, the RBC Housing Affordability Measure, released quarterly since 1986, depicts that even with the huge increases in house prices in Canada, ownership costs as a % of household income remain relatively flat. Because income increased with the cost of home ownership, it is no more expensive to buy and own Real Estate now than it was 26 years ago.
Furthermore, although average price has dramatically increased in Canada, dwelling price/income ratio in Canada still compares to other countries, sitting at around 4.5x income. These indicators show that Canadian prices have increased for many years, that Real Estate affordability is the same or better than Canadian historical levels, and that Canadian prices are on par with most of the world. This evidence indicates room for future growth.
Canadian Historical Real Estate Appreciation: The long term trend for Canadian Real Estate is to increase in value, and for reasons previously discussed, there is reason to believe this will continue. Although historical returns is no guarantee of future performance, it does lend perspective when trying to determine how much things might grow. Below is the Teranet – National Bank House Price Index which charts real estate values in 11 major Canadian cities from 1999-current. As you can see from the Oct 2012 period, there has been a 3.43% increase in national real estate values since this time last year, a -0.25% decrease in values since last month, and an overall increase of 3.84% this year to date.
Teranet – National Bank National Composite House Price Index ™
Index Period – Oct 2012 : Composite 11 Index Level : 154.59 © %change y/y : 3.43% % change m/m : -0.25% Year to date : 3.84% Historical Index Values – National Composite
160 140 120 100 80 60
Since 1999, national house values have climbed about 90 percent. 90% 13 years = about 6.9% avg. growth per year. (click“Methodology” tab this website for explanation).
It would be very nice to keep getting 6.9% growth per year, as that is an excellent return from most investments! But, with properly leveraged Real Estate(Fat Bear Strategy #3), even a much more conservative growth rate of 3% = 15% returns! Read on for an example on how this works: Assume $100,000 property with 80% loan to value(L.T.V.) mortgage = $20,000 invested.
If you had purchased an average Canadian property in 1999, with a mortgage for 80%, you would have realized an average of 35% growth of your money per year in appreciation alone!
But if it was “only a 3%” average increase in prices, you still would have realized 15% per year! Not too shabby.
In Canadian Real Estate, 3% = 15% ! This is a leveraged savings account, and no wonder this real estate thing is a “Fat Bear” Wealth creation strategy!
Since you now see why the OECD named Canada as the leader of the G7 for growth for the next 50 years, you will agree that Canada is a natural choice for a place to invest.
Unfortunately, there is no such thing as an “average Canadian property.” If you are going to buy Real Estate, you must choose a specific property, in a specific neighborhood, in a specific town, in a specific province, in a specific region, within a specific country. Although the average Canadian trend was great, there were properties and towns that were winners that brought the average up, and losers that brought it down. Read on for what’s next to see why the BC region will be a winner, and how it will overperform Canada’s already superior expectations.
Until next time, About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello! After yesterday’s post that completed the explanation of “Fat Bear” strategies, you should understand why Real Estate is such a powerful creator of wealth. But, can you identify the key thing you need to make it work? Like any business, real estate needs paying customers to sustain it, ie. tenants. So how do you know where the tenants will be? The answer lies in the following formula, developed by the Real Estate Investment Network, through over 20 years of research.
We can accurately predict that: Gross Domestic Product(G.D.P.). growth leads to Jobs, and in about 12 months, Population growth(in migration) to fill the jobs. More people means higher demand on rental inventory and higher Rents, as most people rent for the first couple years when moving to an area. About 18 months after G.D.P. growth, the increase in Rental Demand puts upward pressure on Property purchase demand and finally on prices.
If you buy only in areas where G.D.P. is growing, you will always have tenants to rent to, who later become buyers. Both are good for your real estate business! Check back for the next post to learn why Canada is a safe haven in the global economy and where Canadian G.D.P. is growing! Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello! Thanks to everyone for your emails and suggestions, I will be implementing them in the coming months. If you have any suggestions for future content, I’m all ears! Last post was about Real Estate as a hedge against inflation, today is about Fat Bear strategy #3, leverage.
In real estate, the greatest force is leverage. Because real estate is a low risk investment, there is plenty of inexpensive money available for mortgages. This makes it possible to purchase and control real estate for a fraction of the cost. At the time of writing, conventional loans are available for as low as 20% down at 3.99% interest for 10 years!
This means you can stretch your investment capital much further, and if you see below, you will understand why this is so important.
Now, suppose you held the investment until the value doubled, thanks to Inflation and Appreciation as previously discussed. If you sold your investment in each universe, this is what each of “you” would collect: Now that you can see the power of leverage, I would guess that you would prefer to live in a leveraged universe. I must express caution here though. There is such thing as too much leverage, particularly in an environment where interest rates are rapidly rising, and this will be the topic of one of my future blog posts. The other benefit of leverage(a mortgage) is you are getting someone else to pay for your investment. Even without any appreciation at all, at the end of the mortgage, your tenants have paid for most of an investment for you. The “Fat Bear” strategies clearly demonstrate to me why buy-and-hold Real Estate is the perfect investment. However, purchasing property just anywhere can be a recipe for disaster. It is important to know WHERE to purchase your investment to ensure all these strategies are working in your favor. Please continue reading for a Crystal Ball that shows you how to tell an over-performing property from laggard. Until next time, About the author: Sam Perren has helped dozens of investment partners acquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello! Yesterday we talked about the Fat Bear strategy #1, the multiple streams of income that make up a Real Estate meal. This post is about Real Estate as a Hedge against inflation, Fat Bear strategy #2. Let me divert away from real estate for a moment, because the following systems directly affects real estate prices.
I love living in Canada, and I believe in democracy and in capitalism. I am not the only person who feels this way, and it appears these forms of government and economics are here to stay.
Since democratic governments will be around for the foreseeable future, and since they must satisfy interest groups and voters or risk losing a re-election, there is constant pressure to spend money on social programs and infrastructure such as roads, hospitals and schools. Governments frequently go over budget and spend more than they collect through taxes.
Since governments cannot get all the money needed through taxes, or achieve a balanced budget through cuts, they must find a way to pay the bills. Governments are more fortunate than you or I, because when they run out of money, they simply print more!
What does this have to do with real estate? If you are familiar with the law of supply and demand(pictured), you know that an increase in the money supply causes existing money to be worth less. This is called inflation. The Bank of Canada(BoC), Canada’s central bank, is responsible for monetary policy and taking measures to influence the Canadian economy. The Bank of Canada’s policy is to keep inflation between 1-3% per year, with the target at the 2% midpoint. This target for inflation is the sweet spot where there can be healthy economic growth. Since the system we live in, and most of us enjoy, has been around awhile and shows no signs of changing soon, it is safe to assume there will always be inflation.
That means, at 2% inflation(the BoC’s target) if you leave $100 under your mattress for:
It will not be very nice if in today’s dollars you can dine out once or twice with your spouse, but years later when you have less energy to work and are living off your savings, you could not afford it at all!
Real estate, like many hard assets such as gold, tends to rise in value, at least at the pace of inflation. Real estate has the added bonus of increasing rental income. As inflation rises, income gradually follows, and people can afford more rent. In fact in British Columbia, the amount that rent can be increased each year is determined by law, and for 2013 the allowable increase is 3.8%. That basically sums up Fat Bear strategy #2, the hedge against inflation. Read what’s next for Fat Bear strategy #3!
Until next time,
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello! Last week, we talked about learning from those who have already done what we want to achieve. This week I will discuss the “Fat Bear” strategies of Real Estate, and why this is a chosen investment vehicle for most wealthy people. We have all heard of statistics thrown around like “90% of self made millionaires achieved their wealth through real estate.” I found it difficult to verify the data that supports the exact % of millionaires made through real estate, but the truth is that real estate is a cornerstone building block for the wealth of many “Fat Bears.” Lets take a look at a Fat Bear’s meal.
– a 2011 Deloitte report has 9% of top millionaires in the U.S. had over a third of their wealth in Residential Real Estate. For the top 1%, this is true for almost a quarter of their wealth. (even after the 2009 U.S. housing crash!) – there is about 1 millionaire per 13 people in the U.S., and 1 millionaire per 50 people in Canada. According to a National Bank Marketing Research and Market Intelligence report, the asset allocation breakdown of the average Canadian millionaires is as follows: – Business equity (28%); – Residential R.E. (21%); – Domestic stocks (21%) – Foreign stocks (11%) – Domestic bonds (11%)
I do not suggest real estate “because everyone is doing it.” Not ”everyone” is using real estate in their financial toolbox, and property ownership is not for “everyone.” However, the fact is that residential real estate represents a large part (21-44%!) of millionaire wealth, even after a huge crash. This means to me that the proper use of real estate is a “Fat Bear” strategy. Some features of the Fat Bear strategy of real estate investing are multiple sources of income, a hedge against inflation, and leverage. These elements, all within one financial instrument, are what makes real estate such a powerful creator and store of wealth. Today I will share the elements of a “Fat Bear’s meal” by talking about multiple sources of income(Fat Bear strategy #1), and tomorrow I will address the other Fat Bear strategies. Multiple Sources of Income are a Real Estate Meal In keeping with the theme of hunting for food, and thanks to the wisdom of a man I greatly admire, Mr. Thomas Beyer, it is helpful to think of the profit centers of real estate as a meal. 1. Monthly Cashflow Think of Cashflow as the appetizer of your Real Estate Meal. I only purchase properties that will Cashflow. That means rents cover ALL expenses (mortgage, taxes, utilities, maintenance, insurance, vacancy risks, renovations, management, etc…) PLUS a bit extra to build your “sleep at night fund.” Without Monthly Cashflow, you introduce risk into your real estate. A zero, or worse, negative Cashflowing property is not an investment, it is speculation. Speculation leaves one to hope values go up, so one can recapture down payment and holding costs. 2. Mortgage Principal Paydown This is the main course of your Real Estate Meal, and the biggest profit centre. Like the main course at dinner, it can be a bit boring(especially if I was the one cooking), but this is where you get most of your sustainable calories. Because you will be holding your property for 5 years or more, having someone else pay off your mortgage adds up to significant numbers. 3. Appreciation This is like dessert of your Real Estate Meal. Appreciation, or increase in value of real estate, receives the most attention because it is exciting, it is fun to talk about, and it makes great news stories. The reality is that although important, you can still have a satisfying meal without dessert, and you can still make money in Real Estate without appreciation. That being said, I like dessert, and I will go out of my way to get it, so the topic of appreciation deserves more attention. There are three main ways to increase a property’s value:
Check my next post to learn how Real Estate is a hedge against inflation(Fat Bear strategy #2), or download the entire report here. Until next time, Stay S.A.F.E.
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello! Thank you for taking the time to read my report. Before I begin, I would like to share some of the philosophy that guides my investment activities, since you may be wondering at my motives for creating this product(over 300 hours of research/work) and giving it away for free. Keep reading and this will become evident. By investing time in reading this special series of posts, you must be interested in creating wealth for a variety of good reasons:
But, will money and wealth alone give you all you need and want in life? The truth is no, it will not. Consider the following formula for Prosperity: Prosperity = Wealth + Fulfillment Now, what defines your Fulfillment is for you to decide. Each person is different, and there are many right answers to the question “what fulfills me?” Fulfillment is an individual journey, which I encourage you to pursue according to your aspirations. I would love for you to tell me about it! Wealth, however, is a tangible thing that is the same for everyone. Wealth is a real, unchanging element in the formula to Prosperity, and the ethical accumulation and stewardship of Wealth are noble pursuits. What is the best way to accumulate Wealth on the path to Prosperity? A compelling story by a powerful speaker, Richard Dolan, drove the message home for me. This is a story about a Canadian icon whom is feared, loved, and marveled at by many; the polar bear. I hope this story interests you as much as it did me…
What makes polar bears survive, when they live in arguably the harshest environment on earth, and the only thing that provides them enough calories to sustain themselves is the wary, and much faster seals? The obvious answer is that polar bears are great hunters. They break ice so that there is a large hole, and seals who are swimming under the ice will see the holes, and go up to get some air. The ability to hunt is a must for polar bears to survive.
Ever since the early Arctic explorers returned from their adventures, and according to native oral tradition, reports circulated of a polar bear standing over a hole, and it camouflaging itself by hiding it’s nose. But how does a polar bear know that it’s nose is black? How does it know that covering its nose would be effective in it’s pursuit of hunting a seal? Can it see it’s reflection? Maybe, but even so, how would the bear know to cover it’s nose? The answer is that polar bears are very adaptive learners.
If you were a skinny bear, what would you rather be?
A Fat Bear! So, what would you do? Observe what fat bears do! Why? Because – fat bears are obviously very good at hunting!
In real life, to get what we need and want, we must find out what the “fatter polar bears” are doing. If we adopt some of the same strategies, we can become just as good at “hunting”. So how are the “Fat Bears” creating Wealth and achieving Prosperity? Until next time, About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
Hello! This is the first of a series of posts that together will explain in detail why Kamloops is such a great place to invest. Specifically, a great place to invest in Real Estate.
Please read on and watch for new posts in this series every week. These posts eventually became part of a report on Kamloops for Real Estate Investors that is available for download.
The front page features a nice shot of the center of Kamloops where the North and South Thompson rivers converge to form the Thompson River which flows into Kamloops Lake, west of Kamloops.
The smaller photos are a sample of properties I have purchased since 2009. The shots of old Canadian Currency on either side of my pretty face have a special meaning to me. The $50 note(1975) symbolises my time in the public service as an RCMP officer, and is what helped me develop the S.A.F.E. principals I invest with. The $20 note(1969 and ’79) is from Moraine Lake and the Valley of the Ten Peaks. One of the peaks (Mt Perren) was named after my paternal grandfather Walter Perren, in honor of his contribution to developing Parks Canada’s Mountain Rescue Program. In case you were wondering, I got my rugged good looks from my maternal grandfather who was a farmer and a teacher, and a very good man whom I have the privilege of spending time with in my childhood. As you can tell, I have some high standards to live up to. I will endeavor to do so with a report you will find helpful and educating, in the spirit of my heritage.
Please check the next post for a story about polar bears that helps put real estate into context.
About the author: Sam Perren has helped dozens of investment partners aquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here.
It's the new year. I've decided to use this year to cultivate my already existing body of work and deposit it here to live on forever. I'll be focused on providing value for those who want to "follow in the footsteps" I wish had been laid out for me. When I was unsatisfied working in a job and wanted to go full-time as an entrepreneur, it would have been great. Buckle in, and let's have fun while I curate old content, and add in some new commentary that I hope will help you.
Until next time, happy investing!
About the author: Sam Perren has helped dozens of investment partners acquire real estate, representing over $16Million CAD in purchases with rental income of over $100,000/mo. If you'd like access to Sam's "deal of the week" please click here. To ask real estate related questions (or any other), click here.
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Estate Cycle.” The credibility of the authors is without question, Don Campbell has led the Real Estate Investment Network to be the most accurate predictor of which towns will perform well for the past 22 years!
Various techniques makes the polar bear a great hunter, and a popularly reported method is depicted by this bronze statue.
