State of the Doug

The geneological detective that I have engaged in Ireland has a copy of my grandmothers baptismal certificate. There have been many searches for the birth certificate, to no avail. But this is great news and raises my spirits.

I have put a great deal of effort into my final essay for my university course. We'll see how it works out.

Hard to stay debt free. But as a way of life it's all about choices. I owe $4500 from paying $1600 for the Ozzie Jurock seminar, and $1600 for the Real Estate Action Group, which is the monthly meetings. I consider it money well spent. The last $1300 is left over from topping up my RRSP. No regrets, but I feel strongly that I must be debt free so that is a cramp on my exuberance. It gets worse. I will be putting another $8K on my credit cards to complete the down payment of my new investment property in Edmonton.

Property plus time equals money. I have stated that I am going to diversify my revenue streams. In this vein I have an accepted offer in for a $150,000 wood frame 2 bedroom in Edmonton. Financing is in the works. I will put 10% down, of that $7K will be cash, and $8K will be on the credit cards. Mortgage payments will be $860, 5 year term locked in. Condo fees are $255/mth and taxes will be about $75/mth. It will be rented out to the manager of the building and he will act as the property manager on the unit for $825/mth. This leaves me with $365/mth shortfall. Not exactly a revenue stream :)

Which brings me to the subject of fear. I am commiting to pay $150K to buy a place I have never seen. I do not know the square footage, I do not know what floor coverings are in the unit, and I have never met or vetted my new tenant. I will fly there before the deal is closed and find out what I have, and have the ability to back out, up to a certain point. There are a ton of unknowns for me, in fact all of this is new to me. ALL great things in life are accomplished by people that overcome fear and take chances. I could have done more due diligence, in fact I should have. I will do better. Point is, I overcame my fear of the unknown.

I will pay down my debt and start saving a downpayment to buy a condo in downtown Vancouver this Xmas. historically prices are lowest at xmas. Buy in Vancouver you ask? I believe that if you buy at a reasonable price and are willing to hold long enough you cannot go wrong.

Got balls?

I started shopping. Edmonton is my desired location. I believe Oil prices will stay high. Therefore there will be much employment, hence housing demand.

Started doing searches on the MLS
After many searches I narrowed my criteria to two bedroom, $50K to $150K. The minimum was to filter out the mobile homes.

Only 8 listings. 2 were untenable. So I sent an email to each of the other six asking what the rent was. 2 responses (I have heard it's so busy there it's hard to get a realtor to stop and talk to you)

Here's the system. For an investor you want to have the renter cover all expences. Rule of thumb is the .75% rule. Multiply the cost of the property times .0075.

In my case 150000 X .0075 = 1125 This means if I can charge $1125/mth rent it should come close to covering the mortgage, property management, and taxes.

I have looked at renting.ca and Edmonton Craigslist and came to the conclusion $900 - $1000 was the rate.

Leaves me short a couple hundred bucks a month. Hmmm. Only 8 listings. 63% capital growth in Edmonton last year. Low vacancy rate. 3.4% unemployment.

Worst case scenario I eat a couple hundred bucks a month for a while. If the great depression comes I could afford to carry the rent.

Upside...to the moon Alice.

Called the realtor. Offer is in the works. End of June it should be mine. So in reality it's growing in value and I haven't even spent a nickel.

$1000 in the bank is $10000 to play with...

Harvey,

7K cash - 774 FICO - 30K Net Worth - 100K income - Extremely Motivated

Harvey I'm 49 and I need to get investing, now!

Help, please.

Doug

************

Hi Doug

Do you own a residence at the moment? Or will the next purchase be your residence?

If you are looking to buy a residence you have many options such as . . .

1. Zero Down mortgage means you can buy something up to about $500,000

If you are buying a rental property you have options as well . . .

1. 10% down payment means you can buy something up to $70,000

Buying a residence you are qualified on income not down payment.
Buying a rental you are qualified on both. Since your down payment is low the amount of the mortgage will be low.

I need to take a mortgage application over the phone to give you a better idea. Call me when ever you are ready or send me an email with your phone number and I will call you

PS: there is no fee. I get paid by the lender.


Cheers,


Harvey

Sent email to mortgage broker

asking for an appointment. Gathered all necessary materials like tax returns, credit report, pay stubs.

When I find where I stand I will start looking in the maximum range I can afford.

My Net Worth

Commit - Perform - Measure

is one of Ozzies many sayings.

I commited when I started this blog.

I have been performing by talking to everyone, learning through blogs/podcasts/forums. I decided I wanted a Real Estate mentor. This lead me to looking for a RE Investment Club, which led to the only game in town, the Ozzie Jurock umbrella. I ponied up my 1700 buck ante for the RE Action Weekend which is the ante for the RE Action Group, which is the investment club.

I feel that I got what I paid for. Access to "a team".

Mentor: Ozzie Jurock
Mortgage Broker: Larry McGuinness
Lawyer: Rick Ledding
Accountant: Navaz Murji

..and we can file this under measurement of performance to this point.

Back in the commit column we can add the 1500 bucks I just paid to join the REAG for 12 monthly meetings. I was undecided on coughing up the cash, considering I had enough info to venture a stab at investing, but at the end of the last day a guy mentioned that his sister had been going and had just entered her 2nd year. How'd she like it, I asked. Well, she has about 20 properties now, and she just signed up fpr another year...

I'm willing to take risks, to overcome fear, to pull the trigger. I signed up. It hurt, my CC debt is back up to 4K with the tail end of my RRSP contribution and 3200 that Oz gets.

Fortune Favors the Bold