Monday, 26 January 2015

I just bought a house for 800k, My 7 easy home buying tips!

I have purchased numerous homes now in my life, more than ten in total. Here are my home buying tips and my latest deal details.

 My 7 Home Buying Tips

1. Secure Financing, Shop Around!

 Shop around! Don't just go into the bank you are currently banking with and call it a day. Get people to compete for your business. Go to multiple banks, credit unions and mortgage brokers to shop for rates. Don't be afraid to ask for a better rate. Get lenders to compete with each other. Show them your current lending offers.  Whats the worst thing that's gonna happen, they say NO? Who cares! Move on to the next person. Makes sure you do this within a two week span so it doesn't affect your credit score too much. Multiple inquires of your credit will only count as one credit pull if you do it within a short period of time pending where you are from.



2. Find and Interview Real Estate Agents!

 I have been visiting vast amount of open houses this past year and kind of interviewing the realtors in the process. See if you vibe with their business style. See if they understand the market. Ask them questions you already know the answer too to gauge their responses. I knew two agents personally but I did not like how they do business and they were not a good fit. So even though I got along with them I did not trust their real estate knowledge and judgement. I want a killer on my side. Someone that will fight for me and do as I say. You don't want a yes man and someone just looking after their own interests.


3. See The Entire Market!

Volume is key. See as much as you can. Cast a wide net.  Don't rely on the realtor to pick the listings. Get on his alert systems for their MLS. Even though my budget was 800k and only consisted of 3 local areas I cast my net from 600k-950k in about 7 areas. Reason so is the more I see , the more I can compare. Also see whats available above your range. You never know as there are often price drops or the higher priced properties can be negotiated into your price level. Also keep an eye on past listings sale prices, this will further guide you on current market levels and comparable listings. After a while of looking you will get a feel of prices and value. You wont get this information by just lurking on your computer. You have to hit the pavement and look for yourself. You cant gauge build quality, neigbors, shortfalls and neighborhood by pictures online.


4. Make The Lowball Offer!

Business is business! Don't make a emotional decision. Stick to your plan. After finding a few places you like its time to dig deeper. I often give a place a look 3-5 times before I decide to make an offer. Also inspect the neighborhood and at different times of day and night. Don't worry about inconveniencing your realtor. That is their job, make them work for their commission.

Fair market value for homes often differ from their asking price. That is why it is very important to gauge the markets past sales and current inventory for comparables. Often new listings are wrongly priced. At times new listing are under priced and are snatched up within days. Other times over priced listings will sit for a months without an offer and they then resort to price drops back down to fair market value.

Always start low and put it in writing. It shows you are serious if its in writing. Sellers that have a place listed for a couple months with no offers will welcome any offer. You never know what peoples circumstances are. Estate sales, divorce sales, job relocation are all great times to make a buy especially when sellers are desperate to get their money out. Make your offer attractive by keeping it clean and not too many stipulations especially financing.


5. Negotiate Hard!

It is your money, so don't let your realtor dictate how negotiations will go. Yes feelings will be hurt by realtors and sellers but this is business. I always start with a low ball offer in writing to gauge the seller. This is where your realtor has to do some work. Their job is too gauge how motivated the seller is and their bottom price. Play it cool. Let time pass. If you don't like their counter I often will put a low ball at 2-3 other places to gauge them out. Be firm with your offers and ready to walk. Don't sway from your initial plan and don't let your realtor take you up more than you are willing to pay. Remember this : In Real Estate you make your money from your purchase and not your sale. So don't overpay for a house and don't become emotionally attached to it. Be ready to walk away from a deal if its not want you want price wise. Its amazing how many times I have walked away from a deal and then the next day or two the sellers realtor will call back caving into my price demands.


6. The Inspection

Very important part in buying a new home which often gets overlooked. Whatever you do , DO NOT use a home inspector your realtor recommends. Realtors will often recommend home inspectors that are just YES men that wont jeopardize the deal. You cheat yourself out of a solid home inspection that way. My advice is to use an independent home inspector. Often called deal breakers because in essence they give you the real unbiased outlook of the home you are buying. You do not want them rushing through the house. So negotiate the amount of time ( 5 hour minimum for a home 2500 sqft plus) and the price days before the inspection. On the day make sure before they start on how long they will be there and areas of concern inspected. I recommend being there the entire time the home is being inspected itself. Make sure they bring their ladder as the roof and attic must be inspected. A good home inspector will give you a detailed report with pics of all areas of concern and a checklist of all good areas. I have walked away from several deals in the past when the home inspection turned out areas of concern. If the inspection turns up some red flags you have another bargaining chip in negotiations. You can try and get the sellers to fix the issues or offer even less money to get the work done yourself.


 7. The Close and Possession

Once you are satisfied with the inspection and no major issues arise it is time to remove subjects. If issues arise then you can try and further negotiate your buying price lower. Make sure everything in the contract is fulfilled. If you like a certain mirror , shelf , audio system ,wine rack make sure it is included in the deal! Also put a professional cleaning clause in the contract as often people will leave their place a mess upon leaving.




The details of my deal.

1. Secure financing

I was given an early inheritance to put toward a rental property with certain parameters. It had to be close by to me, within 20 years old, well built and something that could fetch solid rental income. It was an all cash deal so I did not need any financing.

2. Find a Real Estate Agent

 For a few months I have been going to all the open houses until I clicked with a realtor. Told him  my house criteria and my plan of seeing as much as I can and coming hard with offers. He said he was up for the challenge.


3. See the Market.

We hunted for 2 months and often seeing 4-5 homes a day mon to fri. Seen maybe 50-60 houses total before I narrowed it down to about 5 houses after seeing them 2-3 times each.


4. Make the Offer

After narrowing it down to 5 houses I took third and fourth visits at the 5 places. There was 2 houses I was quite keen on. I walked around the neighborhoods at different times in the night and timed my drives to various places.I was ready to put in the offer. I put an offer of 780k at my top place who were asking for 830k.

 5. Negotiations

Place 1
They held firm and came back at 825k. In my opinion the place was overlooked and well built and I had a true value of about 860k. I had no doubt the place that has been sitting for a month would sell for minimum in the spring for the 830k. I told them we are to far apart and I didn't even counter offer. The sellers played it off like they were about to expect another offer soon. I wanted to make them sweat. I then started looking at place number 2

Place 2
My realtor extracted information from the sellers realtor that they were motivated sellers due to a divorce. Christmas was rapidly approaching and winter time is notoriously slow in western Canada. So I kept my cool. I then put an offer on place number 2 which was a bit cheaper but further out of town. They were asking 799k and I came in at 710k. Place has been sitting for 3 months and was overpriced but it was a good home. It was also due for a price drop. I estimated the place was worth about 740k. They came back at 780k and I didn't counter offer. I left it like I did the first place.

Back to Place 1
After 10 days we are just before Xmas. Time to go back to the well. Turns out the sellers realtor has been frantic. He was trying to muster an offer from everyone that ever visited the house. We told them we are coming back a bit higher but firm. I put in mind my bottom price as 800k which I kept private from even my own realtor. I put in an offer at 790k cash deal close in a month. Sellers came back at 810k. I returned at 795k firm and final lol. They came back at 805k and said that was their final.

Lol almost there just 10k apart. They were not budging and I I didn't plan on coming back at 805k. I was ready to walk away. Told my realtor I am ready to walk away from it. He was disappointed that we came so close and he tried to get me up to the 805k. I told him quit being so emotional and nervous to get the deal done. I told him maybe if these guys meet halfway at 800K (my top price) I would consider it. He then called me 10 minutes later and told me its a no go. I said ok lets go back after place number 2 again and see how close we can get after the weekend passes.

Monday Morning my realtor calls. They caved! Place 1 for 800k is a deal but I have to remove subjects and close fast. I take the deal!  But just not yet until I review the offer and I add a couple of minor things in the contract like the extra fridge in the garage, Book shelf and a couple mirrors. LOL the sellers are livid with me. They say I am grinding them too hard. Why yes I am! This is business and my name is Asset Grinder!


6. The Inspection

So i only had a few days to remove subjects as Xmas is literally a few days away. I brought a deal breaker inspector I use that is from Vancouver which costs me $150 extra transportation for a total of $550 for a 6 hour inspection. We checked the place top to bottom and only very minor issues came up. Total repair costs $900. I tried to get that amount taken out of the contract but the sellers wouldn't budge. I told my realtor this is a problem. My realtor lets out a deep sigh and looks me dead in the eye and said "I will fucken pay it, lets get this place over with! I guess I owe him lunch. Maybe Denny's for his birthday! LOL.




7. The Close and Possession

I used a lawyer I know to deal with all the closing paperwork which cost about $900 which is the going rate. Got the keys yesterday and did a walk through with my realtor. everything was great except the seller forgot to leave one of the mirrors that were in the deal. My realtor let the other realtor know and within a hour the seller came by to drop it off. I congratulated him on the sold house and thanks for the deal. He didn't shake my extended hand and shoved the mirror in my hand and left grumbling.

So there you have it. Now its time to find a renter! As you can see I am not that fun to deal with but oh well its my money. I don't care about the sellers feelings or even my realtors because its his job.

My New Home Details 
5 min to downtown
Built in 2011
Arts and Crafts style 3 level semi custom home
3000 sqft home
5000 sqft lot

I have estimated future monthly rent to be between $3400-$3600 for a cap rate between 4.6 to 4.9% which is not bad. I think the place will have some decent capital appreciation and even more potential if I put 10-15k into the place to make a separate suite in the basement. It would fetch 880k easy if I were to do that. For now I will rent the place for a few years and see how the market goes. If anything it will be a solid income rental for years to come.





So what you guys think of the tips and my deal????


Saturday, 17 January 2015

$2,171,545 My Net Worth Update January 2015

My Net Worth Update January 2015


    January 17 / 2015  : Updated every mid month

    ASSETS

Home 2015 assessed value                                  total                 $1,253,000

-Equity Investments
Tax free saving account TFSA -                 $40,876
Retirement saving plan RSP -                  $123,859
Canadian margin account -                      $155,543
US margin account ( Ex Rate 1.1986)-     $185,230
margin available $144,139
                                          
                                                                   Equity   total:                 $505,508

-Rental Property
Warehouse Income Property 2015 assessed value
                                                         
                                                                               total:                 $319,000
-Start Up Company
Brewery start up share value
                                                                               total:                   $85,000

-Cash                  
Checking account                                           $814
Business account                                        $8,223
     
                                                                               total:                    $9,037

                                                                  

                        
                January 2015 Grand Total Net Worth:      $2,171,545


                                     Gain/loss from last month +$44,214


Dec.   2014  : $2,127,331 Details Link  -$33,547
Nov.   2014  : $2,160,878 Details Link  + $49,867
Oct.     2014 : $2,111,011 Details Link  - $28,473
Sept.    2014 : $2,139,484 Details Link + $13,390
August 2014: $2,126,094 Details Link + $14,613
July    2014  : $2,111,481 Details Link  + $5,584
June    2014 : $2,105,897 Details Link   + $3,165
May    2014 : $2,102,732 Details Link





 In Summary-

Lots going on this month. I am closing on a new house in a few days and will have a post about the details soon. Markets been swinging up and down. My Canadian stocks have been tanking as oil continues lower and banks showing weakness. The Canadian dollar is tanking as well from  US dollar value 1.13 last month to 1.19 this month. Overall up over 40k from just my equity portfolio alone.

Other changes have been my property assessments for the year that just came in. My home was worth $1,190,000 last year and this year it went up to $1,253,000. A 63k gain or a 5.3% gain. My commercial property was a different story altogether. In 2014 it was worth $384,000 and now in 2015 its worth $319,000. Wow a 20% drop or 65k. So basically my property values went down 2k this year. I always thought my home was quite undervalued via government assessment but I sure wasn't expecting such a huge drop in my commercial warehouse rental. I had my warehouse listed for sale for quite some time but barely recieved any offers and all were lowballs. I guess demand is quite low. I will just keep it rented out until values rebound and keep an eye on the market.

On brewery side note things are coming together. Equipment is arriving everyday and things are chugging along for a spring launch. Will have some more details and pics soon.

In other news I have been featured on an article by Debt Free Guys website
Give it a look and browse through their site. You can follow them on Twitter @DebtFreeGuys


Till the next update Good Day and Grind On!

Monday, 5 January 2015

December 2014 Dividend , Options , Adsense and Interest monthly report

 The whirlwind of the holiday season is finally over. Thank god, I hate traveling and visiting people really. I don't like much company. I like things dull and predictable! I especially big dividend and options paying months!

Stocks have been very volatile still with big swings up and down as my portfolio has been buncing around.

My monthly dividend payers have been doing the heavy lifting. One of my Reits Cominar CUF.un had  a double payment this month. Also this is my last Tim Hortons dividend as the stock has been absorbed into burger king. I took the option of a partial share switch over into their new merger holding QSR but mainly I got paid out in cash to pay down my margin.

Options activity was steady but nothing spectacular with just a few apple put options.

Adsense was up since it was its first full month. My total pageviews were down as I have not been very active during this month.

On a personal note. My dad is not in the best shape still and is in line for a quintuple bypass. He is being very stubborn and is not quitting his over drinking of homemade wine and moonshine. Also his rich diet of salty foods, red meat , high fat and sugar diet is not helping. I have tried to get him to change his ways by hiding the alcohol and grocery shopping for him but he is not very compliant. Its like he is basically giving up without trying which is disappointing. If he continues his bad habits a heart attack or stroke could happen any day now.

One good thing coming of this is his finances. He just sold one of his houses and is giving me money to buy another house to have in my name as an inheritance as an income property. I personally dont want another rental property but I cant convince him I rather have money in equities. He wont even let me buy a commercial property which I would rather have. It has to be a house close to me and no older than 15 years old. So I don't have much say how I will receive my inheritance but it is greatly appreciated regardless. I did buy him a new big screen tv for chirstmas as a gift in return to show my gratitude.

So I have been house hunting for the last two months and pretty much seen the entire market in my area. I found a place I could feel comfortable to live in if I decide to sell my current house. I will keep both places as long as my father is alive and respect his wishes. After that I will more than likely sell my current home and move into this new cheaper one to free up equity. This also brings up a conundrum since I am holding so many REITS in my portfolio. Either I unload them to pay off my margin and take a 10% hit on them or keep them and pay off my margin slowly. Haven't decided what to do yet but I think I will wind up doing something in the middle with a partial sell.

Details of my home purchase and a 2014 year end review post will be coming soon.

Happy New year to all and hope the markets soar in 2015!



December 2014 Dividends Paid
        Monthly payers
 86.63  - HR.UN HR Reit
232.65 - AX.UN Artis Reit
177.33 - D.UN Dream Office Reit
133.34 - DRG.UN Dream Global Reit
 94.36 - REI.UN RioCan Reit
367.50 - CUF.UN Cominar Reit
123.75 - RMM.UN Retrocom Reit
105.00 - BTB.UN BTB Reit
  80.50 - CPG Crescent Point Energy
 18.33 - SJR.B Shaw Communications
 25.70 - ENF Enbridge Income fund
 18.17 - CJR.B Corus Entertainment
   Quarterly Payers
 96.00 - FTS Fortis
 35.00 - ENB Enbridge
 32.00 - THI Tim Hortons
 33.60 - SU Suncor
 86.87 - COP ConocoPhillips
 33.15 - AFL Aflac
 16.32 - V Visa
 83.30 - JNJ Johnson & Johnson
 23.37 - IBM IBM
 32.64 - EMR Emerson Electric
 44.12 - UL Unilever
 23.97 - DD Dupont
 36.12 - MCD Mcdonalds
 19.63 - QCOM Qualcomm
 64.80 - BP BP
 59.22 - RDS.B Royal Dutch Shell
 84.68 - IDV Ishares INTL Select Div ETF
$2,268.05 - TOTAL



Total option premiums in December
 $657.49
 Options Notes -
- Playing Apple a bit with puts that have expired worthless

Total interest paid towards margin for December
$396.00

Adsense for my blog in December
 $16.17
- 11,316 : Pageviews for December
- 14 : Number of ad clicks


2014 Running Dividend Total              $13,291.20
2014 Running Interest Total                   $1,842.54
2014 Running Option premiums total   $4,960.54
2014 Running Adsense total                        $27.03

2014 Breakdown    Dividends     Options       Interest      Adsense
- December           $2,268.05       $657.49     $396.00        $16.17
- November          $2,182.56       $616.81      $501.82        $10.86
- October               $2,499.87    $2,167.48     $538.20
- September           $2,088.65     $1,518.76     $318.73
 - August                $1,482.38                           $87.79
 - July                     $1,239.74
 - June                       $608.62
 - May                       $531.13
------------------------------------------------------------------------------------
TOTALS  2014       $13,291.20    $4,960.54   $1,842.54     $27.03

Tuesday, 16 December 2014

$2,127,331 My Net Worth Update December 2014

My Net Worth Update December 2014


    December 16 / 2014  : Updated every mid month

    ASSETS

Home 2014 assessed value                                  total                 $1,190,000

-Equity Investments
Tax free saving account TFSA -                 $31,696
Retirement saving plan RSP -                  $118,885
Canadian margin account -                      $136,442
US margin account ( Ex Rate 1.135)-      $174,049
margin available $129,749
                                          
                                                                   Equity   total:                 $461,072

-Rental Property
Warehouse Income Property 2014 assessed value
                                                         
                                                                               total:                 $384,000
-Start Up Company
Brewery start up share value
                                                                               total:                   $85,000

-Cash                  
Checking account                                         $945
Business account                                        $6,314
     
                                                                               total:                    $7,259

                                                                  

                        
                December 2014 Grand Total Net Worth:      $2,127,331


                                     Gain/loss from last month - $33,547


Nov.   2014  : $2,160,878 Details Link  + $49,867
Oct.     2014 : $2,111,011 Details Link  - $28,473
Sept.    2014 : $2,139,484 Details Link + $13,390
August 2014: $2,126,094 Details Link + $14,613
July    2014  : $2,111,481 Details Link  + $5,584
June    2014 : $2,105,897 Details Link   + $3,165
May    2014 : $2,102,732 Details Link







 In Summary-




Markets still very volatile especially Canadian Markets. The Canadian TSX was down sharply with Oil stocks taking big hits and also the banking sector taking a grubbing as well. My portfolio has mirrored the drop with it unfortunately. I am not worried though as this is what the markets do even though I am down $33,547.

I have been quite busy with some real estate deals lately and making a major play which is in the works. Doing so will force me to reanalyze my Reit positions and I will be more than likely getting rid of my margin Reit plays in the new year. My Margin Reit play was a big loser for me so far but whatever, no worries, thats business! Got to keep moving forward and making things happen. I am not 100% sure of my real estate plans just yet. Not sure if and when I will be moving but I have some options opening up for me in the near future

In the brewery startup news there has been a few set backs but nothing major. Still looking to start pouring beer in the spring with fingers crossed. With new businesses set backs are expected and I am not worried yet. Could be a couple years before I start seeing some capital back.

My father has been in and out of the hospital quite a bit with a bad heart and a quintuple bypass is needed. Its been stressing me out a bit and I haven't been as active as I would like with blogging lately. I am not worried about the dip in my net worth as their are more important things afoot lately.

Till the next update Good Day and Grind On!



Monday, 1 December 2014

November 2014 Dividend , Options , Adsense and Interest monthly report

Things are looking pretty steady lately holding the markets rebound quite well. Have had good gains in Apple stock but countered with my energy stocks doing poorly. Oil still remains at attractive levels and I will be capitalizing on the opportunity.  Option activity is down as Apple stock premiums have slowed since stock has been shooting straight up. I will pick and choose my spots to buy puts.

I have added a new category for my monthly report Adsense. I will be adding how much money my free hosting blog is generating via ad revenue. I dont expect it to ever be that much but its a fun stat.

 Overall minus margin interest included I am up $2,308.41 via dividends, options and adsense for November. Not too shabby but pretty steady especially with my monthly payers.

Till next month Good Day and Grind On!



November 2014 Dividends Paid
        Monthly payers
 86.62  - HR.UN HR Reit
232.65 - AX.UN Artis Reit
177.33 - D.UN Dream Office Reit
133.34 - DRG.UN Dream Global Reit
 94.36 - REI.UN RioCan Reit
183.75 - CUF.UN Cominar Reit
123.75 - RMM.UN Retrocom Reit
105.00 - BTB.UN BTB Reit
  80.50 - CPG Crescent Point Energy
 18.33 - SJR.B Shaw Communications
 22.92 - ENF Enbridge Income fund
 18.17 - CJR.B Corus Entertainment
   Quarterly Payers
105.00 - COS Canadian Oil Sands
  70.22 - BMO Bank of Montreal
105.00 - RY Royal Bank
  39.38 - PG Proctor Gamble
313.87 - AAPL Apple
  89.48 - T ATT
  61.71 - KMI Kinder Morgan
  37.74 - CLX Clorox
  30.60 - CL Colgate
  52.83 - VZ Verizon            
$2,182.56 - TOTAL

Dividend Notes - Havent done a a dividend increases/decrease report yet for the month but not many changes


Total option premiums in November
 $616.81
 Options Notes -
- Playing Apple  a bit with puts that have expired worthless

Total interest paid towards margin for November
$501.82

Adsense for my blog in November
 $10.86
- 12,886 : Pageviews for November
- 18 : Number of ad clicks


2014 Running Dividend Total              $11,023.15
2014 Running Interest Total                   $1,446.54
2014 Running Option premiums total   $4,303.05





2014 Running Adsense total                        $10.86

2014 Breakdown    Dividends     Options       Interest      Adsense
 - November          $2,182.56       $616.81     $501.82        $10.86
- October               $2,499.87    $2,167.48     $538.20
- September           $2,088.65     $1,518.76     $318.73
 - August                $1,482.38                           $87.79
 - July                     $1,239.74
 - June                       $608.62
 - May                       $531.13
------------------------------------------------------------------------------------
TOTALS  2014        $8,840.59    $3,686.24      $944.72       $10.86