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Volition meetup 2019.03

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The very first book I read that started me on the path to become a real estate investor, was Rich Dad, Poor Dad. In that book, Robert Kiyosaki uses an analogy on how wealth is built.

Think about wealth as water and your finances are a bucket holding that water. Most people have one tap filling that bucket - their job. But they’ve got lots of holes in that bucket - bills, car payments, their mortgage, and **TAXES**. To build wealth, you’ve got to turn on as many taps as possible and close as many holes in your bucket as possible.

Improper tax planning can be one of the largest drains on your real estate investments, so join us on March 20th and lean how to pay less tax! We’ll be covering topics like:

Corporations - When should I incorporate? Should I buy in a corporation? Taxes on corporations? Active vs passive income? Business corps - using profits to invest?
Estate Planning - How do I pass my assets down to the next generation?
Taxation Best Practices - What is building depreciation and why is it important? What is eligible for interest deductibility? How do I deduct the interest of my HELOC?

It’s essential to understand these things even if you only have one property. If you’ve already accumulated a few properties, it’s even more important to correct any mistakes you’ve made. Bad planning can completely kill some investment business cases, home flipping for example, so come learn how to do things right with one of the best in the industry!

Peter is a Real Estate Investment focused accountant and well known in the investment world. He regularly presents in front of hundreds of people at REIN meetings and is making the trip from Kitchener to speak to our group. His accounting firm provides strategic accounting and taxation services to grow your business and and protect your real estate investments. His partner George Dube literally wrote the book “Tax, Accounting, and Legal Strategies for the Canadian Real Estate Investor”.

Their services include:
> Assurance Services
> Business Advisory
> Real Estate Tax Planning and Structure
> Retirement & Estate Planning
> Tax Consulting
> Business Tax Compliance
> Personal Tax
> US and International Tax Services

To ensure that we are covering topics that are relevant to YOU, email your questions or scenarios to ming@volitionprop.com and we will “incorporate” them into the presentation… ;)

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Volition meetup 2019.03

  1. 1. @volitionproperties www.volitionprop.com Volition Investment Mastermind March 2019
  2. 2. @volitionproperties www.volitionprop.com Who is Volition?
  3. 3. Realty ManagementAdvisory Mentorship & Education & Consultation Acquisition of Investment Properties Design & Renovations Leasing & Property Management Renovations
  4. 4. @volitionproperties www.volitionprop.com
  5. 5. @volitionproperties www.volitionprop.com Who is Volition? ● Certified Real Estate Investment Advisors ● Toronto’s Exclusive Investor Realtor for REIN Buyer’s Group ● Nominated for REIN’s Highest Award (Michael Millenear Leadership Award)… (and a bunch of other awards: SilverInvestment Award, Bronze Investment Award, Chairman’s Club, President’sClub, Top Producer, blah blah blah) ● $25M+ in personal holdings over 50 doors
  6. 6. @volitionproperties www.volitionprop.com We do normal stuff like listings and personal residence too! ● Why list with us? Investor advantage! ○ Active buyers / investor list ○ REIN Investor Database ○ REIN Buyers Group ○ The BEST marketing ■ Virtual 3D Dollhouse, Drone, Lifestyle video ■ Multiple languages, foreign investors ● We can also help you find your dream home! ○ Top 1% of all agents ○ Extensive local knowledge of one of your biggest investments ○ Combination personal residence and investment property
  7. 7. @volitionproperties www.volitionprop.com Volition Mastermind Chat Group ● Open to Investor clients & Advisory clients. ● Talk about news, tenant issues, share contacts, basically help navigate the difficulty of this investor world! Let us know if we missed you!!
  8. 8. @volitionproperties www.volitionprop.com FREE Monthly “REI Coffeehouse” Web Chat ● What: No format. No presentation. No script. Q&A. Real people with real problems. Occasionally guest speaker. Send in your questions beforehand, and then we’ll chat about them and get your questions answered. ● Why: “Meetup once a month isn’t enough! I need more networking, more Q&A time, more learning, more community, more like-minded people, more engagement!” ● When: 12pm-1pm during your work lunch break. Once a month (in between Meetups). ● How: Log on using Zoom.us (webcam & microphone). Scheduled thru Meetup.com (www.meetup.com/Volition) (1. Also, if you have any suggestions on the format, content, etc., let me know!) (2. If you have a suggestion on the SPECIFIC TIME other than the planned 12pm-1pm, also let us know!)
  9. 9. @volitionproperties www.volitionprop.com Thank you Peacock!
  10. 10. @volitionproperties www.volitionprop.com Ming’s Market Minute
  11. 11. @volitionproperties www.volitionprop.com Doom and Gloom
  12. 12. @volitionproperties www.volitionprop.com This Week’s Top Stories: Canadian Real Estate Sales And Prices Make Big Drops, While Developer Debt Hits An All-Time High https://betterdwelling.com/this-weeks-top-stories-canadian-real-estate-sales-and-prices-make-big-drops-while-developer-debt-hits-an-all-time-high/ CanadianRealEstateSalesPrintWorstFebruarySinceBeforeTheGreatRecession Canadian real estate sales are slowing dramatically from last year. CREA reported 29,974 sales in February, up 25% from the month before. This represents a 4.41% decline compared to the same month last year. Both the monthly and annual rates raised interesting flags. A monthly increase is expected, but this is the smallest jump from January since at least 2007. The annual decline makes it the fewest sales for a February since at least 12 years. CanadianMortgageHoldersArePayingOver27%MoreInterestThanPrincipal Canadians with are suddenly paying a lot more to interest than principal. Households paid $9.88 billion in principal in Q4 2018, 1.07% higher than last year. Mortgage interest payments hit $12.6 billion in Q4 2018, an increase of 11.12% from the year before. What does that mean? Interest payment growth is over 10x greater than principal payments. Still not clear? People are paying banks $1.25 for every $1 they pay down real estate debt. CanadianRealEstateMakesLargestFebruaryPriceDeclineOutsideOfRecession The Teranet-National Bank HPI (TNB HPI) show Canadian real estate prices made an abrupt decline in February. Analysts from the firm noted that price made a monthly decline of 0.4% last month. The decline brought annual gains to just 1.87%, with prices now down 1.43% from the September 2018 peak. NationalBank noted this is the largest February decline in the history of the index. The YOY increase is also the smallest increase outside of a significant recession. FlipOrFlop: CanadianRealEstateRenovationLoansDownOver40%FromPeak Canadians are borrowing less for residential real estate renovations. Renovation debt fell to $2.97 billion in Q4 2018, down 2.14% from last year. The quarter is down 17.79% from the recent peak of $3.61 billion in Q2 2016. This is seventh quarter of negative growth, compared to the same month last year. CanadianRealEstateDeveloperDebtHitsAnAll-TimeHigh Canadian real estate developers are incurring a record amount of debt to finance projects in Q4 2018. The balance of loans for residential development hit $16.68 billion in Q4, up 20.28% from last year. That also sets a new all-time record for loans for real estate development. Remember, that’s only chartered banks. Developers have been increasingly looking towards private loans.
  13. 13. @volitionproperties www.volitionprop.com https://betterdwelling.com/canadian-real-estate-prices-go-negative-for-the-first-time- since-2009/ Canadian Real Estate Prices Drop For The First Time Since 2009 The price of a typical home in Canada made the first annual decline in almost 10 years, last month. The CREA benchmark fell to $615,300 in February, up 0.3% from the month before. Prices are now down 0.13% lower when compared to the same month last year. This is the first annual decline since 2009, and the only one outside of a recession The annual pace of growth (or lack thereof) is trending lower. The 0.13% decline is small, but lower than the month before. This is the sixth consecutive month of declines, with prices dropping 1.45% over just the past 6 months. Ontario Real Estate Markets See Biggest Price Gains The largest annual price gains were all observed in Southern Ontario. Ottawa made the largest gains with a typical home hitting $400,800 in February, up 7.41% from the same month last year. Guelph followed with a typical home reaching $527,300, up 6.84% from last year. Niagaracame in third at $393,500, up 6.54% from last year. These markets all trail the national price, and are close to their all-time peak. Canadian Real Estate Prices Go Negative For The First Time Since 2009
  14. 14. @volitionproperties www.volitionprop.com Positive Headlines?
  15. 15. @volitionproperties www.volitionprop.com Toronto Home Sales Decline as Price Growth Continues http://urbantoronto.ca/news/2019/03/toronto-home-sales-decline-price-growth-continues The latest monthly sales report from the Toronto Real Estate Board (TREB)shows a continued decline in the Greater Toronto Area's resale housing market in February. 5,025 home sales represented a 2.4% year-over-year decline in homes sold, while a month-over-month decline was also felt from January 2019's figure. While the 416 submarket took a more noticeable hit, the 905 region actually recorded a slight increase in sales measured year-over-year. New listings also declined in February, falling from a GTA-wide 10,473 in February 2018 to last month's 9,828. Listings within the 416 remained fairly steady, dropping slightly year-over-year from 3,365 to 3,301. A steeper dropoff was recorded in the 905, falling year over year from 7,108 listings down to 6,527. This points to tightening market conditions compared to last year, which continues to translate to price growth. Both the MLS Home Price Index Composite Benchmark and the average selling price increased on a year-over-year basis in February 2019, rising 2.4% and 1.6% respectively, though the numbers fell when measured month-over-month. Price growth was driven by growth in the condo apartment and high-density low-rise market segments. The GTA-wide average price now sits at $766,197,while the price of a home within the 416 averages at $812,982. Declining home sales have triggered TREB to put pressure on candidates in the upcoming federal election, underlining the housing market's importance to the Canadian economy. A statement from Jason Mercer, TREB’s Director of Market Analysis and Service Channels, reads “A study conducted by Altus for TREB found that, on average, each home sale reported through TREB resulted in $68,000 in spin-off expenditures accruing to the economy. With sales substantially lower than the 2016 record peak over the last two years, we have experienced a hit to the economy in the billions of dollars, in the GTA alone. This hit has also translated into lower government revenues and, if sustained, could impact the employment picture as well.” Rising home prices continue to drive growth in the rental market, which saw year-over-year gains in both the volume of rentals leased and the price of rent. 2,316 one- bedroom apartments were leased last month, rising 3.8% from February 2018, while the average one-bedroom rent was up by 8.1% to $2,145. 1,383 two-bedroom apartments were leased in the same period, rising 9.3% from the 1,265 recorded last February. The average two-bedroom rent increased by 7.4% to $2,810.
  16. 16. @volitionproperties www.volitionprop.com Let’s do our own research - Real Estate is LOCAL
  17. 17. @volitionproperties www.volitionprop.com Market Update - Sales Volume
  18. 18. @volitionproperties www.volitionprop.com Market Update - Listings
  19. 19. @volitionproperties www.volitionprop.com Market Update - Long Term Sales Trend
  20. 20. @volitionproperties www.volitionprop.com Market Update - Long Term Price Trend
  21. 21. @volitionproperties www.volitionprop.com Market Update - Long Term Affordability Index
  22. 22. @volitionproperties www.volitionprop.com Volition Market Data - Very Local Data
  23. 23. @volitionproperties www.volitionprop.com Toronto Downtown Core
  24. 24. @volitionproperties www.volitionprop.com Volition Metrics - Downtown municipalities
  25. 25. @volitionproperties www.volitionprop.com Volition Metrics - Downtown SF Detached
  26. 26. @volitionproperties www.volitionprop.com Toronto - Everywhere else
  27. 27. @volitionproperties www.volitionprop.com Volition Metrics - Uptown municipalities
  28. 28. @volitionproperties www.volitionprop.com Volition Metrics - Uptown SF Detached
  29. 29. @volitionproperties www.volitionprop.com Volition Metrics - Condos
  30. 30. @volitionproperties www.volitionprop.com What’s News?
  31. 31. @volitionproperties www.volitionprop.com Laneway housing begins to take shape under Toronto’s new rules https://www.thestar.com/news/gta/2019/03/18/laneway-housing-begins-to-take-shape-under-torontos-new-rules.html Laneway housing is a bit of a new frontier in terms of urban development — one that’s beginning to gain traction in Toronto after council passed regulations last summer allowing homeowners to convert garages and build up unused space into suites. The rules state the houses must be self-contained and can be rented out or used to provide a home for family members, but not sold off as a separate property. The idea is not only to provide a boost in income and overall value for homeowners, but also TO increase the number of rental units and secondary suites across the city — albeit a modest increase. There were about 78 potential sites at different stages of the permit process by mid-March. Fifteen minor variance applications — where homeowners can make the case for a slight bend in city rules — have been submitted, and six permits have been issued, according to city staff. Those unique challenges, on top of the somewhat complicated and new permit applicationprocess, prompted Fong to start Ukkei, a business dedicated to making the laneway housing process more accessible. Fong said gentle densification is an important part of any evolving city and people on all sides of the process just have to be respectful and understanding. “I have a feeling it is going to pick up because it is a win-win for renters and homeowners,” Stone says. “But I feel like somebody has to do something to make the laneways a little more pedestrian-friendly.” To that end, the Laneway Project, a design and advocacy group, is coming up with creative ways to draw pedestrians to laneways through art, design and events without interfering with the cars and trucks that use laneways to access homes and work. “Everyone has an interest in seeing who else is in this space and being able to navigate those spaces safely with other people,” says co-founder and executive director Michelle Senayah of the vast network. The Laneway Project has mapped out 2,400 laneways in the city, covering about 250 kilometres. Senayah says signage and signal systems, similar to those used at intersections, could be designed and installed to make sure everybody understands how to share and navigate the spaces. Better lighting would also make things safer and more appealing, she says.
  32. 32. @volitionproperties www.volitionprop.com Main Event! ● Eldon C Theodore ● Partner at MHBC ● MHBC - Planning, Urban Design and Architecture Eldon Theodore is a Partner at MHBC with a dual specialization in planning and urban design where he has been practicing for 16 years. Eldon holds an Honours Bachelor Degree in Urban and Regional Planning from the University of Waterloo and a Masters in Urban Design Studies from the University of Toronto. Eldon is also a LEED Accredited Professional and has been trained under the National Charrette Institute System for conducting community charrettes. September 2018 Meetup
  33. 33. @volitionproperties www.volitionprop.com Menkes Proposes 37-Storey Tower at Front and Sherbourne http://urbantoronto.ca/news/2019/03/menkes-proposes-37-storey-tower-front-and-sherbourne Menkes Developments is proposing a 37-storey mixed-use building on the east side of Downtown Toronto at 33 Sherbourne. The properties on the northeast corner of Sherbourne and Front streets are currently occupied by an Esso gas station and 2 low-rise commercial buildings. The project if approved would join two other redevelopment that are currently transforming the intersection, St. Lawrence Condos on the northwest corner, and Time and Space Condos on the southeast. Both currently under construction. 439 condo units are proposed in the tower, 46 of which are studio apartments, while 301 one-bedroom units, 47 two-bedroom units, and 45 three-bedroom units fill out the rest of the mix. The existing commercial spaces will be replaced at grade in three separate units, bringing 1,427 square metres of commercial space to the area. At ground level, a golden-hued geomorphic metal structure frames the new commercial space at the south-west corner. In the renderings included in the zoning amendment application, the two existing buildings on site have been partially retained, however, the heritage impact statement prepared by GBCA Architects comments that in particular, the building at 178 Front Street is of low heritage value and therefore may be removed from the development as it progresses through the planning process. As the proposal is in its earliest stages, these renderings represent a conceptual ideation, rather than a finalized design. The re-zoning applicationis the first step that Menkes is taking towards constructing the project. City planning will look at the density, height and massing of the building while assessing the application. A site plan applicationwill come forward with a more refined design, materials and additional renderings later in the process. Additional information and images can be found in our database file for the project, linked below. Want to get involved in the discussion? Check out the associated Forum thread, or leave a comment in the field provided at the bottom of this page.
  34. 34. @volitionproperties www.volitionprop.com Yorkdale's massive parking lots to be transformed into new neighbourhood
  35. 35. @volitionproperties www.volitionprop.com Investment Retrospective
  36. 36. @volitionproperties www.volitionprop.com ● 3plex in Little Italy ● Purchased Jan 2017 ● Price: ● Reno: ● Rent: ● Expenses: ● Mortgage: ● Cashflow: ● Feb 2019 ● Appraisal: ● Rent: ● Expenses: ● Mortgage: ● Cashflow: Real Life: "If you bought this 5 years ago..." 2
  37. 37. @volitionproperties www.volitionprop.com ● 3plex in Little Italy ● Purchased Jan 2017 ● Price: $1.2M ● Reno: $175K ● Rent: $6000 (estimated) ● Expenses: $900 ● Mortgage: $4047 ● Cashflow: $1053 ● Feb 2019 ● Appraisal: ● Rent: ● Expenses: ● Mortgage: ● Cashflow: Real Life: "If you bought this 5 years ago..." 2
  38. 38. @volitionproperties www.volitionprop.com ● 3plex in Little Italy ● Purchased Jan 2017 ● Price: $1.2M ● Reno: $175K ● Rent: $6000 (estimated) ● Expenses: $900 ● Mortgage: $4047 ● Cashflow: $1053 ● Feb 2019 ● Appraisal: $1.6M ● Rent: $7000 (with executive rental) ● Expenses: $900 ● Mortgage: $4047 ● Cashflow: $2053 Real Life: "If you bought this 5 years ago..." 2
  39. 39. @volitionproperties www.volitionprop.com ● 3plex in Little Italy ● Purchased Jan 2017 ● Price: $1.2M ● Reno: $175K ● Rent: $6000 (estimated) ● Expenses: $900 ● Mortgage: $4047 ● Cashflow: $1053 ● Feb 2019 ● Appraisal: $1.6M ● Rent: $7000 (with executive rental) ● Expenses: $900 ● Mortgage: $4047 ● Cashflow: $2053 Then go refi! ● Old mortgage: $960k ● New mortgage: $1.28M ● Equity takeout: $320,000 (!) ● New mortgage: $5397 ● New cashflow: $703 (!) Real Life: "If you bought this 5 years ago..." 2
  40. 40. @volitionproperties www.volitionprop.com Real Life: "If you bought this 5 years ago..." 2
  41. 41. @volitionproperties www.volitionprop.com ● All calculated here! ● Our secret weapon! ● BOOKMARK IT ON YOUR PHONE/LAPTOP! Volition Investment Calculator
  42. 42. @volitionproperties www.volitionprop.com ● Mini-Case Study: Price Reduction vs. Abatement on Schedule A Why work with Investor Realtor?
  43. 43. @volitionproperties www.volitionprop.com ● Assignments ● Triplexes again? ● BIG REFIS / BIG APPRAISALS. Equity takeouts and reinvesting. What are clients buying this year? ● Preconstruction? ● Condos? ● Triplexes? ● Gut jobs? What are the trends this year?
  44. 44. @volitionproperties www.volitionprop.com Our in-house Welcomers!
  45. 45. @volitionproperties www.volitionprop.com The Main Event - Advanced Tax Strategies!
  46. 46. @volitionproperties www.volitionprop.com Peter Cuttini! ● Veteran real estate investor and real estate accountant ● 20 years of accounting, management and business experience ● US CPA and Canadian CA ● Published in The REIN Real Estate Report and Canadian Real Estate Wealth magazine
  47. 47. @volitionproperties www.volitionprop.com Announcements
  48. 48. @volitionproperties www.volitionprop.com Sign up for Advisory! ● 60 Minute complimentary Advisory Consultation ● We will help you determine ○ Where you are at ○ Where you want to go ○ Help you build a customized plan to get there ● Sign up on the whiteboard ● We will reach out to you by Monday to schedule a session with our Advisory team
  49. 49. @volitionproperties www.volitionprop.com What do YOU want to learn about this year?
  50. 50. @volitionproperties www.volitionprop.com Next Month - Alternative Rental Market - Furnished / Executive / Short Term ● Wednesday, April 17th ● Review of the alternative rental market - how to cater to special groups
  51. 51. @volitionproperties www.volitionprop.com
  52. 52. @volitionproperties www.volitionprop.com
  53. 53. @volitionproperties www.volitionprop.com Networking Time! ● Please stay, have a drink / food and support a local business ● We will be here for another hour THANK YOU!!

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