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Volition Quick Start Presentation - Feb 1st 2020

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Volition Quick Start Presentation - Feb 1st 2020

  1. 1. @volitionproperties www.volitionprop.com Quick Start! Everything you need to know to get started in real estate investing February 1st, 2020
  2. 2. @volitionproperties www.volitionprop.com Good morning!!
  3. 3. @volitionproperties www.volitionprop.com Filming and Photography By taking part in this event you grant the event organisers full rights to use the images resulting from the photography/video filming, and any reproductions or adaptations of the images for publicity or other purposes to help achieve the group’s aims. This might include (but is not limited to), the right to use them in their printed and online publicity, social media, press releases and funding applications. If you do not wish to be photographed please inform an event organiser.
  4. 4. @volitionproperties www.volitionprop.com Legal Disclaimer Today’s event is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any products, financial or otherwise, referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act should consult with his or her advisor before doing so.
  5. 5. @volitionproperties www.volitionprop.com Thank you! ● Ryerson University ○ Mike Chow and the AV Team ● Michael Rogers ○ Alien Tech Audio ● Janny Fu ○ Volition Properties ● Emir, Toyo, Monica ○ Helpers
  6. 6. @volitionproperties www.volitionprop.com Agenda ● 9:00am -10:30am ○ Introductions ○ How to analyse real estate as an asset class ● 10:30am - 10:45am - BREAK ● 10:45am - Noon ○ Where is the best place to buy? ○ When is the best time to buy? ● NOON - ONE HOUR LUNCH AND NETWORKING
  7. 7. @volitionproperties www.volitionprop.com Agenda ● 1:00pm - 2:30pm ○ How can I quit my job? How does real estate help me retire? ○ Is it all about the numbers/ROI? ● 2:30pm - 2:45pm - BREAK ● 2:45pm - 4:30pm ○ Financing Fundamentals ○ Insurance Fundamentals ○ Accounting Fundamentals ○ Expert Panel ○ Case Studies ● 4:30pm - NETWORKING
  8. 8. @volitionproperties www.volitionprop.com WiFi To Stay Connected (20 min timeout) Network Name/SSID - RU- SECURE Used ID (Name) - ESRS2020 Password - EsRs2020!#
  9. 9. @volitionproperties www.volitionprop.com We’re going to structure this a bit differently...
  10. 10. @volitionproperties www.volitionprop.com How will we handle questions today?
  11. 11. @volitionproperties www.volitionprop.com Don’t forget to make notes on these gems ● T.I.M.E. ○ The four areas of risk when investing ○ Is it TIME to invest in Toronto?? ● The cashflow myth ○ Cash flow is the biggest deal! ● Real People, Doing Real Stuff ● Case Studies
  12. 12. @volitionproperties www.volitionprop.com Our intention for the day ● EVERY SINGLE PERSON to walk out of here understanding: ○ Why Toronto ○ What properties make sense ○ How to get started ● EVERY SINGLE PERSON having learned at least ONE tip/strategy that will make them more money or save them more money
  13. 13. @volitionproperties www.volitionprop.com Time to take action! ● Selfie icebreaker ● This person is your accountability partner for the day ● SHARE WITH THEM YOUR INTENTION FOR THE DAY
  14. 14. @volitionproperties www.volitionprop.com Who are we?
  15. 15. @volitionproperties www.volitionprop.com Who are Matt and Ming?
  16. 16. @volitionproperties www.volitionprop.com
  17. 17. @volitionproperties www.volitionprop.com
  18. 18. @volitionproperties www.volitionprop.com ASIAN
  19. 19. @volitionproperties www.volitionprop.com Who is Matt?
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  38. 38. @volitionproperties www.volitionprop.com Who is Ming?
  39. 39. @volitionproperties www.volitionprop.com Ming Lim - Investor, Dad, Coach and Mentor
  40. 40. @volitionproperties www.volitionprop.com How I started
  41. 41. @volitionproperties www.volitionprop.com My first time ● 3 bedroom semi-detached $115,000 ● 5.00% Down - $5,750 ● Rented for $1500 / month ● Cash flow - $700 / month!
  42. 42. @volitionproperties www.volitionprop.com My first time IT WAS ALL WRONG ● Property was illegal - more people than allowed ● Illegally subdivided ● No license ● Parking didn’t meet regulations What this my agents fault?
  43. 43. @volitionproperties www.volitionprop.com Waterloo to Toronto ● Kept expanding in Waterloo - reached 21 doors ● Started investing in Toronto GTA ○ Townhouse, condo, duplex ● Two major things happened ○ Pain in the ass factor - student rentals - Headache adjusted ROI ○ Proper analysis of investments ■ Role of cash flow ■ Overall ROI
  44. 44. @volitionproperties www.volitionprop.com Where am I now? What’s my “Belize”?
  45. 45. @volitionproperties www.volitionprop.com Where am I now?
  46. 46. @volitionproperties www.volitionprop.com The sunset is so pretty, Matt Not as pretty as you, Ming
  47. 47. @volitionproperties www.volitionprop.com Who is Sam?
  48. 48. @volitionproperties www.volitionprop.com Who is Ed?
  49. 49. @volitionproperties www.volitionprop.com Our guest speakers!
  50. 50. @volitionproperties www.volitionprop.com Richard Tartaglia - Financing Expert ● Richard is a top performing Mortgage Agent who is passionate about real estate investment. His success is attributed to referrals from satisfied investors who have benefited from his strategic advice to mortgage financing. Richard often stresses the importance of the Blueprint approach to stay ahead of our consistently changing real estate and lending environment. ● With a degree in Economics from McMaster University coupled with over 8 years of banking and mortgage brokering experience, Richard brings a very strong understanding of the mortgage financing industry to the table. ● Richard is a winner of Scotiabank’s “Best of the Best” award on three separate occasions. He was awarded Mortgage Alliance’s Masters Club award in 2017, Elite Club award in 2018, and President’s Club award in 2019 for attaining Top 5% in production, out of agents across Canada.
  51. 51. @volitionproperties www.volitionprop.com Dan Tetzlaff - Insurance Expert ● Dan Tetzlaff oversees the Hub Ontario region real estate practice. He manages over $5,000,000 in insurance real estate premiums and has 10 years’ experience at the age of 35. ● Dan specializes in rental properties, Rent to own, student housing, construction, surety, and large complex real estate schedules. ● Dan is partnered with some of the most prominent real estate groups in Canada including the Canada Landlord Association, REIN, OREIO, REITE club and many others. ● He lives in Leslieville with his wife and 2 young children.
  52. 52. @volitionproperties www.volitionprop.com Colton Hoekstra - Accounting Expert ● Colton is a tax accountant that works in the real estate division for BDO Canada LLP. ● He has been working in the public accounting industry for 3 years working with both the tax and assurance teams. ● Colton is currently enrolled in the tax specialists program with CPA Canada.
  53. 53. @volitionproperties www.volitionprop.com Expert Panel! Chris Flo Vinay
  54. 54. @volitionproperties www.volitionprop.com Who is Volition?
  55. 55. Realty ManagementAdvisory Mentorship & Education & Consultation Acquisition of Investment Properties Design & Renovations Leasing & Property Management Renovations
  56. 56. @volitionproperties www.volitionprop.com We Make Toronto Work (our new tagline!) ● Certified Real Estate Investment Advisors ● Toronto’s Exclusive Investor Realtor for REIN Buyer’s Group ● REIN Silver Investment Award, Bronze Investment Award ● Nominated for REIN’s Highest Award (Michael Millenear Leadership Award) ● $25M+ in personal holdings over 50 doors ● President’s Award, Chairman’s Award, Top Producer Award, New Homes Sales Award, Top 1% of all Realtors in Toronto, etc ● Featured in Canadian Real Estate Investment Magazine ● Speaker at International Real Estate Investment Conferences, Expert panelist at numerous real estate events ● Run the largest & most active Meetup group ● Etc., Etc., Etc. ● The point is… we’re qualified. And only ~50 other Investor Realtors in Toronto (out of 50,000) are as qualified as we are to help investors. ● And NO ONE ELSE in Toronto provides a complete end-to-end solution... all the services you need under one umbrella in order to be successful.
  57. 57. @volitionproperties www.volitionprop.com
  58. 58. @volitionproperties www.volitionprop.com 5 years and going strong! 5 s
  59. 59. @volitionproperties www.volitionprop.com Let’s start off with something exciting: Case Study SNEAK PEAK
  60. 60. @volitionproperties www.volitionprop.com If you had $350k right now... ● How much cashflow per month could you achieve in 12 years??
  61. 61. @volitionproperties www.volitionprop.com How does real estate even make money??
  62. 62. @volitionproperties www.volitionprop.com
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  70. 70. @volitionproperties www.volitionprop.com Mutual Funds https://www.thebalance.com/good-annual-mutual-fund-return-4767418 From The Balance - For stock mutual funds, a “good” long-term return (annualized, for a period of 10 years or more) is 8%-10%. For bond mutual funds, a good long-term return would be 4%-5%.
  71. 71. @volitionproperties www.volitionprop.com Stock Market https://www.theglobeandmail.com/globe-investor/personal-finance/numbers- never-lie-but-they-sure-can-deceive/article536314/ From The Globe and Mail - While the annualized returns of the TSX Total Return index was indeed 7.04% for the past 10 calendar years, the average return was 9.1%
  72. 72. @volitionproperties www.volitionprop.com Real Estate Values Over the Long Term
  73. 73. @volitionproperties www.volitionprop.com Incomplete Perspective - Investment vs. Business
  74. 74. @volitionproperties www.volitionprop.com “Where is the best place to buy? What is the best property to buy?”
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  86. 86. @volitionproperties www.volitionprop.com Where in the world should you invest? ● United States? ● Europe? ● South East Asia?
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  88. 88. @volitionproperties www.volitionprop.com What about other markets?
  89. 89. @volitionproperties www.volitionprop.com
  90. 90. @volitionproperties www.volitionprop.com Stable GDP Growth over the past 10 years
  91. 91. @volitionproperties www.volitionprop.com We’re not corrupt! Trust me! ;) Corruption Perceptions Index 2018 - Transparency International
  92. 92. @volitionproperties www.volitionprop.com Source: StatsCan
  93. 93. @volitionproperties www.volitionprop.com ● We’re a country of immigrants and the future only shows further expansion Source: StatsCan
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  126. 126. @volitionproperties www.volitionprop.com T.I.M.E in the Market
  127. 127. @volitionproperties www.volitionprop.com T.I.M.E ● What separates sophisticated investors from those who are lucky?
  128. 128. @volitionproperties www.volitionprop.com T.I.M.E ● What separates sophisticated investors from those who are lucky? MANAGING MARKET DOWNTURN AND RISK MITIGATION ● Everyone is an investing genius when the market is good
  129. 129. @volitionproperties www.volitionprop.com T.I.M.E ● It’s not “IF” the market will turn down, it’s “WHEN” ● Prepare for it by investing against fundamentals and use risk mitigation strategies
  130. 130. @volitionproperties www.volitionprop.com T.I.M.E ● TIME is the Volition acronym for mitigating risk in your investment strategy
  131. 131. @volitionproperties www.volitionprop.com T.I.M.E. Tenant Risk - Risk of a Bad Tenant Investor Risk - Risk from lack of investor knowledge Market Risk - Exposure to Market Changes Estate Risk - Risk Inherent to the Property
  132. 132. @volitionproperties www.volitionprop.com T.I.M.E. Tenant Risk - Risk of a Bad Tenant Investor Risk - Risk from lack of investor knowledge Market Risk - Exposure to Market Changes Estate Risk - Risk Inherent to the Property
  133. 133. @volitionproperties www.volitionprop.com Ontario Risk vs The Rest of Canada
  134. 134. @volitionproperties www.volitionprop.com Toronto mitigates Tenant Risk ● Major urban areas attract the best tenant profile - Millennials ● Young Professional Millennials ○ university educated ○ $60-80k ○ Work in the downtown core ● Want to live / work / play in the same area ● Don’t want to commute
  135. 135. @volitionproperties www.volitionprop.com Toronto mitigates Tenant Risk Why do we like Millennials? ● They pay their rent ● Pay for nice places, in good locations ● They take care of their place ● THEY ARE TRANSIENT
  136. 136. @volitionproperties www.volitionprop.com T.I.M.E. Tenant Risk - Risk of a Bad Tenant Investor Risk - Risk from lack of investor knowledge Market Risk - Exposure to Market Changes Estate Risk - Risk Inherent to the Property
  137. 137. @volitionproperties www.volitionprop.com Investor Risk ● Do you know what you’re doing? ● Are you a local expert? ● Do you have a team to execute? ● What business models works in your area? ● What doesn’t work in your area? ● Who is your target demographic and how are you servicing them?
  138. 138. @volitionproperties www.volitionprop.com T.I.M.E. Tenant Risk - Risk of a Bad Tenant Investor Risk - Risk from lack of investor knowledge Market Risk - Exposure to Market Changes Estate Risk - Risk Inherent to the Property
  139. 139. @volitionproperties www.volitionprop.com Toronto mitigates Market Risk Major urban areas are more resilient to changes in the market ● Diverse economy vs small single industry town ● Job growth ● Economic growth, service based economy, head offices, well paying jobs
  140. 140. @volitionproperties www.volitionprop.com Toronto mitigates Market Risk A great economy leads too... ● Immigration ● Population Growth ● Low Vacancy Rates - less than 1% ● Lower cap rates = lower risk Here’s some data to support this claim that Toronto mitigates market risks
  141. 141. @volitionproperties www.volitionprop.com Volition Metrics - Toronto Downtown Core
  142. 142. @volitionproperties www.volitionprop.com Volition Metrics - Downtown municipalities
  143. 143. @volitionproperties www.volitionprop.com Volition Metrics - Downtown SF Detached
  144. 144. @volitionproperties www.volitionprop.com Toronto - Everywhere else
  145. 145. @volitionproperties www.volitionprop.com Volition Metrics - Uptown municipalities
  146. 146. @volitionproperties www.volitionprop.com Volition Metrics - Uptown SF Detached
  147. 147. @volitionproperties www.volitionprop.com Toronto mitigates Market Risk A great economy leads too... ● Immigration ● Population Growth ● Lower cap rates = lower risk
  148. 148. @volitionproperties www.volitionprop.com Capitalization Rates - What do they mean? Hey Ming - All things being equal - If I could buy a property at 5% or 10% cap rate, I should buy the property at 10% cap - right?
  149. 149. @volitionproperties www.volitionprop.com Capitalization Rates - What do they mean? Hey Ming - All things being equal - If I could buy a property at 5% or 10% cap rate, I should buy the property at 10% cap - right? WRONG!
  150. 150. @volitionproperties www.volitionprop.com Capitalization Rates - What do they mean? ● Everything isn’t equal ● If one property is cash flowing $1000 vs $100 - there is a difference, you just haven’t found it yet. ● Tenant profile? Local market conditions? Single industry dependence? Declining fundamentals? WE ARE NOT SMARTER THAN THE MARKET
  151. 151. @volitionproperties www.volitionprop.com T.I.M.E. Tenant Risk - Risk of a Bad Tenant Investor Risk - Risk from lack of investor knowledge Market Risk - Exposure to Market Changes Estate Risk - Risk Inherent to the Property
  152. 152. @volitionproperties www.volitionprop.com Estate Risk ● Are you buying the right investment property? ● 99% of “investment” properties DON’T WORK. ● Making sure you’re buying in the right areas. ● You can’t just say “Toronto”. You have to be specific. ● What are you looking for in a neighbourhood/area? ○ Gentrification ○ Transit ○ Infrastructure
  153. 153. @volitionproperties www.volitionprop.com Soooo… What the best place to invest in?
  154. 154. @volitionproperties www.volitionprop.com Soooo… What the best place to invest in?
  155. 155. @volitionproperties www.volitionprop.com “When is the best time to buy?” AKA “Is it TIME to invest in Toronto?”
  156. 156. @volitionproperties www.volitionprop.com
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  158. 158. @volitionproperties www.volitionprop.com Average Market
  159. 159. @volitionproperties www.volitionprop.com FLAT Market
  160. 160. @volitionproperties www.volitionprop.com DOWN Market
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  163. 163. @volitionproperties www.volitionprop.com What’s actually happened in Toronto ~7% growth over past 10 years
  164. 164. @volitionproperties www.volitionprop.com But I still want to time the market! ● It’s not about timing the market, it’s about TIME IN the market. ● But if you want to time, time for buying spring. Why? ○ Finding good deals always the hardest thing in investing in any market ○ As a buyer, you want to be primed for maximum choices ○ Spring market starts in January! ○ Construction, if required is best done during the warm months.
  165. 165. @volitionproperties www.volitionprop.com How can I quit my job?
  166. 166. @volitionproperties www.volitionprop.com
  167. 167. @volitionproperties www.volitionprop.com First things first - Understand the role of cashflow
  168. 168. @volitionproperties www.volitionprop.com The Evolution of Investors Stage 1 - Buy solely on appreciation ● Everyone understands buy low, sell high ● Everyone in the room knows there is more to investing than that
  169. 169. @volitionproperties www.volitionprop.com The Evolution of Investors Stage 2 - MAXIMUM Cashflow ● Get some education and decide that Cashflow is King ● Many investor do it the detriment of all else ● Where many investors are stuck
  170. 170. @volitionproperties www.volitionprop.com The Evolution of Investors Stage 3 - Understanding the ROLE of cashflow ● Allows you to hold for the long term - so equity can be built ● How does cashflow indicate risk? ● How does cashflow compare to the rest of your real estate returns? ● When is cashflow important?
  171. 171. @volitionproperties www.volitionprop.com Does cashflow really matter? ● $250 vs $500 cashflow a month? Is your life drastically different?? How does that compare to your overall returns?? So what is cashflow good for??
  172. 172. @volitionproperties www.volitionprop.com Cashflow = Hold for the long term ● The role of cash flow is to allow you to continue to hold your properties for the long term, thru the ups and downs, so that you are not forced to divest at the wrong time.
  173. 173. @volitionproperties www.volitionprop.com Cashflow is less in Toronto because the market is less risky! ● Investing in Toronto is less risky ● Remember TIME and how Toronto mitigates risk
  174. 174. @volitionproperties www.volitionprop.com How does cashflow compare to appreciation? What would you choose? 5% appreciation and $2000 in cashflow OR 7% appreciation and $500 in cashflow
  175. 175. @volitionproperties www.volitionprop.com 5% Appreciation and $2000 Cash Flow Value of Property $1,000,000 Down Payment 20% Annual Interest Rate 4.00% Years 25 Payments Per Year 12 Mortgage Amount $800,000 Appreciation 5.00% Total Periods 300 Rent Increase 5% Monthly Cash Flow $2,000 Final Property Value $3,466,845 Final Equity Built $4,443,095
  176. 176. @volitionproperties www.volitionprop.com 7% Appreciation and $500 Cash Flow Value of Property $1,000,000 Down Payment 20% Annual Interest Rate 4.00% Years 25 Payments Per Year 12 Mortgage Amount $800,000 Appreciation 7.00% Total Periods 300 Rent Increase 5% Monthly Cash Flow $500 Final Property Value $5,692,214 Final Equity Built $5,936,276
  177. 177. @volitionproperties www.volitionprop.com The impact of cash flow vs appreciation 5% and $2k cashflow $4,443,095 7% and $500 cashflow $5,936,276 Delta $1,493,181 What’s the important take away?
  178. 178. @volitionproperties www.volitionprop.com Don’t buy negative cashflow ● Do not buy negative cash flowing properties ○ Can’t handle a dynamic investing environment ■ Property Expenses - Repairs, utilities, etc. ■ Market Changes - Rental control changes ○ Not scalable ■ Would you invest in a business that lost more money the larger it got? Cash flow is important but not the expense of all else!
  179. 179. @volitionproperties www.volitionprop.com So when do you need cash flow ● You need cash flow at the “end” ● So when is the end?
  180. 180. @volitionproperties www.volitionprop.com Simple Approach. Buy one and wait 30 years.
  181. 181. @volitionproperties www.volitionprop.com Basic Scenario ● Buy $1.4M triplex ● Wait 30 years to pay it off What’s the result?
  182. 182. @volitionproperties www.volitionprop.com Basic Scenario ● Buy $1.4M triplex ● Wait 30 years to pay it off What’s the result? ● How do we do BETTER than this? ● How do we do it FASTER than this? ● What are we LEAVING ON THE TABLE?
  183. 183. @volitionproperties www.volitionprop.com Sophisticated Approach. The Volition Approach.
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  190. 190. @volitionproperties www.volitionprop.com The Volition Way ● Buy $1.4M triplex ● Wait 4 years ● Refinance ● Go buy another one ● Wait 8 years ● Reach 50% LTV ● Sell off half, pay off the mortgage of the other half What’s the result? ● SHORTER AMOUNT OF TIME ● LARGER PORTFOLIO ● MORE CASHFLOW ● (...but more work) ● More on this later.
  191. 191. @volitionproperties www.volitionprop.com Is it all just about the numbers?
  192. 192. @volitionproperties www.volitionprop.com
  193. 193. @volitionproperties www.volitionprop.com Don’t buy cheap, buy for *value* Cheap and expensive are relative concepts Buy for value, not on price alone
  194. 194. @volitionproperties www.volitionprop.com Building Your Team
  195. 195. @volitionproperties www.volitionprop.com Building your team ● You’re running a small business ● You’re the CEO ● The success of your business hinges on getting *the* best people
  196. 196. @volitionproperties www.volitionprop.com Building your team ● Key people ○ Accounting ○ Financing ○ Insurance ○ Legal ○ Realtor ● Are they investors?
  197. 197. @volitionproperties www.volitionprop.com Building your team ● Key people ○ Accounting ○ Financing ○ Insurance ○ Legal ○ Realtor ● Are they investors?
  198. 198. @volitionproperties www.volitionprop.com Get an Investor Realtor - Not Uncle Joe ● If you wanted to learn more or talk more about real estate investing, who do you talk to? ● If you wanted to invest in real estate, most real estate agents will go “OK GREAT!! Let’s go buy you a condo!” ● Get a customized plan that is specific to you and your situation. This is NOT a one-size-fits-all.
  199. 199. @volitionproperties www.volitionprop.com Financing!
  200. 200. @volitionproperties www.volitionprop.com Richard Tartaglia - Financing Expert ● Richard is a top performing Mortgage Agent who is passionate about real estate investment. His success is attributed to referrals from satisfied investors who have benefited from his strategic advice to mortgage financing. Richard often stresses the importance of the Blueprint approach to stay ahead of our consistently changing real estate and lending environment. ● With a degree in Economics from McMaster University coupled with over 8 years of banking and mortgage brokering experience, Richard brings a very strong understanding of the mortgage financing industry to the table. ● Richard is a winner of Scotiabank’s “Best of the Best” award on three separate occasions. He was awarded Mortgage Alliance’s Masters Club award in 2017, Elite Club award in 2018, and President’s Club award in 2019 for attaining Top 5% in production, out of agents across Canada.
  201. 201. @volitionproperties www.volitionprop.com
  202. 202. @volitionproperties www.volitionprop.com Insurance!
  203. 203. @volitionproperties www.volitionprop.com Dan Tetzlaff - Insurance Expert ● Dan Tetzlaff oversees the Hub Ontario region real estate practice. He manages over $5,000,000 in insurance real estate premiums and has 10 years’ experience at the age of 35. ● Dan specializes in rental properties, Rent to own, student housing, construction, surety, and large complex real estate schedules. ● Dan is partnered with some of the most prominent real estate groups in Canada including the Canada Landlord Association, REIN, OREIO, REITE club and many others. ● He lives in Leslieville with his wife and 2 young children.
  204. 204. @volitionproperties www.volitionprop.com
  205. 205. @volitionproperties www.volitionprop.com Accounting!
  206. 206. @volitionproperties www.volitionprop.com Colton Hoekstra - Accounting Expert ● Colton is a tax accountant that works in the real estate division for BDO Canada LLP. ● He has been working in the public accounting industry for 3 years working with both the tax and assurance teams. ● Colton is currently enrolled in the tax specialists program with CPA Canada.
  207. 207. @volitionproperties www.volitionprop.com
  208. 208. @volitionproperties www.volitionprop.com Our Expert Panel Real People, Doing Real $#}+!
  209. 209. @volitionproperties www.volitionprop.com Our Panel - REAL People, doing real $#}+! ● Florence Lee ● Chris Law ● Vinay Kanthan
  210. 210. @volitionproperties www.volitionprop.com Other business models
  211. 211. @volitionproperties www.volitionprop.com Advanced Investing (beyond today’s scope) ● Laneway Housing ● Development ● Executive Rentals ● Advanced Financing ● Luxury Triplex Conversions ● BRRR(R) ● Leasing & Property Management Tips
  212. 212. @volitionproperties www.volitionprop.com Case Studies
  213. 213. @volitionproperties www.volitionprop.com What to buy at $350k of capital ● Wait, who has $350k lying around? ● HELOC, Refi, RRSP’s, JVs, etc. ● No one has $350k lying around and no one should have $350k uninvested!
  214. 214. @volitionproperties www.volitionprop.com An example of what to buy - $350k of capital ● Turnkey triplex ○ Purchase Price - $1.4MM ○ Initial Investment (Down, Tax, Closing) - $333k ○ Rents - $6500 ○ Expenses - $1100 ○ Mortgage Payment (3.3%, 30yr am) - $4,905 ○ Monthly Cashflow - $495
  215. 215. @volitionproperties www.volitionprop.com An example of what to buy - $350k of capital
  216. 216. @volitionproperties www.volitionprop.com An example of what to buy to maximize return
  217. 217. @volitionproperties www.volitionprop.com An example of what to buy to maximize return
  218. 218. @volitionproperties www.volitionprop.com An example of what to buy to maximize return
  219. 219. @volitionproperties www.volitionprop.com An example of what to buy to maximize return
  220. 220. @volitionproperties www.volitionprop.com An example of what to buy to maximize return
  221. 221. @volitionproperties www.volitionprop.com What do I buy?
  222. 222. @volitionproperties www.volitionprop.com Luxury Triplex Conversion Turnkey Triplex Condo Preconstruction Condo Small Town Tenant Profile A+ A+ A+ A+ F Short Term Headache F A- A A+ F Long Term Headache A+ B+ A A F Short Term ROI A+ A- C C C Long Term ROI A+ A B- B- D Affordability F C A A+ A+++ Pros New, Cashflow Own land Entry-level $150k Deposit structure Cheap, Cashflow Cons $800k+ required $350k+ required Cashflow is hard at 20% down Can’t get rent or sell in the short term Higher risk Overall A A- B+ B+ D
  223. 223. @volitionproperties www.volitionprop.com **JOURNEY TO MASSIVE CASHFLOW OF $10k/month!! (SCAM ALERT!!)**
  224. 224. @volitionproperties www.volitionprop.com Journey to $10k Cashflow – 3 Questions THE THREE MOST IMPORTANT QUESTIONS Where are you at? ● Existing properties: ? ● Household income: $200k ● Cash $90k, Stocks, $25k, RRSP $10k Where do you want to go? ● “Want the flexibility to work when I want to (contract work, retire early, do something else, etc.)” ● Think: FORM ● Goals: $5000/month ($60,000/year) When do you want to be there? ● When? They don’t know. (But they should know!!). Typical answer. “I don’t know what is realistic to expect” is a very common response. ● You need clarity on this!!
  225. 225. @volitionproperties www.volitionprop.com Journey to $10k Cashflow – Step 1 Step 1: Analyze their portfolio at 80% LTV ● Maximum equity takeout ○ Tommy condo: ○ Gina condo: ● Cashflow after refi ○ Tommy condo: ○ Gina condo: ● Total capital after refi:
  226. 226. @volitionproperties www.volitionprop.com Journey to $10k Cashflow – Step 2 Step 2: Acquisition Phase ● Determine what their capital can buy ● Determine mortgage qualification ability ● ASSUMPTION FOR THIS SCENARIO ○ Triplex, $1.2M, $500 cashflow ● Run financials & cashflow for all properties: 1. Property #1 2. Property #2 3. Property #3 4. Property #4 ● ARE WE CLOSE? ○ Cashflow: ??
  227. 227. @volitionproperties www.volitionprop.com Journey to $10k Cashflow – Step 3A Step 3. Choose Your Own Adventure Scenario A – Lazy Approach ● Wait 12 years. ● What happens during this time? ○ Property Value ○ Rents ○ Interest Rates ○ Inflation ● Run financials & cashflow for all properties according to assumptions: 1. Property #1 2. Property #2 3. Property #3 4. Property #4 ● ARE WE CLOSE? ○ Cashflow: ○ Net Worth:
  228. 228. @volitionproperties www.volitionprop.com Journey to $10k Cashflow – Teaching Moment TEACHING MOMENT!! ● Point of this session? ○ Tips & tricks?? ● Variables to Play with ○ Time ○ Appreciation ○ Interest Rates ○ Rent growth ● What is the MOST important variable? ● Key Learning Takeaways ○ Role of Cashflow ○ Importance of Time / Getting started early ○ WHY the “Lazy” scenario may be a good one for you?
  229. 229. @volitionproperties www.volitionprop.com Journey to $10k Cashflow – Step 3B Step 3. Choose Your Own Adventure Scenario B – TAKE MASSIVE ACTION Approach ● DOUBLE YOUR PORTFOLIO IN 4 YEARS ● THEN SELL HALF ● PAY OFF MORTGAGES FOR MASSIVE CASHFLOW
  230. 230. @volitionproperties www.volitionprop.com Journey to $10k Cashflow – Step 3B Equity Takeout Step 3. Choose Your Own Adventure Scenario B – TAKE MASSIVE ACTION Approach ● IN 4 YEARS, DO EQUITY TAKEOUT ● What is Value, Mortgage, Equity Takeout, Cashflow for: ● Property #1 ● Property #2 ● Property #3 ● Property #4 ● ARE WE CLOSE? ○ Cashflow:
  231. 231. @volitionproperties www.volitionprop.com Journey to $10k Cashflow – Step 3B Double Portfolio Step 3. Choose Your Own Adventure Scenario B – TAKE MASSIVE ACTION Approach ● DOUBLE YOUR PORTFOLIO ● For simplicity sake, assume that you're buy the EXACT same property that you did refinance. ● What is Value, Mortgage, Equity Takeout, Cashflow for: ○ Property #1 ○ Property #2 ○ Property #3 ○ Property #4 ○ Property #5 (SAME AS PROPERTY #1) ○ Property #6 (SAME AS PROPERTY #2) ○ Property #7 (SAME AS PROPERTY #3) ○ Property #8 (SAME AS PROPERTY #4) ● ARE WE CLOSE? ○ Cashflow:
  232. 232. @volitionproperties www.volitionprop.com Journey to $10k Cashflow – Step 3B Wait Step 3. Choose Your Own Adventure Scenario B – TAKE MASSIVE ACTION Approach ● WAIT 8 YEARS. ● What's the magic of 8 years? (Assumption of 5% growth) ● You are aiming to get to 50% LTV. ● What is Value, Mortgage for: ○ Property #1 ○ Property #2 ○ Property #3 ○ Property #4 ○ Property #5 (SAME AS PROPERTY #1) ○ Property #6 (SAME AS PROPERTY #2) ○ Property #7 (SAME AS PROPERTY #3) ○ Property #8 (SAME AS PROPERTY #4)
  233. 233. @volitionproperties www.volitionprop.com Journey to $10k Cashflow – Step 3B Divest Step 3. Choose Your Own Adventure Scenario B – TAKE MASSIVE ACTION Approach ● DIVEST STAGE. SELL OFF HALF. ● What is Value, Mortgage for: ○ Property #1 ○ Property #2 ○ Property #3 ○ Property #4 ● What is Net Proceeds after (proceeds after Realtor & Capital Gains) ○ Property #5 ○ Property #6 ○ Property #7 ○ Property #8
  234. 234. @volitionproperties www.volitionprop.com Journey to $10k Cashflow - Step 3B Pay off mortgage Step 3. Choose Your Own Adventure Scenario B – TAKE MASSIVE ACTION Approach ● PAY OFF MORTGAGES OF THE OTHER HALF. ● (Assume that it lines up) ● What is Value, Mortgage, Rents, Cashflow for: ○ Property #1 ○ Property #2 ○ Property #3 ○ Property #4 ● Total Cashflow: ○ Does this fall short / meet / exceed goals?
  235. 235. @volitionproperties www.volitionprop.com Journey to $10k Cashflow – Teaching Moment TEACHING MOMENT!! ● This is a more aggressive of a scenario. ● Limiting factors ○ Refi mortgages ○ Acquisition mortgages ○ DON’T WASTE MORTGAGES ON SMALLER CHEAPER PROPERTIES (i.e. outside Toronto) ● What is the watershed moment? ● Variables/factors: ○ Appreciation ○ Interest rates? ● Doesn’t have to be this prescriptive. Customize it for yourself: ○ 4 years to double ○ 8 years to 50% LTV ○ Sell off half, pay off mortgages ● BEWARE: ○ The “Myth” of Cashflow ○ Pitfalls?
  236. 236. @volitionproperties www.volitionprop.com Now What?
  237. 237. @volitionproperties www.volitionprop.com Find Your Accountability Partner ● 2 minutes: Share with them something you learned today that will make you more money or save you money? ● Who did not learn ANYTHING?... Let’s rectify that.
  238. 238. @volitionproperties www.volitionprop.com Sign up for Advisory today! ● If you end up working with us, you get your money back on today’s ticket! ● 60 Minute 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 with Janny and her team
  239. 239. @volitionproperties www.volitionprop.com Video Testimonial - FREEBIE! ● See Mike to provide a few words on why you found today helpful ● FREE PASS TO OUR NEXT MEETUP!!
  240. 240. @volitionproperties www.volitionprop.com Next Month - Regular meetup at Creeds! ● Mar 18th at Creeds ● Network and Learn!
  241. 241. @volitionproperties www.volitionprop.com Networking Time! Your network is your net worth Some questions to get you started ● What brought you here today? ● Are you already invested? ● Where do you invest?
  242. 242. @volitionproperties www.volitionprop.com
  243. 243. @volitionproperties www.volitionprop.com THANK YOU!
  244. 244. @volitionproperties www.volitionprop.com
  245. 245. @volitionproperties www.volitionprop.com
  246. 246. @volitionproperties www.volitionprop.com
  247. 247. @volitionproperties www.volitionprop.com
  248. 248. @volitionproperties www.volitionprop.com
  249. 249. @volitionproperties www.volitionprop.com
  250. 250. @volitionproperties www.volitionprop.com
  251. 251. @volitionproperties www.volitionprop.com
  252. 252. @volitionproperties www.volitionprop.com OLD PRESENTATIO N BELOW
  253. 253. @volitionproperties www.volitionprop.com Introduction To Real Estate Investing in Toronto
  254. 254. @volitionproperties www.volitionprop.com Is now the right time to invest? ● Should I buy now? ● Should I wait? ● How do I know when the right time to invest is?
  255. 255. @volitionproperties www.volitionprop.com Is now the right time to invest? ● Sound real estate investment strategies are based on long term returns and are not reliant on market timing ● Ming’s Favourite Saying: “...............” ● Long term investing is critical - here is why
  256. 256. @volitionproperties www.volitionprop.com How Real Estate Builds Wealth
  257. 257. @volitionproperties www.volitionprop.com Appreciation for the long term - how do you get it?
  258. 258. @volitionproperties www.volitionprop.com Appreciation for the long term - how do you get it? LOCATION! LOCATION! LOCATION!
  259. 259. @volitionproperties www.volitionprop.com How to eventually live off your cashflow? ● The Multiplier effect is how you get to lots of doors or significant cash flow ● Whenever you hear about someone who has 20+ doors, this is how it was done
  260. 260. @volitionproperties www.volitionprop.com Long term buy and hold looks great. But what about... ● What about flipping? ● Wholesaling? ● Development?
  261. 261. @volitionproperties www.volitionprop.com Long term buy and hold looks great. But what about... ● What about flipping? ● Wholesaling? ● Development? SHORT TERM MARKET RISK!
  262. 262. @volitionproperties www.volitionprop.com Where do I invest? ● 4 areas of Risk ● What the best place to invest in? ● Look at your customer - target demographic ○ Why is this the best demographic ● Look at long term appreciation of the property ○ Transit ○ Job Market and population growth
  263. 263. @volitionproperties www.volitionprop.com This even applies to your personal residence ● My personal residence ○ Investment Pros ■ Yonge and Sheppard ■ Near public transit, access to highways, school ■ Bought land not house ■ Duplex ○ Investment Cons ■ Low rents compared to downtown ● Purchased for $500k. Now worth $1.5MM ● Original rent was $1000 now rents for $3800

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