Archive for the 'Investing in Real Estate' Category

Investment real estate is a competitive business, particularly in large urban centres like Toronto and Vancouver.

Real estate investors and developers who want to stay ahead of the opposition need to find new ways to play the game.

Establishing a competitive edge means being innovative and looking for novel methods to find business or ways to strengthen your negotiation capability.

Property data tools can be the key to developing this edge. Here’s how:

  1. Knowledge is power.

The more you know, the better. In real estate investing, you want to know more information about a property – and quickly.

When you know details such as the estimated available equity, sales history, comparable sales registered encumbrances, and more, you can use this to start a conversation with the current owner.

This knowledge can help you find properties before they’re even on the market.

It can also help you know where to invest your efforts and help avoid problem deals that waste your time and money.

Consider accessing in-depth information like the GeoWarehouse Property Details Report, or the Demographics Report, to learn more about a property or neighbourhood you’re investigating.

  1. Look at sales, not listings.

Some indexes pull their data from real estate listings – meaning all properties that are on the market, regardless of whether they have sold or not. While this can tell you where properties are being listed for sale, it’s not enough information to be confident in an investment opportunity.

Anyone can list a property for sale, but what’s more important is that the property actually sells. For example, in the first half of 2018 in Calgary, CBC reported that only 44% of properties listed actually sold.

You can gather more concrete, usable information by looking at the final sales data for a property – how much it sold for, where it was listed, how long it was on the market for, etc.

The Province of Ontario Land Registration Information System (POLARIS) uses sales information in its data and products, including the Teranet-National Bank House Price Index.

  1. View the financial status of the property, such as registered mortgages.

You can gain an edge by learning more about a property’s financial status. This might include registered mortgages, liens, transfers, and more.

This can help you avoid a potentially bad deal, which will save you time and money. But you can also use it for your information.

For instance, if you’re looking at a property that isn’t listed, and find that there is a lien on it, you might be able to negotiate with the owner and lien registrant to take on the lien — which could be motivation for the owner to sell.

See registered encumbrances with a GeoWarehouse Parcel Register*.

  1. Look at the ownership history.

Who owns the property now? How many times has it sold in the past? And what were the sale values each time it changed hands?

Although today’s housing market may be different from the housing market of ten years ago, the sales history can still be a valuable way to assess the earning potential. You can use the sales history data to forecast the best scenario, worst scenario, and most likely.

As well, knowing how long the current owner has had the property for can help inform your approach.

If you’re considering a property with a relatively new owner, they may not have as much of an attachment to it, but they may not be ready to move on yet. Conversely, someone who has owned the property for a long time may not want to part ways – or they may be ready to consider downsizing.

Find out the sales history of the property you’re investigating with a GeoWarehouse Property Details Report.

Knowing more from the start can give you a competitive edge and help you make more informed decisions. It all starts with the tools you use.

Access our GeoWarehouse property tools for real estate investors and developers today. Call 1-866-237-5937 or visit www.geowarehouse.ca.

* An official product of the Ontario government pursuant to provincial land registration statutes.

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Finding an investment property can be difficult in uncertain housing market conditions.

Housing affordability issues and new mortgage rules have blocked some Canadians from becoming homeowners and resulted in a housing shortage in several areas of the country.

The Huffington Post reported that the GTA population has risen by 100,000 in the past year, and the housing market there is under severe pressure. A report from the Ryerson University Centre for Urban Research and Land Development also found a “missing middle” in the GTA — affordable, family-friendly housing.

The property search issues aren’t just limited to Toronto, either. Last year in Calgary, CBC News reported that of the roughly 9,500 that had been listed in the first six months of 2018, only 4,200 sold, putting the sales-to-listings ratio at 44%.

Less urban areas, like Prince Edward County in Ontario, are becoming more popular living destinations – and as such housing is becoming harder to find there, as well.

In markets like these, many real estate developers and investors knock on doors to get business. It can be hard to find suitable properties, especially in multi-unit residential and commercial real estate.

But there is a way that searchers can beat the odds and find a great investment property, even when the pickings are slim: by using the right tools.

For instance, when real estate investors and developers use a tool like GeoWarehouse, they gain a competitive edge. This is because GoeWarehouse’s property tools allow users to research areas and neighbourhoods to find opportunities and know more about the property before initiating contact.

With GeoWarehouse, you could:

  • Estimate the property value using an AVM.
  • Compare sales in the area to find a neighbourhood where properties are moving.
  • Use a Demographics Report to learn more about who lives in a neighbourhood, including age distribution, marital status, ratio of owned/rented properties, and more.
  • Use a Parcel Register* to find registered encumbrances on properties.
  • Use a Property Details Report to locate and view a property you’re investigating from the comfort of your office.
  • And much more.

Tools like GeoWarehouse can reduce the legwork and help you maximize your time and effort to find properties before they even hit the market.

Want to use GeoWarehouse to find investment properties? Become a subscriber today. Call 1-866-237-5937 or visit www.geowarehouse.ca.

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There is a lot of opportunity available for private investors in real estate. Often, though, we hear about private investors who find it hard to compete with big investment firms who have deep pockets and seemingly endless resources.

There is a way to level the playing field, though: real estate technology.

You need access to technology that not only helps you source deals, but also properly evaluate what a property is worth in order to make effective buying decisions.

Our FREE new eBook will walk you through exactly how to use this technology to source more properties, find opportunities before they’re listed, and be more competitive.

In this eBook, you’ll learn:

  • How to access the same property data large investment firms use.
  • A better way to investigate potential investment areas.
  • About property investment tools that can help you evaluate the property’s financial position quickly and accurately.

By the time you’re done reading, you’ll know exactly how to compete with larger investors with deeper pockets and understand what technology can help you get there.

This eBook is available today for free. Just click here to get started downloading.

GeoWarehouse is your source for property searches and more. All of our data comes from the Province of Ontario Land Registry Information System, meaning that it’s accurate, up-to-date, and available when you need it.

Learn more about how we can assist with your real estate investment business today. Contact John Singh at 416-360-8863 ext. 2557 or email john.singh@teranet.ca.

 

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Have you been working with real estate deals financed using syndicated mortgages? If so, it may be time to re-evaluate.

Syndicated mortgages are investments where a developer finds several private lenders to invest money in a property, instead of getting a loan through a bank.

Syndicated mortgages have been linked to mortgage fraud, including more than 120 people in the Greater Toronto Area who allegedly lost millions during a syndicated mortgage deal in 2017, as reported by the CBC.

In February of 2018, the Financial Services Commission of Ontario (FSCO) issued $1.1 million in fines as part of a settlement with four mortgage brokerage companies involved with syndicated mortgages tied to real estate projects for Fortress Real Developments Inc. and revoked five broker licenses.

The Government of Ontario has created new regulations to hopefully minimize these types of occurrences. As of July 1, 2018, provincial regulatory changes to syndicated mortgage transactions in Ontario are in effect under the Mortgage Brokerages, Lenders, and Administrators Act. Under the new rules, non-qualified syndicated mortgages will have to comply with expanded requirements.

What is a qualified syndicated mortgage?

Let’s first look at what counts as a qualified syndicated mortgage:

  • Negotiated or arranged through a mortgage brokerage.
  • Secures a debt obligation on a property that is used primarily for residential purposes, includes no more than a total of four units, and (if used for both commercial and residential purposes) includes no more than one unit that is used for commercial purposes.
  • At the time the syndicated mortgage is arranged, the amount of debt it secures, together with all other debt secured by mortgages on the property that have priority over, or the same priority as, the syndicated mortgage, does not exceed 90% of the fair market value of the property relating to the mortgage, excluding any value that may be attributed to proposed or pending development of the property.
  • Limited to one debt obligation whose term is the same as the term of the syndicated mortgage.
  • The rate of interest payable under it is equal to the rate of interest payable under the debt obligation.

A syndicated mortgage that secures a debt obligation incurred for the construction or development of property is not qualified.

What’s changing?

As of July 1, 2018, mortgage brokerages dealing with non-qualified syndicated mortgages (anything not complying with the list above) will be required to:

  • Collect and document specific information related to a potential investor’s or lender’s financial circumstances, needs, objectives, risk tolerance, and level of financial and investment experience using a new FSCO form.
  • Undertake and document a suitability assessment, using specific criteria, for each potential investor or lender using a new FSCO form.
  • Collect and document expanded disclosure information using a new FSCO form. This includes information regarding the property appraisal and, in the case where the borrower is not an individual, the borrower’s financial statements.
  • Observe a $60,000 limit on non-qualified syndicated mortgage investments over a 12-month period for investors or lenders who are not part of a ‘designated’ class of investors and lenders. The regulation defines the designated classes of investors and lenders as those that have already met higher income and asset tests.
  • Report written complaints received by the brokerage related to non-qualified syndicated mortgages to FSCO’s Superintendent of Financial Services within 10 business days of receiving the complaint.

What real estate sales professionals can do

If you are aware of a deal being financed with a syndicated mortgage, do your due diligence. Make sure that it’s compliant with the above regulations.

You can also independently verify the property value. For example, our GeoWarehouse tools make it easy to validate that information and more.

View the full text of the new FSCO regulations here: https://www.fsco.gov.on.ca/en/mortgage/Pages/smi-amendments.aspx

With the FSCO cracking down on syndicated mortgages, it’s more important than ever to exercise due diligence. GeoWarehouse can help.

Learn more about how our tools can help detect mortgage fraud. Visit www.geowarehouse.ca.

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Investing in real estate is one of the most popular ways to make money. Despite predictions of market downturns, real estate continues to grow better than many other investments. Real estate can be a key part of an overall investment portfolio and retirement planning strategy for smart investors.

However, building a real estate investment portfolio is not for everyone. In most cases, building a real estate investment portfolio is not for people who are looking for a quick gain. While investing in real estate can be financially rewarding, there are also downsides.

Real estate investing, at its simplest, is where money is made from rents, not real estate value appreciation. There’s always an expectation that property will go up in value, but that doesn’t always happen. The market may bottom out, or owners may have to sell suddenly, losing money on carefully considered investments. Plus, investing in the residential market, such as with a rental property, may mean investors need to be prepared for midnight phone calls from tenants.

This is where you come in as a trusted real estate professional. Working with your clients, you can do the necessary investigative work to help build their real estate investment portfolio.

Investors, developers and property owners remain positive, if cautious, about the outlook for Canada’s real estate market in the year ahead. The rest of Canada faces unique regional challenges, while the lack of supply in Toronto and Vancouver continues to drive high demand. There isn’t a single market where savvy investors can’t find opportunities to invest if they leverage the right technology and do the required research and legwork.

Many investors have a sizeable portion of their overall net worth tied to a hard asset such as owning their own home, or paying off a mortgage. The key thing to remember is that no one asset type should take up more than 50% of any investment portfolio, but what takes up that 50% differs from investor to investor.

Before investing in real estate, clients need to be prepared to undertake extensive background research on the property, the market and potential tenants, as well as to check for any issues relating to the property. Information that you, their real estate sales professional, can provide easily and quickly with the right tools at your fingertips.

Most people want to invest their money so they have something for their retirement to help supplement whatever retirement plan they may have. Do you invest in RRSPs or real estate? Check this out: http://www.moneysense.ca/save/retirement/retirement-planning-real-estate-rrsps/

In fact, some say storage facilities are the new hot investment trend: http://www.macleans.ca/economy/business/canadas-new-real-estate-war/

How are you helping clients looking at investing in real estate in today’s real estate market? Join the conversation @GeoWarehouse.

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