Surrey Real Estate Investment Club

Welcome!“The most important thing is to do your homework. You

have to read a lot, find out about the areas you want to

go into, where the emerging markets are. It’s a matter

of where you see growth, go and find out, you have to

go into the markets yourself."

~Jim Treliving

Surrey Real Estate Investment Club

Welcome!

"Real estate is at the core of almost every business, and

it's certainly at the core of most people's wealth. In order

to build your wealth and improve your business smarts,

you need to know about real estate."

~Donald Trump

Sponsors

Welcome to the Surrey

Real Estate Investors Club!

Future Plans

1. Strategy & Getting Started

2. The RE Cycle and Selecting An

Investment Area

3. Property Selection and Cashflow

4. Financing

5. Due Diligence & Making an Offer

6. Tenant Selection & Management

Review of Last Meeting

• A simple, little retirement plan

• add $2,000 / month to your retirement fund!

• Why or why not invest in RE?

• What skills are required?

• What strategy?

• hands-off vs active

• residential, commercial, MFH, SFH, condos

• What tactics?

• Wholesaling, B&H, flips, RTO

• Getting started – your vision and plan

www.AspireRealEstate.ca/blog

Tonight’s Agenda

• What is the real estate cycle and how

do we use it to our advantage?

• How do I decide where to invest?

• Location fundamentals

The Legal Stuff…

The information contained herein (the “Information”) is intended for general informational purposes only and should not be relied upon by recipients hereof. Although the Information is believed to be correct, its accuracy, correctness or completeness cannot be guaranteed and has not been verified by either Aspire Holdings or any of its affiliates.

Views expressed in this presentation are based on research materials available from sources that Aspire Holdings (d.b.a. “Aspire Real Estate”) considers reliable but neither guarantees, warrants nor assumes any responsibility or liability of any kind with respect to the accuracy, correctness, completeness, or suitability of, or decisions based upon or in connection with, the Information.

All real estate opportunities come with varying degrees of risk and past performance is not an indicator or guarantee of future results. Prices can go up or down and current performance may be lower or higher than any performance data quoted for comparisons.

What is the first thing that comes to mind when people talk about the

Real Estate Cycle?

The Real Estate Cycle

The Housing Bubble-Kieran Trass

The Real Estate Cycle

The Secrets of the Canadian Real Estate Cycle

- Don Campbell, Kieran Trass, Greg Head and Christine Ruptash

Caution!

• Market specific

• Nearly Impossible to pin point exactly!

• Tactics to use

• Focus on Trends and WHY

• Media

• Fear and Greed

• Each Phase• Beginning

• Middle

• End

Caution!

The Cycle

Boom

Slump

Recovery

BoomEarly

– Population continues to increase

– Returns are attractive for existing investments but new ones offer lower returns.

Middle

– Population growth, rents peak.

– RE sells quickly, few foreclosures.

– RE Financing is readily available.

Boom continued

End

– Rents fall, vacancy rates increase.

– Constructions levels are very high.

– Renovation is very popular.

– Prices are still increasing but will change quickly.

Prevailing emotions:

Fear that RE is good investment shifting to GREED (Fear of missing out).

Slump

Early

– Slow price increase.

– Surplus of RE inventory.

Middle

– Vacancy rates peak.

– RE horror stories. Non-strategic investors sell to get out.

– Cashflow decreases as rents decrease.

Slump continued

End

– Population/employment growth and rents are low but stable.

– Income and RE sales are stable.

– Price of RE drops and affordability improves.

Prevailing emotions:

Greed turning to Fear

RecoveryEarly

– Population increase.

– Rent increase and vacancy decrease.

– Property values increase (<10%).

Middle

– RE is affordable .

– Construction increases.

Recovery continued

End

– Returns decrease as prices increase.

– Rent increases slow down as people become homeowners.

Prevailing emotions:

FEAR shifting to Greed

Strategies during Boom

Early

– Continue buying for CASHFLOW.

– Good time for construction or selling

Middle

– Get creative with existing properties to increase cashflow.

– Opportunities with good cashflow are rare.

End

– Get ready for slump, sell underachieving properties.

– Vacation time!

Strategies during Slump

Early

– Get ready for opportunities to come.

– Continue vacation.

Middle

– Start shopping. Look for those that NEED to get out.

– Focus on strong cashflow.

End

– Quality properties with great cashflow are available.

Strategies during Recovery

Early

– Buy and Hold. Great time to grow portfolios equity and cashflow position.

– Fixer uppers.

Middle

– Continue buying for cashflow and fixer uppers.

– Land for development.

End

– Land for development and well located renos.

– R2O-be careful of leaving equity on the table.

Important points

• Global economy is still a wild card.

• Buy and Hold with

positive CASHFLOW

is a great

investment.

“The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the

best time to sell.”

- Sir John Templeton.

Why Is the Area Important?

You are only making an investment if you make

money while you own it.

Otherwise you are just

a speculator!

But, you make money on the buy, not the sell.

Good location research will improve your likelihood

of success. Poor research can devastate you!

Where Should I Invest?

You have to ask yourself some other

important questions first:

1. How active am I planning to be with this

investment?

2. How far am I comfortable travelling to do

my research?

3. How familiar am I with that area right now?

Some Big Picture Things to Think About

Population Trends?

Employment Situation?

Transportation?

Healthy Economy?

Appealing Opportunities and Plans?

Case Study: Surrey vs Ladner

Real estate with a CAUSE!

C onvenient

A ttracts ….(families, students etc)

U nder Market Value

Credit to RevNYou.com!

Case Study: Surrey vs Ladner

Real estate with a CAUSE!

C onvenient

A ttracts ….(families, students etc)

U nder Market Value

S tarter Homes

E conomic Fundamentals

•

Case Study: Surrey vs Ladner

C onvenient

A ttracts ….(families, students etc)

U nder Market Value

S tarter Homes

E conomic Fundamentals

GDP → Jobs → Population → Rental

Demand → Decreased Vacancies →

Increased Rents → Increased Prices

Research Fundamentals

?????

Focus on a Sub-Market

Same indicators on a micro-scale:

• Rent Rates• Vacancies• Median income• Typical starter home• Typical home owner & tenant profile• Watch listings/prices/DOM & other signs

• Walk the area frequently – take your dog!

Feedback, Prizes and Action plan!

Questions or comments? Please let us know!

Next meeting Wed. March 27th @7pm

Summary: www.AspireRealEstate.ca/blog/

• Find a new person in the group and tell them what you are going to do in the next month to achieve your goal!

• Follow up at next SREIC meeting.