What type of investments do you provide?

We specialize in long term (3-5+ year) tenant occupied holding properties that provide monthly cash flow distributions to the investor.

 

What’s your share in the deal?

We do all the work, you put up the money, and we split all profits 50/50.

 

That seems a bit rich. Is that negotiable?

No. The amount of work we do for our investors is enormous, and a 50{d3fcc36f48ce60b5f255353d159c919a44e2bfefe54e9a26abb7c10e69faf24e} split is a fair and more than reasonable split.We find and screen good investment properties, write multiple offers on the property, negotiate the terms and conditions, finalize the offer, set up legal or co-investor structures. We then select a property manager, onsite manager, and other professionals such as tax advisors, inspectors, appraisers, bankers, engineers, plumbers, carpenters, electricians, and handy‐men. We will market, rent, fix‐up, repair, landscape and/or enhance the property to standards that expert sees fit to achieve appropriate rent and/or resale value.

We keep records of such fixtures, repair material and/or landscaping material expenditures and/or of all other expenses, such as property management fees, sub-contractors, onsite managers, taxes, insurance, realtor, legal, advertising and/or related expenses to market, upgrade, rent and later sell said property. We manage the property manager, supervise the tenant relationship, set up contractor accounts, supplier accounts, and WCB coverage if required. We manage all relationships with banks, realtors, lawyers, accountants, and other 3rd parties.

We negotiate with financial institution to obtain acceptable financing initially and/or later, re‐finance using 1st, 2nd and/or CMHC insured mortgages. We set up reporting and e‐payments to investor, research market realities regularly and adjust rents accordingly. We prepare annual or quarterly statements and documents that may be required by various jurisdictions, and sign personal guarantees for required financing.

You write a cheque, sign some papers, and collect regular cash flow distributions.

 

Can you give me a guaranteed rate of return on my investment?

No. We are going to work very hard to make you money, but predicting a return is impossible. The real estate market doesn’t go up linearly, it varies per year – one year it might go up by 7{d3fcc36f48ce60b5f255353d159c919a44e2bfefe54e9a26abb7c10e69faf24e}, the next it might be ‐2{d3fcc36f48ce60b5f255353d159c919a44e2bfefe54e9a26abb7c10e69faf24e}, then 22 {d3fcc36f48ce60b5f255353d159c919a44e2bfefe54e9a26abb7c10e69faf24e} the next year.But remember: If you don’t make money, we don’t make money (unlike your mutual fund salesperson).

 

Can you explain all the details of the joint venture agreement (JVA)?

No, but we can explain that it’s an agreement to protect both of us, and that it is equally fair. We are not lawyers, so explaining a legal document is not in our skill set, and we don’t want to make a mistake in explaining the document that misrepresents the terms of the agreement.

Can I get a copy of the JV agreement?

Of course, but we’d like to have you meet with our lawyer and he can explain the document, since he wrote it and can very easily explain it to you.

Can I have a copy of the JV agreement to take to my lawyer?

Absolutely! In fact, not only is this a good idea to protect yourself, but this is a requirement of doing business with us. But instead of us sending you a copy, our lawyer will give you a copy when you meet to have the document explained.

Can I see the property before we buy?

No, and here’s why; If you were to buy stock of Telus, for example, you wouldn’t drive to the Telus building and need to see the tiles in the lobby, would you? Would the light fixtures or the colour of the walls affect your decision to invest? No, of course not. The investment should be based on the numbers only and if the investment makes sense – the same is true here.But, what we will do is take pictures inside and out once we’ve closed, and will send you copies so that you can see a full walk-through of the property. We encourage you to keep those photos in a separate photo album to keep track of, for every property we buy together.

How long do you need the money for?

Real estate is a long term investment, so you should expect for your investment funds to be tied up for a minimum of three to five years. When the value of the investment property has risen and a decision to sell has been reached, the proceeds from the sale first go to fully repay your initial investment, then to cover the closing and sales costs, and the remaining funds are then distributed according to the JV Agreement.However, sometimes it makes sense to not sell the property, but the investor may still want their investment back to use for other things. In this case, we will refinance the property and repay the investor, allowing you to get your investment back, and retain ownership of the property. This requires that the property has increased in value enough to support this, and also that the rental rates have increased enough to support the increased mortgage payment.

Are we both on title?

Ideally, yes. Sometimes, it turns out that one party does not have the ability to qualify for the mortgage, and hence cannot be on the title. In this case, the other party qualifies for the mortgage and is on title, and a caveat is registered on the title of the property to protect the interest of the non‐titled party.

Can you provide references?

Absolutely! Since we highly respect the privacy of our current investors, we won’t simply hand their names to you, but instead you can contact us for further information, screening, and their contact information.

Do we make the cheque out to you personally?

Because we often need to act quickly to purchase your investment property, we need to have a small amount of your funds available for immediate access – not stuck in a lawyers’ trust account. This usually involves a first‐round investment of $10,000 to $15,000 payable to us directly. Once we have a property that is under contract, the remaining funds required will be made payable to our lawyer in trust. This ensures that not only can we act quickly on your behalf, but that your money is safe and secure.