The Renegade Real Estate Investing Newsletter
"Cutting Through the Real Estate Investing B.S."
This FREE Real Estate Investing Tips newsletter is your window into the world of real estate investing. You will never get closer to the real action than learning straight from two Canadian brothers, Tom & Nick Karadza, who are actually implementing the strategies they talk about!
In this weekly publication you will get access to our real world guides, trends, tips, strategies and "how to" information that is being implemented "on the streets" with real people, right here in Canada.
To access the full list of articles visit: www.TheRealEstateRenegades.com or check out their new blog: Blog.TheRealEstateRenegades.com
It is published every Thursday, if you have been forwarded
this email and would like your own copy click here to
Friday June 27th, 2008
In this Issue:
- Renegade Commentary: Long Weekend & Real Estate Trends?
- Featured Article: Next 3 Steps of Buying Rental Property
Income For Life Updates...
This month our Income For Life Real Estate Investing Members received an amazing interview with Michael Gerber of "The E-Myth" fame. Michael is a bestselling author of too many books to mention and if you haven't picked up any of his stuff I would highly recommend his book, "The E-Myth Revisited".
In the interview he explains how building a brand can apply to the individual investor on their very first investment property. It's an amazing interview.
On July 24th, 2008 we have our next Quarterly Income For Life Member's Only Event. This is where we get actual Canadian investors who live right here in the Greater Toronto Area to stand up and share the details of how they do what they do. We call it the HOT SEAT and its become the most anticipated part of our events.
We know this sounds crazy but we actually *do* what we talk about with local investors right here in the Toronto area.
This event is for Income For Life Members Only. Not a member yet?
Click here to apply, we'll call you within 48 business hours to see if you qualify!
"Long Weekend & Real Estate Trends?"
So another long weekend is upon us, well kinda, I guess.
The work day on Monday throws a curveball at us this year but I think many of us will find a way around it :-)
So how can long weekends and real estate investing possibly mix?
It gives us a chance to notice things that are going on only a short distance away from us. Sometimes there is great opportunity right under our noses but we are so ingrained in our daily routines we never get out there and explore.
Last year I was driving along to 401 on the Canada Day weekend to Kingston. And although I was getting close I knew I wasn't there yet, but I still saw a development of big box stores being built.
I quickly began scanning for a sign of the city I was in and it was.......are you ready for this......Napanee, Ontario.
The only reason I even knew the name is because I had heard the Canadian pop singer, Avril Lavigne, grew up there.
But here I was in Napanee watching some of the biggest corporations in the world expand into the area. Now for any real estate investor this is big news. This is a very positive sign of future development and growth.
This is something I would not normally have seen but I made a mental note to follow its progress. So not only was I able to escape for some relaxation time, I was also able to continue realizing opportunity.
One of the other things you might notice this long weekend is some newer developments of condominium townhome bungalows.
Now that's a mouthful.
This has definitely not been a popular type of development in the past. But keep your eyes peeled as there are more and more of them on the way.
Remember, the Baby Boomers are starting to retire and downsize. This type of housing, away from the city, has low maintenance and not many stairs.
Once you notice one of these developments you won't stop, because they are popping up everywhere.
There are things going on all around us but often because we have the same trip to and from work we don't get the opportunity to see what is going on.
If you are taking a trip this weekend keep your eyes open. There is a lot to learn and realize about the areas you are passing, and there is a mountain of opportunity out there if you realize it.
And, most importantly, be safe!
Until next time...be a Renegade!
Tom & Nick Karadza
"The Real Estate Renegades"
Real Estate Investing Step-by-Step:
To learn more about our investing approach and the system we use
with our members you can request a copy of our FREE Report to be
mailed to you. In it you will learn:
- How you can turn 3 Single-Family homes into 24 homes without investing any additional money by having homes buy homes. EASY WEALTH!
- How you can create Income for Life in just ONE hour of spare time
a day! This means NO FIXING UP DISTRESSED HOMES!
To request your own complimentary copy of our investing in "Nice Homes
in Nice Areas" report go to www.LeaveWorkOneDay.com and fill out the form
at the bottom of the page.
Next 3 Steps of Buying Rental Property...
Here are the next 3 Steps of Our Buying Rental Property Guide we're putting together....the entire thing will be posted on the website when it's done.
STEP 5: Property Inspections & Insurance
We're always amazed when people buy a residential real estate investment without a property inspection. An inspection is such a critical part of the process.
We always look for the major structural and mechanical to be in good working order. Things like the roof, windows, foundation, plumbing and electrical systems. If you're renting the property you don't want to have to dump thousands of dollars into the property within the first 3-5 years at a minimum. You'll likely eat up all your positive cash flow.
Most Common Mistake During the Property Inspection: Believing everything the inspector says without doing your own research. Once a member of our team found a great property and we almost lost the deal because the home inspector thought the oil tank was too close to the furnace. He even quoted some official sounding piece of by-law. Thankfully, we looked into it and found out that the by-law he was referring to was at least 10 years out of date and was no longer an issue. It can takes weeks to find a good positive cash flow property, don't walk away from it without giving it some thought. How long will it take you to find another one? Time is money.
You must get the proper insurance when buying rental property. You want to sleep at night. I know there are many landlord who try to save money by cutting corners. For example, a "student rental" may have 5 or 6 kids living it on the out skirts of a college or university campus. Insurance on that type of property is usually 4 times more expensive than what it would be to insure the home as a regular family rental. When buying rental properties do the right thing and protect yourself, your investment and your tenants with the proper insurance.
You don't have to go all out and get the contents of the house insured. There is "contents or tenants insurance" for that. And you'll what a good insurance broker who can give you some tips. When buying rental property you may want commercial grade insurance because of higher liability protection and you may want your tenants to have contents insurance because many issues can be covered by their insurance instead of yours. For example, if a tenant causes a little fire in the kitchen that is often covered by their tenants insurance.
Most Common Mistake During This Step: Under insuring your property. Get the right insurance for the property and get enough liability protection. Speak to a qualified insurance broker who has worked with rental properties.
STEP 6: Waiving Conditions On The Offer
When buying rental property most offers will have at least 2 conditions. Your offer will be conditional on financing and conditional on an inspection.
You are in control during this process so don't hesitate to ask for what you want. For example, if the home inspection turns up a few minor issues (tap leaking, loose toilet etc...), don't be afraid to ask for the seller to have it fixed before you waive conditions. It's been our experience that many mortgage brokers and real estate brokers don't want you to do such things but it's your money. Ask for what you want.
But.....don't get ridiculous either. If you have a good property and you know how to make money with it don't walk away from a deal over a loose tap in the kitchen. The time and money you'll have to spend to find another good investment is always more than you think. Money is attracted to speed. Keep pushing forward and don't get stuck on little items.
During the time you have an accepted offer and before you waive conditions your mortgage broker or bank should be busy getting final approvals on your financing. Before you waive conditions make sure you have an understanding of the mortgage.
What's the interest rate?
What is the amortization period?
What are the penalties if you break it early (meaning - is it a closed mortgage or an open mortgage?)
Can you move the mortgage to another investment and avoid penalties if you break the mortgage before the term expiries?
What is the mortgage insurance fee?
Do you pay tax on mortgage insurance? When?
When is the first mortgage payment? Often if you close on the 3rd of the month you won't have your first full mortgage payment for almost 60 days.
Most Common Mistake During This Step: Walking away from a deal after have the Seller refuse to fix a few minor items (e.g. leaky tap in the kitchen). If the foundation and major mechanicals of the house are solid and you are following a system that will make you money then proceed. Of course, if the roof needs attention and the Seller refuses to do anything about it then it may make sense to walk away.
There's an exception to everything and if you're working with a good mentor you can find a way to have the Seller replace or fix major items and still get the property.
STEP 7: Closing On The Property
At this step of buying rental property most things should be in place. At this point your financing should be in place, your lawyer should have a copy of the firm offer and you should begin to focus on advertising the property for rent.
Every day that you don't have a tenant in the property is going to cost you money.
I've worked with investors who close on a property and wait weeks before they have their advertising in place because they're *busy* with other things. Shocking.
Just before you close call the utilities and have them transferred over to you.
Then set up your advertising and start running it 1 week before closing.
We've found that if you run your advertising too early you end up with a bunch of stale leads. People looking to rent are often working with a deadline. If you advertise a month in advance your leads may find something else before your property is available.
Tip: Try to negotiate with the Seller that you can show the property to prospective tenants before you close on the property.
For residential real estate investments your advertising should consist of a yard sign, online classifieds and offline classifieds. We have filled homes from all of these sources and you can never tell where the best candidate is going to come from. We look at advertising as an investment not an expense.
Often you may find someone who is looking for a property that isn't a good fit for the one you have but is willing to work with you to find another property. We've done this many times with prospective tenants. We then work with them to find a home they like, then buy it and rent it out to them. You have a tenant for the home right on the day of closing. It's a slam dunk and a beautiful way to invest in your next property.
There are a few things to be aware of with this strategy. Like not buying a home that is so unique you won't be able to rent it out to anyone other than the current tenant or buying a property without sufficient qualification of the prospective tenant. You don't want them walking away from you after you're purchased the property. We can't say it enough...work with a mentor!
Most Common Mistake During This Step: Not preparing your advertising before closing and wasting a week after closing to begin the process. Time is money!
About The Real Estate Renegades
Tom Karadza & Nick Karadza are authors of the book "Income For Life for Canadians", available on Amazon.com by clicking here (not Amazon.ca just yet!),
and work with a select group of real estate investors throughout the Greater Toronto Area.
They actually do what they talk about it.
They have been called 'Real Estate Renegades' because they are implementing
real estate investing strategies that were once thought to be impossible by
many 'industry professionals'. They are part of several mastermind groups in Canada and in the USA and publish a monthly 12-page real estate investing newsletter and audio series exclusively for their clients.
They also offer real estate investing classes, reports, coaching
and mentoring, and other resources to help both beginner and experienced real estate investors achieve ultimate success. Learn more now at:
You can meet them in person at their next FREE Real Estate Investing Class, "How to Invest in Nice Homes in Nice Areas" by signing up here: www.CanadianRealEstateTraining.com
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