Alberta Commentary 2013

Happy Holidays

December 24, 2013

I wanted to wish a happy holiday season to readers all around the world who frequent this site especially from the USA and France. To all of you in China and India, I will be positing this coming week but the volume will be light because of the global holiday season.

Celebrate the Season

December 18, 2013

With Christmas being only a week away, many parts of the world are in a definite slowdown mode and I am no exception to this. Now is a perfect time to attend those parties that you may have skipped this past year and catch up with people over a cup of coffee. My IT team is essential to everything I do and that is why I keep the lines of communication open especially at holiday time. Most people who come to this site are interested in real estate and thanking your own team for their 2013 contributions would very much be in order.

Some last minute tax planning depending on your own situation would also be in order now before you can really kick back and enjoy the festive season.

Please note that the news articles on this site will be fewer at this time of year than any other but there will always be something new to read.

Annual insurance Check Up

December 11, 2013

Many people see a doctor on an annual basis to detect any health issues which may arise. My father is adamant about an annual tune up on his vehicle to keep it running smoothly. These parallels lead to the question of how often you should check the insurance policy on your investment properties.

Ideally, an annual check up on your insurance coverage would be in order. In a booming marketplace like Alberta, you may find that you may be underinsured as the values keep rising. Conversely, if you live in Detroit, you may find that the values drop and you need less insurance than the previous year.

It can be as simple as a phone call to your insurance company and any changes to the policy could also be brought to your attention that may be unaware of.  Please ensure that you have your most recent property tax statement when contacting them.

If you are considering purchasing an investment property, ensure you are dealing with a broker who deals specifically with investors. It is comparable to having a heart surgeon perform surgery on a ruptured aorta versus a general practitioner.

Yale’s Goal setting study of 1953

December 4, 2013

After you have attended a number of real estate seminars, you are bound to hear about a study from Yale university which promotes the value of writing down your goals in order to achieve them. Their results claim to have found that 3% of graduates who wrote their goals down outperformed the other 97% combined in achieving financial wealth after having them followed for a 20 year period. This study is heavily quoted in order to get people to purchase a rental property or sign up for expensive courses. All of this leads to my question. Did the study ever actually occur as has been mentioned over the past 60 years?

I attempted a simple Google search and found that it had not!! No one from Yale ever recalls being part of the study. The secretary of the class of 1953 did not know of the study. The administrators at Yale were consulted and various offices records were also examined with no results. This is but one example of how seminars heavily promote their own agendas without doing any due diligence on what they are talking about.

For the record, I have never written down my goals because I am too busy taking action.

Recall what you have learned

November 27, 2013

Sometimes, it is worth repeating what one has already covered.  For that reason, we ask our readers to review our previous posts in this section. Some lessons may have been forgotten because there is so much to recall. In order to proceed with investing at a higher level, an occasional review is definitely in order. Otherwise, we are doomed to repeat our past mistakes.

There you have it, your homework for this week!

Why I prefer the internet over real estate for wealth creation

November 20, 2013

I have been very fortunate to have met many successful real estate investors in my lifetime and continue to do so on an ongoing basis. To them, it is their preferred choice to keeping their net worth. I have a strong secondary affinity to this asset class but must confess that the vehicle of wealth creation I have chosen is business ownership and specifically an internet business. Running an internet business is not without challenges but I believe it is much easier for the average person to succeed on the web versus a portfolio of investment properties. Here are some of my reasons why:

1)  Properly used leverage is a key to success. Having a $300,000 mortgage with $50,000 cash on an investment property sounds great but compared to the global reach that a website can provide is absolutely insignificant.

2)  The operating costs of an ongoing web based business are small. There is no reason why anyone cannot start one out of their own home with a few thousand dollars. Compare this with a down payment in the tens if not hundreds of thousands of dollars of a rental property.

3)  The internet is the most profound invention of our lifetime and is bigger than the printing press was 500 years ago. An apartment building or even a portfolio of them cannot compare to the impact technology has on our lives.

4)  The cash flow from a rental property is much smaller than a web based business can provide. It is much easier for someone to quit their jobs via an internet business versus purchasing rental properties. The idea of owning sufficient investment properties to quit one’s job sounds great but does not work out very often because there simply isn’t enough cash flow present.

5)  The possibility of a real estate portfolio going from $10,000 a month in cash flow to $10,000,000 in several weeks is absolutely impossible. However, this is in the realm of a website which goes viral and hence creates enormous wealth.

6)  There is more internet support than ever before. I believe this trend will only increase as technology takes over more of our lives. Finding talented IT staff is easier than a locating a good mortgage broker who understands investments.                       

Choosing a secure PIN for your bank account

November 13, 2013

Banking is an aspect of life that affects most people whether they are involved with businesses, investments or even if you simply have your wages deposited into your account. In today’s internet age, its importance is only growing and so is having safe and secure protection measures in place for someone’s money!

With that in mind, it is astounding how many people use very simple pass codes for their banking and personal information. I was surprised to learn that 11% of the population uses the code # 1234 for their banking information. Someone has worked quite hard for their money and then disregarded important security measures by using a code that anyone can guess.

Also, please do not tell your PIN code to anyone including family and friends. The entire purpose of it is to provide security and telling others defeats the intention.

Please avoid using anything which is easy to remember.  If you an easily recall it, chances are that someone else can too. Avoid using birth years and “feel good” codes such as 5683 (i.e. LOVE).

For more information on this very important subject and if you have an inclination towards statistical analysis, please visit:

Special assessment as part of an offer to purchase

November 6, 2013

Suppose you have decided that your next investment will be a condominium. There are a number of differences that must be taken into account versus a residential home. One of these is the monthly condo fees which are levied by the condo board. These can increase subject to the sole discretion of the board and can be as high as they see deem necessary! In the event that the monthly contributions from all of the owners are insufficient to cover the expenses, then you will hear the two most dreaded words an investor fears on their bottom line: SPECIAL ASSESSMENT.

A special assessment is a one time levy which must be paid to the board which is above and beyond the monthly condo fees. These are non negotiable so please do not hire legal counsel for litigation purposes.

When purchasing a condominium, you will want to avoid this at all cost. The best way to do this is to insert a clause in your offer to purchase that makes the other party legally responsible for assessments which were levied before you bought the property. You may wish to add a clause that states “The Seller is responsible to pay all special assessments levied by the condominium board up to and including the Completion Day, no matter when actually due and payable.”  The seller will then be obligated to pay for any assessments approved by the board regardless of when they are due even if it is after closing.

Building your investment vocabulary

October 30, 2013

To all of our readers around the world. We have had an unforeseen delay regarding our major announcement. As soon as we are ready, we will publish it in our daily news feed.

Regardless of where you put your money or even if you leave it in a bank account, a simple but very powerful prerequisite to success in the money game is to have a large enough financial vocabulary.

You must first choose your asset class that you wish to focus on. In my case, the internet is where the bulk of my time is focused on. Words like dedicated server, HTML, Googlebots, bandwidth and patch releases are what I use to communicate in my field.

If the stock market is your vehicle of choice, then other words such as market capitalization, ex dividend date, asset allocation, prospectus and initial public offerings have meaning.

You must become literate before you proceed. I have seen far too many investors wowed by technical terms they do not understand, put their money into something and then lose a substantial portion if not their entire investment. A simple way to increase your vocabulary is by going for lunch with someone in the field you wish to invest in and having them describe concepts they have used to become successful. They may even have a recommended reading list they have used in the past to further their knowledge. There is no shame in saying my three favorite words “I don’t know” because there is far too much information for one person to ever grasp in a lifetime.

Politics in Washington D.C.

October 23, 2013

We have been very busy this past week with a number of behind the scenes internet activity as we prepare for our major announcement. WordPress 3.7 will soon be available to users around the world and we are anticipating its partial automation of updates which will simplify our ongoing efforts.

Wednesday, the world witnessed a near catastrophe as the debt ceiling level debate in Washington D.C. went right down to the wire. I will not go into details here because it has been very extensively covered around the world.

In double entry accounting, one person’s income is another expense. An example of this is rent payments are considered an expense to a tenant but income to a landlord. With that in mind, Washington’s tarnished image as of October 16th will now serve as the key “trigger event” that Karl and I have been looking for a very long time. This will take us to the next level which will occur before the end of this month.

As a result of our imminent breakthrough, we are nervously anticipating the onslaught.  Watch for the fireworks on this site and you will fully understand exactly what we have been up to!!

Major announcement for October 2013

October 16, 2013

To all of our readers around the world, we expect to have an announcement this month about a major breakthrough we have been working on for quite some time. All of the details will be forthcoming after we have achieved what we originally set out to accomplish.

Calgary – Edmonton community profiles

October 9, 2013

One of the keys to successful real estate investing is to have specialized knowledge of an area which you are potentially investing in. Before saying anything else, one must recall the old adage that “The map is not the territory”.  However, it is a very good place to start. Listed below are two links for Alberta’s largest cities of Calgary and Edmonton.  Although smaller cities have explosive potential in terms of equity appreciation, the large cities are where most investors tend to focus their attention. Some of them can be found throughout the site.

Also, having access to current market rents in Alberta is a key to success.  Rents represent cashflow which is everything!

Having this kind of information before viewing property is almost like cheating but it simply is using the internet to your advantage.  Remember to investigate before you invest……and after!



Alberta rentals:   

Sports teams and real estate

October 2, 2013

This past year, Edmonton finally received funding approval for their downtown arena. Vancouver has also showcased their new stadium B.C. Place as one of the best in North America. Sports venues are one of my favorite measures of seeing the direct measures of a local economy’s real estate market. When a local economy does well, this is reflected in higher attendance at sporting events regardless of how the team is doing. I am sure that the businesses around B.C. Place are doing quite well financially when the team plays a home game, Conversely, the redevelopment of a hockey arena or other sporting facility serves as a drawing feature for others to visit the area and see the type of community that exists. The redevelopment serves to create jobs in the short term and provide a base for the long term benefits which can ripple out to surrounding areas.

The next time you see a new sports facility being built or modernized, call your investment realtor who specializes in the area and see what potential investment opportunities exist.

What do bankers look for in a real estate deal?

September 25, 2013

As an investor, there are a number of factors which make a deal appealing to you.  They may include great cash flow, tremendous upside in equity and multiple exit strategies for disposing your property.  One of the many steps you must consider when purchasing an investment property is what your banker looks for when signing on a mortgage agreement. Having to look at the deal from someone else’s perspective is not as simple.  However, here are a few rules of thumb to help you out

1) Credit rating. Having been current with all your payments including utilities will be a plus when speaking to your banker. They like dealing with people who pay their bills!

2) Down payment. The larger your down payment, the more positively you will be presenting yourself as someone who is willing to take a risk with the bank. Low money deals mean the bank takes most of the risk and this is not a good thing for them! You need to have your skin in the game. By all means, please do not ever max out your credit cards for a down payment.  This is insanity at its worst and will only lead to trouble!

3)  Capacity to pay the mortgage.  If you are making $5/hr and expect to obtain a 2 million dollar mortgage, chances are you will be turned down. You must have the ability to make the bank comfortable in lending you money. Your capacity to pay them back in this case will not work. The bank is asking themselves if you are able to make the payments long term.

4)  Charisma is a vital factor. If you have a personal relationship with your banker and know them one on one, your chances of being approved have just gone up.  People like dealing with other people and most of the time, they just want to help you out. Send them a thank you card/Christmas and birthday card throughout the year.  You never ever know when they could help you out again.

IOS 7 release

September 18, 2013

Apple’s annual IOS release in September has made this month along with April (for tax reasons) two of my favorites.  All around the world, Apple users will download this latest update to their smartphones and tablets on September 18th and see what developers have been up to over the past several months.

Curiosity will also get the best of me but I will not download IOS 7 on that day but will wait until Friday.  My time in the IT world has taught me to let other people download and test this release first and let them take any hits to their computers.  Even though it has probably been tested quite thoroughly, there are always small bugs which cannot be predicted.  A patch release to address these issues is usually sent shortly thereafter.

Even though it won’t be available, I will be doing some Google searches to see if there is an interface between Siri and WordPress as we incrementally move to automate the process of providing updates for Alberta’s real estate market.  WordPress 3.7 and 3.8 will be available this year and we will be vigilant on this development but are not having any expectations as we realize this is far off into the future. We will have much more to say on this at a later date.

Does Buy and Hold work?  

September 11, 2013

When investing in an asset class, it is very important to determine your exit strategy before taking any action.  One school of thought is to buy an investment and hold onto to it forever.  This has been made popular by Warren Buffet.

In recent years, stock markets have become much more volatile than say 30 years ago and some have questioned whether this method still works today. I realize that there are two schools of thought here regarding stocks and will leave that for others to debate but I am here to present my thoughts regarding real estate.

If you are constantly flipping properties, you must keep doing it to maintain a cash position as there is no cash flow in flipping. Furthermore, there are commissions, taxes and other unforeseen expenses which can eat into one’s bottom line.

If however, you purchase a property in a strong market with a solid cash flow, this method is probably the simplest and effective way to preserve wealth. A rising tide lifts all boats and your risk is diminished.  It is by no means as appealing from an emotional perspective but it has undisputed bottom line results which are proven the world over!

Anything worthwhile requires you go against the flow 

September 4, 2013

This month is one which marks an important date in history for me. 25 years ago, I had enrolled in my first university computer programming course. At that time, I was introduced to email and TALK (now called livechat). I had never programmed extensively except for some BASIC which I taught myself when I was a teenager. In the 1980’s, computers were definitely not mainstream and I had faced a lot of criticism for spending so much time in front of a monitor for hours on end. I even went so far as to let my grades slip in school so I could spend time with my floppy disks, keyboard and hard drive. Walking down the hallways of my old high school with 5 ¼ floppy disks in hand would always result in an odd look or verbal criticism.

My reason for pursuing this was that I believed against everyone else’s notions that computers could one day change the world. I did not know how or when, but I was sure it would occur. I still do not believe it has achieved the level of penetration that I had envisioned when I was young, but it is slowly evolving and perhaps 20-30 years from now we will get there.

The point is that I started when very few people would even look at a computer.  Anything worthwhile requires to go against the flow. The courage to take action when no one else will is the key to winning in any endeavor including financial freedom. If something is trendy, you know it is too late even though it feels good to be accepted such as buying real estate in 2006. If you need to be accepted, get a new group of friends who will support your vision.

What do smartphones and tablets have to do with real estate? 

August 28, 2013

One of the most important parts to purchasing a property is the viewing of the property. I sincerely hope no one out there purchases a deal “sight unseen” as you are asking for trouble it could very well get you!

Every time that you do this, please bring your smartphone or tablet to record what you see. Preferably, the settings should be to HD quality video. This important step is just as important as the offer itself. There can be no ambiguity as to what is present should there ever be a dispute as to what actually exists.  You can view this many times before submitting an offer and put in clauses indicating repairs you would like done before a purchase.

A copy of this recording should be kept for as long as you own the property.  Apple users should note that only the iphone 4s or afterwards has HD video quality. This is a very simple but often overlooked part of the deal

Why do stock and real estate markets go up or down? 

August 21, 2013

Investing for equity gains whether you are in stocks or real estate is the goal of many investors (myself included). The sight of seeing a large increase in any asset class is always a welcome sight to see and I doubt anyone would argue with that! This leads to a simple but often misunderstood question of what drives a market up or down.

The immediate answer from investors is that there are more buyers than sellers or sellers versus buyers.  More buyers indicates higher prices and more sellers leads to a price decline. This popular notion however is completely untrue. For every buyer there is always one seller and vice versa in stocks or real estate. The correspondence is always one to one.

The real answer is the spread between the sales price to list. When the market average has sales prices above list, the trend is upward and when the list price average is below sales, it puts downward pressure on a market. A similar argument can be made for stocks and whether the bid is above or below the asking price of a stock.

The next time someone mentions that buyers are flooding market to drive prices up, just be sure you are armed with these facts and not someone else’s hype of misinformation.

Special thanks to Wall Street Supertrader of the millennium Daniel Turov for illustrating this to me many years ago.

You do not have to bring money to a deal

August 14, 2013

Last year, I was approached by an acquaintance to get involved in an oil exploration startup company. In order to be part of the group, I would have to bring something to the table.  At this point, many people may think it would have to be money. This can be one requirement in any business or real estate deal, but that was not what I was bringing to the table. I was offering my knowledge and experience of production and revenue accounting in Calgary’s oil and gas sector. Alberta has a world class energy industry and the skills I have learned over the years can be applied universally. My acquaintance’s deal involves oil wells in the United Arab Emirates and my skills could definitely have applications at some point in lieu of cash.

When involved in a real estate deal, you can bring your knowledge, time, expertise or any other item of value to complete a transaction. It may or may not be money just as long as it moves a project towards completion.

Credit rating

August 7, 2013

No matter where you live or even if you do not invest in real estate or common equities, your credit score is essential to your future. The ability to borrow money (such as for a mortgage) and to pay it back is not just for the very wealthy but for everyone. It has been said that having bad credit is better than no credit to a lender because there is at least a track record for them to gauge. A good credit score is essential to low interest loans and increasing the ability to purchase items.

If you have a credit card, that is one way that your history speaks for your abilities to pay money back.  The good news is that even if you have a poor credit rating, it can be improved upon with some assistance from a mortgage broker who specializes in investment properties.

Each country around the world has its own credit agencies and ways of calculating credit.  Although I do not have them all at my own disposal, here is a partial list which can help you get started.

Read more:    

Once your credit is on a solid footing, you can start the process of getting qualified for your first or next piece of real estate.

The ultimate deciding factor whether you should purchase a property

July 31, 2013

Suppose you have looked at a property and are wondering if it would be a good addition to your portfolio.  You have taken out your checklist and verified that it is in a good area close to amenities, schools and transportation. The curb appeal is there as well as a potential resale in 3-5 years depending on your exit strategy.

Time and again you have checked your numbers and seen that it is positive cash flow with a Starbucks nearby. You may not have all of these above factors in your property but there is one factor no one will ever tell you about.

The deciding factor you must check is not what the numbers tell you but rather what your internal instincts say. This is unquantifiable and that which cannot be explained by mere logic and reasoning. If there is something holding you back, then walk away! Usually when something says do not buy, there is a good reason for it even if you cannot explain it! Otherwise, go for it!

Should one buy new or used appliances for a rental property?

July 24, 2013

One of the many factors when renting out a property is the condition of the appliances.  Washers, dryers and stoves are certainly a cost to take into account as a landlord as well it can be a selling feature to a tenant. The question then becomes should one go for new or used?

If you choose to buy used appliances, the cost savings are immediate as they are cheaper than brand new. Keeping costs down is a business move that cannot be ignored. The downside to used appliances is that they can break sooner than new and then your costs could go up as you will be forced into a buying situation you had not planned for.

New appliances have an extra cost compared to used ones but I believe they are well worth it because they will break down less and they can be a great selling feature to a prospective tenant.  The tenant will have to deal with less hassle with (broken washers and dryers for example) and make their lives easier. Keeping an equity building tenant is key to making money in real estate and going cheap on appliances could cost you someone very valuable to your business.

Also, a real estate purchase is usually hundreds of thousands of dollars and the last thing you want as an owner is to go cheap on several hundred dollars of appliances.

The new type of literacy that affects your investments

July 17, 2013

Regardless of the asset class one invests in there are a number of common factors which affect your success. The ability to understand economic fundamentals and reading a balance sheet are two that quickly come to mind.  Many people have lost money because of their inability to understand these concepts and have left money on the table in times past. However, a new one has emerged and many people think it does not affect them but it is increasingly prevalent all over the world. That literacy is the ability to use computers and technology with ease.

Children today are exposed to iphones, Facebook and other tech devices that most people over 30 did not have growing up. I was very fortunate to have had my first computer in 1984 and used email with livechat in 1988. (Karl predates me on all of this by over a decade and that is one of the many reasons why he is a world class IT support!) Computers to me were second nature because I was constantly exposed to them despite being teased as a teenager for advocating their future impact. I have spoken to numerous IT support personnel and the discussions repeatedly state that most people do not know how to use a computer beyond the bare essentials of turning it on and off.

Most financial advisors use technology to support their clients and send documents when required.  Also realtors, property managers and many others use the internet as a device to increase their efficiency. You are either tech literate or will quickly be left behind. If you are intimidated by a computer, then there is lots of help available for you. Most colleges and other educational institutions offer evening courses on how to use a computer. This will help build your confidence in utilizing this necessary tool for investing as well as life in general!

Do you stop and pick up spare change?

July 10, 2013

Years ago, I was watching a documentary which explained that the cost of creating a penny is more than a penny and that according to the author “A penny saved is worthless!”. This last February, the penny ceased being produced in Canada but other forms of change continue on. Often times, I am walking and see loose change on the ground and see others just walk by and intentionally not pick them up. The question then becomes, do I pick up the spare change?

I absolutely pick up it all up even if it is on the ground. It is not just for the monetary consideration, but rather the power of intention. If you want to achieve any financial goal, it is virtually impossible to climb straight to the top of the mountain. You are much more likely to achieve your goal if you break it down to manageable and achievable monthly weekly or even daily goals. Picking up spare change is leveraging the law of attraction that you are open to receiving more. If you would stop and pick up a quarter, is that not 5 nickels rolled into one?

Start increasing your personal wealth attraction by using this simple but often overlooked strategy.

Flooding update for July 2013

July 3, 2013

I have never been in the middle of a natural disaster until last month.  For those who were affected, it is very much a difficult time. What has greatly surprised me is the extent to which Southern Alberta has been able to address numerous issues regarding the recovery.  Already, Calgary has its electrical grid up and running and the Stampede will go “hell or highwater’. The resiliency of Alberta at this time is truly impressive. Short term, this is a very serious situation but in 6-8 months, I fully expect us to be in a fully operational mode.  Although the news articles I post in the short term can be challenging for readers, always keep the faith that this economy is one of the strongest in the world. Our actions and abilities in rising up speak for us and not even a flood can stop the momentum we have.

Success is not a straight line and no matter what happens, we will get through this. For those of you in Calgary, please visit as something to keep in mind this coming October. A vote is a way of saying thank you for the tremendous leadership Mayor Nenshi has shown to us at this time.

Reflections on last week’s floods

June 26, 2013

Late last week, Alberta was on the receiving end of a substantial amount of rain which caused flooding in many areas in southern Alberta.  The amount of rain that fell was unprecedented and resulted in billions of dollars of damage.  At present, we have the goal of getting critical infrastructure up and running. This includes Calgary’s downtown core which is essential for much of the country’s energy sector.

Although the floods were devastating, our response has been equally strong.  We have had to actually turn back our own local volunteers because we have too many of them!  The response from everyone has been both quick and very decisive in getting things back to normal from the political leaders in Alberta to someone’s neighbor.

Short term, this has been very trying and the numerous pictures showing the destruction many are going through says it all. Longer term, this will only intensify the coming real estate boom in Alberta since more people will hear about our reputation around the world.  As we recover, it will be with better infrastructure which is both safer and utilizes modern technology. The massive Alberta rebuild has begun!

Thank you to everyone who has inquired about my safety. I was completely unaffected by the flood in Calgary along with 90% of the city.

Exit Strategy

June 19, 2013

When purchasing a home to live in or any investment property, it is very important to have your exit strategy before you buy. If you intend to renovate and flip the property, establish your metrics before you even begin down this path. Establish at least a 10 year time horizon (and preferably longer) on which to hold a property and then move onto your next property if you approach it from a buy and hold philosophy.

Do not ever attempt to exactly time the markets because doing so will inevitably lead you to miss the exact bottom or top. If you invest in a market which has solid economic fundamentals to support equity appreciation over the long term, you can do very well if you one buys and sells at market prices. It is not necessary or even advisable to obtain every last dollar possible as this will only lead to failure.

Increasing financial literacy through educational TV shows

June 12, 2013

When I was studying to become an investment advisor (aka stockbroker), I was always trying to learn as much as possible from others who had gone through the road of business and see what tips I could learn from them.  In the mid 1990’s, the amount of information available to investors was quite small compared to today.  In fact, I would argue there is too much information available today!

One option which is available now is through the use of watching expert investors and business owners assist their analysis through the media. Three of my favorite TV shows which I try to watch are Shark Tank, Dragon’s Den and Bar Rescue on Spike TV. My particular favorite is Bar Rescue because this takes me completely out of my business comfort zone into an area I know that I could never succeed in a big way. These shows teach me that it is OK not to be perfect and skilled at everything I do. Just find your own niche and stick with it. By watching others improve their businesses, this is how I use these shows as inspiration in my business of promoting Alberta real estate worldwide!

How to make money in real estate

June 5, 2013

For the classic buy and hold investor, there are in general three ways to make money in real estate. Please note that these are general principles and apply in many countries around the world.

1) Mortgage paydown. Every month that a mortgage payment is made, part of the amount goes to paying down the debt and is like a forced payment plan which goes to your bottom line. This way of making money is comparable to contributing to a government sponsored retirement plan called an RRSP in Canada, 401k  in America or Superannuation plan in Australia. This is the first thing one must look at when calculating your return on investment.

2)  Positive cash flow. It does not make any sense to buy a property that loses money every month and that is exactly why positive cash flow ( i.e. the overall income of the property pays all of the expenses and has funds left over) is absolutely essential.

3)  Equity appreciation. This is another way of saying buy low and sell high and is what most people call “investing”  Although there is nothing wrong with making money in this matter, it must not be your first consideration but more like your third or even fourth. Just ask anyone who purchased property in the United States in the mid 2000’s and was losing money every month because they cannot cover all their property expenses in a down market.

Ultimately, it is up to you!

May 29, 2013

As you proceed down the path of achieving your financial goals, there are many people and situations which you will encounter.  Some will provide you networking opportunities and others will teach you investment systems that empower you to proceed. You will attend business seminars and have meetings with other like minded people who inspire you to do better than you are today.

I have been very fortunate to have met many people who have helped me think in ways that force me out of my comfort zone. These incremental and sometimes enormous steps helped me achieve many goals including the development of this website and its associated slogan of “Empowering Investors Worldwide”.

Ultimately, no one will ever be able to break through the barriers that you face except yourself. Systems and relationships can only take you so far. No matter what you aim to achieve whether it is to lose weight, buy an investment property or any of your personal goals.  You are the captain of your ship and must steer it in the direction that you want it to go. No one can do that for you. Take as much as time as is necessary steering your own ship because once you do, you will never go back to having others tell you what to think and do.

Is the huge money in businesses or real estate?

May 22, 2013

When I was growing up, my parents taught me that land was valuable because it was tangible. They simply did not trust anything they couldn’t see. The fact that people would lose money in stocks merely proved their point. They are not making any more land and as Andrew Carnegie once said “90% of all millionaires become so through real estate”

Over the years, I met other people who believed that businesses were the key to wealth because they were able to amass sports vehicles, yachts and other luxuries that life had to offer. This lead to my question of which (if any) method was clearly superior in achieving extraordinary wealth.

The answer to this question is both simple and clear anywhere in the world. Business ownership is indisputably the method to achieving a high net worth!

If you look at the Forbes list of the world’s richest people, all of them are business owners. They can be in many industries including telecommunications, retail, banking and restaurants to name a few. As for Andrew Carnegie and his quote which has been used to entice many joint venture investors, one must recall that he was a steel industrialist and made his enormous fortune by being a business owner. In today’s dollars, he would be worth hundreds of billions.

Having said all of this, the one asset class which is used to maintain wealth once it has been achieved is real estate. It has a very long track record for keeping pace with inflation.

In fact the most common method to have it all is to make your fortunes in businesses and keep it in real estate. The real estate seminar business generates far more profits than one ever could by completing a foreclosure or renovation. That is what they will never tell you as a member of the audience!

Why the focus on the economics of real estate?

May 15, 2013

Often times, I have met real estate investors who want to purchase property and have many details covered about the renovations, location, price etc.  However, they consistently miss the single most important factor to succeeding in real estate and that is in understanding the unbiased economic fundamentals.

It is the economics of a region that drives valuations, rents, vacancies, renter profile, transportation etc.  Without an understanding of these important trends, the best property in the world would be ignored because there would be no potential for equity appreciation or cash flow.

The economics should be the first and foremost thing to look at investing in real estate. This will separate you from the speculators who are merely wishing prices to increase.

Identity Theft 

May 8, 2013

Ask any investor regardless if they are involved in real estate, stocks or any other asset class if they require paper for their transactions and the answer is a resounding yes.  Documentation showing a title transfer or stock purchase/disposition is essential for tax purposes as well as legal.  The storage of these documents is important but even moreso is the way they are discarded.

Please do not ever throw away anything which has your name, address, phone number or other important information about you.  There are professionals in your area who scour garbage bins and prowl areas in an attempt to steal this vital information from you in order to make a quick illegal profit.

Once your identity is stolen, it is not just the financial headache it causes but an ongoing emotional toll that it takes to restore what was taken from you.  I do not speak from experience but have heard this from others who have been victimized.   This can have negative consequences which can easily last years from a simple act such as tossing your utility bill in the garbage can.

For more information on how to prevent identity theft from occurring, please visit this site:

Yes, it can happen to you!!

Opportunity is nowhere

May 1, 2013

Many years ago, I used to frequently attend investment seminars.  They helped me tremendously because it gave me an environment to learn and be surrounded by like minded people.  During one of these events, the speaker asked us all to read the title to this commentary and most of us stated that “opportunity is nowhere”. Many of us concurred with others at our tables that this was indeed what was being stated; myself included.

There were a few people who did not see it this way and disagreed with our interpretation of the word nowhere. They told us that it was all about the perception of the world around us. We mostly stayed with our original interpretations.  Those few people then said that they read the statement as “Opportunity is nowhere”.

At that point, I understood as to how we saw the same letters but our ideas were polar opposites.  When the markets go down, I do not see this is a bad thing but potentially a good one because it may represent a buying opportunity.

After all, opportunity is nowhere.

Property Management

April 24, 2013

Before you even begin to venture out into any real estate market, you must consider the most important aspect of real estate investing which is the customer (i.e. tenant). They are the ones who will pay your bills, tell you of any issues and leave you with positive cash flow every month.

For this reason, you must absolutely have an outstanding property manager who will oversee their every request. Whether you manage your own properties or outsource this aspect of your business, this is key to success. The best property can quickly turn into a nightmare if impeccable property management does not occur. This can also be the difference between a regular property and an outstanding one with people lining up to rent from you.  It has certainly happened to me!

If the thought of a leaky toilet call at midnight is enough to stop you from managing a property, then consider getting a property manager who has experience in the community you are considering purchasing in. You should also get to know your property manager on a personal level also and this will only make your overall experience more beneficial.

For a detailed list of questions to ask your prospective property manager, please visit this site:

Anticipate the future and not past trends

April 17, 2013

This past week while watching television, I noticed a commercial that I found to be totally incomprehensible.  Back in the 1980’s, it was very common to go to a video store, rent a number of movies (usually new releases) and return them the next day.  JVC’s VHS had defeated Sony’s Beta during the era not because it was a better product but due to their marketing efforts. Even in the 1990’s renting videos was a very popular notion because in my opinion the idea of watching movies will never go away.

With technological advances, all of us have seen the CD and DVD revolution take hold along with the demise of analog signals being replaced by digital communication. Today, even these recent improvements are being replaced by online streaming with MP3s and online demand for new movies accessible at your fingertips.  DVD’s now represent something which is fading into history!

For that very reason, I was completely astonished to see a commercial for a company selling a DVD kiosks business whereby people would go and rent a DVD and return it sometime later.  In this world of instant communication, I do not see how a company can survive in the next 10 years using an antiquated business model.  Blockbusters collapse is proof of that.

When purchasing a piece of real estate, one should watch if the indicators are positive.  What I mean by that is if a Walmart, Starbucks, Subway or other business is moving into an area. Seeing one of these come in is encouraging, having two is very positive and all three is a virtual guarantee that an area will do well long term. Conversely, having one, two or three move out is a negative indicator for the long term economics of an area.

Whether it is real estate, technology or other business venture, it is important to see where the future is trending to and not the past.

Demographics and Investing

April 10, 2013

In our attempt to provide coverage of the economic fundamentals for Alberta real estate, readers are sometimes provided with news of a new school being built or plans for expansion.  On the surface, this does not seem to have anything to do with cash flow, equity or interest rates and may wonder what it has to do with property.  The answer is a great deal.

Demographics is the study of a makeup of a population. When people make more money, they spend more, when they spend more, real estate prices go up.  Peak spending in fact is at approximately 40 years of age and after that point, it starts to decline. One of the factors that drives real estate is the makeup of households and that is why I provide information on new schools as it is a factor as to where growth is or will be occurring.  A community of mostly 25-30 year olds has (all other factors being equal)  a positive demographic profile compared to one where it is mostly seniors who spend much less.

Alberta’s demographics is to show that our province is in fact getting younger and therefore extending our peak spending years many years into the future.

For more information on this important subject, please visit

Are tax refunds a good thing?

April 3, 2013

Speaking for myself, we are now in one of my favorite times of the year; namely time to file your taxes.  The IRS deadline is April 15th in the United states and in Canada it is April 30th.  It is very important to file something even if it is wrong because the penalties for not reporting can be severe. Please obey the laws on this and do not fall into the trap that some claim that taxes are illegal and you do not have to pay.

When I was growing up, my parents taught me that getting money back from the government was a good thing.  The very thought of having an extra cheque in April or May (depending on when you file your personal taxes) was never a bad idea. This was to be treated like an extra supply of cashflow. I now take an opposite point of view to what I was taught.

A tax refund means you paid them too much over the period of a year and they are simply refunding your money from over contributions. You gave them your money at 0% interest and get your principal back. I have worked at numerous publicly traded companies and they go to great lengths to calculate the exact amount they owe. Do not underpay your taxes either because then the tax authorities will request their fair share.

The most important business skill

March 27, 2013

There are many aspects to building a successful business no matter where in the world you are located.  A solid legal and accounting team are necessary to ensure all laws and finances are handled properly. Effective communications is also a necessary part of having success in your endeavors.  However, there is one area that is far more important than anything else to ensure not only the survival but prosperity of any venture.

The most important skill is the ability to sell.  Sales=Income (cashflow).  Without cashflow, you have no way to develop your business or even maintain its current existence.  That is why I love the network training programs because they teach you this vital skill if you are to succeed.  It is often uncomfortable and vital to overcoming any obstacles.  if you wish to see a great example of sales in action, watch any 4 year old ask their parents for candy or toys.  Kids are wonderful salespeople!

Even in relationships, the ability to sell one’s viewpoint or ideology is what differentiates one side over the other.

Steps to take before renting out a property

March 20, 2013

Once you have a property ready to rent, there are some crucial steps to take before someone moves in.

1) Visit the site and compare the rent you are charging to other market norms in your area. This is a rough barometer as to where your property is in relation to the rest of the market.

2) Become a tenant for a day and check out your competitors properties. That’s right, you actually become a tenant for a day and visit other people’s places for rent. It is free and you will learn a lot about how your unit compares to others.  Do they answer the phone professionally and/or get back to you quickly?  How do the suites show?  Do they follow up?  These are the types of things to look out for and see how you can improve your marketing efforts.

3) If you have to choose between taking a questionable tenant and leaving a property vacant, please leave it vacant. The last thing you want is to be featured on world’s worst tenants as I mentioned in a previous post.

How to stop condo board theft without a lawyer

March 13, 2013

I am sure someone out there has either invested in or lives in a condominium.  Essentially, a condominium is a building or complex of apartments and/or houses.  One of the responsibilities when living in a condominium is the payment of monthly fees.  These go to a condo board which is to administer the condominium and the associated land on behalf of the owners

There are many ethical condo boards out there but all it takes is one where the owners are being taken advantage of.  This may result in huge special assessments which go directly into the boards personal bank accounts.  If you try to retain legal counsel to investigate or even call the police, they could say to come back when you have some evidence for them to investigate.  Instead of having to go through a long and emotionally exhausting process which could take have a large financial and emotional toll, I would like to propose an alternate method of stopping condo board theft.

Contact your national taxation authority and have all the people you suspect of embezzling funds from the condo board audited. An investigation of their personal bank accounts for the past 3 years should suffice.  If any condo board funds are being stolen, it could very well be found in a simple tax audit.  I can virtually guarantee that if someone is stealing, they have never even thought of the tax consequences of their actions. No lawyer (but perhaps a priest, rabbi or imam) is capable of stopping a tax audit because the law is clearly written so that government can look at anyone’s records. The tax authorities could then go to the police with evidence in hand and have the criminals charged for fraud if theft is occurring.

All of this would occur for the price of a stamp and envelope and no lawyer would ever have to be paid.

Do not rush to find a tenant!

March 6, 2013

Purchasing a rental property is a significant investment in both time and money.  Every step is critical to success from finding the right financing to a great team of realtors, property inspectors and other specialists. After all this work, it is critical not to rush and find any tenant for your property.  You may have luck on your side but it is entirely possible that you encounter the ‘tenant from hell’.  It is very important to have your property empty and wait until your perfect customer comes along rather than rush to fill it because of your ongoing expenses which include the property taxes, insurance and mortgage.  Here is a link as to some background checking every owner should do on a prospective tenant.

Read more:

As for the tenant from hell scenario, please do not believe it cannot happen to you because it can and will if you are involved with investment real estate long enough.

For a frightening but what I believe to be true examples of some extreme tenants damaging property,

please visit this link:

Please note that there are numerous tenants out there who are very cooperative and helpful in helping create a win win scenario. However, bad tenants often drive away the good ones who help you build equity as an investor.

Value and Growth Investing

February 27, 2013

Two main approaches to investing in real estate (or stocks) are commonly used worldwide when making a purchase. Both have their strengths and weaknesses and i wish to give a brief overview as to their approaches.

1)  Value investing is essentially the bargain hunter approach to purchases. One asks why they would pay $100,000 for a property when they can a very similar one for $90,000.  The motto here is to make the most amount of money on the day you buy a property.  It is comparable to going to Walmart to do groceries rather than Safeway because they have lower prices.

2)  Growth investing is someone who is willing to pay say $110,000 for a $100,000 property because they believe the property will be worth more in the future than today. This is all based on a through understanding of the economics of the area. I have used this method in Calgary and seen other investors lose out on a deal because they would not pay $500 above list prices.

At different times, one can switch between these two methods depending on market conditions but over time, they will build you a strong foundation for success.

Confidentiality: Take it very seriously!!

February 20, 2013

At some point in your life, you may be asked to keep certain employment or business practices confidential.  This information may have the potential to ruin business relationships and you never know who knows whom.  Some people do not take this matter seriously and I wish to give an example of how the potential of their ignorance can have potentially devastating effects.

In 2009, I worked as an oil and gas accountant with Oklahoma based Semgroup. This was an excellent company with great employees, management and outstanding work environment!  Our offices were in a Calgary office Tower.  The owner of this tower is involved with North American energy infrastructure and has thousands of employees.  There was also a brokerage firm in the same building as ours but I have forgotten their name.

Every day, all of the Semgroup employees would hear non public information regarding the inner business practices of the company. This was done simply by all of the employees taking the elevators and listening to numerous conversations. Their employees felt their company was the only one in the building.  They simply could not be more wrong.

It was quite routine for their employees to speak very loudly when others boarded the elevator and discussed what was going on with a now famous pipeline. This was long before the media started giving it serious attention. If everyone at Semgroup got together, we could have easily pieced together their internal operations which they wanted to keep confidential.

One day, someone from the brokerage firm in the building saw me push the elevator for the 20th floor and said “Semgroup; is there anything not public that I should know about?” He did not know that I was also trained as a stockbroker and was well aware of the consequences of passing on insider information of a company. My response to him was to read the newspapers as all the information he needed was there.

At that point, I was very lucky and grateful to all my fellow Semgroup employees who knew and understood the importance of keeping information confidential.  Their ethics and practices have always been an inspiration to me!

Rich Dad Poor Dad

February 13, 2013

In the 1990’s, author Robert Kiyosaki wrote a book called “Rich Dad Poor Dad”. This was one of the very first publications that he has participated in that is now all over the world. The brand that has grown from the book teaches about financial literacy through business building, real estate and paper assets. I was first introduced to his work in mid 2002 and attended a number of workshops from then until mid 2007.

Although I initially received some benefits such as networking and being exposed to new opportunities, I found the sophistication level of most of the attendees to be rudimentary and oversimplified. One very large point that he does not discuss in depth is the impact of the internet and building an online business.  I have never met anyone who has taken in any of their courses and become very successful. On the contrary, there are many people who have nothing to show for their tike and efforts by attending these seminars.  Based on my years of experience having attended numerous seminars, I can offer the following advice.

To all potential business owners; hire a business coach in your vicinity for some very useful education.

To all real estate investment minded people; get to know at least 3 and possibly more people who own investment properties and take them out to lunch.  This is cheaper and far more valuable to you while saving a lot of wasted time and endless sales pitches

For the stock, options investors and all other paper asset investors.  Attend other seminars, buy a book and ask to take out a stock broker or active investor for lunch.  This too will save you time and money.

To find more thorough critiques of Rich Dad Poor Dad, please visit these sites:

John T Reed:

CBC Marketplace:

Wall Street Journal:

Complaints Board:

Rich Daddy nightmares:

What industry are you in?

February 6, 2013

Years ago, I used to work at a Montreal based company called CGI. During one of my many coffee breaks, the question came up as to what industry we were all employed in.  I made my argument in a simple manner and said we were all in the oil and gas sector.  We listened, spoke and interacted with oil and gas clients all day long and that is why I responded we were in the energy sector.

To my great surprise, I was told that we were not in that field but rather technology.  We were all using our experience from oil and gas accounting to solve IT related problems to serve our clients.  That was an important distinction for me because I never had to really stop and focus on what I was providing.

Today, people ask me what industry I am in and assume my answer is real estate. This too is incorrect.  I use all my knowledge to provide unbiased economic fundamentals that affect the numerous marketplaces I cover on this site. My method of providing this information is through the internet. My revenue in this business comes from Google Ads and not any real estate sources.  For that reason, I am in the internet industry with the intention of servicing real estate investors.

Secret Investments

January 30, 2013

Over the past 18 years, I have seen numerous investments in assets classes such as real estate, equities and businesses to name a few.  Given enough time, anyone who is exposed to numerous opportunities will eventually be exposed to a “secret investment”.  In order to find out more about this secret investment, one must sign a non disclosure agreement which states you will not divulge the contents of what you will be told.  I have done this on a few occasions and have found a consistent pattern which I wish to pass on to you the reader.

Before you ever agree to ask more about any secret investment you encounter, ask the person presenting it to you the following questions:

1) Microsoft was not a secret back in 1975 when Bill Gates started the company out of his garage. Does your secret investment have the potential to be bigger than Microsoft?

2)  Google was not a secret when Larry Page and Sergei Brin started it back in 1998. Does your secret investment have the potential to be bigger than the multibillion dollar initial public offering that occurred in 2004?

If you can answer yes to these two questions, then use this third one to get a crystal clear answer as to where the person pitching you is coming from.

3) President John F Kennedy announced to the world in the early 1960’s that America would land on the moon. Conspiracy theories aside, this is unquestionably one of the greatest achievements of all time. Is their secret investment bigger than that?

My guess is that it won’t be.  If these three examples are not secrets, then why would you invest in something which must be kept quiet?

My experience has taught me that every secret investment out there is another way to say that it is not entirely legal and should be avoided at all cost!!!  Besides, using the secret investment argument and that it is off limits to an auditor of Canada’s national tax authorities can lead to a $25,000 fine and/or up to 1 year in prison as per Section 238 of the Income Tax Act.

What Greece can teach us about real estate

January 23, 2013

For the past few years, the entire world has been made aware of the situation in Europe regarding their ongoing fiscal problems.  There is talk about the potential breakup of the Euro-zone, bailouts, IMF intervention and much more.

To me, the whole situation can be summed up simply and very clearly. If a person, corporation or entire country spends more than it makes for a short period of time it must address that issue. Nations can postpone a default moreso than corporations and individuals but the end is the same. Greece spends more than it earns and for that reason, there is huge turmoil being heard worldwide.

For someone who owns a property, two five or more, the lesson here is that you should always buy positive cash flow properties that put money in your pocket and don’t take them out.  If Greece had more money coming in than going out, this would not have become a problem.  If you are considering buying a property in the hopes of equity appreciation while losing money on a monthly basis, consider the lessons from the Euro zone as an example of what can happen.

“John’s venture into real estate”

January 16, 2013

One of my favorite activities is to watch CNBC documentaries.  I am always amazed at the depth and quality of reporting that is done to present a top notch presentation which simultaneously entertains and informs.

In late 2009, an episode was produced called “Painful deal in the desert” which described John’s story. He had a very successful background having amassed a net worth of approximately $100 million dollars as founder of a software company. To this day, his name is known around the world. John had cashed out his considerable fortune in software and decided to enter the land of real estate investing. Although it was not overnight, his net worth began to slide as the housing market began to correct in the mid 2000’s. From that point on, his net worth declined until the day the show aired, he was worth approximately four million. A 96% drop in net worth is considerable for anyone. John admitted he did not know what he was doing in the realm of real estate investing. The implication was that if someone has talent in one area, that does not necessarily mean that success and skills are transferable from one financial endeavor to another which is also something I will personally agree with.

By the way, John’s last name is McAfee as in the founder of an antivirus program which your computer may be running right now.

Read more:

Should you buy a property in a personal name or corporation? 

January 9, 2013

This is a very common question that many investors have. There are no hard and fast rules because everyone’s legal and accounting situation is completely different and it is not possible to give absolute answers but here are some tips which should help.

Very generally speaking you may choose to buy your first one, two or even three properties in your personal name and then decide to incorporate after that point. Keep it simple and manageable. Your final answer is to bring your accountant, legal advisor, insurance broker and banker to the table and take a consensus based on what the majority say, not necessarily everyone. Multifamily properties over 6-8 units should be kept in a corporation for liability protection.

If you must transfer ownership, please note that any transactions between your personal name and a corporation must be done at fair market value of the property.  An appraisal would be required for this.