How do we tap into the first-time investors hiding in your database?

Joel Olson • Jan 20, 2022

(*What's your preference? Listen to the podcast above or read the blog post below)

Did you know that most first-time investors are right under your nose?

There is a lot of media around the idea that investors are scooping up rental units and houses all across the province.

But what if I told you that on our side investors are not some lucrative big city investor with millions, millions of dollars?

What if I told you they're not people that are Uber wealthy, but they're actually the clients you’ve served over the past 24 months.

In fact, our data shows that almost 80% of the clients we've served in the last two years are in a position since when they were first time homebuyers can now become first time investors.

And this is not a bad thing.

The idea that a first time homebuyer can build their wealth, especially when many of them tend to be quite young, by buying a rental property is extraordinary.

And we do ourselves a disservice by not reaching out to our buyers in the last two years and seeing if instead of selling a house, we can help them buy their second home.

Imagine if you can gain a whole book of clients without having your previous clients have to sell their home but having them keep what they have.

The only thing stopping you from doing that is most clients don't even know where to start.

But with huge equity gains in the last 24 months, the majority of people have enough equity for us to leverage their current home to buy a rental property.

With the increases in rental income being derived from most rental properties, it means that the vast majority of rental properties they will buy will more than cash will enable them to have a home that does not put any extra burden on their monthly family budget.

In fact, it's almost as if they'll be able to get a rental unit for free while letting the long term appreciation over 10, 20 or 30 years allow them to be in a better position than ever before.

This is a really about changing a family's financial position.

So who are these people we're talking about?

The majority of people that we've helped the last two years are first time homebuyers that put 5% down.

Now, they have enough equity to pull up to to pull enough equity out of their home by a refinance or adding a home equity line of credit.

The situation or strategy we would do would depend on the client - taking the equity out not putting any additional cash in and using that money to buy another home.

Now, another strategy can be looked at at this point, is a lot of people might think about that idea that they may have bought a condo or a townhouse and maybe now's the time to move to a single family home. In that scenario, they may turn their existing home into a rental and actually only put 5% down on the next house.

So we're not even talking about a huge amount of equity having to be pulled out.

In many cases, we could probably even see them get into a second home by putting 20 to $70,000 down depending on what they're buying and the market they're in.

So if you'd like help, we are currently offering a program where we can reach out to your past clients and see if we can help them strategize and build a realistic strategy on getting into their very first rental property with a little bit of guidance.

This is very, very easy for the vast majority of clients.

The other thing we're doing right now is that we are currently starting a newsletter based on hot investment properties around the province.

Now we invite you to submit some properties that we could show to our database that ranges from Northern BC to Vancouver Island to the interior to the Lower Mainland, really all throughout the province.

If you would submit those properties to us, we're putting them out in a weekly newsletter so they can be exposed to more and more people that may be looking for an ideal rental property strategy.

Additionally, we're setting this newsletter out to our existing clients and building even more clients that may be looking at it.

So, if you're interested in maybe getting a hold of some of these leads, and maybe being part of some of these leads please reach out to us on that as well.

As always, let us know any way we can help you.

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Protect Yourself with a Pre-Approval

By Joel Olson • 07 May, 2024

There is no doubt about it, buying a home can be an emotional experience. Especially in a competitive housing market where you feel compelled to bid over the asking price to have a shot at getting into the market. Buying a home is a game of balancing needs and wants while being honest with yourself about those very needs and wants. It’s hard to get it right, figuring out what’s negotiable and what isn’t, what you can live with and what you can’t live without. Finding that balance between what makes sense in your head and what feels right in your heart is challenging. And the further you are in the process, the more desperate you may feel. One of the biggest mistakes you can make when shopping for a property is to fall in love with something you can’t afford. Doing this almost certainly guarantees that nothing else will compare, and you will inevitably find yourself “settling” for something that is actually quite nice. Something that would have been perfect had you not already fallen in love with something out of your price range. So before you ever look at a property, you should know exactly what you can qualify for so that you can shop within a set price range and you won’t be disappointed. Protect yourself with a mortgage pre-approval. A pre-approval does a few things It will outline your buying power. You will be able to shop with confidence, knowing exactly how much you can spend. It will uncover any issues that might arise in qualifying for a mortgage, for example, mistakes on your credit bureau. It will outline the necessary supporting documentation required to get a mortgage so you can be prepared. It will secure a rate for 30 to 120 days, depending on your mortgage product. It will save your heart from the pain of falling in love with something you can’t afford. Obviously, there is nothing wrong with looking at all types of property and getting a good handle on the market; however, a pre-approval will protect you from believing you can qualify for more than you can actually afford. Get a pre-approval before you start shopping; your heart will thank you. If you’d like to walk through your financial situation and get pre-approved for a mortgage, let’s talk. It would be a pleasure to work with you!

Costs Associated with Buying Property

By Joel Olson • 23 Apr, 2024

When calculating if you can afford to purchase a property, don’t just figure out a rough downpayment and quickly move on from there. Several other costs need to be considered when buying a property; these are called your closing costs. Closing costs refer to the things you’ll have to pay for out of your pocket and the amount of money necessary to finalize the purchase of a property. And like most things in life, it pays to plan ahead when it comes to closing costs. Closing costs should be part of the pre-approval conversation as they are just as important as saving for your downpayment. Now, if your mortgage is high-ratio and requires mortgage default insurance, the lender will need to confirm that you have at least 1.5% of the purchase price available to close the mortgage. This is in addition to your downpayment. So if your downpayment is 10% of the purchase price, you’ll want to have at least 11.5% available to bring everything together. But of course, the more cash you have to fall back on, the better. So with that said, here is a list of the things that will cost you money when you’re buying a property. As prices vary per service, if you’d like a more accurate estimate of costs, please connect anytime, it would be a pleasure to walk through the exact numbers with you. Inspection or Appraisal A home inspection is when you hire a professional to assess the property's condition to make sure that you won’t be surprised by unexpected issues. An appraisal is when you hire a professional to compare the property's value against other properties that have recently sold in the area. The cost of a home inspection is yours, while the appraisal cost is sometimes covered by your mortgage default insurance and sometimes covered by you! Lawyer or Notary Fees To handle all the legal paperwork, you’re required to hire a legal real estate professional. They’ll be responsible for transferring the title from the seller's name into your name and make sure the lender is registered correctly on the title. Chances are, this will be one of your most significant expenses, except if you live in a province with a property transfer tax. Taxes Depending on which province you live in and the purchase price of the property you’re buying, you might have to pay a property transfer tax or land transfer tax. This cost can be high, upwards of 1-2% of the purchase price. So you’ll want to know the numbers well ahead of time. Insurance Before you can close on mortgage financing, all financial institutions want to see that you have property/home insurance in place for when you take possession. If disaster strikes and something happens to the property, your lender must be listed on your insurance policy. Unlike property insurance, which is mandatory, you might also consider mortgage insurance, life insurance, or a disability insurance policy that protects you in case of unforeseen events. Not necessary, but worth a conversation. Moving Expenses Congratulations, you just bought a new property; now you have to get all your stuff there! Don’t underestimate the cost of moving. If you’re moving across the country, the cost of hiring a moving company is steep, while renting a moving truck is a little more reasonable; it all adds up. Hopefully, if you’re moving locally, your costs amount to gas money and pizza for friends. Utilities Hooking up new services to a property is more time-consuming than costly. However, if you’re moving to a new province or don’t have a history of paying utilities, you might be required to come up with a deposit for services. It doesn’t really make sense to buy a property if you can’t afford to turn on the power or connect the water. So there you have it; this covers most of the costs associated with buying a new property. However, this list is by no means exhaustive, but as mentioned earlier, planning for these costs is a good idea and should be part of the pre-approval process. If you have any questions about your closing costs or anything else mortgage-related, please connect anytime; it would be great to hear from you!