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Edmonton Real Estate Investors Association Message Board › ERPIA March 12, 2013 Minutes

ERPIA March 12, 2013 Minutes

Lona C.
user 11437267
Edmonton, AB
Post #: 2
Brent Davies, President, opened the meeting at 7 pm at Rosie’s Restaurant. 48 people were in attendance for the meeting. Brent welcomed the group and asked members how they heard about the group whether through or elsewhere. Many said through meet-up. Brent told the group of the City of Edmonton’s plans to annex land in Leduc County. The City needs more room to accommodate future residential growth and will annex approximately 15,600 hectares of land in Leduc County south of the city along the west side of Hwy 2 down to the Airport and east side extending to north of Town of Beaumont. The Edmonton Journal ran an article on March 12 that the Housing Balloon is set to deflate – the real estate boom is over and analysts predict Canadian housing prices to flat line over the next decade. Toronto comprises 25% of the real estate market – Edmonton is only 3%. Canadian residential home prices grew by an average of 5.4% a year between 1980 & 2012, climbing about 7% a year in the last decade. The annual rate of return for real estate will be about 2% over the next decade, meaning that prices will simply match the pace of inflation. Brent announced that we have a new sponsor the Edmonton Apartment Association. The Association brings together owners, operators & managers of residential rental properties to promote professionalism, education and equity in all aspects of the residential rental business for the benefit of industry members and tenants. They have an online education program. You can link to the group through our ERPIA home page. On March 5, the ERPIA board met. Brent was excited about new ideas that the members came up with. New Members of the board introduced themselves. Brent explained that name badges will be issued when attending the meetings and Questions have been pre-printed and will be answered throughout the meeting. 10 new guests attended the meeting and introduced themselves. Our guest speaker for the evening was Lee Politano, a mobile mortgage specialist with TD Canada Trust covering Edmonton and Area. The TD mortgage program covers mortgages for up to 4 units and then mortgages would have to be covered through the small business department. As long as you can afford the mortgage and prove there will be income from the rental unit – you most likely will qualify for a mortgage. TD only covers a mortgage limit up to $1.5M. TD pays for appraisals. Current rate for 5 year fixed is 3.219%. You have to qualify for 5½% rates for first time home buyers – just in case interest rates go higher. You may have some issues qualifying for mortgages on handy-man specials or remediated homes. Brent Davies next spoke about Joint Ventures in Real Estate. Basically joint ventures are 2 or more people with different skill sets that partner to purchase real estate. Usually joint ventures are 50/50 ownership structure. E.g. one has the money and one manages the property and getting rents etc. Make sure to register a caveat on the property so that you can be notified if the property is being sold. The property cannot be transferred until caveat is lifted. The joint venture agreement should be win-win for each person. Usually it is understood the JV partner with the money is always paid first. The joint venture agreement should cover strengths, weaknesses, negative cash flow, extra expenses, exit strategy. JV Partners may be family, friends, work colleagues. You cannot advertise for investors on your website or on ads as this is solicitation and the SEC frowns on this. Asking for money from the general public is a security breach. A sample JV should include a Letter of Intent, Legal advice, money in trust, the JV agreement and caveat registered. John McCabe was introduced to speak about his new meet-up group entitled “New Creative Real Estate Investing Group”. The group meets 2nd Wednesday of the month at the Whitemud Crossing Library. They discuss creative real estate financing alternatives, non-traditional, investing with no money down. John spoke about a Reverse Auction that he recently held. There were no books for the book draw but Clayton Smith had a REIN CD that was given out as a door prize. The meeting concluded at approximately 8:45 pm.
Lona Chow
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