Real Estate Investment and Connections

At the Financial Forum conference in January this year, there were over 50 people who placed their real estate investment “Wants” on a service on the internet

It is no secret that Since New Year's Day 2000, Americans' stock portfolios have lost nearly $4 trillion, but their home equity has grown by $1.2 trillion.

So it is natural that people are looking for other ways to accumulate wealth and real estate is looking like the best.

At the Financial Forum there was a great interest in real estate. Many who had investments in the stock market also had investments in real estate.

There were different levels of knowledge of investors, from beginners who appreciated learning about what a cap rate was, to what I call “intermediate” where they have some knowledge and perhaps own property but have not invested much yet, and experts, who invest in real estate, presently own investments not just their own home.

There are many rules of measurement to compare investments. One of them is called a capitalization rate, cap rate for short. A cap rate is defined as the Net Operating Income (NOI) divided by the selling price of the building multiplied by 100%, so it is expressed as a per cent.

If you own a building that has an NOI of 100,000 and the selling price is $1,000,000 then the cap rate is 10%. If the NOI is $120,000 and the selling price is $1,000,000 then the cap rate is 12%. If you own a four plex that is worth $400,000 with a $35,000 NOI then the cap rate is 8.8%

You have a question? What is net operating income? Net Operating Income is defined as the Gross Operating Income, less all expenses, but before debt service or your mortgage.

A ten per cent cap rate is a fairly common return in real estate. In actual fact the return is actually much higher. If you buy a property for $400,000 and borrow $300,000 with an interest rate of 7%, then the return on your $100,000 down payment is higher that 10%.

Downtown Toronto can see cap rates of 6-8% but suburbs range from 9-10% and outlying areas 10%-12% and more.

Now with the stock market losing money, and banks paying 2%-4%, an 8% cap rate is much better.

Now with real estate you can also depreciate the building to shelter income during the term that you hold it. You can use this money to reinvest in other things and that adds to your return.

When you sell the property, you can receive the difference in the purchase price and selling price and that too can add to your return.

There are a lot of factors that lead to you being able to sell the property for more money, location, management, etc.

You can easily get into 15% and a lot more on returns in real estate. If you buy a property for $70,000 with $10,000 down and the property goes to $110,000 you can see the tremendous income that can build wealth. Centers such as Hamilton have these kinds of opportunities.

Many people do not sell their real estate when it goes up, they simply re mortgage it. They increase the mortgage and use the money to do other things, including buying more real estate.

Real estate brokers are particularly knowledgeable about this. Some have more knowledge than others.

Why you should use a licensed real estate broker or salesperson? When it’s time to make the most important financial decision of your life, make sure you choose a licensed real estate professional to guide you. Licensed real estate people means that the person you are entrusting to help you with purchasing or selling a property is licensed and trained to represent you.

Many also belong to a local real estate board, provincial and national real estate associations, and abide by a strict code of professional standards. They live by the rules and regulations governing the profession.

Most all licensed real estate people are knowledgeable and committed to upholding the standards of the profession. Some have higher levels of expertise gained from years of experience and education, enthusiasm and the enjoyment of serving and dealing with people.

Real estate brokers can help to serve their clients to help them accumulate wealth and accomplish their objectives.

CCIM is one professional designation considered to be the PH D of commercial real estate.

A Certified Commercial Investment Member (CCIM) is a recognized professional in commercial real estate brokerage, leasing, asset management, valuation, and investment analysis. As an experienced expert, a CCIM is an invaluable resource to the commercial real estate owner, investor, and user. You can find more information at the web site

I have worked with registered real estate brokers and salespeople for the last thirty years both as a broker and a non broker. These professionals have helped so many people buy property and to accumulate wealth. Each of them has varying degrees of knowledge, experience, and enthusiasm to serve you.

They have helped people become millionaires.

You will find them on This is a free service on the Internet for the public. You can search opportunities in many ways. You can place your information there absolutely free. You can receive Haves, the properties for sale, by Email free.

The service is supported by licensed real estate brokers and salespeople and is free to the public.

At the Financial Forum show in January, over 50 people placed their “wants” on the service. is free to the public and supported by licensed real estate brokers and salespeople.

There are four ways to make a connection for your next investment and you can do these four at

  1. Search Database 1 over 6,000 Have and Want opportunities placed by licensed real estate brokers and salespeople. Search Database 2 over 6,000 Have and Want opportunities placed by the public.
  2. Place your Have or Want Free.
  3. Subscribe to receive Haves and Wants by EMail. It is free.
  4. Search for a member and develop a relationship with a member broker and place your information.

Database 1 information gets delivered to the public.  Over 10,000 EMails deliver inforamtion daily to the public. We suggest the Digest for your area which is only one email with the new listings in it.

Database 2 information gets delivered to licensed real estate people plus it is in searchable databases on the Internet. The subject line is public, but the contact information is for brokers. If and when they can help you they can contact you.

But most of all you can make a connection with a professional, to develop a business relationship that will help you invest in real estate.

Information should be updated every 30 days.

Software is available to help you analyze the before and after tax consequences of investing in any kind of income producing real estate. Contact our office.

A recent article in Fortune Magazine stated "97 out of every 100 self made millionaires made it all through real estate investments!"

Finding the right investment can be frustrating and inconvenient but helps make it easier.