As a full-time Canadian real estate investor, we are continuously developing systems to improve our business. Throughout your career you will be involved in deals that are both conventional as well as non-conventional. The latter is what really makes what we do a real business. That said, cash flow is an important part of our regular passive income. To receive this we often have to become a landlord.
Goldmine or nightmare for Canadian Real Estate Investors. Meth Labs Busted, Methamphetamine is among the most increasingly common used drugs in current’s society. Meth is known to be a very powerful illegal drug. This sort of drug causes major health issues not only while using it, but also when producing it.
Mortgage Jargon – Part 3
If you missed the previous article – Mortgage Jargon – Part 2
We will continue in our series of Mortgage jargon. As full time Canadian real estate investors, we need to utilize the following definitions as part of our everyday language.
Since almost every consumer have different circumstances and issues, most of these issues appear in the credit reports and effect the credit score, our Credit Repair Solutions can be personal approach, customized for each individual.
Credit Report
A credit report is a detailed report of your credit
history and is kept by at least one of Canada’s
credit-reporting agencies.
Credit Score
Your credit score is an up-to-date rating of your
financial health. It shows lenders the level of
risk if they lend you money.
Credit Rating
A credit rating is a rating of each
of your credit history items on a scale of 1 to 9.
These ratings are made by credit-reporting agencies.
Request your credit report
You can get your credit report for free.
This allows you to see your credit rating and gives
you a chance to correct any mistakes on the report.
Correct a mistake on a credit report
Your credit information can be kept by more than
one credit reporting agency. Since these agencies
do not always share information, it’s important
for you to check all of your credit reports carefully.
If you find an error in your credit report, you can
take steps to have the error corrected.
Improve your credit score
If your credit score is not as high as you think it
should be, check the information in your credit report.
If the report is correct, read it carefully to find
out what might be bringing down your score.
You can then work to improve your credit score.
The lender at your bank is a good person to ask about
your credit rating. You might have applied for a loan
and been turned down. Don’t be embarrassed, but use
it as an opportunity to learn what you can do to get
your finances back on track. When a lender declines
you for a loan, line of credit, overdraft, or something
else you applied for, they can tell you why. Ask them to
explain anything you don’t understand. Then ask them what
you can do, very specifically, to improve your credit
score and credit rating. If you’ve applied for a mortgage,
ask your mortgage broker these same questions.
Becoming a full-time Canadian real estate investor is not something one should take lightly. The amateur real estate investor will commonly go out and buy a property, make mistake after mistake and end up costing themselves lots of money and time. They will then run from real estate investing thinking that real estate investing doesn’t work.
As a full-time Canadian real estate investor, we must be actively creating massive and passive income for ourselves on a regular basis. Our time is our most precious commodity and therefore must use it wisely. We get the most profitable use from our time by doing deals, not by doing small tasks. There are many facets of being a full-time real estate investor that are very important yet quite time-consuming. If we are able to pass of some of these duties to somebody else, it will be more likely that we can be focusing on doing more deals.
A professional Canadian Real Estate investor should understand thoroughly about Foreclosure process in Canada.
The word “foreclosure” is a nightmare for the property owner as well as for the Lender. Although the numbers usually increase during the real estate bust cycle; it happens all the time.
If the person who borrowed money using a mortgage fail to pay back that mortgage, money-lender can use foreclosure as a legal action. Foreclosure allows the lender to take or sell that person’s house by first getting a Court’s permission to do so.
The property owner will not lose their property right away when he misses a mortgage payment or makes a late payment. Lenders don’t want to foreclose if they don’t have to because it is expensive and is a lengthy process. Not until two or three months after the borrower has stopped paying, would the lender probably start to foreclose. Usually, a lender will send out letters requiring payment. Then, if they don’t receive a reply, the lender will usually start to foreclose and to sue at the same time. The foreclosure process differs from province to province in Canada.
Mortgage Jargon – Part 2
If you missed the previous article – Mortgage Jargon – Part 1
We will continue in our series on mortgage jargon. Many of these references should or will soon become apart of your language in real estate investing.
This ratio is calculated by your mortgage broker. This is a standard by most lenders which states that no more than 40% of your gross income can be utilized to service your property. Your total debts are principle interest, property taxes, heating, 1/2 condo fees, plus all other monthly obligations, such as credit cards, leases, loans, lines of credit, etc.
This term applies to changing lenders at the end of a term. When a mortgage is at the end of it’s term, or coming to the end of it’s term, another lender may pay the costs of switching over to their company. This means that if there is a mortgage penalty, the other lender may pay that penalty for you to break your mortgage and move the mortgage to them. They may also offer you a reduced rate to come to them from a competitor.
A cap rate is a calculation that is used mostly in the commercial side of real estate. The the fair market value is divided into net operating income (rent minus expenses, not including mortgage). Capitalization rate is essentially a percentage calculation that is better when higher. The higher the result, the better rate of return.
A closed mortgage is closed for the term, usually 5 years, but it can be anywhere from 1-5 years. It cannot be paid out unless there is a penalty involved which can be discharged at a cost of either three months interest, or an interest rate differential.
The IDR is a penalty for an early pre-payment of all or part of the mortgage outside the normal payment terms, or even pre-payment terms. This is calculated as the difference between the existing rate and the rate for the term remaining, multiplied by the principle outstanding and the balance of the term. For example, if the mortgage balance is $100,000 at 9% with 24 months remaining and the current 2-year rate is 6.5%, the different between 6.5% and 9% is 2.5%. The interest rate differential is $100,000 outstanding mortgage, times 2-years times 2.5% will equal $5,000 dollars.
A mortgage that is greater than 80% loan to value(LTV). What is loan to value? It is the ratio of loan compared to the value of the property. For instance: if the mortgage was a 70% loan to value on a $100,000 property, the value of the loan would be $70,000.
EquityEquity is the difference between the value of what you can sell your property for (or fair market value), compared to what is owed against it. So the more equity in a property for a real estate investor, the better.
We will continue in our mortgage jargon series in a following article.
World Wealth Builders offers many unique, practical, “out of the box” real estate investor trainings which offers the student hands on, in the trenches style instruction to facilitate both a different mindset as well as a successful and lucrative real estate investment business. To find out more, please go to www.worldwealthbuilders.com
To read the next article – Mortgage Jargon – Part 3
www.WorldWealthBuilders.com/live
P.S. Take Action now to attend the eye-opening seminar and walk away with confidence, knowledge, and specific “action ideas” that can help you achieve your dreams and leave the rat race behind.
We have been training Canadian Real Estate Investors since 1993
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Navtaj Chandhoke
1-416-409-7300
Creating an Entourage of Experts Part 1
As a full-time Canadian real estate investor, we must be able to create multiple streams of income for ourselves. In past articles I have gone through many strategies of creating a network and database in order to create an flow of deals coming to us on a regular basis. But that is not enough… it is never enough!
Flipping before closing
Wholesaling is when you wholesale a fixer upper property to a rehabber. Purchase a property no more than 30-60% of its value. LIVE training will teach you to buy deep discounted Canadian real estate properties. Traditional wholesale deal will allow you to find a cash buyer to assign. Properties that need major repairs are great for builders and renovators.
When you wholesale a property subject-to due diligence for 30 banking days it is called a pretty house. Subject-to subject gives professional real estate investors the chance specialize in purchasing properties. Investors cash will never be used as well as your credit. However, in order to purchase a property, you should get at least 40 % discount for the back end profit. The real estate investment is a numbers game.