different property types. The pro and cons of each type of property from single family, suited properties, and

                 multi family.  Numbers have to work,  but if your basic assumptions are wrong, then the numbers don’t work.

                Our spring multi family tour is scheduled for Saturday, May 5,2012 

                 Just email your interest to attend to brent@brentdavies.com .

Stunning 3+2 bedroom home with 2 bathrooms and 1 on suite.  Double car garage, fenced yard. Located directly across the street from the Jasper Place leisure center.

This great property will be ready for sale or rental on April 1, 2011

Every month, the BrentDavies.com newsletter will include:

• Brent’s Tricks of the Trade: Stories and techniques from a lifetime in real estate, giving an old pro’s spin on common challenges.
• What is Your Favourite Neighbourhood? Every month, I will talk about a different area in Edmonton, giving a ground-up analysis of its strengths, weaknesses, and future.  Discover the money makers, the areas in transition, and the landmines to walk away from.
• Brent’s Market Analysis: A monthly update on the Alberta real estate scene, with an eye to the economic landscape and how changes in legislation will impact investors and landlords.
• What I’m Doing: A personal update on my listings, investments, and other projects.

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When we took over, Fred’s rent was $100 lower than the other suites. We were told this was because he was on a fixed pension. With all the rent increases since 1990, Fred’s rent remained the lowest in his building until his death in 2007 at the age of 90.

Fred was a quiet and private man, who kept his suite neat and tidy. He typically responded with a gruff word if someone tried to offer him a cheery “good day”. He had no living relatives or friends he wished to be notified in the event of an emergency.   In fact his tenant information stated he had no family, and to call 911.  However he become friendly with Chuck, the resident manager who worked for our company for the past eight years. Chuck is a good manager and is good with people. The two became friendly, like good neighbours do.

One Sunday night in early December, 2007;  Chuck called me and said he “misplace a tenant” and didn’t know what to do. Fred always put his rent under Chuck’s door the morning of the last day of the month without fail. A few days after his rent was due, there was no word from Fred, and no answer at his door. To our knowledge Fred had never left to travel or stayed away for any length of time.  His mail was piling up.

I authorized Chuck to enter his suite to check on Fred. Landlords are allowed to enter suites in the event of emergency, and a missing 90 year man is an emergency.  Over the years, we have found several stroke victims.  The phone rang a few minutes later. No Fred. Where does a 90 year old man go? I suggest to Chuck to call the local hospitals and, sure enough, Fred was in a nearby hospital. A few days earlier, Fred had gone out on his morning walk to get a newspaper and a car hit him while he was crossing the street and broke both his legs.

Chuck visited Fred at the hospital several times over the next four weeks, bring him his shaving gear and being a friend when he needed one.

Fred passed away from a heart attack when he was still in the hospital, almost a month later.

Because Fred had no known relatives, the Public Trustee became involved. They conducted an inventory of Fred’s suite and removed valuables, but so far as they could tell, he had not left a will. The Public Trustee made arrangements for his burial and Fred’s obituary was published in the Edmonton Journal mid January, 2008.

Chuck and I were the only people who attended Fred’s funeral; the only other people in the room were the minister and two funeral home employees. Chuck an I had an opportunity to celebrate Fred’s life, from the little we know of him. It was a sobering thought for Chuck and me: how did we want our life to end? What did we want to leave behind when we die?

The biggest surprise was the $120,000 in bank accounts books hidden under his mattress, and if the Public Trustee can’t find any relatives, the money goes to the government. Every one in our office shook our heads over that, and how low we’d kept Fred’s rent over the years, but I don’t regret it; at least we were able to to provide a little kindness for a man who must have been very lonely.

Brent Davies, Property Manager

Saturdayis the LIFE Expo and starts with a panel of experts in property management. I am proud to be asked to be part of the property management panel .  The other 2 panels are Overcoming Obstacles and Raising Capital.

The cost for the Economic Summit is $199 unless you’re a REIN member. The LIFE weekend is usually $787, but if you click here you can get $200 off, and be able to bring additional guests for $387.

You can submit questions in the thread on myREINspace for the panels, and see more information and a lot of videos in this thread.

Several years ago, I observed a shift when advertising in the Edmonton Sun, a tabloid newspaper in Edmonton that caters to the “younger crowd” I was advertising lower end apartments in the paper, and was receiving calls the morning.  I was theorized that guys at the shop coffee room were reading the paper and calling the ads. Same at lunch time. Whenever I have visited a industrial plant, and look in the lunch room, there are several copies of the Edmonton sun, but no Journals. It could be the sunshine girl, and the guys just read the articles. More marketing questions.

Not enough data to make a statement, but enough to ask some very interesting questions.

I was born in the late 1950′s and missed the Great Depression that my parents talked about. I was 25 years old when the recession of the 1980′s hit. I lived through the 80′s down turn as one of the victims, and I survived.  Albertans referred to the recession of the 1980′s as “Trudeau’s Rape of the West”, caused by the National Energy Program (NEP), intended only for the benefit of the east. Oil had gone from $3 per barrel in 1973 to $35 in 1981 and projected to be $70 by 1985. Additional taxes were placed  on oil to benefit the poor easterners who bought expensive foreign oil instead of domestic oil and those taxes were not totally removed until the Mulroney era 7 years later. 

Albertan appear to have conveniently forgoten that the price of oil peaked at $37 per barrel in 1982 and dropped to $10 per barrel by 1986. The oil industry was destroyed! The United States was in recession from 1980 to 1983. Chrysler was bailed out by the US government. Inflation, fueled by the rapid increase in oil prices was 11.5% in 1982. Canadian 1 year mortgage rate interest rates peaked at 18% in 1982.  
 For many Albertans, the 1980′s recession broke many good people, including people within my Father’s circle of friends, and it has taken many of them 15-20 years to recover from those dark days. Bankrupcty was one way out. Suicide was another, but I don’t know of anyone who took that route. 

In 1982, I was a 4th year apprentice carpenter running a $5 million job with 100 trades on site. In 1983 I was reduced to searching the carpenters union job board with 2,000 guys in line ahead of me. That was one of many reasons I made the move from construction to the property management industry.  

During the first half of the 80′s house prices had dropped, and many were worth less than the mortgage owing, leading to some interesting slang: dollar dealers, jingle mail, capped buildings and see-through buildings. 

• Dollars dealers were buying houses for $1 and renting them out until the bank took over. 
• Banks were the proud recipients of jingle mail when the keys were returned to the bank in the mail. 
• Capped buildings were new construction projects just canceled, and the doors were locked and the site abandoned. 
• See-through buildings were newly completed buildings, and you could see right through the building, because no tenants had moved in. 

It was a good time to be a receiver-manager. 

Nu West Developments, Texaco Oil, Dome Petroleum,  Gulf Oil, WW Arcade, Imperial Lumber, Woodward’s Department Stores, Northwest Trust and Continental Bank, are but a few old established companies that disappeared from Alberta. 

Hospitals, schools, government, grocery stores, funeral homes and pawn shops proved to be recession proof jobs. (I’ve never met a teacher who has been laid off.) 

I learned a number of lessons from the recession. Here are 11 of them:

1. The Sun will rise up tomorrow, and the day after, and the day after that. Life goes on. People are born, live and die, regardless of the economy.
2. Personal guarantees can come back to bite you on the ass. Asset protection is critical.
3. Any interest rate under 10% is heavenly and the banker’s secret to avoid foreclosure.
4. Cash flow is critical. Undeveloped land is does generate any money in rent.
5. Residential rentals are always in demand. (Unless you are in a one industry town)
6. Rental turnover can drain your cash reserves.
7. Fantastic deals become available. That very expensive lake lot sold at 1\3 of the old price. Be prepared to jump on the bargains.
8. Don’t drive your new BMW to the wage negotiations. 
9. The market will return to normal. You just have to be patent.
10. Stop looking and brooding over your net worth statement or balance sheet. If you can breathe, you have  the ability to change your life and situation.
11. The strong survive, the weak die. It better to be the strong guy than the dead guy.

  In my next few posts I will go over some strategies for today’s recession that will help you through the rough spots that are coming.