I have taken several courses over the years, and I react the same most people. But after a few weeks, I lose my appetite and look to the next seminar. I just become a professionial  seminar grad.

After one of the REIN (Real Estate Investment Network) ACRE\ quick-start programs, my mind was churning with many questions. REIN puts very successful courses and is a leader in Real Estate Investing.

 What the plan? How to get my wife on side, how to raise capital, how to get the bank to say yes, joint venture with Who?, and other general questions. Too many, and for many, it paralyzes you.

Today I will outline some of the roadblocks I had to overcome to be a successful investor.

Q. What was your plan?

A. Buy investment property, to buy 20 doors, as soon as possible.

Q. How to get the wife on side?

A. Talk and communicate with her. She said yes. ( She also said yes on the day I first asked for a date, and the other day I asked the special question, so many years ago. And yes there been times she said, no don’t buy that! Sometimes she was very right and other times not. But my batting average is about the same.

Q. How to raise capital?

A. I had equity in my farm, and how to release this. Part of the property was under contract with my property management business.  I looked in the mirror and my resources. and raised  a large sum of funds, so I could go buying. The idea on how came to me in the middle of the night. and then banged my head when I realized what I needed to do. I obtained a business partner with money.

Q. How to get the banks to say yes?

A. Still a issue I have today. But the bankers worked for me in obtaining properties, once My Investor binder was in order. I was told by an old mentor aim high with the bank. So ask for more than you really need and wait for the bank to reply back. In 2005, the banks were very generous, a big change from today.

Q. Joint Venture (JV)?

A. One of my first JV was with a Gold REIN Member, who was raising capital by selling off properties to other investors. I did this one JVon a condo unit, to find out what the JV process was, and to learn. (Gold REIN member is one who has purchased more than 18 properties). The initial information, the jV agreement, and the wrapping up of the agreement was a great learning experience. Great way to start if you unsure how to get your feet wet.

Q.  What City?

Rein has a great measurement tool called the god mine scorecard. Edmonton has been in the top 10 cities in Canada to invest in for the past decade. Edmonton continues to be in the top ten cities in Canada.

Q. What neighborhood?

A. I had a great advantage, as a property manager, I knew the good and bad of many neighborhoods in Edmonton, so I knew what ones to advoid at all costs. Or why the property is cheap for a reason. At that time I bought in the northeast, north of the yellowhead trail. Not in the Black Triangle of East Edmonton.

Q. What type of property?

A. Depends on your long term goals and objectives. How long term is your JV partner. Single family properties (houses, townhouses, duplexes, and suited properties) are quick to buy and easy to sell. Multi family is harder to buy and harder to sell.  Today I own single family homes, townhouses (love townhouses), student housing (3 plexes) at the U of A, and multi family. First question is how long is your horizon.

Q. Who is on your team?

A. My team members are people I have worked with in the past and have a good working relationship with. 

For Buying, Realtor (me), Mortgage broker (not banker), lawyer, and property  inspector. Apprasier is appointed by bank, and I have little control over who they chose.

For Holding the property.  Plumber (who goes out at 3 am), handyman,  property manager (Davies Mgt), accountant (Murji & Assoc.)  Good accountants will save you enough tax to pay their bill every other year.  Good subtrades who do great work.  

Q. Can I Find Cash Flowing Property?

A. Clients call, asking I only want to look at cash flow properties. I can on paper, make any property cash flow. 50% down payment, inflate the rent, decrease the expenses. 40 years mortgages. Low condo fees offered by developers.  All tricks used by shyster type salemen to get you to buy.  Getting past the fluffery is the advantage of  having a great team.

A. Cash flow is very important, in a down turn of the market, when the positive cash flow, allows you to continue to pay the mortgage and expenses. Negative cash flow will quickly destroy your investments, in any downturn. That being said, how much positive cash flow is required? One or two negative cash flow properties are ok, but too many are dangerous. Ask investors who got caught in 2008-9.  Rents dropped 20% and prices dropped the same.  This we talk about cash flow in detail in future posts.  

Last item, Real estate investing allows you to obtain long term wealth and life style. Investing is not a race, and opportunities appear every day. It like walking across the pond, knowing what lilly pad is really a lilly pad or just a stepping stone. You do get wet once in while.

I will be giving this talk to the Edmonton Revenue Property Investors Association on March 13, 2012. You can find the association on Meetup.com.

New investors are always welcomed.

We are pleased to announce the election of Brent Davies to the position of the President of the Edmonton Apartment Association, effective January 1, 2012.

Brent has served on the board of directors  for 2000-2001,  and 2010-2011 in a number of positions such as membership, website and vice president.

The Edmonton Apartment Associaiton is non profit organization dedicated to strengthening and preserving the residential rental industry by uniting individuals and businesses with similar challenges, concerns, goals and opportunities.

The membership is comprised of owners, operators, property managers of residential rental properties, and condominium investors. The EAA provided insight, education and feedback on issues facing the residential rental industry..

2012 will see the introduction of the STREETSMARTS, a on line learning course. The first of the series will be the Residential Tenancies Act of Alberta.

Our discovery tours for investors  are designed for the new and experianced investor to test   kick  the  tires of   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, June 9,2012 at 10 am at a secret undisclosed location knowen only to registered folks.  The group will tour several multifamily properties  in the Queen Mary Park neighborhood and Inglewood.

Best of all, free to the first 20 people.

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

For the past 27 years, I work at Davies Management & Realty. It was a family business in many ways, founded in June 1984 (when Chris was 2 years old) by my Father, Bill (55) , David Panar, Myself (27) and my wife Leigh Davies. In the first 10 years, David and Bill both retired. Family business can be wonderful if there is harmony between the family members, and hell if there is not harmony. We were very fortunate and all got along very well.  Leigh and I continued to work hard for next 15 years to make Davies Management into a successful property management company. In 2008 we sold the business to Jason Dolynny, who has continued to operate the company in an excellent manor.

I stayed on as the Broker for Davies Management for several years, to enable Jason to learn the ropes and obtain his real estate licence. But now my work with Davies Management is now really over. One big  milestone passed.

Chris at age 29, has grown up into a husband and father, and his work at the family business when he was younger convinced him to go into real estate. Chris joined RE/MAX Real Estate, Edmonton, one of the best offices in Edmonton over a year ago.

Just like when my Dad and I worked together in those early years, I (at age 53) have joined with Chris in his already successful real estate team at REMAX Real Estate, Edmonton.

This move is a new milestone in my life, a great adventure and time will show the great things we can accomplish together. The ability to work with my kids is wonderful. Not all fathers have that privilege. When Chris asked me to join him at REMAX, it reminds me of the scene in the first Star Wars movie, when Darth Varder met Obi Wan Kenobi on the death star. “I was once the pupil, and now I am the master”.  Not a show down, but an adventure. Should be great fun. New milestone and a new road to travel.

My father passed away at 82 years old this past May.  And the months before and after were very busy with dealing the family on many issues, including the virgil, the funeral, and the estate. As the oldest son, many of these issues passed onto me to look after. A another milestone for 2011.

In January 2012, Chris and I were presented with the Michael Millenaar Memorial Leadership Award for 2011, from the Real Estate Investment Network (REIN).  Both Chris and I have presented both white papers on various real estate issues, and presented on stage. What makes this adward very special to me was the person for who this award is named for. Michael Millenaar was a young man who I met  in 2005, and was kind and helpful person, who helped push me to a new level. Michael  developed an aggressive cancer and this took his life within a year after I met him.  

Brent Davies,

Commercial Realtor, RE/MAX Real Estate, Edmonton,

 780-488-4000; cell 780-974-0252,

I able to choose who I married, (married Leigh 33 years ago), where I live, what I do for a living (sometimes I think otherwise on a bad day), my friends, social activities and my investments.

What I had no choice over was my parents, and relatives. For some this presents a great challenge and for others an advantage. For me, it was an advantage. The one advantage I got from my Father was Real Estate Investing. Dad made a lot of money in the late 70’s and lost a lot of money in 1980’s. I learned about real estate cycles and more importantly, the ability to make a choice. Chris is learning the same lessons today.

Real estate investing is all about making choices.

• Choose to be an investor or not. (Why are you doing this?)
• Chose to buy ( hands on property owner or mutual funds owner)
• Where to buy? (REIN’s Goldmine scorecard)
• What to buy? (Davies Group Investor Discovery Tours)
• When to buy? (timing and business cycles, Recessions past)
• Where will the money come from? (REIN’s joint venture secrets)
• Where to get the financing? (Peter Kinch’s sandbox rules)
• Who is the tenant? (tenant screening tips)
• Who does the day to day business? (retaining control)
• Exit strategies? (how do I get out?)

A few Examples of Poor Choices

• Buying property in poor neighbourhoods ( It cheap for a reason)
• Lone wolf syndrome (I’m smarter than the rest of you)
• “They don’t build land anymore” (real estate markets can boom and bust)
• HOT ! HOT! real estate markets (Condominium conversation and pre-builds frenzies)
• Refinancing real estate (forgetting that eventually you have to pay tax on the money)
• My Accountant does the numbers (not look after the details)
• Speculation (buying based on a tip)

The Results of Poor Choices

• Foreclosure
• Bankruptcy
• Family breakups

The Results of Good Choices

• Establishment of long term wealth
• Personal freedom including the ability to say ”take this job and shove it”
• Improved Standard of living.

Choice is the biggest single tool for the investor. You, the investor; can choose your investment type, the property, the renovations, the tenant, the color of the walls and when and if you sell.

Real estate education is so critical and that is why I support organizations such as the Real Estate Investment Network (REIN). Getting great information on relevant issues and strategies that work in your neighbourhood is so important. I roll my eyes whenever I see in the paper advertising a seminar coming to town teaching all about buying tax liens. Strictly an American strategy and it does not work in Alberta. But people pay thousands every year on learning how to buy something that does not exist in Alberta.

I was given a book many years by Milton Friedman, Free To Choose
. Milton Friedman was an advisor to Ronald Reagan, and a Nobel Award Winner. A good read for the entrepreneur. And why we Free to Choose.

Enjoy your freedom to choose, and enjoy the results.

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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Property managers and landlords are constantly looking for quality tenants. In March 2008, we
ran some tests on Internet advertising because the response to both our newspaper and internet
rental ads in Edmonton, Alberta had decreased. We felt that this type of advertising was not cost-
effective and we were not getting a large enough number of applicants to find great tenants.
We decided to try Internet advertising because it is frequently used by out-of-town residents who
are looking to move to Edmonton. These people are usually young blue-collar tradesmen,
looking to take advantage of Edmonton’s low unemployment rate. We find these tenants are
desirable because once they find a job they usually make good long-term tenants.

In 2006 we discovered an oddity in our properties. A majority of the tenants in our higher end
rental suites and homes owned at least one computer. On the other hand, only 3 of 22 tenants in
one of our lower income buildings had computers. Home internet use was a sign of prosperity.
We felt that by using internet advertising we would be able to screen out lower income tenants
who don’t have computers and would have too low an income to be consistent tenants.
We tested our advertising in March of 2008 by placing five identical ads on different rental
websites. Each website listed a different email and phone number, allowing us to track the
effectiveness of each ad.

The sites we used were:

• Gottarent.com
• Rentedmonton.com
• Rentfaster.ca
• Albertarent.com
• Homerent.ca

Prior to this test, our marketing was based on all calls and inquiries to a central number. Inquires
were asked where they got our name, the internet as the answer. Many times they could not
remember the website.
Our questions were:

1. Was our current program of internet ads working? We were using Rentfaster.ca as our primary website.
2. Which rental websites led to the most inquiries?
3. Was there one site we could use exclusively?

Fill out the form to download the full 12 page whitepaper with the complete results: