Links of Note

Today I came across some very interesting posts that I need to share ASAP. 

The first two-part series is on something called the Smith Manouevre (Part 1, Part 2) posted over at a new Canadian personal finance/investing blog called Million Dollar Journey.  The author FrugalTrader is on the warpath to accumulate $1.0M by the time he hits 35!  A tall task, and I wish him luck.

The Smith Manouevre consists of using a HELOC to invest in rental property.  The interest paid on the HELOC is tax-deductible as long as you invest in the right type of vehicle (dividend paying stocks or real estate for example).  Mr. Smith suggests reinvesting the saved tax dollars into your non-tax-deductable home mortgage, which then increases your HELOC room so that you can invest in more real estate.  The benefit is that your home mortgage is paid off faster and you have access to more OPM for investment purposes.

The second post of interest is from the Investment Property Insider who tells us a little bit about how you can use commercial real-estate to make money, even when the value of the investment declines significantly.  He goes over a quick and dirty example of how a $1M property could lose 20% of its value in 8-years, yet the owner could still make money at a 7.5% cap rate.  His calculation does make a few simplifications, but most notably it assumes that you borrow the money for the downpayment.

Lastly, I came across the first blog via Canadian Capitalist , which is a fantastic site full of great information for the Canadian investor.  I came across it a few years ago, but had lost track!  I'm glad to now have it in my agregator.

Enjoy 

First and second (edit) Carnival

Well, thanks goes out to the folks at BiggerPockets.com for including my recet post on Rental Tracking Software in this-weeks Carnival of Real Estate Investing .

Now I just have to find out what other software packages he was talking about, or perhaps I should change the title to specify tools for the small landlord… either way.

Edit: The post also made the Carnival of Real Estate #22 although I did not make the list of the Top 11 at Active Rain, maybe next-time.

Thanks again, I hope the post had some useful information.

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50cm (20″) of snow… and counting!

Over the last 24-hours, South-Western Ontario, and specifically London was drenched in 50cm of snow and there is still a snowsqual warning. Looks like we could get another 10cm throughout the day today.

From Christmas, sn…

Here are a couple of photos of my neighbourhood just for interests sake. My house is burried, the snowblower could barely get through it… but… my dog was having a blast!

From Christmas, sn…
From Christmas, sn…

The best part is that my car isn't capable of getting off my street, so I'm stuck. Gotta love a good old snow-day!

NG

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Working with People…

I struggle to understand people.  I don’t know why exactly, but it can be difficult.  Thus, I am weary to enter into partnerships with other people because I second-guess myself, and I don’t trust my ability to judge a person’s true character.  I think this is because I’ve misjudged some people in the past.  This is why I found Pamela Slim’s post on Escape from Cubicle Nation so intruiging today.

The post is entitled “The delicate are of business partnering.”  In it, Pam has a lot of interesting points about the personality traits to beware of when considering a business partnership as well as some of the various legal structures that can be employed, and their related pitfalls.

Her list of items to consider when choosing a partner is:
1.  Legal structure
2.  Money matters
3.  Market reputation matters
4.  Communication style
5.  Shared values

If you and your partner’s views align, more or less, in these 5 categories, your chances of success will be elevated.

Personally, I am struggling with this right now as I have two potential partners for REI.  My wife, and a close friend.  However, there is so much to determine before entering a partnership, that I will certainly take this advice to-heart, and make careful considerations before making a final decision that could affect my business and success for years to come.

Escape from Cubicle Nation was featured here before.  I recommend it for anyone looking for advice on entrepreneurship.

Review: “I Will Teach You to be Rich”

Author: Ramit

Subject: Financial advice, interviews, etc.

Verdict: Good site, fun to read, sarcastic and synical.

Details: Ramit has a good sense of humour, likes pens, and thinks he’s better than everyone else (not that there’s anything wrong with that). This interesting mix makes for an interesting read, and the fact that Ramit is indeed knowledgeable in terms of becoming financially successful means you can learn something at the same time.

The best part of Ramit’s site are his weekly features. Every Friday he interviews a successful entrepreneur. These interviews have been very enlightening as the inverviewees run the gambit from owners of a small specialty pen distribution company, to Pam Slim of Escape from Cubicle Nation who blogs about how to successfully start your own business. Every Monday he will also be posting a new way to renegotiate one of your service contracts to save money (the first post showed us how to save on automobile insurance). We’re still waiting for the next installment which is due today.

Anyway, I strongly recommend checking out Ramit’s site. His site was a major contributor to my desire to start blogging about real estate, so it must be good. There is a wealth of useful information in the archives, so be sure to surf around.

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John T. Reed vs. Robert Kyosaki

http://www.johntreed.com/

I found this website was fairly honest and consistent. The real estate advice he gives in his articles section is fairly basic, but it gives a prospective real estate investor some basic fundamental understanding of what is required for the job, how to make sound financial decisions using ratios, etc.

One segment that I enjoyed was his complete disdain for Robert Kyosaki that culminates in a 185kB plain text document outlining inconsistencies in his book Rich Dad, Poor Dad, his life, and other musings. It really is quite scathing, I’m sure Ken over at ARRDPD would disapprove.  However, it is consistent, and reads well.  It is actually quite amusing to look at how JTR’s research disproves many of the careless comments in Rich Dad, Poor Dad.

I do see JTR’s point though. When reading RDPD, one gets the feeling that everything is exceedingly vague. I think Kyosaki, if anything is a fantastic salesperson who has managed to find a key niche of selling real estate investment advice to people who will probably never get involved in real estate investing.  The book is dumbed down, and mostly amounts to a bunch of flag waving like you see at a highschool pep rally. 

For some readers, Kyosaki makes them feel smarter by giving them ‘insider’ information like how to calculate your net income.  For other readers he makes you feel superior to the rest of the world by constantly putting down people as not being able to figure out the most basic foundations of accounting.

The article entitled
“Suggested sequence for starting a real
estate investment program” has some good information.  Its more of a
pre-questionairre to see if you have the right-stuff for investing in
real estate.  It is a simlar approach to that used by Robert Griswold in “Property Management for Dummies.”

Either way, there is some good information on John’s site that is worth a look and skimming the Rich Dad, Poor Dad book review is good for some amusement on a Friday afternoon.

NG

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Housing Bust or Slump?

Over at BiggerPockets, they are linking to a FinancialTimes analysis (subscription required) on the housing boom, and its imminent demise.  The contrasting theories are that the boom will either bust, or slowly slump…

I for one am hoping for a slump.

Does anyone subscribe to the FT that could give us some more insight as to the content and opinions in the article?  I do not.

Thanks.  NG

Link of Note -> How-to: Succeed at a PF Blog

Thought this was an interesting post.

I think I’m doing a pretty good job of the networking aspect of the job, and it is interesting to see readership grow. Hopefully the things I’m writing about are somewhat interesting or entertaining.

Next, I really need to get off the basic WordPress.com host.. because they’re jacking me around with the lack of movement on the category issue, and I have almost no customizeability or option to add adsense ads. (Now that’s half a tongue-twister!)

NG