If you are capable of paying off large sums your credit will increase even faster.

If you start collecting cards and increasing your limits it is very easy to max out the cards.

This can cause you to be paying thousands of dollars in interest every year.

So one tip never use more than 80% of the credit on any card at one time.This will cause your credit score to drop.If you need to use a larger percentage get them to increase your line of credit first.
Tell them not to increase your line of credit if you can’t handle credit wisely.

Use only one credit card on a regular basis that way you limit yourself to one payment monthly.

Times New Roman;”>That doesn’t mean you shouldn’t get other cards and work your credit line up to a large amount if you have a good purpose for it.
Some of these credit card companies will let you use your card as a line of credit at very favourable interest rates.You can use this to fund money making schemes by freeing up other cash. Just make sure you aren’t doing this on a wing and a prayer with something that you know nothing about.

For instance I have a card with a $45,000. line of credit on it. I have never used this card for purchases.I have always called and negotiated with them for loans with very low rates of interest, then I would pay large payments on the card paying if off very quickly.

This caused them to increase it again and again and again.For the last few years I have just waited for them to call me.The minute the line of credit is no longer in use they will start calling and if I want some funds for an investment I can negotiate.
Last week they called me. The rate started higher but as I didn’t have an investment in mind I didn’t need any money. The rate quickly dropped to  2.99% for an unlimited period of time, as in forever.

They wanted a 1% upfront fee which I negotiated away. 

What did I do? Since this is 2 .3% below my mortgage rate I took 80% and used it to pay off a large chunk of my mortgage .  This allows me to make larger monthly payments on a chunk of my mortgage while saving 2.3% in interest , which turns into thousands of $ in savings over the next several years and I can get that bit of mortgage knocked off completely in the next 3years
You always have to remember that in doing something like this it is showing on your credit bureau at all times as it is a line of credit and not a mortgage.
Therefore it is imperative to be dead on time with all of your payments. You have to do it in a way that works for you not against you. Therefore be careful about cancelling cards or having your amount of credit reduced.
Cancelling can cause your credit rating or Beacon score to drop somewhat and it can take several months to pick up those extra points. 
Hope this helps.

Or are you in the dreaming phase and need help getting started?

Our Toronto Waterfront Real Estate 2009 Report will help you get the information you need to choose your new waterfront home/ condo/loft  or community.

Have a preference for a Harbourfront condo? Our Report  could be just what you need to kick start your journey into fabulous spacious skyline living with high ceilings, stunning spaces, lots of light and a unique downtown lifestyle.

Prefer the Beach? Our brand new report will give you all the info you need on Toronto’s East Beaches, homes, lofts condos and the great community that you  would be living in.  Toronto Waterfront Real Estate is one of your best buys for both Lifestyle and long term appreciation.

We have focused on:

Our guides are divided into two sections.

2/ Toronto’s East Beaches – from Ash Bridges Bay to the Bluffs.  Condos and Lofts plus

A new section on homes and the fantastic Beach community to be added soon. We”l get that out to you in the next few weeks as it becomes available.

In our opinion you just can’t go wrong buying Toronto Waterfront Real Estate.

Living in Toronto Waterfront Real Estate can require a substantial financial investment. Particularly if  you want to buy a house rather than a condo.  You will truly find waterfront real estate to be a good investment.  Waterfront homes and waterfront communities in Ontario have more than doubled in price in many areas over the last 5 years. However, you will find many economical opportunities for first time home buyers in Toronto’s downtown waterfront condos.  Condos in Toronto are a booming market.

This guide will tell you about the condo buildings, the address, their special features, amenities, descriptions, and more. Waterfront Communities with homes will be described with a general price guide and neighbourhood features. Take a bike ride or roller blade along the Martin Goodman Trail. Walk thru Toronto’s many diverse waterfront neighbourhoods and decide which condo building or neighbourhood may be for you.

To get your Free Report 2009 Guide to Toronto Waterfront Real Estate just fill out the form below and your Toronto Waterfront Real Estate Report will be on it’s way to you shortly.

The Toronto Real Estate Market is finally slowing down  We tell you about the market exactly the way it is. To read my latest market update or listen to my latest video just check our blog   Toronto’s Home blog.  To Read our Latest Newsletter check this link   Great Life Team News

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Probate

When a property is owned by the deceased alone, the property will be subject to Florida probate. This is a legal process which allows for a property to be transferred to an owner\s beneficiary.

Probate is costly, time consuming and freezes your estate. Probate can cost up to 3 percent of the market value of the property at time of death. And can take between six to 12 months.

How to Avoid Probate

To avoid probate you will need the deed to be in the name of a Cross Border Revocable Living Trust (CBRLT).. This works if you are in the process of buying or if you have already purchased the property.

There are two main steps and here they are.

1/CBRLT. This will be drafted with specific clauses for Canadian residents. The client is the grantor and trusteed. /she has full power and authority to lease, mortgage or sell the property.

2/ A deed transferring the ownership from the client’s name to his new CBRLT is prepared and recorded.

What This Does

1/ Property is exempt form Florida Probate.

2/ Beneficiary whether surviving spouse, children or others, is designated as such in the trust with as many scenarios or provisos as are appropriate in any well thought out estate plan.

3/ Creditors cannot seize the beneficiaries interst in the Florida property or the proceeds if it is sold.

4/ If the beneficiary divorces, the exspouse will have no right to shre in the benficiary’s inheritance.

5/ If the property owner becomes mentally incapacitated, he is replaced by the successor trustee named in the trust . This will avoid Florida guardianship procedures.

6/ No annual filing requirements to the IRS or Canadian tax authorities.

7/No deemed disposition upon transfer of title to the trust

8/ No annual accountant or attorney services required.

9/ U.S. estate tax payable upon death of first spouse deferred by Qualified Domestic Trust (QDOT) in the CBRLT

The above does not constitute legal advise. You will need to consult with your own tax and legal advisers to determine what solutions suit your personal situation.

Closing A Florida Home“>

A lot ot the concern with doing this results from not understanding how to finance a property and how to take title and manage taxes.

I recently had the opportunity to attend a Florida seminar and glean some more info on this which I will share with you here. Please don’t construe this as legal advise. You will need to talk to a lawyer and or accountant who deals with cross border issues to determine what to do in your situation. This is meant to alleviate some fears and concerns about the process only.

With the loonie about par with the American dollar, interst rates low and a huge inventory of even brand new homes available & ofttimes sitting vacant there has not been a better time to buy in the last 10-15 years.

So first off you don’t have to pay for the property cash. You can get a mortgage on your home in the sun without a u.s. social security number or a U.S. credit history.

RBC Centura Bank which is a fully owned subsidiary of RBC Royal Bank with over 45 branches in Florida has developed a banking & home -lending program for Canadians which is called RBC ACCESS USA. It has a number of financial solution & takes into account your Canadian Credit History.

They have a team of financial professionals specially trained to assist you with U.S. banking and home lending requirements.

Banking & Mortgage laws and regulations & terms are quite different in the U.S. and RBC’s team knows the difference between the U.S. and Canada when it comes to banking & getting a mortgage.

While we can get a mortgage in 2-3 days here in Canada and sometimes in only 24 hrs. in the U.S. it can take up to one month. So if you are looking to buy state side in the near future you can pre-qualify the same as you would here . This can save you time and help you to bargain for a better price in the current buyer’s market.

Being pre-qualified is a much stronger position to be in than having to buy conditional. Canadians are use to this and have no idea how much more challenging this is in the U.S. and just how much power and leverage this can give you.

U.S. mortgages generally give the mortgagee (that’s you and me) the option to pre-pay at any time without penalty… Another big difference and great advantage as you can knock it down every time the exchange rates are favourable and you have some extra cash.

Also in the U.S. you don’t have to renegotiate your rate every 3 years or 5 years. You can get a fixed rate for 30 years. All the more reason to buy now while the rates are historically low.

When you mortgage in the U.S. the bank will give you a “good faith” estimate which will itemize all the charges involved in the transaction. This way you will know all the cash you need available.

With RBC Ventura you can finance up to 80% on a second home loan providing that you qualify.

You will need make sure your will or trust covers your U.S. asset and to seek proper cross border advise in that regard. More on that coming up.

Closing A Florida Home

First bit of info is knowing about occupancy.

If you are Canadian you can stay in your Florida home for up to and 1 day less than 6 months without incurring a need for permission from the U.S. authorities and without both tax and health care ramifications in Canada.

One day more than 6 months and you could lose your OHIP benefit if it was discovered you were out of the country. Pretty easy to do when you know that your comings and goings are recorded at the border.

To purchase a Florida property you will need to write an offer and give your deposit money, called earnest money in the U.S. when you cross the border to an escrow agent (usually a lawyer)or a realtor.

They have a legal obligation to hold your deposit until one of 2 things can happen 1/ the seller hands him or her a deed conveying title and a “GUARANTEE” that they in fact do own the property. 2/ The deal falls through, in which case your deposit money comes back to you.

If the lawyer determines you get what you are meant to get then there will be a closing where your money is exchanged for the title and you will get the keys to your property.

So who is making the “GUARANTEE”? In Florida as here in Canada now there are Title Insurance Companies. So your lawyer would supply you with a policy issued by a big well -known insurance companies that have been in business for decades and that are highly solvent. They do research to make sure the seller owns the property and to make sure there are no others claims or liens against the property.

If the title is clear then the lawyer will issue you an insurance policy. There is a clause in this policy that insures the insurance company will pay you the price you paid for the property in the rare occurrence that despite their research the seller did not own the property and that if he did and there was a lien that wasn’t found then the insurance company will pay off the lien. It’s a good system that works well.

If you have heard that property insurance and property taxes in Florida are higher than elsewhere then you are correct. They are higher than states that have income tax and death tax. However, there are ways to reduce some of these costs plus the savings on the purchase cost at the moment should substantially offset these costs, plus of course the lack of other taxes and the generally lower tax brackets that exist in Florida.

If the property insurance costs seems high it is quite simple buy something that was built after 1992 and that is not right on or next to the beach. Property insurance is much more reasonable for these properties as the building codes changed in 1992 and were much improved plus beach front is of course more subject to winds and hurricanes.

Properties built after 1992 perform much better in high winds and this is why they cost less to insure.

Currently as of today’s date property taxes are running about $1600.00 per year for every $100,000 of property value. Taxes are market value assessed yearly. So your taxes will be based initially on your purchase price.

However depending on how you take title if you rent the property then it can be arranged so that your expenses including interest are deducted from your income on the property. That lower net figure will not be taxed by Florida (the state) only by the U.S. Federal government at rates much lower than in Canada.

So it may be time to grab your beach towel and sun block and check out living part of the year under the Florida Sun.

With Canadian real estate at an all time high it is hard for investors to make numbers work on properties here. So if you are an investor this may be a great opportunity for you to build up your portfolio and to buy Florida real estate while enjoying avoiding our Canadian winters.

Closing A Florida Home

35%- Payment history
30%- Amount you owe
15%-Length of credit
10%-Types of credit
10%- New credit

Payment History
Your Payment History is the frequency and amount you’ve paid on past debts.

In the event that a debt has been sent to collections it will stay on on the record for 7 years.
If you have a debt that has been in collections for 5 or so years (so it’s almost to the 7 year mark) do not just pay it off, because once you pay you will have “paid collections” on your record for another 7 years.

Instead, call the collections company and tell them you fully intend to pay the debt if they will write a letter to each repository (company that does credit reports — there are 3) telling them to expunge the collection once you have paid. With their affirmative answer, pay it! You have their word that it will not be on your credit report.

Amount You Owe
The amount you currently owe for your credit cards, mortgage, car, etc. is on your credit history. This can be good or bad, depending on how much you owe compared to the limit you have.

Our advise to you is to not max out your credit cards! Your credit report is based on the amount you owe on your credit card compared to the credit limit.

If your amount owed/credit limit is 0-30%: green light, 30-60%: yellow light, 60-90%: red light. Your credit score will be higher if you have three cards in the green light range as apposed to one card that is in the red light range.

Hint: Mortgages are on your credit report. If you have many loans you don’t want to continually go to the same bank. Your mortgage broker will help you (he gets paid if you get your loan).
Be up front with your mortgage broker about your loans so he can shop at different banks. If he doesn’t know where your other loans are he might try to get you a loan at a bank where you already have a loan and they could deny you.

Length of Credit
The length of time you have established credit is important. The sooner you get started building your credit, the longer you will have to create a high credit score. Get credit history started young! Buy things on your childrens’ credit so they have some established when then need it.

Types of Credit
There are different types of credit. Mortgages are good (unless you have a lot of them). Some credit cards are good and some are not.

Don’t open department store cards – cancel them. The Bay and Home Depot are okay because they will be beneficial to you.

Note: If you only have dept store cards, don’t cancel them because you need some form of credit history. Work on opening a new card (see possible good cards below) then cancel your department store cards.

New Credit
Getting new credit cards, cars, etc. can hurt your credit score because your credit is checked each time you apply for something new. Sometimes when your credit is checked it lowers your credit score.

There are hard-hit and soft-hit credit pulls. A hard-hit credit pull is not good. This is when you have a mortgage broker, car dealer, etc. pull your credit — it lowers your credit score every time you do! A soft-hit credit pull is okay. This is when you pull your own credit. You can do this as much as you’d like.

Good Credit Cards to Use

Paypal.com
AMEX Blue
AMEX Platinum Business
MBNA/AMEX Platinum Rewards – you can get immediate checks
Sky Miles Cards – these have high interest, so pay them off every month
Credit Card Calls/Checks
Discover Platinum Cards
Make all cards Platinum or Rewards cards

*When you get credit cards, make sure to get them with 0% interest for 6 or more months. This will give you a 6+ month loan with no interest.

1/Buying outside the Bell Curve The Bell curve is in the middle it’s what most people in a city can afford.

If the middle of the market in your city is about $300,000. don’t buy a million dollar property or you will be come a don’t wanter owner very fast.. as soon as the big mortgage payments kick in.

People don’t want to live in crime ridden areas but most people cannot afford to buy in the prime areas.

Buy the type of house most people can afford. Usually a 3 bedroom one or two bath house.

Three bedroom, 1 or 2 bath. Just remember that… geared to the average wage earner. This is always saleable.

2/ Buy based on emotion. Many folks buy on emotion. They forget to analyze the numbers. Or folk get caught up in how it looks or smells. Don’t worry about these issues.

Don’t get caught up in a house having to meet your personal standards. Alternatively, you may be Tempted to buy something because it is your dream home, but the numbers don’t work.

Forget it, the numbers are what count. And you can quickly de-stinkify a stinker.

3/ Forgetting to do your Numbers or Cash Flow Analysis. The numbers must work. Either you must be buying 25-40% below market or there has to be strong cash flow.

In other words you must have a good ROI meaning Return on Investment.

If the rents don’t make sense and don’t cover the expenses and make a profit. Don’t continue. Walk Away Quick.

4/ Funding it the wrong way. Most people think they have to come in with a very large foundation.

Donald Trump didn’t get where he is by using his own money he used everyone else’s. Don’t overuse your cash. Go with a low down and make sure the cash flow works.

5/ Speculating on an increase- Forget it if it happens it’s fine. You want to walk into equity not hoping that somehow equity will grow Or have good cash flow when you close the transaction. Not looking at a monthly loss. Never buy negative cash flow.

Okay so What  I am saying is, in Real Estate you make your money on the Purchase. In other words you make your money during the negotiation.

After that it is gravy But don’t be saying to yourself  “If  I hold it 5 years it will go up and be worth this or that” Maybe it will and Maybe it won’t.. You don’t care All you care about is

A/ either the price is right or

B/ The income is right.

When I buy an investment property I don’t care if the value goes up or down. I care about how much money I put in my pocket each month. That’s the whole point of becoming financially Independent.

6/Thinking that one house going awry means all houses go awry. People get upset if a renter leaves early or defaults, don’t worry about it. One tenant issue does not a business make or break.

Ultimately things are appreciating long term.

Save last month’s rents so you have a buffer.

Try to Have an equivalent of 3 months rent in an account for each property. This is ideal. However for sure have at least one months rent. For an emergency situation.

7/ Trying to do too big of a deal on the first property.

Don’t try to go too big go duplex or triplex not a strip mall or you will scare yourself and things will go off the tracks.

Bonus Sins – Here’s A Few Extra

8/Harming another in a transaction. Don’t try to take unfair advantage of the Seller.

Once you are a landlord stay in your integrity. Become a good landlord not a bad one. It is a step by step learning process.

9/Trying to invest in a vacuum without a team

Basic Core of Your Real Estate Investing Team

Attorney

Mortgage broker

Personal banker

Realtor

Home inspector

They all support you and assist you in your Venture. Be happy to pay them their fees.

Don’t be afraid to negotiate fees if you are buying or working with them regularly and can promise a specific level of business. Say five or ten million a year. ( to be negotiated)

10/ No substitute for knowledge There are lots of books and courses, on the subject of real estate investing .

If you would like full fledge Coaching on the matter of real estate investing you can reach the Toronto’s Home Investor Coach Aeriol Nicols at (416)465-4545.

You keep hearing about how you can buy all these great deals with no money down or very little down and do quick flips pocketing a ton of cash.

If you live in southern Ontario most folks find that the banks are not that amenable and that they seem to need large amounts of cash to do anything. Plus if you are in the Toronto area, which is the best rental area prices may seem very high to you.

So how can you get into the investment market and make it work?What is the truth of real estate investing and how can you get started?

Well first thing to realize is that a lot of those people selling their product(the high priced seminars costing thousands of dollars) are making as much money from the sale of their seminar as they are from their actual real estate investing, in fact maybe even more.

For Example Robert Allen of No Money Down Fame has confessed to initially making a million dollars buying real estate but to making Millions (plural) selling his knowledge.

This does not invalidate investing. Real Estate long term is your best investment of any type. At least that is my humble opinion.

There are good real estate investing courses and good investment teachers, most of them won’t charge you thousands of dollars for their course unless you are at a very advanced level.

To know more about this call our Team and we can help you get started on this course in a very reasonable manner. We can be reached at 416-465-4545.

So how do you get started? Well first let’s define investing. Investing means to buy something and hold it with the hope of appreciation and gaining a good return in the long run. That immediately eliminates the quick flip idea.

So to invest and hold immediatley implies a longer term, and also that there has to be a way to do that.

You have three main considerations when thinking about purchasing your first income producing property.

1/ you will have a mortgage and the property will have to provide enough reliable income to cover your mortgage, taxes and utilities plus a monthly surplus to be considered as a deal that works. Otherwise you will end up losing this property.

2/ You will also need a downpayment to buy this property. If you are just getting started you may not have the 25% down or even 35% down that banks require on different types of properties. So this is a huge consideration.

3/ The property will have to be both managed and maintained. You will have a new set of skills to learn with regards to your tenants. How to be friendly, effective, but firm with your tenants.

You will have to learn new attitudes to demands for work on the property as your tenants will have you building them a new unit if you cannot firmly draw the lines.

You will need to learn some basic bookkeeping and a few tax rules to keep your finances sorted out. Plus you will need to learn how to deal with trades.

Having said the above are you still interested ? If so where you begin depends on your financial strength. If you are a first time buyer with a small down payment you should buy a property to live in that has two or three existing units.

Canada mortgage and housing corporation or commonly known as CMHC will give you a mortgage for up to 95% of value on a property with up to 3 units.

If you are not going to live in the property you will be subject to traditional bank rules unless you can find secondary or seller financing.

So let’s say you want to buy a property in Toronto for $450,000. You can theoretically buy that with $22,500.00 downpayment plus you will pay CMHC an insurance fee on top of your mortgage for the privilege of buying with a low downpayment.

Combining the two this would give you a mortgage of $443,531.00 approximately. Which would carry for roughly $2452.00 per month at today’s rates. Plus taxes say about $250.00 per month, plus utilites lets add in another $400.00 per month for heat, hydro, water and building insurance. That totals approximately $3100.00 per month.

Sound a little scary. Okay, but now we are going to add in some income.

Let’s say your building has 3 apartments a main floor that currently rents for $1000.00 a basement apartment that rents for $725.00 and a Second and third floor apartment that rents for $1300.00 per month or a total of $3025.00 per month income.

Those are reasonable rents in Toronto’s current rental market. Doesn’t quite cover the costs though does it?

However, let’s take out the main floor income and you live there in a 2 bedroom suite. You now own a home and live in it for about $1100.00 per month.

That still is about $500.00 per month less than the average downtown condo runs for the first time buyer in the $225,000- $250,000 range.

But the big thing to remember here is that you did this with only 5% downpayment… in other words you have leveraged a $450,000. property with only 5%.

When prices rise by say 10% your house will go up in value far faster than your condo. Plus land intrinsically holds a far greater value in recessions than a condo just because there isn’t any more of it to be made.

So you will receive a monthly income that covers your mortgage and the bulk of your expenses, your tenants will pay for most of your house.

You will have a home to live in, build equity as the property increases in value and you will have created tax advantages for yourself.

So whats next? You will start to improve your property and start to optimize it. This way over time let’s say five years you will increase your rents. In Ontario when a tenant moves out you can set any rent you like or whatever the market will bear. Over five years the property will increase in value building your equity position in it.

If you are not going to live in a property don’t ever buy one that doesn’t pay for itself. This strategy is for building and improving a position for a first timer.

The law of doubling says that money doubles every seven to eight years.

After five years if you have done renovations & proper maintenance to increase your income and the overall value of your home you should be able to refinance your property to take money out to buy another one. Plus don’t forget your mortgage has decreased as well.

So using this plan you can look at buying a substantial property every five years. You can then move from your first property to the next one and repeat the process or if the income and improvements have created a huge increase in value you could buy a single family home. But that might slow down your investing timeline…

Follow this method of building and you can within 7-8 years be approaching millionaire status. As a single parent this is the plan I followed. I now live in a substantial single family home in a country setting in a wonderful community 30 minutes from the urban centre.

Don’t forget that here at the Great Life Team we are here to help you with this process. We have over 20 years experience as investors… So call us for a chat when you would like more information or sign up for one of our investor workshops that will be coming soon.