Hot Tips for
Real Estate Investors
IV. How to Apply Hot Tips
Case One
Question:
An old friend of mine has been
renting for years. (Such a waste! )
She has plenty of money for a hefty
down payment but is too scared to do
anything.
Answer:
Give her a copy of Hot Tips and have
her read about Aqlim's purchase of
eight houses and six condos.
Inspiring stuff! At the start Aqlim
was afraid too but she overcame her
fear by finding a good realtor and
following the game plan clearly
outlined in Hot Tips (pp. 7-9). If
your friend follows Hot Tips’ advice
about location, type of house and
price parameters (p. 7) and then
gets involved in the search and
becomes very knowledgeable about
prices, she is well on her way to
understanding the market and
acquiring the courage necessary to
make that first offer.
During your/her search, make sure
she knows such things as the “eight
vulnerable scenarios” (p. 24) and
when she finds a promising unit,
suggest that she read how Aqlim
negotiated each of her purchases
(pp. 76, 81 in particular). Remind
her of the section called
“fine-tuning your offer” (p. 102).
This will boost her confidence.
Case Two
Question:
I’m trying to get my son started in
real estate. We have very limited
funds but would like to help. Our
son has a steady job but it pays
only $8 an hour. My husband and I
know that if he buys an apartment it
will lead to bigger and better
things. Any ideas?
Answer:
Hot Tips has lots ot good ideas for
you. Check out the sections on
reverse mortgages (p. 86), CMHC’s 5%
down program (p. 87), renting with
an option to buy (p. 89) and sharing
(pp. 27, 36, 71, 92). Maybe you can
help with the reverse mortgage.
Sharing is an excellent way too (e.
g. with a Murphy bed). It might even
be worthwhile for him to go without
a car for a couple of years if doing
this will get him into his first
unit. By the way, if the bank is
reluctant to give him a mortgage,
try this: loan him $10,000 (or
whatever) and have him deposit the
money. It will make him/her look
like a non-risk. As to repaying it,
you can make some kind a creative
deal with your son/daughter. (for a
copy of my article on buying a condo
in partnership send $3 (Can.) to R.
Thomson, phone toll free 1 888 560
3433, or e mail
rthomson@islandnet.com).
Case Three
Question:
I’m thinking of going In 50/50 on
some property but I don’t have much
of a down payment. My partner’s
situation is just the opposite--his
job doesn’t bring in much money. Can
this work?
Answer:
It should. Read Hot Tips, p. 92.
It’s quite common these days for
property-buying partnerships to be
formed between one person who has
the down payment (but no steady
investment income) and another
person who has no down payment but
does have a well-paying job. As
stated above (p. 4), Aqlim went in
50/50 at least four times, twice
with her realtor.
A word of caution. No matter how
much you like your partner, have an
agreement drawn up by a lawyer and
don’t under any circumstances omit
the “shotgun clause” (See Hot Tips
p. 92). If one of you wants to sell
and the other doesn’t, things can
get ugly...
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