#110, 9780 Cambie Road, Richmond, V6X 1K4 Ph. 604-618-2128 Em. teresa@pointbinvestment.ca, Multiple Realty Richmond

Real Estate Investing = Tenants Finances your Future

photo-2-3-150x150I came across a blog post from REIN (Real Estate Investment Network) a few months ago that I thought would help my readers understand why real estate investing is one of the most powerful investment vehicles in the market. Here is what REIN Property Analyst, Ray Reuter saids about investment real estate.

Here’s some super simple math showing exactly why residential real estate is so cool.

Let’s say you go out and buy a single property TODAY for $300,000 (call it a suited house) and based on your conservative numbers, this property does nothing more than break even every month (and we’re buying in a stable, well-performing market based on the fundamentals).

No cash flow, just break even.

Then we’re going to assume that the market will stay flat forever. We both know the market will go up, it will go down, but assume that over the next 20 years those ups and downs equate to a FLAT market…it’s still worth $300,000 in 2033.

Still with me?


Now over that 20 years the property just breaks even, nothing more, nothing less. Sure we’ve been up some months, but we’ve had some repairs & maintenance, some vacancy…so, over those 20 years we just break even.

Some would call this a boring piece of real estate…even a ‘non-performing’ piece of real estate.

Call me crazy, but guess what, I call that a $900 a month savings plan that someone else (called my tenants) paid for .

That’s right, after 20 years of holding this ‘non-performing’ piece of real estate I’m left with the equivalent of someone giving me $900 every single month for 20 years…I call that one heck of a savings plan.

Tell me, do you put $900 away every month right now? Maybe…but that’s still YOUR money, money you had to work hard for!

I’m talking about $900/month that someone gave me for the last 20 years, and it’s mine…all from an unexciting, ‘non-performing’, piece of residential real estate.

Want the math?

OK. So I bought for $300,000, I put 20% down plus closing costs, so roughly $65,000.

In 2033, 20 years from now, I sell it for the exact same price…$300,000.

I get my $65,000 investment back.

I pay the Realtor and closing costs and I’m left with roughly $215,000.

That’s no cash flow, that’s no appreciation, that’s simply my tenants paying down my mortgage (both principle and interest) for the last 20 years and leaving me with a free and clear property.

So $215,000 divided by 20 years = $10,750 per year

Divide that by 12 months = $896/month…that someone else gave me.

Sure we can calculate opportunity cost for your $65,000 investment, but tell me, would you be even mildly happy if someone, some stranger, was contributing even $500 a month into a savings plan for YOU & YOUR FAMILY for the next 20 years????

That’s like someone else contributing to your RSP fund every month. You OK with that??

Of course!

Go ahead, poke holes in it if you want…

“Ray, no one gets a 20 year mortgage!” OK, do you think with some strategic planning you can have this property paid off after 20 years…especially if you bank on no cash flow? I say of course!

“Ray, what about a the roof, the furnace, etc???”

You’re absolutely right.

But let’s be serious, over the next 20 years do you think my rent is going to go up or down? Do you think my property will be worth more or less in 20 years buying in a fundamentally strong area?

Heck, even WHEN interest rates go up, guess what? So will my rent!

This is a no-brainer.

You can spend the next hour tearing this apart, telling people this Reuter guy is full of #$%…

OR maybe…just maybe, this makes sense.

Bottom line – real estate is simple…it’s just not easy!

And we’re not talking get rich quick, we’re not talking some ‘sexy’ investment strategy that 0.1% of investors ever pull off, just a simple old piece of real estate that you rent out and maintain for 20 years that YOU have 100% control over!

IT’S SIMPLE – I invest $65,000 to make $215,000 (before tax)…I’ll take that all day long, and that’s ONE PROPERTY.

Now imagine if you bought 10 properties just like that over the next few years (which isn’t rocket surgery).

It’s the power of leverage, the power of having control of your investments, and the power of being in the business of putting a roof over someone’s head (a business that ain’t going anywhere any time soon!!!)

Think about it, read this note a few times, this stuff works.

– Ray Reutor, Real Estate Investment Network

My Recommendation:  It’s never too late to start investing in real estate.  Start small with a condo and build up to a townhouse and then a single family home with multiple suites.  Real estate investing is the ONLY investment that can utilize tenants to finance your monthly income and your future retirement.  Start investing today.  You will be happy you started, and your family will thank you for it.

– Teresa Leung

I am a licensed realtor dedicated to securing you wealth through strategic real estate investment.  My mission is to help you achieve financial freedom by creating enough passive income to eventually replace your working income, so that you can spend more time doing what you love with the people you care about.  For more information, go to www.pointbinvestment.ca.

The First Door is the Hardest


When successful investors talk about their property acquisitions, they always say their first door was the hardest.  A few years ago, before I bought my first investment property, I wasn’t really sure what those investors meant. Since I decided to purchase, in 3 months time, I easily came up with the required 20% down payment (made up of my own savings, a gift from my dad, and a short-term low interest loan from my mom.)  There was no difficulty there at all!

Finding my first property was equally easy.  I had my sights on a 2 bedroom condo in St. Albert, Alberta overlooking the Sturgeon River.  The suite is on the top floor of the building and has a view of the river.  This area also has all the economic fundamentals of a solid investment.   In case you don’t know where St. Albert is located, it is 10 minutes North of Edmonton in Alberta and has an average household income of $136,000 (Vancouver’s average household income is just under $90,000), where the rental vacancy rate is just 0.5%.  The suites in this particular property provide a positive monthly cashflow after all expenses are paid, and is even managed by Alture Properties for a nominal monthly fee.  With monthly income, a waterfront view, and Alture taking care of all tenant issues, this investment was a true winner.

I believe that the Universe wanted ME to own this property as there were about 3 or 4 people who tried to purchase this particular unit before me, but for some reason, none of those people were able to close on it due to various issues.  I considered this a pretty great score.

After these initial steps, everything that followed was pretty much a royal pain in the butt.  Here’s what happened;

Financing Issues

I was surprised by all the financing issues I had given that I had an excellent credit score of over 700, full-time employment with salary and commissions, a home with lots of equity, a home line of credit (HELOC) with a zero balance, and my 20% down payment.  My new waterfront suite even had tenants currently renting at above-market rents, making this acquisition a profitable business.  Here’s the situation with the banks;

Bank #1: The first bank said they could only finance 70%, which meant I had to come up with another 10% for a total of 30% down payment.  Solution?  Real estate investing is all about leverage and having your tenants pay the mortgage.  Fronting another 10% of my own money is silly, so I went to another bank.

Bank #2: The second bank said they would finance 75% but wanted me to reduce my HELOC from a few hundred thousand to $50K.  Apparently, they now calculate debt servicing by assuming I have used my entire HELOC even though I have a zero balance!  Reducing my HELOC wasn’t an option for me, since this is my seed money for future investment properties.  Solution?  I went to another bank.

Bank #3: The third bank said they would finance 75% loan to value and I would get to keep my HELOC with no changes or limit reductions.  Given that I only had 20% of the down payment, this option meant I had to come up with another 5% for the down payment.  Solution?  I realized that borrowing rules have continued to tighten and very few banks are now willing to finance 80% loan to value on investment properties, so 75% isn’t unreasonable. Since I was ok with this, I now needed to come up with another 5% of the purchase price.

I was thinking of taking this out of my HELOC, when out of nowhere my sister from Hong Kong called me.  We were discussing other matters, and I casually told her about this 5% that the bank wanted for my waterfront condo.

Note: My sister happens to own a few investment properties all with waterfront views.  Saying that she loves the water would be an understatement.  Every window of her home overlooks the Hong Kong harbor and even her office has a beautiful view of ships sailing in water.  

When I spoke to her about this purchase, she was excited that I saw things HER way, and offered to fund the additional 5% with an interest free loan… all without me even having to ask her!  An interest-free loan beats paying 3.5% on my HELOC any day!  (I love my family…)  Great, I’m all set! So I thought…

Appraisal Issue

Bank #3 had my property appraised and it turned out the appraised value came in slightly lower than my offer price.  This sometimes happens as appraisers get to choose which properties in the area to use as comparibles, and this appraiser happened to chose a few non-waterfront condos further from the river.  As banks will only finance 75% of the appraised value, I would need more money to cover the difference between the purchase price and the appraised price.

Determined not to give up, I spoke to the seller (who happens to be my employer at the time) and through negotiations, they agreed to finance the difference with a Vendor Take-Back Loan!


So after almost 2 months of overcoming various obstacles, I finally bought my first investment property. The bonus was I effectively financed 95% of my investment property using other people’s money!  So for anyone who thinks it is impossible to purchase their first property, this proves that it really IS POSSIBLE. It may be annoyingly difficult, but it is possible! And lastly, remember that obstacles are what you see when you take your eyes off your goals, and any great achievement is preceded by many difficulties and many lessons; great achievements are not possible without them.

My recommendation.  I can now confirm that all the rumors are true.  Your first investment property purchase will be the most difficult.  Both saving up the initial deposit and being able to finance the mortgage requires determination, creativity and patience.  If you truly desire to succeed in real estate investing, be persistent and explore your options.  If you’re unhappy about terms of the agreement, walk away from the deal.  There will always be other great properties and banks that are willing to lend you money.  Open your mind to asking family for help, vendor take back loans (VTB’s), and joint venturing with others.  The more open you are at exploring these options, the more successful you will be in creating wealth through real estate.

I am a licensed realtor dedicated to securing you wealth through strategic real estate investment.  My mission is to help you achieve financial freedom by creating enough passive income to eventually replace your working income, so that you can spend more time doing what you love with the people you care about.  For more information, go to www.pointbinvestment.ca.

Journey to Liberty

Vision-Board-300x172Let me introduce myself. My name is Teresa Leung and I am a Real Estate Investor and REALTOR®.  My job is to help people’s money work harder for them through investing in strategic income-producing properties in Western Canada.

Prior to doing this full-time, my real estate investing dream was well… just a dream. I am a single mom and my goal was to have the liberty to work less AND spend quality time with my young daughters.

I started my journey to liberty by creating a vision board of everything that I wanted in my life within five years time. Along with many other desires like getting better sleep and finding the right balance between work and play, I envision myself owning 20 doors. At that time, I only owned my principal residence and didn’t know how or where to start.

Napoleon Hill, best-selling Author of “Think and Grow Rich”, once said, “Desire is the starting point of all achievement, not a hope, not a wish, but a keen pulsating desire which transcends everything.”

With that in mind, I looked at my vision board every morning when I woke and every evening before retiring to bed. By undertaking this simple step, I have created in my mind the intention to attain the things I wanted. I then took action. I got out of my comfort zone, and started to surround myself with people who were already successfully doing what I wanted to do.

Two years later, I’ve acquired 8 doors, all producing a positive passive income. In addition to that, many of my other goals on my board started to materialize and I am almost halfway to my goal of 20 doors!

What did I learn from this experience?  It’s important to dream big, but know that a dream is just a dream without actions.

–          Teresa Leung

I am a licensed realtor dedicated to securing you wealth through strategic real estate investment.  My mission is to help you achieve financial freedom by creating enough passive income to eventually replace your working income, so that you can spend more time doing what you love with the people you care about.