A Big Year Ahead

by Darrin DeRoches January 9 - 15, 2014

It’s a new year so let’s look ahead into the Hamilton real estate market.     First things first — money. The Bank of Canada overnight rates may rise this year but other outlets are saying that they will stay firm until mid–2015. Money has been cheap for some time and will stay low for this year which means that you can buy more houses since you will qualify higher. If the rate does start moving you will still have time to get into the market this year. A little bump in the rate will only make small increases in the average mortgage payment.     Condos in the city will become the most talked about real estate topic this year. There are several major projects that will start selling this year and everyone will weigh in with their opinions. The speculator can make some easy money if they buy the right project at the right time. A lot of agents will try to “push” a certain project since their company is behind it but you really have to be careful when speculating. The Connaught, the Tivoli, the Lister Block and a few others will begin selling this year but which one should you pick? An independent broker like me who has bought and sold investment properties — personally — can give you the real insight without any bias. Condos are making a splash in Hamilton this year and there is money to be made.     2014 will also bring a plan on the land around the airport and this will also change our city as we know it. There are great opportunities ahead and the savvy investor can really make money if they see the big picture. Business parks will grow fast and the airport lands will become the biggest investment we have seen in decades.     The new Go train station and stadium will also be completed this year and these projects have already created great interest in their areas but again the smart investor can find amazing opportunities if they look ahead. If you are looking at buying a rental or opening a business in these areas the right price and location can bring great returns.     All this investment in the city will bring jobs which in turn will create needs for more rentals and single family properties. If you pick the right property in the right areas whether it is downtown, by the airport or by the bay, you can win with the right real estate or win big with the perfect location. Work with the right people and you can realize big returns in real estate this year. 2013 brought a 7.5 per cent return on real estate plus the amount you paid down or better yet your tenant’s pay down will bring an even greater return.     2014 looks to be a very exciting year for real estate in our area where we will see the average sale price for a home to hit the $400,000 mark and condos, stadiums, transportation, jobs are all coming to our city. Take advantage of it and you will be enjoying your investments for years to come! V     Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca.

Happy New Debt Free Year!

by Darrin DeRoches January 2 - 8, 2014

The New Year is upon us and most people are carrying debt.  Debt is part of everyone’s daily life but how we choose to deal with it could make a huge difference in the coming year.  When it comes to real estate, debt can cause you to lose your house or even stop you from ever owning a home. Depending on whom you work with and how you deal with it, you can come out ahead of debt in 2014.     There is a new company that just started in our area whose main goal is to help you with your debt and real estate.  Hundreds if not thousands of people lose their homes to the bank and debtors every year because they do not know who to call or how to handle the situation.  Debtors force homeowners into foreclosure or power of sales but you can take control of the situation and actually come out ahead. Let me use a recent client as an example.     The client was days away from losing his home, being put out on the streets, and owing thousands of dollars to the bank, credit card companies and debtors. Luckily he called the right person who stopped all of the phones calls and threats and not only saved him thousands of dollars, but he walked out ahead ten grand.  The bank was about to power of sale his home when this company stepped in, negotiated with the bank and his debtors and took control of the situation.  This company is not a “buy homes for cash” or “second or third mortgages”.  They are a group who is comprised of a mortgage broker, real estate broker, trustee and debt counselor.  Individually they can help you with a part of the problem but together they can solve the problem.     The client owed more money than his home was worth and he could not keep up with his mortgage payments, credit card payments and everything else.  The debt counselor contacted all parties involved and put together a consumer proposal which enabled him to pay off the debt once the mortgage broker was able to secure a line of credit on his home.  The trustee went over the whole scenario and concluded that this can go forward once the real estate broker sold the property.  The home was sold for above market price, the debts were then paid and the homeowner walked away with ten thousand dollars in his pocket.     Sixty days prior to this, he was looking to hand in his key to the bank, sleep on a buddy’s couch, still owe tens of thousands of dollars to his debtors, and have no credit and a bleak future.  Working with the right group made everyone happy from the bank, debtors, and credit card companies and most important, the homeowner.  If you or someone you know has a similar situation, give us a call or email and we can connect you with this group who will not only save you from what seems like an impossible situation, they will set you up for a great future – debt free!  Happy New “debt free” Year! V     Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca.

Stated Income Mortgage

by Darrin DeRoches December 26, 2013 - January 1, 2014

If you are self–employed and looking to buy a home in the new year and are wondering how to make it happen – think ahead.  A lot of people nowadays do not have a tax return that states a high income.  Most self–employed people look to show as little income as possible so that they pay very little tax. This becomes a problem when they want to lease a car or buy a property but things are slowly changing.  In the past, you would have to go to “private lenders” who would charge you a high interest and high signing fees to get any type of mortgage.  Today you can get with a bank and negotiate the same mortgage with less fees and lower rates.     I was speaking with CIBC mortgage manager and asked him how one of my clients can prepare himself to buy a property when he has a very low stated income.  There are several ways to accomplish this but the best may be to be incorporated.  If you start a company and have it for over six months, you can then justify to a bank that you are a legitimate business and use their stated income program.  Let’s say you are a plumber who works for a builder and they pay you cash. It would be very hard to prove your income even though you make a good living.  If you started a company that does plumbing or even plumbing consulting and you took that cash and deposited in the company account for three months to show income, you could then prove to a bank that it is a “legitimate company” and state your income. The bank knows your history as a plumber and now sees three months of a company making money; they now take this information and accept how much income you make even though you may show the tax man a different scenario.     In their stated income program you need to show income statements for three months, a license for your business and a business card verifying what you do for this company. This with a 10 per cent downpayment then they can the approve you for an appropriate mortgage.  If you have a license to do anything from a plumber, bartender to a stripper you can create a company and prove your income. The banks realize that you work in a cash business but are able to sufficiently pay a mortgage but you just need to have the right paperwork in order.  So if you are looking to buy a property in the new year, take time to set things in the right direction and in a short period of time you can arrange a mortgage and own your own home. The rates are a bit higher and it will take time and money but it will be worth it. If you need to establish credit it also can happen in the same time period and you just need to make a plan.  Give us a call and we can help you own your home in 2014. V     Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca

Hamilton Is Rising

by Darrin DeRoches December 19 - 25, 2013

Remax issued a report that Hamilton is expected to have the highest appreciation in housing prices in the whole country this year. That is big news when you think about the whole country, not just the province. They say the year will end up with a 7.5 per cent increase in property values and this beats out any predictions from the beginning of the year where most experts looked for a modest increase of two or three per cent. We beat it by double and then some. The average house sale for 2013 will be $387,000 dollars in our fair city. They expect it to break over $400,000 dollars in 2014 and that should be easily obtained. These numbers may not seem like a big deal to those from around the country but the homeowners in this city are making money.     I recently looked into re–finacing one of my income properties and the bank asked me what it was worth and, being a real estate broker, I figured I would go a little lower than I thought. Most people tend to over state the value but I thought $275,000 was a fair number. The appraisal was done and it came out as $291,000. The bank tends to value the properties a little lower than full value since they are lending out the money. If I was to go back year to year on the property it has valued up every year since I owned it. This year alone the property made $20,000 in value plus the amount paid down by tenants.     Five years ago, the average home in Hamilton was valued at $280,000 dollars. Next year this same home will be worth over $400,000 dollars. If this person had negotiated an interest only mortgage and did not pay down one red cent of their mortgage – they just made $120,000 dollars. If they sell it today, after costs they will still walk away with $100,000 for living in a home. If the same buyer bought any type of investment property in the same five years and had the tenants pay down the mortgage, they would stand to make another $30,000 dollars off the mortgage. They actually made $150,000 dollars in five years since they took the chance and bought a second property.     The moral of the story is that Hamilton is going to have the highest return in the country and maybe you should think about taking the money you have made in your home — re–finance it as I am — and invest it into more real estate so that in five years you will be up at least another $150,000 times the two properties (yours and the new one) so you will actually make over $300,000. Give me a call and we can help you find the right property and have one of our mortgage brokers get the equity out of your home and into a second property. V     Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca.