Lethbridge, AB

In the course of my business, I come across many properties that make me think, "Should I add that one to my real estate portfolio?" Here are a few of my favorite investment picks for this week:

1. MLS#20084970 - Flower's On 9th: This thriving flower shop has been in the same location for 50 years, has an established clientelle, a solid income stream, staff willing to stay and an owner willing to train. In a great location near the Lethbridge Regional Hospital, this is one to put on your list.

2. MLS#20085100 - 308 - 4 Ave. Warner - This solid bungalow is located 45 minutes south of Lethbridge in Warner, AB... home of the Warner Hockey School. Freshly painted with refinished hardwood, new roof, siding and H20 tank in 2008, updated electrical, and an undeveloped basement with separate entrance... this is a "suite" deal for under $100K.

3. MLS#20084975 - 330 - 12 St. N. - This 2 bedroom bungalow had a complete makeover in 2005 and has been well cared for since. With 25% down, at 6 % over 25 years, payments work out to $815.27 / month. Property taxes were $1022 in 2008. Vacancy rates in Lethbridge are at all time lows (visit CHMC for rates and average rents) Do the math and call your mortgage specialist.

4. MLS#20085101 - 2027 - 1 Ave. N. - Suited for under $200K... need I say more?

5. MLS#20085895 - 151 Blackfoot Blvd. W. - Four bedrooms, parking for 4 vehicles, close proximity to the University of Lethbridge and the possibility of renting for $400 a room. Or a great place for your future graduate to call home through the University years. Only 5 years old.

6. MLS#20085858 - 1509 - 8 Ave. S. Lethbridge Fix and Flip. Priced under $170,000 with a full undeveloped basement and a single detached garage. If you've got the sweat, I think you can dig up some equity here!

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"The only reason every American doesn't own an elephant is because they haven't been offered one for no money down and easy monthly payments"

The horrible truth behind that statement is reflected in the purchasing decisions many people have been making for much of the past few years. Everything from vacations, furniture, and elctronics has been sold using the sales gimmick of "no payments until....". I have a friend who sells vacuums for prices in excess of $2,000 and while I am pretty sure they are nice vacuums, unless you can drive them to church on Sunday the price seems a little steep to me. What the change in marketing strategies of recent years has meant for the consumer has been a total shift in the way they think.

I remember in the early 1980's my parents saved up money to go to the furniture store and buy a new sofa set. We loaded up the station wagon and drove to town and they picked one out. It was a beauty, rusty orange with wishing wells or waterwheels or some other browny orange pattern with wood accents on the arms. I believe 'the good couch', as it would forever be known in our household, cost about $1200 for the entire set and was paid for with cash money that my parents had saved up and earmarked for this purchase. Compare this to the modern furniture shopper experience. According to my neighbor who manages a large box furniture retailer, the majority of their purchasers have $0 when they walk in the front door. The furniture is sold primarily on a 'do not pay for xx months' basis, and on a less common basis charged onto a purchasers credit card. It is an absolute rarity for a customer to actually pay for their furniture. The retailer actually earns more of their corporate profits from the financing then from the margins on the product.

The customer mindset has changed from shopping for 'how much can i afford' to 'how much can i afford to finance'.

A recent automobile sale that I visited made this extremely evident. It wasnt held at a car lot, but rather in a rented hall and was staffed by travelling hired-gun car salesmen who help lots clear used inventory all across the country. As none of the vehicles had prices displayed in the window, I was forced to communicate with an aggressive little guy who when I asked what the price was of a certain van was told it was $199/month. I told the salesman that I did not need to finance and just wanted to know what the price was, again he told me the price could be as low as $49/week. After much prodding and reiterating that I would simply be writing a check for the vehicle, he divulged that the salesmen at the event did not know the actual prices of any of the vehicles only financing numbers, and to find out any more specific information the financing manager would need to be asked. At first I thought the guy was joking, but he was not. Their entire sales technique was based upon selling a vehicle based upon the payment amount and not the actual price, interest rate, etc. Amazing to me.

I have always held the theory that any item which you are being sold that requires that you make a decision within 5 minutes, that you have to attend a presentation with your spouse, that they offer you a free gift over the phone, that they wont tell you the purchase price until the end of the demonstration, or that sounds too good to be true..... IS. So when you get offered that elephant, and inevitably the day is coming, just make sure you get your spouses consent and sleep on the decision, otherwise you may need a big shovel to clean up the mess you will be getting yourself into.

Robert May

I had a meeting today with a business development manager from Hometrust today. As the lending climate in Canada is in a bit of a state of confusion, it is important to stay in constant contact with industry members and keep abreast of product changes and developments.

Hometrust has previously been an alternative lender (aka B lender or subprime lender) but are moving more into main stream products. I assume that this is a progression towards improving the quality of the mortgages on their books. They have also become famous for offering a secured credit card which can be a great first step for people to rebuild their credit or to establish credit for the first time. I have personally used their card and have helped many friends and clients use it successfully to rebuild or attain higher credit scores.

Hometrust, like many other lenders, has began to focus more upon credit scores. They are shying away from low score applicants. They are also lowering their offered loan to value ratios on may products. They still offer the entire product list of mortgage products insured by CMHC and AIG. (one of the few lenders using AIG). Also of note, is that Hometrust is one of the few lenders who is currently offering mortgage products for rental properties, as this was the first product that most lenders in Canada withdrew from their offerings.

In summary, my meeting assured me that Hometrust intends to succeed in the tightened credit market by offering products that others have shyed away from. They also remain committed to offering B products and subprime products on quality products for marginal applicants.

The National Do Not Call List (DNCL) came into effect in Canada on September 30th, 2008. It is a set of rules that telemarketers must follow regarding unsolicited telecommunications (by way of either fax or phone). Consumers can register up to 3 different telephone numbers in an attempt to reduce the amount of telemarketing calls they receive. Registered charities, political parties and newspapers are exempt from the DNCL rules.

This new regulation affects me in two ways, as both a consumer and a real estate agent. As a consumer, I am delighted to have a new tool to help me effectively battle unsolicited calls. As a mom with two small children, I get a little hot under the collar when I rush to the phone or my 1 year old's nap is cut short only to pick up the phone to hear a recorded voice ask me if I am interested in reducing my credit card rates..... for the third time this week....NOOOOOOO!

As a REALTOR®, this new set of rules affects me from the other side as well. As of yesterday, it became our office policy that unsolicited calls or "cold calling" would no longer be permitted (which brought mostly laughs, cheers and one sarcastic "Oh no! How will I ever do business?!" around the boardroom table!)

I personally don't believe in cold calling. I have never made a cold call, nor did I ever intend to. I really believe that there are better ways to reach people and build business. In my opinion cold calling shows great disrespect for people's time and personal family life. I believe that the unscrupulous acts of unsolicited telemarketing left a bitter taste in the mouths of many and based on the fact that the phone lines to register for the DNCL were absolutely JAMMED on September 30th, it seems there are a few Canadians out there who agree with me!

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Recent changes in federal regulations on mortgages have eliminated the popular zero-downpayment financing programs that were available through the major mortgage default insurers.

This does not mean that you will be unable to purchase a home without a minimum of 5% downpayment saved.

All Source Mortgages uses several lenders who have options available even if you don't have 5% or more saved towards the purchase of a home. It is important that you get in touch with a mortgage professional in order to discuss all of your options.

Fast Facts about Downpayment programs offered by All Source Mortgages

Do I qualify for a mortgage with Less than 5% downpayment?

As long as you can prove a strong credit history IE: established credit history combined with strong credit score, you may be eligible for a cash-back or flex-down mortgage, essentially where the downpayment amount is borrowed.

What is strong credit score?

A credit score of 650 or above and minimum of 24 months of revolving credit (IE credit card/line of credit) is typically the minimum requirement used to qualify for these types of programs.

Does "Zero-down" mean that I don't need any money saved to buy a home?

Lenders will still require you to prove savings of at least 1.5% of the purchase price of home. This amount is to verify that you will have enough money on hand at possession to pay for closing fees such as lawyer's fees, property tax adjustments etc. Ask your mortgage broker or lawyer for a complete list of expected costs of purchasing a home.

I have a few credit "issues", but would still like to purchase a home.

We do have access to lenders that are willing to provide mortgage financing even if you don't have A credit. In cases where credit score is under 650, the rate that you will be offered and downpayment amount will likelybe related to your credit score. Typically, the lower the score, the higher the rate due to the risk associated with the deal. It is best that you discuss your credit history with your Mortgage Development Manager in order to determine your options.

For more Mortgage Solutions please contact Shaun today!!