Credit Repair Mysteries – how do I fix my credit?

Credit is a mystery for most people that are not in banking or finance. For most people, if they have a good job and never defaulted on a credit card bill (the bane of many a millennial that didn’t know better and said screw telus/rogers/bell when they were 14 and then find out that really screwed up their credit when it was brand new) then you would have been able to get credit cards, car loans without too much trouble.

Then when you first think about buying a house you go into your bank (not my recommendation) and the cheerful banker asks you to sign some forms and fill in an application then plugs a bunch of numbers into a database tool and it spits out a number you can qualify for. That number was shockingly low for most people that are middle class, just like I was a bit shocked with I first tried to buy a property for myself – about 180K was my approval….which at that time in Calgary could have bought me a beautiful single story outhouse in a bad part of town!

So it was at that time I decide to buy a nice car because a house was out of the question, and after all I couldn’t drive the house to work…so that made sense to me at the time. Looking back is always easier than looking forward, was the the best financial choice? Maybe, maybe not – but as luck would have it that was just prior to the top of the market in the 2005-2007 era right before the crash. So, sometimes things work out even when we don’t have all the info to make the informed decision.

Now, some people might get a different answer from the banker’s little software – congrats you can afford 400K! If only your credit score didn’t suck and it is below their allowable guideline (typically 650+ for the “big 5” in Canada). At this point is where most people learn for the first time that your credit score is a big deal – unfortunate timing when you have a lease ending and you want to go house shopping!

The banker will know very little about credit and possibly give you some terrible device – so beware banks are not in the business of credit scores they are in the business of banking! Talk to a specialist or an amazing mortgage broker who knows about credit repair.

What to do? There are also many credit counseling advisors out there, which can give you good habits to follow. What we suggest is that you talk to a credit repair specialist that knows real estate and how to fix credit fast – because who wants to wait another 2-3 years? That will help expedite the process, contact us and we can recommend rock stars in this field.

Credit matters – why they don’t teach this somewhere in schools is unfortunate. We are here to help, also dispel myths about home buying such as: if you go bankrupt you can’t buy a house for 7 years. That is total BS and if that’s you give us a call because we have options. Home ownership could be closer than you think.

To your success,

Tim Reid

-Respect The Hustle

Book review by one of the greats

I love to read, as some of you may have seen from my posts – I have crushed a number of book since covid, frankly not driving around as much being stuck in traffic in addition to getting more sleep has really helped the book/month ratio. I will be including a comprehensive list from my book shelf here shortly.

Mr Bruce Firestone founder of the Ottawa Senators is one of my mentors and here is one of his latest blogs taking a review of corporate mergers which are not always the best for the employees…see the full article here

Let’s Talk Goals

a goal wothout pa plan is just a wish

With school now back in session for 2020 and a lot of uncertainty in the air, the last thing on the mind of a lot of business owners in real estate and others is their goals for the last quarter of the year.

Just because it is hard to see the horizon, does not mean you can skip having a destination! Imagine for a moment the mayflower not having a destination of coming to Canada…” North America or thereabouts” would not have got our ancestors here to our great nation!

We often think of the things we DON’T want as opposed to what we DO want:

  • I don’t want to go broke
  • I don’t want to get divorced
  • I don’t want to lose my job

What you put out into the universe (or god of your understanding) is what you will get back – having your focus on your intentions and GOALS consistently will move you toward them. It has been said that “what you focus on expands” so if you constantly focus on what you DON’T wand then you will get more of that.

Having goals is very important, however often they wind up like resolutions – never accomplished and only done once or twice per year. Thinking about your goals ALL THE TIME and re-visiting them and re-evaluating them to get valuable data on how well you doing (or not doing sometimes) is key to making them happen.

We have all set goals that maybe we didn’t meet in the timeline that we set out….sound familiar? The conclusion our lizard brain can make in this scenario is that “setting goals doesn’t work, I never meet them anyway” which is of course not true just feedback that there are adjustments that need to be made.

When setting goals it is important to make them around things you TRULY want, have them be specific, time-bound (with a realistic timeline), and measurable. If these ingredients are not present then you have a recipe for disaster! When you can’t measure your progress you feel like your never going to get to the destination, when you set unrealistic timelines then running out of time/stress/anxiety will follow, and if what you are working on does not move your closer to something you are passionate about then how often will you make consistent action toward it? (not very often, just like the treadmill collecting dust of the gym membership not getting used).

We suggest having both short term and long term goals, in all areas of your life: personal, spiritual, health, work/business, financial, creative ETC – whatever sectors of your world that you want to improve, for some there are areas that are humming along great and no significant changes needed.

When creating your goals, be conservative with your goal/timeline – be kind to yourself. The motivation to keep working on them is derived from having confidence that through consistent action you CAN achieve them if you surpass them or crush them early then FANTASTIC! This outcome is much better than reaching your goal date and only being half done and discouraged – which is not helpful, remember to adjust and re-set the goal self- beatings are not conducive to motivation for goals!

What are your goals for the last mile of 2020?

Contact us and let us know, we would love to hear your vision for your world over the next few months.

To your success,

Tim Reid

-Respect The Hustle

What is your real competition?

What-is-your-real-competition

Recently I was reading a marketing book which told the story of Coke when they were preparing to enter the Russian market many years ago. Like a large well funded company they spend a lot of time and resources researching the market and customer behavior.

What the found was that the biggest competitor to their product was the CITY BUS! The fact was that a lot of Russian consumers did not have enough disposable income to enjoy a coke PLUS ride the bus home! I know that is hard to fathom today (this was many years ago) or in many developed countries around the world.

However the lesson is still just applicable today as it was then, you need to ask yourself as a real estate business owner (or any business) when you enter the market for the first time, launch a new product, or expand your reach into new markets: what is my real competition in this space?

The facts could be far from your assumptions, and we all know what an a** assumptions can make out of business owners with the best intentions.

To your success,

Tim Reid

-Respect The Hustle

Delegation Will Set you Free

4 people's hands in fists coming together, signifying teamwork and delegation

When we start off any business, real estate being no exception to the rules of course, we have to wear all the “hats”. These are things that the 9-5er may not have ever even thought about before such as:

  1. Accounting/book keeping (they are NOT the same thing)
  2. Sales
  3. Marketing
  4. Deal Analyiss
  5. Underwriting
  6. Negotiating
  7. Business Credit
  8. Corporate Financing
  9. Total Cost of borrowing
  10. Mangement
  11. HR
  12. Operations
  13. Creating Systems (critical)
  14. Time Management
  15. Social Media
  16. Traditional Media
  17. Branding
  18. Legal
  19. Building your power team

Seems overwhelming right? Well, that is OK because you do NOT have to go it alone. Even though you may not have the budget for full time staffing in many if not all of these areas in the beginning, you can outsource almost everything these days. I would suggest that even IF you did have the budget to hire a bunch of full time staff that it would be an ineffective allocation of resources.

Why? Primarily because you are learning what you are great at in the list of skills above, and what your time will be worth to your new business (or even existing) – and this is VERY important to know before you decide where to delegate/outsource/hire any role in your new empire.

Rome was not built in a day, as they say – great companies aren’t either, it takes some time to build them up and add head-count. I have seen countless businesses start and fail because they added a bunch of staff before they were ready and it killed their cash flow (employees are expensive) especially when compared to contractors. You can even rent board members, advisors, even a CEO for a few days per month to give the guidance you need for a fraction of the costs.

Now, when you are clear on what you love to do and really hate to do in your business (such as accounting/book keeping for example) then you can decide what to delegate, when, and to whom.

The whole reason we start a business is to have freedom, have fun, and provide value to the market place in a way that is fulfilling. How the heck can you do that if you despise a bunch of tasks you have to undertake every day? Simple: you CAN’T.

With that in mind, budget and map out on the calendar when you want to outsource making it a goal – having X increase in stabilized revenue then we can hire Y which will free up Z amount of hours for your the Entrepreneur to spend more time working ON the business and not IN it.

To your Success,

Tim Reid

-Respect The Hustle

Avoid Bank Penalties with Blended Mortgages

penalty notice

When real estate investors start out, normally they use their own resources: credit, down payment, bank financing. This is the common way we all get started in real estate investing, however without having knowledge of creative financing structures the penalties can bite into your profits big time!

Whether you plan to flip, RTO, or renovate and refinance the property how your mortgage is set up is key to maximizing your profits. The bank’s and most mortgage brokers will never tell you anything about how to use blended mortgages – why? Because it isn’t in their interest to help you pay less interest and reduce fees, that is how they make their money!

A blended mortgage is defined as using 2 or more different mortgage products to fund your deals. There are private mortgage and financing options that are available, further, a variable VS fixed-rate mortgage is important. LOC’s do not have penalties when paid out early, and fixed-rate/variable-rate mortgages have pre-payment penalties in almost all cases.

Some mortgages will allow you to blend/extend the mortgage and use it to purchase another property. However, this can be problematic because of the price difference between properties 1 and 2.

When you plan to refinance/sell the house in the short term, then finding creative ways to minimize that penalty is a wise thing to do. Using blended mortgages+private money to structure the deal is one of the things we specialize in at the phoenix group.

Example: a 300K property you could get a LOC for 65% of the value 195,000 and a fixed-rate mortgage for 15% (total LTV 80%) 45,000 to fund your project. Now, you have a penalty to pay on the fixed Mortgage of only 45K rather than the full 300k! This is one of the things the bank will never tell you, however with the right guidance they can be sold on these structures easily and effectively.

Stay tuned for more insider secrets like these.

PS: If you want to learn how this strategy and others work Contact Us to book a discovery call to have a chat on how we can serve and support your real estate pathway to wealth.

To your success,

Tim Reid

-Respect The Hustle

3 Must Reads For Real Estate Investors

learning estate

They have always said that readers are leaders! I totally agree with that in real estate investing and business – there are a lot of skills to be learned. There are a lot of real estate courses there, that they do a debatable job of teaching the real estate tactics, but what about the other business skills that you need?

I started to coach other real estate investors as a Canadian for Canadians because I learned how much I DIDN’T know after school and working my way through the corporate world.

Business is 80% the same for any industry, and having some great insights from people who have been there before will give you a head start and cut the learning curve by years.

3 Books that all Real Estate Investors should Read:

  1. Duct Tape Marketing – John Jantsch. This book takes the fundamentals of all marketing and makes it applicable to the small business in simple easy to understand terms
  2. The Lean Startup – Eric Reis. This book shows you how to take a product or service to the market efficiently without spending too much money.
  3. The 4-hour workweek – Tim Ferris. One of the best books on the entrepreneurial method and how to think like a business owner and not a technician

Coaching will also exponentially cut your learning curve, and help you replace years of learning, reading, trial, and error – Contact us to set up a discovery call to help us serve and support you to the highest level

To your Success,

Tim Reid

-Respect The Hustle

RRSP Myths Real Estate Solves

RRSP Money Stacks

We are told by banks, government, and traditional financial advice to save money in our RRSP’s because you get to grow your investments tax deferred. Now, what does DEFERRED really mean? What that actually means and many do not understand or even if they do it often gets forgotten…you pay the tax LATER is what that means.

Do you know what the tax rate will be in the future? I would suggest to you that it will be higher than it is today – during the great depression the highest tax rates increased. With the current state of the world I would bet your going to see increased taxes over the coming decades to pay for the assistance the Governments around the world have had to put into the economy.

When you start taking your RRSP funds out when you retire you will have to pay whatever tax rate that the feds decide to set at that time. Have 1,000,000 saved? That could only really be 600K or 700K you could actually spend – scary thought right?

I believe in Cash flowing assets – real assets like fully optimized single family homes (contact us to learn more about what that means) and multi-family assets. No matter the tax rate in the future, people will always need to have somewhere to live, and rental rates are tied to inflation protecting your earning ability.

RRSP’s only really benefit the owners if they are Self-directed and you use them for real estate backed arm’s length mortgages. This is something we help people with on a regular basis, after learning the TRUE COST of most mutual fund investments people are shocked at what a ride they are being taken on….in favor of the bank’s/mutual fund companies interest and not their own.

If you found value in this post please feel free to share!

PS: If you would like to learn more about how to analyze the fees your being charged on your investments/how to build a cash flow machine for generations through real estate. Contact us for a complimentary discovery call

To your success,

Tim Reid

-Respect The Hustle