June 2016 update of successes

[Cory Sperle]

Since this thread has come alive once again (happy to see) and it has been mentioned that many of the post are older and updates would be appreciated I thought I would take this opportunity to do just that.

We proudly closed on our fifth multi family building since 2008. A 24 suite building in a prime location in Saskatoon, Saskatchewan. We purchased the project with 8 investors in March of 2016 and we have started the process of cleaning house, and even in a tough market we only have one vacant unit.

The 3 story concrete mixed residential/commercial we purchased in Beaumont December of 2014 is also doing very well. This is significant since we bought as oil was taking its downward plunge where it has been ever since. Although times are tough, and our anchor tenant is a pipeline company we have been able to significantly improve the asset in 18 short months taking the rent roll from $26,600 per month to $32,500. Proof that good cash flow can be obtained even in down markets. Our 15 suite building near NAIT is also performing well, where we have maintained a vacancy of 1.1% over the past 12 months where the CMHC survey was 6.1%. We have had to adjust our rents to the current market however by being proactive we are sailing right though the downturn.

Also of mention I finally got around to submitting my properties to REIN and have the bronze and multi family bronze pins, and silver is right around the corner.

With all the bad news out there the importance of charting your own course, and following it methodically and meticulously has been especially true today. We can choose to react to the news in any way that we desire, but those that plan well, and have a long term vision of Alberta are doing, and will continue to do well. I thank everyone who had the dream and vision and share their successes and failures for contributing as it means a great deal to me and many others. I continue to learn and grow each day, and this forum is a very large part of what I am thankful for today. I look forward to reading enlightening posts so keep them rolling in!

 

[kfort]

Well done Cory, good to see folks discovering the somewhat hidden gem in central sask.

 

[Thomas Beyer]

Congrats. Keep going. Keep overhead low and try to avoid the now very expensive and profit reducing OM route.

 

[alaas1977]

Congrats. Keep going. Keep overhead low and try to avoid the now very expensive and profit reducing OM route.

Hey Thomas

Just curious what OM stands for, I specialize in houses, so perhaps this is a commercial term.

Thanks a bunch, Lisa

 

[Thomas Beyer]

An OM is an offering memorandum, one of the 5 exemptions allowed by the Canadian security regulators you can use to raise money without a prospectus. The other 4 being: friends & family, close business associates, accredited investors and minimum acquisition costs ($150,000). More on that if you google NI 45-106. An OM is a lengthy document (almost as long as a prospectus actually) describing the principals, the business and the intentions how you intend to use the money, together with IFRS compliant audited financials, and the requirement to produce an annual update how you used the money and annual IFRS compliant audited financials. IFRS is the International Financial Reporting Standard. An opening financial statement showing $1,000 in cash will cost you 10,000, more if more complex, plus legal fees of 25-35,000, less if cloned from previous offerings. Investors then subscribe to the OM with a subscription document spelling out the terms and risks and restrictions.

If you use an OM, or raise money on a larger scale using accredited investors you might have to involve an EMD (exempt market dealer) that takes a commission upfront (usually about 8-12%) and often a share of profit too at the end, or an ongoing trailer. More on those registration requirement for fund raisers if you google NI 31-103.

As such, Cory, and a few other folks that syndicate larger assets use those 4 exemptions usually as the initial cost and ongoing overhead is far lower and thus, the investor return higher. We have been using OMs since 2005, but stopped using them recently due to ever increasing compliance costs and rules.

The security commissions have really done a fine job protecting their job security & pensions and making it much more difficult (and expensive) for smaller investors to participate in larger deals as lawyers, EMDs and accountants get paid first. We now do deals with accredited investors, friends, family and close business associates only due to these additional costs which vastly increased over the last 3-5 years.

As such, Cory is on the right track of deal-by-deal syndications.

 

[Tina Myrvang]

Since this thread has come alive once again (happy to see) and it has been mentioned that many of the post are older and updates would be appreciated I thought I would take this opportunity to do just that.

We proudly closed on our fifth multi family building since 2008. A 24 suite building in a prime location in Saskatoon, Saskatchewan. We purchased the project with 8 investors in March of 2016 and we have started the process of cleaning house, and even in a tough market we only have one vacant unit.

The 3 story concrete mixed residential/commercial we purchased in Beaumont December of 2014 is also doing very well. This is significant since we bought as oil was taking its downward plunge where it has been ever since. Although times are tough, and our anchor tenant is a pipeline company we have been able to significantly improve the asset in 18 short months taking the rent roll from $26,600 per month to $32,500. Proof that good cash flow can be obtained even in down markets. Our 15 suite building near NAIT is also performing well, where we have maintained a vacancy of 1.1% over the past 12 months where the CMHC survey was 6.1%. We have had to adjust our rents to the current market however by being proactive we are sailing right though the downturn.

Also of mention I finally got around to submitting my properties to REIN and have the bronze and multi family bronze pins, and silver is right around the corner.

With all the bad news out there the importance of charting your own course, and following it methodically and meticulously has been especially true today. We can choose to react to the news in any way that we desire, but those that plan well, and have a long term vision of Alberta are doing, and will continue to do well. I thank everyone who had the dream and vision and share their successes and failures for contributing as it means a great deal to me and many others. I continue to learn and grow each day, and this forum is a very large part of what I am thankful for today. I look forward to reading enlightening posts so keep them rolling in!

Very inspiring, thank you for sharing

 

[trevismcconaghy]

Being from Saskatchewan myself, it is great to hear others investing in this great province. It is great that through experience and management you are having continued success with your investments. It sounds like once you have the new building in line, you will be able to repeat the process....
I can't say enough about the massive difference the REIN team and membership have made in shifting my mindset to align with where I want to be in life. Much like yourself, this knowledge has had a very positive benefit in so many areas, not just financial but in many of the deeper areas that go far beyond money.

 

[Cory Sperle]

Thanks for steering me clear of that OM route Thomas, the key message I received last time I saw you in Vancouver. That was the idea to keep costs as low as possible for maximum benefit and profit to the investors first, and then myself for a job (hopefully) well done. This has worked for me thus far for the last 3 projects, and hope to continue on and pick up a few more projects. The biggest benefit to doing it this way as I am in no hurry to buy, although an aggressive purchaser, I can afford to be patient and do nothing until the right opportunity comes up.

 

[Dan Golby]

Very well done!! Thanks for the update, always great to hear success stories