His method is almost entirely foreign to everyone around him. These people force their speculation on property investing in their own city, namely Vancouver and Toronto. Two of the most overpriced markets to make steady cash-flow in all of Canada.
He is a doer.
He thinks outside the box.
The responses he shares should educate and seduce you like the five o'clock shadow does to a woman, or cleavage to a man. This is free advice from someone that walks the walk. You'll read more about real estate agents, getting investors and money engaged and mortgages.
Stick around, you just might learn something to show off to a colleague in the next 5 minutes.
I really have to give credit to my mentor Darren Weeks for this one, he is a “Rich Dad” advisor and author of “The Art Of Raising Capital”. He taught me how to create win-win-win scenarios with myself, my partners and my tenants. I help average people invest in real estate and enjoy all of the benefits of owning a great rental property without having to do any of the work involved in making it successful investment while. I truly believe that everybody should have buy and hold real estate in their investment portfolio, so I make it completely hands off for my partners. They can live their life doing whatever makes them happy and just enjoy the passive income rolling in. I provide my partners high returns with very minimal risk! The banks have brainwashed society into thinking that high returns=high risk but I’m telling you it does NOT have to be that way with real estate investing. I make sure that our risk is very minimal, even if our house burns to the ground we will make a huge return!
TYWLIS – Do you fly down to visit your properties periodically? How are they managed and what is the cost to do so?
Yes I do, but not too often since it’s not really necessary. I can do everything remotely with the internet, phone, email and pictures from my team. Setting up a local team that I could trust wasn’t very easy, but now that I have everyone in place and they know what I expect of them, it all goes smoothly. My property managers are basically the glue that holds the team together down there. They do the inspections, hire the contractors, get the property rent-ready, advertise it and interview tenants (including criminal record check, income verification and credit check) and they don’t get paid unless the property is rented. For all the do they’re a bargain at 10% of the rent.
TYWLIS – Do you purchase through a US real estate agent?
I get some of my properties through real estate agents, but most of the time they are from auctions or from wholesalers (people who go and search out undervalued properties and then flip to investors). I rely on my realtors for property values, bidding for me at auctions when I cannot attend, making offers and writing contracts as well as giving me information about areas that I am unsure of. They are a very important part of my team.
TYWLIS – How does it work getting a US mortgage?
It isn’t always easy, but it is do-able. The trouble we run into is that traditional US banks cannot check our credit rating and are very inflexible when it comes to lending since the recession. There are a few Canadian banks that have US subsidiaries that will lend to Canadians looking to buy in the US but it varies on which states they will lend in, whether they lend for investment properties and other stipulations. There are private money lenders that will lend based on the performance of the property regardless of your personal credit. They will usually need a higher downpayment and their interest rates will typically be quite a bit higher than the posted rate.
TYWLIS – Are the taxes on rental income complicated to sort out with Revenue Canada and the IRS?
I wouldn’t recommend anyone trying to do their own taxes and filings in the US unless of course you’re an accountant. I have a great cross-border accountant that specializes in Canadians with US income. There are many different options for how Canadians can hold US property (in your own name, LLC, LP, C corp, land trust) and each will have certain advantages and disadvantages. Best thing would be to consult with a cross-border lawyer as well as a cross-border accountant for your personal situation.
TYWLIS – What is your goal with these property purchases – price appreciation, consistent stream of monthly income?
Definitely both of those, as well as buying below market value. I want to make sure that I am getting at least a 10% return from the cash flow and am buying the property at 20% or more below market value. I will never account for appreciation, that is just icing on the cake. I have close friends who were burned from buying a pre-sale condo in downtown Vancouver and were hoping that by the time it was done and the Olympics came that it would be worth even more… Well they were wrong, the market dipped and they were stuck owning a condo that they had to pay $500/month for until they sold it for a 5 figure loss! I just wish that I could have helped them before signing the contract. Remember that if you are just banking on appreciation, you are NOT investing, you’re speculating and that is a VERY dangerous game to play. THAT is when real estate gets risky!
TYWLIS – Any advice to people that only think local and in their own backyard?
At first, I was the same way and wanted to invest here. That way I can do the renovations myself, find my own tenants and be more hands on with every aspect of my investment. The problem with that is I would be doing tons of work and either losing money every month or barely scraping by! Each member of my team in Memphis does their job better and faster than I would if I were managing a property here. From the contractors to the property managers, they are all pros. If you were renting out a property or even your basement suite here, would you check their credit and do a criminal record check? Would you be able to serve them with an eviction notice and a $50 fee for being late with their rent payment? I would find it very tough to do ANY of those things so I leave it to the pros, they will do a better job than you or I. One of my mentors always said “Follow the money!” If you can find an investment property in your hometown that will put money in your pocket every month then great, go for it. But if not then you should seriously look at where others are making money and just do what they are doing.
Thanks for letting me talk a bit about my story and about my passion: investing in US real estate. If anyone has any questions about real estate, investing in the US or about Memphis I would be happy to help. Just email me at firstname.lastname@example.org
Courtesy of his LinkedIn profile:
Michael Japuncic is a real estate investor, president and CEO of Azure Investing, LLC and Azure Management Inc. He is based out of Vancouver, BC with offices in Las Vegas and Memphis. He started investing in US real estate in 2009 and has focused most of his efforts on single family houses in Memphis, Tennessee. He helps clients looking for a safer alternative to the stock market by investing in cash flowing properties with above average returns as well as US tax liens and deeds. His specialty is helping Canadians purchase investment properties in the US (the right way) in order to take advantage of tax laws as well as protecting themselves and their capital. You can contact him at email@example.com or www.azureinvesting.com
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