Should I Buy Now OR Wait Until 2024? + Mortgage Update with Expert Hugo Dos Reis

@volitionproperties
www.volitionprop.com
Should I Buy Now OR Wait
Until 2024? + Mortgage Update
with Expert Hugo Dos Reis
September 13, 2023

@volitionproperties
Agenda
And yes, the Meetup will be recorded and posted on our website!
www.volitionprop.com/mastermind-meetup/
6:30 - 7:15 pm Volition Intros and Market Updates
7:15 - 8:00 pm Mortgage Update! Our guest speaker Hugo Dos Reis
8:00 - 8:20 pm Networking Break
8:20 - 9:00 pm Should I Buy Now or Wait Until 2024?
9:00 - 10:00 pm Wrap Up and Networking

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Housekeeping Items
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● Recordings: This presentation is being recorded and slides will be
available.
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E-mail info@volitionprop.com or use the QR code

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Rental Market Updates
Flo

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Leasing Market Update: It’s on FIRE!🔥
Property 1 bed, 1 bath
basement unit in
fourplex
1 bed, 1 bath
basement unit in
triplex
2 bed, 1 bath upper
unit in duplex
2 bed, 1 bath upper
unit in triplex
Size 450 sf 650 sf 685 sf 700 sf
Area Upper Beaches Monarch Park Danforth Monarch Park
Leased at $1,950 + utilities $2,150 + utilities $2,695 + utilities $2,750 + utilities

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Monthly Property Tour
Wilson

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Join us for our free monthly property tour!
● 3-4 curated properties in the west or east end
● We will analyze the business model including rents and reno costs
● Max 6 participants per month
E-mail wilson@volitionprop.com to register!

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Mortgage Update with
Hugo Dos Reis

F A L L M O R T G A G E M A R K E T U P D AT E
H U G O D O S R E I S
M O R T G A G E B R O K E R &
F O U N D I N G P A R T N E R
INVESTOR EDITION
ON LIC. 13511. SK LIC. 512011

Agenda
BOC announcement and impacts
OSFI HELOC changes 2023
Refinancing laneway suites
Niche lending solutions:
 High net worth
 NIAT (Net Income After Tax)
 Reverse mortgages
Interest rate forecasts
Recommendation if buying/refinancing today
General Q&A Session

GDP Growth
Unemployment
Inflation (CPI)
September BOC
Announcement

September BOC Announcement Update
GDP slowed in the second
quarter of 2023 and missed
market expectations by
0.3%.
Canadian economy
contracted by 0.20%
(annualized) and is currently
well below the market
expectations of 1.2%
growth for 2023
GDP GROWTH

Currently 5.50% as of
August 2023 and has been
slowly rising since May 2023
after stagnating at 5.00%
for almost 6 months.
UNEMPLOYMENT

Rose slightly to 3.30% for
July largely due to gas price
fluctuations
BOC expects inflation to his
2% target by late 2024 or
early 2025
INFLATION (CPI): Average change in prices for a market basket of consumer goods.

INFLATION IMPACTS

OFSI Changes
Effective end of lender fiscal 2023
 November 1st for many lenders but
otherwise, January 1st, 2024
Re-advanceable mortgages will be
capped at 65% LTV - (currently 80% LTV)
Can refinance up to 80%, but most be as
mortgage
HELOC CHANGES 2023

OFSI Changes
Appraisal value of $600K
Current credit limit of $480K (80% LTV)
The credit limit will decrease by $300/mth until
the credit limit is $390K (65% LTV) over 25
years:
Original credit limit $480K – Credit Limit
at 65% LTV $390K = $90K
$90k divided by 300 months = $300.
Annual impact is $3,600
HELOC CHANGES 2023
Example:

OFSI Changes
What should you do?
Refinance before the deadline to
take advantage of the current 80%
LTV re-advanceable rules
HELOC CHANGES 2023

Niche Lending Solutions
High net worth
NIAT (Net Income After Tax)
Reverse mortgages

High Net Worth
Access higher lending with liquid
investments/savings
Some lenders will allow you to borrow
above your limit based on liquid savings
Eg – If your max borrowing is $500K but
you have $300K in liquid savings
(outside down payment then you can
potentially borrow $800K
Minimum amount usually $250K+

NIAT: Net Income After Taxes
For corporate clients some “A” lenders will
consider net income after taxes to assist
with borrowing
Eg. – Corporation shows $200K NIAT, some
lenders will allow up to 60% of this income
to be added to application or $120,000
Allows clients to take advantage of “A” pricing
to assist with cash-flow
Clients can show LESS personal income and
still qualify for traditional lending

NIAT Example
A B
Dividend Income $100,000 $100,000
NIAT of $200,000 $0 $120,000
Total $100,000 $220,000
EST. Max lending $400,000 $950,000

Reverse Mortgages
Access money from your home without
selling or any monthly repayments
Minimum age is 55 years
Max LTV is 55% (subject to age, property
location and value)
Interest is compounded and added to
original balance.
Current rates 8%+
Mortgage is paid out with sale or death.

Reverse Mortgages
E.g.: $1.5MM Personal Residence
No mortgage
70 years old
Max borrowing est. $600K

Reverse Mortgages
Mortgage doesn’t require monthly payments.
Better cash-flow
Tax-free equity take out. No impact to existing
government benefits.
Can receive lump-sum + monthly distributions
Can be used to invest/gift for down payment
Retire immediately
ADVANTAGES/STRATEGIES

Reverse Mortgages
Equity is eroded with interest compounding
and non-payment.
MISCONCEPTIONS

Reverse Mortgages
CASHFLOW ANALYSIS :
$1,500,000 PURCHASE
HELOC Reverse Mortgage
Down payment ($300K) $1,800/mth $0
Mortgage ($1.2MM) $7,525/mth $7,525/mth
Taxes/Utilities $500/mth $500/mth
Rental Income $7,000/mth $7,000/mth
Cashflow -$2,825/mth -$1,025/mth

Interest Rate Forecasts
Policy Rate Forecasts
2023 (Q4) 2024 (Q1) 2024 (Q2) 2024 (Q3) 2024 (Q4)
Scotia 5.00% 5.00% 4.75% 4.25% 3.75%
CIBC 5.25% 5.25% 4.50% 4.00% 3.50%
TD 5.00% 5.00% 4.50% 4.00% 3.50%
BMO 5.00% 5.00% 4.75% 4.50% 4.25%

How to position yourself today
for a new mortgage/renewal

Mortgage Strategies
Assuming, based on the data, that rates will come
down in the second half of 2024 for some clients
considering a 1-year fixed rate might be the best
option.
Current 1-year fixed rates are higher than longer
terms but allow the opportunity to renegotiate when
rates ultimately come down in late 2024. Some of
our lenders allow a 6-month early renewal feature,
which means you can renegotiate sooner.
1 YEAR FIXED RATE

Mortgage Strategies
For the more risk-averse.
Would be ideal to help lock in rates and monthly
payments.
3-year terms are currently better priced but note
that they come with a large penalty if you decide to
break.
2-3 YEAR FIXED RATES

Mortgage Strategies
With rates nearing the top of the market, variable
rates are likely to make a comeback.
If you can get a very attractive discount on a variable
rate, this might be the way to go and enjoy the
benefit of rate decreases over the next few years.
5 YEAR VARIABLE/ADJUSTABLE RATES

Mortgage Strategies
If you have a variable/adjustable rate with a short
time to maturity (say, 1-2 years), consider asking
about converting to a short-term fixed rate to hedge
against future increases.
Many lenders allow this option without a penalty or a
new application to be completed.
CONVERT TO FIXED

Mortgage Strategies
HELOCs are often used to fund renovations,
investments and emergencies, but they can also be
used to carry your traditional mortgage balance.
Instead of borrowing with a mortgage on a fixed or
variable term, a HELOC allows you to have a fully open,
interest-only option. This means that although your
payments are adjustable (linked to Prime), you will only
have to make minimum monthly interest payments,
which could allow you to increase cash flow significantly.
CONSIDER A HELOC

Hugo Dos Reis
Mortgage Broker & Founding Partner
Vine Group, Lic. 13511
hugo@vinegroup.ca
416 616.4451
Thank you.
Questions?

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Networking break!
See you in 20 mins!

@volitionproperties
Should I Buy Now OR Wait Until
2024?

@volitionproperties
From the Oracle of Omaha

@volitionproperties
Opportunity: Properties under market value
Property 1 bed, 1 bath downtown
penthouse condo
assignment
Newly renovated home in
Little Portugal
Infill development / garden
suite opportunity
What’s
special?
Available ~$67k lower than
2019 price
Motivated seller offering a
$70k reduction
$200k below market, $500k
profit on redevelopment
Why? Get built-in equity Get a turnkey property
without the pain and expense
of a reno
Get in a infill build from a
distressed seller

@volitionproperties
Opportunity: Upgrade from condo to first triplex
Property Legal Triplex in Little Italy
What’s
special?
Luxurious owner’s suite with 1 bed + office,
outdoor space, and parking
Why? - Smaller gap makes the leap possible
- House hack for similar carrying costs and faster
equity growth

@volitionproperties
Opportunity: Luxury Properties with Laneway Suites
Property Legal Triplex + Laneway Suite in Little Portugal
What’s
special?
High-end, turnkey property without the long time
horizon and carrying costs for development
Why? - 5% cap rate from day 1 with strong financials
- Avoid COA and mitigate project risks

@volitionproperties
Opportunity: Cashflow at Today’s Interest Rates
Property Hamilton Fourplex
What’s
special?
Turnkey, renovated, solid rents
Why? Cashflow! Near proposed Hamilton LRT. Seller
offering VTB.

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These are available for purchase!
Scan to talk to Volition about these opportunities!

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Why should I believe you? 🤔

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But First… PSA – Don’t Mess With Monkey Bars

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Economic Fundamentals
GDP Growth
Job Growth
Population Growth
Rental Demand
Vacancy Rates
Rental Rates
Real Estate Demand
Fundamentals vs. Influencers
Market Influencers
Interest Rates (cost of financing a purchase)
Ease of Borrowing (the availability of financing)
Confidence in real estate as an investment vehicle
Inflation
Legislative Amendments (taxation and/or local authority)
Foreign Investors in Local Real Estate
Investment Alternatives
Creates an
opportunity for
sophisticated
investors

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The Irony of Market Psychology

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Risk Mitigation is built into Volition’s DNA
Is it the right T.I.M.E. to invest?
T – Tenant Risk
I – Investment Model Risk
M – Market Risk
E – Estate Risk

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Tale of Two Investors: Tommy & Gina

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Tommy – Hesitated. Froze. Missed.

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Gina – Calm Clear Mind.

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Bonus: Jon Bongiovanni – Still Awesome

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Importance of Holding for the Long Term

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Equity Growth Model
Equity: $300k
5% Growth
Equity: $6.5M

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Equity Growth Model
Equity: $300k
2.5% Growth
Equity: $3M

@volitionproperties
Equity Growth Model
Equity: $300k
0% Growth
Equity: $1.5M

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Equity Growth Model
Equity: $300k
-2.5% Decline
Equity: $700k

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OMG Interest Rates…😱
3% Interest Rates

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5% Interest Rates

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10% Interest Rates
Did you see the
difference?!?!

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So What Do I Do In Today’s Environment
As a buyer… As a seller…

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Final Thoughts
There’s always something to buy!
Contact us for details on specific opportunities and off-market listings
If we go deeper, would there be interest?
● How to Mitigate Risk
● Best Investment Business Models & What To Buy
● How can we be sure that Toronto has longevity?
● How you REALLY make money in real estate
Stick around for Q&A and we’ll go into more details

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Take MASSIVE Action…

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How Volition Can Help. As Advisors.
FREE 30-min
Advisory session
with Matt
Come prepared with:
Capital available to invest
Mortgage qualification
Current real estate portfolio details
We will help you determine:
Where you are at
Where you want to go
Customized plan to get there

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Home Buyer & Home Sellers
are 50% of our business! We
can ensure that your home
makes good financial sense.
Pre-Analyzed Deals for Investors looking
for the BEST investment properties in
Toronto!
How Volition Can Help. As Agents.

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Your Next Step… Take MASSIVE ACTION
SCAN TO BOOK A FREE 30-MIN CONSULT WITH VOLITION!

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Next Month: Joint Ventures with Guest Speaker
Austin Yeh
Date: Wednesday, October 18
Location: Louis Cifer Brew Works (417 Danforth
Ave.)
RSVP: www.meetup.com/Volition
LARGEST REAL ESTATE MEETUP IN TORONTO WITH OVER 4000+ MEMBERS!

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Encore! Encore!!

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Encore! Encore!!
Volition’s Q4 market outlook
What do I do if I’m:
- An Investor Buyer
- A Primary Residence Buyer
- An Investor Seller
- A Primary Residence Seller

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End

Should I Buy Now OR Wait Until 2024? + Mortgage Update with Expert Hugo Dos Reis

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