Evaluation of real estate cashflow opportunities in Canada?

After 2-3 month research, I found no real estate opportunity worth investing in in a cashflow perspective in Canada. All opportunities are minimum 30% overvalued. I used the method describe in this post: "How to evaluate a real estate opportunity?"

the herd will tell you:

• Its the market value
• Value will continue to increase...you will make a capital gain
• Canada population will grow (yes->Supply and demand biggest factors for real estate investments)
• Lot of studies are showing that real estate isn't overvalued (please do the math)
• Interest rates will stay low

Stop following the herd!
Capital gain is risky because you have to play the flipper buy low/sale high and most people can't do it and will be stuck to sale low to someone who has cashflow. 

To make an finance analogy, overvalued stocks are overvalued because they consider potential growth:

• Population growth
• Employment increase due to aging population & decrease canadian $ (canadian workforce is cheaper)

 
Canadian real-estate is overvalued because it is already considering lot of potential growth and future is risky because:

• Canadian $ depend too much on oil and everyone is trying to move away from it (canadian dollars will keep decreasing)...you should invest elwhere
• Interest rate won't stay low forever....which means your overvalued will become super overvalued
• Banks apply more then 20% cash down rule (don't recognize market value, remember Banks don't take risk, you take it all)

Bottom line: buying overvalued real estate force you to stay in the capital gain game to make your investment worth-full.
Recommendation: buy in the US because real estate value is more reasonable + US will most likely gain value against CAN dollar due to oil.

remainder:

There are FOUR profit centers in real estate:

• Income
• Appreciation
• Mortgage Pay-down
• Tax Benefits

Price are way less overvalued in the states but you have to consider the overhead of US tax. You need a Tax Payer ID (no need for an social assurance number) + you can use software such as taxact to fill your taxes.

Rich strategy = Do the opposite of the poor Majority

The rich are the minority which means the mainstream media a guiding the majority. Their is a simple rule to follow to be rich. Do the opposite of what the majority is doing smartly.
You can use this simple trick, when your hairdresser think of buying a condo, sell your condo.
Since the beginning of 2005, the late majority of Canadian are jumping into the house market when the rich where starting to move out. Now, the majority is starting to freak because they start realizing the market was overpriced which means it will soon be the right timing to buy, not sell.

the main indicator the bubble will burst is:

• Slow down of sale speed (seller obstinacy)
• Increase bank down payment

You might say: increase bank down payment??? Yes.
As an example, in Canada, the down payment is 20% for a second building.
Most of the banks now ask 25-30% down payment. The math is simple, even if you pay the market price the bank takes no risk. If the bank ask more then 20%, it means you are paying more then the real value which means you have to put more down payment to reduce the bank risk.

Example:
- Triplex = 500K
- standard down payment = 20% (100k)
- Bank evaluation = 400K
- Risk = 100K no warranty
- Bank new down payment = 100K + 25%*100K  = 125K (25% of 500K)

Why it is over valued: simple economics. Value is drive by increase of population & salary.
Quebec province has the worst number is both.

What is another big difference between the rich an poor:



Poor are optimizing capital gain first. Rich are optimizing cash-flow. If your real-estate investment is base only on capital gain, yes you are fucked and you think like a poor. Smart rich people are optimizing cashflow then capital gain.
For patient people, they will be lot of opportunity ahead, why?

• Most real-estate investor will start selling
• Buyer majority will stay out of real-estate (decrease demand)
• Majority will go back to stocks (think it is less risky; decrease demand further)
• Seller will run out of money ;) due to bad economic condition
• Canadian dollar is going down....natural resource value is going doing (US oil dependency is down  & Why Iran Nuclear threat is no more an issue?

Its the same as the idea to buy when everyone is selling and sell when everyone buys ;)

Why you will fail to leave the rat quadrant, except if you...

You are stuck in the rat race but don't know how to to initiate the transition to your freedom. 

Here is my suggestions:

1. Get empowered and get your Why
1. TED talk (20 mins): Why you will fail to have a great career: Larry Smith
2. TED talk (15 mins) Amy Cuddy:Your body language shapes who you are 
3. Reading (1hr) The Flinch (free on amazon) learn to control your fear/need for security
4. Hour of power by Anthony Robins -> ritual
5. Decision model book= Making of Model of why p71-> to determine futur/know your why, first know your past  
2. Why you need financial education: rich dad poor dad
3. Increase your financial IQ http://www.amazon.com/Rich-Dads-Increase-Your-Financial/dp/0446509361 (only used hard cover available)
4. Understand who you are with the cashflow Quadrants (Employee, Self-Employer, Investor, Business) :Robert Kiyosaki Explains The Cash Flow Quadrant - YouTube (10$ for amazon ebook)
5. Are you ready?
1. Why you will fail to leave the rat quadrant, except if you...
2. The red line self rat trap
6. Get to your roots to find the project (the how) you should be working on (why): If you were financially free or had 2 Millions $, what will you do? How is the 

How to turn your wife into a cash cow

First, cash cow is an expression used to make a point and not in any way used in any bad way against women. If you remove all women, the entire economy will collapse. Women are the biggest driving force of the economy. Their instinct drive them to spend because they are design to seduce. In this modern age, they have to spend even faster to follow fashion and trends which are not assets. Women needs are infinite and have no limits. More clothes, more presents for kids, more jewellery, more holidays, nicer houses, nicer car, more shoes, more free time, a second house, redesign the house, and so on for ever and more expensive.
If your wife has infinite needs, here is how to turn her into a cash cow?
Every needs has to be fulfil by an income. A need stays a need but it doesn't need to be fulfil by your job income.

Wife: I want a new car
Man: OK but lets create a cashflow that will paid if.

Wife: I want to go to cuba
Man: OK but it has to be paid by an investment cashflow.

Wife: I want a second house (chalet)
Man: Yes but let's get a cashflow asset that will cover the monthly mortgage payment and so on.

Wife: I want to work less hours
Man: Yes, let's get cashflow to compensate missing income.

To slowly introduce this concept, I recommend you to play the cashflow game with your friends and wife.

http://www.richdad.com/Rich-Dad-Games/cashflow-the-web-game
(mobile version) https://play.google.com/store/apps/details?id=com.grupoheron.cashflowmobile&hl=fr
iphone version: https://itunes.apple.com/us/app/cashflow-financial-statement/id419229056?mt=8

So, are you going to turn your wife nightmare infinite needs into a cash cow opportunity?