Investment Success Story

Oct 09

(Guest Post by Scott Devries)

In 2009, I began to research real estate as an investment option for client portfolios. Clients were starving for income and interest rates were at historical lows, directly impacting bond and GIC yields, so earning reasonable income on the fixed income portion of their portfolios was challenging at best. While some investment structures did provide more income, they were directly linked to the publicly traded markets and were subject to corrections in their valuations. For example, the REIT (Real Estate Investment Trust) market corrected approximately

30% in 2008.

Through these market downturns, what I observed was that home prices remained quite stable in Canada. At the same time, Dr. Bruce Firestone asked me to look at a real estate investment opportunity for my clients that involved direct ownership of residential real estate in Ottawa with full property management. The targeted annualized cash yields were between 5-6% which seemed modest; however there was direct equity participation on the sale of the home that would likely bring double digit total returns.

“When I had a client in difficulty in 2008/09, he came to me with a problem – his business in the US was down and he had a building in Ottawa that he couldn’t sell using the MLS system – it had to be a private sale. So what did we do? We turned to an expert in finance, Scott Devries, who organized a group of investors to help another Century 21 Explorer Realty client buy below market and, then operate the property effectively and finally sell it when markets turned up. What did investors get? Excellent management and an ROI of 25% p.a. over a 44-month period. This is one of the reasons why 61 out of the100 richest families in Canada had all or substantially all their wealth in real estate,”

-Bruce M Firestone, Broker, Century 21 Explorer Inc, Founder, Ottawa Senators

After analyzing the opportunity and completing my due diligence, I ultimately recommended to a couple of my high net worth clients that we invest in the project, which we subsequently did. The project was a four year investment which seemed reasonable and I felt that it would help diversify their portfolios.

The property we acquired did not go without challenges in that the original tenant had some health issues and had to leave and the next tenant failed on their rental commitment and we had to evict them. This was done seamlessly through the property management team and required no action from our investors.

Despite these challenges, the model worked perfectly. We sold the home in September of 2013. Our investors doubled their money with an annualized return of 25.6% on an absolutely hassle-free basis. Despite all of the volatility in the markets, we were able to secure both cash-flow and capital appreciation for our investors.

In the last several years I’ve been working extensively on mortgage structures and alternative investments that I believe will help meet investors income requirements and preservation and growth of capital objectives. While I am not suggesting equity markets should be ignored, I believe it is the successful diversification of these asset classes that will lead to investor success.

“Scott is a wealth management advisor with vision and a passion to serve the best interest of his clients. He has a keen ability to identify investment opportunities and to surround himself with a team of field experts to construct them. Scott recently offered me the privilege of participating in a residential investment project that netted 25.6% per annum of return. Scott worked in tandem with legendary real estate giant, Bruce Firestone and a property management team to identify and execute the deal. In less than four years, I almost doubled my original investment! Thank you Scott, I can’t wait our next real estate venture.”

-Dr. Pierre Maranger

I have built a wonderful development and research team to identify mortgage investment opportunities within Canada. We target returns of

8-15% with the security of having our clients registered on title. This solves both their income requirements and their goal of increasing their net worth.

While clearly we cannot expect 25.6% annualized returns, real estate affords us the opportunity to create both solid cash flows and capital appreciation with investments secured against real property.

If you would like to find out more about these investment opportunities, please feel free to contact me. We will also be hosting a series of seminars and I would be most pleased to forward the schedule as we move forward.

Warmest Regards,

Scott Devries, B.A., CIM, FMA

Devries Financial Group Inc.
900 Morrison Drive, Suite 206
Ottawa, ON, K2H 8K7
T: 613-226-9888

C: 613-293-6000

s.devries@devriesinc.ca

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About the Author

Bruce is an entrepreneur/real estate broker/developer/coach/urban guru/keynote speaker/Sens founder/novelist/columnist/peerless husband/dad.

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