On Your Bank Accounts, T-bills, GICs, RRSPs, IRAs, TFSAs, Mutual Funds, Stocks, Bonds, Pen Funds, Insurance…?
Then you are not alone. Scott Devries of Devries Financial Group Inc writes how he got some of his clients involved in real estate investing:
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 as they are today. In parallel bond yields were at historical lows, so earning reasonable income on the fixed income portion of the portfolio was challenging at best. While some investment structures did provide more income, they were directly linked to the publicly traded markets and like everything else, they were subject to corrections in their valuations. For example, the REIT (Real Estate Investment Trust) market corrected approximately 30% in 2008.
Through these market corrects, 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 was quite reasonable, with direct equity participation on the sale of the home.
I ultimately recommended to a couple of my high net worth clients that we invest in the project, which we did. The project was a four year investment which seemed reasonable and I felt that it would help diversify their portfolios.
The home we acquired did not go without challenges in that the original tenant had some health issues and had to leave and the subsequent tenant failed on their rental commitment and ultimately we had to evict them. This was done seamlessly through the property management team and required no action from our investors.
The model worked perfectly, despite these challenges and we subsequently sold the home in September of 2013. Our investors virtually 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.
In the last 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.
I have built a solid development and research team to identify mortgage investment opportunities within Canada. We target returns of 8-15% p.a. with the security of having our clients registered on title. This solves both their income requirements and their goal of increasing their net worth.
Scott Devries, BA, CIM, FMA
Devries Financial Group Inc
900 Morrison Drive, Suite 206
Ottawa, ON, K2H 8K7
Testimonial for Scott:
“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 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, @profbruce, www.brucemfirestone.com, October 2013.
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