Have any of you seen the late night infomercials about how you can get rich from quickly buying and flipping real estate? Ever wonder what it would be like to try such a venture? Well the young Casey Serin has jumped into this venture head first and he has a blog (iamfacingforeclosure.com) that tells his story. Casey has had a lot of publicity from TV and Internet media and regardless of all the negative comments he gets on his blog, he still trudges through.

Here is a summary of what happened to him. Casey has an entrepreneurial spirit and found, after a couple of real estate transactions, that he could make some money buying and selling real estate. He joined a real estate seminar/course (like the ones in the infomercials) and started purchasing homes in multiple states with 100% loans from banks. You’re probably thinking, how did this young guy qualify for multiple homes at such a young age? According to his blog, he “fibbed” on his loan applications telling the banks that he made more than he actually did. Then comes the real estate market downturn, and things start to get ugly. He has trouble selling his inventory because now the homes are worth much less than what they are mortgaged for.

Excess mortgages + time = BIG PAYMENTS. Payments so big that Casey cannot afford to keep up with them. We believe that Casey is working hard to get rid of his inventory, but unless something drastically changes in the near future, his houses will be foreclosed on.

We feel for Casey as we have some experience in flipping homes and it is NOT easy. If you are just starting out, the key is to start slowly one house at a time to minimize your risk. Then, when you get more experienced, confident, and start loving what you are doing, move foward with full force. We believe that Casey will survive this ordeal and come out stronger. Best of luck Casey!

If you would like to read more about Casey’s situation, visit his blog at: http://www.iamfacingforeclosure.com.

Be Wise … and Be Stingy…

If you have a mortgage in Canada, you will know that the interest paid is not tax deductible as it is in the United States. As depressing as that is, there is a ray of sunlight on the horizon, it’s called “The Smith Manoeuvre”. The Smith Manoeuvre is a strategy that shows Canadians how to convert their non tax dedutible mortgage into a tax deductible investment loan. On top of that, the strategy will help you pay off your mortgage at an accelerated rate.

In a nutshell, this is how the strategy works. The homeowner obtains a HELOC - home equity line of credit (one with a revolving credit limit), uses the HELOC to invest, claims the interest paid on the HELOC at the end of the year, and uses the tax return to pay down existing mortgage. This is a very superficial explaination of the technique and should be examined with greater detail with your financial advisor. Here are some links for more detailed information:

Smith Manoeuvre Homepage

Moneysense Article - The ‘Smith Manoeuvre’ and your mortgage

We apologize for the delay between articles/posts, we have been away for a conference for the past week. Hopefully, by Monday we will be back on track with fresh, educational articles. In the mean time, check out the newest post regarding buying or renting for a new college grad.

As a young graduate fresh out of University/College, should you rent or buy your next dwelling? Their really is no straight answer, it really depends on the situation of the graduate. There are questions to be answered like, do you have the money saved for the closing costs and down payment? Can your new job support the monthly payments? Is the market too hot right now to buy? These are the very questions that are answered in an article written by CNN. Check it out below.

Question: I’m a recent college grad and now a young working professional making $39,000 a year who’s at a crossroad in life: I’m moving away from home and have to decide whether I should buy or rent a home.

Hey, what’s the rush about buying a house? If you’ve just finished college and are moving out of your parents’ place, why not take some time to get your career going, save some money, build a 401(k) or other retirement account going and then think about buying a house? I say this not because I’m down on the joys of home ownership. I think having your own hacienda is great. It makes you part of a community and over the long term the appreciation of home values can be a great way to build wealth. But buying a house involves shelling out a fair amount of upfront costs - the down payment, title insurance, mortgage application, etc. - not to mention a commission when you sell. Closing costs for buyers average

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