We sat down with Real Estate Investment Expert, Mike Ponte, of Prosperity Investments, to find out why NOW is the time to invest in Real Estate. Click to watch the full video below, or read the transcript below to find out just what he had to say about Real Estate Investing in this crazy market.
GEOFF: Hey there, Geoff Lee with the GLM mortgage group a division of Dominion Lending Centres. On a daily basis, we get phone calls continually about when is it a good time for me to invest in a real estate property or an investment property. Today I brought Mike Ponte of Prosperity Investments, the president and founder of this organization. Mike holds 180 doors with a portfolio of over thirty million. So, Mike, how would you answer that question when is the best time for an investor to
invest in the property?
MIKE : That’s a great question. I get that same question all the time and it really starts with two key two key principles. Number one is really what is your goals and objectives to begin with. You have got to understand what is it specifically you are trying to get out of your real estate deal. So is it the cash flow side? Is it just based on holding? and if it’ s a long term hold what is it specifically? Understanding that and every market is very very different but it does start with your mindset. And then the second piece that I think is really really important to get it out to everybody, is real estate is a long-term investment. It’s not an investment that is just going to happen for one or two years and if you want to become billionaires, at that point in time you’d have to really go with that type of mindset of knowing that you will be doing this for a very very long time. Knowing that when I bought real estate you know 15-16 years ago my values are significantly higher than what I’ve paid 15-16 years ago and the same principle will hold true as well ten years from now. So, what you buy today, and what your values are going to be ten years from now , it will do the same thing. I always believe that there’s always a good time to invest in real estate and it’s always a great time. The real key question is “what is your goals and objectives to begin with” and buying in those markets that are gonna fit that specific criteria.
GEOFF: Another question that we get asked is well what rate am I going to get? And a lot of times when you’re buying a rental property there’s a rate premium. So. Mike as a real estate investor, with over 180 doors, how important is the rate to you versus the monthly cash flow?
MIKE: To be honest with you the rate really doesn’t have a lot of impact. At the end of the day it’s the cash flow side. Because I have bought stuff that had a much higher interest rate than it is today I actually own properties that are still at a much higher interest rate than it is today. But some of those properties are generating more cash flow for me than what it is on some of the lower rate. The reality higher interest rates that tend to apply creates more demand for rental properties and with more demand for rental properties than values of rental income housing actually goes up. That’s the same principle you gotta look at. Sure, interest rates are important, but at the end of the day it’s always about the cash flow and how much cash is going to be
brought back to you and put it into your pockets.
GEOFF: So a final question a question that we had yesterday was, you know what we’re in such a hot market right now I want the market to cool down before I buy an investment property. Is there a right time to buy? Should we buy in a hot market? Should we buy in a low market? What would be your suggestion to this?
MIKE: Well you know, I tend to talk to a lot of people and we get the same principle the market’s ‘too hot’ so I can’t buy then because they just can’t afford it or it’s – you know the market starting to shift and now is starting to go down a little bit. So, in a lot of cases I tend to find that that is more of a delay tactic more than anything. The reality is (and the most important part) is it not to be so focused on what’s happening in the real estate market it’s really understanding what’s happening in more of the economic market. It’s looking at what’s happening. For example we’re here in the Lower Mainland. What’s happening in the lower mainland…where are those jobs being created? Where are people migrating too?Where do people want to move into? I actually tell people, be much more focused on that statistic and that number…not so much focused on the real estate prices because that really has no bearing. Higher understanding of the economic factors first and foremost is what’s going to dictate what’s going to happen in the future.
GEOFF: Thank you so much! Geoff Lee DLC GLM Mortgage Group and Mike Ponte of Prosperity Investments!
