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Important Questions

Answered by President, Cody N. Ellis

Are you sure the market is going to keep increasing?

Yes. I am absolutely sure that the markets we invest in will keep increasing in value over the long term. To be clear I don't think all real estate will go up in value, far from it, but I do believe in the fundamentals of the neighborhoods where we hold our properties.

In fact, I even think there are a number of areas in Calgary that would make terrible places to invest. And I know for a fact there are poor investment properties on the same streets as some or our properties. The point is a successful investment involves the right property, in the right area, managed by the right team.

For more information read through the market section of our site. If you have further questions I’d be more than happy to go for coffee and discuss the research and analysis we use.

What is the worst case scenario?

Worst case? Let's say, by some miracle, that after 25 years our property is only worth the same amount we paid for it. Bummer. But our tenants have now paid off our property's mortgage completely. Which means we should go for a really nice lunch and have a serious discussion about how we're going to spend our $4,000 or more in monthly rent cheques now that we are mortgage free. Do you know how to surf? Because that's the way I'll be leaning.

What is your share in the deal?

We do all the work from researching and studying economies and communities, finding and securing properties and managing the asset through the entire life of the venture. As you've likely heard from someone you know, it's very easy to get yourself into a bad or difficult real estate investment and our team's experience is key to the property's success.

Along the way the monthly cash flow(profit after all expenses), which remains in a joint RBC account we both have access to and reporting on, is split 50/50 if we decide to withdraw it. Upon the sale of the property after 5 years (or more if we both agree to hold it longer) your original investment is paid back first 100% using the money our tenants have paid down our mortgage, the cashflow in the RBC account and all the price gain experienced by the property. Only at this point is the remaining profit split 50/50.

As you can see, unlike virtually all other investments, if you don't make money then I don't make money. Let me put it this way, I haven't been ripping out pee stained carpets and scrubbing smokey stained walls since 2005 for the fun of it. I'm a nice guy, but I don't work for free.

Your share seems a little rich, is it negotiable?

No. We are very experienced with what it takes to run a successful rental project from choosing the area and property to the day we close the sale and we always earn our share of the profit. Take the time to speak with a few people who have tried and likely given up on owning a rental property and you'll quickly discover what our time and expertise is worth.

Will you explain the joint venture agreement and go over the legal details of the project?

No. We are not lawyers. For your protection it needs to be explained by your lawyer. We can tell you that the agreement is designed to be equally fair for both parties.

Can I see the property before we buy it?

This can be arranged, however we strongly recommend that you take the emotion out of buying real estate and make your decision strictly based on the numbers and projections involved in the project. If you were thinking of investing in Telus would you want to take a peek around the office before buying their stocks? Of course not. You don't need to like the look of your rental property for it to make you A LOT of money.

Is my money secure?

Yes. In fact it’s as secure as the money you’ve paid down on your own mortgage. Real estate is one of the few investment vehicles that provide a physical asset the investor can touch.

If I want to invest my RRSP’s won’t my banker charge me a penalty?

Probably, however in the majority of cases Ellis Property Development is able to pay the fees on your behalf and structure the cost into the investment.