DOUGLAS GRAY, B.A., LL.B., formerly a practicing lawyer, has extensive experience in all aspects of real estate and mortgage financing. He has acted on behalf of buyers, sellers, developers, investors, lenders and borrowers. In addition, he has over 35 years of personal experience investing in real estate. He is the author of 26 best-selling real estate, business and personal finance books, and is as well a consultant and columnist. Mr. Gray is president of the Canadia Enterprise Development Group Inc. and lives in Vancouver, BC. His website is www.homebuyer.ca.

• Preface xi Acknowledgments xiiiChapter 1: Understanding Real Estate Investment 1Why Consider Investing in Real Estate? 2Understanding the Real Estate Market 10Establishing Your Investment Strategies 14Key Investment Strategies to Consider 15Buying with Partners 17Summary 29Chapter 2: Types of Residential Real Estate 31Condominium 31Single-Family House 45Property for Renovation 54Recreational Property 57Multi-unit Dwelling 63Apartment Building 63Raw Land 66Summary 68Chapter 3: Finding and Evaluating the Right Property 69What to Consider When Selecting a Property 69Where to Find a Property for Sale 83Determining the Value of the Property 88Summary 102Chapter 4: Selecting Your Advisory Team 103Common Selection Criteria 103Selecting a Realtor 106Selecting a Lawyer 110Selecting an Accountant 114Selecting a Lender 117Selecting a Financial Planner 117Selecting a Mortgage Broker 122Selecting a Building or Home Inspector 123Selecting an Insurance Broker 126Summary 128Chapter 5: Understanding the Financing Aspects 129What Is a Mortgage? 129Types of Mortgages 130Sources of Mortgages 138Key Factors to Consider When Selecting a Mortgage 139General Contents of a Mortgage 144Determining the Amount of Mortgage Available 148Applying for a Mortgage 149Cost of Obtaining a Mortgage 153Defaulting on Your Mortgage 159Creative Financing 163Dealing with Negative Cash Flow 164Summary 166Chapter 6: Understanding the Legal Aspects 167Types of Ownership of Property 167Understanding the Purchase-and-Sale Agreement 170Services Provided by the Purchaser’s Lawyer 180Services Provided by the Vendor’s Lawyer 185The Listing Agreement 188Forms of Legal Structure to Hold InvestmentProperty 190Other Legal Cautions and Protections to Consider 193Summary 200Chapter 7: Understanding the Tax Aspects 201Local and Regional Taxes 201Provincial Taxes 202Federal Taxes 202Income Tax 210Tax Implications of the Purchase Structure When Buying an Apartment Building 226Summary 233Chapter 8: Understanding the Insurance Aspects 235Organizing Your Insurance Program 235Types of Property Coverage 237Types of General Insurance 244Summary 248Chapter 9: Buying Your Property 249Selecting the Right Real Estate Agent 249Determining a Property’s Value 252Preparing the Offer 255Presenting the Offer 256Giving a Deposit 261Making a Deal 262Using a Lawyer 263Insuring Gain 263Closing the Deal 264Summary 266Chapter 10: Managing Your Property 267Types of Management 267Keeping Records 272Finding the Right Tenant 275Maintaining Rental Properties 285Avoiding Common Fire Hazards 291Improving the Bottom Line 293Saving on Expenses 297Summary 298Chapter 11: Selling Your Property 299Determining When to Sell 299Determining How to Sell 301Preparing to Sell 306Preparing the Property 309Closing the Sale 312Moving On 314Summary 315Chapter 12: Understanding Financial and Estate Planning 317An Introduction to Financial Planning 317An Introduction to Estate Planning 317Summary 331Appendix 333Form 1: Personal Cost-of-Living Budget 333Form 2: Personal Net-Worth Statement 336Form 3: Calculating Your Gross Debt-Service (GDS) Ratio 341Form 4: Calculating Your Total Debt-Service (TDS) Ratio 342Form 5: Projected Cash Flow 344Form 6: Projected Income and Expense Statement 346Form 7: Projected Balance Sheet 347Form 8: Income Approach Worksheet 348Form 9: Investment Property Analysis Checklist 350Chart 1: Criteria for Determining Real Estate Cycle 352Chart 2: Recovery on Renovation Costs 352Chart 3: Amortization Period in Year 353Chart 4: Interest Payments 353Chart 5: Prepayment or Increased Payment Savings 354Chart 6: Mortgage Amortization Chart 354Chart 7: Monthly Mortgage Payments for Principal Plus Interest 355Checklist 1: Real Estate Assessment Checklist 356Checklist 2: Mortgage Checklist 364Checklist 3: Real Estate Purchase Expenses Checklist 368Checklist 4: Business Deductions Checklist 370Checklist 5: Landlord and Tenant Suite-Inspection Checklist 372Checklist 6: Master Checklist for Successful Real Estate Investing 376Glossary 383Further Education and Information 395Index 397

DOUGLAS GRAY, B.A., LL.B., formerly a practicing lawyer, has extensive experience in all aspects of real estate and mortgage financing. He has acted on behalf of buyers, sellers, developers, investors, lenders and borrowers. In addition, he has over 35 years of personal experience investing in real estate. He is the author of 26 best-selling real estate, business and personal finance books, and is as well a consultant and columnist. Mr. Gray is president of the Canadia Enterprise Development Group Inc. and lives in Vancouver, BC. His website is www.homebuyer.ca.

• Preface xi Acknowledgments xiiiChapter 1: Understanding Real Estate Investment 1Why Consider Investing in Real Estate? 2Understanding the Real Estate Market 10Establishing Your Investment Strategies 14Key Investment Strategies to Consider 15Buying with Partners 17Summary 29Chapter 2: Types of Residential Real Estate 31Condominium 31Single-Family House 45Property for Renovation 54Recreational Property 57Multi-unit Dwelling 63Apartment Building 63Raw Land 66Summary 68Chapter 3: Finding and Evaluating the Right Property 69What to Consider When Selecting a Property 69Where to Find a Property for Sale 83Determining the Value of the Property 88Summary 102Chapter 4: Selecting Your Advisory Team 103Common Selection Criteria 103Selecting a Realtor 106Selecting a Lawyer 110Selecting an Accountant 114Selecting a Lender 117Selecting a Financial Planner 117Selecting a Mortgage Broker 122Selecting a Building or Home Inspector 123Selecting an Insurance Broker 126Summary 128Chapter 5: Understanding the Financing Aspects 129What Is a Mortgage? 129Types of Mortgages 130Sources of Mortgages 138Key Factors to Consider When Selecting a Mortgage 139General Contents of a Mortgage 144Determining the Amount of Mortgage Available 148Applying for a Mortgage 149Cost of Obtaining a Mortgage 153Defaulting on Your Mortgage 159Creative Financing 163Dealing with Negative Cash Flow 164Summary 166Chapter 6: Understanding the Legal Aspects 167Types of Ownership of Property 167Understanding the Purchase-and-Sale Agreement 170Services Provided by the Purchaser’s Lawyer 180Services Provided by the Vendor’s Lawyer 185The Listing Agreement 188Forms of Legal Structure to Hold InvestmentProperty 190Other Legal Cautions and Protections to Consider 193Summary 200Chapter 7: Understanding the Tax Aspects 201Local and Regional Taxes 201Provincial Taxes 202Federal Taxes 202Income Tax 210Tax Implications of the Purchase Structure When Buying an Apartment Building 226Summary 233Chapter 8: Understanding the Insurance Aspects 235Organizing Your Insurance Program 235Types of Property Coverage 237Types of General Insurance 244Summary 248Chapter 9: Buying Your Property 249Selecting the Right Real Estate Agent 249Determining a Property’s Value 252Preparing the Offer 255Presenting the Offer 256Giving a Deposit 261Making a Deal 262Using a Lawyer 263Insuring Gain 263Closing the Deal 264Summary 266Chapter 10: Managing Your Property 267Types of Management 267Keeping Records 272Finding the Right Tenant 275Maintaining Rental Properties 285Avoiding Common Fire Hazards 291Improving the Bottom Line 293Saving on Expenses 297Summary 298Chapter 11: Selling Your Property 299Determining When to Sell 299Determining How to Sell 301Preparing to Sell 306Preparing the Property 309Closing the Sale 312Moving On 314Summary 315Chapter 12: Understanding Financial and Estate Planning 317An Introduction to Financial Planning 317An Introduction to Estate Planning 317Summary 331Appendix 333Form 1: Personal Cost-of-Living Budget 333Form 2: Personal Net-Worth Statement 336Form 3: Calculating Your Gross Debt-Service (GDS) Ratio 341Form 4: Calculating Your Total Debt-Service (TDS) Ratio 342Form 5: Projected Cash Flow 344Form 6: Projected Income and Expense Statement 346Form 7: Projected Balance Sheet 347Form 8: Income Approach Worksheet 348Form 9: Investment Property Analysis Checklist 350Chart 1: Criteria for Determining Real Estate Cycle 352Chart 2: Recovery on Renovation Costs 352Chart 3: Amortization Period in Year 353Chart 4: Interest Payments 353Chart 5: Prepayment or Increased Payment Savings 354Chart 6: Mortgage Amortization Chart 354Chart 7: Monthly Mortgage Payments for Principal Plus Interest 355Checklist 1: Real Estate Assessment Checklist 356Checklist 2: Mortgage Checklist 364Checklist 3: Real Estate Purchase Expenses Checklist 368Checklist 4: Business Deductions Checklist 370Checklist 5: Landlord and Tenant Suite-Inspection Checklist 372Checklist 6: Master Checklist for Successful Real Estate Investing 376Glossary 383Further Education and Information 395Index 397

DOUGLAS GRAY, B.A., LL.B., formerly a practicing lawyer, has extensive experience in all aspects of real estate and mortgage financing. He has acted on behalf of buyers, sellers, developers, investors, lenders and borrowers. In addition, he has over 35 years of personal experience investing in real estate. He is the author of 26 best-selling real estate, business and personal finance books, and is as well a consultant and columnist. Mr. Gray is president of the Canadia Enterprise Development Group Inc. and lives in Vancouver, BC. His website is www.homebuyer.ca.

• Preface xi Acknowledgments xiiiChapter 1: Understanding Real Estate Investment 1Why Consider Investing in Real Estate? 2Understanding the Real Estate Market 10Establishing Your Investment Strategies 14Key Investment Strategies to Consider 15Buying with Partners 17Summary 29Chapter 2: Types of Residential Real Estate 31Condominium 31Single-Family House 45Property for Renovation 54Recreational Property 57Multi-unit Dwelling 63Apartment Building 63Raw Land 66Summary 68Chapter 3: Finding and Evaluating the Right Property 69What to Consider When Selecting a Property 69Where to Find a Property for Sale 83Determining the Value of the Property 88Summary 102Chapter 4: Selecting Your Advisory Team 103Common Selection Criteria 103Selecting a Realtor 106Selecting a Lawyer 110Selecting an Accountant 114Selecting a Lender 117Selecting a Financial Planner 117Selecting a Mortgage Broker 122Selecting a Building or Home Inspector 123Selecting an Insurance Broker 126Summary 128Chapter 5: Understanding the Financing Aspects 129What Is a Mortgage? 129Types of Mortgages 130Sources of Mortgages 138Key Factors to Consider When Selecting a Mortgage 139General Contents of a Mortgage 144Determining the Amount of Mortgage Available 148Applying for a Mortgage 149Cost of Obtaining a Mortgage 153Defaulting on Your Mortgage 159Creative Financing 163Dealing with Negative Cash Flow 164Summary 166Chapter 6: Understanding the Legal Aspects 167Types of Ownership of Property 167Understanding the Purchase-and-Sale Agreement 170Services Provided by the Purchaser’s Lawyer 180Services Provided by the Vendor’s Lawyer 185The Listing Agreement 188Forms of Legal Structure to Hold InvestmentProperty 190Other Legal Cautions and Protections to Consider 193Summary 200Chapter 7: Understanding the Tax Aspects 201Local and Regional Taxes 201Provincial Taxes 202Federal Taxes 202Income Tax 210Tax Implications of the Purchase Structure When Buying an Apartment Building 226Summary 233Chapter 8: Understanding the Insurance Aspects 235Organizing Your Insurance Program 235Types of Property Coverage 237Types of General Insurance 244Summary 248Chapter 9: Buying Your Property 249Selecting the Right Real Estate Agent 249Determining a Property’s Value 252Preparing the Offer 255Presenting the Offer 256Giving a Deposit 261Making a Deal 262Using a Lawyer 263Insuring Gain 263Closing the Deal 264Summary 266Chapter 10: Managing Your Property 267Types of Management 267Keeping Records 272Finding the Right Tenant 275Maintaining Rental Properties 285Avoiding Common Fire Hazards 291Improving the Bottom Line 293Saving on Expenses 297Summary 298Chapter 11: Selling Your Property 299Determining When to Sell 299Determining How to Sell 301Preparing to Sell 306Preparing the Property 309Closing the Sale 312Moving On 314Summary 315Chapter 12: Understanding Financial and Estate Planning 317An Introduction to Financial Planning 317An Introduction to Estate Planning 317Summary 331Appendix 333Form 1: Personal Cost-of-Living Budget 333Form 2: Personal Net-Worth Statement 336Form 3: Calculating Your Gross Debt-Service (GDS) Ratio 341Form 4: Calculating Your Total Debt-Service (TDS) Ratio 342Form 5: Projected Cash Flow 344Form 6: Projected Income and Expense Statement 346Form 7: Projected Balance Sheet 347Form 8: Income Approach Worksheet 348Form 9: Investment Property Analysis Checklist 350Chart 1: Criteria for Determining Real Estate Cycle 352Chart 2: Recovery on Renovation Costs 352Chart 3: Amortization Period in Year 353Chart 4: Interest Payments 353Chart 5: Prepayment or Increased Payment Savings 354Chart 6: Mortgage Amortization Chart 354Chart 7: Monthly Mortgage Payments for Principal Plus Interest 355Checklist 1: Real Estate Assessment Checklist 356Checklist 2: Mortgage Checklist 364Checklist 3: Real Estate Purchase Expenses Checklist 368Checklist 4: Business Deductions Checklist 370Checklist 5: Landlord and Tenant Suite-Inspection Checklist 372Checklist 6: Master Checklist for Successful Real Estate Investing 376Glossary 383Further Education and Information 395Index 397