Jordan & Jenny Newsletter—February 2008

Hello everyone,

I was very surprised by the temperature difference in Kansas City. Over here, the average temperature in winter is around -5 degree. But there had been a few days that dropped to like -16 degree and the next day became 12 degrees Celsius. What a big change compared to Vancouver.

For this month, I am trying something new. I want to share with everyone what I am doing, what I know, and what I am interested. So I separated in to several little chapters that tells you my current progress in real estate, share with you my real estate knowledge, and my personal interest.

For the month of January, we have moved from the studio we rent to the house we own and moved again from the first house to the second house. It’s a very wonderful and satisfying feeling when the first time you step into the house you buy and actually live in it. It also feels much better that I am paying myself the rent than paying for other people’s mortgage and can’t even own the property. We didn’t realize how much time it can take to organize the rehab for two houses, and moving at the same time. My goal is to acquire one property every month. I still have 5 days to do it. ^^

Real Estate Knowledge Corner—Financial Freedom

My friend has asked me this question: what is financial freedom? My definition of financial freedom is: you have enough passive income every month to support your desired lifestyle.The next question would then be: what’s passive income? A passive income is the opposite of earned income like salary. Everyone has income from the job they have. Either you are paid by the time or by the work you did, you need to do something to earn that income. But what happens if you stop working? You don’t get any check from your boss. A passive income is money that comes in every month without you working for it. So it doesn’t matter if you are on vacation or you are sick or you are sleeping, the money still comes every month. A few examples of passive income are: vending machine, coin laundry, storage, real estate, loyalty, dividend from stock. These types of income only require you to spend the time to set it up for the first time. Once you set it up, you only need to spend maybe 10 minutes or less a week to maintain it. And for the rest of your life, unless you sell it to someone else, or something unforeseen has happened, the money will come to you whether you like it or not.Think about it, if you have enough money coming in every month to pay for all the expenses you have, what would you rather be doing right now? Who would you rather be with? Where would you rather be? That’s where the biggest difference is: When you are financially free, it FREES you to do whatever that you WANT to do, instead of what you NEED to do or HAVE to do. Even if you love your job, you can still do it, you will then become going to work everyday because you want to, not because you have to.

Our First “Cash Cow” in Kansas City

We bought this single family house back in December. It has already been fixed up really nicely and it’s going to be rent out in February. The listing price for this 2 bed 1 bath property was $49000 when it was just listed. But the bank dropped the price to $32000 after being on the market for 3 months. We made an offer for $15000, and got it for $18000. The cost to fix it up is $10000 (including painting the whole house, new roof, new plumbing, and buying used appliances). We have just rent it out for $650/ month. So all in cost (buying it, fixing it, closing cost, insurance, tax, utilities) ~ $31000. Even if I borrow all the money from the bank at 6.25% interest to do the whole deal, I still net about $280 of cash flow each month. Because this house actually worth $65000 at market price, I have made $34000 in equity. That’s more than what I made at Best Buy in a year!! For a deal that costs $31k and generates $280 a month for the rest of my life and $34000 instant equity, I’d say it’s a pretty good deal for me!! I try to make it as simple to understand as possible, but if you are interested in knowing more, feel free to contact me.

Martial Art – my interest (Jenny found it boring until she started using it to hit me)

All of my close friends know that I have a huge interest in martial art. Don’t know why, but I just like to fight. Noooooo, just kidding. I am a peaceful person who just happens to be fascinated by the art of Kung-Fu. As all of you knows, there are many styles of martial art. The one that I am particularly interested in and practice is a style called: Wing Chun. This style was said that it was developed by a female shao-lin monk back like 300 years ago. So the moves and theories behind it are all concentrating on ways to overcome a larger force with little or no force. Because women don’t have as much muscle as men do, you need to rely on other ways to generate a great amount of force without using plain muscle. That’s why I like it so much because it focuses on how to make each and every move as efficient as possible. Here is a video clip of my sigong (the teacher of my teacher) demonstrating how much power human body actually have. http://www.youtube.com/watch?v=0cJkJeKpGt8

JORDAN & JENNY’S NEWSLETTER - JANUARY 2008

Hello Friends,

Happy New Year to everyone!! Another year has gone by. What an exciting year it was for us. A lot of great things and challenging things happened this year. I have definitely learnt a lot this year. So here is my recap:

January – I have been promoted to be the supervisor in training at Best Buy. I tried to do my best as a sales person and supervisor not because I want to kiss ass or anything. I do it in a sense to prove to myself how good of supervisor you can be, and to learn as much as I can on how a big corporation operates. In my opinion, you will never learn anything unless you put your heart to it 100%.

February – We have closed on our first investment property in Vancouver. We spend about one and half month renovating it. We did tiling, painting, changing counter tops, laminate flooring, and dry walling. You might ask why we didn’t hire contractors to do it. It was because we want to experience and learn how it’s like to renovate a house, and also, we didn’t have the budget either. ^^

April – Our first investment was ready to put on the market. You can go to our website if you are interested on how it looks like. www.vantagecanada.com

September – Our property was finally sold after 4 month. We didn’t price it too high or anything. But rather, it was because there was a balcony that needs replacement since it was rotted and water leaking through. So when people go check out the property, they see a big blue tarp right on the roof where the balcony is. In Vancouver, there was a big problem with leaky condos. A lot of condos that were built around 1990~2000, the building code is not good enough for the new building techniques. And so those condos had bad roof and siding design and would eventually leak water into the building structure. A lot people lost money because of the amount of money needed to fix the building. So when people come to see our condo and saw that big blue tarp, they would be scared away because it might be a leaky condo. Even we priced it 5% below market price and offer to pay the fix up, it still took us 4 month to get it sold. Our lesson for this is you need to really be on top of what the management company is doing to your property and their schedule is like, so you know what to expect and you know when is the best time to sell. To replace a balcony for a condo like that, you should be looking at about $50000 and less than a month to finish it. But by the time we close on that property, it still looks like what it was 4 month ago – a blue tarp covering it.

October – we have attended the foreclosure boot camp & field training from EWI (Enlighten Wealth Institute) in Kansas City and Indianapolis. We have also FIRED OUR BOSSES and moved to Kansas City to establish our power team over here and start our real estate investment empire.

November – after a month of searching, analyzing, and making lots of offers (we sent out 45 offers) on properties, we finally have our first house accepted. I have written another column to cover this property. It will be on the newsletter for next month.

December - We have bought another house. This time, it’s a duplex, at a better location, and even better cash flow. This year was the year that Jenny and I both turned 30 years old. But in my mind, I am still 25, full of energy, just got a slightly bigger belly. Although I didn’t make my goal for this year (flip 5 properties and make $100k in real estate), we still managed to flip 1 property and make 20K cash and make 60k in equity. So my goal for next year is to at least assign 10 properties and acquire more properties so we have $2000/month cashflow or more.

Jenny’s Little Corner – How We Get Started

Some people began asking how we’ve gotten into real estate. It all started when my best friend Johnson persuaded me to read this book “Rich Dad, Poor Dad” by Robert Kiyosaki many years ago (before this, I stayed anyway from anything business). In his book, Robert introduced the idea “Financial Freedom”which can be achieved mainly by acquiring properties that produce positive cashflow. Although I liked my old research job but I found it harder and harder to do the 9 to 5 thing. I started to follow what Robert said in his book, I tried network marketing, quit my research job to go work for a company that was going public (to learn the stock side of business), tried to look for income properties in Vancouver (we later learned that Vancouver is more a flip market than a cashflow market), read as many books on real estateas I can get my hands on, went to free seminars on business, stock or real estate. We eventually have to pay tuition to get more advanced information and mentorship but at the beginning when you don’t know anything about real estate, there are so many free resources out there and you can pick and choose your mentors (the authors of those books), go to these authors’ websites and go to as many free seminars as possible. That’s how we get started.

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Jordan & Jenny’s Newsletter – NOV 2007

Hello Everyone,

Thank you for reading our very first newsletter (I am hoping that it won’t be the last one). The reason why you get this letter is because you have known Jordan or Jenny at some point in time. This newsletter is pretty much a tool for us to get back in contact with all of you, sort of like a periodic update from us, what’s been happening in our lives, what’s exciting, that kind of thing. Since it’s the first one, it might be a little rough, lots spelling, grammatical errors, etc.

Kansas City – Exciting City

Yes, we have moved to Kansas City, Missouri two weeks ago. This is our first stop in our real estate investing empire. We are here to buy rental properties to hold for cash flow or resell for quick cash. Since there are a lot of great things happening in this city and the housing price is still relatively low, we’ve decided to come over here for about 3 to 6 months, to set up our power team and buy some properties. Then we will move on to the next city and do the same thing. The city is actually putting a lot of money down, either in tax incentives or invests with private corporations in an effort to revitalize the city. Here are the few great things:

• A new sport stadium right inside downtown core called Sprint Center, a joint venture with Sprint, has just finished construction – about $250 million worth of investment. They are also trying to bring a NBA team or NHL team over here too.

• The Power & Light District, is currently under construction. When finished, it will be a commercial, residential, and entertainment mixed use area located at the west side of Sprint Center. H&R world headquarter is going to be there, bring about 2000 new jobs alone. Altogether, it’s a $2 billion project, estimated to bring 8000 new jobs, and 10000 new housing after completion.

• The city is also planning to have a new light weight rail going from north of Kansas City all the way to thePlaza area. The citizens have voted last year to support the building of the light weight train. But it’s still in the planning stage. After all, what we’ve seen here is somewhat like Vancouver in 2000, everything is breaking ground, and people are excited about new changes.

But because of the foreclosure problem from ARM mortgages, a lot of bank owned properties have flooded the market. To an investor point of view, it is a good time to BUY & HOLD. Since we are able to get houses at very discounted prices now, the monthly rental income can cover all taxes, insurance, property management fees, mortgage payments, and still generate positive cash flow, meaning cash in the pocket every month! Wait until the housingmarket returns to normal and add appreciation to the formula!

Until Next Time!

About Sprint Center, Power & Light District, Light Weight Rail
http://rewebportal.com/powerandlight/index.php?option=com_wrapper&Itemid=8
http://www.kcata.org/

Newsletters

Hey, I've decided to post the newsletters Jordan and I wrote since November 2007 on my blog. We usually only email the newsletters to our family, friends and associates but recently, I've realized that maybe the information on our newsletters may be of use to other beginning real estate investors. The newsletters are kind of like a diary of our investing journey, we've recorded our experience, lessons learnt, etc every month. So here they go...

I am back in Vancouver

I have been back in Vancouver since April this year. Although I still travel once or twice per month to the U.S. for real estate seminars. I am getting tired of flying now but am still excited about going places and meeting new people when I travel. I heard one of the check-in agent say the airline only guarantee to take you from one place to another. They don't guarantee you what time you will get there. I have had flights cancel twice now. That's the annoying part. OK. No more complaining.

I have been investing out of town since April. At first, I was nervous because I don't get to go look at the houses anymore. But luckily, we already have our power team set up in Kansas City, MO and we've been working with them for quite some time now. I trust them to be my eyes and ears. We have two houses that I didn't get to see the final renovated results in person. Both houses are rented out now so I don't think I will get to see it besides in pictures. We have a house under contract and I have never been to that property. But I feel OK, if the inspection pass, I will probably buy it. Check out my website at www.vantagerei.com for some of the houses we have for sale. I will be updating the site soon with more properties.

Top 3 Most Interesting

Jordan and I came up with the Top 3 most interesting things in our real estate investing business.

#3. We drove by one of our properties and saw a bunch of people inside the house. There's a guy outside the house standing by a car with a lot of tools in the trunk. There were 2 or 3 guys standing around the front door. The lawn mower was moved from the back yard to the front yard. We though they were trying to steal our empty house and all they could get was the lawn mower. So we called our realtor, he told us to call the cops. We did. The next day, we found out they were just there to fix the front door. They were called in by the seller. They also removed our broken lawn mower. Oops. Sorry.

#2. Our offer was accepted on this property so we went look at the house for the first time. During the time we were there, the house across the street was quite busy with activities. I saw cars driving back and forth on the street. I saw a mom taking her toddler to that house. I thought to myself "what a family oriented neighborhood." Then after we checked out the house, everything was good and we thought we could go ahead and buy the house. As we were driving away, we saw there were a dozen of sneakers in a variety of colors hanging on the power line. Each color of shoes represented a type of drug. The house across the street was a drug house. We called the realtor and canceled the contract to buy the house.

#1. We got an counter offer, so we went check out the house with our buyer's agent. The house again looked not bad. The neighborhood was ok but as we toured down to the basement, there was a nice 2000 something Jeep Cherokee with leather interior and nice audio system in the garage. I naively asked the realtor if the car comes with the house. The realtor found the registration for the car lying on the garage floor and called the owner. It turned out the car was stolen 3 weeks ago. The teenager from across the street came over and ask if we wanted him to move his car from the back of the house (there was another older car in the back yard). We told him it's ok, we've alreay called the police.


Bonus: Young kids in trouble...we don't know what they did...I only heard the police yelled "get down on the ground" when he was chasing the kids. We saw this happen when we were checking out our investor friend's house.

Time goes by fast...

Wow, it's January 31st already!!! Time goes by so fast. I guess I am enjoying what I do now, hence time goes by quickly. I remember it was torture when I was an employee waiting to get off work, staring at the clock which moved oh so slowly. Donald Trump said something about people who can't wait for the weekend to come and something like he enjoys every second of everyday, no matter if it's weekend or weekday. I think I understand now. It was just the end of 2007 and now it's the end of January...I had an exciting two months...bought 2 rental properties (1 house + 1 duplex = 3 units total). Fixed them up nicely and all are rented out already except the unit we are living in right now. Now I am waiting for the contract on the 3rd house we are buying...I am so excited!!!