Why Real Estate?
Real estate has been one of the most popular method of wealth accumulation in human history. Here's why:
1. Real estate is "real" asset that's easy to understand
You can see and touch real estate, making it a "real" asset that in theory is much more likely to hold its value. Contract this with stocks, bonds, currencies , etc which are "paper" assets that you can't see or touch and therefore have no intrinsic value. Not only is real estate a real asset but it's also easy to understand in principle - you own the property, and someone pays you for the privilege of using it (for example, a tenant renting your property).
2. Real estate has may profit centers
Many people understand buy low, sell high as a strategy for real estate which is also known as appreciation. However, this is only tapping into one of the many profit centers that real estate offers:
3. Real estate unlocks the power of leverage
Lenders love real estate because of its status as a "real" asset, and therefore will lend you money in order to help you buy it, generally up to 80% of the property's value. Contrast this with stocks, which you generally have to buy with 100% of your own money.
As an example, if you had $50,000 to invest you could only buy $50,000 in stocks but you could buy a property worth up to $250,000! To further this example, in order to make a $5,000 profit in one year your stocks would have to return 10% but your property would only have to go up by 2% in order to make the same $5,000 profit and that doesn't take into account the other 4 profit centers of real estate.
1. Real estate is "real" asset that's easy to understand
You can see and touch real estate, making it a "real" asset that in theory is much more likely to hold its value. Contract this with stocks, bonds, currencies , etc which are "paper" assets that you can't see or touch and therefore have no intrinsic value. Not only is real estate a real asset but it's also easy to understand in principle - you own the property, and someone pays you for the privilege of using it (for example, a tenant renting your property).
2. Real estate has may profit centers
Many people understand buy low, sell high as a strategy for real estate which is also known as appreciation. However, this is only tapping into one of the many profit centers that real estate offers:
- Market appreciation - property increases in value over time.
- Forced appreciation - add value to a property by improving it (renovating, adding a bedroom, bathroom, etc.)
- Positive cash flow - money left after expenses deducted from rental income.
- Mortgage paydown - over time, mortgage is paid down until you own the asset outright.
- Tax advantages - investment property owners can claim depreciation as a tax write-off against income earned, lowering their tax bill. Other tax write-offs for investment properties can include vehicle expenses, office expenses, meals & entertainment, etc.
3. Real estate unlocks the power of leverage
Lenders love real estate because of its status as a "real" asset, and therefore will lend you money in order to help you buy it, generally up to 80% of the property's value. Contrast this with stocks, which you generally have to buy with 100% of your own money.
As an example, if you had $50,000 to invest you could only buy $50,000 in stocks but you could buy a property worth up to $250,000! To further this example, in order to make a $5,000 profit in one year your stocks would have to return 10% but your property would only have to go up by 2% in order to make the same $5,000 profit and that doesn't take into account the other 4 profit centers of real estate.
"90% of all millionaires became so through owning real estate.
More money has been made in real estate than in all investments combined."
- Andrew Carnegie, billionaire industrialist.
Spruce's Process
- Generate leads for off-market or distressed properties
- Negotiate purchase of property
- Value add during design, planning and construction phases of project
- Position property to maximize value in marketplace
Joint Ventures
First of all, what is a joint venture and why do people do joint ventures?
A joint venture is a business agreement between two or more parties, with each party bringing something different to the deal. For example, one partner may bring the money to the deal while the other brings the deal and the management expertise to see the deal to completion.
Currently, Spruce Properties offers exclusive opportunities to joint partners interested in being capital partners. Qualified partners must meet the following criteria:
If you’re interested in partnering with Spruce for a project as a capital joint venture partner, fill out the form below and we’ll be in touch soon.
A joint venture is a business agreement between two or more parties, with each party bringing something different to the deal. For example, one partner may bring the money to the deal while the other brings the deal and the management expertise to see the deal to completion.
Currently, Spruce Properties offers exclusive opportunities to joint partners interested in being capital partners. Qualified partners must meet the following criteria:
- Must be a family, close friend or accredited investor
- Amount of capital required depends on size of project
- Source of funds can be savings, RRSP’s, TRFSA’s, line of credit, home equity lines of credit, etc.
- Investments can be as short as 6 months to as long as 5-10 years.
If you’re interested in partnering with Spruce for a project as a capital joint venture partner, fill out the form below and we’ll be in touch soon.
"Every person who invests in well-selected real estate in a growing section of a prosperous community adopts the surest and safest method of becoming independent, for real estate is the basis of wealth."
- Theodore Roosevelt, U.S. President.
Testimonials
I have had the pleasure of knowing Chris Thorne from our University days attending classes together towards the completion of our Commerce Undergrad degrees. His level of professionalism and entrepreneurial spirit was evident on projects we worked on together and now in his career in real estate. Chris is insightful of the market and has a clear direction when taking on projects. As an investor, integrity and sound judgment are the most important qualities to me which Chris possesses in abundance. I truly believe Chris is destined to be one of the great leaders with a positive reputation reflective of our very tight Winnipeg business community and I highly recommend him to any future investor.
- Omar, Investor with Spruce
As a frequent investor with Spruce Properties, I've been impressed by the detailed analysis and due diligence they undertake before selecting a project, the steady growth of the organization, and the professionalism with which they treat all their stakeholders. I would recommend them to anyone - customer, supplier or investor."
- Peter, Investor with Spruce
Working with Chris and Spruce Properties has been an absolute pleasure. Over the past few years we have collaborated on several real estate investment projects throughout the City of Winnipeg. Chris has greta attention to details when it comes to designing modern spaces that will sell or rent for top dollar. I strongly recommend Spruce Properties for anyone interested in learning more about real estate.
- Ben, Investor with Spruce
Chris and his team are hardworking, strategic thinkers. Spruce works hard on creating value and I would highly recommend their involvement on any project.
- Thomas, Investor with Spruce
Spruce Properties is committed to ensuring that their clients have a positive experience. As an investor with Spruce, Chris was quick to respond to emails and keep me updated on any new developments with the project. I was very happy with the outcome and look forward to an ongoing relationship with him and his company.
- Jordan, Investor with Spruce
I have had the pleasure of knowing Chris Thorne from our University days attending classes together towards the completion of our Commerce Undergrad degrees. His level of professionalism and entrepreneurial spirit was evident on projects we worked on together and now in his career in real estate. Chris is insightful of the market and has a clear direction when taking on projects. As an investor, integrity and sound judgment are the most important qualities to me which Chris possesses in abundance. I truly believe Chris is destined to be one of the great leaders with a positive reputation reflective of our very tight Winnipeg business community and I highly recommend him to any future investor.
- Omar, Investor with Spruce
As a frequent investor with Spruce Properties, I've been impressed by the detailed analysis and due diligence they undertake before selecting a project, the steady growth of the organization, and the professionalism with which they treat all their stakeholders. I would recommend them to anyone - customer, supplier or investor."
- Peter, Investor with Spruce
Working with Chris and Spruce Properties has been an absolute pleasure. Over the past few years we have collaborated on several real estate investment projects throughout the City of Winnipeg. Chris has greta attention to details when it comes to designing modern spaces that will sell or rent for top dollar. I strongly recommend Spruce Properties for anyone interested in learning more about real estate.
- Ben, Investor with Spruce
Chris and his team are hardworking, strategic thinkers. Spruce works hard on creating value and I would highly recommend their involvement on any project.
- Thomas, Investor with Spruce
Spruce Properties is committed to ensuring that their clients have a positive experience. As an investor with Spruce, Chris was quick to respond to emails and keep me updated on any new developments with the project. I was very happy with the outcome and look forward to an ongoing relationship with him and his company.
- Jordan, Investor with Spruce
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