Cash Cow Properties

Cash Cow Properties by Sunil Tulsiani
www.privateinvestmentclub.ca
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Cash Cow Properties

Sunil Tulsiani


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Copyright Sunil Tulsiani, 2010. All rights reserved.

The right of Sunil Tulsiani to be identified as copyright holder of
this work has been asserted in accordance with the Copyright,
Designs and Patents Act, 1988. This ebook edition published
2010

Cash Cow Properties

Published by Web Direct Studio, 118 Gatley Road, Cheadle,
Cheshire, SK8 4AD, UK.

This eBook is made available at:
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Cover and interior design by WebDirectStudio
www.webdirectstudio.com (website)
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Notice of Rights
All rights reserved. No part of this publication may be
reproduced, stored in a retrieval system, or transmitted, in any
form or by any means, electronic, mechanical, photocopying,
recording or otherwise, without the prior permission of both the
publishers and copyright owner.

Limit of Liability / Disclaimer of Warranty
Whilst the author and publisher have used their best efforts in
preparing this publication, they make no representations of
warranties with respect to the accuracy or completeness of its
contents and specifically disclaim any implied warranties of
merchantability or fitness for a particular purpose. No warranty
may be created or extended by sales representatives or sales
materials. The advice and strategies contained herein may not be
suitable for your situation. You should consult with a professional
where appropriate. Neither the author nor publisher shall be
liable for the use or non-use of the information contained herein.


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The fact that a website or organization is referred to in this
publication as a citation and/or potential source of further
information does not mean that the author or publisher
endorses the information that the website or organization may
provide or recommendations it may make.


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What gives me the right to teach you?

I suppose it is only right that before we get started I
establish my credentials with you. Before I became a
real estate millionaire I was a former Police Officer
believing, like you and like my father taught me that
the only way to make a lot of money was to work
hard.
I was in the Ontario Provincial Police (OPP)
force for fifteen years, in a highly responsible position
which I hugely enjoyed. What changed for me was
family and the birth of my two children. My work
with the OPP required long hours, rotating shifts and
unexpected overtime. It was the thought of not being
able to see my children grow up, of missing out
irreplaceable moments with them, which then led me
to the thought that I really needed to find a business
which required less work and paid more money.
To achieve this I did a brave thing: I took unpaid
leave of absence from my OPP work and wrote down
a goal: to buy a property a month. That would mean
that in my first year I would buy 12 properties.
Admittedly that was a hard and certainly brave
goal to write down but I felt, at the time, that unless I
had a goal like that to motivate me I was unlikely to
get where I wanted to.
In my first year as a real estate investor I ended
up buying 77 properties and making a lot of money in
the process. That was back in 2005. Now I am a
public speaker, a certified Business Coach and, most
importantly, a successful real estate investor.


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In retrospect it all seems to have been plain
sailing but, believe me, along the way I made some
classic mistakes and I learned from them the hard
way.
The valuable knowledge I gained is used when I
mentor Doctors, Teachers, Police Officers, business
owners and blue collar workers, people as ordinary as
you and me, helping them understand what it takes to
become a successful real estate investor.
The secret to making a lot of money is that there
is no secret. Everything we do involves simple, yet
powerful investing strategies. Today, I continue to
take advantage of current real estate investing
opportunities in the Greater Toronto area,
Kitchener/Waterloo area, Orangeville/Berry area and
other parts of this wonderful country.
Dip in, enjoy this book and its information and,
most importantly, use it to take action by picking up
Cash Cow properties which put money in your pocket
every month.
I know it sounds like a clich but if I can make
millions without a lot of money and without any
experience then so can you. When I started my real
estate investing career I knew even less than you do
right now.
I wish you a massive success for yourself and
your family and I hope that you will really start
investing for their financial future.

Sunil Tulsiani,
Toronto, Canada, 2010


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#1 - The Property
Market

In this book, I want to achieve two things: motivate
and educate you. I really want to get you started in
real estate. I hope to persuade you that real estate
investing can still lead you to a lifetime of wealth and
personal fulllment, as indeed it has done for me. No
matter what financial goals you set for yourself, no
matter how little cash, credit, or income you currently
possess, if you choose to, you can still build your fortune
in real estate and I am living proof of that truth.
Just Say No to Excuses

But wait a minute, you say. You cant be talking to
me. In my area of the country, property prices have
climbed sky-high. Besides, I really dont have enough
cash, credit, or time to get started. And even if I did,
real estate seems too complex. I cant even balance
my cheque book.

I have been active in real estate for just over five
years and in that time I have made many of the
mistakes which you would expect a beginner to make
and have been lucky enough to survive my own
ignorance, learn from the mistakes and move on. In


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the process, I have honed my real estate investing
technique to include approaches and techniques which
no one uses.

There is something which I often mention in my
workshops: Fear is an emotion many of us
experience every time it comes to making a change in
our lives. We experience it when changing jobs, or
quitting a job. We experience it when we face change.
We experience it when it comes to investing. And
every time, each time, fear is the result of the same
thing: the unknown.

In my time with the Ontario Provincial Police, as a
Police Officer, there were many times when there was
fear to be dealt with, sometimes in situations I had to
deal with, at other times in fear faced by those around
me. What I found is that fear is a healthy emotion. It
does not go away until it is understood and controlled
and the only way to take action, to go through your
fear and actually face it and do what it is you need to
do so that fear can go away.

This is too short a book to cover such a large subject
here. I mention this though because I want you to
understand that no matter how successful I may seem
now, I too, once, stood where you stand, caught
between two worlds. Needing desperately to get out
of my secure job which I loved but which took all
my time and energy and kept me away from my
family. As you can imagine I was afraid of the
unknown and of the thought of failure which the


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move into real estate investing entailed. In other
words, the choice I faced required me to give up my
security and career and the guaranteed bi-weekly
cheque paid into my bank account and launch my
own business.

Build Wealth in Any Market

Youve heard it said before, The only constant is
change.And when markets change, that change
creates opportunities. Here are just a few examples of
the kind of opportunities which can generate wealth:

When prices appreciate fast, you can fix and flip
for quick profits.
Appreciating prices also give you the tax-free
benefit of cash-out refinances.
Falling interest rates (even with stable prices)
reward you with lower monthly payments and
increased cash flow.
Depressed markets provide you with an
abundance of foreclosures, more motivated sellers,
and bargain-priced properties.
High rates of inflation drive up market interest
rates and cut down short-term demand. Thats the
perfect time to look for seller financing.
High rates of inflation also reduce the number of
newly constructed houses because builders must
pay higher construction costs and higher interest
rates. Fewer housing starts clearly signals an
excellent time to buy. A slowdown in new


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housing always foreshadows a jump in prices as
growing demand outpaces new supply.

These moneymaking examples merely touch upon
some of the strategies you will discover through my
books and they illustrate one central message that I
have advocated throughout my career as a real estate
investor and in many of my training sessions:

Q. Whens the best time for you to invest in real
estate?

A. Right now!

But dont jump to the wrong conclusion. By saying
right now, I dont mean that you can never go
wrong. Rather, I mean that theres never a wrong time
to invest if you choose the right strategy. And thats
what Im going to show you here.
You Must Believe It to See It

Given the large rewards that most beginner and savvy
real estate investors have achieved over the years,
Ive often wondered why most people fail to invest in
real estate. I have personally taught thousands of
people just like you and I have mentored hundreds so
that I can say with confidence that one of the most
serious obstacles to overcome is that most people
simply dont believe in themselves.


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As a result, most people dont believe in their ability
to actually make big money in real estate. Many
people erect a wall of excuses that blocks their vision.
This wall prevents them from seeing just how much
money they can make for themselves and their
families.

Positive thinking. Belief in yourself is where the
power lies to become financially free.

Imagine the Future

Think about your future. Imagine youre reading the
real estate classied ads 10 years from today. What do
these ads of tomorrow say?

Are property prices higher or lower than they are
today? Are rent levels higher or lower than they are
today? If you believe in the continuing growth of our
country (and Canadas economy in the face of a
global credit crunch has proven our ability to manage
our finances), you must believe that just as with every
past decade, todays property prices and rent levels
will look cheap relative to where they will stand 10
years from now.

A new survey suggests almost half of Canadians near
retirement feel they are not financially prepared to
live comfortably after they leave the workforce.


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A poll of people over age 45 done for the Canadian
Institute of Actuaries found that 42 per cent of
respondents indicated they were unprepared for
retirement.

Federal minister J im Flaherty has proposed modest
increases in Canada Pension Plan payroll premiums
that would be phased in over time, while the Canadian
Labour Congress is pushing for a doubling of
benefits.

When I read the results of surveys such as this, two
thoughts come to mind:

1 Why didnt more of these now-disappointed
workers invest more money in real estate instead of
whatever else they are investing in?

2 And more important, why dont they at least
invest in one cash-flowing property?

Some people are now rushing into many, probably
questionable and definitely not high-paying forms of
investment, instead of looking to invest in real estate,
only serves to reinforce my message here. Theyre
putting thousands of dollars into savings accounts,
GICs and other low-earning investments. Some
people believe that real estate investing is a risky and
complicated business. Some even believe that you
need a lot of money to make money. Yet, nothing
could be further from the truth.


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Two False Beliefs on real estate investing: In his
popular book The Four Pillars of Investing (McGraw-
Hill, 2003), William Bernstein repeats two widely
held myths of modern investing. You may have heard
them before. But lets look at them again here:

1. No guts, no glory. Bernstein claims that if you
want to increase your potential rewards from
investing, you must learn to accept more risk.
Bernstein writes, Whether you invest in stocks,
bonds, or for that matter real estate, you are rewarded
mainly for your exposure to one thingrisk.

2. The market is smarter than you are. Here,
Bernstein merely repeats the efficient market theory
of modern finance. In an efficient market, all asset
prices supposedly reflect their true market value.
According to Bernstein, you can never find bargain-
priced investments.

I can personally tell you that , both of Bernsteins so-
called pillars of investing are not accurate. When you
invest in real estate, you gain these two profit-
generating benefits:

1 In real estate, you are not merely being
rewarded for taking risk. You are rewarded for getting
the right property at below market value. Then you
just need to attract the right tenants who will pay your
mortgage and other costs. Is there a risk involved?
Absolutely! But in real estate you can minimize the


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risk by doing your due diligence prior to going firm
with your offer.

2 You can beat the market. There are a lot of
books, courses and seminars which sell you a
system. Some work and some are very complicated.
If you are intent on beating the market however here
is how: Get to know the unemployment figures,
mortgage rates, how many days it takes to rent or sell
a property in your market and their potential growth
rates. There are many properties you can research on
the web or through a local real estate agent. Make
sure you get all the figures you need and then, make
sure that what you have makes sense in terms of the
deal you are thinking of putting together.

I often stress that it is very difficult to make money by
doing what everybody else is doing in exactly the
same way. In order to make money it is important to
do things differently and stand out from the crowd.

Summing up, no doubt, todays real estate market will
challenge you. But if you really know how to find
money making opportunities in the Greater Toronto
area or anywhere in North American you will be on
your way to making lots of money for you and your
family.


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Your step by step plan

Write down your goals. When I started I actually took
a piece of paper and wrote down: I will invest in one
property per month. I was a dreamer and I hope you
are too!

The first thing you need to do is write down your
goals. Not just think about them but actually take that
first, concrete step of writing them down. Those who
do not write down their goals almost never realize
them.

Set goals now. If you want to get rich you need to
write down your goals. I know this sound simple and
even ridiculous because it is such an obvious thing to
do. But it is going to be the central point of your
success.

1 Write down five simple goals which you want
to reach in the immediate future. Use simple, direct
language and make sure that what you write provides
you with a clear guide to where you want to be a short
time from now. Be concrete in what you write. For
example: I will invest in two properties in the next
six months.

2 Write a list of affirmations which reflect the
aims of your goals. For example: I am financially
free., I am wealthy. Say these affirmations to


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yourself at least twice daily. Reinforce them in your
mind.

3 Get your credit report and monitor it. I
recommend you go to www.equifax.com/home/en_ca.
Do not opt to get the free report. Rather choose to get
the one you pay for as it is available almost instantly
and it is the one the lenders get to see anyway. Once
you do get it, go through it carefully and make sure
there are no errors.

3 Read the real estate section in your local
paper (in order to begin to get some knowledge). The
Toronto Star or the Globe and Mail are perfect for
this. Alternatively your local paper is a good place to
start.

4 J oin a real estate investment club (and I hope
you will think about joining us here at Private
Investment Club: www.privateinvestmentclub.ca).

6 Read at least one more book on real estate
investing within the next three months. Also read at
least one book by personal coaches such as Tony
Robbins, Wayne Dyer, Robert Kiyasaki, Robin
Sharma, and Napoleon Hill.

7 Commit to making your first real estate
investment within the next three months. Now, this is
a scary thought! I am asking you to show
commitment (a word which is scary in its own right)
but think that in my example, when I decided to take


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the plunge I committed myself to buying one property
per month. Thats twelve properties a year! I am not
asking you to copy this. I am asking you to commit to
making one purchase in the next three months, but
unless you decide to take this action and commit
yourself nothing will happen.

8 Get a mentor. Most successful people in the
world get a mentor or a coach. They could be an
investor who is successful already. They could be
anyone who has done this and you have access to
them. It is really important that you have someone to
talk to who will help you stay on the path you have
chosen until you reach your goal of financial freedom.
Secrets of getting money to invest in
real estate

Now, if you have money to invest by all means go
ahead and invest in Cash Cow real estate properties.
But if you dont lets see how you can make lots of
money even if you think you have no access to
money. Remember, these are the methods I followed
and now you can too!

1. The first may be an obvious one but it
is really important. If you are renting, stop!
You need to find a way to own your own
property. How, I can almost hear you ask.
The first step is finding a good mortgage


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broker for you area. If you have not got one
then feel free to send us an email at:
service@privateinvestmentclub.ca and we
will be only too happy to help you. Banks
will lend you with as little as a 5% down
payment for your personal or secondary
property and 20% for an investment property.
In some cases they have been able to lend
with 10% down payment and the rest coming
from Vendor Take Back (VTB). In some
instances money can be gifted to you or you
may even be able to borrow from someone
you know. You could even get yourself a line
of credit to be used against your 5% down
payment and closing costs. You may want to
get yourself a property anywhere you can,
rent the basement and get yourself a monthly
cash flow. This is particularly good when you
can get yourself a variable mortgage as low as
2%.
2. Save money. When it comes to
saving money you really need to be inventive.
In my workshops and training sessions I point
out that you are directly responsible for what
will happen to you. So, grab the bull by the
horns and work out where you are wasting
money every month. How about, for example,
negotiating a better insurance rate for your
car, house, or indeed any other insurance you
may be paying for? You will also need to
work out ways to economize at a personal
level: fewer trips to Starbucks, for instance,


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and their $4-$5 coffees, packing your own
lunch and reducing pizza take outs. This is
also a good time to look at subscriptions such
as long-distance travel plans, Cable TV
subscriptions, phone bills which inflate your
costs without need. The trick is to become
cost-effective and save money without
becoming cheap by working out where you
can reduce waste rather than cut back on
essentials.
3. Dont Put the Car before the
Investment Property. If you own a car thats
worth nearly as much as a down payment on
an investment property, sell that car. Get rid
of those big cash-draining car payments. If
your car is mostly paid for, theres a good
part of the money you need to move up to
investment property. If youre thinking about
buying a more expensive car, stop! Until you
can afford to pay cash for a car, drive the
least expensive, dependable pre-owned car
you can find. For too many investors, their
car is the enemy of their investment program.
If you ask me, today, I do not buy a new car
even though I can afford it. I would rather
invest that money into a Cash Cow property.
4. Use the equity in your house. One of
the best ways to raise money for Cash Cow
properties is to use the equity of your house.
Lets say, by way of example, that your
property is now worth $300,000 and you have
a mortgage of $200,000. Your equity in this


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case would be $100,000. You simply go to
your bank and refinance your mortgage to
cash out the equity. Lets say your bank
agrees to give you $75,000. You now have
$75K to finance your Cash Cow property.
5. I will be writing another book on this
subject alone but for now see if your close
friends, neighbors or family members would
like to earn 10-12% on your investment. They
will simply lend you the down payment and
you will borrow the rest from the bank.
Remember that you will only invest in
properties which make sense numbers wise. If
you do not have close friends or relatives then
the best way to raise money is through a real
estate club. There you will meet people with
money to invest who are sick and tired of
settling for 2% - 3% returns on their money.
There are some good real estate clubs in most
large cities like Toronto, Vancouver or
Montreal. Before joining a real estate
investment club carry out the following
checks:
a. Do the organizers of the club invest,
themselves, in todays market?
b. Is the guru teaching himself/herself
or is the presentation farmed out to a
marketing company to simply sell
you courses, DVDs and books?
c. Is the head of the club successful?
d. Does the club meet monthly or at
least quarterly?


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e. Is the leader of the club successful
investing in the same type of
properties you are being asked to
invest in?
f. Are the meetings intended to sell you
extra courses, books, DVDs and
share theory or are the intended to
help the members of the club actually
invest?
g. Are you able to network and get
advice?
h. Are you able to get access to money
for your Cash Cow property?
i. Are you able to get access to inner
circle properties which are not
available to the general public?

It is important that when you do join a real estate
investment club the meetings (ideally every three
months) should inspire you to take positive action and
invest in property.


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#2 Why Invest in
Real Estate
Now youre going to see why real estate investing
offers you greater opportunities to build wealth than
any other type of investment. With real estate, you
can make money in dozens of different ways. For
starters, here are four potential paths to profit:

1. Appreciation
2. Positive cash flow
3. Mortgage paydown
4. Instant equity

Appreciation in Market Values

One of the best reasons to invest in real estate is
appreciation. Although real estate values go up or
down on a short term basis, in the long term (typically
over a 10 year period) they always go up.

I will give you an example. Lets look at what
happened to the real estate market between J anuary
1988 and December 2009. In that time we have had
crashes, depreciation, prices shot up, there was
another decline, yet throughout this period real estate
values show a steady growth. In Toronto alone the


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average price for a property went from $200,000 to
$391,360 (almost double in value). If, at this time,
you had bought a property worth $200,000, had paid a
down payment of 20% (thats $40,000). Over this
time your mortgage would have been paid off by your
renter and your $40,000 would have appreciated by
almost $350,000 which means your investment,
today, would be almost double its original price. What
if, at the time, you had three properties like this? You
would be a millionaire today!

Okay, you say, but that was then and this is now.
Surely prices cant continue to increase as they have
in the past? I answer, They can and they will. And
to drive the point home I would ask you to just look at
the previous example once again. In fact I believe that
prices will more than double in the future allowing
you the opportunity to make money.

It is worth casting a look at:
http://www.realosophy.com/Analytics/Main.aspx
which shows just what has happened with Toronto
real estate values over time from figures reported by
real estate agents themselves.

To see the future and understand a little more of what
I am saying weigh together these dominant trends:

1 Population growth. During the next 20 years,
the population of Canada will increase by at least 10
million people.


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2 Incomes. During the next 20 years,
employees, entrepreneurs, professionals, and business
owners will see their incomes rise by over 50 percent.

3 Vacation homes. During the next 20 years, at
least 3 million more Canadians (and foreign
nationals) will choose to buy vacation homes within
Canada and the United States.

4 Echo boomers. During the next 20 years,
more than 10 million echo boomers (children and
grandchildren of the baby boomers) will enter the
housing market to buy homes.

5 Restrictions on development. During the next
20 years, zoning, environmental laws, building
regulations, and land shortages will continue to
restrict development in those areas where most people
want to live.

6 Immigrants and minorities. Canadas visible
minority population is growing much faster than its
total population: 25% growth from 1996 to 2001
versus 4% growth in the general population. This is
due largely to increased immigration from Asia,
Africa, the Caribbean, Central and South America and
the Middle East. In 2001, about 70% of the visible
minority population was born outside Canada. From
1981 to 2001, Canadas five largest citiesToronto,
Montral, Vancouver, OttawaGatineau and
Calgaryreceived large shares from West Asia,
South Asia and East Asia. Currently only 30 percent


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of our fastest growing immigrant and minority groups
(Hispanics, blacks, Asians) own their own homes.
With government programs and lender outreach
efforts in full swing, during the next 20 years people
in these minority and immigrant groups will continue
to buy homes in record numbers.

7 Investors. During the next 20 years, more
than 10 million baby boomers will need retirement
income. They will increasingly turn to real estate
investment to meet this need. Demand for property as
an investment will continue to explode.

You dont need advanced knowledge of economics
and demographics to recognize the fact that every
major social trend is pushing real estate prices
upward.

In real estate you can make money the moment you
buy a property. Unlike most other investments, you
can buy real estate for less than its market value.
Distressed owners, owners who want to sell fast and
hassle-free, lenders who own foreclosures and poorly
informed sellers frequently part with their properties
at prices (or terms) that immediately put dollars into
your pocket.

Some investors flip properties they buy at a bargain
price to generate quick cash. Others hold for the long
term and use the bargain price (or terms) to boost
their long-term profits. Either way, bargain prices fill
your bank accounts with money.


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As you might suspect, most small-time investors
mismanage their rental properties. Why? The reasons
can be many and bear in mind, this is one of the best
ways to get a Cash Cow property, a tired landlord, a
lazy landlord, a landlord who is mostly out of town,
someone who is no longer really interested in the
property and so on. The bottom line is that you can
simply grab the property for an excellent price or
great terms and start building your wealth.


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#3 Cash Cow
Properties

So what is a cash cow property? Simply put it is a
property which puts money into your pocket every
month after paying off all expenses. It is important,
when doing your due diligence, to take into account
all expenses involved prior to acquiring it.

The term "cash cow" is a metaphor dating
generations. The term once referred to a high yield-
producing dairy cow. Once the cow was bought, the
cow continued to produce milk throughout its
lifespan, providing the farmer with a living income. A
Cash Cow property is exactly the same.

One of the benefits to owning a cash cow is the
minimal monetary outlay required to acquire the
property. Your property is being paid off by someone
else (the renter) and you get to enjoy the benefits of
surplus cash. What a wonderful way to get wealthy!

Buy below market value!

Those who attend my real estate investing training
sessions will know that one of the most important


28
things you should do is to invest in below market
value properties or have the vendor give you a VTB
(Vendor Take Back) mortgage, which is also known
as seller financing. As long as the numbers make
sense it is ok to set up a VTB and borrow the rest
from a bank.

How do you do know that you are really buying
below market value? The answer is very simple. You
will need to get the sold comparables (sold comps) for
properties in the area. This simply means that if the
property you are thinking of investing in is 1000
square feet the property next to it should be a similar
price provided it is similar in nature.

In Canada you need to use a licensed realtor to give
you this type of information. At Private Investment
Club (PIC) we provide sold comps to our own
members (some conditions do apply). In order for a
sold comp to be meaningful it should not be more
than six months old.

Cash Cows

In todays confused real estate market it is best to buy
properties which generate a positive cash flow every
month. These involve a lot less risk and they provide
you with great returns so when you find a winner
dont wait too long before making a decision. At the
very least put it under contract with conditions (see


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your lawyer for advice). Then do your due diligence
to make sure all the expenses are accurate. Remember
that unless you follow through and take action,
nothing will happen.

With cash cow properties it is important to remember
that its no good having a place that produces a good
yield when rented but is empty for long stretches of
time. Your property needs to be in an area thats
desirable by the type of renters who will pay off your
mortgage. Some things to consider include access to
public transportation, surrounding shopping malls,
plazas or shops, access to good schools, the crime rate
in the area and the vacancy rate.

How to buy a cash cow

This is where the rubber hits the road. Pay close
attention to this section and you will be in a good
position to provide handsomely for your family.

1. Only work with vendors who, for whatever
reason, need to sell their property quickly.
Simply Google words like Below market
value property or Cash Cow property or
motivated seller, quick sale, etc. Also
check your local papers. I find that the
Toronto Star is a good place to find good
properties.


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2. Find newly developed properties in your area.
For cash flow purposes look for condos,
town-houses, semi-detached homes (they all
do well in terms of generating cash flow).
Detached homes with separate basement
apartments also do well. Go to the builder
when they have sold most of the properties
and they are stuck with just a few units.
Developers, at this point, have made their
money and are motivated to sell quickly at
below market value.
3. Connect with a knowledgeable real estate
agent in the area that you want to invest in.
Be careful, however, to only deal with an
agent who is also an investor. They should
have several properties tucked in their belt. It
is a given that a good agent will be able to
find you good properties.
4. If you know someone who is a successful real
estate investor get to know them better and
take them out to lunch. Ask them questions
about their real estate investing or better still,
if they have a Cash Cow property in mind,
consider going into a joint venture with them.
5. Once again do what I did. I attended most
of the meetings in the Toronto area and I
connected with many like minded, successful,
real estate investors. They always seem to get
many great properties. J oin a real estate
investment club (like
www.privateinvestmentclub.ca).


31
6. Tell everyone you know that you are a real
estate investor and marvel at the magic of
word of mouth publicity. Someone you know
knows someone who can help you set up your
Cash Cow property.
7. Build relationships with lawyers (those who
are active in real estate and divorce),
mortgage brokers, mentors, brokers. Make
sure you create a win-win situation by
offering them something for bringing great
offers to your attention.


32
#4 - How to Invest in
a Cash Cow Property
Using Little (or
None) of Your Own
Cash

I know this is a very exciting yet controversial
method of getting properties. Some of you probably
dont even believe this exists, I know I didnt prior to
2005. I thought it was a scam or a way for people to
sell their courses. I have attended many of these
courses/bootcamps and some of them are structured
so that all you can do is keep on buying their
advanced courses.

So, have I invested in real estate using no money
down strategies? You bet! In fact this is the only way
for you to become super wealthy.

As the reader of this book I am going to share with
you some secrets I have shared with my elite clients
whom I coach. It is very important that you
understand this section, it can make you a millionaire
(but you need to take action for that to happen).


33

Its true. You can profit in real estate without much
cashespecially if youve strengthened your credit
score. But even when you lack platinum-power credit,
youve still got a variety of little-or-no-cash-down
techniques that you can draw on to get you started as
a real estate investor. This is something I did and I
learnt the hard way and you can too, only you get to
benefit directly without having to go through the
process of making the mistakes I made.

How to buy a property with no credit
and less than $1000 down

Remember this is something I have done on a
repetitive basis and there is no real reason why you
cannot do it also.

Here goes. First you find a property using the
methods in this book. The moment you do, put it
under contract with $1000 down (remember you are
dealing with motivated sellers). Then you need to find
someone who has little time but needs to earn a high
rate of return on their investment. Lets say you
followed my advice and have joined a real estate
investment club. You simply take your deal there and
present it to your fellow real estate investment club
members. You show those who have money to invest
why your property is a good investment and explore
the option of going into a venture together. Your new


34
partner will take on the mortgage and put down the
money and you will do all the work. This entails:
finding the property, getting it cleaned and fixed,
finding the renter and overseeing it (or arranging for a
third party who answers to you to oversee it on a daily
basis). For your sweat equity you will get up to 50%
of the profits.

Here is an example:

The property is worth $200,000
Your partner puts up 20%
Plus closing costs $45,000
You buy it for $175,000

Your agreement says you are a 50% partner

Lets say in 10 years the property appreciates to
$300,000. You will have paid approximately $40,000
worth of mortgage payments. Then our equation looks
a little like:

Property bought for: $175,000
Appreciation $125,000
Mortgage pay down $40,000
(25 years amortization @4%)
_____________________________________
Total profit: $165,000

Your investor gets 100% of his initial down payment,
then the two of you will split the profit of $165,000


35
minus any closing costs, 50/50. Note: you will also
get 50% of the positive cash flow as well!

How to make money from properties
with no equity

Here is another way to invest in a Cash Cow property
without using any of your own money and you do not
even need an investor or partner which means you get
to keep 100% of the profits.

Whats more this is the one scenario where you do not
even have to buy the property below market value.
This works mostly outside main cities and for
properties which can be rented by two separate
families (i.e. basement and first floor).

Heres how it works:
1. Find a landlord who has grown tired of his
property (or someone who no longer wants
to own a Cash Cow property). Lets say its a
semi-detached house with a finished
basement with a side entrance.
2. Check the price. In our case lets say the
value is $300,000. The vendor is motivated
but does not want to reduce the price.
3. Find out what kind of return the vendor
thinks he can get (typically 5% - 8%). In
order for this to work you need to make


36
sure that rents from the upper and lower
level of the property are, collectively,
higher than the operating costs you are
carrying (which include mortgage
payments and any set up costs).
4. Tell the vendor that instead of taking a
discount you will ask him to lend you the
down payment and, in return, you are willing
to offer them 8% - 12% return on their
investment with monthly interest payments.

Here is an example:

Property bought at $300,000
20% down payment needed $60,000
(VTB)
VTB (seller finances) the 20%
Mortgage $240,000

Total monthly carrying cost (fix-ups, VTB and
closing costs: $2,000
Rent for both levels: $2,300
Money in your pocket: $300

Word of advice: Not all banks will do no money
down deals but some will. You need to have a good
relationship with your banker. If you need any help in
this area simply send us an email at
sevice@privateinvestmentclub.ca and we will help
you connect with someone in our inner circle.


37
Learn to evaluate a property quickly

Remember for a single property, the values are
derived from sold comparables. But the thing about
Cash Cow properties is that you need to do your
proforma quickly. I personally have developed a
quick formula for Canada where you plug in the
numbers and within minutes you know if the property
will make you money or not and just what kind of
profit margin you should expect to make.

If you want to develop your own formula make sure
you take most of the anticipated expenses into
account. If you would like to use my own formula,
simply send me an email at
service@privateinvestmentclub.ca requesting a
proforma sample and I will happily send you a copy.


38
#5 How to build a
Portfolio

In order to build a portfolio all you have to do is
figure out what level you would like to reach and
simply repeat the process.

For example, suppose you say that you would like to
build a portfolio of ten properties this year. This can
be accomplished by using the investor/partner method
whereby you find great investment opportunities or
connect with people who can find great money real
estate opportunities and present to people who would
like their money to work hard for them.

I can assure you from personal experience that right
now there are so many people in Canada and in the
US who would like to partner up with you. They are
looking for an easy way to make money in real estate
and you can be he person who helps make this happen
for them.

Since this is a huge subject in its own right, I will
shortly be writing a book on the subject covering just
how you can raise all the money for real estate.

For now however there are two excellent strategies
you can try:


39
Attend your real estate investment club
meetings on a regular basis (at least every 90
days) and network.
Place an ad in a newspaper such as the Globe
and Mail or the Toronto Star. You may also
Google Free ad in Ontario and place your
ad on the internet. Some of the websites to
consider are: http://www.kijiji.ca/,
www.craigslist.org, http://www.ebay.ca/ and
http://www.nowtoronto.com/ (Now
Magazine).

To help you get started here are two sample ads:

Would you like to make 12% - 15% return on
your money secured by solid properties? Call
XXXXXXX

Are you looking to invest in properties which are
below market value? Do not require you to do any
fixing and are expected to make 25% return? Visit
our website: XXXXXX or email us on: XXXXXXX

Build a database of the people who respond to you.
When you have a solid property you simply go
through your list to see who is interested in a joint
venture with you.

Remember this will work right here, in Canada,
whether you want to get one property or 50, the
process is the same. Your financial independence is in
your hands. You need to take action.


40

J ust the other day I was in the dressing room after
finishing a game of squash. A friend walked by and
asked a typical question: Sunil, is this the right time
to buy a property?

My answer is that if you get properties below market
value and they produce cash for you every month then
this is the best time to invest. Even if the market
softens a bit you will most likely do well.

Right now you can get access to mortgages for less
than 2.5% - thats like getting money for FREE!

This is the time for you to take advantage of great
properties, In my opinion there will be a lot of new
millionaires in the next 3 5 years and also there will
be a lot of people who will sit on the fence and do
nothing. They will be waiting for a dollar to come in,
waiting for the USA market to go up, waiting for the
media to tell them this is the right time to buy a
property. It is up to you to decide where you want to
be.

I can assure you of one thing: my members, my
friends and I will be making a lot of money in the
upcoming lucrative market.

I would encourage you to also take action towards
your financial freedom. I wish you all the success!


41

About the Author
Sunil Tulsiani is
Canadas pre-
eminent real estate
investment guru.
He is also a
certified business
coach and an
amazing trainer.
His mission is to
help those he
mentors become
millionaires over
the next five years.

A former member
of the Ontario
Provincial Police
(OPP) Sunil he is
commonly referred
to as the Wealthy
Cop amongst his
members and
friends. His
lectures, training
seminars,
workshops and
writings have helped thousands of average real estate
investors succeed.


42

Testimonials about Sunil

"I first met Sunil Tulsiani in January 2009 at the first PIC [Private
Investment Club] meeting I attended. I joined PIC that same day
and remain grateful to the friend who told me about PIC and took
me to my first meeting.

Attending PIC meetings introduced me to wonderful young people
who were and are energetic, enthusiastic and very eager to
succeed..I learned so much from them and their ability to forge
ahead.

As part of my PIC benefits, I was entitled to two free mentoring
sessions with Sunil. I found him thoughtful, smart, interested in
and focused on me and he initially helped me to articulate my
goals.

More recently, in October 2010, I decided to sign on with Sunil as
my business coach and the process has been excellent. It took me
a few sessions to fully articulate what I wanted to do and Sunil had
the patience to let me explore where I truly wanted to go. Once I
decided on a plan, he has been behind me..and sometimes, in
front of me, all the way. With probing questions, with direction,
with suggestions, with ideas. Always pushing me, but with
courtesy and respect. Now that Ive launched my new business in


43
a major way, I continue to work with Sunil.hes my sounding
board and certainly my go to person in terms of developing my
business and confirming my own style and way of doing business.
I appreciate having him in my corner and his business acumen and
support is invaluable."

Michaele-Sue Goldblatt, MSW
Founder, WE Women Entrepreneurs

"I met Sunil Tulsiani almost two years ago. Up until then I have
been living from paycheque to paycheque, never feeling like I
would ever own or obtain property of my own. I never took the
initiative to even look at the possibility of owning property. I
assumed and accepted that this would never happen for me.

With Sunils help I am now the proud owner of my first investment
property located in Kitchener, purchased at below market value
and producing positive cash flow. I now have instant equity and
am working on purchasing a second property. It was the scariest
thing Ive every done and at the same time the most rewarding
and exhilarating. I would never have been able to do this without
the support and generosity of Sunil. He believed in me, even when
I didnt.

Thanks for everything!"

- Liane Rohm

"Sunil is a confident, trustworthy friendly knowledgeable person.
He is truly a high caliber person with good ethics and motivational
skills. He coached me to become a confident real estate investor.
He believed in me and built confidence in me when I wasnt even


44
sure about myself.

I had very little or no knowledge about real estate investment
before meeting Sunil. He coached me and persuaded me to do my
first investment in less than 5 months after joining his coaching
sessions. I came to know about an exclusive offer in down town
Toronto. The property is in the heart of downtown with an
amazing view. It didnt even require any upgrades or repairs and
already rented with good cash flow. I also learnt how to do no or
very little money down deals.

In another few weeks time I also came to know about another
amazing deal through the mentoring program. The property is
located in downtown Kitchener, and it is a below market value
property and producing positive cash flow. And I made this
investment 3 weeks after the 1st one, all less than 5 months into
the mentoring program.

Sunil made me a very happy person and brought so much
confidence in me. I cant wait to do the next investment. I highly
recommend anyone to get coached by Sunil. If I can do this with
Sunils help, any one can. I couldnt have asked for a better coach
than him.

Thank you very much Sunil"

- Uthaya Harichandra


45

Find out more:

J oin the thousands of investors who benefit from
networking with like-minded people and the
specialized knowledge that comes with access
through the Private Investment Club
(www.privateinvestmentclub.ca).

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