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World Outlook Conference 2015. The world is a MAD place…ALWAYS!  Credit crunch  Currency crash  Central Banks devaluations  Greece  Depression 

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Presentation on theme: "World Outlook Conference 2015. The world is a MAD place…ALWAYS!  Credit crunch  Currency crash  Central Banks devaluations  Greece  Depression "— Presentation transcript:

1 World Outlook Conference 2015

2 The world is a MAD place…ALWAYS!  Credit crunch  Currency crash  Central Banks devaluations  Greece  Depression  Run away inflation  Falling Canadian Dollar  Rising/falling interest rates

3 No help from developers Tear down all the trees...and then...call them... Pine Avenue Elm road and Fir Street

4 Economists Economists know a hundred ways to seduce a woman… Economists know a hundred ways to seduce a woman…

5 Real Estate Action Plan: Goal? Well…We are the Boomer Generation

6 Boomers ARE different... We want to and can live longer We want to and can live longer We are "down-aging" We are "down-aging" We LIKE being older! We LIKE being older! We think QUALITY of life We think QUALITY of life We work in smaller companies We work in smaller companies We become Social Media Hounds We become Social Media Hounds And more and more plan to retire in BC And more and more plan to retire in BC

7 Baby Boomer Trend  Trends  Long term Baby Boom trend  Next 20 years...they'll keep coming to BC  A full 61% of Canadians over 65 intend to come to BC to retire!

8 Boomers  Yuppies  Dinks  Dins  Veeps (cialis)  Dildo Mamis: Middle Aged Men In Spandex Mamis: Middle Aged Men In Spandex The Chinese want cars, we want bicycles The Chinese want cars, we want bicycles

9 Forecasting is never easy….  …particularly when  it is about the future!

10 To forecast we have to set the baseline  Macro Principles  Local principles

11 Basic Principles to study Macro:  Inflation or deflation ahead  Timing (Burnaby home)  Trend  Cycles Local:  Inward migration/job creation  Affordability  Demand and Supply  Interest rates

12 Let’s look at Basic Principles to study Let’s look at Basic Principles to study Most important… Inflation or Deflation?

13 We at JREI believe in Inflation as a certainty JREI has held the multi-year position... …that Hard assets are inflating worldwide!!! …that Hard assets are inflating worldwide!!!  Milton Friedman: "Inflation is primarily a monetary phenomena"  This slide is 14 years old

14 Are we telling the truth on inflation? It is not 2%! Shadowstats.com

15 More inflation… the outcome….always! Exactly what we have seen for 50 years Exactly what we have seen for 50 years (My book ‘Forget about location, location, location’ (1998) ) (My book ‘Forget about location, location, location’ (1998) ) In 1998 – the average price in Vancouver In 1998 – the average price in Vancouver was $278,000

16 But Ozzie – it is clear it is deflation! The world has always been full of naysayers America’s Great Depression, Murray Rothbard, 1963; How You Can Profit from the Coming Devaluation, Harry Browne, 1970; The Coming Credit Collapse, Alexander Paris, 1974; How To Profit From A Monetary Crisis, Harry Browne; The Invisible Crash, James Dines, 1975; The Coming Deflation, C. V. Myers, 1976; How to Prosper During the Coming Bad Years, Howard Ruff, 1978; At the Crash of a Tidal Wave, 1995 and Conquer the Crash, 2002, Robert Prechter; The Crash of ‘79, Paul Erdman, The Crash of ‘80, Paul Erdman, Panic of ‘89, Paul Erdman; The Great Depression of 1990, RAVI BATRA; How the World Will Change in the Great Depression of the 1990s, James Dale Davidson and Lord William Rees-Moog; The Death of Inflation, Roger Bootle, 1996, Money for Nothing, Roger Bootle; Bailouts or Bail-ins, Nouriel Roubini and Brad Setser, 2004, T he Great Depression of 2010, Harry Dent America’s Great Depression, Murray Rothbard, 1963; How You Can Profit from the Coming Devaluation, Harry Browne, 1970; The Coming Credit Collapse, Alexander Paris, 1974; How To Profit From A Monetary Crisis, Harry Browne; The Invisible Crash, James Dines, 1975; The Coming Deflation, C. V. Myers, 1976; How to Prosper During the Coming Bad Years, Howard Ruff, 1978; At the Crash of a Tidal Wave, 1995 and Conquer the Crash, 2002, Robert Prechter; The Crash of ‘79, Paul Erdman, The Crash of ‘80, Paul Erdman, Panic of ‘89, Paul Erdman; The Great Depression of 1990, RAVI BATRA; How the World Will Change in the Great Depression of the 1990s, James Dale Davidson and Lord William Rees-Moog; The Death of Inflation, Roger Bootle, 1996, Money for Nothing, Roger Bootle; Bailouts or Bail-ins, Nouriel Roubini and Brad Setser, 2004, T he Great Depression of 2010, Harry Dent

17 But Ozzie – it is clear it is deflation! 1982 – Crash in Vancouver 1982 – Crash in Vancouver 1987 – Stock market crash 1987 – Stock market crash 1989 – Savings and loan crisis – 787 banks closed in US 1989 – Savings and loan crisis – 787 banks closed in US 1990 – Tough market – 5 year rate 13.5% 1990 – Tough market – 5 year rate 13.5% 1993 – Currency crisis 1993 – Currency crisis 1998 – Currency wars – Russian crisis – Mexican crisis 1998 – Currency wars – Russian crisis – Mexican crisis 9/11 – Deflation, deflation 9/11 – Deflation, deflation 2014 – in this room - ! Every time … Deflation is imminent! 2014 – in this room - ! Every time … Deflation is imminent! ALL PREACHED DEFLATION- BUT WE WENT THROUGH THE VALLEYS…. And had more inflation. ALL PREACHED DEFLATION- BUT WE WENT THROUGH THE VALLEYS…. And had more inflation.

18 Massive changes are taking place (in 2001 here) Shift will continue to be from paper assets to hard assets Inflation - deflation ? The likely outcome? INFLATION!

19 I have been in the Real Estate Business for 45 years Inflation is good for Real Estate

20 LAST YEAR we said: It is a mad world… Outcome in uncertain times? The rich will continue to look to park their money Outcome in uncertain times? The rich will continue to look to park their money The rich will continue to flee emerging markets and collapsing currencies and are stampeding into The rich will continue to flee emerging markets and collapsing currencies and are stampeding into London Real Estate (high end residential and commercial!) and other world-class cities – yes including Vancouver, Toronto and Montreal. London Real Estate (high end residential and commercial!) and other world-class cities – yes including Vancouver, Toronto and Montreal. The rich will buy anything and pay any price for things of value….INFLATION ROLLS ROYCE The rich will buy anything and pay any price for things of value….INFLATION ROLLS ROYCE

21 I SPENT THE SUMMER IN EUROPE Real Estate values are rising in Switzerland, Sweden, Norway, Finland, France, Germany Real Estate values are rising in Switzerland, Sweden, Norway, Finland, France, Germany London up 14% - over 1 million 18% London up 14% - over 1 million 18% Dublin up 18% - residential Dublin up 18% - residential Spain – George Soros Fund Spain – George Soros Fund I WILL SPEND 2 MONTHS IN EUROPE THIS YEAR TOO I WILL SPEND 2 MONTHS IN EUROPE THIS YEAR TOO

22 Current hard asset inflation worldwide is already a fact India, China and a slew of India, China and a slew of other Asian markets are experiencing huge real estate inflation Source: Roubini Global Economics

23 Why Real Estate? REAL ESTATE  Physical asset  Local in nature  YOU can control

24 WHY IT IS BETTER than MOST other investments? REAL ESTATE HAS: LEVERAGE, your cash investment maybe 25% or 5% (as an owner) IT PRODUCES AN INCOME MORTGAGE REDUCTION (over time) – Over half the payment going to principal – paid by tenant CAPITAL APPRECIATION GAINS –(spectacular gains!)

25 You have control over your investment Real Estate investment you can affect the outcome personally! Flexibility:  Timing  Trend  Study cycles  You can add value

26 Inflation will help real estate Real Estate offers many ways to make money. You can: Assign it Assign it Mortgage it Mortgage it Rent it out Rent it out Lend on it Lend on it Grow stuff on it Grow stuff on it Leverage it Leverage it

27 Unique advantages and flexibility  REAL ESTATE?  In US:  Defer capital gain – forever  You can write off interest against income  In Canada:  You can defer your capital gain for up to 5 years (by carrying a mortgage)  REAL ESTATE HAS HISTORY!

28 Home price increase

29 2014 Investor with 25 % down payment ( Mortgage redux)

30 Homeowner returns with 5 % down payment

31

32 Real Estate Last year I asked you to:  Buy Phoenix and Las Vegas, Austin, Houston, San Diego  Our RETURNS on full price are up 14% - 29%  On DOWNPAYMENT? Spectacular gains!  Find out what we recommend this year!!!

33 Real Estate Action Plan: Goal? So? Actually based on history Everyone should buy a condo every 5 years! (imagine that you had!)

34 BUT WHAT IF THERE IS NO INFLATION?

35 Take a 300,000 mortgage at 2.9%: Nearly 50% of the payment is going towards principal! (Monthly payments are $1,402.86 per month) (Monthly payments are $1,402.86 per month) Mortgage balance after 5 years is $255,880 or $44,120 (52% of all payments!) has been paid off! Mortgage balance after 5 years is $255,880 or $44,120 (52% of all payments!) has been paid off!

36 Inward migration Net international immigration to B.C. jumped 16% in 2014 to 35,640, There will be 50,000 by 2017 – most settle in LM Korean or China bank set up in British Columbia, rather than say New York State or even Washington. 100% corporate tax break The Immigrant Investor Venture Capital Pilot Program says each investor will be required to have a net worth of $10 million and make a non-guaranteed investment of $2 million over 15 years. These funds will be invested in “innovative Canadian-based start-ups with high growth potential”. Overseas buying of businesses – hotels – golf courses

37 Interest rates 5 year money – still available at below 2.7 % 5 year money – still available at below 2.7 % Variable as low as 2.05% Variable as low as 2.05% LIFE TIME LOWS…! LIFE TIME LOWS…! Short term versus long term.. Short term versus long term.. Investors don’t worry about interest rates…WORRY whether you get the money at all at re-finance! Investors don’t worry about interest rates…WORRY whether you get the money at all at re-finance!

38 What is Poloz doing? Poloz warned we are ‘the most indebted ever’ Poloz warned we are ‘the most indebted ever’ Poloz warned house prices are 30% over valued Poloz warned house prices are 30% over valued Then he brings DOWN INTEREST RATES to easier to buy?! What gives? Then he brings DOWN INTEREST RATES to easier to buy?! What gives? What does he know that he is not telling? What does he know that he is not telling? Outcome? Outcome? Will he shorten Amortization period? DP increases? GO long on your mortgage now! Will he shorten Amortization period? DP increases? GO long on your mortgage now! He must do something or we will continue to have higher prices He must do something or we will continue to have higher prices

39

40 What about affordability?  We have never been affordable in Vancouver  You want to live here or in London, New York, Hong Kong …you have to pay the price  Affordability matters only in small towns

41 Supply and Demand 23 year history in our 2015 OUTLOOK ISSUE

42 49-page Outlook 2015 Forecasting issue All this and more is covered in this BRAND NEW issue: 5 best places to invest in Canada 5 best places to invest in the US 5 best suburbs in Vancouver, Toronto, Calgary, Edmonton, Phoenix and Las Vegas for cash flow 5 best ski resorts with potential 5 best small towns in BC 5 best towns in Alberta What to buy and what not to buy. Forecasts for 2015 for Toronto, Edmonton, Calgary, Vancouver, Okanagan Plus Phoenix, Las Vegas, and other US markets. Only $49

43 OutlookOutlook

44 THE WORLD? Top 5 places to retire in the world … Europe? THE WORLD? Top 5 places to retire in the world … Europe? Spain Portugal Cheap and you get a residence passport? And.,, George Soros buys here

45 What about the US... Will it survive????

46 Will the US survive?...17 trillion economy! A 13.2 Trillion economy!!! Will the US survive?...17 trillion economy! A 13.2 Trillion economy!!! a

47 NO QUESTION ABOUT IT.....IT WILL SURVIVE! (This slide is 6 years old)

48 Yes, but the enormous debt??? It is not the debt…it is the ability to service the debt that matters The world is lending the USA billions for 10 years at 1.8% !!!

49 JREI has argued for years that the policy of devaluation does not work We researched Greece, Germany, Russia, China, Europe, Britain JREI has argued for years that the policy of devaluation does not work We researched Greece, Germany, Russia, China, Europe, Britain THE USA IS PROOF !!! Fastest rising economy and a soaring dollar at the same time! The USA is the locomotive for the world Best employment picture since 1999! Export growth Housing growth Margaret Thatcher

50 Ozzie recommended year 2010-2014 Mesa + 17% Avondale: 2010 - 109,000 Avondale: 2010 - 109,000 2013 - 150,000 2013 - 150,000 Laveen: 2010 - 129,000 Laveen: 2010 - 129,000 2013 - 164,000 2013 - 164,000 Goodyear: 2010 - 167,000 Goodyear: 2010 - 167,000 2013 - 215,000 2013 - 215,000 Glendale: 2010 - 132,000 Glendale: 2010 - 132,000 2013 - 180,000 2013 - 180,000 Mesa: 2010 - 160,000 Mesa: 2010 - 160,000 2013 - 202,000 2013 - 202,000

51 Last year Ozzie recommended In 2014 San Diego +17% San Diego +17% Phoenix +30% Phoenix +30% Las Vegas +21% Las Vegas +21% Seattle + 4% Seattle + 4% Austin +15% Austin +15% Houston +29% Houston +29% PLUS MASSIVE CURRENCY APPRECIATION…OUR INVESTORS ARE IN LVOE WITH US!!! PLUS MASSIVE CURRENCY APPRECIATION…OUR INVESTORS ARE IN LVOE WITH US!!!

52 What about buying with a depreciating Canadian dollar? REMEMBER, THE MOST IMPORTANT THING IS TO HAVE A GOOD DEAL! Let’s look at investing in the US whether the dollar goes down, up or stays the same in say 5 years. To simplify let’s assume that we want to invest $100,000 US and we expect as well a $100,000 profit at the end of 5 years (comprised of annual cash flow and capital gain). We then sell in 5 years and repatriate our investment of down payment, cash flow and profit back to Canada.

53 CANADIAN $ INVESTED IN US REAL ESTATE Step 1 Canadian $ same Step 2 Canadian $ up Step 3 Canadian $ down

54 DOLLAR STAYS THE SAME AT $.80CTS: Invest $120,000 Canadian (Approx. $100,000 US) and make $100,000 US profit in 5 years. 5 years later you get back $120,000 Canadian plus $120,000 Canadian (US dollar profit) = total: $240,000 or a profit of $120,000 DOLLAR GOES UP TO PAR $1.00 Invest $120,000 Canadian (Approx. $100,000 US) and you make $100,000 US profit in 5 years. 5 years later you lose on the exchange and get back $100,000 and you get $100,000 profit = total: $200,000 or a profit of $100,000. CANADIAN INVESTED IN US REAL ESTATE

55 DOLLAR GOES DOWN TO $70CTS Invest $120,000 Canadian (Approx. $100,000 US) make $100,000 US profit in 5 years. 5 years later you get back (approx.) $128,000 Canadian plus $128,000 Canadian (US dollar profit) = Total: $258,000 or a total profit of $136,000 YOUR WORST CASE STILL GETS YOU A SUBSTANTIAL PROFIT IN YOUR BEST CASE YOU BENEFIT FURTHER You lose on the exchange going in, but you win on the profit in US dollars when you repatriate. BUT ONLY if you have invested in a good deal! CANADIAN INVESTED IN US REAL ESTATE

56 We still like...  Las Vegas  Phoenix  Scottsdale  Portland  (We dropped all oil states)  Buy where prices have fallen 20 - 30%...  volume is increasing sharply

57 We still like to buy in the US...  Mesa (We own over 400 units here)  Scottsdale  ( We bought 70 units in Scottsdale in December  Glendale (We have 120 units under contract)  For all suburbs we like in Vegas and Phoenix look at Outlook Issue  Come to booth and register

58 Blue card – 1. Win an I pad – Mini Plus 2. win a $300 consultation with Ozzie Jurock Want info on? Want info on? “How to Structure a US Joint Venture” Seminar Monthly Real Estate Investor Meeting at the REAL ESTATE ACTION GROUP – www.REAG.CA Buying Real Estate by using your RRSP Sign up at our booth…

59 CanadaCanadaCanadaCanada

60 Residentially, there are 2 kind of markets…. Residentially, there are 2 kind of markets…. The very rich and everyone else. Very rich doing fine… The very rich and everyone else. Very rich doing fine… Most others markets will remain flat. Most others markets will remain flat.

61 Canada Top 5: Last 2 years Ozzie recommended (Canada Recommendations for last year alone are up 5% - 30%) 2013 2014 2013 2014 Terrace +14% 18% Terrace +14% 18% Kitimat +15%24% Kitimat +15%24% Ft. St. John +18%12% Ft. St. John +18%12% Edmonton +5%+8% Edmonton +5%+8% Calgary +6% +10% Calgary +6% +10%

62 Canada top 5: This year we dropped all oil producing provinces. Still buy a house in Calgary and Edmonton – but investors stay on sideline Great time to make real stink bids on new condos here This Year : This Year : Etobicoke Etobicoke Hamilton Hamilton Surrey Surrey Richmond Richmond

63

64 For 2015 in BC we like  Prince George  Kelowna In Lower Mainland we like  Richmond  Surrey  Langley  East Village – Vancouver East  Burnaby-Coquitlam-Tsawassen

65 BC Ski resorts  We like  Whistler – bottom in place – US dollar  Sun Peaks  Fernie  Kimberley

66 WE’LL BE OK …long term – all positive WE’LL BE OK …long term – all positive Vancouver increased by 1 million people between 1981 – 2011 IT WILL INCREASE ANOTHER MILLION BY 2041! IN ONLY 2,900 SQ KMS. HUGE CAPITAL INVESTMENT CAPTIVE AREA ON THREE SIDES

67 Still buy:  Trailer parks  Mini Storage  Strata warehouses  Industrial land  Cash flow ALL

68 Don’t buy:  Hotel Condos  Time Share  Quarter Share  Commercial  Office  Farmland in Prairies

69 Be very careful…outside Buy cash flow - anywhere in USA and CANADA USA and CANADA Do NOT buy anywhere else

70 For capital gain: Go --- Where new jobs are Go ---Where the rich play For cash flow – go to US

71 8 astounding predictions 1. Massive money printing means continues – QE 4 will be necessary 2. The bottom is FIRMLY in place in the US real estate market. 3. Vancouver will become a Financial centre powerbase in Canada by 2016. Korean or China banks and other multinational companies will set up in British Columbia -qualifying international business - and their employees. 100% corporate tax break BC will do more business with China – Harper’s new Remnbi deal BC will do more business with China – Harper’s new Remnbi deal Foreign buying of commercial / hotels/businesses will accelerate Foreign buying of commercial / hotels/businesses will accelerate

72 8 astounding predictions 5. Site C Dam will be built. All LNG plants will be built by 2018 5. Site C Dam will be built. All LNG plants will be built by 2018 6. Poloz will reduce interest rates again in March and will announce new rules for mortgage lending…Higher DP and/or shortening of Amortization periods 6. Poloz will reduce interest rates again in March and will announce new rules for mortgage lending…Higher DP and/or shortening of Amortization periods Federal Government brings in foreign investment restrictions on private investors – or tax penalties like Hong Kong, Australia, Austria and elsewhere – BUT embraces the rich Federal Government brings in foreign investment restrictions on private investors – or tax penalties like Hong Kong, Australia, Austria and elsewhere – BUT embraces the rich 7. More people move back into the city everywhere– lifestyle 7. More people move back into the city everywhere– lifestyle 8. People will use more real estate apps: Realtor.ca, Realtor.com, Loopnet.com, Zillow.net !!! 8. People will use more real estate apps: Realtor.ca, Realtor.com, Loopnet.com, Zillow.net !!! JUROCK REAL ESTATE INSIDER will become the largest real estate newsletter in North America --- JREI NEW APP!!!JUROCK REAL ESTATE INSIDER will become the largest real estate newsletter in North America --- JREI NEW APP!!! You will type less and talk more…Siri --- BUY: Dragon soft wareYou will type less and talk more…Siri --- BUY: Dragon soft ware There will be valleys – but we’ll walk through them –ALWAYS!There will be valleys – but we’ll walk through them –ALWAYS!

73 Must do now! Remember dear Real Estate Investor these are crazy times …uncertainty will persist … expect the unexpected …the occurrence of Black Swan events are growing in frequency 1.Protect what you have---it is paramount 2.Sell your losers now – keep cash flow – buy more cash flow 3.Get long term financing in place now on all real estate (not because of interest rates – but further restrictions to slow down RE markets) 4. Have some cash ready - up to 50%…There will be smashing opportunities

74 BUY! Ozzie Jurock's Facts by Email Go to GOOGLE for information, Go to REAL ESTATE BOARDS for stats Get the JUROCK’S REAL ESTATE INSIDER and find out WHAT IT MEANS! The Facts by Email is a weekly real estate email newsletter containing: Feature stories on International, National, USA, Western Canadian real estate; Independent Analysis – Unbiased- No Advertising.

75 TODAY ONLY 1. Jurock Real Estate Insider Facts by E-mail with APP - How, When & Where? - Hot properties you can actually buy weekly - One-year Subscription - $177 value 2. Jurock’s 49-page Outlook 2015Forecasting Issue - 5 best cities US/Canada 5 best suburbs – 5 ski resorts. Economic Analysis, 23 year history of numbers. Accurate predictions - $49 value

76 3. Jurock’s Hotline - Late Breaking News - Hot deals explained - $97 value 4. Invitation to the JREI Landrush 2015 Conference - Always a sellout – Feb, 2028 - Two Tickets $194 value Over $517 Value! TODAY ONLY $ 1 88! Plus Gst

77 The best market... n...is between your ears!

78 We live in paradise THE WHOLE WORLD IS LINING UP… n …at our immigration offices… n YOU are already here!

79 …don’t allow the negative …don’t allow the negative rust to settle in your mind rust to settle in your mind The nay-sayers will always be there….

80 n ENERGY.... ENTHUSIASM... AND EMPATHY!!! Live your life....with

81 n Emanuel Kant: "To be is to do" n Nietzsche: "To be is to be" n Sinatra "Do be do be do" You are here to have fun - like it or not!

82 n...DO SOMETHING!!!...and have fun doing it! Get up happy! Get up happy! Whatever you do...

83 n Have a bubble bath Live a self-actualized life!

84 In the end... n It is all about becoming.... A human being...not just a human doing... It is all about all BECOMING

85 Go for the bird on the roof... n...a bird in the hand makes it hard to blow your nose!

86 Canada’s commercial markets under pressure Commercial and office markets in Calgary and Edmonton under great pressure (Third quarter 525,000 sq. feet negative absorption) Lower Mainland commercial markets dropped by 30% in sales volume - lowest since the start of 2013 Industrial down 15 % Office and retail down 23% Retail space under pressure – big box stores do not hold customers

87 Note!  Building activity foretells future!  Nobel price winning economist ---Vernon Smith studied for 60 years---he found  Builders stop building – they act first!  NOTE: Calgary has is experiencing a third monthly drop of building starts  2 Toronto builders stopped building – give back deposits to pre-sale buyers  2 builders convert buildings to rentals!

88 Main Forecast  Long term all prices will be higher because of inflation  Long term all prices will be higher because of a power shift East to West - Vancouver will become the financial centre.  Short term all prices will decline in oil provinces


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