World Outlook
Conference
2015
The world is a MAD place…ALWAYS!

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





Credit crunch
Currency crash
Central Banks devaluations
Greece
Depression
Run away inflation
Falling Canadian Dollar
Rising/falling interest rates
No help from developers
Tear down all the trees...and then
...call them...
Pine Avenue
Elm road
and
Fir Street
Economists
• Economists know a hundred
ways to seduce a woman…
Real Estate Action Plan: Goal?
Well…We are the
Boomer Generation
Boomers ARE different...
• We want to and can live longer
• We are "down-aging"
• We LIKE being older!
• We think QUALITY of life
• We work in smaller companies
• We become Social Media Hounds
• And more and more plan to retire in BC
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!
Boomers
 Yuppies
• Mamis: Middle Aged Men In Spandex
 Dinks
 Dins
 Veeps
(cialis)

Dildo
• The Chinese want cars, we want
bicycles
Forecasting is
never easy….
…particularly when
it is about the future!
To forecast we have to set
the baseline
Macro Principles
Local principles
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

Let’s look at
Basic Principles to study
Most important…
Inflation
or
Deflation?
We at JREI
believe in Inflation as a certainty
JREI has held the
multi-year
…that Hard assets
position...
are inflating
worldwide!!!
 Milton Friedman:
"Inflation is primarily a monetary
phenomena"
 This slide is 14 years old
Are we telling the truth on inflation?
It is not 2%! Shadowstats.com
More inflation… the outcome….always!
Exactly what we have seen for 50 years
(My book ‘Forget about location, location,
location’ (1998) )
In 1998 – the average price in Vancouver
was $278,000
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, The Great
Depression of 2010, Harry Dent
But Ozzie – it is clear it is deflation!
• 1982 – Crash in Vancouver
• 1987 – Stock market crash
• 1989 – Savings and loan crisis – 787 banks closed in US
• 1990 – Tough market – 5 year rate 13.5%
• 1993 – Currency crisis
• 1998 – Currency wars – Russian crisis – Mexican crisis
• 9/11 – Deflation, deflation
• 2014 – in this room - ! Every time … Deflation is imminent!
• ALL PREACHED DEFLATION- BUT WE WENT THROUGH THE
VALLEYS…. And had more inflation.
Inflation - deflation ?
The likely outcome? INFLATION!
Massive changes are taking place
Shift will continue to
be from
paper assets
(in 2001 here)
to hard
assets
I have been in the Real Estate Business for 45
years
Inflation is good
for Real Estate
LAST YEAR we said: It is a mad world…
• 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
• 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
I SPENT THE SUMMER IN EUROPE
• Real Estate values are rising in
Switzerland, Sweden, Norway, Finland,
France, Germany
• London up 14% - over 1 million 18%
• Dublin up 18% - residential
• Spain – George Soros Fund
• I WILL SPEND 2 MONTHS IN EUROPE
THIS YEAR TOO
Current hard asset inflation
worldwide is already a fact
India, China and a slew of
other Asian markets are
experiencing huge real estate
inflation
Source: Roubini Global Economics
Why Real Estate?
REAL ESTATE
 Physical asset
 Local in nature
 YOU can control
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!)
You have control over your
investment
Real Estate investment
you can affect the
outcome personally!
Flexibility:
 Timing
 Trend
 Study cycles
 You can add value
Inflation will help real estate
Real Estate offers many ways to
make money.
You can:
• Assign it
• Mortgage it
• Rent it out
• Lend on it
• Grow stuff on it
• Leverage it
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!
Home price increase
2014 Investor with 25 % down payment
(Mortgage redux)
Homeowner returns with 5 % down payment
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!!!
Real Estate Action Plan: Goal?
So? Actually based on history
Everyone should buy
a condo
every 5 years!
(imagine that you had!)
BUT WHAT IF THERE IS
NO INFLATION?
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)
• Mortgage balance after 5 years is $255,880 or $44,120
(52% of all payments!) has been paid off!
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
Interest rates
 5 year money – still available at below 2.7 %
 Variable as low as 2.05%
 LIFE TIME LOWS…!
 Short term versus long term..
 Investors don’t worry about interest rates…WORRY
whether you get the money at all at re-finance!
What is Poloz doing?
 Poloz warned we are ‘the most indebted ever’
 Poloz warned house prices are 30% over valued
 Then he brings DOWN INTEREST RATES to easier to buy?! What gives?
 What does he know that he is not telling?
 Outcome?
 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
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
Supply and Demand
23 year history in
our 2015
OUTLOOK ISSUE
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
Outlook
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
What about the US...
Will it survive????
Will the US survive?...17 trillion economy!
A 13.2 Trillion economy!!!

a
NO QUESTION ABOUT IT ...
..IT WILL SURVIVE!
(This slide is 6 years old)
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% !!!
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
Ozzie recommended
year 2010-2014
Mesa
+ 17%
• Avondale:
2010 - 109,000
2013 - 150,000
• Laveen:
2010 - 129,000
2013 - 164,000
• Goodyear:
2010 - 167,000
2013 - 215,000
• Glendale:
2010 - 132,000
2013 - 180,000
• Mesa:
2010 - 160,000
2013 - 202,000
Last year Ozzie recommended
In 2014
• San Diego +17%
• Phoenix +30%
• Las Vegas +21%
• Seattle + 4%
• Austin +15%
• Houston +29%
• PLUS MASSIVE CURRENCY APPRECIATION…OUR
INVESTORS ARE IN LVOE WITH US!!!
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.
CANADIAN $ INVESTED IN US REAL ESTATE
Step 1
Canadian $
same
Step 2
Step 3
Canadian $ up
Canadian $ down
CANADIAN INVESTED IN US REAL ESTATE
DOLLAR STAYS THE SAME
AT $.80CTS:
DOLLAR GOES UP TO PAR
$1.00
• Invest $120,000 Canadian
(Approx. $100,000 US) and
make $100,000 US profit in 5
years.
• Invest $120,000 Canadian
(Approx. $100,000 US) and you
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
• 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
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!
•
We still like...
Las Vegas
 Phoenix
 Scottsdale
 Portland
 (We dropped all oil states)



Buy where prices have fallen 20 - 30%...
volume is increasing sharply
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
Blue card –
1. Win an I pad – Mini Plus
2. win a $300 consultation with Ozzie Jurock
• 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…
Canada
• Residentially, there are 2 kind of markets….
• The very rich and everyone else. Very rich
doing fine…
• Most others markets will remain flat.
Canada Top 5:
Last 2 years Ozzie recommended
(Canada Recommendations for last year alone are up 5% - 30%)
•
2013
• Terrace
+14% 18%
• Kitimat
+15% 24%
• Ft. St. John
+18% 12%
• Edmonton
+5%
+8%
• Calgary
+6%
+10%
2014
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 :
• Etobicoke
• Hamilton
• Surrey
• Richmond
For 2015 in BC we like


Prince George
Kelowna
In Lower Mainland we like

Richmond

Surrey

Langley

East Village – Vancouver East

Burnaby-Coquitlam-Tsawassen
BC Ski resorts
 We like
 Whistler – bottom in place – US dollar
 Sun Peaks
 Fernie
 Kimberley
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
Still buy:
Trailer parks
Mini Storage
Strata warehouses
Industrial land
Cash flow ALL
Don’t buy:
Hotel Condos
Time Share
Quarter Share
Commercial
Office
Farmland in Prairies
Be very careful…outside
Buy cash flow - anywhere in
USA and CANADA
Do NOT buy anywhere else
For capital gain:
Go --- Where new jobs are
Go ---Where the rich play
For cash flow – go to US
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
Foreign buying of commercial / hotels/businesses will accelerate
8 astounding predictions
• 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
• 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
• 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!!!
• You will type less and talk more…Siri --- BUY: Dragon soft ware
• There will be valleys – but we’ll walk through them –ALWAYS!
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
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The best market...

...is between your ears!
We live in paradise
THE WHOLE WORLD IS LINING UP…

…at our immigration offices…

YOU are already here!
The nay-sayers will always be
there….

…don’t allow the negative
rust to settle in your mind
Live your life....with
ENERGY....
ENTHUSIASM ...
AND EMPATHY!!!
You are here to have fun - like it or
not!
Emanuel
Kant:
"To be is to do"
Nietzsche:
"To be is to be"
Sinatra
"Do be do be do"
Whatever you do...
...DO
SOMETHING!!!
...and have fun doing it!
Get
up happy!
Live a self-actualized life!
Have
a bubble bath
In the end...
It is
all
all
BECOMING
It
is all about
becoming....
about
A human being...not just a human doing...
Go for the bird on the roof...
...a
bird in the hand
makes it hard
to blow your nose!
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
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!
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