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Millennial electrician earning $80000 invests in bitcoin and real estate

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  • Name: Stephen Hajnal
  • Age: 30
  • Annual income: $79,500
  • Savings: $8,500 in TFSA; $4,000 in RRSP; $4,000 in cryptocurrencies
  • Debt: $142,000 mortgage
  • What he does: electrician
  • Where he lives: Ajax, Ont.
  • Top financial concern: “We definitely want to buy an income property by next year. I’d prefer to do Oshawa but we’re considering Hamilton.”

Stephen Hajnal has been an electrician for 10 years. It’s a career that offers him both work-life balance and a good paycheque; he works four nine-hour days a week and earns $79,500. If in the future he needs to bump up his earnings, he can work overtime and bring in as much as $120,000 in a given year. Plus, there’s retirement security – he works for a unionized company with a defined contribution pension plan.

Choosing to study a trade has paid off with plenty of opportunity. Mr. Hajnal works with large organizations such as universities that are upgrading their heating and cooling systems to reduce energy costs and become more efficient.

“I do a lot of building automation – electrical controls for unit cooling systems and [installing] sensors for temperature and humidity,” he says. “I am happy where I am – not all companies do the four-day week.”

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In 2014, Mr. Hajnal bought a townhome in Ajax with his wife. Since then, he’s done numerous renovations, averaging $3,000 a year. “We’re probably going to do a rental suite in the basement at some point,” he says.

He’s also dabbled in the stock market and invested $4,000 in cryptocurrencies. “I got into that about a year ago,” says Mr. Hajnal. “I’ll trade in between two or three currencies using QuadrigaCX, a bitcoin trading platform. So far, I’ve doubled my money,” he says.

Despite his success with cryptocurrencies, Mr. Hajnal says he puts most of his money in more standard investment vehicles, such as the tax-free savings account, where he holds technology and real estate investment trust stocks.

But his real passion lies with real estate. “We definitely want to buy an income property and then rent out the other one,” he says. He hopes to get his current mortgage down to $100,000 by next year to refinance so he can buy another property.

Down the road, he wants to purchase several larger buildings. “The ultimate goal is to have a few low-rise rental properties and live off the income from that,” he says.

His typical monthly expenses:

$1,980 on mortgage.

$55 on property insurance.

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$300 for property tax.

$250 on renovations. “I’ve spent quite a bit. We did the furnace, the AC, we’re planning to do the driveway, we changed the windows and doors. Next we’re going to do the roof and then the powder room.”

$206 for car payment. “I have a 2009 Sonata and my wife has a 2014 Mazda 6.”

$160 on gas. “I travel quite a bit for work.”

$350 for car insurance. “[We’re with] Allstate. It’s for my spouse and I.”

$70 annually for car maintenance. “I can’t remember the last repair.”

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$120 on groceries. “We shop at No Frills, Food Basics or Fresco. We avoid the expensive ones. I normally do the cooking for the week on Saturday and Sunday. We eat a lot of Indian or Asian, lots of pastas. My wife just became vegetarian so we don’t eat a lot of meat.”

$90 on eating out. We might go out once a month. We usually go out for a family member’s birthday.”

$20 on coffee or tea. “We usually make it at home. I used to get a coffee at break. Now I make a bigger one and it lasts all day. It’s a good way to save money.”

$90 on alcohol. “A nice bottle of whisky or cognac will last a few months. In the summer we might get a case of beer. We don’t drink very much.”

$60 for cellphone. “We are with Koodo.”

$14 for Netflix.

$60 for Internet. “It’s Acanac. It’s good – 300 gigabytes a month.”

$14 on Netflix.

$50 on clothing. “I usually shop every six months. I go to Mark’s. I go to Winners or the Gap if I feel like spending a bit more for business-casual clothes. I typically spend $300 each time.”

$15 on hair. “My wife usually cuts mine at home.”

$170 on pets. “[We have] an older dog who requires a special diet and medications. A Bichon Frisé/Maltese. She’s 13 years old now and she has problems with her eyes – she needs creams and drops. And she has kidney stones. We also have budgies – they are two years old. The birdseed will last a couple of months. And we buy the odd toy – it’s $5 to $10 every couple of months.”

$400 per year on camping and hiking. “We’re looking at Bon Echo or Algonquin Park this year. We might rent kayaks this year. We have most of the [gear] already. I would call it glamping.”

$6,000 per year on holidays/trips. “We take two trips of one week each, and two smaller trips on long weekends. In the past year we went to the Mayan Rivera, Mexico and Cuba. We did Washington over the winter and we may do New York City over the summer.”

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Real Estate

This Week's Top Stories: Canadian Real Estate Sales Fall, While Second Mortgages Rise Across The Country

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Time for your weekly cheat sheet on this week’s most important stories.

Canadian Real Estate

Over 1 In 10 Mortgages Issued In Canada Are On An Already Mortgaged Home

The Canada Housing and Mortgage Corporation (CMHC) found that multiple mortgages on the same home is on the rise. Analysts counted 145,013 new loans on already mortgaged homes in Canada, up 4.16% from the year before. That’s 15.12% of all mortgage originations, or over 1 in 10 mortgages in Canada.

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Canadian Households See Borrowing Costs Rise To Highest Levels Since 2011

The cost of borrowing is on the rise across Canada. The BoC  effective rate increased to 3.77% at the end of July, up 18.55% from the same month last year. The effective rate is a blended rate that reflects rates consumers are likely to face in the real world. This is the highest level we’ve seen since May 2011, and the fastest increase we’ve seen in a very long time.

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Teranet: Canadian Real Estate Prices Continue To Decelerate, Smallest Growth Since 2009

The Teranet-National Bank of Canada House Price Index (Teranet HPI) shows higher prices across the country. The C11, an aggregate of prices in the country’s largest markets, increased 0.78% in July. This represents an increase of 1.75% from the same time last year. The good news it’s positive, the bad news is those numbers are much slower than usual. The average increase for July has been 1%, and the annual increase is the smallest we’ve seen since 2009. Canadian real estate prices are so far trailing historic performance.

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Toronto Real Estate Sales Lead Canada For Growth, BC Leads The Declines

Canadian Real Estate Association (CREA) numbers show that real estate sales continue to drop across Canada. Unadjusted sales fell to 41,872 in July, down 1.71% compared to last year. Only 3 markets saw sales increase in July, and the majority of declines were in BC. Fraser Valley, Vancouver, and Victoria are now home to the fastest falling sales in Canada.

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Toronto Real Estate

Toronto Condos Squeeze Out The Smallest Price Change Since August To Print New High

Toronto condo prices moved higher in July to print a new all-time high. The Toronto Real Estate Board (TREB) reported the City of Toronto condo benchmark reached $530,200, up $900 from the month before. More interesting, this is the smallest price increase since last August.

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Vancouver Real Estate

Vancouver Condo Inventory Jumps 66%, Largest Monthly Price Decline Since 2012

Vancouver condos saw prices slide, as inventory surged. REBGV reported the price of a typical condo reached $700,500 in July, down 0.5% from the month before. That was accompanied by sales sliding 26.5% from last year, and inventory surging 66.96% from the same time. Lower sales, higher inventory, and lower prices – makes sense.

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BitCondo: Is cryptocurrency the future of real estate?

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When you’re in the market for a new home, you probably have a lot of things on your mind: square footage, school districts, mortgages rates.

One thing you’re probably not spending much time thinking about: Bitcoin.

But perhaps cryptocurrency and blockchain technology will soon be a major consideration for property purchasers and sellers.

At least that’s what some Boulder County real estate professionals are gearing up for.

“Blockchain and cryptocurrency really has the ability to change every aspect of real estate, from titles, to lending, to the brokerage itself,” said Jim Merrion, a Boulder real estate agent with Coldwell Banker.

Anthony Meisner, sales manager with Land Title Guarantee Company, addressing the DISCON Distributed Consensus conference at the Boulder Theater Aug. 3. (Paul Aiken / Staff Photographer)

Merrion, along with Anthony Meisner with Boulder’s Land Title Guarantee Company, are preaching the gospel of the blockchain and encouraging real estate industry professionals and clients to embrace the technology.

“This (technology) is finally mainstream enough in the real estate community that people are really talking about it and considering the implications and benefits,” Meisner said.

Block-what? Crypto-who?

Simply put, cryptocurrency — the most famous and valuable example is bitcoin — is a form of verifiable and transferrable digital money that exists independent of centralized banks.

The blockchain is technology that uses large computer networks to create a decentralized ledger or database that tracks activities such as the transfer of bitcoin.


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Merrion said he first dipped his toe into the crytocurrency pool in about 2012 when he bought a couple of bitcoins.

“I bought it as a lark and sold it way too early,” he said. “I just thought it was an interesting idea.”

The cryptocurrency market has been on a wild ride since Merrion bought those first tokens, with the value of coins in a seemingly endless cycle of skyrockets and crashes punctuated by temporary periods of stabilization.

Despite the peaks and valleys, some see this technology as the future not only of currency, but also of a host of business applications.

“A lot of smart business people are using this technology to tackle really important things like real estate,” said Alan Curtis, a former Innosphere employee who last year founded Radar Relay in Fort Collins. Radar Relay is a wallet-to-wallet cryptocurrency exchange technology firm.

The use of cryptocurrency also opens up local markets — such as real estate in Boulder County — to a global pool of customers and investors.

“At the end of the day, there are people all over the world that you want to do business with, people all over the world that you want to interact with,” Charles Hoskinson said at a cryptocurrency conference in Boulder earlier this month.

Hoskinson leads the blockchain platform Cardano, which hosts the Ada cryptocurrency, and has been involved with the founding of a host of other well-known cryptocurrency technologies, including Ethereum.

“We’ve gone from siloed, isolated economies that were paper-based and basically designed in the 19th century or before to economies that are highly globalized,” he told DISCON conference attendees.

Alan said, “The idea of global access is critical.”

Blockchain technology could help make the process of buying or selling a home more efficient by streamlining the titling process and eliminating the need to shuttle documents to and from the county clerk’s office, experts say.

The transparency afforded by the blockchain can also help reduce the potential for fraud “and really move the needle to help people realize we can have a more secure environment,” Merrion said.

A Front Range first

Merrion listed a two-bedroom townhouse in Arvada earlier this summer. With mentions of easy access to highways, recently replaced windows and quartz countertops, the listing is much like any other.

Jim Merrion a Boulder real estate agent with Coldwell Banker speaking to the DISCON Distributed Consensus conference at the Boulder Theater in Boulder

Jim Merrion a Boulder real estate agent with Coldwell Banker speaking to the DISCON Distributed Consensus conference at the Boulder Theater in Boulder Colorado on Friday August 3, 2018 (Paul Aiken / Staff Photographer)

But there’s a phrase that sets the listing apart: “Traditional financing, Bitcoin & other Cryptocurrency accepted!”

“As far as any of us can tell and from all the research we’ve done, this is the first” property along the Front Range to be marketed on a major multiple listing service as accepting cryptocurrency, Meisner said.

Merrion quickly found a buyer for the Arvada home who opted for the traditional financing model, but he plans to continue marketing homes to cryptocurrency holders.

“It is part and parcel of my discussion with clients,” he said. “The industry is headed this way and I certainly don’t want to be left behind.”

Once Merrion brings together a buyer and seller, Meisner and Land Title can step in to help facilitate the transaction.

“We serve as neutral third-party,” Meisner said. “So if there are questions that arise, we can refer people to attorneys, refer people to cryptocurrency experts.”

Even if Merrion were to find a buyer interested in using cryptocurrency to buy a home, bank regulations require those coins to be liquidated before a purchase. However, if a seller owns the home outright without a mortgage or lien, a peer-to-peer purchase can be made without turning the coins into cash first.

“Some parties don’t want to have to liquidate their coins” and would prefer a peer-to-peer transaction to minimize frictional costs such as fees and slippage, Meisner said.

The first peer-to-peer bitcoin real estate transaction occurred late last year in Miami, according to multiple media reports from December.

Meisner and Merrion say it is only a matter of time until that kind of deal is made in Colorado.

“I would say it’s possible” there will be a peer-to-peer transaction in Colorado this year and “it’s probably very likely next year,” Meisner said.

He added: “We would really like to be the first.”

Lucas High: 303-684-5310, lhigh@dailycamera.com or twitter.com/lucashigh

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How To Transfer Heirloom Real Estate

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Some assets require special estate planning strategies and a lot of thought. One such asset is what I sometimes call heirloom real estate, or family real estate.

This is a property that’s been in the family for a while and that you’d like to stay in the family’s hands. Heirloom real estate includes vacation homes or other second homes, farms, a longtime residence and similar properties, but not business or investment properties. Often the family real estate has been the site of pleasant memories for many family members.

As the senior generation ages, it can be the place where three or more generations gather at least once a year, usually around a holiday. As families spread around the country or world, the family real estate can become the one anchor or source of stability and continuity for the family.

To maximize the probability the property will remain in the family and help keep the family together, you have to give the details some thought and work with your family members and estate planner.

The inclination of most people is to leave the real estate in their wills to their children jointly, much as they do with the rest of their estate. That’s usually not a good move for heirloom real estate for a variety of reasons.

If the property is in a different state than where you reside, your estate will have to be probated in two states. The state where you reside will control the probate of most of your estate, but real estate is probated in the state where it is located. You can avoid that second probate by having the property owned through a trust, limited liability company (LLC), or other entity.

There are many other practical reasons why leaving the property jointly to your children might not be a good idea, whether you leave it to them directly or through an entity such a trust or LLC.

Once a property passes to the next generation, they have to work out ownership issues. They need to develop a schedule or procedure for when each owner can use the property, who uses which bedrooms and other facilities, what can be stored or left at the property, and similar issues.

Maintenance, care and other routine expenses often become big issues. Each sibling has to agree to pay a share of these expenses. Will the expenses be shared equally, or will the cost-sharing be based on the amount of time each uses the property, the ability to pay or some other formula?

Some expenses are mandatory, such as real estate taxes. But other expenses can be discretionary. Someone has to decide if and when the discretionary expenses will be incurred. Major upkeep and renovations can cause conflicts. Even when it is clear that a repair is needed, the co-owners might disagree on the quality, cost and timing of the replacement. Someone has to solicit bids and choose the contractor.

Almost inevitably, at least one sibling will want to sell the property while others don’t. Perhaps one sibling now is living far away from the property and hardly makes use of it. Or the sibling has a cash need.

Sometimes when the other siblings are unwilling to sell and unable to buy the other sibling’s share, one of the siblings will seek to sell his or her share to an unrelated person.

Joint ownership also creates problems when one of the owners divorces or passes away. The property could bring the whole family into the divorce proceedings.

The passing of a co-owner raises the issues of whether that owner’s share goes to the surviving co-owners or the heirs of the deceased.

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Many of these problems are resolved by having the heirloom real estate owned by an entity.

In many cases, a limited liability company (LLC) is the best choice. The LLC provides the liability shield of a corporation with the operating and tax flexibility of a partnership. Limited partnerships, trusts and corporations also are viable choices.

If it is decided that an LLC or other entity is the best option, the parents who currently own the property should create the entity as soon as possible. They will be the original owners of the LLC and set up its operating rules.

Over time, they can give or sell ownership interests to the children. Or they can hold the LLC for life and leave its ownership to the children through their estates.

The parents set up rules for sharing and maintaining the property that can be implemented on a trial basis while the parents are alive. Changes can be made as experience is gained.

The LLC also allows the creation of a committee or other structure that enables some of the owners to make decisions about the maintenance, improvement and other management of the property. Again, creating the structure early allows it to be refined over time.

An important feature of the LLC structure is that it can prevent the property from being sold outside the family. The LLC bylaws can prohibit any owner from selling his or her shares to someone who isn’t a family member. The bylaws can also create a process for one member, or other owners, to sell to the LLC and provide a formula for determining the price and payment terms.

Of course, the LLC doesn’t resolve all of the cash flow and money issues. The co-owners must still be willing and able to finance continuing ownership of the property. The money problems are best resolved when the parents leave a cash fund or a life insurance policy to the LLC that will cover some or all of the ownership costs for at least a period of time, perhaps an extended period. It might also provide a way for the other owners to buy out the interest of anyone who wants to sell. Without a cash fund or insurance policy, the siblings must deal with the cash flow issues.

The LLC can also be a good tax planning tool when the estate might be subject to federal, state,or inheritance taxes. Giving shares of the LLC and establishing minority ownership interests can reduce the value of the property for tax purposes.

Before creating an LLC or other structures, the parents should be sure that the children really want to retain the property in the family after the parents are gone and will be able to afford it. Some children simply won’t have the money, or they’d prefer to spend it on other things. Other children believe that after the parents are gone, visiting the property will trigger sadness and regret rather than happy memories.

You can ensure a property remains heirloom real estate, but have candid conversations with the next generation to ensure they understand the full picture and are interested in retaining the property.

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