Tax Efficient Mortgages for Real Estate Investors Presented by: Jason Henneberry Grow | Protect | Optimize

Background   Personal RE Investment Portfolio   Mortgage Planning for > 10 years   Focus on Advanced Mortgage Strategies   2008 VP Sales Tax Deductible Mortgage Plan   2011 Launched MORTGAGEPAL.CA Jason Henneberry Founder, MortgagePal

Overview Optimize Rental Portfolio Cash Flows

Who is it for? Homeowner (with a mortgage ) + Real Estate Investor (eligible expenses) Optimize for Greater Efficiency

Greater ROI Higher Rate of Return = Greater Investment Risk

Income Sources   Employment Income   Self Employed Income   Real Estate Portfolio Income Principal Residence (Mortgage Payments) RE Portfolio Expenses   Mortgage Principal & Interest   Property Tax & Insurance   Strata & Property Mgnt Fees   Maintenance & Upgrades $Mortgage Payts $Portfolio Expenses $Debt Reduction$RE Portfolio Expenses Debt Conversion How it Works

Principal Residence Bad Debt Mortgage Good Debt Invest Loc Implementation

$350K Mortgage 25 Year Amortization $1937 Monthly Payment at 4.5% 39% Marginal Tax Bracket Case Study Principal Residence SIR 6 Unit Strategy Annual Expenses: $25,000 Annual P&I Payts: $43,000 Total Eligible Expenses: $68,000 Rental Portfolio Free Tax Refunds (used to pay down mortgage): $59,571 Interest Savings (Primary Residence Mortgage): $41,199 Total Savings (Tax Refunds + Interest): $100,770 Pre Tax Income (39% Marginal Tax Rate): $165,196

Questions

Strategy II Fixed RateVariable Rate

Are Your Ready? “What if your mortgage rate went up by 2 points?” – Garry Marr, Financial Post “Interest rates have nowhere to go but up”- Jim Flaherty, Canada Finance Minister

Advantages   Prepare for Rising Rates / Inflation   Protect Investment Cash Flows   Pay Off Your Mortgage Faster   Increase Return on Investment

Case Study Today (2013)At Maturity (2018) Outstanding Balance$350,000$299,103 Rate2.99%5.47% Payment (Monthly)$1,654.56$2, $350,000 Mortgage Debt Your Payment Shock at Maturity would be: $387.54

Case Study Amortization Reduction Savings Future Payments Pre Tax Income 14 Payments $19,422 $31,839 Gradually Increase Payments Minimize Payment Shock Pay Off Additional Principal Save Thousands in Interest Regular Payment Increase Payment Shock Protection

Questions