Contrarian Communication

Secret: Never over-commit to communicating with investment partners.

My written commitment to investment partners includes annual reporting for income tax purposes only – and then I try to sneak in at least two other written communications throughout the year, a telephone call or two, and a personal visit (which usually doesn’t include discussion of our mutual real estate investments).

Here’s a sample a recent mid-year update:


The bottom line, which I’m ironically writing on the top line, is that your Edmonton townhouse portfolio is doing just fine. We have well-maintained properties, happy tenants, positive cash-flow, adequate reserves, and mortgage principal is retiring monthly.

Attached is a mid-year financial report, spreadsheet showing cash-flow & equity, and an updated prayer list.*

[Note: I include a short paragraph (usually no more than 3 sentences) with our current bank balance (reserve fund), and any notable property-specific information (tenant turnover, renovations, etc).]

When we began investing together, I had all kinds of data (job growth, population growth, low vacancy rates) supporting the prospect of appreciating real estate values in Edmonton. Now that all seems moot. Property values have remained essentially unchanged for nearly 10 years.

Perhaps you’re thinking it might be time to sell?

Edmonton’s housing market inventory has reached a 10-year high, according to Royal Lepage. Affordability isn’t really an issue for Edmonton homebuyers. At 28%, the share of income a household needs to cover ownership costs is among the most attractive in Canada. It’s a buyers’ market.

From pipelines to politics, things just don’t seem to be going our way. But Alberta is resilient.

Sir John Templeton famously said: “The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” So, for the first time in almost three years, I bought another townhouse this week.

I do not believe there’s any law that says real estate always goes up in value, and I don’t have any hard evidence to suggest that it will. When the time comes that you want or need to exit these investments, I will join you. In the meantime, all is well and I’m happy to hold.

I’d like to see you. I’m planning to arrange a visit to {CITY} in {MONTH} and I’ll be in touch!


Jeff Gunther
* The first attachment is prepared by my accountant; the second is a ‘dashboard’ linked to my data; and the third is a list of properties with tenant names and brief prayer requests (many of my partners pray for our tenants).

See if you can find all the contradictions in that report. Here’s the point: We don’t know the future, and we never will. It’s more important to communicate than to attempt to provide “accurate” information.

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