Double-Digit Returns

In Good Markets And Bad

Harmel S. Rayat

• Publisher: Talia Jevan Properties, Inc.
• Year: 2019
• eBook ISBN: 9780578461281
• Edition: 1
• Topic: Betriebswirtschaft
• Subtopic: Immobilien

Finally, proven wealth-building insider secrets revealed in an easy to understand, simple to follow and quick to implement way. The battle-tested strategies revealed in Double-Digit Returns in Good Markets and Bad have generated relatively low-risk real estate investment returns of over 40 percent per year for almost 15 years straight.

Whether you’re a seasoned investor with ample capital or just starting out with a modest amount of money, you’ll easily and quickly learn how to produce above average investment returns, in both good markets and bad. In this book, and among many other things, you’ll discover:

• a factor much more important than location in real estate;
• startling population trends that will all but assure double-digit profits;
• how following the Golden Rule can maximize your income, and
• exactly where, when and how to invest (even if you’re short on funds).

Intentionally written in a pithy and straightforward manner, this book is the distillation of the hard-earned experiences of the author, who started out as a mailroom clerk and then went onto a career in investing. Early on, many of his investments did poorly; with some failing outright. Over time, he learned how to deploy capital in much better ways, surrounded himself with a great team and eventually established a family office.

Like every investor, his goal has always been to generate the highest risk-adjusted returns possible. However, market volatility, excessive fees, bad recommendations and conflicted advice always seemed to get in the way.

So, wanting less risk, greater cash flow and some diversification, the author decided to invest in real estate in 2006 with no prior experience using the proven strategies revealed in this book. Almost immediately, he and his team started generating what many would char­acterize as exceptional returns. His portfolio was worth $50 million, with modest debt. Surprisingly, the returns got better and better. Before too long, his real estate portfolio zoomed past the $100 million mark.

After a decade in business, which included the tough years of 2008 and 2009, an independent accounting firm was engaged to perform an examination of the author’s investment returns in accordance with standards set by the American Institute of Certified Public Accountants. This independent examination confirmed annualized returns on equity of 33 percent per year (simple interest) for the 10 years ended December 31st, 2015. In comparison, the S&P 500 had a return of 6.4 percent per year and the average hedge fund as measured by the Credit Suisse All Hedge Fund Index gained just 6.3 percent (in total, not per year).

More recently, for the 13 years ended December 31st, 2018, the author’s annualized returns stood at 45 percent per year, walloping most benchmarks and further validating the long-term financial benefit

1

My Start as a Mailroom Clerk

I still reminisce about my early days, delivering packages to buildings I own today.

My name is Harmel S. Rayat (www.harmelrayat.com). I’m no kid—I am in my late fifties with some gray hairs to prove it. My passions are helping people live better lives, music, technology, real estate and, of course, investing; I’ve been an investor for more than three decades.

I grew up in Vancouver, British Columbia. After graduating high school in 1979, I went to a local Vancouver community college for a program in small business and entrepreneurship, where Don Siemens mentored and guided me towards the brokerage business.

To get my foot in the door, I landed a job as a mailroom clerk and messenger boy for a large brokerage firm, Nesbitt Thomson Bongard. I would carry and deliver, by hand, pouches containing bonds, stock certificates and other important financial documents, worth, I assumed, a lot of money to a lot of people.

As part of my job, I often delivered items to the basement of a major bank through a building now renamed as the Birks Building, an iconic downtown Vancouver landmark, which, 26 years later, I acquired and still own (see photo in the Introduction).

It was a menial job to be sure, but I was exposed to and able to talk with many smart stockbrokers. Some of what I learned at the time just came from watching and listening. Even more came from asking questions of, and getting answers and a bit of advice from, the successful brokers I came in contact with. Yes, I was, as Tony Robbins would say, “modeling” even back then in order to incorporate what I learned into my efforts to become a stockbroker.

I tried my very best to land a job as a broker myself but was turned down by just about every investment firm, from the bucket shops to the white shoe firms of the day. At the time, I was told I was too young, had little education to speak of and had no moneyed connections.

After being turned down by just about every firm, in 1982 I finally moved up from being a mailroom clerk to a full-fledged stockbroker.

Although deflated, I was not going to let someone else dictate my future. Finally, in 1982, I moved up from being a clerk and a messenger to being a full-fledged stockbroker at Canarim Investment Corporation (now Canaccord Genuity Group Inc.), again thanks to Don Siemens, who somehow was able to open the one door that led directly to the palatial private office of the then president of the firm, Peter Brown. It was a relatively short interview, and I am not exactly sure what I said or did to land the job, but I did. I will forever be grateful because his decision to hire me changed my life.

As part of my on-the-job training, I spent time on the trading desk of Canarim and on the trading floor of the now-closed Vancouver Stock Exchange, which today has been repurposed into a hotel and office tower to accommodate the continued population growth of Vancouver. Soon, I was assigned my own desk and given the Yellow Pages to start prospecting and cold calling for customers, which was very tough work. To this day, I try my best to take “cold calls” from individuals looking to build their business. At the end of each call, I wish them luck and encourage them to keep making those dials.

After many, many such calls, I made some headway and slowly started to reel in customers. To commemorate my very first order on August 4th, 1982, I kept the now faded, but originally blue-colored trading ticket, time-stamped at 9:50 am. It’s framed now and hanging in my office, which is in a building I used to deliver to as a messenger and now proudly own.

Although I worked hard at it for a number of years, the brokerage business was not for me. You see, to make a good living, you have to recommend new stocks to your clients constantly. Are there really that many good stock bargains around at any one time? If so, why did the world’s greatest stock investor, Warren Buffett, a man I also like to emulate, say that he finds only two great ideas a year?

After being turned down by just about every firm, in 1982 I finally moved up from being a mailroom clerk to a full-fledged stockbroker.

So, in 1987, just before the stock market crash, I left the brokerage business and started investing on my own, in earnest, in companies with great products. I also tried my hand at starting and managing a few small businesses, ranging from old tech auto salvage to a few new-tech technology companies. However, not every business I invested in or started did well; some failed outright, including my auto dismantling business.

Between the loss of my mother and business failures, I hit a low point in my life. No matter how bright and sunny the days were, all I saw were dark clouds. With the passage of time and a lot of help and support from my family and friends, my lugubrious state of mind slowly but surely cleared.

Many pounds lighter from my depressed state, I went back to work and eventually regained my stride. I have always loved science and technology, so I decided to become a venture capitalist. I would back companies with promising technologies, fund them with some of my own money and raise the rest mainly through friends, family and stock offerings to outside investors. This is an age-old strategy used by everyone from first-time real estate investors and cash-strapped entrepreneurs to even the founder of one of the greatest tech companies of all time, Jeff Bezos (see chapter 9).

Although a potential return and profit is a factor in my investment decisions, my primary motivator has been, and continues to be, my desire to help smart entrepreneurs, inventors and scientists to create and commercialize products and technologies that can not only generate profits, but that can also make the world a better place. I believe you get what you give in life; if society benefits through my investments, society will reciprocate. Good always begets good.

My style of investing is called impact investing, which is meant to provide capital to “companies, organizations and funds with the intention to generate social and environmental impact alongside a financial return,” as described in the 2017 Annual Impact Investor Survey released by the Global Impact Investing Network.

Impact investing is why I invested in the development of a bio-artificial liver device after my mother passed away from liver failure at age 57. As I said earlier, losing my mother not only put me into a deep depression, it was also devastating for our entire family. Her passing was the catalyst that motivated me to try and help save others from the same illness. You can read more about this part of my life in chapter 10.

It’s also why I invested, and now have controlling positions, in two innovative publicly traded companies that are, to borrow from Warren Buffet, my two great ideas.

The first is SolarWindow, which has developed transparent coatings that turn ordinary windows into electricity-generating windows (www.solarwindow.com), for which the possibilities and benefits to society, in my opinion, may be endless.

The second public company is RenovaCare (www.renovacareinc.com), which has developed the SkinGun™ to spray a patient’s skin stem cells onto severe burns and wounds. Again, in my opinion, the potential benefit to society warranted my investment.

My style of investing is also why I have written this book. My goal is to share the strategies that have worked so well in my life, strategies that have allowed my team and me to generate double-digit returns (45 percent per year annualized since 2006), in both good markets and bad.

By sharing my hard-earned knowledge with all those interested, my goal is to help others, as many have helped me. If just one individual benefits from the information in this book, hopefully you or someone you know, then I’ve accomplished my goal.

2

Jump on the Population Growth Wave

The U.S. is growing by 1 person every 18 seconds.

Over the years, I have invested in many companies, both public and private, ranging from old-tech auto salvage to new-tech enterprises companies that included an early version of Angie’s List and Robinhood, the online brokerage firm launched in 2014.

However, despite the potential for significant personal and financial rewards, this style of investing also involves substantial risks. So, in 2006, I established Talia Jevan Properties (www.taliajevan.com) to provide relatively low-risk (remember, all investments have associated risks) investment diversity. As ongoing cash-flow has always been important to me, I stayed away from development and value-add projects, which require skills and acumen that I still need to acquire.

So, to minimize my risk exposure, I focused on the ownership of high-quality, full or almost full commercial properties in cities with economic strength, stability and a variety of income streams (technology, tourism, industry, etc.), social and cultural diversity, geographical appeal and, most importantly, population growth.

According to the U.S. Census Bureau, one baby is born about every 8 seconds, versus one death every 10 seconds. Add the net migration of 1 person every 31 seconds and you have a country that is now growing by one person every 18 seconds (as at February 25th, 2019). In comparison, Australia and Canada are each growing by one person every 75 seconds, while Germany is growing by one person every 4 minutes. In case you’re wondering, China and India are adding 1 person every 6 seconds and 2 seconds respectively.

In 1960, there were almost 200 million people in the United States. By the end of 2018, the population had grown to nearly 330 million. All of these people must live somewhere, must work somewhere and must relax somewhere. This burgeoning population is why neighborhoods are gentrifying all across the U.S., from Seattle’s South Lake Union area to Boyle Heights in Los Angeles and all the way across to Brooklyn, NY, where Williamsburg is all the rage. In the years to come, new buildings will be built right next to existing buildings, which, all things bei...

Table of contents

• Title Page
• Full Page Image
• Contents
• Introduction
• 1. My Start as a Mailroom Clerk
• 2. Jump on the Population Growth Wave
• 3. Timing Versus Location
• 4. Always Be Fair
• 5. Follow the Golden Rule
• 6. When, Where and How to Invest
• 7. Avoid as Much Risk as Possible
• 8. My S•U•C•C•E•S•S Formula
• 9. Putting It All Into Practice
• 10. My Non-Real Estate Investments
• About Harmel S. Rayat
• Copyright