The PREC Planners

It's amazing how small the world can be in business!

Back in 2017, I was recruited into this industry by Rick Chase, who happens to be great friends with Mathieu Nesbitt. Fast forward to 2020, when my husband and I needed a mortgage for a larger property. We couldn't get one through a broker, but luckily, Matt at TD came to the rescue and was fantastic.

Just recently, I got a text from Matt. A real estate agent who attended one of my presentations tried to give him my business card, not knowing we already knew each other. Matt had a good chuckle and told her we were already connected.

This led to Matt and I catching up over coffee this week. We talked about how our businesses have grown, the importance of having an amazing admin team, and our plans for the future.

I'm so glad the universe brought us back together after so many years. Sharing ideas, struggles, and best practices with a trusted friend and colleague is truly invaluable.

📚 Understanding CPP and OAS: What I notice during my education sessions. 📚

Every time I host an educational session, I make sure to cover the essentials of CPP (Canada Pension Plan) and OAS (Old Age Security).
Here's what I've noticed that most people aren't aware of:

1️⃣ Fundamental Differences between CPP and OAS:

CPP: You only receive CPP if you've contributed to it during your working years.

OAS: Everyone receives OAS based on residency, but the amount can be clawed back depending on your income.

2️⃣ Timing Matters for CPP:

Choosing when to start collecting CPP (as early as 60 or as late as 71) is a crucial, personal decision. Consulting a financial planner ensures you make the best choice for your situation.

3️⃣ Taxable Income:

Both CPP and OAS are considered taxable income

🌟 Optimizing Financial Plans with Conquest Planning Inc. 🌟

At The PREC Planners, we leverage the best tools to create comprehensive financial plans for our clients. One of our favorites is Conquest Planning Inc.. This software excels in handling data for corporations and rental properties, which is crucial for many of our clients.

🛠️ Why Conquest Planning?
Conquest allows us to build and test various financial strategies. For example, I'm currently working with a real estate agent who owns three investment properties. Over the years, he has contemplated selling one or two but was unsure about the impact on his financial future. With mortgage renewals on the horizon, he was anxious about potential cash flow changes.

🔍 Our Approach:

Data Entry: We inputted all details for his properties into Conquest, including purchase prices, current market values (with a growth rate of 3%), mortgage details, rental incomes, and expenses.

Strategy Development: We created three different strategies for him:

1) Retain All Properties: Showed how rental income would fund his retirement and the capital gains owed upon death, with succession planning discussions.

2) Sell at Various Stages: Illustrated the financial impact of selling properties at chosen years and investing the net proceeds.

3) Sell One Property Next Year: Demonstrated the benefits of applying the proceeds to his personal mortgage and achieving a mortgage-free primary residence.

We also explored the pros and cons of transferring properties to a holding company under his PREC.

🤝 Let's Plan Your Future:
If you're a real estate agent with rental properties and uncertain about your next steps, send me a message. I’d love to work with you to build a solid financial plan and help you make informed decisions for your future.

🚗🌩️ Last week, I road-tripped to Vaughan to meet with the amazing team at Forest Hill Real Estate Vaughan for my education session, "PREC...Now What? Unlocking the Power of your PREC."

I was a bit skeptical about the turnout, given it's mid-July and we're all in vacation mode, plus the torrential downpour and thunderstorm that day. But, we had a full house with 20+ agents filling the boardroom! 🙌 And of course, I forgot to take photos...

We were also joined by their in-house lawyer, Jonathan Hacohen from Kormans LLP. Having a lawyer in the room added great value with his insights on all things PREC.

It was an engaging session with lots of questions about when to form a PREC and how it fits into your personal finances.

If you're a brokerage owner or manager looking to improve and support your team's financial literacy, reach out to us at [email protected]. We offer a variety of topics to present on.

🌟 Should I form a PREC in the final years of my real estate career or just leave it? 🌟

This was one of the hot topics we delved into over breakfast last week. A big shoutout to Scott Somerville and The Clark Team, C21 Synergy Realty Ottawa, for inviting me to your peer group breakfast meeting to discuss financial planning with your PREC.

I love these interactive sessions because each discussion brings something unique. Besides PREC, we also tackled some pressing questions about CPP—when to start it, how it works, and whether you should keep contributing.

Do you have a group of real estate agents that meets regularly? I’d be thrilled to join and address your financial questions about all things PREC.

P.S. I have a soft spot for breakfast meetings. Just sayin'. 🥞☕

🔍 Did you know there are approximately 100,000 real estate professionals in Ontario?

At a recent tradeshow, I had an insightful conversation with the registrar from RECO about the history and current state of Personal Real Estate Corporations (PRECs) in Ontario. Surprisingly, only 16,000 agents are registered with a PREC, despite the years of effort to make them available.

Why is this? We concluded that there's a significant financial literacy gap in the real estate profession. Many agents aren't equipped with the knowledge to decide if a PREC is right for them.

At The PREC Planners, we're dedicated to closing this gap. We're on a mission to enhance financial literacy for real estate professionals.

Interested in booking an education session for your team? Email us at [email protected] and explore our session offerings on our website. Let’s work together to make informed financial decisions! 💼✨

If you want to learn when you should form a PREc (or not) join our upcoming session on Aug 14th you can regsiter here: https://calendly.com/joanne_planners/commission-to-capital

This past year working in the PREC/real estate agent space has been incredible, and I've met some amazing people along the way. Sherry Douglas was one of the first brokerage leaders I connected with. Her office was where I gave my very first "PREC" presentation. It's amazing to see how much we've evolved since then! It's been a steep learning curve, but we’re making great strides.

Thank you, Sherry, for this wonderful feedback and testimonial:

"Working with JoAnne Martin and the PREC Planners has been an absolute game-changer for our brokerage and our REALTORS® Their expertise in financial planning has not only empowered our agents with the knowledge they need to secure their financial futures but has also elevated the standard of service we provide to our clients.
JoAnne goes above and beyond in her approach, taking the time to understand the unique financial situations and goals of each individual agent. Their personalized guidance has helped our agents make informed decisions about investments, retirement planning, and wealth management, ensuring they are equipped to navigate the complexities of the financial landscape with confidence.
What sets JoAnne apart is her ability to communicate complex financial concepts in a clear and accessible manner. Our agents have praised her patience and dedication to ensuring everyone grasps the material thoroughly. Through workshops, one-on-one consultations, and ongoing support, JoAnne has fostered a culture of financial literacy within our brokerage, empowering our team to make sound financial decisions both personally and professionally.
Thanks to JoAnne's invaluable insights and guidance, our REALTORS® are not just better equipped to manage their finances; they're also better positioned to serve our clients with integrity and expertise. I highly recommend JoAnne and the PREC Planners to any brokerage or team looking to invest in the financial well-being and success of their agents."

🌟 Thank You, The Oakville, Milton and District Real Estate Board 🌟

I had an amazing time last week at the conference and tradeshow! It was a fantastic opportunity to connect with so many dedicated real estate professionals and share insights about financial planning. A big thank you to the Oakville Milton and District Real Estate Board for organizing such a well-executed event.

Check out some highlights from our booth! 📸

Looking forward to future events and continued collaboration with the talented real estate community in Oakville and Milton.

I recently spoke with an broker after one of my presentations who said, "What do I do? I feel like I've outgrown my accountant, but he's a buddy and has been doing this for me for years. I don't think he can handle what I've got going on."

It's OK to outgrow your current team.

When you first started your real estate business as a sole proprietor, things were straightforward. You sold houses, made money, paid taxes, and used the remaining funds for living expenses and maybe bought an investment property. Back then, you didn’t need a bookkeeper, your accountant could have been anyone, and you likely managed your own DIY RRSP mutual fund portfolio.

Now, a decade (or more) into your career, things have become more complex. You have a PREC and probably a holding company or two. You have a team and staff. You own multiple investment properties, both personally and within holding companies, and likely partner with other investors. Your DIY RRSP portfolio has been neglected because you don’t have the time. Perhaps you even own a brokerage with its own corporate structure. Bookkeeping has become overwhelming, and your accountant is frustrated with the disorganized finances you present. They may lack the expertise in corporate taxation that your growing business requires.

We're all professionals; there are no hard feelings. Businesses grow, needs change, and you owe it to yourself and your business to ensure that the professionals you rely on can provide the expert advice you need. There are professional ways to navigate these changes, and I’m here to help. Whether you need a sounding board, advice, or coaching on ensuring your growing business gets the attention and sound advice it deserves, I’m happy to assist.

🌟 "Can I afford to quit my job working in government (teaching/nursing/high tech) to pursue real estate full time?" 🌟

Thank you, Solid Rock Realtyand GGinaRose for inviting me to speak with your team about managing their PRECs and building wealth through real estate careers last week. It was a fantastic group, and I thoroughly enjoyed the dialogue!

One of their agents asked me this question, and it’s one I hear often. Many start their real estate journey as a side gig or second job. They fall in love with it, find success, but fear leaving their stable careers behind. These careers often offer stable income and pensions but can also drain your time and energy.

I see many agents struggle with this decision: "I want to grow my real estate business, but I can’t if I'm working 40 hours a week at my other job. Can I afford to quit to focus on real estate full-time?"

As part of my planning process, I help you work through this tough decision. We’ll analyze the numbers, provide clarity, and explore the best and worst-case scenarios. My goal is to empower you to make the best decision for your life.

Helping people answer this question is my passion. Let’s work together to find out if you can make your real estate dreams a reality! 🏡✨

A big thank you to TThe Oakville, Milton and District Real Estate Boardfor inviting me to host the "PREC...Now What?" information session! It was fantastic discussing financial planning and wealth-building strategies tailored for real estate professionals.

We had an engaging session with lots of great questions, especially around the new capital gains rules and their impact on your business. Here’s a recap of what we covered:

Corporate Cashflow and Taxation
Salary vs. dividend income
CPP and RRSP overview – when to use them and when not to
PREC Nuances:
Shareholder restrictions and their implications
How holding companies work
Paying your spouse and family members from your PREC

I’m looking forward to connecting with more of you at the upcoming Oakville, Milton and District Real Estate Board Symposium and Tradeshow on June 26th, make sure you RSVP.

See you there!

I had an interesting day today hosting an educational session for real estate agents about financial planning. We spent a good amount of time discussing how the new capital gains tax rules might impact them.

One agent shared a real-life scenario that's currently unfolding:

Her client, who sold their multi-generational family farm for $10 million, is in a tough spot. The sale was supposed to close on May 30th, but the buyer needed an extension until July 30th due to financing issues. The seller agreed, not realizing the tax implications.

The agent asked if this client could still use the old capital gains rules since the original closing date was before the new rules kicked in. Sadly, the answer is no. Because the sale will now close after the June 25th deadline, the seller will likely have to pay more in taxes. We don't have the specifics on their Lifetime Capital Gains Tax Exemption or the exact capital gain, but it's clear they'll face a higher tax burden.

It's frustrating because the seller extended the closing date to help the buyer and now stands to lose money. This isn't about the ultra-wealthy; it's about a farmer trying to secure his family's future and retirement.

Working in my industry can often feel isolating, as many of us operate within our own firm's 'silos.' That's why staying connected with industry peers, sharing best practices, and discussing current challenges is incredibly valuable. Over the years, I've attended many 'fireside chats' where senior advisors share their stories, including the ups and downs, which has been crucial in helping me grow my business.

Whenever I'm asked to volunteer or participate in groups to talk about my business journey and the hurdles I've faced, I'm more than happy to do so. I hope others can learn from my experiences and grow their businesses more efficiently.

A big thank you to Canada Life Co and the British Columbia Advisor Solutions Team for inviting me to share and chat with your team. You really didn't have to, but the flowers and the kind thank you card you sent to my office yesterday totally made my afternoon!

A huge thank you to RE/MAX Hallmark Realty Ltd. and Sherry Douglas for organizing yesterdays informative session on the new capital gains tax rules coming into effect on June 25th.

We had an engaging discussion on the key aspects of these changes, including:

-Who will be most impacted by the new rules,
-The differences between the inclusion rate and the tax rate,
-How these changes could affect financial planning for your PREC and investment properties.

Some of the insightful questions raised during the session were:

-What happens if there are multiple owners of an investment property when it’s sold?
-Should agents buy investment properties through their holding company or personally?
-How are capital losses carried forward affected by the new rules?

It was a pleasure to see so many real estate professionals eager to stay informed and proactive about their financial strategies. If you missed the session or have further questions, feel free to reach out to me. Let's navigate these changes together to ensure your investments are well-protected and optimized.

Stay tuned for more updates and future sessions!

Thank you, Forest Hill Real Estate Inc. Concept, for hosting me at your Wychwood office today. It was a pleasure meeting your team and diving into discussions on and Financial Planning.

We had an engaging old-school round table chat, covering:

The new Capital Gains tax rules
Strategies to mitigate tax using your PREC
Integrating Life Insurance with your PREC

Though I'm not the best at snapping photos and my marketing brain takes a backseat when I'm in education mode, the session was a great success. Plus, we had a special appearance from the office puppy!

If you're a brokerage owner or team lead looking to help your agents build wealth and enhance their financial literacy, feel free to email me or explore my presentation and education session offerings on my website here: https://theprecplanners.ca/presentations-and-education/

Photo of my road trip helper and I grabbing some lunch before we left Toronto and headed back to Ottawa!



email: [email protected]

Thank you Royal LePage Your Community Realty for having me into your Richmond Hill office today to talk about all things PREC.
Questions agents asked today:
1) what’s the deal with the new capital gains tax rules coming out (we spent a fair bit of time on this)
2) can you explain how insurance policies work inside a PREC ? (We talked about both life insurance and critical illness insurance)
3) How can I pay my spouse from my PREC?

Every education session I do goes a bit of a different direction depending on what the agents have on their minds, and I’m happy to flow with it and make sure they get the information they need to make sound financial decisions.

And of course, while in Toronto, my road trip buddy (daughter) and I hit up Casa Loma!

Thank you so much to he Crazy Courage Business Stories podcast (links below) where I share about my journey to starting the PREC Planners including:

- Having the right team and support in place is crucial for business growth and success.
- Mindset plays a significant role in achieving success as a business owner.
- Obtaining professional designations can provide validation and confidence in one's abilities.
- Niche markets can offer unique opportunities for business growth and specialization.

Sound Bites:

"If you don't know what a PREC is, you're probably not a client of mine."
"Real estate agents, it's literally like you sell a house, brokerage pays you your commission check, that's it. That's the only revenue that can go into it."
"As your business evolves, you can start offloading tasks and not having to wear as many hats yourself."
"Committing to a full-time salaried non-revenue generating position was the scariest part of making this jump."
"The best coaches will tell you, you have to spend time working on the business, not in the business."

LINKS for Spotify, Apple and Amazon:

https://open.spotify.com/episode/2l9c6TUqK1pmox2wSHRujn?si=rNx7MMzMQw6vdRdI8nMD9Q

https://podcasts.apple.com/us/podcast/joanne-martin-the-prec-planners/id1719705307?i=1000657642582

https://music.amazon.ca/podcasts/47dbef12-78f7-4492-a630-88f8591a64a5/episodes/cc27c61b-e267-43db-a0a6-adef22176f9d/crazy-courage-business-stories-joanne-martin---the-prec-planners

JoAnne Martin - The PREC Planners JoAnne can be reached at: https://theprecplanners.ca/ [email protected] https://www.facebook.com/profile.php?id=100087489627384 https://www.linkedin.com/company/102782500/ Joanne Martin, a financial planner specializing in Personal Real Estate Corporations (PRECs), discusses the challen...

🚨 Real Estate Agents: Are You Sitting on Too Much Cash? 🚨

As a financial planner working with top-performing real estate agents, I've seen many of you holding onto excess cash.

Here’s why I see agents keeping cash:

🏠 Saving for the next investment property: Smart idea, but there are better ways to grow your money while you wait.
💼 Inconsistent income from commissions: It's natural to want cash on hand “just in case,” but there are strategies to ensure you have liquidity without missing growth opportunities.
⏳ Too busy to invest: Your time is valuable and focused on closing deals, but ignoring investment opportunities can cost you in the long run.

When we work with our clients we make sure you have enough liquidity and create a strategic investment plan tailored to your needs and goals, so you don't miss out on opportunities.

Don't let your hard-earned money sit idle. Let's connect and explore how you can make your cash work harder for you! 💼💰

Email [email protected] to book a complimentary consult

As a Real Estate Agent, you spend a lot of time driving. You also spend a lot of time looking at screens.
You don't have to admit it online, but I also know you spend a lot of time looking at screens while you drive...
It's a perfect recipe for, well, nothing good. You're more likely to get into a car accident, simply because you're on the road more than average people.
So, what's your plan if you are in a collision? Let's pretend you're 'fine', everyone is 'fine', but you end up with a bad concussion.
Concussions make you dizzy, headache, trouble focusing, double/blurry vision, brain fog, light sensitivity... on and on. And the best treatment for a concussion is not looking at screens and resting.
Let's say this happens to you right now, at the height of the spring market. What's your plan? How are you going to keep your business going? How are you going to keep paying your bills? Sure, you have liquid savings (I hope) you can pull from, but then you must work twice as hard later to build that back up.
And no, the ORWP does not have coverage in it for disability insurance.
I write this today because I personally know two agents in the last month that this happened to. And they're struggling in every aspect, and it really sucks.
I don’t like to just jump right into ‘products’ but if you’re a self-employed real estate agent, you need your own disability insurance. You just do. The odds are not in your favour, and you need to mitigate that risk as much as you can.
That’s all, that’s my rant for the day.
If you want to look at some disability insurance options that would work best for you, send me an email – [email protected]

Financial Post wrote a great article about the new Capital Gains rules.
I can't share it on FB, but it was written by Kim Moody and published yesterday - May 28th if you want to look for it.

A quote from the article: "You might think that legislation to change the capital gains inclusion rate should be pretty easy to draft. But you would be incorrect. Details matter.

For example, how will capital-loss carry-forwards now work? Will the government enable a one-time election — effective June 25 — like it did when it repealed the old $100,000 capital gains deduction (which became effective Feb. 22, 1994) to effectuate dispositions? Or will it only respect legal dispositions? How exactly will the triggered gains interact with the new/amended Alternative Minimum Tax?"

I'm going to host an information session on June 11th about this, specifically how it could impact real estate agents. If you'd like to join us, emial [email protected] and we'll send you the Zoom link.

---------------Life Insurance and your PREC -------------------
My oldest daughter turns 14 this week. When my husband and I had her, we were in our mid 20's, had just bought our first home, and were both working as employees. We bought life insurance, and critical illness insurance to meet our needs and budget at the time.
But things change. We now I have five children, have bought another home and are both self-employed. It's been a wild 14 years.
I see this all the time with my real estate agent clients. You put life insurance in place years ago, you didn't have a PREC, maybe you just bought your first investment property, the kids were younger.
But what do you NEED now?
I know you see the premiums coming out of your personal bank account every month - but are they doing what you had intended when you first got the insurance years ago? Have your needs changed?
Did you know you can put insurance policies inside your PREC and have your PREC pay the premiums?
You can use certain types of life insurance as a tax-sheltered investment tool inside your PREC?
A full insurance analysis is part of our Planning Program. We'll read all your current policies, explain what you have, and do a needs analysis to see what you need. We can then recommend how you can change (if needed) to get more efficient coverage, which often will involve using your PREC better.
Send me an email - [email protected] and we can brainstorm about your PREC and insurance.

Photo- flashback to 2010 to when she was so tiny!

I have this sticker on my desk.
It's a good reminder to keep it simple. Success is in the discipline to do the simple things - the follow-ups, reply promptly, do what you say you're going to do.
A good reminder for all the self-emplyed people in my life.
Success isn't complicated, just a disciplined campaign to do the ordinary things that needs to be done.
Make it a great Tuesday.

Agents are starting to , or have, significant retained earnings inside their PREC. Naturally, they want to 'invest in what they know' and buy more investment properties.
Questions agents have:
- Do you need a holding company or not?
- How does your PREC qualify for a mortgage?
- What are the pros and cons of having the investment property inside a corporation versus personally?
- Can you have multiple owners of an investment property if it's inside your PREC?
- Should you move existing personally owned properties inside your PREC or leave them?

The Answer .... it depends. Seriously. There's no one answer to these questions that will apply to every agent. To get it right (and avoid some expensive mistakes), you really need to look at your big picture.

I'm always happy to have a complimentary one-on-one call to brainstorm about your individual situation - use my Calendly link here to book something in. https://calendly.com/joanne_planners/meet-n-greet-chat-about-prec

Make it a great week!
email: [email protected]

We provided a great education session for the team at Engel & Völkers Ottawa yesterday about PREC's and wealth building strategies for real estate professionals.

Some of the questions from yesterday's attendees were:
1) Can you use money in my PREC to loan to another company?
2) How can I pay my spouse from my PREC?
3) Should I keep contributing to CPP now tht I have a PREC?

Thank you Erin and the Team at Engel & Völkers Ottawa for having me into your office, you've got a great set-up there!

If you're an agent with similar questions - send me an email, [email protected]. I'm always happy to discuss what might be best for your individual situation.

If you're a brokerage owner or manager - these are the kinds of questions your agents have. Providing them with the financial confidence to manage thier businesses, gives them the clarity to go out and keep new business coming in. If you'd like to schedule an education session for your office, you can email our office at [email protected]

In my experience there's three types of real estate agents when it comes to retirement:
1) "How soon can I stop?"
2) "I plan on slowly weaning off, transitioning my clients to my successor, cutting my workload by 25% every few years until I'm ___x___ age"
3) "I'm going into the grave with an offer in my hand!"

Pushed out, carried out, or leave on your own terms - you still need a plan.
Do you have questions about retiring from your real estate a career?
Send me an email - [email protected]