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Updated almost 9 years ago, 12/09/2015
Noobie Investor from Calgary
Hi BP Community,
My name is Graeme and I am a new REI located in Calgary, Canada. I am a fulltime IT Project Manager in the Oil & Gas sector and since reading a number of investment books I am looking to expand my investments beyond the stock market. I was fortunate to buy a single family home after University and lived with 2 roommates for 4 years before turning it into a fulltime rental property. I moved in with girlfriend (now wife) and we are looking at moving out of her townhouse to buy a 'Family home', making the townhouse our 2nd rental property. My goals in Real Estate are to buy additional rental properties (SFH, Multi-units) in Calgary initially and expand outwards as my knowledge grows. Looking to connect with anyone in the Calgary area that is into REI to network, learn and potentially partner up with!
Cheers,
Graeme
@Graeme Cram Welcome to BP Forum. Tons of good info and helpful people on this forum. There are a bunch of people in Alberta and Calgary on this forum and there have been a variety of meets over the past few months that have been setup.
You seem to have a pretty firm grasp of the house hacking concept. Consider this winter finding a good deal on a slow selling r2 lot, and put in a low offer. You may get a lot at 100 k less than last year or more of a discount in a good sw inner city location. Partner with a builder to build a duplex and sell half, and lower your own cost base on the side you keep. This is one way to upgrade in the Calgary market that I have a done successfully last year. Another is to find a horrible outdated single family house and rehab it.
Benefits of this are you get to build to your own specification without having to pay steep builder upgrade fees. Downside is market risk and hard to finance, possibly don't make enough profit on the project. If this sounds like too much work or market risk then right now there are dozens of half broke builders trying to unload inventory. Just go buy something you like.
Hey Graeme,
I'm in a similar situation. We have one rental right now but looking to move out of our single family house also. I've been doing the numbers on the house we are in now and isn't to much wiggle room. Disappointing for sure. We only owe 240 k on the house now. Looks like rents might be coming down too. But on the flip side I frame for some "big name" builders and their sales are not good at all. So could be a great opportunity to get into a discounted new house .But if you're in oil and gas for a career how's your job security?
Welcome to BP!
It is interesting times in the Calgary market for sure. The outlook is not looking too great for 2016 but can present a good opportunity for investors.
While I do not own any rentals currently, I feel that Calgary isn't the best place for buy and holds.
The numbers don't make much sense if you go by the 1%, 2% rule etc.
However that being said, there any many ways to increase your cashflow per unit. One of them being taking advantage of the new legal suite rule that the city is passing.
http://www.calgary.ca/PDA/pd/Pages/Permits/Projects/Applying-For-A-Secondary-Suite.aspx
Thanks all for your replies!!
@Jessie Shields - Thanks I will keep an eye out for those meets and try to attend.
@Sean Kollee - The house hacking was a big win for me as I was able to pay down my house in the 4 years with my roommates paying the majority of the mortgage and me making double-up/lump sum payments throughout the time. My plan now is to pull some of the equity from this house to buy our next family house / rental properties. I never thought of the duplex idea I may have to talk to you further about that!
@Jesse Conforth - I hear ya.. The townhouse my wife bought was unfortunately not a wise investment. We hope to break even when we initially rent it out and then grow it over time. Job security is always scary in O&G - goes with the cycles. I was laid off in 2008 too when it was bad but then quickly moved over to a tech company to ride out the storm (with much less pay...). My current role supports the Downstream side of O&G primarily the refineries which are making good money right now, so I should be safe for now..
@Jett Rao - Yeah I believe the 2016 outlook isn't great at all. We plan to buy 2016 spring/summer when hopefully we can find a deal! I will look into the 1%, 2% rules as I confess I don't know those. The legal suite is very interesting and appealing to me. The areas they are proposing are exactly within my desired neighbourhoods. Perhaps I buy one and get your team to renovate it to include a legal suite? :)
@Graeme Cram we are always looking to do business with like-minded people!
The 1% rule is simple. Gross monthly rents = 1% of purchase price.
I.e. $1,000 in monthly rent for $100,000 purchase price. These numbers are hard to hit in Calgary. But from what I am seeing, they are very possible in the US.
@Graeme Cram - Let me be frank, the 1% rule (or 2% rule commonly shown on these forums) will not work.
Yes market is in a slide, but, at the same time, these are the times when dealers are available. I believe the absolute key in buying single family homes in Calgary are, buy with lower amounts of money down and/or figure out a way to minimize your downside risk while keeping your cash flows. I own three rentals (and a 4th closing) this Friday and I can tell you my cash flows are great, and I have found a way to hedge my risk.
No, its not traditional buy and hold, but the essence of it is most definitely the same. Please feel free to get in touch, looking forward to meeting you.
P.S. we do have a bigger pockets Calgary Facebook group which helps us coordinate our meet ups. Feel free to join, hoping to meet you soon!
Ram
Welcome to BP and see you around the forum
@Ram Srinivasan would love to hear more about how you structure your deals!
@Jett Rao Yeah no doubt that 1% would be very hard to hit in Calgary! Potentially you could do that in College towns in Alberta like Red Deer or Olds? Maybe...
@Ram Srinivasan Thanks for the comments. I have found the group on Facebook and look forward to the next meet! Very curious to hear about how to structure your deals. I personally was expecting to need to use my savings or a HELOC to finance the downpayment/reno's of units that I plan to buy.
When and where is the meet up next week ? I don't have "the Facebook" I'd love to tag along
Hi @Graeme Cram,
Welcome to BP. With the market in a downward direction things look pretty positive for investors while pretty negative for us oil and gas peeps. Looks like you are getting some good advise from other Calgary BP members. This place is a gold mine, ask a lot of questions, meet up with as many investors as you can and pick their brains. You will find something that works for you.
We should get another meet up going here sometime in Calgary gang. That last one was fun. We can get Graeme in on it and bounce ideas off eachother.
@Jesse Cornforth you don't have "The Facebook"? How do you stay up on your terrorism news, your "The NDP is destroying our world" news or the "Justin Trudeau is the hottest and best or dumbest and worst thing for Canada" news?
Hey
@Cal Ewing you know the ol paper...... Kidding of course. Not having the Facebook does hurt me on the networking front. Also keeps me away from the crazy political debates ! But I thought we had a really great meet up last time. Should definitely try to get a group of us together to brain storm some strategys to attack this "sky is falling" market. Maybe there is some opportunities out there.
Yes.. lets try to get something organized next week guys.. the coop in hamptons I found worked well.. weekend thr best time for folks?