Newbie Investor From Port Moody, BC, Canada With One Deal Done

[Marie Tai]

Hello!  I've been lurking here on Bigger Pockets for a while now reading articles and listening to the Podcasts.  I've learned so much and I really have to thank Bigger Pockets for getting me started.

I'm a nurse from Port Moody, BC.  I have wanted to invest in real estate for a while now, but was deterred when my bank initially told me that I would have to save more money or make more money back in 2014.  It's too bad that I stopped there at the time because I could have bought properties for a lot cheaper back then and would probably have been able to start small with the help of a mortgage broker.  

I ended up investing my money in TFSAs and RRSPs to grow it faster.  Which wasn't such a bad idea.

Finally, last year, I took the leap and contacted a mortgage broker.  Turns out I could borrow money just fine as long as I didn't go through my regular bank.  After a couple tries with different realtors that didn't work out, I googled "the best rated realtor" in my area.  The realtor with the best reviews was too busy to help me personally, but she assigned me to one of her team members.  After looking at some listings and narrowing down what I wanted and needed to have positive cash flow, we went out looking at condos ONCE and I found my current rental property!  I couldn't believe how easy it was once I found the right realtor!  

For those of you that are struggling in your property searches, see if maybe a better realtor can make a difference.  For me, it was night and day.  She did all the background research for me so that I wasn't going out and looking at properties that would later turn out to have maxed rental restrictions.  Also, she had great references for a lawyer, insurance broker, etc that also helped to smooth out the process for me.  It also helped that the original realtor that I contacted was a real estate investor herself with over 6 properties.  She personally checked out the condo for me to find any potential issues and she confirmed that the property was in a good location with high rent.  Basically, she gave it her thumbs up from a real estate investor's point of view, which really helped to make me feel better about the purchase.  She also participated in the bidding process so that I could get the deal before open house, and thus risk paying more due to multiple offers or losing out to a higher bidder.  By October 2016, the condo was mine.

Since then, my husband and I have done about $4000 of renovations to the condo (repainted walls and ceiling, refinished the hardwood floor, fixed up and reframed the electric fireplace, crazy amount of cleaning, refinished the sink, put in new blinds, brighter lighting fixtures, etc).  Our goal was to create a really nice, higher end condo so that we could list it for a higher rental rate because it was in a prime downtown location.  We took a long time because it was our first rental property and we were learning as we went.  By January this year, we put the condo up for rent and by late February, we had a great tenant in.  

We used all the recommendations on Bigger Pockets on how to find a good tenant and it really worked!  The only thing I would caution is that if you list ALL the requirements you look for in a tenant on the advertisement, you will get very few replies.  This happened for me in the beginning of January so I lowered the rental rate by $100, thinking that was the issue.  Later on, I updated the ad to only promote the condo and list basic requirements like no smoking and I found that people replied like crazy.  I would follow up these replies with the more detailed requirements and I would be left with only a few, which was okay.  I think this worked better for me because it gave me confidence in the rental appeal of the condo at the rental price listed and then let me follow up with the email which would essentially screen out most of the people that didn't fit my rental requirements.  I ended up finding my tenant at the lower rental price, but I think I could have rented it out for the price I initially wanted or even higher because there was actually a ton of interest from renters.  Even so, the rent covers mortgage, property tax, city utilities, and strata fees.  Also, since last year, the property has gone up in value by about $30K!

If I could go back in time, I would change a few things. Of course, I would have left my rental price $100 higher, in which case I would cash flow better; I would make the amortization period longer so that I could cash flow better (I chose 20 years instead of 30); I would have gone with a different mortgage company (I found out later that this mortgage company doesn't offer HELOC and no bank wants to give you a HELOC if they are not the primary mortgage provider); I would have gone with a one year mortgage instead of 5 locked in so that I could access my equity faster or sell the property in less than 5 years (plus the interest rate would have been lower). Also, I forgot to calculate city utilities so my initial calculations were off (luckily I had some buffer room).

Still, I've got the rental investment bug now and I can't wait to buy the next property.  I just have to find some more creative means to fund it now.  If there are other rental investors near Port Moody, BC, I'd love to meet up and chat!  It's my favourite thing to talk about real estate now  :D Maybe we can team up and do some deals!