All Forum Posts by: Aaron Moore

Any realtor can get you a copy of the local assignment agreement.

Or... If you're in Ontario, then google something like: OREA assignment agreement download

I've never done a double close and haven't heard of people doing that in Canada.

If anyone wants to learn the ins and outs of Agreements then look up Barry McGuire. He's a lawyer in Alberta. Look up some of his articles and educational material. He also does a course in Ontario every few years. He's the only person I can think of in Canada who is teaching this strategy. It is more popular in Alberta than here in the Toronto area... due to the ups and downs of the Alberta economy. But it still works here for the right situation.

1. How did you find the deal?

>> I buy lots of private deals from my advertising. I've found AFS deals from direct mail and internet advertising. To be precise I have done 3 Agreement For Sale purchases. It's not the most common way I buy houses.

2. Why did you decide to ask for an AFS?

>> For some it was the only option for i) me to make money and ii) the seller could avoid paying money from their pocket to cover realtor fees and mortgage pre-payment penalty. For one purchase it was how I could put more money in the seller's pocket as a different option to buying their house for cash.

3. How did you negotiate the deal?

>> Every deal is different, but for two of the deals it was the only option for them not to pay money out of their pocket to sell. That needs to be explained to the sellers AND their lawyer. The seller's lawyers also spoke with my lawyer to "figure out this AFS thing". My lawyer knows me and has done past deals with me (non AFS)... so he'll vouch for me and "sell" me and my solutions. But he's not going to vouch for someone he doesn't know.

4. How did the AFS practically work on this one (how did the numbers play out)?

-There are a lot of numbers and I don't want to make a research project for myself. These deals were done in 2011-2013. I put small amounts for deposits in the range of $2000-$7000. One of the deposits was a few thousand in escrow until I bought out the house. So the seller didn't get any money... the agreement was I pay off their mortgage and get their house SOLD and out of their name within and few years. Profits were in the $6000-$20000 range per deal... these were all relatively "low equity" deals. Two of them I did rent to owns with for 1.5-3 years. One I renovated and flipped in two months. In hindsight I wish I had kept one or two of them as long term rentals! But it felt good to turn the renters into home owners and I'm glad I made the rent-to-own tenants wealthier :)

I know a lawyer in Oshawa and a lawyer in Burlington that have worked on my AFS purchases. I want to avoid a bunch of people calling them and trying to pick their brains for free about AFS. So please private message me if you want the contact info and if you're a person who will pay for their time and/or also use their services for "regular" buying and selling services.

What details do you want about a past AFS deals?

I've done a few AFS deals. In practice, the lender doesn't care about the AFS. (If you miss some payments, or annoy the lender is some way, then maybe the lender will find problems with the AFS... but I haven't heard of such an example. Maybe someone else can share an example.) The lender keeps getting their mortgage payments as usual and they are happy. The seller stays on title until the mortgage is paid out (usually by the renewal date... unless the seller agrees to renew). The buyer can choose to register their AFS on title or not (you pay LTT if you register). 

There are many ways to find deals. My style is marketing, marketing and more marketing. (my website, letters & flyers, outdoor signs, pay for referrals, etc) As a wholesaler I sometimes buy from other wholesalers when I want to get busier and I obviously see other people buying the deals that I wholesale!

You'll qualify for more mortgages if you only have one spouse's name on title and mortgage.

Once you have multiple properties it also makes life easier when one spouse applies for another mortgage... you only have to supply documents for the one spouse and their properties. Gathering documentation for rental property mortgages gets to be a lot of work the more properties you have.

So yes! If one spouse can qualify for the mortgage, then only use one spouse. 

REIN and Don Campbell have done more market research than I'm likely to do.

Here is their 2018 ranking for Ontario...

Ranked in order of potential for housing market strength over the coming five-year period:

1) Ottawa

2) Kitchener -Waterloo-Cambridge

3) Hamilton

4) Barrie

5) Brampton

6) Durham Region

7) Toronto

8) Kingston

9) Orillia

10) Grimsby and St. Catharines

You live in Durham and there is opportunity there. People are making legal 2-units with decent cash flow. You might be able to find a condo townhouse that works too. I'm active in Durham and I'm still seeing good deals come up. If you're driving distance to Toronto, then you're in diversified economy with good fundamentals. But prices close to Toronto have gotten high and its tougher to find cash-flow. Looking at the list, I'd be careful of a city like Kingston that has a smaller population and doesn't have other large cities nearby... but I don't know much about Kingston... I'd just be careful of smaller cities that are far from large metropolitan areas.

A lot of people "try" the wholesaling business and don't succeed at it. Maybe they realize it's not for them. It's a business and you need to do a lot of marketing and talking to sellers. It's a lot of work.

-get comfortable talking with house sellers.

-figure out how to solve problems and help sellers out of tough situations.

-understand that you can't buy every house, you're only looking to buy profitable houses. And you need to be able to politely explain this to sellers.

To find sellers: You need to do marketing to get sellers to call you. (sending letters is the simplest) I'd recommend starting in neighbourhoods where there is "rental income" potential and also has an older housing stock that's good for fix and flips.

To build a cash buyers list:

-when you have a deal post it on kijiji, craigslist or any other site where you can advertise private deals.

-co-wholesale with an investor who already has a buyers list (like me)

-go to local real estate investor education/networking groups and find out who buys properties regularly.

The marketing strategies are similar to the US and elsewhere: website/SEO/PPC, outdoor signs, letters/flyers, etc

There are many podcasts and youtube videos that teach wholesaling these days. That will give you a good foundation.

George Dube and Peter Cuttini of BDO, they're based in Waterloo but work with a lot of real estate investors throughout Ontario.

I regularly work with a couple real estate lawyers in Toronto, but I wouldn't say the specialize in investors.