All Forum Posts by: Ash Badry

@Scott Galloway
I'm not sure what you're asking when you say "How were these places set up?". Most of the houses we BRRR'd were dated with either finished or semi-finished basements. Only one already had a kitchen in the basement. We were buying the least expensive houses we could that were in our specific target neighbourhoods and met the rest of our criteria. There are very few real wholesalers in Edmonton and we've never bought a property off of one.

Like Cody said, putting in sweat equity can be a great way to go but the main thing I see inexperienced people doing is not accounting for the money they should be paying themselves. If you choose to do work yourself that's fine but there is a cost to doing that. For every hour you spend swinging hammers you could be working at your day job making X dollars or putting that time into finding more deals and raising money. These last two activities are actually much higher value than any physical work you could do at the property. A lot of people will just tell you how much money they had to spend on materials and contractors and either ignore or not even realize the cost of the time they put in. Either way is fine, just be aware of your true costs. 

You're right, Canmore is a great market for STR's. It's very seasonal and therefore our income fluctuates and we own the properties within a LP so it's not so easy to say what our "cashflow" is. What I can say is that getting nightly rentals in the summer of over $600 per night doesn't suck.

Be careful about investing in markets like the Okanogan as they can be extremely seasonal. Doesn't mean it won't work but be sure to do your homework.

Send me a PM if you want to see some of our listings, I think listing them in threads is frowned upon.

@Scott Galloway 

Sounds like an interesting idea. Having done a number of BRRR's in Edmonton I think your numbers may be a bit optimistic. In my experience fully renovating a 3 bedroom house around 1100 sq ft and adding a new legal basement suite where one didn't exist before costs closer to $100k. This was us general contracting the rehab and hiring trades for most of the work. Of course it also depends on what your finished product looks like, if you use trades or "handymen" and if you cut any corners along the way.

I have not actively looked at the Whyte ave and west of 99 st area recently but my gut tells me that finding a house that isn't a knock-down for $315k would be a tall order. I'm guessing lot value in that area is at least $350k, but again having not looked recently I may be out to lunch. Those properties are older and therefore typically have smaller footprints with only one bathroom upstairs and up to 3 small bedrooms. I would imagine it would be difficult but not impossible to fit a 2 bedroom suite in the basement without it being cramped. There is usually more issues involved with rehabbing older properties too. 

If we could buy properties for $315k, put $75k into them and have them appraise at $490k and cashflow $1000 monthly we would be doing that all day long but we quit doing BRRR's consistently over two years ago (we did a one-off suited house flip last fall) because the numbers weren't there.

We also run STR's (short term rentals) in Edmonton and more recently Canmore. It's true, you can definitely produce more net income monthly compared to a long term rental but there's a heck of a lot more day to day work involved. You're running a 24/7 hospitality business on top of everything else you're doing and if you're not on the ball your reviews will reflect that and your income will soon drop as a result.

We are considering shutting down one of our Edmonton STR's because the income has actually decreased over the past 12-18 months with so many people throwing their properties on Airbnb. We are superhosts with a 5 star rating on all our listings so it's not the experience we offer causing the income decline. With that being said we actually manage STR's for other people and just picked up one near WEM. So far it's doing well and I suspect that being near the mall is one of the better locations in Edmonton.

My wife and I run a STR Meetup called Edmonton Short Term Rentals Association. You might want to check it out if you want to learn more about STR's. It's free and I think the next meeting is in September. There is also plenty of training courses and podcasts on the topic.

I hope my post didn't sound too negative, I was just trying to share my experience with you and I'd hate to read a post 12 months from now where your flip didn't turn out the way you hoped. My suggestion would be to dig deeper into the numbers before you pull the trigger. Cheers.

Hi @Pierre Daigle, one of my mentors is fond of saying “With clarity of vision, strategy and tactics become evident “. I’ve found this to be very true with my own real estate investing. 

Recently my wife and I have committed to working only on the few things that we know will get us closer to our current goals. Having this “clarity of vision“ has greatly simplified our business and reduced our daily stress. It’s eliminated the question “what should we do next?”  

My recommendation to you would be to sit down with your wife and clearly define your current 6 and 12 month real estate investing goals. This will make it obvious what your next step should be. 

Once you've done that and have any more questions about the Edmonton market, long term rentals, short term rentals, JV's or BRRR's feel free to shoot me a message.

@Cory S. My wife and I have had no problems getting insurance for our Edmonton houses with legal basement suites. Feel free to PM me if you would like an insurance broker referral.

Welcome @Naoka! It's great to continue to educate yourself but it's even better to get out and start meeting people in the industry. In Edmonton there is a Meetup group called Edmonton Real Estate Investors Association. I would start there and look for others to attend.

Edmonton is lacking wholesalers who regularly have deals so if you're able to have a consistent deal flow you'll do well. I'm constantly looking for deals myself so feel free to PM me about my specific deal requirements.
Cheers!

@Keenan Freker, I'll echo what was repeated above, just take it one step at a time. Worrying about buying your 5th property when you don't even have line of sight on your first will do nothing but distract you and waste time. Distractions are like to cancer to real estate investors. If you have the ability to set goals and work on them without getting distracted you'll be more successful than 90% of the other investors out there. 

I like the quote that goes something like 'Go as far as you can see, when you get there you'll be able to see further'

I agree with @Chris Chang, a JV partnership with a stranger can work if structured properly. You need to spend some time getting to know them and making sure that their goals and expectations match up with yours.

When we do any JV's we make it clear that our JV partners have no say in any decisions except those involving sale, refinance and yes or no when it comes to repairs or capital improvements over $2000. We are the real estate experts and therefore we decided how to run the property. The JV agreement is crucial, don't speed through it or cheap out and use one you found online.

Another thing to consider is how much investing experience you have. If you are new to the game then giving up some profit in order to gain experience is totally worth it for your first deal. There's nothing wrong with doing the first deal to learn and subsequent deals to earn. However, if you have the ability to do your first deal entirely on your own then that may be a better path as you won't be putting a JV partner's money and your reputation at risk.

If you have no experience at all I would highly advise you find a local investor doing what you want to do and either be the cash partner in one of their deals or volunteer to help with anything on their projects just so you can learn how the game is played.

Best of luck.

@Ralph Noack I just got off the phone with @Linda Labbe yesterday and she is doing exactly what you're talking about. I suggest you reach out to her and see what you can learn.

Hi Cody, try calling Julian at Commercial Linocraft, you'll have to look up the number as I can't put it in a post. He does work for us all the time.

I suggest that you attend some local REIA meetings and start meeting people in the industry who are doing the thing. Search for 'Edmonton REIA' and 'Mogul Mastermind' on meetup, both are great groups to get involved with.

There are many different ways to "get started" so it's really up to you to learn what the options are and which appeal to you. I would advise that you find one investment strategy and avoid the 'shiny penny' syndrome.