All Forum Posts by: Brianne H.

Hello, I am interested in purchasing buy and hold out of state 2-4 unit properties in the next year. I understand when doing the math to calculate cash flow, after PITI, you still need to factor in property management, vacancy, and cap ex. However I'm wondering what other expenses have come up, perhaps on a yearly basis (or even less frequently) that I should be considering in my calculations? So far I'm thinking:

- Accounting/doing taxes (how much does this run you per year?)

- Travel expenses checking in on the properties every so often

- Software (Do you use it, or is that more for the PM? How much does it run you?) 

- ?? 

On a similar note, what amount do you keep in reserves per unit? (I'm assuming that's considering for vacancy, % of insurance deductible for the property, cap ex/planned upgrades, and emergency repairs - how much?) 

What else am I missing? 

Well I can't speak to the shelf life of insulin, my first thought about adding an addendum is that putting something like, "Landlord is not responsible for any medication that requires refrigeration" should be sufficient. I personally wouldn't say they can't store medication in the fridge or must provide a mini-fridge for it - what a hassle, and people aren't going to do it anyway. Besides, it's not having medication in the fridge that's the problem, it's that you aren't responsible for it that a tenant may take issue with. 

Thank you for the responses. I am very unfamiliar with how to best structure this and how to pay the least amount in taxes. An experienced accountant is an obvious must, but I'd like to learn more myself so I have a better understanding and not just relying on other's opinions. 

@Steve Nowak are you allowed to specify no subletting (or assigning)? I know in AB unless a landlord has a good reason (that can be proved in court if it came to that), the tenant has the right to sublet or assign the lease. Now the landlord can charge a "reasonable" fee for the tenant to do so, but they must allow it. 

@Justin Currie
Well I'm actually in a fairly similar situation. 

#1 - I've done this 3 times now. We've averaged one house a year, and bought the first one in 2014, right when oil prices peaked before tumbling down. We are currently trying to sell house #3 at the moment. If you don't mind living in a mess, it can be a great way to get started to having a nice chunk of cash for your next venture. The issue that I'm having at the moment is that the market has come way, way down since we first bought in 2014. Even with our current place, when we bought, we were looking at a sales price of $20-25k higher (comps supported it) than what we're likely going to get now. And since I've yet to find any fabulous deals here like the US has, my margins on this particular house are QUITE thin. However, the other 2 we did okay on, and I have no complaints. In our particular situation, we wanted to build a decent lump sum to put as a down payment on an acreage as a primary residence, and with whatever's left over, use that as a down payment on a buy and hold. 

What % are you looking to put down? How long are you anticipating living in the property? Fairly quick flip or live in for a while and grow equity? Can you explain what you mean by adding renos to the mortgage results in huge penalties when selling? 

#2 - This is my next step, once our house sells and we figure out what we're doing for our primary. Finding a cashflowing rental in Calgary may be tricky... though a BRRR could have some potential to work. We considered going that route with our house #2, since it had a suited basement with tenants. Ultimately we ended up selling it, but the numbers would have given us about $350/m cashflow if I self-managed (it was our plan B, so we didn't buy with the intention of renting out both units, we expected to live upstairs and rent downstairs.)

Hi, I am a Canadian looking to start investing in buy and holds (small multis, 2-4 units) in Ohio in the next 6-12 months. I've heard about the main benefit of an LLC being that you're farther away from personal liability should someone sue - are there any other benefits? Can a Canadian corporation act in the same way as an LLC, and can they hold real estate in the US? Basically I'm wanting to learn more about the best way to do this, and pay the least amount of tax (in either country), understanding the cross-border complications add more hassle. Any advice or tips are appreciated! Also, if anyone has tips on financing/mortgages for Canadians they'd like to share, I'm all ears!

What others have said. Hopefully you have a property condition report on live-in. If not, in some areas, you can not keep a security deposit or portion thereof if you don't have the move-in report/photos for proof.

Yes. And we've done 3 now! It actually goes in a cycle, at the beginning he's okay with it, then when the mess and work starts his mood goes downhill. He vows we'll never do another, but then as soon as we sell and he sees what we're making, he's okay with it again. For us it's a means to a goal - we wanted to do a few live in flips to have a good down payment to buy an acreage, since they are expensive where we live and we didn't want a massive mortgage. Hopefully we will be able to buy one this year.

I had a tub reglazed in a flip - is was also pink, put in in '71, had chips and scratches in the glaze. Would have been far more of a pain (and cost) to rip it out and replace due to minimal space. Had it professionally reglazed for $600 CAD, turned out BEAUTIFULLY. Looked brand new, there was no way to tell where the scratches and chips were. I was quite impressed with how it turned out, took half a day, though it stank for 3 days. Thank goodness it was summer so we could keep the door shut and window open for a few days.

Just be sure that you're A) giving enough notice to increase the rents, and B) Make sure you follow the law exactly in regards to how to go about giving notice to raise the rents. In some local areas, they can be extremely strict with how and when to serve the notice to increase, like in BC Canada. (For example in BC, you MUST use a specific form to raise rents. If you don't use that EXACT form, the tenant can take you to court, and they WILL win, and get all the increase in rents due back to them. It's happened.)