All Forum Posts by: Brianne H.

@Nathan Hillier I am also in Calgary and hoping to move into US real estate soon. I'd love to chat with you and any others who might be interested in the US as well. 

@Chris Dittrick I think that Avenue Financial has the traditional lenders as well as hard money lenders. I could be wrong but I did talk to them a few years ago about a project I was doing, but for a variety of reasons, never ended up doing that particular project so it never went any farther than that. 

Hi @Ken T.

I'm in the Calgary area, and though I haven't personally invested in BC, my parents own 2 rentals there, and after hearing about some of the nightmares they've been through, I've decided I absolutely will not invest in BC, and here's why:
- All of BC is rent-controlled in how much % you can increase the rent every year. This past year it dropped even more with their NDP government. (4% down to 2.5%)

- Once a tenant is in, you can't simply evict them or non-renew a lease. If they're adamant about staying, once they're in, they're in. Good luck getting them out. When you read through the landlord-tenant act, there are extremely few ways of getting a tenant out. Even if you sell the place and someone else wants to move in, you can't force them to vacate. 

- As you might have guessed by now, the laws are very much in favour of the tenant. 

- If you have an issue with the tenant, you actually can't go to court, you must go through the RTB, and through an arbitration process. The arbitrators tend to also favour tenants, and the burden of proof on the landlord is high. Did I mention that the conference call with the arbitrator isn't allowed to be recorded? 

- All notices must be served exactly the way the law specifies - example rent increases need to be served on the specific form, you can't just give a written notice of rental increase that you draw up yourself. I'm trying to find the article I read some time ago of an older couple who owned a rental property, I think the husband died and the wife (who wasn't as familiar) took over. Had the same tenant for years, had a good relation, served written notice of rent increases over the years without issue. Eventually tenant finds about that rent increases must be served on a specific form, he takes the issue to RTB, and wins, with the ruling being that any rent increases from the time the wife took over (probably about 15 years at this point) were invalid, so the landlord owed the tenant about $24k. 

- Screening tenants is going to be fairly limited - for example did you know you're actually not allowed to take a copy of their driver's license? 

- Beyond the extremely tenant-friendly laws, keep in mind that there are more taxes in BC as well - at closing expect a few thousand dollars more, and now there's this speculation tax - I don't know all the ins and outs about that, but I imagine it may significantly affect investors. 

Clearly I'm pretty biased against investing in BC, but if you do decide to do it, you've been warned :) For me, it's a far greater risk and much more scary for me to invest there than it would be to buy something in AB. Things aren't great here at the moment, and no one really knows where the bottom is, but based on history, prices and economy will come up again, it just might take a few years. 

@Lindsay Harris that's tricky. My inclination would be to have an appraiser and/or several realtors give you their opinions on ARV once you detail the renovations you're planning on doing. Are you planning on a refi or selling?

@Larissa Luna I would use it to pay down the credit card debt. Assuming regular CC rates of 20%+, the amount you'd be saving in interest every month might just be similar to the amount of cashflow you'd get from one or two doors. 

Again assuming high interest rates, can you transfer the balance to a line or credit or get a promotional rate of low interest? That might help keep the costs from escalating while you work on paying it down aggressively. 

Hi @Debbie C.,

If your agent hasn't been helpful so far, probably best to look for a new one. They're unlikely to suddenly start being more helpful! I've only dealt with appraisers for refinance purposes, not for actually giving a value to selling the place, so in my experience, the appraiser has had to follow the lender's instructions to a T on what to include, or not to include for value (example they can only count one outbuilding and no more than 5 acres of value for rural properties.) What may be a better idea depending on your area is to meet with at least 3 different realtors. Get to know them a little bit, see who you'd like to work with, but also get their opinions on what the house could realistically be sold for A) as-is, and B) if you do the necessary repairs. In theory they should know the area and be able to give you realistic figures, and then you'll also know who you'd like to work with. If one of them throws out numbers that are way higher/lower than the other estimates, that might give you an indication that they don't know the market. 

Also, it would be a good idea to get an estimate or two on what the estimated repair costs will be. It will help you be able to make your decision, as well as if you got an estimate on a new house build. Good luck! 

@Dana Curtis welcome! Sounds like house-hacking (buying a multi-unit property, living in one unit and renting the rest) might be a great place to start, if it's owning rental property that you're interested in. You could likely get your housing costs down to very little, if nothing at all and making a little cash. Just be sure you know your state landlord-tenant laws if you're going to manage the units yourself. While you're still working, take the money you would have used for housing costs and save up to buy your next property. 

Hi @Cindy H.,

Out of curiosity, what areas are your properties in? A few things to note: 

1) If your place was rented for $1800 starting in 2014, keep in mind rental prices have also gone way down since the good years 5-6 years ago. Keep in mind you may not be able to get $1800 for it again.

2) If I remember correctly, if you pay down your primary residence, and then borrow against it, the interest you pay can be deducted for tax purposes, so that's something you've definitely got going for you. 

3) On the other hand, an ~$1800 rental on a ~$350k valued property isn't a fantastic return, especially if you're got financing on it. 

4) If you sell, you'd be able to get that large amount of cash now, but as you know prices have dropped. If you were selling in a different year, you would likely be able to get a lot more for it. My own property just appraised for 480k, and in a better year would probably be closer to 550k-600k. 

5) 4.45% for a variable rate? That would be for a HELOC, correct? Is there a reason you'd like to keep all of it as a HELOC, or would you maybe want to do a portion as a HELOC and the rest as a mortgage? Prime + 0.5% seems to be going rate for a HELOC, but if you wanted to keep a portion as a mortgage, you could knock off about 1%.

@Ram Srinivasan

What's your reason for evicting, and what's the reason for wanting to get rid of the property? Is your option to purchase essentially a rent-to-own? How much of an option consideration have they paid? 

For those of you saying "just make sure you have a good contract!" or, "legit contractors have contracts!" PLEASE learn from my experience (my situation summarized on Page 1) - A CONTRACT IS NOT A SECURITY BLANKET, AND IT DOES NOT ALWAYS PROTECT YOU. 

In my case, the guy I hired came with a contract - great! Someone who knows what he's doing and is legitimate. I read through everything, agreed with all the terms, there was protection in there for me, all the things you want to see. I later find out that as he's giving me almost-daily updates of "I pulled the permits today" and "The trusses were ordered today from ____, they'll be here in 2 weeks." All of it were blatant lies and none of it actually happened, and it was never his intention to complete the contract. 

But wait, I have a contract, so I'll just take him to court, and he can get charged with fraud! First of all, no, he can't be charged with fraud here because AS LONG AS YOU HAVE A CONTRACT IN PLACE, it's a civil issue and not a criminal issue. So a smart criminal just has to draw up a contract (making themselves look more legitimate) and HE'S got the protection from the law? Yes - answered by a police officer. 

Secondly, sure I can take him to small claims to sue him, and I'm certain that I'd win. But winning and collecting are 2 very different things, and when the guy doesn't own a thing of value, you can't get blood from a stone. So is it worth the $200 filing fee, plus taking a day off work to go to court, when I likely won't ever see a dime from him? It kind of feels like throwing good money after bad at this point. Meanwhile even though I find out after the fact that he's done this to many others (who have reported him to the provincial agency - nothing happened, and took him to court - garnishment on an empty bank account) he's still out there doing what he's doing, likely getting as far as he is because "he's got a contract", and there's not much anyone can do about it. 

So in a nutshell, don't be sucked into thinking that just because you have a contract in place, and it's in your favour, that you're protected. If you are faced with the worst-case scenario possible, do you have enough other protection in place? My learning from this experience has been that for large projects in the future, I will be using an escrow account, and I'll be doing my own checking to make sure the stuff that a contractor says is getting done, is in fact getting done.