All Forum Posts by: Chris Habets

The only way I could see this being a good way of paying out a down payment would be if the card was offering a significantly discounted transfer fee and interest rate. Every few months I get an offer of a 1%/1% transfer, or a 1.5% transfer and 0% interest, etc.

I agree with Thomas - tell them the new rent, because the house is now worth far more. Tell them it's that rent or bust.

Best case, they say yes. Worst case, they manage to get back into the place and pay you the old rent - and you can apply for a higher rent increase than normal through an exception for renovations. See here (it's a tenant legal advice website) http://www.ontariotenants.ca/law/law.phtml#Q14.

It would be form N10 (http://www.sjto.gov.on.ca/ltb/forms/#landlord-form...) if you were forced to go the route of an above-guidelines rent increase. But I think that's exceptionally unlikely. I would assume that you're creating a new lease on the basis of the tenant not having lived there for so long. 

If you can find a regular person with a ton of cash safely invested in 1.5-2% savings account, that's perfect. But that's probably hard to find - specially someone who will trust you to pay the 5-7% you promise them.

The other (more realistic) option is to call a mortgage broker. I've spoken to Ottawa Mortgage Brokers about this, and they have private money lenders that will base their loans on home value and rental/flip potential rather than your personal financial situation. These same people can do Hard Money. 

Another method to find HM would be your local real estate investment group, if you have one, but I have zero experience with that.

I used the eviction-for-personal-use myself, for a legitimate "that was where I needed to live" reason. I understand the reasoning behind this rule. It used to be a soft "legitimate want" litmus test that a tenant could not hope to follow up on without some serious legal help, which they can't afford. If you accept the government's goal to keep housing affordable to people in their current homes by controlling rent increases and making evictions difficult (in theory so that only legitimate ones go through), then this rule is reasonable.

Hi Frank, I don't think I agree with this. Yes, it's different - the banks are a lot more difficult to work with, at least on the small-time side of things, but we also have a similar private money market and hard money lenders. The BRRRR strategy should work the same way here as in the USA. Hard Money 10-12%, rehab, rent it, and find private money to get out of the HM loan.

http://www.randyselzer.com/HST-resale-homes-Ontari...

This is a good overview, Hannah. No HST on resale homes is the long and the short of it, though.

Thanks Luc, I appreciate the input! 

Thanks Thomas. Even at current occupancy, it's a 8.4% cap-rate ($239K), which is better than what MPAC suggests for Brockville. 7.2% at $279K.

The economy is a concern for sure - Brockville is a ~22000 person town, plus two "suburbs" of 15000, median age 7 years older than Ontario. Retirement and Tourism, basically.

Hi all,

I've got a deal on the line in Brockville, Ontario, (near Ottawa). It's a mixed use, 2 commercial units (storefront), 5 apartments (3x2/1, 2x1/1), one "weird" commercial unit in the basement that is quite a large space but has no road frontage. Used to be a thriftshop, currently unrented.

Only 2 apartments are currently rented at $700/month each, and both commercial units are rented at $1200 and $1300, leased until 2021. The owners have not been trying to fill the units for years.

It has around $40K of deferred maintenance that needs to be done.

Units were rented at $700x3 and $600x2. The property manager we spoke to thinks it should be $1000x3 and $800x2, but I think that's a bit high. I ran it at the "previously rented" rates.

The owners are asking $279K, but I've ran the numbers below at $239K based on a $325K ARV. Putting 40% down (seems high, but that's what we expect for a commercial loan - I haven't looked into alternative financing yet). Mortgage at 5% and 25 years.

Assumed a 9% vacancy rate, a 20% cap-ex rate (very old building) and applied a ~10% buffer rounded up on all of the utility bills we've seen as well as insurance. Property tax is estimated. Assumed sold in 10 years - although I expect it would be a hold property for longer.

May as well put the analysis in at full asking price...

"Calculated Sale Price" is a number I use in other things, no real need to look at it. What do you think?

I haven't done weekly like this, but I have done monthly.

I did it as a "live-in" landlord (rent-hacking?), and then moved to a normal landlord doing this kind of thing. We told the tenants they all shared responsibility for common areas.

I wouldn't recommend it. One lease is MUCH better from a landlord and borrowing money perspective. As a landlord, there is a lot less work to maintain one lease. You can allow that lease to be flexible for a tenant - for example, JOHN is the tenant, but he can choose his roommates as long as there is max 1 per room and you're kept informed of the names. JOHN pays but JOHN can choose what he charges the roommates. For borrowing, renting by the room (at least where I am in Ontario) banks consider non-income.