All Forum Posts by: Chris O.

yea - that town has never even come close to recovering from the fire exodus + drop in oil prices

 That's what I was hoping, appreciate the info. 

 We bought a home in fort mac some time ago and is under water on it by about $130K. He has renters there that have caused about $15K in damage. Original plan was to repair and continue to rent - but he has been working with a debt consultant who suggested it would best to just walk away as he has some CC debt he could roll in as well. 

I've verified the income and job security and am quite comfortable on that front. I just didn't know the ins/outs of the bankruptcy process as related to current rent - but I assume I can still evict through normal process for lack of payment. 

I am starting a new lease with a tenant that is likely to declare bankruptcy on a underwater mortgage and consumer debt. That discussion aside, where does monthly rent fall in the equation? I know the security deposit is a bit murky, but if we were to start rent in Sept and declare bankruptcy in Nov for instance, does he have to continue paying monthly rent, or is there something where he could avoid eviction without paying? I am not concerned that he could suddenly vacate the premise prior to end of lease (I can just rent out again) - I am concerned he could stay there for half a year for free and there's nothing I can do about it.

I am starting a new lease with a tenant that is likely to declare bankruptcy on a underwater mortgage and consumer debt. That discussion aside, where does monthly rent fall in the equation? I know the security deposit is a bit murky, but if we were to start rent in Sept and declare bankruptcy in Nov for instance, does he have to continue paying monthly rent, or is there something where he could avoid eviction without paying? I am not concerned that he could suddenly vacate the premise prior to end of lease (I can just rent out again) - I am concerned he could stay there for half a year for free and there's nothing I can do about it. 

Jason, would love to have a chat - I'm in Comox Valley so Parksville is just around the corner. I'll send you a PM.

Been trying for over a year to lock down my first place. Made a few offers that lost out. I'm in a very hot market (Vancouver Island) where sub 5 cap rates are the norm. The 1% rule does not exist, 0.5% is a possibility. 

I've found a small rancher, 30 years old, in good condition. About 1300sq ft on a decent size lot in a nice town. $425-$430K CDN should nab it. I can get $2K/M rent for sure, maybe $2.1k. It's a small town where the local wages don't support the prices (not uncommon today). 

I'd have to HELOC the DP as my investments are all locked up in stock/RRSP's. After accounting for everything but not maintenance or vacancy- I'm about $50 negative a month in cash flow (but accounts for me paying $350/m in interest on my DP).

Without having the DP in cash, I'm behind the eight ball on every property in terms of having to make cash flow. At 3% annual increase in property tax and insurance, but 0% increase in rent and appreciation, I'd take home $42K after closing costs in 10years. Maintenance and vacancy will eat into that but hopefully offset by increases in rent/appreciation (even 1% a year). 4% cap on this deal.

I am too nervous trying to get my first house to look anywhere but local - I'd like to be able to go there to address anything that needs to be fixed/done. 

Is this just too hot of a market and I should just stop looking until a down turn? I missed out a few things I could have bought last year that have gone up since, I'm sure that's fueling me here to pull the trigger. 

Curious if most people ignore either the interest cost on a down payment loan, or if in all cash, the opportunity cost on that cash. Every calculation model I see seems to discount that part of the transaction when it comes to cash flow. I'm trying hard to find some things that work in a hot market, and the $300 -$400/m in interest on the DP loan is making it tough to hit cash flow targets. I feel I'll never take a dive though without ignoring this. These properties are still positive investments, even with 0% appreciation or increase in rent over 10yrs (4-7% IRR). I figure that's a fair buffer (the 0% appreciation/rent increase) but most have sub $100 cash flow if not a hair negative.

Looking at a 1960's Duplex on the island - it's been updated inside so no need to renovate. Also won't be living in either unit - I've got one side vacated but the other has tenants that are $400-$500 below market rate. Deal only makes sense at market rates on both sides. Anyone know of any options or is this a dead deal with the new rules passed last year protecting against rate increases