All Forum Posts by: George Lay

I would base the numbers on what the actual numbers say as well. Get lease agreements and have them match with bank deposits. 

In terms of cash flow, i would also point out, cash flow for the property may differ from cash flow to your pocket. Basically, take your Net Operating Income and subtract Mortgage payments (and taxes if you really want to be conservative). 

And finally, dont forget to set aside some money for repairs and upgrades. 

For fear of gender discrimination  i would word it as human waste as well. 

For some reason, my landlord instinct kicked in and i started thinking "thank God he didn't die in your unit". 

Having said that, right place at the right time and right tools, so it was meant to be. 

In my experience there no reason you can't do all of these steps at the same time.  Just let the people you talk to, know your current situation and your timeline. 

Day 1. Talk to the bank

Day 2. Talk to a potential property manager

Day 3. Talk to Realtor

Day 4. Talk to another bank

Day 5. Talk to a contractor

Day 6. Talk to another property manager
Day 7. Talk to another Realtor

Day 8. Talk to another bank.

Day 9. Talk to a potential contractor

Mix the days however you like. 

Some points to take away: 

1. (Self Reflection) If you don't do any of the above in a reasonable amount of time... then you'd have to look at how serious you really are about this.  

2. (Givers versus Takers) If a person requires you to do something before they even talk to you (Taker), they're probably not interested in working with you anyway.  The best people give first.

3. (Persona) If you're truly serious, people can tell...

Hope that helps. 

The bedbugs could have come from anywhere. 

I'd say no because of the threats. Lenders can say no to loans just based on character and fit. You should be able to sdo the same. Much like a business doesn't need to allow everyone into their establishment, however the moment you try to explain why, you'll be opening yourself to a whole bunch of possible human rights complaints. So just keep it short and vague. 

I assume that each state regulates grandfather clauses. Where i'm from, once the property changes title, the clause ends. Also if the existing tenant moves out, the clause will end.  It's probably not a good idea to rely on a grandfather clause to protect you if your investment strategy depends on it. 

It's true that there's less to worry about regarding everything outside your unit, all of the things @Greg Scott mentioned are very valid issues and happen more often than people realize, i can vouch for that. 

You want to read over the minutes for a number of years to see what longstanding issues are going to be problems. You may see comments relating to water leaks, or roof repairs, or engineer reports to pay close attention to. These can be big ticket special assessments once the HOA decides to deal with them. You'll also want to look over the financials to see how well the property is being managed and to make sure there is a healthy contingency fund in place. You'll have to draw your own philosophy and conclusions about the numbers. A surplus could be good because they're spending less or it could be bad because the HOA is neglecting some of the necessities.

One final word of caution, take all the minutes with a grain of salt as, not all issues are going to be obvious. For instance, there may be conversations of pest being found that don't make it into the minutes but could result in hefty extermination bills. You'll want to look at indirect things such as "warnings to residents not to leave food scraps in hallways" or "needing to replacing damaged wiring" etc. 

I think the 1% and 50% rules are both applicable for quick and dirty. It’ll tell you how far off you are. Your Gross is about 300k shy and if it’s true the expenses are that low, this place is run like a SUPER well oiled machine. Not only would you have to subsidize this property for the foreseeable future, odds are (with all due respect of course and not to question your PM skills), you might expect the expense ratio to increase under your tenure in comparison. If this property is truly newish, there’s not much that that you can really do that will get you to your break even. I’d would say, that unless you got the price to 65%-75% of asking or you go in with 5 -7 million of your own cash with no concern for ratios like CoC or ROI it’s not going to be a fun property to own. Unless there’s something that is not known about the property which would justify a deeper look.

Hi All,

If you're having a meetup, count me in! I live in the north shore in Vancouver as well and like Edmonton as my go to. Its nice to see a topic relating to Canada versus having to translate everything from the US. 

There's really no truly wrong decision here. If given the choice, I prefer to keep the money in my bank account versus the lenders bank account. Having said that, once you give it to the lender, if something comes up, you cannot ask for the money back so flexibility is an added bonus in your own account. If you've used a HELOC, you can pay down the HELOC to reduce the interest payments until your taxes are due. As @Aaron K. mentioned above post, the caveat is that you are financially responsible :)

One thing you might look into is paying for property management. A good one will take care of filling units with low maintenance tenants cause they want to spend as little time and effort getting paid as possible. Well worth it to outsource the stress in my opinion.