All Forum Posts by: Darren Horrocks

Yes, this thread was a valuable learning experience. I've already addressed building the buffer mentioned into my spreadsheet. And created an amortization schedule that has the extra BOC principal payment option built in too! 

Now I just need to buy another property for proof of concept! Hahah   I hope other newbies read this, it is definitely great advice that is not voiced often. 

One last question: 
Do I always project my cashflow analysis using 25 year AMs? Even though I have access to 35 year AMs?

Hypothetical: - zero research done fyi

Install a solar system on each rooftop of every rental property you own. Assuming lifetime buy and hold, and (I'm not sure of this) it can be connected to only sell generated energy back, and not cover the usage of the house.

Keep tenants paying their regular rent + hydro, and start selling the energy produced by the panels back to the government. Effectively creating a solar farm on the rooftops of your properties.

Cashflow ++? Pretty greedy? Tenants be upset? Justify to them its another type of investment?

If you hold these houses for 20-30 years, and you are paying back the initial cost between 5-10, the rest is gravy no?

Yea I'd agree with @Thomas S. - Seems like you'll get more headaches relying on her to maintain her small space, and would she use your equipment? Seems like if her exclusive space is small, its worth saving the headache and just mowing it yourself.

I wouldn't pay someone to do it if you're living at the property, just mow it yourself and save the money. 

Is relying on 2% per year rent increases enough to create a buffer for market rates going up between 2.6% and BOC 4.64%, given that i'm on a 5yr fixed and in those 5 years i'll have been able to increase rent for both units by 10%

Effectively creating a $257.50 increase in gross income, with no extra expenses, that should cover the $186.03 difference I mentioned earlier. 

Am I thinking this through properly?

In regards to the original question, I think just from listening to the variety of ppl interviewed on the BP Podcasts, it proves that its possible to acquire "skillsets" from the use of partnerships. You can find those people who excel at what you lack. And TOGETHER you are one solid investor :) hah

 I have started doing my projections /w 100% as well. The more and more conservative I start making my numbers, the more "deals" don't fit anymore.

Is there such a thing as too much padding? 

 This is a monster reduction in the amortization period! I'm going to run my numbers and see where i'll be at. Ok, figured it out.--> I'm carrying a warm and fuzzy ;) 35yr AM @ 2.6% and with your strategy i'll shorten my AM by 11years and 5 months! 

Do you choose variable /w conversion/cap b/c of the interest savings in the short term? Over the life of my loan the difference is about $25,000 in interest paid /w no prepayment btwn variable(2.2) and fixed(2.6).

Applying the BOC 5yr fixed rate of 4.64% puts my cashflow at -107.59$per month... Thats $186.03 difference! :S 

Suggestions? 

 This is a great idea! And something I have not seen or heard in all my research or discussion.

Do you save it till the end of the year and do a lump sum payment?

When doing cashflow projections on a prospective property, do you buffer your mortgage interest rate when doing projections? And if so, by how much and why?

And have I made a big mistake by not doing so for my current purchases? (Options to mitigate the risk now if rates move up?)