All Forum Posts by: Dylan Earl

Wow! I am surprised so many people here use third party apps and software... I just use the bank lol Setup etransfer with auto deposit (no password required). I setup a generic email address with two factor authentication for extra "just in case" protection, link it to bank account and then have everyone at that building etransfer to that generic email address. I automatically forward all "etransfer" emails from each inbox to my main email and filters into a subfolder where I can easily click and see who has transferred on time and who has not. 100% Free and easy!

We call it a cashout in Ontario, Canada. It basically means the quote for repairs less taxes and allocated profit. Contractors will usually designate 10-15% for Profit & overhead. If you don't proceed with insurance selected contractor then they give you quote price minus P&O and less taxes obviously. 

It's a cheque, you can use it anyway you see fit! 

You don't have to do anything. Contractor will get paid for any emergency work they complete. Insurance is usually separated into two phases: 

1) Emergency work (paid for by insurance which is partially covered by your deductible) 

 2) Repair Work (paid for by insurance depending on your coverage and quoted work)

I would highly recommend a cashout... but chances are your premium will go up. Ask your insurance how much you think it'll go up if you were to make the claim. 

If it were me... I would take a cashout if it's $10,000+ 

Anything less not worth it

Super interested in hearing some responses to this one!
I think most people typically structure a Business partnership with shares/ownership %'s and then purchase the property with that on title.... but I could be wrong. 

Look into "Joint Venture" agreements perhaps! 

I rent to students and I have some recommendations:

1) Sometimes people/roommates don't get along... make sure they sign a "roommate agreement" which covers guests, noise, furniture, appliances, maintenance (if applicable) etc. 

2) Sometimes people want to move out while the others don't.. make sure they are ALL on ONE lease. If one wants to leave, EVERYONE has to leave (OR they find someone to replace the one leaving) this can be done by making sure all of their names are on ONE lease agreement and that it is specifically stated as "a collective single tenant"

3) Sure, students party and make a mess, that's to be expected. If they are too loud, bylaw will fine them... however when damages occur, I can guarantee they don't have the resources to get it fixed. I'd recommend monthly or quarterly surprise check ups on the property. We usually provide 24 hours notice to tell them we coming to change out furnace filter OR test smoke detectors

4) Get their contact info, drivers licenses, student ID numbers, parent contact info, send out an email in the beginning with EVERYONE on it so they know what to expect. 

5) Take photos before the unit was occupied. After they move in, get THEM to fill out a move-in inspection checklist.. anything NOT on the inspection checklist discovered during move out needs to be identified and brought to their attention + their parents promptly. 

Takes some effort but students come and go and cycle which is nice if you end up with a not-so-great member! 

Best of luck

Don't text - always call. Want proof of a conversation? Send a text or email after the conversation regarding key points that were discussed. Absolute life saving advice I was given! Don't be hostile always offer to visit and check it out. If they are super concerned about it (ie. it's urgent) tell them to do the repair, keep the receipt and you will meet with them to discuss. It's not that bad interacting with other people :)

I have a degree in Business - it helped me start my networking and understand the core concepts of economics. Made some great relationships that I hope develop into real estate partnerships! 

Hey Trent, 
Great question - I've wondered the same about how the refinancing works too. Just want to simplify your scenario:

1. Purchase at $100k with 20% down = $20,000 Investment

2. Pull a Mortgage for $80,000 at 4% int which equals approx $630/mo expense

3. Spend $10,000 to add $50,000 in Value to the property (Total upfront capital invested: $30,000)

4. Estimated monthly expenses: $1006 vs Estimated Revenue: $1000 = Negative CF

5. Refinance at appraised value of $150,000 with 80% LTV gives you $120,000 worth of equity

6. Existing mortgage of $80,000 nets negative CF ... so how does $120,000 mortgage improve the circumstances?

I think with a BRRR strategy the point is to put that money you've generated (from wise construction and appreciation decisions) to work elsewhere. You've essentially generated $40,000 with $30,000 which has multiplied your original investment by 1.3. The sacrifice is that you now increase your debt which means your payments will rise... but the trade off is that now you can buy a second piece of real estate with that money and keep the cycle going.

I'd be curious to hear from a lender/broker how the refinancing adds up too. Is it also assumed it takes on the interest rate of the existing mortgage? What if mortgage rates have changed by the time you refi? Can you only refinance at the end of the term of the mortgage? (P.s. I am Canadian so we may have different rules)

Hello all, 

I currently own a 6 bedroom house as my principle residence with my wife, and rent out the main floor (x4 bedrooms) which helps to cover mortgage, utilities etc. I purchased a 2nd piece of property earlier this summer - vacant land up north, as a partnership with 5 other guys I work with/for... It's sized at 13.5 acres but we are going to do a development there in the future...costs are next to nothing (liability insurance and PT) maybe $150/mo

I am looking at picking up a 3rd property, being another rental property. 

Timing Wise: I see our fourth house will be our "grow our family" / hunker down house. Based on all the listings and showings I've seen that are "close" to what we would want, are currently out of our price range in terms of month to month affordability (comfortably anyway).

Trying to decide if it makes sense to pickup 3rd property to be rental property prospective numbers on a specific listing I am back and forth on... which are as follows:

List price: $399,000

I would offer: $370,000 based on a walkthrough I did... needs new roof ($6000), everything is outdated (floors and doors), the property is a mess (outside is uncut/overgrown/weeds everywhere), Garage ceiling has mold and water damages inside...will need new blown in insulation etc

I'd go 10% down: $37,000

Closing costs estimate $9500 (approx 2.5%)

immediate repairs/renos: $25,000 (I will roll this into the mortgage)

Capital Req: $47,000

Anticipated Mortgage: 3.2% 5 year fixed, 25 year amortization: Cost/mo approx $1650

Taxes, Maintenance, Insurance: $675

My monthly expenses would be approx total: $2275

I expect $450/room + utilities on tenant x 6 rooms = $2700

Net: $425/mo

I cannot afford the $47,000 up front capital so I'd either have to partner with someone/others (50% or 33% or 25%)

Does this CF seem too low for the investment... I mean if I put 50% up say 23,500 in and get 50% net revenue = $212.50... it's going to take like 10 years just based on cash flow... 

I can hope appreciation would be 2-3% per year (let's assume after Renos is $400,000) but is relying on that appreciation enough to offset the potential costs of vacancy, damages etc? 

Looking for feedback/thoughts as this is a new thing for me and I want to make it work... but also need to build the confidence to assure my wife we are good to keep this thing going!

Thanks everyone

Garbage not collected by the city? Or do they mean bins lol

No washer dryer is unfortunate but eh what do you do. As for lawn service, if they aren't renting the whole house and getting access to the full yard then I agree with them actually, they shouldn't be on the hook for lawn maintenance. I have so many cases of people sloughing it off and not doing it and then I get a call from city by-law and end up sending my own guys anyway... brutal!