All Forum Posts by: Dylan NA

Very true, in the example above the seller got back to me and he said he would accept 230,000, so im sure i could close at 225,000. Now i asked about the suite being legal and it is not. The seller was renting the house to a family for 1,500 dollars plus utilities. Which isnt that bad, but then the renter was renting the illegal suite to other people and charging 750 dollars, im like thats sooooo illegal lolol. Thats y i always use property manager, because 90% of landlords are asking to be sued because they dont know about the legal side of being a landlord. 1,500 plus they pay utilities might be tough for me to make cashflow. I would need 800 in mortgage, 200 in tax, 100 in insurance. Thats 1,100 right there, thats 400 in monthly cash flow, minus 50% because stuff is always more than what it seems, i would basically be breaking even, stupid

So lets be honest, majority of houses that are sold on real estate websites, are either overpriced or just simply not worth their value. am curious is it bad to constantly low ball on prices for houses? For example, I asked a seller, if he would take 225,000 on his 250,000 property. Now if he does sell that is awesome, I just got a very very good deal, if he doesn't whatever. Is this the strategy I should typically use when buying houses? I would never ever offer someone the actual price they want on a house, I would always low ball around 20-25,000. In order to do well in real estate we need to get very very good deals on the houses we buy. If I tell the person I will buy there house instantly for 225,000 and its worth 250,000 maybe 7/10 people wouldn't do the deal, but theres lots of people who aren't patient and would accept the deal.
What is your opinion on low balling every house offer, until you find a deal you like. Do most of you lowball? im curious to know.

As for the property I am looking at its going for 250,000. It has 2 bedrooms upstairs and a suite downstairs with 2 bedrooms, I asked if the suite in the basement is legal too btw. So I could charge 1,300 dollars for the upstairs and 1,300 for the the basement. That leaves me with 2,600 gross income a month. Lets assume 400 dollars in total bills, 200 dollars for property tax, and 100 for house insurance.

That's 700 dollars in expenses, now lets assume I paid 250,000 instead of 225,000. My mortgage would cost me:

250,000 x 20% downpayment= 200,000 mortgage a month= 980 dollars

now lets assume I got it with 225,000 x 20%= 180,000 mortage= 880 dollars a month

Total expenses now would be: 880 dollars a month, + 400 dollars, 200 dollars, and 100 dollars= 1580 dollars. plus 225 dollars for property manager= 1,805 dollars for my total expenses.

So I would make 800 dollars a month net. 

What do you guys think of my idea to constantly low ball on prices?

 If i did get a property manager to

manage it, would i still have positive cash flow? what do u think? i would like to have all property managers so i can keep working fulltime

Got another question for you guys at bigger pockets:)

Also since I am a beginner, I went on the weekend to chapters and looked at various real estate investing books, if anyone has any good suggestions that could really help me out, please refer me to books, I love reading and learning. With that in mind I have a question.

So I have found a nice single family home,  that I am considering buying. It is currently listed at 227,000, but I know for a fact I can low ball and get them down to around 210,000 or so.

It is in a very good location, close to sports coliseum and LRT station. Has 3 bedrooms and 2 bathroom, total sq footage is 1300. Heres the good thing, built in 1994. So its realitvely new.

The monthly mortgage is 800 dollars, which isn't bad in my opinion.

I plan on renting the whole house out for 1,600 plus they pay utilities, which I think is a very very good price. I looked at other houses in the area being rented out and they range from 1,500 to 1,800 dollars.

So I would only have to pay the mortgage each money as well as property tax and house insurance. House insurance is only 100 a month and property tax 150 a month.

So total expenses is 1050 dollars. I get 1,600 dollars. So I should make around 550 dollars a month cash flow. Even if I make 400 dollars a month extra I would be happy:). Just looking to get my first house no matter what I have to do.

Also I do work as a 4th year electrician so even if something goes wrong like vacancy I make 4,000 dollars every 2 weeks, so a lousy 800 a month in mortgage wont kill me. What is your opinion on this? Do my expenses add up, is it a worth while deal, or should I get a duplex instead or a fourplex?

This deal seems better for me just because I already have 40,000 dollars which is the downpayment needed, in the bank just sitting there right now

anyone else?

 single family houses are 10% for property manager, duplexes are around 5%, i have looked at 5 different property managers so far and those were the averages. Also i made a mistake, it says side by side duplex registered as condominim row housing by the city of edmonton. 4 individual suites with 10 bedrooms altogether. Is this bad? that its registered as a condominium row housing? im a beginner thats why i need your help:) It says a side by side duplex. As for bills lets say be verg aggressive than and say 300 for water, 350 for gas, 350 for power. Thats 1,000 in bills, even so i still would have a capital gain

 Ya im already prequalified for 600,000 dollar mortgage, so thats enough for what i want to buy. I want to buy a full duplex for 400,000-600,000. Single family home isnt what i want to do anymore, same with half duplex. I found a full duplex, it has 4 suites and 10 bedrooms throughout plus 6 bathrooms, so i was thinking of buying that, its going for 650,000. So i could put a 130,000 downpayment on it and still have 20,000 in the bank plus a good job still. I could get 6,000 altogether for each suite each month, mortgage would cost me 2,400 plus 600 in bills, 500 in taxes and insurance a month probaly, and 300 for property manager, Now thats 3800 altogether in expenses and i was hard on myself for the bills, taxes and insurance. So i would net around 2,200 a month, lets be extremely conservative and say 1,500 a month. That is pretty damn good in my opinion, and on top of that other people are paying the mortgage on the duplex so in 20 years it will be 100% paid off

 I have looked and lots of people simply just get a direct deposit from the property manager each month, yes i understand some may rip you off, but thats why i have did my research on all the different types in edmonton and i have found a few who have good rates, and the comments and reviews from other investors are good as well. And in all honestly as long as i am making some sort of passive income i will be extremely happy, because on top of positive capital gain, the renters are paying my mortgage monthly, in 20 years after the mortgage is done i own the duplex now and can probaly sell it, if its worth 650,000 i have no doubt in 20 yrs it be over 800-900,000, either way im making money:) But i gott do it now and stop procrasinating. I feel like im wasting my time, im already 22 yrs old and have no rentals, maybe im being too hard on myself. Also do u work a full time job too? like 100 hours every 2 weeks or only flip houses. I would love to flip houses, but i cant when im working 100 hours every 2 weeks. I use my job to create the wealth for the property than have a manager take over and do everything else. 

If im making 2,000 a month in total savings from my job after all expenses than when i buy my first rental, all make say at the very very low 1,500, after everything is all said and done, now i am making 3,500 in savings, so my next property wont take as long for me to save till. Than i buy another one and get another 1,500 and my new savibgs is 5,000 and just keep doing that ya?

 Thx michael, its people like you who i am learning from so i really appreciate all the help. And yes i was thinking about using a property manager, here is why i want to: Before i was going to buy a single family, with single family property manager charges 10%. With a duplex though they only charge 4-5%:))) So if my gross income is 7,000 from the 4 suites/bedrooms than property manager takes 350 dollars, I am 110% okay with that, they have experience and know what they are doing, they also have the tools to make sure my duplex has all 4 suites filled with renters who are on 2 year lease agreements:) They also know all the legal details and know everything there is too about real estate, i on the other hand and am inexperienced, i am okay with that and willing to learn, but in my opinion 350 dollars is okay to give up for what they offer. As long as i make even 500 dollars in passive capital all be happy, but i have a feeling all make closer to 2,500 dollars to 3,000

 Ya im looking into full duplexes now. I found one with 4 different suites, and a total of 10 bedrooms so im happy