All Forum Posts by: Dylan NA

Everyone has their own preference and comfortable level in term of how to manage their property. It's either DIY or using property management. I've seen a guy owning a 2-bedroom condo and hiring property manager to do that.

Have you get yourself pre-qualified Dylan? It's better to find out earlier before you start shopping. Find out how much mortgage you can qualify and then you can decide how much down payment you will put.

Another idea is to partner up with someone. For your primary residence, let's say you bought a half duplex/ single house/ whatever, you can ask your brother or your friend to put their name in the title, both of you sharing mortgage, rent etc.

For your second property (whichever type it is), same thing, try to partner up with someone who has a steady income, put his name to qualify for mortgage but both of you will be in the title (you are only act as partner), your partner can live in the property and managed it by himself.

Partnership, IMO will save property management fee, will distribute the risk, will reduce your mortgage amount, and you get more properties.

You may be even able to get your third property as cash partner, because with your current income perhaps you will be stretched out from mortgage under your primary residence.

Not sure if my above idea will work all the time, but it is something worth to think about.

Cheers,

Gus

Ya man i am already prequalified. I can get a mortgage up to 600,000. Also me and my brother own a house currently but were going to sell it because were both moving. But for the pairing up i was thinking about gettinh my dad to invest with me, i was looking at a duplex that is going for 650,000 that has 4 suites and a totla of 10 bedrooms. So instead of me putting the downpayment for 130,000, my dad puts in 65,000 and i put in 65,000, yes we share the total income but thats okay right:) i figure i could get a total of 6,000-7,000 from the 10 bedrooms. Which is very very reasonable in my opionion, because thats what the going rate is in the area.

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Okay so lots of people have been giving me a ton of advice, and I have been reading like crazy lately on real estate. A big thanks to everyone on this forum. I was looking at half duplexes and single family homes, I now have been looking at full duplexes and I am absolutely blown away, by the amount they are renting for like what the hell hahah, money Is crazy.

Here are a few of the options I am looking at:

Option 1: 415,000 duplex. A total of 10 bedrooms and 5 baths. Currently rents out at 4,330 a month. Now if I put a 115,000 downpayment on it, my monthly mortgage would be 1,450 dollars minus say 500 dollars for bills such as water, gas, power, etc. Minus 7% of gross income for property manager=300 dollars. 300 dollars for house insurance and house taxes. Total expenses= 2,550 dollars. Total profit= 1780 dollars. This seems a little too good to be true, here is a link so you guys can see the property. It is a 1964, not that old in my opinion. Here is a link to the property

https://www.edmontonrealestate.pro/listing/e3437190-5503-5507-134-av-edmonton-alberta/

Option 2: 650,000 duplex. Has a total of 10 bedrooms and 6 baths. This unit has 4 individual suites. It is technically for sale for 688,000 but I would low ball a little bit and I know I could get it for 650,000. It was built in 1997 and is very new, looks amazing.
Suite 1 and 2: 3 bedrooms each, so 6 altogether

Suite 3 and 4: 2 bedrooms each, so 4 altogether

I know for the 3 bedroom suites I could easily charge 1,700 dollars for rent. For the 2 bedroom suites I can easily charge 1,200 and get that as well. So total rent would be 5,800.

Total mortage would be 520,000 dollars, so 2,400 in mortgage, plus 500 in bills, plus 300 for house insurance and tax, plus 400 for property manager= 3600 dollars. So 2200 dollars in profit a month. This seems way way more realistic. I have no idea why the first duplex is only going for 415,000 but that seems low and generally if something seems to go to be true it usually is. 650,000 for a full duplex seems more realistic in price. What option do you think is better. here is a link to 2nd option

https://www.edmontonrealestate.pro/listing/e3436358-10433-10431-154-st-nw-edmonton-alberta/

Also I know I have made 2 posts already on which is better, if my posts are annoying or bugging anyone just let me know i don't want to upset anyone, but im still a beginner and everyone on here is giving out such good advice, i wanna ask as many questions as possible and learn

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Originally posted by @David Faulkner:

It is all about priorities ... if you do not make time to be somewhat active in real estate, at least in the beginning, then I would really question getting into it. You may be better off putting your $150,000 in a low cost S&P 500 index fund or REIT fund if you want to stay with REI. Otherwise, buying and renting a home, even a newer one, takes time and effort.

The case for reallocating time to your Real Estate Investment goes something like this: What is the highest and best use of your time? Painting somebody else's house for $20/hr or painting your own house for $100+/hr in equity bump? Can you get just as good of a workout lifting a sledgehammer for 2 hours a day as you can lifting barbells? $7/month shooting youtube videos or saving $1050/month in rent? I don't have the answers, but these are the type of questions to ask ... to become wealthy, you'll need to carefully manage your time, energy, and focus as well as money.

great reply, but theres lots of people who just get property managers to do everything and they sit back and rake in the cash, at the moment i am making 45 dollars an hour doing electrical but hate it, happiness comes over money anytime of the day. Why couldnt i just use the money i make from painting to buy the rental property than let a property manager handle everything, whats wrong with that?

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Originally posted by @Ram Srinivasan:

@Dylan Something

Primary residence capital gains is tax free. There really isn't a minimum time that you have to stay in the property for. Honestly, If I were you, I would buy your primary residence 5% down (leverage), rent out the other rooms and jack up your cash flow. You COULD hire a property manager but honestly starting out, you need the experience and you are living in your OWN property, so if things break down, you have to have a couple contacts to fix it. So if you don't mind the decrease in privacy, this is the way to go. My regret is that I did not do this when I was 22 years old and living in Fort Saskatchewan, AB

:) great idea man:) Ya i actually talked to my friend two weeks ago and he is moving in, in 3 weeks man, i am charging him 700 dollars. Me and my brother currently own the house im living im right now, so once my friend moves in im only going to have to pay 250 dollars a month for rent as opposed to 600, me and my brother each pay 600. And fort saskatchewan is close to where i live:) Are you still living their or did you move away. May i ask another question. Once i have got my new house all rented out, i will still have alot of money to play with, what should i do than to invest it? Also im curious as to why to only put 5% downpayment on the house? The less the downpayment the more my monthly mortgages and the longer i pay the mortgage the more interest i am payinh to the bank. The exact same reason as why i bought my truck used with 90,000km for 20,000 as opposed to a brand new truck for 60,000 and making 1,000 monthly payments on it for 8 years like most of the kids i went to school with. Just wondering why only 5% down, also if u go with 5% down u have to us CMA and they charge a rate as well

for

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Originally posted by @David Faulkner:

What would your exit strategy be with the single family home? Live in it 2 years, then sell tax free (this is the tax code in the US, not sure if there is a capital gains exclusion for capital gains on a primary residence in Canada)? Save up a down payment in with your low expenses, then buy another place and turn the 1st house into a pure rental? What would the whole house rent for vs. by the room?

I don't know your market, but personal did the last option I mentioned repeatedly in SoCal and it worked out great. Single family homes will tend to cash flow less than duplexes, but get you better appreciation and more stable renters (families) ... so depends on if you are after higher cash flow or lower (but steadier) cash flow with higher appreciation. I agree with previous statements to forget about buying condos and if you buy a duplex, buy both sides. Also, for a single family, given your construction background, I'd pick up an older, smaller home (maybe 1980s, 1500 SF, 3 bed, 2 bath, no HOA) that needs cosmetic work (floors, paint, landscaping, minor kitchen and bath refresh, etc.) at a discount and put in some sweat equity before renting rooms. 20% on a home like this will be less money, leaving you some cash for renovations which would create more equity ... you could later cash out refinance to tap that extra equity and redeploy it in the next property, or let it sit and have higher cash flow with a lower mortgage if you want to go safer.

No exit strategy at all with the single family home, i want to rent it out and make passive capital gain. But yes for Canada too if u live in a home for 2yrs the capital gain u earn isnt taxed. I have 150,000 dollars saved up so no downpayment is to much for me considering my price range of 250,000-300,000 for rental property. I could technically buy 3 properties but i want to buy 1 first and get my feet wet. My biggest biggest goal is to give the property to a property manager, i literally have no time in my day to do anything let alone remodel a house, because even if its doing flooring or small kitchen or bathroom stuff that will take time. Im also an electrician, so ive never replaced flooring before or redid a bathroom or kitchen, etc. If someone showed me once i could do it, i learn extremely quickly. But again i dont have any time. Here is my typical schedule:

6;00a.m- up for work

4:30-5:00pm- home for work

5:00-7:00pm- bodybuild(workout), shower,etc

7:00-8:00- make supper/eat/dishes/etc

8:00-11:00- make youtube videos for my channel.

I typically am always rushing to do everything. Thats my schedule from monday to friday, on weekends i spend it with my gf:) and that is my rest day.

My youtube channel is also monetized and i make money from it, well i attempt too, i average 15,000 views a month and make right now 7 dollars a month lol. I know this is a real estate forum but what do u guys think i should do about the youtube? should i scratch it or continue doing it, i started doing it in june, so 5 months and i have 535 subscribers. Youtube is passive income too but so u guys think im wasting my time doing it for only 7 dollars a month, keep in mind if u ever fo become famous u will make a ton, also its easier to get more subscribers once ur channel is bigger. harder to go from 0-500 than 500-1000.

but ya aside from that whats the best direction to go with real estate investing if i have no time for it and want a property manager to do everythibg

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Originally posted by @Quin Kroschinski:

Hey Dylan,

I would still go for the full duplex any day of the week. Ive seen duplex's with non conforming basement suites rent for $1200 down and ups rent for $1600 a month. In the current market were in I don't think we could get that. But if you could generate $2000 on one side that would cover most of your costs. Like Charlie said I wouldn't bank on roommates and girlfriends because the situation can change very quickly. There are quite a few managers around, I myself manage quite a few in the Edmonton and area. What are your investment goals? I think once you figure this out then it will make it easier to decide what direction you want to go in. Personally I would stay clear of anything with a condo fee or HOA fee of any kind. I have a few condos and they are by far the worst because you have other people (condo board) controlling your investment as well the condo fee can eat into your cash flow. Keep asking!!

Thanks,

Yup, ive done alot of research on condos and that is why im staying far away too is because of condo fees and the board members control everything.

If I buy a full duplex for say 500,000 than I would need 100,000 downpayment and a 400,000 dollar mortgage, which would cost me 2,000 a month for mortgage, now if u said 1600 for a top and 1200 for a bottom that's 2,800 in total of income. With the 2000 dollar mortgage and say 400 dollars for gas, water, tv, and power, as well as 300 probably a month for house insurance and taxes, then im basically breaking even.

Would it be better to buy a house for 300,000 dollars a 5 bedroom house, and rent each room out for 700 dollars, which is a pretty good rental price in edmonton. That would make me 3,500 a month with only a 1150 monthly mortgage, and 400 for bills and 250 for for taxes and insurance, that would be 1800 dollars a month total for bills and mortgage and insurance and taxes. That would leave me with 1700 profit. Wouldn't this be better than buying and renting out a duplex?

Also if I get a property manger to manage my house, would they rent each room out for 700 dollars or would they stick a whole family in the house and charge say 2,000 dollars or something?
Im very curious on this as well, I tried googling this but no answers come up. Would a property manager have 5 random strangers live in a house together, and charge 700 a month, which would make way way more income, or give it to a whole family for say 2,000 dollars. Very curious on this, thx man

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Originally posted by @Quin Kroschinski:

Hey Dylan,

Ive been investing in edmonton for a while as well selling real estate in the area. Im with Michael on this one and it would be leveraging your cash to buy more real estate preferably single family versus condos. With the money you have in the bank why don't you buy a full duplex? They range from 500-700k if you can qualify and would be a great rental property as the years go buy. The next best would be a single family with a basement suite, 3 bed up, 2 bed down. Message me if you want any more info and I can help answer any other questions you might have.

Thanks,

still waiting for ur reply on my questions, u have been the most helpful so far in this reply, thx again

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Originally posted by @Chad Carson:

@Dylan Something

I am from the deep south in US, so I have no clue what Edmonton is like. But I do have experience getting started living in rental units, so I like the way you're thinking.

Big picture your goal should keep overhead super low, keep good cash reserves (3 months+ personal expenses, 3 months+ rental mortgage payments), acquire properties in the best locations possible that still cash flow well, and lock-in long-term, low interest financing. If you hang with that plan for the next 3-5 years, you'll be in good shape.

I liked your 2nd option of avoiding the big house. If you truly are getting your feet wet, it's good to keep your outgo low. You may be able to handle the big payment on the house now, but if you want to switch careers or if you go through a rough patch, you'll be thankful for that low overhead.

I don't like the idea of half duplexes, but maybe that's more normal in your area. My first choice would be to buy the entire duplex, live in one side with your friend and GF, then rent the other side out to more people. Run the math on that, and I bet it's the best cash flow situation of all.

Best of luck!

@Dylan NAundefined

thx for the reply man i appreciate it:)

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Originally posted by @Quin Kroschinski:

Hey Dylan,

Thanks,

Thx man i really appreciate it. Reason i want to buy half a duplex is just to get my feet wet since im a beginner, than if i see capital gain i will start buying full duplexes:) What is better in ur opinion a half duplex or a 5 bedroom house?

Keep in mind when i buy them i an 100% strictly going with a property manager, i dont want to manage anything, as i am extremely busy enough, with a fulltime

job, gf, and bodybuilding(naturally) 5 times a week, so i dont have time to collect rent, do repairs, etc. Whats ur thoughts on property managers and do u recommend any in edmonton? i have looked at about 8 so far and have a few in mind. Sorry for all the questions but im eager to learn

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Originally posted by @Michael Montgomery:

Hey Dylan,

My apologies, there are certainly some options for half duplexes in Edmonton in this price point.

I like the idea of exploring the half duplex. As mentioned, I am personally fond of leveraging my cash as much as possible.

Then you might be able to privately purchase the other side of the duplex in the future should your neighbour want to sell. I have one full duplex and it's a great rental property.

I don't know the market in Edmonton as well, so I'll have to let the pros there weigh in!

Cheers,

Michael Montgomery

thx michael u have been extremy helpful, may i ask u a few questions while i have u hear and if u could answer them, than u would have no idea how much it would help me along my journey.

Q1: since u have a full duplex and know what half duplexes are, than can u clarify something for me. When u buy a half duplex do u get a top and bottom each with different doors? for example top floor would have like 2 bedrooms and a bath and kitchen, and bottom would have 2 bedrooms and a bath and kitchen? And the too level would be blocked off from bottom level, is that how half duplexes are?

Also kind of personal, but may i ask what u make a month from a half a duplex? do u make around 500 dollars plus in cash flow? or do u just break even and hope for it too appreciate in value over time, thx u so much for ur time

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All Forum Posts by: Dylan NA

Dylan NA has started 5 posts and replied 31 times.

Post: Which Option is better?

Post: Full Duplex appartment, Im attempting to buy it

Post: Which Option is better?

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