All Forum Posts by: Elijah Williamson

I closed on my first property in December 2021 and got it rented out by mid January. The tenants I chose are a young couple with 2 small children. They passed my screening with flying colors. Great references from their previous landlords, good credit, no criminal history, made more than 3x the rent and had nearly 11k saved up. They were super excited to move into the property and wanted to discuss staying long term as my lease was only 6 months.

Now, only a couple months into their 6 months lease, they informed me that they're out of work and broke. I was there a few days ago to replace a light fixture and although the house was very clean and well kept, I noticed all brand new looking furniture. New couches, new big screen tvs, new beds Everything was new. I only know it's new(er) because they moved in with very little. Don't get me wrong, the place looked great and I'm not going to tell anyone how to spend their money but now they're asking if "I could work with them" because they're broke and no longer working.

I told them I'll get back to them later and now I'm here, asking for advice. Should I be kicking out this young family or is there another option I could pursue?

@Ockert Kruger

Small towns. They dot Alberta everywhere. I know investors are weary of small centers but they seem great for the new investors with little capital like myself. They're very relationship based too which helps.

I was informed this morning of someone looking to sell their house privately this morning. I quickly set up a time to meet the owner and discuss why he wants to sell and what he's looking for. I met the owner this afternoon and after talking with him and learning his story, I'm not convinced I should buy the deal. I'm a new investor with one property and this one is a little more unorthodox than I'm used to seeing.

He owned the property for 5 months so far. Bought it for $110,000 and has $6,000 into it. It's pretty much turnkey from the initial walkthrough. Here's where it gets a little more complicated. He currently has a tenant living there with a right to purchase agreement. The tenant is paying $1100 a month with all of that going towards the downpayment. He has 12 months to get financing for the property or the owner takes 50% of the money saved thus far and the contract is extended for another 12 months. The agreement is for $125,000 and the tenant has about half of the required down payment. If he misses a payment, he's out and the owner gets all the capital saved so far.

The current owner wants to sell both because the tenant just quit his job and he's trying to get out of the REI game. He's willing to sell to me at $120,000 but he wants me to keep the right to purchase agreement with the tenant.

So there's already a buyer and if he goes through with financing I make $5000 minus the closing cost. Would I be paying closing costs twice? Transferring to my name then the tenants in 6 months? I'd be making $2000-$3000 then wouldn't I?

Am I missing something here? I've never run into a deal like this before and I'm not really on board with it currently.

@Roy Cleeves

What about background/criminal checks? How can I obtain these?

In Brandon's book, he suggests charging a application fee ($35) to process the application. Is this a normal practice here as well?

Hey guys, I'm now ready to start finding tenants for my first rental property. I just finished rereading Brandon Turners book on managing rental properties, this time with a highlighter and notepad, and I'm wondering how to run credit and background checks on applicants. Is it even common practice to get them done before moving into a rental?

I recently just purchased my first rental property and I'm in the middle of some light rehab on it. Once all that is done, I'll need a lease agreement to give to my future tenant. Where could I find one that works for the Alberta area? I have read Brandon Turners book on self managing but being from the States, I wasn't sure if everything would be correct in my case.

Any tips on where to find potential buyers if you don't have a list of contacts already?

I recently looked at a property that I think could be a good flip/BRRRR but unfortunately don't have the capital to do it myself. It needs quite a large rehab but the guy wants it's gone ASAP as it's an estate sale and he doesn't have time to deal with it. He's already asking below market. My next thought was to try and wholesale it but it's something I've never done before and don't know too much about.

What's the process for wholesaling here in Alberta? Is it even legal? Anything I should know?

I'm a new investor and because I'm self-employed, I can't get a loan for properties in my local market unless I can put down 20%. I've turned to looking for rent-to-own properties. I'm not quite familiar with the exact process myself, only reading a little bit on the subject here and there but I thought I had enough information to get started. I just got off the phone with a seller who was interested in a lease agreement but his idea of how it's done was different to mine and now I'm wondering if I'm wrong. I wanted to ask the experts to see what's considered "normal" in the rent-to-own space.

My view: (numbers were not exact and meant as an example) Current rent was $1,400/month. We'd do a tenancy agreement at $1,400/month with $1,000/month going towards my future downpayment and the $400 being his to keep. We'd also sign a option to buy agreement at whatever price was negotiated and in 2-5 years, I'd take my "downpayment" to the bank and get a fixed mortgage for 25-30 years. I have two family members who are doing this exact thing and had one seller who wanted to rent-to-own using this method (She was asking way above the normal amount though)

His view: We sign both agreements like normal but no money from the tenancy agreement goes towards the downpayment ($1,400/month.) That's his to keep. The option to buy agreement comes with a monthly of $1,000 which is what goes towards my future downpayment.

As you can see, the numbers work out to  be totally different. That would be $16,800 in lost capital a year. The deal barely worked as it stood and losing an extra $30,000-$40,000 on it killed it completely. Am I wrong with how to structure a rent-to-own?