All Forum Posts by: Graeme Ford

@Kareem Aaron not from your area, but all of the research that I completed reveals there is no statute on prepaid rent. To me this means you could request as much prepaid rent as you see fit so I don't see how what you are requesting is even remotely illegal. The only statute I could find was on Rent deposits, which is a maximum of 2 months of which you have already remained within the law for that. I would say that you have every right if your tenant signed a lease stipulating 2 months rent at time of signing to collect said rents. I am by no means a lawyer, but there literally isn't anything that I could find stating that. 

Hope this helps and best wishes. 

@James Danchus It can definitely be hard to come up with these figures and that is what makes knowing your market so important. When it comes to electricity bills and insurance you can be crafty and look for properties that are similar to one you may have an interest in, some of these will list what the annual or monthly expenses are related to insurance and electricity. Once you have enough data points with properties that are similar you can start to come up with some figures on the high end and low. I would suggest you be conservative with your numbers and input the high end of your findings to mitigate the risk of being off in your numbers. 

Vacancy rate is something you can discover through inquiries to local investors, lenders, research studies online, and property management companies. You could call property management companies and ask what their vacancy rates are and they should have no issue providing you with this information. 

Capital expenditure can be tricky because it is relative to the income a given property may produce. Start inquiring about how much it would cost to replace a roof and how often would this occur and similarly inquire about water heaters etc. Next look at the income from the property and you can designate a percentage that suits your needs. For example, if you have a property that does not have high rent rates relative to the cost of replacing the big ticket items you will be required to set a higher percentage for Cap X. If in your inquires you conclude you require $200/month for Cap X, the percentage will be quite different for a property that rents for $600/month versus $1200/month. The best thing to do is figure out what is a safe dollar figure to be setting aside every month to ensure you are covered and base your percentage on those requirements. 

Hopefully this is helpful. Take care and all the best. 

@Jason D. and @Ben Dols funny how it took me a matter of seconds to determine exactly what you guys are pointing out that the 1% rule and 100x rule are the exact same thing. Didn't seem too complicated for me to understand that the two are the same. Either way you have to understand not to purchase a property that is overvalued and if you are going to be the type of person who follows either then you have already completed the research that 99% of people would not have. To equate the difference in understanding one over the other to the difficulty level of understanding quantum physics is ridiculous. Either way research and understanding is required. To each their own I guess. 

@Claude Boiron thanks for the information! Very helpful and it is greatly appreciated. I plan on moving back to Ontario (near Toronto) most likely within the next year. Working in Alberta to raise some capital currently. 

@Bosko Mijatovic All I can say is there is something that happens psychologically with people when it comes to payment for service. People have a tendency to believe that there is a definitive connection between the cost of something and the value that it holds. They begin to justify that it must be worth it if they are charging this much money. 25K is a lot of money to put up and that could be a down payment for a property, which will be the real schooling you need. There is no education that will compare with actually purchasing a property and seeing what it takes to maintain/operate it and be successful in doing so. 

@Jordan Abeel Sorry to hear about your situation. This is not the fault of the contractor. It is irrelevant that they were in plain view. It doesn't take much for a person to recognize that work is being completed on the house and keep an eye on it for an opportunity to break in and take whatever they see fit to. 

It is the homeowner's responsibility to ensure that a vacant property has things in place to prevent break in such as setting up a radio to play while vacant, leaving a light or two on, removing things from plain site. The contractor was just doing his job and it is your job to manage the contractor. I understand where you are coming from with them leaving it in plain site, but it is not their responsibility to prevent break in, it is yours. Do you have insurance and is that insurance inclusive for a vacant property? Some policies are not vacancy specific and it is important to have a policy that does include this for circumstances such as this. 

You should check out Crime Prevention Through Environmental Design (CPTED) it was brought to my attention by a fellow BP member who is a veteran investor. It discusses actions you can take to protect your property. There is a ton of literature on it that can help you to prevent this from happening in the future. 

Hope this is helpful and I wish you the best for the future. 

@Noah Wood I am a newbie who is in the education phase so I can't speak from personal experience so I thought I would just aim you in the direction of an expert on the topic. I am also up in Canada where LLCs don't exist and therefore aren't even something that I can implement here. I spent a decent amount of time looking into LLCs only to find this out unfortunately and that is why I know a bit about them. In January of this coming year our government is setting even tighter restrictions on mortgage lending, yet another obstacle put in front of Canadian investors, but we'll make it work. Just thought I could point you to someone who really knows their stuff. All the best.  

@Noah Wood I would recommend you watch podcast 109 with Scott Smith. He is an asset protection attorney and outlines the use and reasoning behind LLCs. There is a ton of information that you can gain from someone whose career is based on this exact topic. You can go into the shownotes for that show as well and there is a Document created by Scott that has a wealth of information. One thing to keep in mind with LLCs is it does tend to become more difficult in terms of lending acquisition so that is something to research and consider. Scott does say that you should from the very start setup LLCs as this will create asset protection in the form on anonymity. Hope this helps. Take care. 

https://www.biggerpockets.com/renewsblog/2015/02/1...

Here's the link for the show notes. 

@Cecile Gonzales welcome to bigger pockets! 

Awesome that you have made the decision to go down this route. First I would like to point out that I myself am a newbie and am not into wholesaling as Canada has very different circumstances surrounding lead acquisition. 

What have you done in terms of educating yourself? Have you figured out exactly what strategy you want to complete? I know you say wholesaling, but there are different criteria sets for different wholesalers based on profit margins, property types etc. 

From my understanding this question about whether or not wholesaling is illegal or not comes up often and the verdict that I have seen is no it is not. People do it all over the states so if it was I think this would definitely not be the case. This website has tons of information on wholesaling and its inner workings. There are forums you can browse through that will help you find the information that you require. Have you been listening to the podcasts? These are an amazing resource to utilize and often times there are wholesalers who talk in great depth about their strategies etc. 

I would recommend you dive into those as much as you can. I know that since I made the decision to listen to every podcast that bigger pockets has come out with and take notes, the information and tips I have acquired is astounding. The podcasts will also help you organize your thoughts. I take my notes and break them down into categories so I can catalogue the information I am receiving. 

Fun fact I am a fellow nurse! Keep at it and take care. 

@Eric Schrader I would suggest you watch the bigger pockets podcast #109 with Scott Smith. He is an asset protection attorney and discusses the uses of LLCs. He suggests for asset protection that you should have an LLC from the start because this creates anonymity of your assets. There are some issues with LLCs as well such as lending acquisition. Banks don't really like lending to LLCs so this can make it more difficult. Give that podcast a watch as it has a wealth of information. You can also check out the show notes where Scott breaks down what he speaks to in a document form.

www.biggerpockets.com/show109

The document is called 10 ways to protect your assets. 

Hope this helps. Take care and best wishes.