All Forum Posts by: Jason Ridout

Glad to hear you found something to pull the trigger on John. Even if the half duplex only breaks even, you're still paying off an appreciating asset.

You are right about new loan qualification and interest rates holding prices down, but I also have another theory. 

Houses in the lower mainland are already out of reach for people, and even a 2 bed condo in Langley fetches over $400,000. The higher interest rates and tougher loan qualifications will make those already expensive properties, unreachable. What are people that are priced out of the market going to do? Go where they can buy. The island is still affordable. I think the housing prices are going to settle, and maybe even slide a bit in the lower mainland, but the island seems like more of a bargain now, than ever before.

I just got an 11 year old house under contract in port alberni. 3 bed 2 bath up, and a roughed in 1 bed suite in the basement. It's in town. $255K. When your choice is a condo in the lower mainland for $400-$500K or a nice house for $255, that's an easy choice for me. There is also a rental crisis in Port right now. People are moving there, and there are almost no vacancies. I have also seen inside many rental units there now, and there's a reason people complain about tenants, the suites are disgusting. You have a **** suite, you get **** tenants. I think there are a lot of good tenants, looking for a nice place to live.

I'm only expecting about $1,900/month income once I put another $40k in to finish the basement. $1,900 on a $300k investment, is not ideal, but I'm really banking on appreciation. I can't see a relatively new house, with suite, only being worth $300k in a few years. I don't like to bank on appreciation, because it's obviously speculative, but there aren't many options out there. I have 3 houses in Prince George I bought last year, that just hit the 1% rule, and I can't find those deals anymore up there either. The lower mainland has pushed up so hard, that everywhere else is now playing catch up, and prices are getting pushed up to the point that it's going to be hard to find anything that hits the 1% in BC. 

I'm just banking on Port Alberni being very under valued right now. The house I have under contract would be worth $450k or more in Parksville, which is 30 minutes away from Port. That's a $200k spread in 30 minutes. I know Port has a reputation, but so did north Surrey 10 years ago, and people just saw that it was way cheaper than everything around, and now it's gone through the roof.

Anyhow, I'm rambling. Thanks for reading!

I've gone to view some properties in PA, and found that you can probably hit the 1% rule if you are willing to buy in the D neighbourhoods, which I'm not. The C neighbourhoods are much more desirable places, but from what I'm seeing, you are looking at $260-$290k for a decent house with suite, and you'd only be looking at $2200 a month returns if you're lucky.

I little inside scoop though, my wife works in insurance, and recently had a gentleman come into her office to insure the 9 houses he recently purchased. I think a lot of investors are putting their money into PA right now. Might not be an ideal cash flow place, but if you had good capital, I think prices are going to climb there, and actually already have.

There's a guy named Chris Fenton that heads a real estate team that seem focused on investors. Might be a good source. http://www.justlistedalberni.ca/investment-service...

I'm also noticing extremely high priced, nicely renovated houses in Parksville, next to relatively cheap dated houses. There's a BC box house for sale right now for $380K, (mls# 429756) a block from a freshly renovated split level for just under $600K (mls# 432035). Buy and holds might not do well in the area, but I think there's money to be make on flips. People that are moving from the mainland, that sold their houses for top dollar, aren't hesitating to drop their cash on nice houses here.

If someone wants to look at partnering on a flip here in Parksville, I am local and can oversee the rehab, and even put in some sweat equity.

I've owned properties for many years, but only recently have I started to invest in multiple properties at one time. I used to be afraid of the concept. The large amount of debt, managing properties, fearing a major crash in the market. All the fears that are common amongst new investors.

A friend of mine started buying up houses a few years ago. His plan was 10 houses in 10 years. He now has 10 houses, but it's only been 4 years. I thought he was crazy. I thought it was an extreme gamble, and that he could lose everything. The concept of a property making money made sense to me, but the idea of leveraging yourself so heavily seemed like a recipe for disaster. 

Every time I talked to my friend, I learned a little more. He referred me here, where I learned more. I read a few books about investing in real estate, and listened to podcasts. Every time I learned something, my friend seemed a little less crazy. I eventually bought a rental house near some of his rental houses, and then bought another. Again, I learned. I learned the true costs to buy, renovate, and insure a house. I learned how to deal with contractors, and property managers. I learned how to pick a house, and a neighbourhood. I saw the money start returning, as the houses became occupied with renters.

95% of people I knew, thought I was crazy to borrow and invest in rental houses, especially 10 hours from my home. But I understood what I was doing better than 95% of the people I knew. I then realized, my fear, had been replaced with knowledge. I had learned, just as my friend had. He was no longer the crazy one. He made perfect sense. His numbers all added up. Everything he said could be researched and proven. The people that deemed my friend crazy didn't have numbers or facts to back up their fear of investing. In reality, they knew little or nothing about real estate.

So who are you going to trust? Someone with tangible facts, and on the ground experience, with numbers and evidence to back up what they're saying, or someone that "has a hunch"?

What I learned is that most nay sayers, know very little about real estate. Surround yourself with people that have done it, and you'll find a lot of positive people that will tell you that you're on the right track. It gets draining when everyone tells you that what you are doing is crazy, and that you're going to fail and lose everything. Don't take advice from people that know less than you. Real estate is very complicated, and you can't learn it overnight. That's probably why so many people are afraid of it. It's good to be afraid of something you don't understand, but it's better to replace that fear with knowledge.

There's a lot of advice that can be learned by just reading these forums, listening to podcasts, and reading books.

The two big things I've learned about investing, is it's a mindset.

1: Don't listen to anyone that knows less than you do about investing in real estate. It seems everyone that knows very little about real estate will only say bad things, but people that understand it, have positive things to say. Surround yourself with positive people. Which bring me to the other thing I've learned.

2: If you are unsure of something, or are even afraid of it, learn more about it. Fear can be replaced with knowledge.

I'd put the minimum down, unless you can get money from a hard lender cheap enough. If it's going to take you a few months to get the house rehabbed, and you've borrowed from a hard money lender at a high interest rate, it's going to cost you a lot of money in interest. If you can put the minimum down, and get the rest from the bank at a low interest rate, you'll be better off.

Again, I'd say a heloc is your best option. Hard money is usually the last resort, because it usually carries a high interest rate. That being said, if you are getting it from a family member, or friend, for a low interest rate, then there's no real downside to using a hard money lender.

I'll let someone else chime in on the waiting a year before refinancing. I don't have to wait a year through my bank, but I'm Canadian, rules might be different in the US.

A very good friend of mine has got me into investing in real estate. I was already somewhat involved, but he introduced me to BP, and the whole world of BRRRs, and finding neighbourhoods that cash flow etc.

He talked me into buying my first strictly rental property, in a city a long way from home. (About 500 miles) I was going to invest locally, but he showed me all the numbers, and where he recommended, was a far better location. I bought a rough 70s house with a suite in the basement. I did some work myself, and had a contractor do some as well. It's in a solid neighbourhood, has gone up due to forced appreciation and the fact that I managed to scoop it for below market value. The house now generates $2500 a month, and I'm into it for about $240,000. It should cash flow about $650 a month after all capital expenses. All this was on my friends advice.

I'd like to invest more into the same city. The numbers work very well. The friend that helped me into my first house there is going to be starting an investment company. He has 6 houses in the same city, and wants to scale up, so is looking for investors. He knows the city better than me, he knows the market better than me, he knows the contractors, property managers, rental market etc better than me. He is more than willing to give me any advice I ask for, but I think he will always be able to squeeze that little bit extra profit out of properties.

So do I buy more property on my own, or just give my cash to him, and let him do his thing? I understand that he will take a cut, but it will be very small. I think it might cost me 5% or so for his costs, but he will probably find a way to get 5% more out of properties than I can. I don't mind being hands on, but at the same time, if I can generate the same growth through him, why spend countless hours learning what he already knows?

For the record, I would never hand money over to an investor that is just starting a company, but like a said, I've know this guy for almost 20 years, and he has never once fed me a lie, and every property he invests in, is extremely well researched, and is always profitable. I trust his investment choices at least as much as my own.

Sorry to revive an old thread, but was wondering if you found anything worth buying on the island John? I live in Parksville and am looking to buy more property. I was hoping to keep my investing on the island for the convenience, but the numbers don't seem to work well here. Lots of places that do 0.5% but nothing close to the golden 1%. 

I was looking in Port Alberni as well. Both at multi-family and houses with suites. I talked to a property manager, and she just said no. Not a lot of employment. Lots of people on welfare. She said as with anywhere, you can get good renters, but she says she dealt with lots of damaged suites, and people skipping on rent. It might be more worth while looking at it as a place that might turn around, so a holding property might have a better result.

Sadly, I'm not happy with any of the numbers on the island. I can be done, especially holding properties, as the island is going up fast, and will continue to, but as far as cash flow, it's hard to beat a place like Prince George, where you can find the golden 1% if you look hard enough.