All Forum Posts by: Nick Hines

Hi Guys,

Quick background: started with a duplex, added a fiveplex to the mix. Sold the duplex because it was too much maintenance. Now we're looking at a great little triplex but I'm hesitant because it sort of seems like taking a step back, in terms of units/roof that is. Any input here? Also, the fiveplex is right beside us but the triplex is an hour away in a university town (you can see the school from the building and it should cash $900/month with a 16k DP). We can wait ~2 years to pull cash from the fiveplex to buy larger places, but I'm wondering about strategy. Assuming it's a good investment, is it better just to collect as many units as possible? What about distance? I'm hoping to manage it myself for a year or two but I've already found a few prop managers in the area between 5 and 10%.

Any input would be much appreciated.

Thanks,
Nick

Guys (and Ann) -

Thanks so much for all your replies. At the face of it, this seems an easy decision. However the basic idea here is that this property is golden and can never devalue. Even land in this area is priced out of reach for anyone but the elite. My basic thought is that we are so overheated, it can't possibly go anywhere but down. Purchases are being made on pure speculation - not proper cashflow calcs.

Bryan, I'd love to heat about better opportunities, everything sounds like doom and gloom right now!

Thanks again!

Hi there,

I finally decided to make a profile and join; been lurking in the shadows for too long.

Here is my problem (it's a great problem, but still one I need to make the right decision on):

I bought a five unit five years ago for 630k in an amazing location on a quiet street in the heart of downtown Hallifax, Nova Scotia; pop. ~380,000 people. The area I purchased is landlocked, surrounding by water on all sides and is known as the peninsula. Prices have been increasing at a dangerous rate (40% property tax increase in two years).

I've been getting some input from some senior investors here and they are all telling me to sell - right away. They have packed up from what they feel is an overheated market and taken their money to much larger buildings outside the city center.

At this point, once the dust settles, the NOI is $4881. I owe $469k on the mort but I also have $170k owing on a 3% credit line that I've been using for other things - but this is part of my argument to sell so I must include it here. I took a realtor through and he says I will be able to sell for somewhere in the 1.27-1.3M area. The property really will not cash at all at this rate. But that is what people are willing to pay here right now - crazy but true. There is a huge hype here right now.

Now for me, the property actually does cash. But not much. About $1600/month. In August I can get out of the mort and it will improve things, maybe cash $2250/month.

Things here in Canada are dangerously close to where the US was a few years back. Although we have less sub-prime debt, people are barely able to afford a house here and we're hearing doom and gloom in the news every single day. This was posted today:

http://www.cbc.ca/m/touch/business/story/2012/05/29/rbc-home-affordability.html

So, with all this being said, is there a definite argument to sell here? I very much appreciate any input.

Best Regards,
Nick