All Forum Posts by: Logan Crowder

Hello all. Hoping some folks can give their two cents on the spreadsheet I built out and advise on any errors. The specific section of concern is the 10-year holding period summary.

This example is demonstrating buying a condo in Downtown Vancouver in 2011 for short term rental, selling end of year 2015 and buying two more units with the sale proceeds to hold for a further 5 years. this is being compared with someone who bought the same unit in 2011 but held all the way to year end 2020 instead of selling to reposition their investment. The person who sold and bought two more properties has a higher ROI and IRR than the other investor who just held.

Spreadsheet Link Here

I am hoping to get some feedback on if there are errors in the formulas used. ROI total is sum of 10-year cashflows, principal pay down and appreciation over initial investment back in 2011. I've been heads down in these spreadsheets for this whole week so want to make sure not missing any obvious mistakes.

Feedback on this statement would help to and if it is correct:

"IRR and ROI are so different as ROI is acting as if the debt pay down and appreciation are being realized whereas IRR is factoring those two returns aren't actually realized until end of year 10."

Unfortunately, he does kinda got you there if the contract does in dead say you've agreed to purchase the property as is. The seller does not have to do anything to fix the house if he doesn't want to. For future reference, you should have a clause in the original contract stating something along the lines of canceling that 'as is' bit or the seller allows the buyer to assign this contract and allows the assignees to do any due diligence before entering into a binding contract, etc. A lawyer would know better how to draft that to be enforceable.

Did anyone quote on how much it would be to fix the damage? Let's just say hypothetically it cost $2,000 and your assignment fee is to be $12,000 then why don't you negotiate with the buyer that you will cover the cost to repair up to the quote received. Getting the deal done is more important than how much you make. 50% of something is better than 100% of nothing.

It's hard to say how much you can negotiate with the seller without knowing who he is and his situation. All of that would change how I approach him and try to negotiate with him to make it work. Perhaps hitting his emotional side could work, maybe he has family somewhere else and by selling this home it allows him to be with them or closer. Perhaps he's selling for financial reasons and I could then go back to him explaining that by avoiding some minimal effort such as calling insurance to deal with some issues could cost him big in the long run because when the market is sh*t in the next couple years (if it gets worse) he will have to hire a Realtor and pay 6% to sell it nevermind the fact that his house is at peak value right now (depending on your market but most places hit peak in 2018) and if he decides in a year he wants to sell it will be for less money.

There is always an angle with someone you just need to find it, and sometimes yes it is very hard to do so.

The worst case scenario is you get your money back and can mark this down as an 'experience' deal

Personally, I will always strive for $0 out of pocket when it comes to finding a deal whether it be financed from a hard money lender or a combination of financing strategies. How I answer your question will depend on certain details such as how much seller financing you're looking for, 100% or 10%. The appropriate interest rate and term will also be contingent on that information. If you can do 100% financing perfect, even better is a vendor take back for just the downpayment portion and you cover the balance by way of a conventional loan from the bank as that's the cheapest money you'll get. Here in BC lets say you're buying a property for $500,000. The minimum downpayment for that property is $25,000 and the bank will finance 95% of the purchase price, that would mean you only need the seller to finance $25,000.

How this is structured can go a million different ways, really depends on both you and the seller and what both you're goals are. In order to draft and pitch a solid offer, you should have a firm understanding on who the seller is and what their goals are moving forward. What terms are most attractive to them. Could passive income for 10 - 20 years be a plus for them or passive income for 5 years then being paid out by way of you refinancing that loan at the end be beneficial for them? Perhaps you can negotiate with the seller that you will purchase the property at a higher price and pay bank rates for interest. The terms for financing will be more important than the interest rate. I always advise my clients to speak with a lawyer regarding vendor take backs first and foremost. Once you have agreed on the terms for seller financing the lawyers are the ones who formally structure everything for both parties, don't think for a second you can do this yourself.

Generally, interest rates for seller financing are going to be higher than bank rates, 5-12% I'd say is fair but it will vary depending on your market and the deal.

Don't be scared of losing a deal, what you're pitching to them is an opportunity for them to make even more money then what the house is listed for and create a stream of monthly income which for some sellers can be a phenomenal situation and you would be doing them a favor.

The options for an exit strategy is either refinancing after the home is renovated and rented or continuing with the payments on the loan until I am able to refinance. I'm thinking that as I'm not able to refinance the property, If there was a cosigner or someone else on title who could refinance such as my parents then that could be an option?

So, I have a problem. I'm a Realtor... Not that the field of work isn't great or anything but being a Realtor means I'm self-employed which also means I can't get a conventional loan from a bank or broker until I have at least 2 years of recorded income. I've been heavily involved in real estate for 2 or so years now and have what I would consider an above average knowledge of real estate investing thanks both to being an executive of a local investors group at 18 and also as a Realtor for close to a year now.

I've listened to if not hundreds, thousands of hours of podcasts revolved around real estate so am very familiar with "no money down" investing which is the route I am trying to go, however, it's off to a bumpy start so far. This is the strategy I came up with for funding a deal when I come across one...

Option 1) Hard Money + Vendor Take-Back

One of the Realtors in my office runs a MIC (Mortgage Investment Fund) and said they would do a max 75% LTV loan at a rate of about 6% for 7 or 8 points and they will most likely want the 1st mortgage due to the amount of risk involved as I have never done a deal and am 20 years old. If I got the 75% from them that leaves 25% remaining I am to come up with. I'm looking at buying a fixer-upper in Kamloops, BC with a cost of roughly $350,000 so the remaining $87,500 (25%) would be a second loan by way of a Vendor Take-Back. In order for this to work, I would have to find someone with substantial equity in there home.

"As I'm typing, option 1 to me sounds like the best option"

Option 2) Two separate Hard Money loans

This was my first strategy to go about buying a place for no money down. It would involve the same loan discussed in option 1 followed by a second loan to cover the 25%. The problem with this is the Realtor in my office running the MIC informed me that the rate on a second loan such as for me would be at an astronomically high rate due to the risk (upwards of 20%) which would almost make it impossible for the numbers to work. If that's the case then the remaining balance would have to come from either the bank of mom and dad (unlikely option) or someone with money who really knows and trusts me and is willing to loan the money at a reasonable rate (may be possible).

Problem: Refinancing

My plan was to buy the property, do some renovations and fix the place up then rent it out and refinance to pay out the lender(s). The rehab and other closing costs I would bring the money for ($20,000 roughly). I've been informed that as I can't get a loan from a traditional lender I also can't get approved for refinancing. This to me presents a problem but I would appreciate further input whether or not it actually is.

Is anyone using VR headsets with there buyers to help them find properties? If so, how? 

I'm wanting to start utilizing the technology as I can see how it could be extremely beneficial to the client, especially ones from out of province but looking for some guidance on the getting started part of it.

Today I signed up for the BC real estate licensing course and I'm wondering if anyone can recommend helpful strategies for successful completion of the course such as study or note taking strategies or anything else pertinent to the subject. Thank you, any feedback is greatly appreciated!

This weekend I will be meeting with a Realtor who my mom worked with a few years ago and whom I've met and talked to a couple times. Never about real estate but she isn't just a stranger. I've arranged to meet with her with the hopes of figuring out more about her branch, how her team is ran and what a possible position with her team or another one would look like after I get my license. I have a list of some questions I want to ask her but I'm wondering if anyone can recommend some sophisticated important questions I could ask her to make myself stand out as someone who knows what they're talking about and sound like I would be a good fit. I'm not a beginner educationally when it comes to real estate, I know some of the terminology and how being a realtor works. here are the questions I have so far, any modifications or additions would be extremely helpful, thank you. 

p.s. the branch is the top branch in its area, that being the lower mainland of bc where real estate is currently very hot and it's a populated city if that makes a difference.

• what are the total start-up costs once your a realtor
• would there be a place for me at your office working for either yourself or someone else
• what can I expect my job to consist of doing
• what would you say is your main source of generating leads
• what's been most effective in keeping everything organized
• what's the structure of your team
• what's the split
• does Remax offer any training opportunities
• What are the features of some bad agents you no? Is there a lot? What makes a great agent here
• Do you have specific areas of town you work in and that's it

I was hopping to make it through the year living off my student loan but it's not looking like it's going to work out that way. I'm wondering if anyone can recommend some part-time jobs I should consider given I'm pursuing a career as both an agent and investor. Thanks

that's a great list of books you put up Roy and I've already gone through a few of them. I'll be sure to add the remainder to my library, appreciate it!