All Forum Posts by: Michael Voulgaris

@Brendan Conners I may not be the most experienced or fancy pants investor on the block, with that I would still be happy to offer any advice or guidance I can should you have questions. I am like minded in the idea of seeing value in creating a local-ish community of people interested and active in investing in real estate in western Canada, so feel free to reach out should it be of interest to you

@Brendan Conners Interest rates can be tough to negotiate, especially since we may be entering some inflationary periods economically. However, if you have a good mortgage broker and you shop around multiple mortgage brokers, you can still find amazing deals out there. A thing to consider is that when you get a mortgage, and you have to renew it in 5 years, if we see inflation rise then those mortgages can get a lot more expensive when that first 5 years is up. Everyone has a different strategy in how to navigate this area, but to max out your mortgage amount when potential inflation in the future can be something to at least be cautious about and read into. I would advise asking family and professionals with more specific experience in this area, but for your own peace of mind, making sure you have floating capital, or less of a mortgage where you can create a situation where you can do some improvements and increase your equity in the property are some ways to be cleaver and still come out on top in a challenging market environment.

I used my first 4-plex as a principal residence, and I rented 3 units out, and I was working in and around the area of it for a while and kept 1 unit vacant for a few months for my personal use while my work wrapped up. After that I moved back home (a different town) and rented that other 4th unit out with no issue. The government has a number of programs to help new/young home buyers and investors. Websites like CMHC, BCREA, even your banking institution are all good sources to look for some of those programs and incentives. Just make sure to always consult a private party (family/friends/mentors etc) to review any of that stuff to double check that it really works to your advantage and wont put you in a bad spot down the road (like mortgages that look cheap and affordable up until you have to renew them kind of things). 

@Conor Kelly anytime! In my research, I have my own reasons for having confidence in that area for the next 5-10 years. But like I said, my strategy is to find large projects with confirmed momentum and investment from large groups (companies/governments etc) and look for other property developers investing in those areas. If all that looks good and secure to me, then I start shopping around to effectively cash in on their investments but doing my own personal investments in the nearby area. That's just my method and it is what has lead me currently to the north coast. If this is a method that you find interest in, do not limit yourself just to some stranger online saying it's a good area to invest etc. Currently I have a few other areas I am privately looking at replicating my system in as well, so always stay looking.

That aside, if you are interested in the north coast area as a possible place to spend energy researching, I can put you in touch with a few people to have a chat with and just ask questions (mortgage brokers, realtors, property managers etc). Mind you they will sell the positive views obviously as it's in their business model to do so, but having people who will spend the time to have a conversation without having any commitments can be a nice way to cut through some of the sea of research and narrow your focus a bit at least. If something like that would interest you, send me a DM and I can put you in touch

I mean, my first rental property was another similar multi-plex in Duncun, for similar reasons at the time. It took me 2 years of living cheap and working hard, sacrificing a lot. But in BC, a 4-plex is the smallest size you can still get away with 10% down if you claim to live in one of the units for your BC first-time home-buyers benefits. However, for anything over $500,000 you will have to pay the land transfer tax, so be careful. But say you found something around $490,000.... downpayment would be roughly $60,000 with closing costs, insurance, fees, and everything. If you can do some upgrades to the units, increase rents with those kinds of "option packages" I was discussing, as well as get your property in a growing community.... in a few years you can increase the value of your property a great deal, use the BRRRR method and repeat.

I set my target at a specific monthly income I wanted to earn from my property, with a certain level of involvement I felt I wanted to give it. Seeing as it took me a few years to save, I figured I could at least give my investments the benefit of being treated like a part-time job until they became more systemitized. I wanted my investment income to replace my working income so I had to treat my investments as serious as my career, that was just my personal mindset to it. So set your goals, and be willing to make the sacrifices needed to get to them, and have high standards, it's your life and you will get out of it what you put into it. Continue to learn and ask questions along the way. That way when you are able to start seriously shopping around, you already have certain questions on your mind when evaluating and negotiating. 

@Conor Kelly , @Brendan Conners I spend maybe 1-2 hours on that property per month. To be fair, I spent a fair bit of time initially setting up basically a rate sheet. I sent the rate sheet to my property manager, they enact that rate sheet. I keep tabs on all my properties and their advertisements, but that is just due diligence and fun for me, so I don't necessarily see it as work, but with that factored in, maybe an extra 2 hours per week or basically scrolling..... I contact my property managers in different areas a few times a month just to stay in touch, 5-10 minute phone calls here and there just to say hi and check-in. Other than that, it's just general research and following news channels for things like I was saying: new projects coming to certain communities, how those projects are going (progress, hold-ups etc), additional influencing factors like covid, or rental shortages/surpluses, rising or falling prices etc. All basic stuff that a few minutes in the morning while having coffee a person can stay current enough to make informed decisions on rates without eating away time in your day. 

In my Kitimat example, I do NDT work, metal inspections, and such, so I am familiar with the work and the industry coming to that town. With that, I just send out generic emails to companies I know will be involved and will be in the area. Things like construction companies, crane companies, field mechanic companies etc. Usually, LinkedIn, or city council calls can get most of that info in a few minutes here and there. When I find a few companies that I know will be working in the area, I send a generic welcome email with a rate sheet and my property manager's contact info. Outside of that, I have rotational advertisements I worked on with my property managers, and in my random check-in phone calls, we have brief discussions over which ones get views and replies and which don't. All in all, I would say I spend maybe 10 hours a month per property, and that includes keeping up connections, check-ins, reviews of ads, sending emails, researching, and browsing, and financials. In my situation, it is a fair trade-off. It does become more streamlined over time if you are wanting to be completely hands-off and have no involvement. Considering these are massive investments that have significant importance to me, I enjoy the time I spend managing the fruits of my labor and ensuring my growth. 

@Conor Kelly Vacancy rates are a concern if you are not able to be adaptable sure. The example I wrote on that property was to highlight that by offering different packages, by being able to accommodate short-term and long-term rentals, renting to the general public as well as to companies, all these "options packages" make me flexible to changing market conditions. For me, I like to look at areas where I see high growth potential in certain communities by looking at large work projects coming to the area, for Kitimat... CGL. The papers have been releasing articles for about 2 years with people leaving Prince George to head to Kitimat, there was a particularly famous one last summer about PG having a shortage of hairdressers because they were moving to the coast to cash in on prime business before things really took off. Now covid changed a fair bit of that, but the point here is that I look at trends and projects and what kind of growth potential they can bring to a community and what kind of set backs can stop it in it's tracks. Looking at the long term commitments a number of Asain countries already have in place to purchase Canadian LNG as a means of reducing global emissions by getting those countries off of crude, coal and more. For me, for the next 5-10 years, the north coast has too much growth potential and too many parties invested in seeing it through. I looked at the real estate trends in that area as well, house values are all going up monthly it seams, and I have there are several new projects on building new subdivisions in the area as well as the north coast is expected to see an estimated 100,000 new jobs in the area over the next 5 years. 

I want to reiterate, this is just one example, it's just a current one that I have a lot of focus on. The two primary points I wanted to make in this forum are to counter the stigma in BC in particular that has been growing that you don't make good returns off renting. The first point was being creative and flexible with your rents, how you rent, and being able to adjust to market conditions so you can keep your properties rented while rigid investors may miss those opportunities. 

The second point, if you have investment properties with 4 doors or more, then the rents you can earn can influence the value of the property and thus the equity, and thus BRRRR methods or any other flip and sell methods. So if I bought a 8-plex for $1M with rents at $800/unit per month, say 1 year later I make no changes and just collect rents, pay down mortgage etc, it wont change much over that 1 year. But say if I can rent half of the building to businesses and increase the rents to $1,200/month, and then do all those add ons (furnished, utilities etc) those values can increase the perceived value of the property and maybe now after 1 year the property is $1.3M. These numbers are completely made up but I'm using them loosely to show that I personally think it is a fallacy to think of rents purely as cashflow only. I just wanted to bring awareness that wherever you decide to invest, or however you decide to invest, do not get stuck in a single train of thought, like rent cash flow is not a means to build wealth or cash flow is not how you make money in real estate in BC.

@Brendan Conners Sorry, I am not good with tagging and such, but check the post I made above that discusses rental's as more dynamic options where you can do more with them to make situations better for yourself and ways in which you can be creative with them to make rentals highly profitable and combo to add increased value to your properties equity all the while earning higher cash flow then you would otherwise think you could

I would like to play devil's advocate here because rental focused approach can be quite profitable, it depends on the deals you make and the creativity you approach your investments with. In my post a few days ago regarding my 4-plex in Kitimat is a good example that I will lay out here:

I live in Fort St John, BC, for work, but I invest in developing communities. This method requires a lot more homework into projects coming to a community, potential setbacks, community support, and municipal investment that coincides with projects coming to an area. a few things I did, in particular; I used a private mortgage broker, I used a long standing top quality home inspector, offered additional financial incentives to be very picky with the properties I sent them to so I could use their findings to bargain down deals or get sellers to eat the cost to fix certain things, saving my lots of time and money in the long run. set my mortgage payments to be bi-weekly, which gives you almost 1 month of extra payments per year as opposed to monthly, and it pays down your interest quicker. I also make my units option to be fully furnished or not, utilities included or not (with big charges to make it worth my while), month-month at the higher rent options, 6-month at slightly discounted from month-month, and then slightly more discounted for yearly leases. This allows me to have cheap mortgage payments, pay down interest faster, have a fluid ability to adapt to market conditions on the fly (very important and financially life-saving during covid or other setback events). The 4-plex in question here has 2 3-bedroom units on the ends, and 2 2-bedroom units in the middle.

Here are the financials:

4-plex : $590,000.  

Mortgage at 1.8%, ($1,044 bi-weekly)

property management at 10% of rents.

 month-month rent 2-bedroom: $1,700

Month-Month rent 3-bedroom: $1,900

fully furnished: +$400/mo per unit

cable included: +$200/mo per unit

Heat included: +$150/mo per unit

Hydro included: +$200/mo per unit

6-month lease: -$100/month rent ($600 savings overall, a good selling line)

1-year lease: -$200/month rent (remember, if tenants break tenancy on signed off leases without justifiable cause, you can be owed the remainder. However, if you have difficult tenants, you are also stuck with them for a year. you can weigh your own pro's/cons)

At the cheapest rates, fully rented: +$6,400/mo

mortgage: -$2,088/mo

property managment: -$640/mo

misc and rest: -$2,000/mo

average net proceeds on discounted 1 year leases with no add-ons: ~ $1,600/mo. 

While I agree no one is getting rich off $1,600/mo, I can also share that with good communication and good management teams, you can upsell your tenants and provide a better living experience at the same time. With my current packages rented out, my monthly net proceeds are in the +$3,000/ month range. The other thing to mention is when there are 4 units or more, the rent prices and situation you set your buildings to can also affect the value of the property, which means your equity can raise higher than neighbors of exactly similar properties based on your creativity with your set up. Increased equity with creative solutions is an easy way to use your BRRRRRRR method and slow and steadily repeat. an extra tidbit that I like to use, is to have a mixture of renting to businesses that send workers to areas because they tend to like month-month and shorter leases, also for them it is a business expense and they can write costs off so as long as you can provide all the services to make their efforts as easy as possible, they are more likely to pay the higher rates. This just diversifies my spread of adaptability for my properties. 

I understand this is a long reply, I apologize, however; I wanted to give an insight into one of my properties and different ways an investor can be creative with rents and rental packages to not only increase their monthly cash flow but also to increase their properties value and ultimately your equity and ability to keep investing. 

There are many strategies and methods, and everyone has their favorites and each method has its pros and cons. Do not rule one or the other out, it can lead to limiting strategies and may lead to missed opportunities, even if it's a method you don't normally love sometimes they are still worth the time of consideration, thought and some research. Keep an open mind, and always be willing to learn more

Hey Brendan, I would be happy to connect and discuss your goals and focuses. I am from the lower mainlaind (Sechelt/Victoria) and I work up north and invest in commercial properties in developing towns with high growth potential and security of long-term development. I would be happy to chat should you be interested. Currently, with the CGL LNG project, the north coast has a lot of potential and should not be overlooked. One thing I like to do is look at large projects, approved and funded, in all sorts of areas, and then do research into property development in that same area. Look for things like new subdivision developments, new storefronts and municipal investment into development in the same towns the projects are in. Using a ideas similar to this can help stack the odds in your favor to be in the right place at the right time. 

as some examples, I have created a number of rental packages such as fully included (cable, hydro, furnished etc) where I total all the bills based on the high-cost season and add $100 to each bill and total it all into the base rent. Companies wanting short term rentals for their workers generally like this idea because it's completely hands-off for them, you as the landlord get premium rates on your rents, and you can hold the company who is renting off of you accountable, which can be a lot more simple than chasing casual tenants. However, to keep yourself marketable, you can have 6-mo, and 1-yr leases available as well which can be strong security when renting remotely.  There are always ways to be creative with rents, property value, tenancies, purchases etc. Keep an open mind, and stay focused and you may surprise yourself with the opportunities you can create

I am living in Fort St. John, investing in Kitimat, but I'm from Sechelt and looking for my next investment to be around the lower mainland. I would love to connect with people in the area