All Forum Posts by: Ockert Kruger

Looking for information re: investing in the US as a Canadian - for cashflowing / appreciation investment properties, if there are any Canadians doing this I would really appreciate some very simple info about how you went about doing it - setting up a bank account, did you open an LLC there, did you have to pay additional taxes etc.. Unfortunately finding deals in Canada is tough, the rent / value ratio isn't realistic and we don't have tools that make strategies such as 'driving for dollars' possible. Looking to the US for my investment goals.

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Calgary, Alberta

Quote from @Eagle Yeh:

Hi,

I have a newbie question on analyzing a deal. How do you process properties that look similar on paper when analyzing cash flow? I am practicing the suggested steps to analyze 5 deals a day from properties on MLS (I use Zillow and house sigma).

What I find was that there were often times that properties look similar on paper (similar sell price, similar rent, similar house condition, and age). They usually turn out similar on paper in cash flow. When it comes to this situation, do you just offer one to "bias for action"? Do good deals come in similar observation? or good deals are just not readily available on MLS usually.

Thanks,

Use cash on cash return - cashflow by itself isn't enough. If all numbers including cap ex etc are the same I would pick the one where I would most likely go live myself. Also, if both are equal in terms of returns try and buy them both! I don't know where you find anything with decent returns in this market, if you have then congratulations.

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Quote from @Elijah Williamson:

I was informed this morning of someone looking to sell their house privately this morning. I quickly set up a time to meet the owner and discuss why he wants to sell and what he's looking for. I met the owner this afternoon and after talking with him and learning his story, I'm not convinced I should buy the deal. I'm a new investor with one property and this one is a little more unorthodox than I'm used to seeing.

He owned the property for 5 months so far. Bought it for $110,000 and has $6,000 into it. It's pretty much turnkey from the initial walkthrough. Here's where it gets a little more complicated. He currently has a tenant living there with a right to purchase agreement. The tenant is paying $1100 a month with all of that going towards the downpayment. He has 12 months to get financing for the property or the owner takes 50% of the money saved thus far and the contract is extended for another 12 months. The agreement is for $125,000 and the tenant has about half of the required down payment. If he misses a payment, he's out and the owner gets all the capital saved so far.

The current owner wants to sell both because the tenant just quit his job and he's trying to get out of the REI game. He's willing to sell to me at $120,000 but he wants me to keep the right to purchase agreement with the tenant.

So there's already a buyer and if he goes through with financing I make $5000 minus the closing cost. Would I be paying closing costs twice? Transferring to my name then the tenants in 6 months? I'd be making $2000-$3000 then wouldn't I?

Am I missing something here? I've never run into a deal like this before and I'm not really on board with it currently.

I can't help you much with your question but where did you find a property for $120 000 that rents for $1100???

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sure, please message me.

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a system for managing property - something that would make remote management possible, thats user friendly and that tenants wouldnt mind using.

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Canada doesn't nearly have the same amount of information access as those in the US do - have you been able to find any off market deals in Canada, specifically Alberta? Any suggestions or advice?

If you've had any success please share and discuss.

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Rent Redi is not available in Canada according to the Google play store. Which software is available for property management and which do you recommend?

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How is value determined for a construction project and for forced appreciation - is it something I can build a spreadsheet for eg calculating cap rate or is it something that can only be done by professional appraisers?

1. If were to approach a developer to build a multifamily property and the cost would be $2million, how do I determine what the post construction value (for cash out refinance) would be once its filled with tenants. Even if I know what rents I'm going to get I still need to estimate the cap rate to determine the value, cap rate is based on purchase so how does that equation work?

eg cap rate = NOI/build cost

Does the bank use a general cap rate for that area and building type? How is that determined?

2. If I buy a multifamily and raise rents - same question, how is the new value determined?

eg cap rate = NOI/current market value

To determine the current market value a cap rate needs to be selected.

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eg cap rate = NOI/build cost

Does the bank use a general cap rate for that area and building type? How is that determined?

2. If I buy a multifamily and raise rents - same question, how is the new value determined?

eg cap rate = NOI/current market value

To determine the current market value a cap rate needs to be selected.

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Originally posted by @Brad Jacobson:

Great question @Alicia Marks! I have two immediate thoughts:

1. Most new investors have an amazing opportunity to get into the real estate game by house-hacking. The best part of house-hacking is that any deal is better than no deal. If you're able to divide your housing costs at all, it's better than not doing it 100% of the time. Even if you can't find your perfect house-hack, buy one ASAP and start building that equity and savings rate.

2. In my local market (UT), analysis tools like the "1% rule" are impossible to achieve. Nevertheless, I continued to buy properties that didn't meet the standard criteria and found that all I had to do was invest from a position of strength (with good reserves) and sit on the properties for a year or two before they became incredible investments. Properties I bought prior have up to $800/door more cashflow now than when I bought them. They weren't money makers at first but have turned into the best financial decisions I've ever made.

In other words, don't wait to buy real estate, buy real estate and wait!

Good luck to all!

New investor here - could you explain how a property that doesn't meet the criteria becomes an incredible investment in just one year? How is that possible? Are you referring to the inflation-related increase in property prices?

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All Forum Posts by: Ockert Kruger

Ockert Kruger has started 6 posts and replied 13 times.

Post: Canadians Investing in the US

Post: What is a good deal/bad deal when number looks similar on paper?

Post: Should I take this deal? Alberta

Post: Canada, Alberta - finding off market deals

Post: Canada - property management software

Post: Canada, Alberta - finding off market deals

Post: Canada - property management software

Post: forced appreciation appraisal

Post: post construction value estimation

Post: QOTW: How to help a new investor stuck in “Analysis paralysis?