All Forum Posts by: Parker Mott

@Hai Loc - yes. If need be, to accommodate a serious buyer, we can see about extending the closing to August to ensure you won't have a couple months of vacancy. We made it a June closing in case the end buyer wants time to renovate, refurnish and properly market the unit to tenants.

Address: 12 Bridgeport Drive East, Waterloo, ON

(note: this is a residential condo, not multiplex. Can't share Canadian residential properties over BP...yet!)

5 bedroom student rental. Corner unit. 10 minute walk to Wilfred Laurier Campus. 2.5km to University of Waterloo. Very low vacancy rate. Rent ready. Big bedrooms, updated laminate floors.

My partner and I will be assigning the property to you as the end buyer.

Closing is June 12th, but we can discuss an extension if needed.

Due to the seller's personal situation, we have negotiated a discounted price for a local investor to take over. This is a cashflowing property and 5 students from University of Waterloo already want to rent out the unit starting September 1st!

Other 5 bedroom units in this building are selling anywhere between 305-325k. Seller is willing to leave behind all chattels and furniture (furnishings are a little shabby but functional for university students).

The unit offers 1 private outdoor parking space (additional income). Coin laundry and rec room in basement commons area. Owner pays gas and hydro. Tenants pay for internet, though all-inclusive rent is negotiable with your tenants. Condo fees are $571 and includes water, exterior maintenance, etc.

MONTHLY FINANCIALS 

Gross Rents: $2500 (or $2550-2600 all inclusive) + $50 parking 

Utilities: $150 

Condo Fees: $571 

Contents Insurance: $10 

Property Tax: $150

Annual NOI: $19,416-22,416

Cap Rate: 6.5-7.5%

If you're interested and serious about buying this discounted rental, send me an email and I'll provide more numbers, general information, more property photos, and answer any other questions you may have.

Purchase Price: $295,000 

Comps: $305-325,000 

Closing: June 12th, 2018 (or later, if required)

All serious buyers, pls PM Parker for more details and a dropbox link to additional photos.

@JenniferBeadles. Sounds like a smart approach.

@MichaelN. In one case, they already knew about the property (it was notorious). In the other, I said I wanted to rent it as a fourplex (not that it was currently rented out as such). Just be smart and cagey when talking to bureaucrats.

Hi Members,

I'm a wholesaler in Ontario, Canada looking at several residential properties in the province that are currently renting 4 or 5 units, but which are zoned as single family residences. In all these cases, I called their respective cities to see if the properties could be legally converted into multi-fam, to which the zoning department said, basically, "no" for various reasons. Sure, you could apply for a minor variance, rezone, or challenge the city's refusal, but that takes time and money – and I am wholesaling here, so it's questionable that burden will attract a buyer even if the price is nicely discounted.

Are there landlords out there who, if the price was right, would acquire a rental property that wasn't in compliance... Of course, there's the risk of fines and having to shut the rental down and use it strictly as a single family, which would reduce your cashflow. I suppose if the wholesaler negotiated the price down to single family numbers or lower, that would pique interest.

I've discovered a lot of properties with this obstacle that I could potentially wholesale, using the illegalities as leverage to cut down the asking price. 

I'm curious, as a landlord, what your perspective is here. 

Does a great price offset the risk for you, or do you find it best to play by the book no matter what? Any related anecdotes are encouraged. 

Thank you all in advance for reading and responding,

Parker

Here's Phil's response:

"We just did a skip transfer on a deal in Canada a few weeks ago.

One of the great things about investing in Canada is that so few resources exist about it so we basically have the business all to ourselves.

We wish you all the best."

Didn't answer my question about citing his sources about the skip transfer, so that leaves plenty of room to be skeptical.

Ouch. I'd be interested in the other inaccuracies you observed, Roy. You have to take everything you watch on Youtube about real estate with a grain of salt.

Thanks for all your helpful replies. For what it's worth, this is the video I was referring to that mentions "skip transfers" (see 7:25). https://www.youtube.com/watch?v=b93fu6jGeEo&t=581s

I emailed this investor, Phil, personally about his mention of "skip transfers" and will let you all know his input if he responds. Maybe he's on to something we don't know; if a skip transfer is possible in Canada it would sure be worthwhile to pursue if you have to double close on a deal.

@Claude Boiron

Thanks again for your comment. Yes, it occurred to me after. I was thinking of foreclosure sales; in this case, with an outstanding mortgage the end buyer can just pay off the balance with his funds. Makes sense. That's a weight lifted.

@Roy N.

Yes, thank you for specifying. I know title insurance exists in Canada, but from the perspective of conducting a close, they do not (from what I gather). 

Nonetheless, if I or one were to choose to double close in the future, do you two or any one else have insights on a "skip transfer"? If the spread is larger on a deal, surely there's a way for an investor to take title and quickly sell it to an end buyer...

Hi BP Members and Fellow Wholesalers,

I'm a wholesaler in Toronto, Canada looking to make an offer on a home very shortly. If the offer is accepted and a PSA is signed, I will eventually have to double close as the property is mortgaged by a bank and from what I understand banks won't allow you to assign their properties to an end user (is this true for Canada as well?).  

Thus, once a deal is made, I will have to do a "double close", but am not sure how this would be done in Canada since we do not have title companies. There is very little reading on the subject (for Canadians), which deepens my curiosity. I did watch a video where an American investor praise Canada for the "skip transfer", which allows you to do a double close without transactional funding or paying land transfer taxes. I've tried to research more about a skip transfer, but cannot find anything further about this type of transaction.

Are there any investors or wholesalers (Canadian or otherwise) with knowledge on the proper way for a fellow Mountie to double close in a real estate deal? I intend to consult a lawyer on this subject, but if any BP members have some tips or experiences to share, it would be greatly appreciated. 

All the best,

Parker M.

Hi Claude. Thanks for your feedback. 

Your suggestion about creating a non-circumvention clause is a bright idea. It would have to be a separate contract I imagine (almost like an NDA), not a purchase agreement, if I didn't control the property yet. Then again, if you don't control the property, the buyer has very little fiduciary responsibility to you, so I'm not 100% if I would be entitled to say, "hey, sign this first so I know you won't screw me over, even though you technically and legally can." 

I guess I'm asking... is it viable to have your buyer sign a contract before you actually control the property? If so, this type of contract could be useful for the newbie wholesaler looking to secure buyers before actually acquiring any property to assign.