All Forum Posts by: Paul MacInnis

yes, unfortunate but true!  That being said.....at least you get your capital gains tax bill out of the way up front!   

@Bhekizwe M., @Taylor Servais, @John Casmon - thanks a lot guys!!  Was An exciting day!  

I'm already improving the units after a couple of quick vacancies!   

@Lear Walls - thanks!   For these 2 I had my own money - although the proceeds came from a recent fire that destroyed one of my other buildings.!  I have a couple of other deals brewing that I plan on using OPM for though!  :)

@Roy N. - Cheers!!!

One of these was in Windsor and the other one is in a small town (village actually) called Canning - about 15 minutes from Wolfville........lovely part of the world.

Ok, so maybe it wasnt' exactly no problems, but the other stats are true.  I've closed on my 5th and 6th properties - and for the first time, two properties on the same day.  One is a 4-unit and the other is a 5-unit.  

I was an investor before joining BP but this community has given me the tools, network, and confidence to be more aggressive in pursuing properties.

Both properties were funded conventionally - the 5-unit was 15% down with CMHC insurance (i'm in  Windsor, Nova Scotia, Canada),and the residential was 20% down.  

5-unit - purchase price was $175k.  Mortgage (with CMHC fees wrapped in) is about 155k.  Building is solid (recent major upgrades are done - roof, etc.) with 4 one-BR units and a 2-BR.  Tenants pay all utils.  Gross income is $2430 but I will be doing small 'makeovers' to each unit and increase gross rents to $2700 as they come available - first is already complete.  

4-unit - purchase price was 135k.   Morgage is on about 108k.  This building is also in great shape - new roof, boiler, hot water heaters, fibreglass oil tank, etc.  I'm in the process of doing approx 10k worth of necessary cosmetic type upgrades.  Tenants are very happy with the new upgrades and although I pay the heat this is an excellent cash-flowing property in the short term.  Gross rent is $2750.

I've hired a property manager for the first time - after nearly 11 years of managing my own units - and although i'm still involved - this has already been paying dividends as the extra time is allowing me to pursue other deals and see what the BP rental property calculators tell me! I am also now in discussions with several potential new JV partners for the next deals which is really exciting as well.

@Brandon Sturgill, very good question. I certainly don't have a difinitive answer by any stretch - but i'm looking into my FIRST JV involving a rehab and a partner (that isn't my Father!).

The deal i've taken to the potential JV partner is this.......I will pay for a distressed triplex property outright in cash.

We will use private money to fund a fairly significant rehab on the property.

We will get it re-appraised and have a mortgage put on it (we have an appraiser going to the property soon to tell us the as-is and as-complete value to make sure it's viable in the first place) - and after paying me and the private money back - I will collect  60% of the 'profit' and the partner will then own the property outright. 

The partner is far from silent - he's incredibly handy and will be partially involved on the actual rehab but he's also coordinating the group that will perform the rehab.  My % cut is slightly higher as i've come up with the structure for the deal.

#'s will look something like this:

Purchase - 40k

Rehab - 50k 

Holding Costs - 6k

Legal/Misc - 5k

Total - 101k

Expected appraisal value - 160-180k (I know this seems high but this property has been bank-owned and on the market for almost 5 years and has dropped from 150k to 65k........believe it or not the property tax assessment value is 198k.

So if we get 160-180 - we could get a mortgage of somewhere between 128-144k.   Profit would be 128k-101k = 27k OR 144k-101k = 54k.    60% of each would be - 16k OR 24k.  

Total time allotted for project is 3 months.   

Would love to hear other structures that people are using!

@Brent Byers, I agree with @Account Closed.........I would absoltely get a home line attached to your current mortgage (if you dont' already......aka a HELOC) and use some of the equity at about 3-4% to get another multiplex.......with your equity position you'd be able to get into a great building.

Now, if you don't have an LOC attached to the mortgage - I'm not 100% sure if adding one counts as a refinance.......i'm sure people in here will know with certainty - and if not, just call your bank.

Hope that helps!

@Joseph Walker - congrats on jumping into REI!

I also live in a town of 3000....and there isn't a huge amount going on here but it's quasi close to our 'big city' - 40 mins away - and some typical small businesses.   

I own 10 units in town and 7 more in other small towns and i've had a lot of success with cash flow.  The appreciation is limited as you say, but to be honest, the whole province is limited - excpet the major city of Halifax.   Someone else said the same.....nature of rural.   The cash flow has been excellent and although i've had some horrid tenants  - the bulk of them are just good people that live simple lives.   

I've grown to really love the 'niche' of rural properties that cash flow well!   HOpe that helps!

@Kevin William - welcome to BP!

Congrats on deciding to jump into real estate investing.   It's a wonderful wealth management tactic.

You have an enviable position to be sure and as you say - without the due diligence it's hard to make a decision just yet.   As noted above there are amazing resources on BP - something else to consider is setting up keyword alerts for your area, types of properties you're interested in, and also to find people in your region to network with.  

Everybody is different and will find the type of deal they are comfortable with - best of luck finding yours!!

I really like the point above about not worrying TOO much about the debt at 3.5%......you should certainly be able to find properties cash flowing at more than enough to pay that as well as some extra cash flow.   

I believe someone asked - but what exactly is the scenario with your property?  You own and rent it? Or live there?   Either way - good problems!!!