All Forum Posts by: Robin Valadares

@Joel Arndt, Ancaster actually. I purchased the home in 2014, hence the lower purchase price compared to the current market!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $265,000
Cash invested: $1,500

2+2 Bedroom, 3 Bathroom, Semi Detached, 1.5 parking space, Freehold Home. Currently tenanted.

What made you interested in investing in this type of deal?

At the time the area was booming in interest because of a proposed transportation/infrastructure advancement. It was an hear a short drive from my personal residence that allowed for a positive monthly cashflow investment.

How did you find this deal and how did you negotiate it?

With the help of a realtor.

How did you finance this deal?

I was fortunate to use a HELOC against my first rental to help finance the DP required for this property. This allowed me to purchase the property with minimal personal cash

What was the outcome?

Currently tenanted property generating monthly positive cashflow

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $370,000

3+1 Bedroom, 4 Bathroom, Double Garage Free Hold End Unit Town Home, currently tenanted.

What made you interested in investing in this type of deal?

It was my first investment deal, I was looking for an investment vehicle that benefited my situation at that time.

How did you find this deal and how did you negotiate it?

I used a real estate agent to help me through the process and the negotiation.

Lessons learned? Challenges?

First tenant that occupied the property I had to evict 3 months later for non payment. It taught me a valuable lesson in tenant screen and the judicial process. I have since done a lot more due diligence in my screens with a large help to the tenant screen algorithm on BP.

Hello BP community!

My wife and I are  beginner real estate investors in Hamilton, Ontario. We both currently work in the Health Care field as physiotherapists. We currently own 2 properties in the area and are part of the buy and hold philosophy. However, we have a dream of living in the US to enhance our ability to reach financial independence sooner while providing a better life for our future family. I've been researching companies looking to hire Canadian trained physiotherapists but am not having much luck. My goal would be for one of us to work as a therapist and then slowly branch out our real estate portfolio so in the future it would be my main priority.

I'm hoping to connect with anyone who has completed the transition that we are hoping to complete. Our states of preference would be Florida, South Carolina, Texas, California and Arizona. I'm an avid golfer and specialize in golf rehabilitation, so I would love to continue to treat, year round, while actively investing in real estate.

Thank you for your time, looking forward to any advice or suggestions you may have!

@Andrew Postell and @Mike Oliveira thank you for your feedback and insight. I appreciate your perspectives! 

Andrew to answer your earlier question, my CAPEX includes a monthly maintenance figure, I have also included my property management fees as well. Basically the end result of cash flow is considering almost everything I can think off and it leaves me with my bottom line. Mind you, if I do obtain my desired rent of $1700, my monthly cash flow will be boosted by $150 and yearly by $1800.

Mike, the property is actually located in the St. Catharines area. Rent prices are not on par with Hamilton's but I foresee an increase in market rents once there is further progression with the MetroLinx expansion. 

Hello BP Community,

I'm probably raising a question that may have been discussed in previous threads. In any case I was hoping to get some advice with my new deal.

I have the following 4 scenarios regarding going with a variable rate mortgage or a fixed rate mortgage. I believe I have my option selected with respect to the cash flow it provides me but I wanted some opinions in case I am missing something.

I'm using my HELOC for the DP at the interest rate there is 3.2%.

Variable rate is 2.55% 5 year, monthly payments 30 year amor

Fixed rate is 3.09% 5 year, monthly payments 30 year amor

All the numbers are based on receiving a rent of $1550, I'm hoping to get %1700. Cash flow includes CAP EX, vacancy, property management, mtg and property taxes.

Scenario 1:

75% purchase price at Fixed Rate

25% DP through HELOC

Monthly Cash Flow: 56$

Yearly: 668$

Scenario 2:

75% purchase price at Variable Rate

25% DP through HELOC

Monthly Cash Flow: 112$

Yearly: 1345$

Scenario 3:

80% purchase price at Fixed Rate

20% DP through HELOC

Monthly Cash Flow: 34$

Yearly: 413$

Scenario 4:

80% purchase price at Variable Rate

20% DP through HELOC

Monthly Cash Flow: 95$

Yearly: 1135$

Obviously the numbers suggest that scenario 2 and 4 provide the best returns. The only difference is that that 5% is equivalent to 13.5K, so I'm wondering whether the extra 5% from my HELOC warrants the 13.5K. Am I right in saying that since the interest i'm paying with the variable rate is tax deductible, that it doesn't matter what the rate is. I am a buy and hold investor, not considering any appreciation in the property but strictly cash flow.

Please let me know your thoughts!

thanks for your advice @Kevin Siedlecki and @Steven B.

The HELOC will be paid back after the sale of the rental property it is secured against. The home is 20 years old with a new roof, furnace , it just has a original ac unit.

From what I see that area will appreciate in the years to come ( I do not like to rely solely on this) and I believe the market rent will reach close to 1900$ seeing as it's a 4 bed 3 bath house. At those numbers I'll be in positive cash flow. However currently it looks like I'll be taking a hit. 

HELLO BP COMMUNITY,

I just purchased my second single family rental property in St Catharine's. I was hoping to get some advice if I am setting up this rental properly in order to maximize my ROI and cash flow.

Purchase Price: 270K

Option 1:

Market Rent 1450-1700

Use 20% for down payment from existing HELOC, interest is at prime + 0.5%: payment: ~ 140$ per month

80% conventional mortgage at 5 yr fixed at 2.9% @ 30 year amort: 900$ per month

Property taxes at 203$ monthly

Insurance @ 100$ month

5% vacancy

10% property management (I'll be managing it myself)

10% Cap Ex

 Cash Flow Summary: 1600 rent- (140+900+203+100+80+160+160)

= - 174.3  a month

Option 2:

Everything same as option 1 but use my own money for down payment.

Cash flow becomes -34.3$ a month

Option 3:

Either increase my HELOC down payment or personal down payment to 25-30% in order to increase my monthly cash flow.

I'm thinking option 1, I believe the market rents will increase in time and I know since I am managing it that I will save the 180$ monthly

I want to know if I am missing anything glaring? 

I'm looking to purchase more properties in the coming months so having access to cash is very important but at the same time I do not want to be experiencing negative cash flow.

Thanks for your advice!

@Jenifer Levini

Thank you for the follow up. I was able to have my account connect me with a lawyer who has subsequently set up my corporations. I appreciate your advice on the matter. 

@Roy N. excellent post! Very informative. Thank you for breaking it down like that.