All Forum Posts by: Ryan Kucey

I get possession of my first property that's a duplex here in Nova Scotia, Canada, and we got a $40k reno budget built into the mortgage. I made the mistake and told the contractor when he was in doing the quote that we were hoping to get the full $40k reno budget from the lender.

I'm hoping to get a second opinion on our quote. It's a tough market for us here as most contractors are booked up several months in advance. So I'm at the contractor's mercy and replacing him won't be easy... we need to get all the work done within 90 days for the lender to cover it.

Here's the list:

Upstairs Unit

· Demo of kitchen

· Demo of bathroom

· Replace countertop to a stone counter (Color to be selected by customer, $3000 allowance)

· New stone island countertop ($1500 allowance)

· Island cabinets ($1000 allowance)

· Design, Build, Install Ikea Kitchen cabinets (Kitchen & Island)

· Ikea Kitchen Cabinets ($119 Linear Ft, 20 Total Linear Ft)

· New 12 x 24 tile installed in kitchen (145 Sq. Ft, Color/Style to be selected up to $2.75 per SQ +$2 SQ ft. install)

· New 12 x 24 tile installed in bathroom (65 Sq. Ft, Color/Style to be selected up to $2.75 per SQ +$2 SQ ft. install)

· 3 Pcs Tub surround & vanity ($2000 allowance)

· Installation of 3 Pcs Tub surround & vanity (Removal & rebuild of wall)

· Plumbing Kitchen, Bathroom & W&D Hookup (Licensed plumber included)

· Install a washer & dryer hookup in bathroom or spare room - 24” W&D not supplied

· Electrical for W&D hook up (Licensed Electrician included)

· All additional flooring in unit to be replaced with 12 Mil laminate (800 Sq. Ft, Color/Style to be selected up to $2.75 per SQ +$2 SQ ft. install)

· Removal of old carpet & linoleum flooring

· Removal & disposal of all garbage (upstairs & downstairs)

· Install & supply kitchen sink (Allowance $500)-(No charge for installation, included with counter)

· Install dishwasher (Does not include Dishwasher) - Plumbing included

· New baseboard through out the entire unit (150 Linear Ft) includes MDF trim up to $1.15 LF

Downstairs Unit

· Demo of kitchen

· Replace countertop to a laminate counter (Color to be selected by customer.) ($600 allowance)

· New 12 x 24 tile to be installed in the bathroom (50 Sq. Ft, Color/Style to be selected up to $2.75 per SQ +$2 SQ ft. install)

· New 12 x 24 tile to be installed in the kitchen (62 Sq. Ft, Color/Style to be selected up to $2.75 per SQ +$2 SQ ft. install)

· New 12 x 24 tile to be installed in the laundry room (70 Sq. Ft, Color/Style to be selected up to $2.75 per SQ +$2 SQ ft. install)

· Ikea Kitchen Cabinets (lower & upper) (25 Linear Ft) ($119 Lin Ft)

He quoted us at $42,500 + 15% HST. When I ran the numbers at $40 an hour and estimated (I obviously don't know the hours needed to do the job) 240 hours of labor, it was $30k. Wondering where the missing $12K is coming from.

Hoping to get some feedback from people who understand the Atlantic Canada market!

0 Votes

Thanks guys! We since found a surprisingly good deal on the MLS from an investor who wanted to move quickly and a realtor who didn't give a damn and did an awful job listing it. Their loss, our gain. I'll keep all this in mind though when we go to buy our next one.

1 Vote

Originally posted by @Rene Owczarski:

@Ryan Kucey If you can get the bank to fund the rehab, and a contractor to do the work, I would go with that option.

But just quickly looking at your number, I’ve got a bunch of additional questions.
- What’s the after repair value for the property going to be, if you do $25-40k in repairs vs renting as-is? We're in a really unique market -- according to the bank, the ARV is $262K. But this market, the average list to sale price is nearly 110% for multi-family. On the market, I suspect it'd be closer to $310-325k. But what matters is the bank's opinion.
- Are you buying for 70% all in (purchase and rehab cost) of ARV? - Nope, we had to pay market value. This is a house hack and we're not banking on BRRRR'ing. The market I'm in is nuts -- we have 40% of the supply of last year and 12% appreciation. Nothing on the MLS goes under market value and off-market deals are even crazy competitve because so many investors are searching for them.
- What’s your taxes and insurance for the property? Since just P&I on a 30 amortization, $280,00 base loan amount and 4.5% rate is $1,418.72 per month. - 25 year amortization, rate of 1.9% and taxes of 1.2%.
- What would your upstairs unit rent out for, after you leave? $1,350 a month or higher? - Upstairs we figure will rent for $1,700-$1,900.

0 Votes

Hey guys, hoping to get some opinions on what option is best for me in my first duplex purchase. It'll be a house hack that I plan to live in just long enough to still be able to have the 5% down. I already have the property but we don't take possession until Nov 2.

Purchase Price: $240,000

1bd Basement apartment rent as is: $1,000/mo

1bd Basement apartment rent after renos: $1,350/mo

Renos needed: 1,500 sq/ft flooring, two IKEA kitchens, two bathroom renos, paint, interior doors. Possibly adding a second bedroom in a 16x12 utility room downstairs.

Option 1:

We do $240,000 + $25,000 - $40,000 in mortgage plus improvements from the bank. Effectively, we'd have a mortgage for $265,000 - 280,000, which would cost us around $180 - 200/mo more in mortgage + interest. All renos would have to be done with a contractor. I have one already, he figures it's a 4-6 week project.

Option 2:

We do $240,000 and do most of the renos ourselves, no mortgage plus improvement from the bank. There are only a few things that I'd need to hire out. I figure we can probably get the project done for $20-25K in material and odd trades jobs. This would also prevent us from adding a second bedroom downstairs, at least for now.

The issue with Option #2 is that the $20-25K would have to be funded out of my own pocket and set me back from buying the second property a year or two. The quality of work would also be lower as I don't pretend to be as skillful as a contractor.

A lot of variables here I know, but I'm interested to know if anyone has advice. Also open to other options not mentioned. Thanks!

0 Votes

Originally posted by @Yuan He:

Hey Ryan, I feel you, the market is white hot and people are out there offering insane prices to buy.

Disclaimer: I haven't closed on any of the private deals yet, but did get some contacts of owners. Just to throw my two cents out here. I basically tried two ways:

1. I went on facebook market and kijiji looking for those rental ad that are listed by actual people not affiliated programs. Then start the conversation about acquisition there.

2. You already mentioned, door knocking is frowned upon, but no one says anything about driving around and talking to tenants in a distance. I did this, approached some tenants asking their landlords' contact, stating that it is purely for business inquiries not personal harassment. Got some luck there.

Once you close on your first and start finding applicants for your unit, you can then further expand that by calling their references who usually are also owners.

Best luck !

Good to hear stories like this. Have you tried sending letters?

0 Votes

Originally posted by @Brandon Smith:

@Ryan Kucey I feel your pain. Been looking for a new residence for myself while also looking for some rental properties and the market is just insane. I've been driving for deals as well, and some tools to make better use of this time would be very helpful!

Do you think it's illegal here in Canada? I'm wondering why this information is available easily in the US, but not here in Canada.

0 Votes

Just got our 4th offer rejected, been looking for a duplex for months here in Atlantic Canada. The property we just lost out on we offered $39k over ask and we were 5th out of 6 offers. I'm channeling the frustration into motivation, and I'm going to start driving for dollars.

Question is, I know there are a lot of tools out there for the US market that show addresses, homeowner info, rent estimates, etc, but I haven't been able to find anything for the Canadian market? Is there anything similar to the Driving For Dollars app that works here?\

2 Votes

Wondering if anyone has advice on how to find off market duplex/triplexes in Atlantic Canada? Specifically Halifax, but other markets in the area would be similar.

Many of the ways that this can be done in the States is by using software like DealMachine, but I don't know of any software or websites like this that help in the Canadian market.

COVID also makes it more challenging right now because there aren't any in-person networking events and door to door is discouraged and frowned upon.

Been watching the MLS for the past several months, looked at about a dozen properties, made offers on three. No bites yet. Tough market for buyers here. Any advice is welcome!

1 Vote

Originally posted by @Trevor Gaal:

Hi Ryan,

Starting to think about your 2nd, 3rd,... 6th property is a chess game. You need to plan your next few moves. So first, you'll want to make sure you have your "3 C's" lined up: 1) your Credit score, 2) your debt-to-income ratios (Capacity), and 3) your Collateral... you should be good for the third one as you have enough for your next down payment. You'll want to talk to a good investor-focused mortgage broker, not just any random broker. Tell them your goals and the strategy that you'd like to use, they'll help guide you and give you some education that you'll need at this point.

In terms of your capacity for another mortgage you'll want your broker to choose a lender that will count the maximum amount of rental income when determining your ratios. Scotia Bank has generally been the most favourable for this, but your broker will know which lender to approach based on your situation.

The next thing to consider is your investor profile and your skill set. Do you have much time to dedicate to managing your first property if you get a 2nd one? Do you like dealing with tenants and the issues that come up? Are you handy? Can you do small repairs yourself? Do you have the time to learn new skills and start doing some renovations if you do a BRRRR project or a conversion?

Personally I'd do a conversion and add a secondary suite to a house as close to the peninsula as you can afford. Either that or buy a beat-down triplex and fix up the apartment you're living in while renting the other two, then switch to the next unit and fix it up, and so on. The problem with multi-fam in HRM is, as you said, it's HIGHLY competitive because of the low low inventory. I've made 7 offers in the last 7 weeks (all my highest and best offer) and have been beat every time. There's a lot of folks willing to over-pay on speculation right now in Halifax! I'd look for a conversion project that's been on the market for more than 90 days. Those sellers are now willing to negotiate on price. There's either something that's just not appealing to a regular home-buyer, or they're priced too high. Either way, it can be a great opportunity for you because you're looking at it from a different angle than most home-owners.

I hope that helps somewhat. Feel free to reach out if you have questions or what to chat real estate in Halifax. Happy to help where I can.

Cheers,

Trevor :)

Hey Trevor, good to meet another investor in HRM! Your advice is valuable. I'm working with a real estate agent who specializes in real estate investing and has connected me to a mortgage broker who also specializes in this. So I'm starting to build the right team.

My credit score is excellent, I've been borrowing and paying down credit and debt properly since I was 19. I've got a healthy salary of around $140-150K, although I'm not overly knowledgeable on how debt-to-income ratios affect mortgage lending. I read in Brandon's book that in the US, it's either 4 or 10 mortgages one individual can hold through conventional lending. Hoping to learn more about this as I continue researching and networking.

Thanks again!

1 Vote

All Forum Posts by: Ryan Kucey

Ryan Kucey has started 6 posts and replied 13 times.

Post: Real Estate Investing in Halifax, Nova Scotia

Post: Looking for a second opinion on a quote from a contractor

Post: Driving for dollars in Canada

Post: Mortgage plus financing or my own capital?

Post: Mortgage plus financing or my own capital?

Post: How to find off market deals in Atlantic Canada?

Post: Driving for dollars in Canada

Post: Driving for dollars in Canada

Post: How to find off market deals in Atlantic Canada?

Post: I have $75K and I want to buy multiple properties – thoughts?