All Forum Posts by: Christopher H.

@Suzanne Laird

Theres a few things to unpack here. Generally speaking buying a property that is negative cash flow isn't ideal unless it's part of the strategy itself such as a flip. We should also consider forced vs organic appreciation. If you can go in and force appreciation it might make sense to take some neg cashflow for a short period if there was a very clear path to being positive. I.e. .. If you could BRRRR and time the interest rates well

Otherwise, Buying a property that is negative cash flow without any forced appreciation or a clear short term upside(flip) might be described more as gambling then investing.  

PA is a tough market for those exact two reasons you described.  We dumped a property there last year just behind the ambulance station, it took a minute to sell and as you say the appreciation is minimal, it's a cap rate town.  I would hesitate to lump Edmonton into that though.  Traditionally it's been more of a boom/bust affected by Oil+Gas.  Alberta in general is booming currently.  There is definitely cashflowing properties if you look in the right spots, but they come with their own risks.  Saskatoon could see decent appreciation over the next 5-6 years as sask is often a top performing economy in the world during downturns.  There is deals in all of these spots if you know the right thing to look for. 

Sounds like you guys have done a great job so far.  It can get tricky to find deals in these ultra competitive markets,  Keep patient :) 

 @Lubica J.

Lots to take in here and some great feedback so far.  My suggestion would be take a really close look and consideration of @Chris Baxter comments.  

Why are you investing in real estate?  What specifically are you trying to achieve by doing that?  How do you know its the best choice for you to achieve said goal(s)?

You listed some of the most desirable places to live literally in the entire world.  Kelowna, Victoria, and Vancouver have exceptionally savvy and competitive real estate markets.  This isn't meant to be negative either, it can work out really well in your favor.  These places have an excellent long term outlook and many many reasons to consider them which is what makes them competitive.  

I can't say for sure if you will be able to find yourself a deal, but I can say with some certainty that if you are to define what you are trying to achieve it will provide you some direction.  Defining what a good deal is will make it easier to find :) 

Reach out to me if there's anything I can do to help.  Good luck

 Here is a few more things I thought of while reading your post.   Hopefully there is some value for you. I used some simplified ballpark numbers just to convey my thoughts and assumes you are financially sound without the cash or cashflow from the property.

Regarding #3, not %100 rental ready sounds like a good opportunity.  Would it be possible to find a unit that would command a higher rent with a light reno?(floor, trim, paint, fixtures). For example a 1000 sq ft unit @$20 sq ft your into it for $20k and you go to the market for an additional $250/m.  That's 3k/year or a %15 return, even if we had to increase our reno budget the return is still decent.  You also forced additional appreciation and set yourself up for a potential brrrr(later).  Still requires cash, but most deals do, and this at least positions you better for later on if the deal was good.  

Rates: They can only go 3 ways! If you were to do the above and for example locked a 3 yr fixed and rates go up then you win(as far as rate goes). If they go down then when it comes time to REFI you could leverage that forced appreciation to pull equity and switch to an ARM you can ride down for years to come. If they stay flat then so be it you cashflow.

Market crash:  Yep.. If you can time it perfect then congrats I hope you dumped every single penny into houses and enjoy your retirement in a decade.  If you buy then it dips a bit what's the worst that would have happened? you missed out on the 15-30k less you could have got the property for? Because if you don't buy and BOC starts lowering rates how quickly does it go back that same amount the other way? 

I'm not necessarily saying to buy or sell or when as it very much depends on your personal scenario, but if you find a deal that makes sense on a good property that you would keep as a long term hold then usually the answer is going to be buy imo.  

CH

Vincent puts on great events, highly recommend.  

My honest advice is to put as much effort and focus on getting that first deal done.  You will learn a ton going through your first one and that could have a huge impact on what you want to do going forward.

Keep it simple and focused.. find a good deal and buy it.

@Sophie Grizzle

Exciting!  

Sometimes people try to complicate things or overthink them.  Investing in real estate is actually very simple if we look at it from a high level.. 

Good House: How's the foundation, roof, HVAC?  What can you expect for repairs over 10 year?

Good Location: Is it located well for its purpose?  I.e. If you're buying a small family home you want schools and grocery stores close by, if its an urban condo you want walking amenities and transit, etc.  

Good Price: Does the deal meet YOUR investment goals?  Is this price fair for this particular property/neighborhood? No special skills needed. Just market knowledge and good math.  Both of which you can learn, hire and/or find pretty easily.  

It's a patient persons game right now.  There is deals coming.  

Good luck :)

Good job doing your due diligence... There is a few red flags here.  

Your mortgage payment is 2123/m and insurance as you noted.  Should come in closer to 1k/m .. Excellent deal by the numbers.  This is also assuming you need a PM when the time comes, which is a big expense, and often times worth it.  

The numbers are strong, but knowing the market is so critical.  

Fort Mac is a northern oil&gas town.  It's a huge center of economic activity.  Rents are high when oil is flowing, but boom bust cycles are very real.  When things are good you have higher risk of turn-over and night moves.  When things are bad things are really really bad.  So, you get paid a little extra for your risk. Not to say any of this is negative it's more about pricing it all in. I know successful investors that have done very well in Fort Mac and similar towns such a GP, lloyd.. The savvy ones play the cycles in these markets and if you do it right you can make an absolute killing.

HVAC/roof/foundation are good? 

Well done, Daiken! 

PS: When you are on B/W payments take the amount x26 and /12 to get an accurate monthly.  Not a significant difference on this deal, but when you get into larger payments you will notice it.  

980BW x 26 = 25480 /12 = $2123.33

Hey, Gareth.

1.  If its just to cover the 90 days then you could keep it simple with a basic checking account.  If it was going to be longer or an uncertain amount of time and you want take it further you could look at parking it in a simple fund like TDB8150.  Small short term hedge against inflation that's liquid in 1 business day.  

2.  The big 5 as mentioned.  There are also a couple that dont charge fees.. I think Simplii is one.  Alberta has a couple strong credit unions also.  

3.  Yes, I have several contacts depending.  Check  DM.

CH

One strategy I've seen produce excellent returns is the student/STR approach. Not sure if it would make sense in your scenario, but it can be very effective.

1)Sept - April = Student Rental

2) May - Aug = STR

In many cases, because your running fully furnished, will get you higher rents and/or lower vacancy as students will prefer these rentals. Also the shorter commitment will give you an edge over the 1 yr rentals when your competing in fall. This strat is highly dependent on the STR market locally so it does not work in all scenarios. Also, it requires more management and investment etc.

With that said.. I've seen this implemented multiple times and you can do very very well with it. Typically this is used as a hedge done by people who's primary approach is summertime STR's. I.e. a college town that's also a summer destination, so secondary markets close to lakes, beach, etc.

Good luck