All Forum Posts by: Stevo Sun

Quote from @Akintunde Aboaba:

I’m looking to start investing in real estate this year and would appreciate insights from experienced investors on the best strategies in today’s market. With new regulations in Canada like the flipping tax and property gains tax, I want to be mindful of the risks involved.

I’m exploring a few options and would love to hear your thoughts on each:

1. Airbnb Rentals: Is short-term rental still a profitable and sustainable option given current regulations?
2. Residential property rental: Could this be a scalable and profitable approach, or is it too risky?
3. Commercial Property Rental: How viable is investing in commercial spaces for steady income?
4. Other Strategies: Are there safer or more profitable alternatives I should consider?

I’m also concerned about challenges like dealing with difficult tenants and navigating new taxes. Any advice on how to mitigate these risks would be greatly appreciated.

Looking forward to learning from your experiences.

Thank you!

 I think you need to focus on one strategy first before you explore too many different options. The strategies you listed are drastically different from each other. Find one that fits with your life and how much effort/capital you have. Then learn about it and dive in.

Quote from @Kelly Mae:

I am considering building up on my fourplex. 2 additional units. The cost would be about 500k about $250k cheaper than it would be to buy another duplex property in my area. I will likely get approval based on my zoning. The footings support an addition. I would be taking equity out of the property to build. I am debating the move and would like to know the downsides I might be overlooking. Currently the building runs well, good tenants who are below market rent but there is harmony and dependable cash flow. Thoughts?

 Other than cost overruns and unforeseen issues, I think it's just a question of if this is worth it. From all the news about Ontario it seems like rents are dropping. Obviously you are on the ground, so you would know better. 

A project like that will probably take 6 months to 1 year, so what's your expectation for future rents? I assume you can't have tenants while you are building on top of them. Can you carry the property for the construction period? Just some things to think about.

Personally I would not do it. I would try to refi some equity out of the fourplex and buy something else with it.

Quote from @Damian LaGrange:

Thank you. In this case the current financials on the property aren't great(rents well below market value and the owners family living in several of the suites) so the lenders will likely not provide the funding based on poor NOI. The actual potential value of the property is disproportionately higher than you would expect based on current revenue. Also, the owner expressed concerns over the capital gains tax early in the discussion...so I am thinking the opportunity to do vendor financing will help me get a good purchase price and help the vendor with taxes. Also, I plan to put 20% down...rather than 25%...which will allow me to keep cash on hand to complete the needed rehab. I am assuming that most lenders require 25% DP.

 Sounds like you are talking about a commercial property. If the property is owned outright by the owner you can negotiate whatever terms you want. 

It's referred to as VTB (Vendor Take Back) or Seller Financing. But it's not super common in Canada. Not many sellers are willing to do a VTB unless they cannot get the price they want in the market. Of course, there are some exceptional cases where the seller might consider it. But you have to understand the seller is taking on a significant risk of having someone else run the property and not knowing if they will get the final payout.

If you are getting typical rates, why would you not just buy the property outright with 20% down and obtain mortgage financing from a lender? In cases where VTB tends to work, the price the seller wants is higher than what the market will give them, so they are willing to take on some risk and wait but get the price they wanted.

Quote from @Jessie Marie-Luce:

Can anyone please recommend a great property management team in Calgary, AB (Canada) area? I'm just getting started out in this area and would appreciate any suggestions or advice. Thank you!

If you are just starting out and you are local, I would highly suggest self management. This will help you learn about property management and also you'll know what to look for in a PM. 

Quote from @Samson Ger:

Hello, I'm from Canada and struggling to find a good home insurance provider for my STR. I have found a couple but they want me to insure my primary as well as the rental. The provider I'm currently with isn't able to send me anything via mail, I've tried 3 different addresses and non seem to work for them. Personal/rental/work.

Normal insurance providers won't touch an airbnb.

Any help would be amazing!

 Not sure what you mean by they can't send you stuff by mail, I have never heard of that. But I would suggest finding an insurance broker they can help you find the coverage. They also don't get paid until they get you insurance so it's free for you to use until the job gets done.

I'm not sure what that book is about but you have no financial backing to be investing in real estate. How do you plan on financing your purchase? Banks won't give you money without a steady income stream.

Like others have said real estate is far from passive. You need to amass a large portfolio for it to be passive (aka hiring someone to manage).

If you want to be financially independent as fast as you can then you need to do a few things. 

1) get as high of an income as possible (this usually takes schooling and/or experience, think high income profession - law, medicine,etc)

2) live as frugally as possible (you will sacrifice a lot here, think of not going out with friends, live at home/save on rent, etc)

3) invest as much as possible and I mean invest not yoloing on random hot tips (you are starting young, time will be on your side)

If you do this consistently and remain highly disciplined, you will get there faster than most. A lot of people who did the sacrifice and became financially independent regretted it. I think a lot of them realized that they could have enjoyed life a bit more and still got there relatively quickly.

Good luck!

Quote from @Nardin Farag:

Hi, I am Canadian and trying to find a seller finance deals in Canada or USA, but all agents I talked with they dont have any idea about it, can anyone advise on how to find these deals, connect me with an agent who does it before? 

Depends on where you are. In Canada it's often called vendor take back. But they are not very popular and usually for larger properties. So you'll have to find agents who knows how this works. I think with the downturn in Ontario those have been more popular.

Quote from @Ehrich Roberts:

Hi Abu,

Congrats on having gotten started!... my question is specific towards obtaining a mortgage in BC Canada.

 If you are looking to use rental income instead of personal income to qualify for mortgage, you'll be looking at commercial financing. So typically 5 units or above. I think some commercial brokers will do 4 units. The other thing is for commercial loans the brokers usually prefer it to be bigger.

Quote from @Sophia Rubinstein:

Hi Everyone!

I'm new to the community and located in Edmonton, AB. I am taking my first steps toward FI and am interested in real estate investing. Does anyone know a good financial adviser/planner that I can use in the area? Preferably someone patient who doesn't mind answering a million questions.

Thanks in advance! 

Sophia

 You don't need a financial advisor/ planner. Definitely not one from a bank.

Just post your questions here and people will answer.