All Forum Posts by: Tom Stromar

Welcome to BP!

I'm in Nanaimo myself - whereabouts is your new fourplex? 

Tom

Hi Dan,

Unlike Vancouver (gasp!) and now Victoria, it's definitely possible to get cash flowing properties here in Nanaimo (although the market's been on a tear the last 6 months so that might evaporate in a couple / few years if the current trend continues). 

Although as Tyler mentioned, the cap rate is 5%, not great.

For those that are willing to put in a bit of effort, recent zoning changes make it possible to get *really* good, one might say, downright un-Canadian, double-digit returns. 

Hi Devin - funky looking building!

It's usually in projects where the developer has run out of money that this type of scenario presents itself. Do you know if there's any equity position here? Is he carrying any borrowed funds against the property? 

Welcome to BP!

Hows the sentiment in Calgary these days - the news is painting a grim picture. How does it look on the ground? Any good deals to snap up?

We're based in Nanaimo actually. My wife is originally from Port Alberni while I'm a 'tourist' that came over from Vancouver ;)

I do know there are a great number of benefits from holding an agent's licence such as direct MLS access, an awesome network (other agents and professionals, builders, etc..). Also, properties you can earn money selling yourself MLS properties. Not all roses of course. There are numerous monthly and annual fees and additional rules we need to follow when transacting. For example, the court considers agents experts in the market and as such to have an unfair advantage when dealing with members of the public and for that reason must disclose to anyone with whom their dealing that they are an agent.

As well as investing in Real Estate, selling it is our day job so there is a nice synergy there. You would need to work out whether or not the expense of holding the license makes sense if you're not actively using it.

Thanks for the info - I can never have enough actual rental and price info :)

We've currently have three configurations of property that will cash flow at current market values here in Nanaimo. Two can easily be created out of existing stock and one of those is quite lucrative - this is what we are pursuing now. It's pretty easy to generate 10% Cash on cash and our current project looks to be 18%. 

At our core we are cash flow types but will place the spec game if and when it makes sense. Fortunately, again as agents, it's a bit easier for us to keep our fingers on the pulse of the market and we have access to some great stats that allow us to see excessive supply or shortages.

It would seem to me that if one had the right 'crew' applied to the right deal that redevelopment (flips, etc..) might be lucrative in Vancouver at these price levels. 

If you want more info about the license we would be happy to share - just let us know :)

Hi Tanya - how long ago did you move over from Courtenay? I see in your profile you've got a rental condo. Is that here on the island or on the mainland? If on the mainland, I'm curious as to the number you're getting.

Hi Ross - welcome to BP!

I can certainly shed some light on the foreclosure process for you here on the island. With ubiquity, the lenders apply for a court ordered sale of the property and then secure the services of brokerage to market the property. Most of the lenders have their preferred agents to deal with.

The property's are placed on MLS. Occasionally the banks will request that no mention of the foreclosure proceedings be mentioned in the advertising however this is not common. Further, once someone became serious about the purchase it would be disclosed by necesity of the process.

The first buyer to offer on the property, negotiates with the lender and this initial offer proceeds much as regular transaction what with the ability to have due diligence clauses such as inspection, financing etc... Once the contract becomes unconditional, a court date is set.

On the day of  court, any member of the public is welcome to submit an offer on the property as well. These offers must be unconditional and have their accompanying deposit funds. Being unconditional, if buyers need to secure financing they need to do this before the court date as well as any other appropriate due diligence.

Where there are more than one party making offers on court day, each party is made aware and has the opportunity to change the offer which is then sealed and submitted with all other offers to the Master or Judge who then decides the winning bid.

Having been through this process numerous times I can tell you that while there are deals to be had they quickly evaporate with multiple bidders and it is impossible to know if you'll have any competition until the day of court so the whole process can be a bit hit and miss but exciting none the less!

You're right in that it is easier for agents to locate the foreclosures as we have access to the various systems where they are listed and we are excluded from any 'advertising bans' of their status, so if you're looking to pursue them you should definitely connect with an agent. I can certainly recommend someone for you in whatever area you're looking to focus on as I've met quite a few in the last 10 years, just let me know.

There are many other ways to find motivated sellers however and BP has a plethora of techniques, such as yellow letters, etc, etc.. As I'm sure you are, just keep browsing the site, you'll find no shortage of ideas :)

Hi Joshua - the city has suspended DCCs in certain areas to encourage development :)

Hi Joshua,

Welcome to BP! I don't think you'll find a better site for finding information about Real Estate Investing.

While the cap rate is about 5% in Nanaimo, some recent zoning changes make it really easy to develop cash flowing properties. My wife and I are focusing on this currently and have found that we can generate $800 cashflow on 250K investement with 20% down. The CoC ends up being around %12-20 depending on the property which I'm sure you'll agree is spectacular for the island.

Let me know if you would like more info

There are also a number of reasonable properties in the old city right now being offered for sale, three pop to mind immediately, I can send you the details if you like.

Cheers!

Welcome to the Bigger Pockets Alex!

There is a trove of great information on the site and definitely check out the pod casts which are very entertaining and highlight a mix of different investment strategies and styles.

Where did you grow up on the island? My wife is originally from Port Alberni and we're both currently in Nanaimo. (Good to see a fellow islander on the boards...)