All Forum Posts by: James Bailey

I’ve had this same situation where I had an accepted offer for $342,500 with a condition for “partner approval”  Upon further inspection I found Water issues just like yours, pouring in!!! I went back, wrote them a very nice letter saying hey listen we’re still willing to buy the house “as-is” but it’s become more of a risk so it’s going to have to be $15,000 less (horizontal crack). And they said NO they told me to scram. 
Then 2 weeks later they called me back 🤷‍♂️ 

Also with that easement you can do whatever you want but personally I would assume that you’ll have to smash down your garage. Chances are you won’t but the numbers “should” work in a worst case scenario. Just my 2 cents from Canada. Good luck 

Investment Info:

Single-family residence fix & flip investment in Edmonton.

Purchase price: $248,000
Cash invested: $105,000
Sale price: $427,000

Bought a P.o.s
Full gut renovation and I added a legal basement suite.
Sold it to an investor that purchased another flip from me. He rents it out now for $3200 a month

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

Get your money out fast. Build experience. Get a name for my work. Build a brand.

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

MLS deal!
It only had 2 bedrooms up so we leaned on that for a price reduction. Then we just put a wall In the middle of one of the bedrooms, then there were 3. Ta da

How did you finance this deal?

Private money from local investors

How did you add value to the deal?

Put in 100k Reno

What was the outcome?

Sold for a high profit

Lessons learned? Challenges?

Worry more about the RPR. Worry less about fancy landscaping if it’s going to be a rental property.

I'd look up a broker on LinkedIn. Not any broker but a really good one. I scoured through and found a woman who sounded like a real pro and had a bunch of connections. She ended up knowing a private lending institution that specializes in house flips. I've used them twice now. They focus more on analyzing the deal rather than the individual and all I have to do is put up 10k as a down payment, they fund the rest (last deal I did was a 270k purchase). They only operate here in Alberta but they have a solid busines model so I bet there are other companies like them all over the world. 

I had to pay renos myself but you can find way around that too. If you get approved for a Lowe's credit card you can buy almost all your reno stuff there and they have no interest for a certain period of time. I got my whole kitchen and bath there on my Lowe's credit card, no interest for 18 months. Also a lot of flooring stores HVAC companies etc will finance you their products. Obviously this can be risky so make sure your deal is a good one.

Chances are you know some people that have some money, and have it sitting in a mutual fund or something. Close them! offer them a higher interest rate then they are getting (which probably sucks) and convince them there is no risk. I have several people offering me money at a 5 point return, if I turn the house around in 4-6 months  that return for them is the same as a 10-15% interest rate savings account which doesn't exist. You can even offer them a % of the profit and make them feel like a partner.

If you have a conversation with 10 people a week and you bring up the concept of house flipping casually in each one, most of them will be interested in the topic, maybe one just as much as you. Maybe they have some money? Get their number, take them to view some properties, paint a picture in their head. Just throw it out there to everyone you talk to, I tried this and was literally offered money from several people without even asking. Just watch out when people offer you cash.

@Don Konipol @Betty Cruz, Thanks for the feedback! I have since simplified my plan. I found a buyer that I am getting pre approved for a mortgage through my broker. New plan is to flip a condo and gift him the down payment to buy it from me at full appraised value. I get the down payment back through profit on sale along with a healthy chunk for myself. Using this method I would have actually made more money on my last flip where I paid 12k in realtor/holding costs and lowered the price to move it. Betty Cruz, your idea looks good to me and almost the same as my new one. Forgive me if I misinterpret, but it seems like the "profit" you make on the first deal will just be gifted back to your partner on the next deal after you buy a place off them. In that sense I wouldn't call it profit because it is just bouncing back and forth. Looks like yours is a solid long term plan for cash flow while mine is more short term payoff. watch out for the higher capital gains on resale, thanks for your input!

Hi all, 

I'm up in Alberta, Canada and it gets pretty cold here in the winter. I have buy/holds and I do some flipping but the market really slows down in the winter and that's not a time that I want to try and flip a house, so I thought about the BRRR strategy that I've read about here on BP.

The problem with trying to do that here is the LTV on a refinance is only 65% so trying to pull that off here will invariably leave me with my own capital tied up in the rental property, which I would rather not have. I need to turn around and use that money for more deals.

Since on a regular mortgage you can easily borrow 80% LTV, If I enlist a partner to buy the house from me, we can share interest in the house and I won't have to tie up my money...

SO HERE'S THE IDEA

Step 1: Buy SFH with hard money, fix it up and install a legal basement suite.

Step 2: GIFT the down payment to said partner (through a proxy) which will be paid back through the profit on sale along with my original investment and capital gains when I "sell" them the house. 

At this point. My partner has acquired a property with no work and no down payment. Great deal for them! Wowee

Step 3: Open a caveat on the property in my corporation's or another partner's name.

Step 4: Both suites in house and garage are rented out. (approx. $600 Net income monthly)

Step 5: Through a carefully written contract, my partner, the new owner of the house, will hire my corporation as their property manager on an X year term for something like $400/month or potentially some percentage of equity.

My benefit now is a nice passive income stream, and perhaps best of all, I will not be limited to the number of houses I can do this on, opposed to putting mortgages under my name with I will cap out on and probably not even get approved because I'm already leveraged out pretty hard.

This is the first time I've written down this idea, I've mostly been confusing myself and others around me with eccentric ramblings thus far so I hope it makes sense. Let me know if you think it can work and definately if you have any suggestions I would really appreciate it. Thanks!!

James

Vinyl = no underlay, higher durability and easy repairs. Your handyman will figure it out in 5 minutes! I just did vinyl for the first time in my last flip without watching any videos, it was like putting magnets together and you only need an exacto knife to cut it. One of the tiles got a huge scratch on it so I just cut it out and glued a new one down in 5 minutes, if that happened with laminate floors I would be pulling off the baseboards, pulling up all the connected pieces etc. etc. hassle ensues.

I live in Edmonton. My partner and I have a combined 9 units here and they all cashflow. All our units are renovated so we haven't had much trouble filling them. I would suggest a Principle + Improvements mortgage to get a good deal on a dated property and have the mortgage company roll in the renovation costs into the mortgage instead of buying a turnkey property for way more. BRR works too. One house with a basement suite was 317k. Gross rents are 2400 so it's cashflowing 600 depending on utilities. Our condos typically cashflow 100-150. We are currently considering getting some stuff in the US, want to trade!? Haha just kidding...

Hi guys,

Writing my first post here. I've been watching for a long time but didn't have much to say until I bought my first house which I just got the keys for yesterday! congratulations to me woohoo. couldn't have done it without all of you guys! Thanks.
 
So as soon as the renters in the
basement left for work I started ripping up my carpet in the entrance of the house so I could replace it with some nice porcelain tile. It's about 100 square feet including the entranceway, 6 steps and a landing. i have pictures but dont see an option to post it on here...

Anyway, under the carpet there was a ridiculous amount of yellow glue, as if that carpet alone was holding the entire house together. It's STILL STICKY to the touch. the carpet was mostly glued to plywood but in a small section it was glued down to some linoleum. 

I've been looking all over the web and mostly just run into people arguing with eachother. No time for that and DEFINATELY no time to scrape all that glue up, the lino isnt going to budge either without some kind of blood sacrifice.

I have to get these tiles in! Got a wicked deal and there's no refunds! 

I know atleast one of you smart folks has ran into this problem and did something clever which will save my *** and impress everyone so let's hear it! Thanks in advance for the help, and thanks for having me.
 

James

Originally posted by @Brandon Turner:

Hey @James Bailey welcome to the site! Great to have you here! If you haven't checked out the The BiggerPockets Podcast yet, I highly recommend it!

Thanks Brandon, you're the man. I'm all over it. I was in your webinar on lending this evening, and I've been binging on those podcasts like a Netflix series. I'm more of a book guy to be honest but I'll take it where I can get it!

Thanks Cal, I like how you're investing out of the country, no doubt you can usually get a lot more bang for your buck in the states. After I make my first move here in Edmonton I'm definitely going start jacking up those frequent flyer miles!