All Forum Posts by: Travis Hewlett

@Account Closed, Just a couple of suggestions: Buy a house or duplex with a low down-payment mortgage, near a college that some of your friends are attending. Rent each room out individually. Save up enough money to go travelling for a year so you can experience the world while you're young and you can. At the same time you'll be earning cashflow from your rental. When you get back from travelling decide if you want to go to college, become an agent, or do something entirely different. Why not get your real estate license and attend college at the same time? 

I found when I went to college right out of high school, I partied and didn't take it as seriously as I would have a couple of years later. When I graduated college, I traveled to Australia and Thailand for a year and may wished I would have traveled before going to school. I probably would have taken another major with more life experience and traveling under my belt. 

Whatever you do, keep an open mind and know that you can always pivot! Good luck!

Hi @Munish Mehan,

I know a few people that have rentals in Canmore with really great results, although there is definitely a few things to watch out for. Zoning - you need to make sure the property you're looking to purchase in is zoned for short term rentals. Some buildings won't allow you too rent out on Airbnb, but you can put your unit into the rental pool and the building/concierge will rent out your condo like a hotel room with profit sharing. Some buildings are strictly long term rentals which may have rent control to accommodate the seasonal staff and employees.

Financing - I've heard that it is tougher to put 20% down on properties in Canmore, and the banks ask for larger down payments.

Properties are also very expensive in Canmore. Tourism drives a lot of the businesses and housing market in Canmore, and although Alberta has been in a recession, the rest of the world has been experiencing expansion. If we see a global slowdown, Canmore's tourism may experience a slow down. Just something to consider as Canmore's market is driven by larger factors more-so than other markets in Alberta. There is also some new condo development that will add some supply. We were very interested in Canmore's market, but there were some hurdles and decided focus on lower hanging fruit. It would definitely be beneficial to have some local boots on the ground and local insight before you jump in.  Good luck!

Hey @Warren Marshall

You can pay an appraiser, typically a slightly discounted rate, to give you an after repair value, based upon your renovation plans and previous comparables in the area etc. We paid around $300 to have this done, although the appraiser was terrible and was 100k low on what the actual appraiser came in at.This was due to the specific appraisers lack of experience as well as a serious lack of comparable properties in the area. I would seek out an appraiser that you've used before or has a good track record. 

Another alternative is to reach out to a few realtors in the area for their thoughts, but come prepared with your renovation plans, design ie; level of finishes, appliances, flooring, lighting, etc. to make their life a little easier as well as receiving an accurate value. Good luck!

Hey @Alexandre Cournoyer,

There are a few different types of foreclosures in Alberta ie; bank owned, Judicial sale, Court of Queens bench. Which type of foreclosure is it? We have had the best luck with bank owned foreclosures because they typically just want them off of their books. We bought a condo that was listed at $225k, which we offered 140k on, and ended up closing at 145k. We had another property under contract for 480k while the bank still had a mortgage of 590k and were willing to take a 110k hit to get it off of their books. We weren't able to close on this property, which still drives me crazy when I think about it. Both of these we were able to access but had our lowball offers accepted by the banks. Sometimes they allow conditions on the offer, but not usually. 

We've noticed over the past year the court of queens bench or judicial sale properties have been listed at relatively low prices compared to market value on the MLS. They've then been accepting multiple offers, driving a bidding war, making all of the offers public to the other bidders, and then have a second closed bid submission date. The properties we offered on went up to 75k over the original asking price with no-condition offers. The properties we had offered on, ended up selling for market value, but the buyers were forced to buy them without any conditions, adding an uncomfortable amount of risk in my opinion.

From our experience, we have been successful with extremely lowball offers, especially if they are bank owned and you jump on them as soon as they hit the mls. There's quite a bit more risk if you can't include inspection or financing conditions with your offer, so make sure your price makes it an outstanding deal. If your offer makes you uncomfortable because you think it's too low, double down and go twice as low, and see what happens. We were extremely uncomfortable making offers on foreclosures and couldn't believe they were accepted. 

If you can't get into the property, it adds a ton of risk, so make sure your numbers still work if you had to fully gut it and renovate the whole place, with a few backup plans if your initial strategy doesn't work. Good luck!

Hi @Mahesh Sam, 

We are currently investing in Alberta, as it has been in a downturn for the past 4 years and properties are trading at a huge discount from 2014 levels  It is a very affordable market with high paying jobs, even though employment is still way down. We are finding value-add properties that provide good cashflow now, so when things improve they will cashflow like crazy and we can enjoy the appreciation. REIN just published their 10 Best Cities to invest in Alberta report and classified Edmonton and Calgary in the middle of the slump making long term cashflowing buy and holds, excellent options. Feel free to reach out for any info. on the Alberta market.
Our short/medium term plan is to invest here while we are in an extended dip, and the CAN/US exchange rate is not attractive for US investment. Once the US market cools down and the exchange rate improves, we will be taking profits from our portfolio here to invest in multi-family in the US. Hopefully as the US market cools (if it does) and if this recession happens, the CAN/US exchange rate will move closer to parity, making investing in the US a no-brainer. Looking back at the 2008 recession, as Canadians buying properties in markets like Dallas or Pheonix in the 2009/2010 timeframe with a near parity dollar, would have been spectacular. There may be similar opportunities for Canadians investing in the US on the horizon. Or I could be totally wrong and the US economy keeps trucking along on this never-ending bull run! Good luck!


 

Thank you @Jerry Charlton and @Miguel McKinnon!

Miguel, have you completed a carriage house project in Calgary? I've talked to a few people and done some research, but I've heard the banks/appraisers don't have enough comparable's to properly value them. Have you been able to get your construction costs back after you refinance the carriage house?

Hey @Cara Kennedy,

I believe you mentioned in a previous post, that you are from Canada. If that's the case you can lend out of your RRSP's by self directing them through companies like Olympia Trust. These would be secured on a property and the rate is anywhere from 6-12%. Unsecured funds can be lent at any rate depending on your risk tolerance, trust, timeline. We are looking at borrowing renovation funds at anywhere between 8-15%. This is just from my experience, but I'm sure some other private or hard money lenders will chime in and provide more detail. Happy investing!

Hello BP,

I live in Calgary, Alberta, Canada, and the other day when I was pulling away from my house, my neighbor handed me a letter through the window of my truck. They knew we do some real estate investing and asked if we could help them with an approximate value of their house, or if we'd like to buy it from them. They also have a few rental properties in a city, which is a few hours away and they would like to move closer to those rentals and out of Calgary. I am in the midst of a couple deals other deals and don't have any capital available to purchase their house. The property is  single family home with a 2 bedroom basement suite, that they have been listing on AirBNB. They don't need the capital for a downpayment on their new property. I am currently waiting for the mortgage details as well as their AirBNB rental information ie; vacancy, returns, etc.

I would like to try and structure the deal without having to put any capital into it as either seller financed, lease to own, or agreement for sale. If they are willing to sell it fully furnished, we would plan on listing the 3 bedroom main floor and the 2 bedroom basement suite on AirBNB. I could then do some cosmetic upgrades to the exterior, legalize the basement suite, and build a triple car garage raise the value and then put a mortgage on the property, over a 1-3 year timespan and then fully pay them out. If anyone has any ides of how to structure this deal, it would be extremely appreciated. Thank you and have a great day!

Travis Hewlett - Kaizen Projects 

Hey @Slava Cheplygin,

I am a Keyspire member as well, and was definitely shell shocked after the excitement of the 3-day training weekend was over. I had just shelled out 20k that I really didn't have, but since I'd committed, there was no turning back. Keyspire did teach me an absolute ton about real estate and likely saved me well over $100k in mistakes I would have likely made without them. Joint venture partners don't just fall into your lap as soon as you get a membership, but if you put in the work, find deals to present to potential partners, and utilize the network, you can make your money back and much much more.  Through the Keyspire network I met a realtor, that brought me a foreclosure condo, that we picked up for 80k under value, I met multiple joint venture partners that we're completing deals with, and on the hunt for more. As long as you use Keyspire as a tool, and put in the work, your 20k membership will turn from a liability into an asset that pays dividends for the next 20 years!

Feel free to shoot me a DM to chat about our experience, or how to make to the most out of the membership. Good luck and happy investing!

Travis

Hi @Rick Laszlo,

As some of the other members mentioned, I would tread carefully with these opportunities right now in Alberta. Cap rates are quite compressed 4-6% in the larger markets and people in the smaller markets seem to be trying to get the same thing. The more rural the market like lacombe and medicine hat, the CAP rates should increase slightly and provide more cashflow.

I would suggest having quite a large reserve fund for repairs right off the bat, depending on the age and condition of the building obviously. If you're looking to partner with people on these, make sure they are local to these markets and have experience in the market as well as property management. I've looked at multifamilies in these smaller markets and the buildings can all look the same from the outside and walkthrough, but depending on how they were managed have completely different reputations around town and tenant profiles. The smaller markets really have tight rental rates and raising the rent $25/month can push people away quite easily. The size of these will also require a lot of property management and attention so make sure your partner is ready for this, there is a live-in manager, or the market has reputable property managers available. 

Good luck,

Travis