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All Forum Posts by: Travis Hewlett

Travis Hewlett has started 7 posts and replied 71 times.

Post: How to take advantage and be ready the next crash?

Travis HewlettPosted
  • Rental Property Investor
  • Calgary, Alberta
  • Posts 71
  • Votes 49

Hello BP,

The other day I was watching my favorite show, "The Grand Tour" (a spin-off from Top Gear), which is a hilarious car show where they test many different types of cars and supercars. Jeremy Clarkson, the sarcastic and witty English host, mentioned that in 2017 there were 15-20 new supercar companies that had all built and released a new supercar. Richard Hammond and James May, the other two hosts, bantered on about who are going to buy all these cars and why would people buy a these new supercars over a Ferrari, Lamborghini, or any of the other supercar companies that have heritage and history. As I was sitting on my couch I realized that 3 blocks away from where I live, Calgary's luxury auto mall has rapidly sprung up over the past few years. Serving as my daily dose of motivation and inspiration, I drive by  brand new Lamborghini, Lotus, Ferrari, Alfa Romeo, Porsche, Maserati, Mercedes and BMW dealerships. All of these dealerships have been built in the last 3 years or so. Calgary is very dependent on the Energy market (Oil and Gas) and has really been hit hard over the past few years, but the states and many places around the world seem to have experienced a ton of growth. Who are buying all these cars in Calgary and Worldwide?

Over the past couple of years I've developed a voracious reading habit and started studying/following as many billionaires and successful people as possible. People like Ray Dalio, Warren Buffet, Tony Robbins, Peter Schiff, etc  all seem to be warning us about an impending recession around the corner, one we'll likely experience within the next 1-4 years. The stock market has been experiencing the longest bull market in history over the past 10 years since 2008. This bull run has also been propped up by countries all over the world printing trillions of dollars to stimulate their economies and pull them selves out of the 2008 financial crisis. One of Warren Buffet's famous quotes is "Be Fearful when others are greedy, and greedy when others are fearful", and it really hit home seeing the clips of all these new supercar companies! Is it just me, or do other people think there could be a massive crash in the stock market right around the corner?

I am early in my real estate investing career with a few properties under my belt and gaining some steam as a working partner in Joint Ventures. One of my main goals over the next few years is to raise money from my network in Canada and put together syndication deals in Multi-Families in US markets where the returns are much better than the Canadian markets. I would really like to prepare myself over the next year or two and be well versed in syndication as well have target markets identified. In two years we'll also have some properties that I'll be able to pull equity from to invest in the deals as well.  I've been engulfed in books, podcasts, trainings, and bp over the past few years, and I'm in business development/sales, so raising money is a strength, but I would really like to learn as much as possible about the legal/entity structures of syndication as well as gather information/contacts in U.S. markets that will provide great returns after a market crash.

I'm sorry for the long-winded post, but I was hoping to gather some information to shortlist my market search as well as find some good resources on syndication. 

- What are some of the U.S. markets that were the best to invest in, after the 2008 crash?

- What did other investors learn from the 2008 crash?

- How long on average did it take markets to bottom, before it was a good idea to start buying?

- What were some indicators in markets that helped investors know they would eventually recover?

- What current markets in the US are experiencing massive growth and will likely continue to grow for the next decade or so?

- Does anyone know of any U.S. multi-family or real estate investing meetups, masterminds, or REI's that stream or record their meetings? I'd like to join these groups remotely if possible.

- Any syndication resources would be appreciated. 

- How are other investors preparing for a crash, and how did you benefit from the last crash?

Have a great day and happy investing!

Travis

Post: BRRRR Strategy with a Niche - Oversize Garage/Shop

Travis HewlettPosted
  • Rental Property Investor
  • Calgary, Alberta
  • Posts 71
  • Votes 49

Hey @Tony Akhigbe and @Carson Wilcox,

The niche is the large workshop/garage, where we will definitely be very careful/picky on the tenant we rent it to. We've already got a guy lined up that would be using it for some small woodworking projects and working on a car project in the evenings. There has been lots of interest from mechanic types that would be using air tools during the day and as you mentiond, it would attract too many noise/odor issues. The uniqueness of the lot will help keep the tenants from the house and the garage completely separate so they don't have to interact at all. 

As for utilities, we are checking with the provider to see if we can separately meter the garage, as we have to run new services. If not, we'll charge the garage tenant a $50-75 utility fee, and split the remainder of the utilities 60/40 for the tenants in the house. I will leave them in my name and issue the bill to the tenants monthly. There will also be strict guidelines written within the lease for the garage pertaining to utilities and use. I had included utilities in the rent on a condo I own, and the tenant was mining crypto-currencies. After 3 months I ended up evicting him for a few breaches of the lease. He had an electrician add an extra breaker, and had pets in the condo when I was doing an inspection. If he hadn't broken the lease on multiple fronts, I would have been on the hook for  $500/month power bills. 

Post: BRRRR Strategy with a Niche - Oversize Garage/Shop

Travis HewlettPosted
  • Rental Property Investor
  • Calgary, Alberta
  • Posts 71
  • Votes 49

I should clarify, that after the Re-Fi, the cashflow drops to $1000/month. The new mortgage payment is $1900. I've had a ton of interest in the garage and am in discussions with an individual to sign a 2 year lease before we even break ground on the garage. We've shared the plans and have offered to add some features to fit the tenants use. There is a huge jump in price for hobbyists, contractors, and car guys from smaller garage space to commercial bays for rent. We've found a good size and price point to fill a need for a lot of people and from the initial interest, don't believe we'll have any issues in the future getting $1000/month rent. The numbers still work when the garage is rented for $350, contrary to the gracious comment above.

Post: BRRRR Strategy with a Niche - Oversize Garage/Shop

Travis HewlettPosted
  • Rental Property Investor
  • Calgary, Alberta
  • Posts 71
  • Votes 49

Thanks for your comment @Thomas S. , have a great day

Post: Canadian Investors & their Real Estate Deals

Travis HewlettPosted
  • Rental Property Investor
  • Calgary, Alberta
  • Posts 71
  • Votes 49

Hey @Anastasia Kristina, Thanks for starting this thread, great conversations so far! 

I'm investing in the Calgary market and can only comment on the Alberta market. We got hit pretty hard in late 2014 and prices definitely fell and there is currently a lot of inventory, making it a great buyers market. It seemed like it bottomed and then our lovely government added the stress test and tightened regulations making the Alberta market even softer. 

It seems like we're definitely close to the bottom, and with Oil and Gas activity picking up, it should definitely help stabilize prices. I work in business development in oil and gas, and there's definitely a lot more activity, projects, and optimism in Calgary. Although we can't get any pipelines built, other projects are still moving forward. The oil and gas crash, also spurred an innovation ecosystem in Calgary, and there are many entrepreneurial groups trying to diversify Calgary so we're not driven by commodity prices. Real Estate prices typically follow 1 -2 years behind oil and gas activity, so hopefully we'll see prices climbing again in a year or two.

Our plan is to pick up as many cashflowing properties as we can while the market is down and soft, then re-fi when it improves and recycle the capital into more projects or possibly down into the states on larger deals. I just posted a deal were working on that would likely work in markets throughout Canada, see the link below. We're always looking to network with local investors, contractors, or potential joint venture partners. Feel free to reach out anytime, and happy investing!

https://www.biggerpockets.com/forums/311/topics/61...

Travis Hewlett

Post: BRRRR Strategy with a Niche - Oversize Garage/Shop

Travis HewlettPosted
  • Rental Property Investor
  • Calgary, Alberta
  • Posts 71
  • Votes 49

Hey BP,

I wanted to share a deal we just closed on, in a market where cashflow is very tight and hard to find. The deal is in Calgary Alberta, which is currently a buyers market, but still hard to find good cashflowing properties. It's a Bungalow in a great neighborhood that provides a decent spread from purchase price to ARV. We found the deal on the MLS and bought it slightly under market value. The lot has a sloped backyard which drops about 15ft to the alley. We are going to renovate the main floor, add a suite in the basement, and build a large 3 car garage/shop. Because of the slope of the yard, we'll be able to build a deck for the upstairs tenants on the flat roof of the garage, adding bonus value for the tenants in the house.

Before we closed on the property I posted a classified ad to rent garage/shop  for $1000/month. I received a ton of inquiries and found out there is a large need in our market for woodworkers, car enthusiasts, hobbyists, and people looking for more storage. The rent in our market for a typical garage goes for $250-$350, but since we have the space and are building it from scratch, we can add an extra bay and charge a premium. We are also making sure it will have 11-12ft ceilings and a 9ft double car door, to make it attractive to potential tenants. 

Cashflowing $200/door in Calgary is hard to find, but with adding this large garage, we've increased our cashlow on this property to around $1500/month. With the extensive renovation to the property and the garage addition, we should be able to pull out all, or very close too, the initial investment after we re-finance in six months. I am the working partner in this joint venture project with a financial partner holding the mortgage, providing the down payment, and renovation budget. It is a 60/40 split, 60 for the financial partner. We should be have enough spread from the purchase price, renovations and ARV, that we'll be able to pull out all of the initial capital on the re-finance depending on how the appraisals are going in a softer Calgary market

See below for the numbers,

Purhase Price - 360k Down Payment - 72k Closing - 2k Reno's - 120k Holding Costs - 6k LOC Debt Service 4k

Total Initial Investment and Holding costs - 204k

ARV - 520k to 560k Main Floor Rent - $1500 Basement Suite Rent - $1200 Garage Rent - $1000

Total Monthly Income - $3700

Monthly Exp - Mort pymt - $1250   Prop Tax - $190    Ins.  -  $130    Vac Rate 8% (1 month) - $240  Capex5% - $150  Repair(5%) - $150

Total Monthly Expenses - $2110

Total Monthly Cashflow - $1590

We will build up the operating account to around $8000, and then start taking the vacancy rate, capex, and repair budget as cashflow adding another $540/mth to our pockets. If all goes well on the re-finance we'll have all of the initial investment pulled out of the project, or very close too it, providing and infinite ROI for many years into the future, and can recycle the money into the next project.

Filling the need for people looking for a large garage/shop gave us a niche and took this project from average to amazing returns. Hopefully this helps anyone who's struggling to find cashflow in more expensive markets with typically low cashflow. Feel free to reach out with any questions regarding the deal, our market, or how we structured the joint venture. Happy Investing,


Travis Hewlett

Post: JV on my first multi fam

Travis HewlettPosted
  • Rental Property Investor
  • Calgary, Alberta
  • Posts 71
  • Votes 49

Hey @Monica Litster,

I am in the process of closing on a property with a financial Joint Venture partner. I brought him the deal, will handle the property management, accounting, manage the reno's, etc. He is financing the mortgage, providing the 20% down payment, and the $120k renovation budget. We are planning to re-finance after 6 months, and hopefully be able to pull all of the original investment. We are splitting the cashflow 50/50, and after his initial investment is paid back the equity split will be 60/40, 60% to the financial partner. This is the first JV for both of us, that is why the split is 60/40. I wanted to get one under my belt and will hopefully get 50/50 on the next one. We have a legal JV agreement, but have not started an LLC. It's a little different in Canada, but we may look into rolling this property and the next one into a LLC. I hope it goes well!

Travis

Post: Alberta Canada: 1% Rule

Travis HewlettPosted
  • Rental Property Investor
  • Calgary, Alberta
  • Posts 71
  • Votes 49

Hey @Josh Horvath,

The 1% Rule is very hard to find in Alberta, other than smaller rural communities. The 1% Rule will never work in any of the cities unless you find a ridiculous deal or foreclosure or something. Typically the guru's and some of the REIN members look for 0.7% or better, but they are still hard to find as well. If you're willing to buy a property that needs a lot of work and BRRRR you can find decent cashflow, but other than that, 0.7%-1% are next to impossible to find anywhere in Canada.

Post: Calgary Meet Up Group for Canucks who Invest in the USA

Travis HewlettPosted
  • Rental Property Investor
  • Calgary, Alberta
  • Posts 71
  • Votes 49

Hey @Cal Ewing,

Great idea, I’m interested in attending for sure. Let me know when you nail down a time and location. Thanks,

Travis

Post: Flip to Myself or sell As Is?

Travis HewlettPosted
  • Rental Property Investor
  • Calgary, Alberta
  • Posts 71
  • Votes 49

Hi @Leeanne B.

You could renovate, refinance and then pull out the equity in the house.  You could also partner with a flipper or developer. What neighborhood is the property in and is it zoned for basement suites? I’m from The city as well and may be able to help.