All Forum Posts by: Alex Kouramanis

Hello fellow investors!

My partner and I are flippers in Ontario. We are investigating a new business model and wanted to know if anyone is already doing this and if they would reach out to share their experience.

The model is as follows: Buy land, clear it, add well, septic and a foundation or pad. Then, buy a high end modular home, plop it on the land and sell as a new built home.

Obviously there will be little details here or there to work out, but pretty simple, straight forward model. Just wondering if anyone else has done or is currently doing this and what their results were.

Thanks and happy investing!!

Awesome, thanks for your thoughts Christian! I should have been clearer, the $17k fee is the interest rate differential calculated by the bank. 

Cheers!

Hi all,

What do you think about this:

If you had a $300k mortgage that you had to port or else you would pay a hefty fee of $17,000, would you be better off paying the fee and getting new mortgages at lower interest in smaller deals on your own, or would it be better to JV with someone who will not put money in on a five year deal but take care of the management role and split revenue? I guess the question really is about, should you work with someone who has a deal but whom you don't have a history with and who won't put money in (because of course there are investors lined up who won't ask for that)? Would it really be better to pay that crazy fee and go it alone?

Thanks!

Thank you so much everyone for your insight!! Very helpful indeed. 

I wonder if there will be a change in buyer's moods too; some of you mentioned niches, looking to get into smaller units within a threshold (i.e. up to a million bucks) and when you surpass that, quality and space becomes the focus, obviously within the stronger neighbourhoods.

We got a pretty nice margin from the sale of our live in flip. In fact, it seems to me that my best move would be to repeat a winning formula. 

I do of course worry that there is a ceiling in the east end of the GTA; some of the due diligence I have done and also my experience in selling our home leads me to think that if affordability enters buyers' minds, they will either look further out of the city for dirt or buy lower entry point homes (e.g. condos, towns) closer to trendy areas. If income picks up a bit in late 2016, and following that, interest rates, this might be a catalyst for that line of thinking...

Hey again all,

Just sold my home and looking to do another live-in flip in Toronto. I've noticed a lot of semi detached properties have been flipped in good areas in the city but I'm more of a detached guy. 

My question is, and it probably heavily depends on the buyer market in my area, is there a better return for me if I flip a semi or a detached property? In the same area, semis are going to be cheaper than detached and assuming of course lot sizes and sqaure footage are equal, I wonder if buyers of high priced, fully renoed properties prefer design over actual dirt/lot size which requires maintenance, gardening etc. I suppose the type of buyer who is looking for a high end finished product is not looking for yard work, but then again, maybe buyers want privacy with the option to do gardening when they retire etc...

Any thoughts based on experience in the area would be a big help! 

Thanks!!

Mike Wood thanks for your insights here. You make a good point abot a narrower buying pool. I think it would be much easier to drive up price if im dealing with an emotionally invested end user looking to raise a family. 

Theres a couple reasons I believe there is a market for my property. 1) most of the houses in this area are made with two separate units and they sell typically because larger families scope this area and need the space. 2) Because the area has decent rents and because prices are climbing so high, people are looking for places with inocme suites to support payments. 

The main concern for me, which you pointed out, is at what point am I over improving? I just can't be sure if my buyer will appreciate nad pay for a nicer looking place with an income suite, or if the buyer profile is more about saving and earning as much money as they can. 

The kitchen and bathroom will be done by me. It's possible to hit $10k with Ikea, but you're right, probably a good idea to expect to pay more just in case.

Thanks for your help Mike!

Awesome, thank you for your replay Claude! I just left you a voicemail. I look forward to taking more about my property.

Have a great one!

Hello fellow BP members,

My question is: should I renovate according to buyers or according to potential?

Let me back up. We have a detached bungalow which we purchased about 2.25 years ago for $440,000 in Scarborough, Ontario. We converted it into two separate units and rented the upstairs for $1350 and lived in the basement. In that time we spent under $25,000 on the house including a new roof. The basement is more aesthetically pleasing than the upstairs. Our tenants just moved out and we are renovating the upstairs to get it ready for May 1st to sell.

I am interviewing realtors at the moment and my last discussion was about how to renovate. I wanted to budget under $10k to get a new kitchen and bathroom upstairs, however the agent suggested that I not spend this money and just improve how things look as they are now. My target was to sell for over $600k and hit as high as $650, but the agent had pointed out that buyers in my area are not young professionals looking to move to the suburbs, but older folks with kids/teens just looking to get a piece of the market. 

I know that if I just sand and stain cupboards or paint the bathroom, I will not inspire anyone to spend more than comparables in the area; a self-fulfilling prophecy. So, I am left wondering: should I put up the time and money and go ahead with my reno plan or listen to agents and stick with the expectation they have of buyers? 

Thanks!

Great, thank you for the feedback everyone. Very useful!

Awesome advice Joel! Thank you very much for walking me through that. I always find it harder to ask questions BEFORE I make mistakes. Thanks for the heads up on selecting the right attorney and for giving me an idea of pricing. I want to maintain relationships with everyone I do business with, but you're right, it's on me to get clear on terms and pricing. I'm in the driver's seat.

Much appreciated!