All Forum Posts by: Filipe Matos

35% cash on cash is almost impossible to achieve, you would need to get 1,400 in net monthly rent on a 250k property. Maybe possible without property management.

50k per unit? Only in Windsor, Hamilton downtown close to the factories, and small towns. You are risking here to have great cash flow but no much appreciation.

I have heard of investors selling everything because they had too much trouble with trouble tenants eating their cash flow and almost losing money because of lack of appreciation. 

I have heard Marc once, I kinda liked it, so I find strange he would preach such numbers in Canada in today's days.... 

Numbers are changing year by year... Maybe he didn't update his numbers in the last 3 years?

Teacher out of touch with the market? Or maybe I am missing something.

I hope I am wrong.

I cringe when I hear Canadian investors paying US based gurus to guide them in Canada , same when I see nowadays lots of us listening people that have no properties, or only a couple properties that barely cash flow.

Filipe

 Hi Joel, I am very active in Hamilton, just bought one property there and almost closed on a second one.

If you don't like the numbers for student rentals in Hamilton, then you will not like it almost anywhere else in the whole Canada, same for any other kind of real estate in Canada except some apartment buildings. Things are not as easy as 2 years ago.

I was getting good cash flow in Toronto until a year ago, but now, forget it. Close to Toronto,  I can only get good cash flow in Hamilton.

Maybe you are looking at small and overpriced  properties, there is tons of them now, you have to be patient and look for the needle in the hay stack.

If you don't have patience, maybe you should look at student rentals in st Catherine's

Also, If you are interested in providing financing, let me know, I may need it in a few months.

Good luck

Yeah, I think commercial mortgages are not included on the approval of residential properties. 

I have had a good track record with banks, but it seems that does not matter to them anymore.

tks

Hi Roy, I wonder if my situation is a bit different since my total mortgage amount is higher than 1.5million and the mortgages I require are higher than 400K?

I got approved months ago for 3% on a 200K mortgage, but maybe they make it difficult for higher amounts?

I am fine with 20% down, what I am not fine with is rates above 3%

Which lenders do portfolio lendig? 

Hi all, I am finding very hard to get proper financing for residential deals with A lenders, 20% down and rates lower than 4%.

it seems that since mid 2014 it is impossible to get lending from A lenders (big 5 banks) at preferred rates (+-3%) for investors that have more than 1.5 million in mortgages, even if the number of mortgages is only 2.

This is what I found:

RBC: they have a limit of 1.2 million for residential mortgages and low rates (<3%)

BMO: they require 30% down instead of 20% for non owner occupied properties

CIBC: unlimited mortgages with 20% down, but properties need to cash flow, which in Toronto is impossible upon purchase.

Other banks don't even respond since I have I high dollar amount in mortgages  

 The Best solution I found until now was going with a B lender that will charge 4% to 5% in interest with 20% down. This becomes quite costly, making commercial lending almost more viable at 3.5% rates with 30 to 35% down, meaning, moving from residential purchases to building purchases.

Anyone with the same issue?

Another point I would like to touch: 

What size of buildings do you guys purchase and how was the experience?

Buildings greater than 15 units might be too much for me since my approach is go in , renovate the whole thing and rent asap. Doing a 20 unit building may take too long, annoy tenants too much unless I hire 3/4 teams of contractors.

I am feeling my sweet spot might be 10 to 15 units max.

This might be my first experience with buildings and I am finding that it might not be such a great business approach as I was expecting.  

I found a few issues with buildings: 

- cap rates are decreasing fast around here

- property taxes seem to be absurd in some cases compared with 5/6 plexes 

- expenses can be actually higher per unit compared with 3/5 plexes

- tenant profile is probably worse

- Rents not be higher compared with 5/6 plexes 

- cash flow might not be greater  compared with some 5/6 plexes

- bed bugs seem to be a serious issue in buildings

 That's right Simon, that is the feedback I get around here from fellow investors. Hopefully we all will do things respectfully and all will be fine and in good terms in the end.

cheers

ok, yes , it can be complicated , it all depends on the tenants.

I prefer to vacate the whole building at once so it's clear I am going to make it a major construction site and save the tenants from living in the middle of dust for 6 months.

It's clear for everyone it's best to clear the whole building, and giving 4 months is a pretty good time to look for another place to stay. Where I am planning to buy, rents are affordable, so they should not have to spend too much on moving to a new place.

We shall see.

Sending an offer now, asking price is a bit high, lets see how it goes.

thanks everyone.

Thanks Roy, what about offer one month rent to the tenant to leave on his own by serving an N9, notice from the tenant to leave, the Tenant agreeing to receive one month rent as compensation?

thank you