All Forum Posts by: Filipe Matos

If you do not have a clue, I would hire a real estate agent that knows the different bylaws in the different neighborhoods. Before buying call the city to ask what that street allows for, do not ask about the specific house or you can open a can of warms.

Hire also a Fire consultant that knows the bylaws in the area.

If you really want to buy an illegal unit and legalize it later, then also hire an experienced architect/engineer that is used to legalize rentals.

The most "friendly" area for illegal units is Downtown Toronto, there is an extreme need for apartments , if they would shut down all illegal units, there would be thousands of tenants on the street.

If you still think about buying an illegal unit and keep it as is, make sure you comply with Fire cod - that is non negotiable - and have an exit strategy in case you are sooner or later shutdown by the city.

If you get shutdown and cannot or want to legalize it, you will have to change doors or exits, remove kitchens, etc... etc....

I can only talk from my experience.

I am a kind of person that looks for style, I don't care if it is cheap or custom made. Sometimes you can build a custom made kitchen that costs more than 10K and it looks cheap or cheezy or old fashioned.

Most of the times I use white Ikea kitchens , they can look quite expensive.

HomeDeport White builders grade at $99 look too cheap, the brown ones not so much. Rona sometimes has brown maple doors cabinets for $99 a piece.

I find paying 2.5 times more for better quality is too much, does that mean, if the builders grade cabinet costs $99, the bigger quality would cost $300?

Home Depot has better quality cabinets for 10/20% more in raw oak, but you have to stain and varnish or paint them. Rona sells them already stained for the same price in Maple. Yeah, kind cheap quality but it looks nice.

My tenants pay more for looks, it does not matter if it's expensive or not.

I do not know about HD or Rona quality yet because i only have them for 1 year. IKEA ones I have them for 7 years with no problems as long your kitchen sink does not have leaks.

If you were to flip and sell, that would be another story. There is a thread on this forum about it, and it talks about IKEA and HD.

I am thinking about starting to flip houses for Rent to Own and I might continue to use IKEA kitchens unless HD or Lowes has cabinets for the same price and as good looking.

Filipe

For me until now it was useful to have all on the personal side since banks require me to have a personal income over 100k to buy small properties over 700k in Toronto.

Now that my personal income is lower than , I am forced to invest outside the gta and possibly on commercial properties, in this case it might start being advantageous to incorporate, plus I am expecting not to have losses anymore

On that accountant diagram I see something about Family Trusts. I do not know if its related or affects anything in this case, but Canadian government is eliminating the Graduated tax rates for trusts and estates in the near future.

Auch.... :) good comment.

I own now 3 multi family properties, all personally. At some time I may decide to incorporate for tax purposes, once I start having lots of profits and not enough expenses.

I make sure I have good insurances in all properties, including 2mllion of liability on each one.

more against corporations at least in Ontario, Canada: Penalties/Fines are sometimes double for corporations compared to individuals.

I do not know how what are the liability differences in case there is a death by fire. I know that an individual owner can go to jail , but I dont know how it works when it's a corporation.

Also, I think if you have a tax loss on one corporation, then you cannot apply that loss on the other corporation that has a profit. So I see here a tax disadvantage.

If someone is setting up corporations just to protect themselves in case of bankrupcy in Canada, I think its overkill. I don't think there risk in going bankrupt unless the person is investing on speculation instead of high cash flow.

Filipe

I live in Canada and have investments in Portugal for ten years with the right people, but I don't love it. you lose money once awhile compared with you being there helping to make decisions.

I would only invest in another country if the returns are really better than where I live. For me I would have to have more than 15% return on cash while where I live I would have 10%.

This is just my personal opinion

CHMC tax deduction for rental properties as seen on several websites, but you should confirm with your accountant:

"The CRA booklet regarding rental income and expenses, states on page 11, that mortgage guarentee /insurance fees are tax deductable at 20 % per year over 5 years."

The "mortgage specialist" I was put in contact with by RBC Online is saying that I need a minimum 25% down and if I want to do at 20% I have to pay CMHC :)

Do you agree with this "mortgage specialist"?

quoted:

"We can finance up to 80% of the value of a 1-4 unit investment property or 85% of the value of a 5-6 unit property which this would apply to you.

If you placed;

1. 15% down the CMHC premium would be 4.5%

2. 20% down the CMHC would be 3.5%

3. 25% down the CMHC premium would be 2.25%

On that note 20% down is considered conventional and if you can place at least 20% down we can ask for an exception. I confirmed the premium with CMHC

Because a 6plex falls under “non-standard” units it will fall under CMHC but once again we can try to ask for an exception.

"

Deal! I like drinking :)

Update about RBC 6 Plex mortgages:

Do not contact the branches or RBC online, they may not know or be able to help you on this, I am getting conflicting information all over the place.

The guy that seems to know about this special product is Dan Simpson from RBC:

https://mortgage.rbc.com/dan.simpson

He He, The "Rockstars" really put themselves out there, I was face to face with them a few days ago for the first time. Have been following them and Mr Hamilton for 2 years. Maybe now is the time to use their services, we shall see.

They are really great, all the work they have to give information for free, and now they have a membership club that costs around $38 a month to get more special reporting/meetings...

Filipe