All Forum Posts by: Wendell Fong

Mogul Realty Group,  Alberta on Fire

I am going to say yes.    I do credit checks and look at scores all the time.  

I do not know the exact metrics that the system uses to move your score up or down, but as long as you are paying off your credit cards every month then I think it helps (at least it cannot hurt) . I do not know if this moves your number up or down, but there is a number on the report that says something like % of credit used.  So if you have two cards with 5k limits..  and 4k in outstanding balance, your % of credit used would be 40%.   If you only had the one card with 4k in outstanding balance your % of credit used would be 80%. 

Two other things to consider:

1) BC is very heavily tenant favored.  Rental increases are limited to cost of living and set by the province.  (used to be COL+2%.. now is only cost of living.)    While you are limited to one increase per year also in Alberta, there is no limit to the %.  You can increase the rent by 5% in Alberta if you want to.  BC Rent Increases

2) Strata often limit the number of units in a complex that can be rented out.  Check your bylaws before buying a Strata unit.  I have had units, purchase by overseas buyers, get caught between the empty homes tax and a Strata Bylaw limiting the units that could be rented.  They were essentially forced to sell, since the units were empty and they could not legally rent them out.   I have run AGM's where the owners voted to lower the number of rental units permitted.  

One more time.  

Ken McElroy's 5 predictions for housing in 2022, on youtube June 11, 2021.

https://www.youtube.com/watch?v=qospzZ0ttVs

Ken McElroy's 5 predictions for housing in 2022, on youtube June 11, 2021.

Never ever make your first RE investment negative cash flow unless it is your primary residence.   

" No one has ever gotten rich off of $300/mo cashflow."  I disagree with this statement.  There is an estimate that says 90% of millionaires got to become millionaires investing in Real Estate.  What they Don't say is that the vast majority got that way by accident.  In addition to that $300 cash flow, they made a monthly mortgage payment and of that say $1600 payment, a large portion goes into equity.  

example 500k property with 125k down payment 375,000 mortgage at 2% .. rough estimated mortgage payment is $1600 with 800 going to interest and $800 going to principal pay down. That is $300+$800 per month, not just $300. 

Wait until you have a problem tenant that does not pay..  or the roof leaks, or some tree roots break through your drain tiles.   If your in a Strata, I have seen Special Levies for major projects that go +50k per owner!  As a Manager, I have passed Special levies, approved by owners of over $10k EACH for major repairs.  Wait till your company closes AND the tenant doesn't pay.  What do you do if there is a market correction and the value of the property drops to 400k?  If you were positive cash flow, you would just bank the cash, build up your capex/contingency fund and ignore the market fluctuations. 

After a few years, when you have too much equity or cash in your contingency fund, re-finance and look for your next investment. 

I have lots of real life stories to tell, but I suggest you keep reading and studying.  I am sure you will get lots of different opinions.  Get lots of input and keep asking questions. Try listening to Ken McElroy's   predictions, right at the end of the talk around Minute 18.  He is American, but the principle still applies.   

Nice win on that appreciation play.  The bulk of the investors here do not do appreciation plays.  It is all about the positive cashflow.   With cashflow, you can ignore the ups and downs of the market. 

With that in mind, it is hard to get positive cash flow in BC.  In addition, BC is very tenant friendly, and Strata bylaws are typically also restrictive on landlords who want to rent their units out.

If you are interested, there is a Vancouver-Edmonton virtual RE meetup on June 16 for new investors , 5:30pst.  Message me and I will send you the link/invitation.

Cheers

YOu need to give more details. Can you specify how much of the space you will be using for your own business? Are you planning on using 5k or 25K of the 30k space? How will you set the rent? You need to specify who is the landlord and who is the tenant.  Is the owner/operator and you 50/50% owners in the business and 50/50% owners of the land? I only say this because I had a similar setup where i purchased warehouse space and my company was the primary tenant.  I (the landlord) charged my company below market rent for the space it used.   I obviously gets complicated if the splits are not 50/50.

I meant to say.. see how others did, what you want to to.  

In the words of so many motivational speakers.. "Success leaves clues."  

That is why I like to read biographies. 

Save your money for now. Start with education. Ask a question a day/week here on BP. Start with bad questions and improve the quality of questions over time. Take 1/10 of that $3000 and buy $300 worth of REI books. Learn the lingo. It will help point out your weaknesses and where you need to build your team. There is a list of RE and general investing books, recommended by guests on the BP podcast. Once you pick out a strategy or know the stage of investing you are at, then scan the BP podcast list (for that state or strategy; househack; single family;first investment;first multifamily; first commercial +5units, first syndication, raw land; short term rental, BRRR, Fix and Flip, Wholesale, Buy and Hold etc. ) and listen to the interview. See how others did what you did. Especially listen to their mistakes. 6m-12 months from now when you know who you need and what skills you are missing, then you can start building your network. If you don't have any network, then consider joining REIN.