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All Forum Posts by: Wendell Fong

Wendell Fong has started 2 posts and replied 85 times.

Post: Extensive damage to property - filing a claim?

Wendell FongPosted
  • Investor
  • Vancouver BC
  • Posts 88
  • Votes 60

Ok, here goes.  

I cannot guarantee this is correct, but I will give you the process we use in BC, Canada.  The process is like a decision tree that causes different actions depending on the amount of damage and if it is an insurable/not insurable.  From your description, I will just describe the most likely events. 

So you need to get your HOA bylaws and HOA insurance. Your HOA should carry insurance for this and you need to determine if the damage goes above the HOA's deductible. If it is, then the HOA manager should be sending out a restoration company to mitigate the damage. /Tarp/etc.

1) the HOA manager should send the HOA's insurance adjuster to confirm the damage was caused by an insurable event.

2) They should also send a restoration company to do an estimate of the repair cost to confirm it is above the deductible. 

If It is over deductible and it is an insurable event, then the HOA's insurance will get involved. If you do not have a copy of it, ask your property manager for a copy of the HOA insurance and the HOA bylaws. The HOA will usually be responsible for the full repairs Except that they will send you a bill for the deductible amount. HOA deductible could be anywhere from 5-50k.

3) You should review your own personal Condo insurance to make sure you have HOA deductible insurance to cover that deductible amount. Your personal insurance should cover the HOA's deductible and you in turn will only be responsible for your personal insurance deductible amount.

Let us know what the damage estimate is, your HOA deductible, and if the adjuster confirms it is an insurable event.

Post: Own a condo & moving 10 hours away. Hold and rent? Sell and buy?

Wendell FongPosted
  • Investor
  • Vancouver BC
  • Posts 88
  • Votes 60

Assuming you have no support or family in Chilliwack, I would sell the condo.  I do not know your age and experience,  but I would rather take the equity and purchase a duplex in Calgary and live in the worse of the two units.  While living there, fix up the unit I was living in. (house hack etc...) For your first rental income, you want to have a very close eye on what is going on and be able to fix things, or at least know there is a problem and be able to see it first hand. 

Post: HELP!!! Cash Flow Seems to Good to Be True! What Am I Missing

Wendell FongPosted
  • Investor
  • Vancouver BC
  • Posts 88
  • Votes 60

After all that checking, you have a (almost) 2%er which is a pretty good deal.  

Post: HELP!!! Cash Flow Seems to Good to Be True! What Am I Missing

Wendell FongPosted
  • Investor
  • Vancouver BC
  • Posts 88
  • Votes 60

I do not believe your property tax value.  It must be wrong.  My brother lives in NJ and Property tax is 2.4%...

that pus the property tax much higher.   I also cant see how you get 6 rents on one property.  Have you verified the rents and taxes?

Post: Starting out in Syndication

Wendell FongPosted
  • Investor
  • Vancouver BC
  • Posts 88
  • Votes 60

Syndication. Do you mean you want to put a deal together with other investors and be the general partner?

Post: sell SFH to buy 3 condo's?

Wendell FongPosted
  • Investor
  • Vancouver BC
  • Posts 88
  • Votes 60

You should also request a Form-B.  This will identify the number of current units that are rented out.   (item L)  among the other bits of information that the form provides. 

Post: sell SFH to buy 3 condo's?

Wendell FongPosted
  • Investor
  • Vancouver BC
  • Posts 88
  • Votes 60

Hi Ryan,

I am currently a Strata Manager in Vancouver.    You need a set of the Strata's bylaws to check to see how many units are allowed as rentals.   Even if there are 10 out of 100 units allowed, the Strata may already be at the limit and you are stuck.  You can sometimes get hardship exemptions but that is unlikely if this is an investment property.   You can also get stuck between a rock and a hard place if you CAN't rent due to Strata Bylaw restrictions, and then get stuck with an empty homes tax. (Local tax in BC designed to limit foreign buyers who buy and let property sit empty) Before you buy, you should request a set of documents from E-Strata Hub, .. a Depreciation report and a copy of the Strata's most recent insurance; AGM minutes to check any recent Special levy projects that have been completed or if you are due for a large project soon.  The Depreciation report should give you a good idea of when and how much money is supposed to be spent on replacing aged building components such as roof, elevator, exterior painting, HVAC/MUA, etc. and what year to expect to see that project coming up.    if you are in Surrey or surrounding area, Insurance is likely to be the largest increase in the Strata budget and will affect your Strata fees directly.  I even have Strata that are trying to reduce the number of rentals from X to X-2 or so so that they can use this to their benefit when dealing with insurance since renters are a higher insurance risk.

Personally I would keep the property and refinance to get into your next property.   You have extensive knowledge of the current property, its problems and how to fix them and who to call to fix them.  That is extremely valuable!    If there is a leak here..   go there and shut off that valve.  if there is an electrical problem.. go to the panel located here.. and check the breaker panel.   etc. 


Originally posted by @Evan Polaski:

Secondly, I have never heard of a HELOC having restrictions on what you can use the money for, but this doesn't mean my experience is all encompassing. I have used my HELOC to buy several flips, but I have issued wires straight to title companies and drawn down the whole line in one check to myself. No calls from any compliance officers asking how it was going to be used.

It is common use for investors to use HELOCs as down payments for investment properties. If you plan to use the HELOC as a cash purchase, you will probably not have any issues. You could get questions from underwriting if you are combining your HELOC as the equity with a loan on the investment property. An underwriter might view that as a 100% financed property and flag it.

I agree, I have never heard of a bank asking what the HELOC is being used for. I think you should just go to several banks and ask for the best rate /maximum amount of HELOC you can get on your home. If you get 500-1M in a HELOC, take a small amount out, say 100k and make the monthly payment on it. Leave the rest available until you need it. When your getting close to doing a deal, you can just pull it out and put it into cash.

Post: Deal Analysis - 5plex

Wendell FongPosted
  • Investor
  • Vancouver BC
  • Posts 88
  • Votes 60

Wait a month and see if it is still available.

Post: Apartment Syndications: Start small or Go big?

Wendell FongPosted
  • Investor
  • Vancouver BC
  • Posts 88
  • Votes 60

if you are the General Partner, start small.   That's it.   First off you must either have tons of cash sitting around our you can sell ice cubes to the Eskimo.   You believe you can get a group to invest with you without any prior history... well that would be amazing. 

My greatest mistake was investing with a fix and flipper who I had a history with. He decided to form a JV and purchase a +90 unit complex. Great fix and flipper, poor manager of the +90 units. The vacancy dropped and he struggled to break even. It took three years but the JV eventually imploded.

I have made it my mission to be the General Partner on the next JV AND start with 9-20. I do not need a partner to do this but I do want to get a few cycles under my belt with small risk/small reward before I get to larger projects.