All Forum Posts by: Yousef Reda

Hi Oliver. Are you doing all these renovations on your own? 

Hi my 2 brothers is currently renting and paying 1500$/month in a property owned by someone else. He has bad credit. I thought maybe I should get the benefit by investing in a property that he can live in and pay rent to me instead of some other random person. 

Is this a good idea? Or should I buy a rental property from a non family member. 

I know he will be consistant in payments. One thing is one of my brother is not the best with keeping things maintained. The other brother is a plumber so would fix issues on his own anyways. 

@Francois De Gourville

Thank you so much. Its great to hear that you already know the inside details. Im not from Edmonton so I wanted to know what I was getting into. As Warren Buffet says " Be fearful when others are greedy and greedy when others are fearful" this is a classic example of someone who wants much higher then the local prices for an older apartment. Although yes it can cash flow etc. Ive put him on the backburner for now. What are your thoughts about the market in Calgary now? Im noticing prices coming down mostly for the bigger high end prices >500 K. They are starting to come down for other houses too below that. Im slowly swifting through 3 bedroom places right now. 

Yea the market in the province is not doing well. However this city has been staying strong as it is doing well economically here.(Strong tech jobs) The location of this condo is in a prime location. I have read that real estate in prime locations usually dont get hit as much with a poor economy. Calgary was hit by a recession in 2008 and prices did drop for 1-2 years but then it climbed. This recession now is not as bad as 2008. The Arena that is being opened 1.5 km away will increase property value by 3.5%. So even if there is some depreciation the arena will buffer that if not give me positive return. 

Hi guys thanks for your quick inputs. 

Kevin my understanding is the 1% rule is to help with estimating good cash flow. If this doesnt meet the 1% rule but is + cash flow by 300$/month shouldnt we disregard the 1% rule? As there are properties that meet the 1 or 2% rule and still have poor cash flow. Also the owner now leases the property to 1 person at a time. That 1 person goes out to find 2 other people to rent it out to. So in the end its 1 lease for the 3 bedrooms. He has done this consistantly for the last few years. 

Knowing this do you still think I should not consider it? 

Its a 3 bedroom, 2 storey condo, in Edmonton Alberta. Its right in the heart of downtown Oliver Village. An arena(Rogers center) being built there soon. Its 9 minute walk to a university, few minutes walk to a shopping center. 

Pros:
- location
- He says it cash flows well. I did the calculation it should cashflow me 517(but if i use a property management service since this is a long distance investment i should cashflow around 300$/month) The rent he charges seems high 2200$/month for a 280,000$ property. He showed me the last 3 years of him being able to lease it to university students on yearly agreements

- HOA has good reserve
- HOA manages well
- Underground parking
- Currently rented till August

Cons:
- Older building and newer condos are coming out around the area

- Calgary market is down and hence may affect edmonton prices

- Apparently previous tenant says it smells like marijuana few times a month
- Condo price seems to be on the higher side for condos in that area.  

- This is an out of state/province investment for me
- May need renovations in the future

I offered this guy $260,000, he said hew ont go lower then 275,000$. Do you guys think this is a good investment property overall from this information? Please advice this is my first investment property and hence I want to be very diligent!

Hi how is it that you found out the building was underperforming and that prices are low. Is this from older ads or word of mouth or what? 

Thanks for your time!