London Ontario May 17

Real Estate Events & Meetups
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London Ontario May 17

When:

Where:Tiger Jack's 842 Wharncliffe Rd S, London, ON

Cost:Free

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Matt Geerts
Investor · St. Thomas, Ontario · Member since 2015 · 692 posts · 312 votes

Our last event was a big success with 16+ people in attendance, and it was unanimous that we need to do this regularly. It was also widely requested that we start earlier to make more room for deeper discussion.

So please join me again at Tiger Jacks on Southdale Rd. in London Ontario at 6:30pm on Tuesday May 17th, 2016.

This time around I'd like to add just a BIT of structure to our meet-up. The one thing that we all hear over and over again on the Bigger Pockets Podcasts is that the number one reason why people give up, fail or never get started in REI is a lack of taking action!

So this time around I'd like to encourage everyone to bring to the table one thing they've done in the last month to advance their real estate investments, and one thing they plan to do in the next month. No matter how big or small, any action is better than no action.

I'm looking forward to seeing you all again!

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Thomas Forsythe
Investor · London, Ontario · Member since 2016 · 18 posts · 14 votes
10y

Has anyone looked up who owns a property using land registry office or any other source that gives that information? Let's say I go out driving for dollars and I see a distressed home, I write the address down and then would like to know who owns it. Would I just mail a letter to the address or try to look up who owns it incase it's a rental. I know it's possible, my tenants gave fake rent reciepts to another landlord when I was trying to get them evicted and he looked up who owned my property and my name came up. 

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  • Matt Geerts
    OP
    Investor · St. Thomas, Ontario · Member since 2015 · 692 posts · 312 votes
    10y

    @Matt Smith , @Samuel Sedore , @Account Closed

    0Reply
  • Matt Geerts
    OP
    Investor · St. Thomas, Ontario · Member since 2015 · 692 posts · 312 votes
    10y

    For some reason I can't tag more than one Matt in a single post, so forgive the extra posts. To the other Matt's, I'd appreciate if you could all get legal name changes to reduce confusion.

    @Matt McKee

    0Reply
  • Kellan P.
    Rental Property Investor · London, Ontario · Member since 2016 · 79 posts · 19 votes
    10y

    I'll be there, looking forward to seeing and hearing from everyone!

    0Reply
  • Derek Allen
    Thorndale, Ontario · Member since 2015 · 18 posts · 4 votes
    10y

    I hope to attend this time around!  Thanks @matt geerts for organizing the meetup!

    0Reply
  • Account Closed
    Investor · Cambridge, Ontario · Member since 2016 · 25 posts · 5 votes
    10y

    Hey Matt,  would like to go but have to work. Maybe can try a weekend some time.

    1Reply
  • Samuel Sedore
    Real Estate Agent · Kitchener-Waterloo-Cambridge, Ontario · Member since 2013 · 408 posts · 90 votes
    10y

    i'll be there! Thanks for the shout out. @Account Closed future carpool opportunity?

    0Reply
  • Matt Smith
    Saint Thomas, Ontario · Member since 2016 · 11 posts · 1 vote
    10y

    Thanks @Matt Geerts for getting meetup #2 rolling!   

    I will be a maybe for this one though.  I am in the Army Reserves and am tentatively awaiting orders for summer training which is scheduled to start May 16 (10 weeks of fun in Gagetown, NB).  If I can't make it I am sure my wife Kristina will come.  We will be closing on our duplex next Thursday so we can tell you all about it! 

    0Reply
  • Matt Geerts
    OP
    Investor · St. Thomas, Ontario · Member since 2015 · 692 posts · 312 votes
    10y

    That is awesome, @Matt Smith!

    Send me a PM with the address if you don't mind!

    I think it is great that you two are both so involved in this.

    0Reply
  • Kristina Schmitt
    Saint Thomas, Ontario · Member since 2016 · 19 posts · 6 votes
    10y

    @Matt Smith, actually I'm going to be in Arizona for work that week, so I won't make it to this one either, but I'm definitely up for the next one. 

    0Reply
  • Chris Silveira
    Wholesaler · Hamilton, Ontario · Member since 2016 · 1 post · 0 votes
    10y

    Thanks @Matt Geerts I just recently moved to London and look forward to meeting everyone!

    0Reply
  • Michael Rosehart
    Wholesaler · London, Ontario · Member since 2016 · 15 posts · 9 votes
    10y

    If I didn't have a newborn baby I'd be all over attending this (my wife would probably enjoy it as well).

    I have been engaged with the city of London to get approval on rezoning my property to a duplex ...it went to council and let me tell you the city of London HATES Landlord. Not only do they try to steal the profit with hefty licensing fees, but the process to convert a property to a duplex will cost you thousands and hundreds of hours of time.
    This is something I didn't factor in. All in all I should still make a nice tidy profit.

    Do all of you use the minimum 1% rule? The rule works like this - if a property is worth 200k, it has to earn 1% of it's value in monthly gross rent (i.e.: 2000/month). A 400k property should gross 4000/month.
    NOT ALL LONDON PROPERTIES ARE CREATED EQUALLY. There are probably a few thousand properties I wouldn't touch with a 10 foot pole.

    What are your thoughts? I go for the 1% rule on all my properties - sometimes I have to convert to a duplex or do some major renovating, but it's always worthwhile!

    I'm all about gaining financial independence through real-estate to eventually just do this for a living.
    #2moreyears

    Michael

    0Reply
  • Kellan P.
    Rental Property Investor · London, Ontario · Member since 2016 · 79 posts · 19 votes
    10y

    @Michael Rosehart I haven't heard many people enjoy their experience working with the city.. at least you're not alone. 

    From what I've gathered, not everybody uses the 1% rule, everybody has their own set of criteria. A goal cash flow per unit is common, but even then, some people calculate before/after vacancy, and everyone seems to have their own method of estimating maintenance costs and CapEx.

    I personally shoot for 1% as a rule of thumb when evaluating at a high-level, but it often takes patience and creativity to get there (like you said, significant renos, conversions, etc). The BiggerPockets blogs often tote the "2% Rule", which is essentially non-existent in London at this time - $4000/month for a $200k property.. uh-huh.

    0Reply
  • Matt Smith
    Saint Thomas, Ontario · Member since 2016 · 11 posts · 1 vote
    10y

    It seems like the 2% rule is more of a unicorn then anything else around our area. I like using the 1% rule for a really quick analysis, but my goal once digging into the numbers is at least $100 per door.  The problem with the 1% rule is that it doesn't factor in items such as rent setups (who pays utilities, etc),  building condition, long term investment plans, etc.  

    St.Thomas has a revitalization program in place right now which provides grants and 0% financing for projects around the downtown area, including changing single family to multi-unit. It's worth exploring if you want some options in the future.  

    0Reply
  • Matt Geerts
    OP
    Investor · St. Thomas, Ontario · Member since 2015 · 692 posts · 312 votes
    10y

    Michael,

    I am one that is not very interested in the x% rules. If I get 3% rent but my property has negative cash flow, what is the point?

    I calculate cash flow after all expenses (including 1% of prop value/yr for big maintenance) and target $200/mo per door. I also won't buy any more properties without 15% cash on cash. 

    What I don't do is account for my time. I KNOW that I am trading time for early retirement. This is my hustle. 

    I look forward to chatting with you about your interaction with the city.

    BTW, I am typing this with my 4-day old girl on my lap and all three of us expect to be there!

    1Reply
  • Kellan P.
    Rental Property Investor · London, Ontario · Member since 2016 · 79 posts · 19 votes
    10y

    Net cash flow is king. The % rules are a quick method of eliminating a property from consideration, but it's second nature for the more experienced investor (ex. $200k and rents for $1000/month, odds are it's a negatively cash flowing property after all expenses/maintenance are considered). One property at 1% could have negative cash flow, while another place at 0.8% could meet your cash flow goals.

    4-day old, congrats @Matt Geerts! Looking forward to meeting the new family member.

    0Reply
  • Matt Geerts
    OP
    Investor · St. Thomas, Ontario · Member since 2015 · 692 posts · 312 votes
    10y

    Thanks!

    Our property throws >200/mo at a measely 0.7% 

    0Reply
  • Thomas Forsythe
    Investor · London, Ontario · Member since 2016 · 18 posts · 14 votes
    10y

    Hey everyone! I'm new to BP and have been a landlord for one year now with only one property. I plan on coming this Tuesday to meet some local real estate investors! I will be a licensed carpenter within a year so i have a construction background to bring to the table! I look forward to meeting you guys!

    0Reply
  • Kellan P.
    Rental Property Investor · London, Ontario · Member since 2016 · 79 posts · 19 votes
    10y

    Hey @Thomas Forsythe, looking forward to meeting you and hearing about your property and construction background!

    0Reply
  • Matt Geerts
    OP
    Investor · St. Thomas, Ontario · Member since 2015 · 692 posts · 312 votes
    10y

    Hey Tom,

    I saw your intro thread and came here to copy the URL to send to you, but you are obviously ahead of the game.

    I am really looking forward to chatting with you. Buying properties in need of improvement is my next step, and I am sure a few in the group would agree.

    See you on Tuesday!

    0Reply
  • Michael Rosehart
    Wholesaler · London, Ontario · Member since 2016 · 15 posts · 9 votes
    10y

    I'm coming out tonight.
    Matt - points well taken. As a graduate of the Richard Ivey school of Business I have a ton of experience working in excel.
    I only look at the 1% rule as a screen, and then I plug the projected numbers into my income statement and cash flow calculators that I have built in excel.

    If you have done things properly and financed at a reasonable rate I'd say it's impossible to not cash flow on a 1-2% rule property...

    For instance, a duplex I purchased for 193k in a great area (north-west London) is net positive 800/month - that's including maintenance, utilities, prop taxes, mortgage etc. 3 more of those properties and I'd have 3200/month coming in (NOT INCLUDING Mortgage principle pay-down). That pretty replaces a 60k pre-tax salary (since rental income isn't fully taxed given all the write-offs we can throw against it that we can't with our day jobs). That said, I also have negotiated some kick-*** mortgage rates. My new build house closed on a 2-year fixed, 1.84% mortgage rate.

    Why anyone still pays 2.5-3% is beyond me...ratespy.com...unless they don't have the financial qualifications, in which case having a property at a higher interest rate is better than nothing.

    When I was looking at deals here in London I'd say nearly 50% of them sucked...they just didn't cash flow well (especially around Richmond Gates where properties are egregiously priced compared to the rent they bring in).

    I am really looking forward to learning and sharing tonight! 

    Looking forward to meeting everyone around 6;15-6:30 at Tiger Jacks! 

    0Reply
  • Michael Rosehart
    Wholesaler · London, Ontario · Member since 2016 · 15 posts · 9 votes
    10y

    As a screen it is very valuable. Once you have narrowed down on a geographical location and approximate price range, a nice third screen is the 1% rule - so at a minimum a 200k property would gross 2000/month in rent. Now, in a smaller town like St. Thomas the vacancy rates might be higher, so to compensate for that I'd say a minimum 1.5-2% rule may need to be applied. Likely this screen will leave you with properties that need some TLC. So, you have to factor in the $$ you will invest to generate the rent. The reason this rule is a good starting place is you end up wasting less time - For instnace, a 200k property that only brings in gross rent of 1500/month is gross I probably wouldn't even look at it. I wouldn't want to waste my time because I know the property likely isn't going to cash flow - all other things considered equal. I've found that, for the most part, properties in the areas I've looked at all have similar property tax rates (since they are the same value and @ the same London tax rate), all have similar utility usages, similar mortgages etc. So, the 1% rule is a great way to quickly compare properties. Since I am a busy father, husband, landlord and I work full-time I don't have time to thoroughly screen properties - thus I need rules of thumb to narrow it down to 1-2 key properties.

    0Reply
  • Matt Geerts
    OP
    Investor · St. Thomas, Ontario · Member since 2015 · 692 posts · 312 votes
    10y

    @Michael Rosehart

    Two things - St. Thomas has a remarkably low rental rate with a higher than average percentage residences rented, and good luck renting a 200k property for 2k unless you're talking about all-inclusive on a crappy old fourplex (ie, expenses will be nuts) or rooming house.

    A friend of mine rents a home valued at 300-330k for $1600/mo.

    I find you can get CLOSER to 1% if you look in the bottom of the barrel. 90k homes rent for 900, for example.

    Now, with all of this said, I'd be an idiot if I thought for a moment that having never seen one of these unicorns means they are not out there and stopped looking. Grind grind grind.

    See you tonight!

    0Reply
  • Michael Rosehart
    Wholesaler · London, Ontario · Member since 2016 · 15 posts · 9 votes
    10y

    Fair points. These are unicorns - but why would you want a mule when you can have a unicorn simply by applying some rules/analysis to the search and waiting a little longer to find the right property?
    When I started out I talked to a few landlords that were sort of just breaking-even or only making a couple hundred a month net of mortgage pay down....I thought how is this worth it? The answer - it isn't. If you just lever up the funds and buy a balanced ETF index portfolio you get about 7% average return. This approach requires 0 effort. So, if we are to put in effort, we have to then value that effort as well. So, I'd expect at least a 15% return on the total purchase price of the property (levered up to 30-40% on my down payment + renovations investment). For the amount of effort, it really isn't if that's all you are making peanuts in my opinion. That said, probably half of the landlords in London don't do much better than this and I suppose they are happy with mediocre returns. Not every property can be a unicorn as you have mentioned...I just would prefer 4 unicorns to 10 mules. In the end, they are the same net profit for your investment.

    Your friend who has the 300-330k property for 1600/month is actually not getting a very good return. I'd divest in that faster than you can say divest :)

    I could help him buy 330k in property (probably 2 properties) that will bring him 3500/month... (and I'm not talking a dump).
    I sold my first rental that I owned near Western for this exact same reason. There were investors from Toronto willing to buy at a 7 cap rate, and I knew my property wasn't cash flowing anywhere near the 1% (mostly because the property values in this area are WAY too high for the rent they bring in).

    I can't wait to discuss tonight.

    Best,

    Michael

    0Reply
  • Matt Geerts
    OP
    Investor · St. Thomas, Ontario · Member since 2015 · 692 posts · 312 votes
    10y

    As I said before, you can make nice cash flow without being 1%. With real creativity ROI also means nothing because you have zero or less dollars in the "I".

    My friend is RENTING that house for 1600! The best part is that's on a lease option for 250 :D

    0Reply
  • Thomas Forsythe
    Investor · London, Ontario · Member since 2016 · 18 posts · 14 votes
    10y

    Has anyone looked up who owns a property using land registry office or any other source that gives that information? Let's say I go out driving for dollars and I see a distressed home, I write the address down and then would like to know who owns it. Would I just mail a letter to the address or try to look up who owns it incase it's a rental. I know it's possible, my tenants gave fake rent reciepts to another landlord when I was trying to get them evicted and he looked up who owned my property and my name came up. 

    1Reply
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