looking for opportunities in rental properties

Contractor · Toronto, Canada · Member since 2023 · 10 posts · 0 votes

Hi every one . As an ew member i am just exploring the opportunities in rental single / multi family homes. working full time HVAC contractor i visit different homes on daily basis. i listened to bigger pocket pod cast many times and finally decide to jump in. i own two rental properties and have experience in fixing and renovating the house. at present i am exploring new deals but money is the major issue that is stopping me to go. the properties that i own already refinanced so no margin left in them.

any feed back is appreciated

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Sankeethan Ratneswaran

Investor · Ontario, Canada · Member since 2022 · 12 posts · 8 votes

@Rizwan Ahmad

You didn't give enough information about type of property, loan amount, payments, whether it's cashflow or not etc.
I'm assuming that you have only used 80% of the equity in your property. When you say your mortgage or heloc is maxed out I'm assuming you mean with the big A lender banks like TD or RBC right. So there is 20% equity in your properties still.

You can reach out to a Mortgage Broker and ask for a second mortgage to take out the remaining 20% equity. If you go to a mortgage specialist at the bank they won't be able to help you because they only do mortgages directly for the bank they work at. So first step is to inquire and find yourself a good mortgage broker.

Second mortgages are expensive. They're typically interest only payments and can be 10-13% interest annually.

For example:

if you have a 500k property then your mortgage or heloc would probably be 400k
You can go to a mortgage broker and they can try and get you a second mortgage for 100k.
Typically lenders in the Oshawa will charge a 5% lenders fee and 13% interest. I don't know what they charge right now in this market, you'll have to ask. You also have to pay the Lenders legal fees. The loan term can be 1 to 5 years usually and you can pay it off whenever.

So 5% lender fee on 100k = 5k.
13% interest is 1,083.35 monthly payment for the loan.
Broker fee might be 1% ; $1,000.
Legal fees might be: $2,000

So you'll get $92,000 and you'll have to pay $ 1,083.35 monthly.

The questions is....
1) what are you going to do with that $92,000?
2) How are you going to afford $ 1,083.35 monthly payments
3) How are you going to repay the 100k

The Answer is...
Open up Google Sheets (Excel) and pretend you're an accountant lol. Start doing some math. Start running scenarios on how you can afford this and pay back the loan and have a cashflowing property.

It's just math. If the numbers don't work then don't get the loan. Wait for a good Deal, and if you need more money or can't get a mortgage approval then find a good JV Partner.

I hope that answers your question.

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Marlon FongPro Member
BiggerPockets Support · Bridge City, TX · Member since 2016 · 1k+ posts · 367 votes
3y
Welcome to the site @Rizwan Ahmad! It's great to have you here.

Here are some recommendations for you:

Find and connect with other BP members that are in your area: http://www.biggerpockets.com/m...

Set up keyword alerts to be notified of the topics that interest you: http://www.biggerpockets.com/a...

Read Beginner’s Guide: http://www.biggerpockets.com/r...

Check out BP Money Podcasts: https://www.biggerpockets.com/...

Wishing you the best!
0 Reply
Sankeethan Ratneswaran
Investor · Ontario, Canada · Member since 2022 · 12 posts · 8 votes
3y
If you find a good enough deal where you can pull out all your money during the BRRRR, then finding a JV partner to give you the money shouldn't be an issue. You just have to ask people!
0 Reply
Rizwan Ahmad
OP
Contractor · Toronto, Canada · Member since 2023 · 10 posts · 0 votes
3y
Quote from @Marlon Fong:

Welcome to the site @Rizwan Ahmad! It's great to have you here.

Here are some recommendations for you:

Find and connect with other BP members that are in your area: http://www.biggerpockets.com/m...

Set up keyword alerts to be notified of the topics that interest you: http://www.biggerpockets.com/a...

Read Beginner’s Guide: http://www.biggerpockets.com/r...

Check out BP Money Podcasts: https://www.biggerpockets.com/...

Wishing you the best!

Thanks marlon for the valuable information
0 Reply
Rizwan Ahmad
OP
Contractor · Toronto, Canada · Member since 2023 · 10 posts · 0 votes
3y
Quote from @Sankeethan Ratneswaran:

If you find a good enough deal where you can pull out all your money during the BRRRR, then finding a JV partner to give you the money shouldn't be an issue. You just have to ask people!

hi Sankeethan. thanks for the feed back. i live in oshawa ontario and new the the real state business. this is a great forum to talk to like minded people
0 Reply
Rizwan Ahmad
OP
Contractor · Toronto, Canada · Member since 2023 · 10 posts · 0 votes
3y
Quote from @Marlon Fong:

Welcome to the site @Rizwan Ahmad! It's great to have you here.

Here are some recommendations for you:

Find and connect with other BP members that are in your area: http://www.biggerpockets.com/m...

Set up keyword alerts to be notified of the topics that interest you: http://www.biggerpockets.com/a...

Read Beginner’s Guide: http://www.biggerpockets.com/r...

Check out BP Money Podcasts: https://www.biggerpockets.com/...

Wishing you the best!

another question. is there a Canadian site to set up my profile ?
0 Reply
Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
Money should never be the issue.
0 Reply
Rizwan Ahmad
OP
Contractor · Toronto, Canada · Member since 2023 · 10 posts · 0 votes
3y
Quote from @Sankeethan Ratneswaran:

If you find a good enough deal where you can pull out all your money during the BRRRR, then finding a JV partner to give you the money shouldn't be an issue. You just have to ask people!

Hi sankeethan
Can you explain a bit more. my rental property is maxed out I can’t take any more money at the moment until it gets more equity by the time at least couple of years. Can’t sell it at this time.
0 Reply
Sankeethan Ratneswaran
Investor · Ontario, Canada · Member since 2022 · 12 posts · 8 votes
3y
@Rizwan Ahmad

You didn't give enough information about type of property, loan amount, payments, whether it's cashflow or not etc.
I'm assuming that you have only used 80% of the equity in your property. When you say your mortgage or heloc is maxed out I'm assuming you mean with the big A lender banks like TD or RBC right. So there is 20% equity in your properties still.

You can reach out to a Mortgage Broker and ask for a second mortgage to take out the remaining 20% equity. If you go to a mortgage specialist at the bank they won't be able to help you because they only do mortgages directly for the bank they work at. So first step is to inquire and find yourself a good mortgage broker.

Second mortgages are expensive. They're typically interest only payments and can be 10-13% interest annually.

For example:

if you have a 500k property then your mortgage or heloc would probably be 400k
You can go to a mortgage broker and they can try and get you a second mortgage for 100k.
Typically lenders in the Oshawa will charge a 5% lenders fee and 13% interest. I don't know what they charge right now in this market, you'll have to ask. You also have to pay the Lenders legal fees. The loan term can be 1 to 5 years usually and you can pay it off whenever.

So 5% lender fee on 100k = 5k.
13% interest is 1,083.35 monthly payment for the loan.
Broker fee might be 1% ; $1,000.
Legal fees might be: $2,000

So you'll get $92,000 and you'll have to pay $ 1,083.35 monthly.

The questions is....
1) what are you going to do with that $92,000?
2) How are you going to afford $ 1,083.35 monthly payments
3) How are you going to repay the 100k

The Answer is...
Open up Google Sheets (Excel) and pretend you're an accountant lol. Start doing some math. Start running scenarios on how you can afford this and pay back the loan and have a cashflowing property.

It's just math. If the numbers don't work then don't get the loan. Wait for a good Deal, and if you need more money or can't get a mortgage approval then find a good JV Partner.

I hope that answers your question.

1 Reply
Rizwan Ahmad
OP
Contractor · Toronto, Canada · Member since 2023 · 10 posts · 0 votes
3y
Quote from @Sankeethan Ratneswaran:

@Rizwan Ahmad

You didn't give enough information about type of property, loan amount, payments, whether it's cashflow or not etc.
I'm assuming that you have only used 80% of the equity in your property. When you say your mortgage or heloc is maxed out I'm assuming you mean with the big A lender banks like TD or RBC right. So there is 20% equity in your properties still.

You can reach out to a Mortgage Broker and ask for a second mortgage to take out the remaining 20% equity. If you go to a mortgage specialist at the bank they won't be able to help you because they only do mortgages directly for the bank they work at. So first step is to inquire and find yourself a good mortgage broker.

Second mortgages are expensive. They're typically interest only payments and can be 10-13% interest annually.

For example:

if you have a 500k property then your mortgage or heloc would probably be 400k
You can go to a mortgage broker and they can try and get you a second mortgage for 100k.
Typically lenders in the Oshawa will charge a 5% lenders fee and 13% interest. I don't know what they charge right now in this market, you'll have to ask. You also have to pay the Lenders legal fees. The loan term can be 1 to 5 years usually and you can pay it off whenever.

So 5% lender fee on 100k = 5k.
13% interest is 1,083.35 monthly payment for the loan.
Broker fee might be 1% ; $1,000.
Legal fees might be: $2,000

So you'll get $92,000 and you'll have to pay $ 1,083.35 monthly.

The questions is....
1) what are you going to do with that $92,000?
2) How are you going to afford $ 1,083.35 monthly payments
3) How are you going to repay the 100k

The Answer is...
Open up Google Sheets (Excel) and pretend you're an accountant lol. Start doing some math. Start running scenarios on how you can afford this and pay back the loan and have a cashflowing property.

It's just math. If the numbers don't work then don't get the loan. Wait for a good Deal, and if you need more money or can't get a mortgage approval then find a good JV Partner.

I hope that answers your question.

wonderful let me calculate and find my option.
0 Reply
David Gagne
Investor · Holley New York · Member since 2022 · 8 posts · 1 vote
3y
Hi Rizwan Ahmad,
Have you thought about investing in the US? My property management company has had several inquiries from Toronto investors. My niece lives in Toronto so I know it can be very expensive to buy any kind of real estate there.
0 Reply
Ingvar V.
Member since 2023 · 35 posts · 3 votes
3y
Quote from @Rizwan Ahmad:

Hi every one . As an ew member i am just exploring the opportunities in rental single / multi family homes. working full time HVAC contractor i visit different homes on daily basis. i listened to bigger pocket pod cast many times and finally decide to jump in. i own two rental properties and have experience in fixing and renovating the house. at present i am exploring new deals but money is the major issue that is stopping me to go. the properties that i own already refinanced so no margin left in them.
any feed back is appreciated

Hey, I send you a message looking forward to talking with you soon!
0 Reply
Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
3y
Why don't you look for deals, once you have one you can ask around for partners or wholesale it to another investor to generate cash.
Once you have enough cash you can buy another rental.
[email protected]248-209-6824
Logical Property Management4.9451 Reviews
Website View Page
0 Reply
Rizwan Ahmad
OP
Contractor · Toronto, Canada · Member since 2023 · 10 posts · 0 votes
3y
Quote from @Lucky Khushalani:
Hey Rizwan,
We source of market deals across Ontario. Lets connect.
Sure I appreciate
0 Reply
Rizwan Ahmad
OP
Contractor · Toronto, Canada · Member since 2023 · 10 posts · 0 votes
3y
Quote from @Drew Sygit:

Why don't you look for deals, once you have one you can ask around for partners or wholesale it to another investor to generate cash.
Once you have enough cash you can buy another rental.

still learning how to get deals, where to find and how to finance
0 Reply
Rizwan Ahmad
OP
Contractor · Toronto, Canada · Member since 2023 · 10 posts · 0 votes
3y
Quote from @David Gagne:

Hi Rizwan Ahmad,
Have you thought about investing in the US? My property management company has had several inquiries from Toronto investors. My niece lives in Toronto so I know it can be very expensive to buy any kind of real estate there.

thats what i am thinking any suggestions?
0 Reply
Paul Sverdlin
Rental Property Investor · Ontario + Ohio · Member since 2018 · 82 posts · 53 votes
3y
Quote from @Lucky Khushalani:
Hey Rizwan,
We source off market deals across Ontario. Lets connect.

Hi Lucky, how are you sourcing deals in this market, if you don't mind lifting the curtain a bit?
0 Reply
Paul Sverdlin
Rental Property Investor · Ontario + Ohio · Member since 2018 · 82 posts · 53 votes
3y
Quote from @David Gagne:

Hi Rizwan Ahmad,
Have you thought about investing in the US? My property management company has had several inquiries from Toronto investors. My niece lives in Toronto so I know it can be very expensive to buy any kind of real estate there.

Hi David, where in US are you operating?
0 Reply
David Gagne
Investor · Holley New York · Member since 2022 · 8 posts · 1 vote
3y
Quote from @Rizwan Ahmad:

Quote from @David Gagne:

Hi Rizwan Ahmad,
Have you thought about investing in the US? My property management company has had several inquiries from Toronto investors. My niece lives in Toronto so I know it can be very expensive to buy any kind of real estate there.

thats what i am thinking any suggestions?

If you are in Ontario ,Buffalo is a good market and so is Rochester NY. Our company works between both markets.feel free to reach out with any questions
0 Reply
David Gagne
Investor · Holley New York · Member since 2022 · 8 posts · 1 vote
3y
Quote from @Paul Sverdlin:

Quote from @David Gagne:

Hi Rizwan Ahmad,
Have you thought about investing in the US? My property management company has had several inquiries from Toronto investors. My niece lives in Toronto so I know it can be very expensive to buy any kind of real estate there.

Hi David, where in US are you operating?

We operated between Buffalo and Rochester NY
0 Reply
David Gagne
Investor · Holley New York · Member since 2022 · 8 posts · 1 vote
3y
Quote from @Paul Sverdlin:

Quote from @David Gagne:

Hi Rizwan Ahmad,
Have you thought about investing in the US? My property management company has had several inquiries from Toronto investors. My niece lives in Toronto so I know it can be very expensive to buy any kind of real estate there.

Hi David, where in US are you operating?

We operate between Buffalo and Rochester New York
0 Reply
Rizwan Ahmad
OP
Contractor · Toronto, Canada · Member since 2023 · 10 posts · 0 votes
3y
Quote from @David Gagne:

Quote from @Paul Sverdlin:

Quote from @David Gagne:

Hi Rizwan Ahmad,
Have you thought about investing in the US? My property management company has had several inquiries from Toronto investors. My niece lives in Toronto so I know it can be very expensive to buy any kind of real estate there.

Hi David, where in US are you operating?

We operate between Buffalo and Rochester New York

Hi David
what is typical management cost for a duplex. do you arrange renter and maintenance. it would be a long distance investment and need to be secure in case the tings go wrong
0 Reply
Hai Loc
Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
3y
Quote from @Rizwan Ahmad:

Hi every one . As an ew member i am just exploring the opportunities in rental single / multi family homes. working full time HVAC contractor i visit different homes on daily basis. i listened to bigger pocket pod cast many times and finally decide to jump in. i own two rental properties and have experience in fixing and renovating the house. at present i am exploring new deals but money is the major issue that is stopping me to go. the properties that i own already refinanced so no margin left in them.
any feed back is appreciated

You seem overleveraged with your existing investment properties. It can get sketchy when mortgage renewals come up that can eat into your cash flow or add to your negative cash flow.
You can always profit on a good deal if you discovered it.
Put it under contract to wholesale, JV with other investors
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