Signed up a few days ago, just now getting around to an introduction.
Longtime stock investor, relatively fresh options investor, now contemplating real estate. Still have not made my first offer, not even close. I've done all the reading I think I need to do for now, just looking for local groups to start attending. I found one in Durham, and on in Toronto. I hope, no I will, make my first purchase in 2019.
I'm really hoping to meet others on BP that are in Canada, Ontario, or the GTA. So if that's you let me know.
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HI Jason and welcome to BP. There are relatively few of us out on the east side of Toronto who are active on BP so good to have you on board. You said that you had found two groups to network with and I assume that includes the fabulous Durham REI group by Quentin D'Souza. If not, then that's one you need to try out. The other one is the equally fabulous Real Estate Investment Network run out of Vancouver but with a massive following across Canada and hundreds of members in the GTA. If you are not familiar with them, you need to be, but the chances that you don't already know about Don Campbell and Patrick Francey are just about nil so enough said.
Durham is very much a strong place to invest because positive cash flow is still possible. To get to know that area better for investment purposes, you need to connect with investor-focused realtor Michael Dominguez.
I have no commercial relationships with any of Durham REI, REIN Canada, Campbell, Francey or D'Souza or Dominguez - these are just the best resources out there. If you have an interest in the Hamilton, K-W-C , Barrie, Toronto West, or general GTA commercial/multi-family residential, then I have people to recommend as I've researched local agents for people I have been helping with their start in real estate investing.
If you do start to invest in the Scarborough to Durham corridor, I have a set of trusted trades that I use and am happy to share because giving them more business helps me.
I can relate to your being a securities investor first who is now looking into real estate. My wife and I both had a solid base of capital markets investments before we started on real estate about a decade ago. We have a modest portfolio of 4 houses / 9 doors and are actively looking for new investments ourselves.
Let me know if you would like to chat let me know. You can invite me to connect on LinkedIn and we can exchange numbers that way. I have nothing to sell.
Hey @Adam, I'd love to talk about your options experience.
And what groups are worth attending?
- PREIG (seem to be flippers mostly, not interested).
- Durham REIC (going to go in November, too busy for the meeting tomorrow night)
- REIN Canada Toronto chapter. But $200 for guest... sheesh. I get it you want people to be serious, but xmas is coming and that $200 can be put to other uses.
- There was another group that has meetings in and around the Durham area (Ajax) that I asked to be notified when they are back in town.
Hey @Noel, I have bumped into all those names. I've also read a some books by Calum Ross (but his firm is close to the public it seems), Tahan Aburaneh, Doug Grey, and of course Don Campbell.
The books are starting to repeat themselves: get a team, have a plan, yeah yeah yeah. So it's time to start going out and meeting people, and doing some of the analysis that the books suggest.
I'm not particular about staying in Durham as I plan to take as passive an approach as I can (to that end I've been listening to the Passive Real Estate Investing podcast, but Norada is US and I'm not looking to go to the US quite yet if ever).
I have two questions at this point that I'd love some of the more experience to chime in on:
1) Are Durham, Hamilton, KWC, Barrie, etc considered different markets (in the ACRE sense of the term) or one big market?
2) I've learned a bit about how to ultimately structure things so you can keep the assets out of your personal hands (LLCs, etc.) but the thing that isn't discussed much is how do you actually get the money into your hands. I mean at the end of the day I need money in my hands in order to pay my bills.
But we are probably past the "introduction" post at this point.
Hey @Jason. I actually just joined a really cool options trading group. It gives alerts & backtests everything and anything you want to backtest. Even over the ‘07-09 crash. It’s a paid membership but I don’t mind sharing. As for Rein, yeah. I agree. I’ve never actually went. Seems the time has passed for that.
My fav RE groups are "SO REIT" which is based out of Burlington. & York Region RE group which is in Newmarket. There are a few others like "Let's talk about real estate" by Luc Boiron. These always have huge turnouts with friendly helpful people from beginner to pro. Not a fan of some parts of Durham like Oshawa. Invested there, on a new build. Never again!
@Adam any chance it's Option Alpha? I'm already a member. And doing well... I think. But I'm only 5 months in. What broker platform are you using? TOC or IBTK? Me I went with IB due to commissions mostly.
York Region I could probably do, that's just up the road. Got a link to a site?
They had a meeting tonight. Next one in November. Can’t send a dot com on this board. Won’t allow. Gimme a text. I left the number earlier in my post.
@Jason - about your questions
Those are all very different markets; radically different markets in fact. If you just look at the City of Toronto itself (3 million of the 7+ million Greater Toronto and Hamilton Area) it has, within it, dozens of distinct "markets." When it comes to tenant profile, risk, and cash flow (or lack thereof) there is so much variety within the city that it makes your head spin. When you look at KWC compared to Barrie, compared to Oshawa compared to Hamilton compared to any of the Toronto neighborhoods, you will find massive differences. A good strategy is to compare areas and see which best suits your situation and then become an expert in that neck of the woods - find the best investor-focused realtor, etc.
About your second question, I am not a lawyer or accountant so you will need specialist advice there. We own our companies in an incorporated company. This gives us legal protection if someone sued the business as our personal accounts and personal professional corporations are not involved. It costs more in terms of accounting and administrative costs to set up an incorporated Ontario corporation. I don't think that you use an LLC unless you are building a business to attract investors and that is a more complicated structure with more costs involved and I think you only do that when you have a lot of success under your belt and know how to deploy hundreds of thousands of dollars to millions of dollars with outside investors' money. Still, I am not an expert in any of this.
The key issue you brought up is how to get the profits / cash flow / money into your hands to pay the bills. Well there may be some bad news there. Profits from real estate investments, at the scale you would be starting at, are taxed at the highest marginal tax rate. Even though it is a business, the government says it does not get the corporate tax rate or the small business tax rate. I'm not aware of any way to get money out of the business at anything less than the top tax rates so if you, or anyone else reading this has ideas, I'm all ears.
Since we are now connected on LinkedIn, we can chat about the money thing, but my belief is that investing in real estate in most cities in Canada does not typically throw off enough cash for someone to live on. Prices are high, expenses are high, and rents are modest so the strategies that can get you enough to live on, to give some examples, might be student housing, higher risk cities with low house prices and poor economic fundamentals, or starting with buying a multi-million dollar portfolio requiring hundreds of thousands or a million+ of down payment. For example (and I have not run the numbers lately) if you were to buy a ready-to-rent house with a basement suite in Oshawa in the low 500s all in, and put 100k down plus closing costs, and if you managed the property yourself, then you might get a couple hundred per month cash flow on average. That's 2k per year, maybe 5k per year if you are really lucky. And if one year you unexpectedly need to replace a roof and a furnace, that place needs cash instead of generating it.
So I'd be curious about how much you have to invest and how much you need to gain in monthly cash flow. The larger benefits you get from investing in residential real estate are from the mortgage pay,down and the capital appreciation over a long period (as prices can always go down in the short term). The benefit you get in cash flow is usually the smallest of the returns from investing in real estate.
Finally, the meeting tonight in Ajax can be found if you google Durham REI.
welcome Jason - I work in Pickering - where did you find for meetups - have you gone to one?
@Adam Narbon I wouldn't mind grabbing that link for the York Region group as well. Would you mind passing along?
@gary McGowan. Great guy. Investor as well. It’s his meetup. One of my favourites.
Hello @Jason Murray
Welcome to BP, and congratulations on making the decision to invest in your future via real estate.
I have written a few blog posts that may help you get started here on BP, and with your investing. Please click on the links, give them a read, and share your thoughts in the comments.
First is a post that I feel will help not get overwhelmed with the amount of info that is here on BP:
The second is a post that will help get you focused with your real estate investing goals:
The last one is a post that will help you choose an “investor friendly” real estate agent. There are many agents out there, but it’s important to choose the right one.
I love answering questions if you have any! Good Luck :)
@Justin H. Not yet. The first was the night before my 21st anniversary, I thought I'd stay home that night. I'm going to go to the Durham REIN November meeting. They are in Ajax.
@Noel, perhaps we are just not in the right part of the real estate cycle? There have got to be some cashflowing properties out there. Granted I have not begun to look, probably next week, I've been traveling a lot this week, 4 hours of driving a day cuts into what you can do. :-O
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