Investor · Kitchener-Waterloo, Ontario · Member since 2008 · 1k+ posts · 1k+ votes
10y
@Jeff Beler@Tahric FinnGuys, stop looking for properties. You have to focus on finding motivated sellers who need to sell and then offer a solution to their problem. That's how you create good deals.
To do this you need to generate your own leads. The trick is to position yourself as either the 1st person they call, or the last person they call.
1st position: In this case you want people calling you who have a pressing time constraint that prevents them from getting their property market ready, listing it, negotiating and waiting to close. They need to sell NOW and they're willing to take a below-market price to get their cash fast.
Last position: In this case you want people calling who have tried everything to sell their property and have nearly lost hope that it's ever going to happen. They probably owe as much as the house is worth and can't lower their price to get it sold because they'll have to pay their agent out of their pocket, and they can't afford that. They're willing to let you just take over their payments.
Now go figure out how to get in contact with those people and you will find that there is an abundance of deals everywhere.
Real Estate Agent · Kitchener-Waterloo-Cambridge, Ontario · Member since 2013 · 408 posts · 90 votes
10y
Hey Angelo
I personally invest in my area but I do have some colleagues in Hamilton I would be happy to refer you to. They could help point you in the right direction.
Great strategy, similar to the one I'am trying to employ. Best of luck with your investing!
Investor · China · Member since 2016 · 11 posts · 2 votes
10y
hi @Kory Hodgson, I also have one student rental in Guelph and just purchased another SFR in Guelph. How did you find the SFR vacancy in Guelph? Have you notice what's the sizes of house people are mostly looking for? Do you also self managed the properties? I am having a little bit of difficulties renting out the Guelph rooms for the summer. Is renting to family better? Love to hear your experience. Thanks.
Real Estate Agent · Toronto, Ontario · Member since 2016 · 31 posts · 9 votes
10y
Hey @Joe Di Fonzo I've had a couple good contractors do some work on rentals in Hamilton in the past, as well as quote for larger projects in Hamilton we considered but never went through with.
Investor · Orangeville, Ontario · Member since 2015 · 2 posts · 0 votes
10y
There is a strong room rental market in Orangeville, with the average room renting for $600. I am house hacking and renting out three rooms. Appreciation has been crazy, about 10-12% annually. For a single person or a couple without kids, it is a good opportunity to get into real estate investing. I own a back split which allows me to rent out the top floor, keep the lower floor for myself, and share with middle level, including kitchen, with my tenants. Eventually I may convert it to a duplex by adding a second kitchen. The town is generally walkable, so you can rent to tenants without cars. Vacancy in Orangeville is low at 1%.
I am looking to purchase a rental in Guelph using equity from this house. Guelph has the lowest vacancy rate in Ontario at 0.6%, it's a beautiful town with diverse industries, and 20 minutes from kW and Cambridge, which are listed on the top 10 rental markets by rein.
Investor · St. Catharines, Ontario · Member since 2014 · 18 posts · 3 votes
10y
Nice work everyone. This summer has been a bit of a tough one in my area with not many houses for sale on the market, turning it into a bit of a mob mentality with people bidding over the asking price. Are any of you finding that the case in your areas?
Rental Property Investor · Iroquois Falls, Ontario · Member since 2016 · 13 posts · 4 votes
10y
Hello everyone. Great to see so many posters from Ontario.
We've been investing in North-eastern Ontario for five years. Mostly buy and hold rentals. SFH, duplexes and small multifamily/ commercial mix.
We recently started to rent and sub-let vacant SFH's that were listed but not selling. We basically cover the owners costs and re-rent with the tenants paying utilities etc.
Hope to make a business of it as well as manage properties in the near future.
Bradford West Gwillimbury, Ontario · Member since 2016 · 4 posts · 2 votes
10y
This thread is awesome so much insight! I'm getting excited just seeing how many people in my area are actually doing this!! I'll be joining the ranks soon...
Toronto, Ontario · Member since 2016 · 3 posts · 0 votes
10y
Hi all,
First post here, thought it was appropriate to do so on this thread.
I live and work in Toronto, and have a large amount of equity in my current home.
I've been tinkering with idea of using some of this equity for a buy and hold in the Barrie/Orillia area. Anyone involved in that sort of thing up there?
Investor · Toronto, Ontario · Member since 2014 · 320 posts · 125 votes
10y
@Angelo Vella - I'm from the Toronto area as well. I'm primarily invested in Waterloo, but am looking to concentrate my assets here in Toronto.
I've heard mixed things about Hamilton from my investor friends. Some have had great success there, others have had nightmares with the kinds of tenants.
We really need to do a Bigger Pockets local meet up with all the new folks here!
Real Estate Agent · Mississauga, Ontario · Member since 2016 · 42 posts · 6 votes
10y
Seems like a lot of people is investing in Hamilton. I went to a Rockstar meeting last week and most of the investors there are investing in Hamilton. Buying SFH and adding secondary suites.
I want to get into the KWC area or Guelph area for my first property.
We definitely should get a BP meetup setup in the GTA. I would make it out there if it was on a Friday night or Saturday morning.
Kitchener, ONTARIO · Member since 2015 · 20 posts · 0 votes
10y
Hi all,
I currently have one (primary) property in Kitchener and have rented out the additional rooms.
Hoping to refi and get an owner occupied 4plex in a year or two but the big challenge right now is that I work for a start up.
Speaking about the start up (alertlabs.com), I think anyone who's paying for tenant's water usage or have dealt with water related damages in your properties should check it out. It'll save you quite a bit of money.
Looking forward to hearing more about the BP ON meetup!
Rental Property Investor · hamilton, Ontario · Member since 2015 · 66 posts · 15 votes
9y
in for starting a hamilton area meet up! currently invested in student rentals, looking to buy another in st catherines and london. Also looking at multi family buildings 5 or more units always interested in joint ventures...
semi retired · Toronto, Ontario · Member since 2015 · 17 posts · 4 votes
9y
Hey all.
I have a question in regards to a multifamily property (3 units) that is zoned single family which I am looking at purchasing in Hamilton. The plan is to run a BRRR strategy on the property to update all 3 units and refinance to pull equity out of the property once it is renovated and rented. I am wondering how the fact that the property is non-compliant with it's zoning might potentially affect a refi and if there are liability concerns based on it's illegal use.
First of all in terms of an appraiser pulling comparables to help determine it's value, would an appraiser compare it to other 3 family units regardless of it's zoning or would they compare it to other single family units based on it's zoning? If they did choose to compare it to other single families the comparables still support a strong refi however I'm also worried that there may be a deduction on it's appraised value based on the fact that if someone were to walk into the property and want to purchase it as a single family dwelling they would have to invest money to change the configuration of the property to restore it back to a single unit layout. I also wonder if our income from it as a rental property would not be taken into account to help the strength of the refi given it's illegal use?
Also on our mind is concerns with liability, in the event that something happens on the property of a serious nature (ie fire etc.). Assuming that we have met proper fire code and provided a safe living environment for all our tenants, which we always do with our properties, would there still be concerns around liability based on the simple fact that the property was not legally zoned for it's current use as a 3-unit property?
Any help on this would be great as our decision to buy the property is based a lot on our answers to these questions.
Rental Property Investor · Toronto, Ontario · Member since 2012 · 538 posts · 298 votes
9y
Joe,
First I would check if the property is what is called 'legal non-conforming'. This is a form of grandfathering that occurs when the a property is already being used for a purpose and the city changes the zoning making the existing use illegal. For example, a parcel that was zoned light industrial under the original city plan but then as the city expands, is rezoned commercial-retail. Another example is an existing shed built to the lot line but the city then changes zoning to require setbacks. IF this is the case, you should be OK but be very certain and still check with a lawyer who knows what they are talking about.
Anytime you are dealing with a property whose current use does not comply with its current zoning, you are taking about significant risk. It can be anything from banks simply refusing to finance to the city coming and issuing violations which would tie up the property until cleared. The lawyer who is handles RE should be able to give you a much better idea of possible consequences.
IF it is NOT the case or 'legal non-conforming', run-don't walk to a lawyer who is familiar with municipal law and city politics. You need 'expert' advice on something like this. For the few hundred $ of advice, you could be saving yourself a world of hurt.
Real Estate Investor · Waterloo, Ontario · Member since 2017 · 21 posts · 8 votes
9y
Most lenders won't consider illegal income from a unit. They would pull comps based on square footage and appraise it based on a single fam res. Some lenders MAY appraise based on a % of the illegal rent, maybe like 25% or something.
IF it is legal for a triplex most banks will just appraise based on income. The only thing they will analyze with regards to the area is the average cap rate. w/e the cap rate is they will just divide the income by that and voila! a value. If you are in an area with a 7% cap rate and your net income is 2000/mth you would have a value of $342,800 (as an example).
Real Estate Investor · Waterloo, Ontario · Member since 2017 · 21 posts · 8 votes
9y
keep in mind, to roll a BRRRR in canada banks will only add 50% of your legal rental income to your yearly income consideration. But will take the full balance of your mortgage. So good luck with snowballing anything like we see our lucky neighbors to the south doing.
keep in mind, to roll a BRRRR in canada banks will only add 50% of your legal rental income to your yearly income consideration. But will take the full balance of your mortgage. So good luck with snowballing anything like we see our lucky neighbors to the south doing.
Jason:
The inclusion rate for rental income varies from lender to lender - some are as high as 80%, others are at 50% (or possible lower). A lender's inclusion rate will also change from time-to-time.
keep in mind, to roll a BRRRR in canada banks will only add 50% of your legal rental income to your yearly income consideration. But will take the full balance of your mortgage. So good luck with snowballing anything like we see our lucky neighbors to the south doing.
Jason:
The inclusion rate for rental income varies from lender to lender - some are as high as 80%, others are at 50% (or possible lower). A lender's inclusion rate will also change from time-to-time.
I've only had recent experience with lenders that would only accept 50%. If you can find one that will take 80% that will help a little, but it will still cripple you from moving your equity through a bunch of properties. I know why they do it, so you don't get guys too overextended, but most people, if they are showing an income of 40-60K/year will probably only be able to buy 1 place and then wait a long time for the equity build up.
BUT that being said, obviously if you can find someone to lend at better terms, knock yourself out. It's just something to consider when you're going into your first property. If you are expecting to buy 5 houses in a year with essentially the same downpayment trickling through each of them, you'll want to know what the banks say about it first.
keep in mind, to roll a BRRRR in canada banks will only add 50% of your legal rental income to your yearly income consideration. But will take the full balance of your mortgage. So good luck with snowballing anything like we see our lucky neighbors to the south doing.
Jason:
The inclusion rate for rental income varies from lender to lender - some are as high as 80%, others are at 50% (or possible lower). A lender's inclusion rate will also change from time-to-time.
I've only had recent experience with lenders that would only accept 50%. If you can find one that will take 80% that will help a little, but it will still cripple you from moving your equity through a bunch of properties. I know why they do it, so you don't get guys too overextended, but most people, if they are showing an income of 40-60K/year will probably only be able to buy 1 place and then wait a long time for the equity build up.
BUT that being said, obviously if you can find someone to lend at better terms, knock yourself out. It's just something to consider when you're going into your first property. If you are expecting to buy 5 houses in a year with essentially the same downpayment trickling through each of them, you'll want to know what the banks say about it first.
Jason:
In addition to the variability between lenders, the rate at which rental income is included also depends upon the borrower. In our experience, the residential lending division at most of the Big-5 apply greater scrutiny to your financing application after you have 5 - 7 mortgages and all of them have ridiculous requirements once you reach 10 mortgages. However, your track record and the overall leverage of your portfolio are also factors.
On the commercial side, you have a different set of rules - each deal is evaluated as a business on its own merit.
It's not hard to find residential lenders who include rental income at ratios greater than 0.5. We closed two mortgage with CIBC last year where rental income was included at 70%. TD has done the same. The last mortgage we placed with Scotiabank, the inclusion rate was 80%.
In addition to the variability between lenders, the rate at which rental income is included also depends upon the borrower. In our experience, the residential lending division at most of the Big-5 apply greater scrutiny to your financing application after you have 5 - 7 mortgages and all of them have ridiculous requirements once you reach 10 mortgages. However, your track record and the overall leverage of your portfolio are also factors.
On the commercial side, you have a different set of rules - each deal is evaluated as a business on its own merit.
It's not hard to find residential lenders who include rental income at ratios greater than 0.5. We closed two mortgage with CIBC last year where rental income was included at 70%. TD has done the same. The last mortgage we placed with Scotiabank, the inclusion rate was 80%.
Are you talking about using a property's rent to qualify for the it's own mortgage?