Rental Property Investor · Montreal, Quebec · Member since 2014 · 100 posts · 42 votes
Hey Fellow BP members,
I'm so excited! I just purchased my 3rd SFH in Montreal, Canada 3 weeks ago. I purchased the property for 165K, however it's worth more like 200K in it's current condition. It came with tenants & the cashflow is decent. The best part about this deal is that I actually didn't have to come out of pocket at all. The bank took a lien on my 2nd property for 20% which means that I didn't have to take out mortgage insurance through CMHC & I didn't have to come out of pocket. I also worked out a deal with my real estate broker & the bank broker whereas they would split the costs for my notary.
I'm so happy with how this deal turned out. I have a beautiful house that is already cash flowing & It didn't hurt my back account at all. :) I'm looking forward to my next buy & hold. Hopefully I'll be just as lucky the next time. It's awesome trying to figure out creative ways to save money. On to the next one... Hopefully Jan/Feb 2016!~
Lisa Perez and well done I a new investor in the UK, Bristol and is wondering if you would know anyone who might know where I would be able to get the wholesaling contract forms that are need to I can start close deal like yourself?
Well done and keep up the great work
R.E.I
Christopher
P.S please forgive and correct my spelling grammar if wrong.
Don't forget this is the US. Why a notary they cost like 25 bucks here.
George:
Actually, the property is in Canada.
Un notaire in Québec - and a notary in the rest of Canada - is not like a notary in the U.S.A. ... in short, they are so much more. Notaries are typically practicing lawyers and have a greater role and set of responsibilities than simply witnessing documents.
I'm so excited! I just purchased my 3rd SFH in Montreal, Canada 3 weeks ago. I purchased the property for 165K, however it's worth more like 200K in it's current condition. It came with tenants & the cashflow is decent. The best part about this deal is that I actually didn't have to come out of pocket at all. The bank took a lien on my 2nd property for 20% which means that I didn't have to take out mortgage insurance through CMHC & I didn't have to come out of pocket. I also worked out a deal with my real estate broker & the bank broker whereas they would split the costs for my notary.
I'm so happy with how this deal turned out. I have a beautiful house that is already cash flowing & It didn't hurt my back account at all. :) I'm looking forward to my next buy & hold. Hopefully I'll be just as lucky the next time. It's awesome trying to figure out creative ways to save money. On to the next one... Hopefully Jan/Feb 2016!~
Lisa xoxox
Hi Lisa, can you go over the numbers? What is the interest on the loan, and what's left for you after all monthly payments on both properties?
Actually, you can still find residential mortgages with 30yr amortizations- though they are fewer. That said, you must qualify at a 25yr amortization, 5-yr term, fixed rate mortgage regardless of the actual mortgage you place.
That's awesome, I assume you are still cashflowing even after paying the interest on your LOC? If one can still get decent cashflow at 100% financing, then is generally a good deal.
Don't forget this is the US. Why a notary they cost like 25 bucks here.
George:
Actually, the property is in Canada.
Un notaire in Québec - and a notary in the rest of Canada - is not like a notary in the U.S.A. ... in short, they are so much more. Notaries are typically practicing lawyers and have a greater role and set of responsibilities than simply witnessing documents.
Thanks Roy I forgot that's what they call lawyers lol. My grandmother was Canadian.
Wow, I hadn't realized that the bank had merely placed a lien on your 2nd property as the down payment on this purchase. I thought you had taken out a HELOC on it. Don't take this the wrong way Lisa, as I think it's brilliant that you were able to pull this off and sounds like you got a great deal on your property, but this just goes to show how lenient the banks are getting in Canada. As @Carlos Fernandez pointed out, this used to be done prior to the crash during the early nineties, and it seems has resurrected again. With rates so low, the banks seem to be loaning on volume with razor thin margins, just to boost their profits.
With practices such as these, how long can the frothiness continue?
Wow, I hadn't realized that the bank had merely placed a lien on your 2nd property as the down payment on this purchase. I thought you had taken out a HELOC on it. Don't take this the wrong way Lisa, as I think it's brilliant that you were able to pull this off and sounds like you got a great deal on your property, but this just goes to show how lenient the banks are getting in Canada. As @Carlos Fernandez pointed out, this used to be done prior to the crash during the early nineties, and it seems has resurrected again. With rates so low, the banks seem to be loaning on volume with razor thin margins, just to boost their profits.
With practices such as these, how long can the frothiness continue?
Chad:
Ironically, the Schedule 1 banks are not getting that lenient - the government has even pulled back the qualification and other regulations to where they were a decade ago to try and prevent a fiasco akin to what the U.S.A. suffered though in 2008/2009.
I too am also very surprised, and wonder if the bank has placed a second (HELOC) on the other property, but perhaps a registered lien in Québec is sufficient to secure their position.
No money out of pocket is great and all, but for those of us that were around 25 years ago, we all have stories of friends, families, and colleagues that got clocked b/c they were over-leveraged and ended up losing everything.
I recommend having your own formula to make sure you are protected from a market collapse, something like 3-6 months reserves for ALL properties.
How did you approach the bank to get them to accept to put a $20K lien on house #2? Did they bring it up?
What kind of banks would likely do that? Regional? Local? Is it a Canadian thing? Banks used to do this all the time in the US a couple of decades ago, but the housing bubble burst in the early '90s, or so I am told...
Originally that wasn't the plan, I was going to put down 5% on the property but the person I dealt with at the bank offered it to me. I couldn't believe it. The bank I used is a regional bank in Quebec but they also have a presence in Ontario. In Canada they make it pretty difficult for you to get a loan, they're not so easy. I had a hard time on my 2nd property due to the fact that I filed my taxes in the US for so many years because I was residing there. They wanted to see at least 2 years of tax filings in Canada & I only had 1 year at that point. Literally every single bank turned me down. This bank at the last minute saved the day heheh :) and of course for this property I went right back to them.
I'm so excited! I just purchased my 3rd SFH in Montreal, Canada 3 weeks ago. I purchased the property for 165K, however it's worth more like 200K in it's current condition. It came with tenants & the cashflow is decent. The best part about this deal is that I actually didn't have to come out of pocket at all. The bank took a lien on my 2nd property for 20% which means that I didn't have to take out mortgage insurance through CMHC & I didn't have to come out of pocket. I also worked out a deal with my real estate broker & the bank broker whereas they would split the costs for my notary.
I'm so happy with how this deal turned out. I have a beautiful house that is already cash flowing & It didn't hurt my back account at all. :) I'm looking forward to my next buy & hold. Hopefully I'll be just as lucky the next time. It's awesome trying to figure out creative ways to save money. On to the next one... Hopefully Jan/Feb 2016!~
Lisa xoxox
Don't forget this is the US. Why a notary they cost like 25 bucks here.
If you could get me a notary to close the deal properly that will charge me 25$, I'll give you a hundred heheheh :)
@Lisa Lavie congratulations! That's got to feel great! I am searching for my first deal so I love to see the great outcome and the creative financing that works!
Good for you Tiersa, that's great! Please keep me posted. I wish you the best of luck with your future investing :))
that is my dream!congrats!.i want to land my first property with a hard money lender and flip it.i'm very good at marketing and finding solid leads.starting to build buyers and seller list.how would i go about finding distress properties
Awesome!... The best way to go about it is looking online, driving through your neighborhood, talk to local agents, etc. I always look online first & look at the pictures. My goal for these properties hasn't been to find distressed properties because I love finding properties that are easy to rent as is without much or any work at all however once I start getting into flipping, I'm going to be scouring to find the worse properties hheheh :) and the best way to do that is look online, I also look at craigslist listings. Best of luck with everything.
i'm currently working on whole selling a 3/2 house.there asking 69,000.it needs some work.how would i go about negotiating the price
How much work does the house need? What are the comps in the same area for a 3/2 house?