All Forum Posts by: Chris Muller

With some markets slowing down or continuing to be in a low spot, I see some investors are moving into rent to own deals.

Looking to find out more info if anyone is willing to share...

How do you prospect for partners?

How are you prospecting for tenant-buyers? And screening processes

How are you structuring the rent to own agreements?

Lastly would be - what are returns like?

From the macro level of looking at these they seems to generate good returns, you have good quality tenants and have a set exit point and know the return up front.

Of course the risk is the tenant bailing on the agreement and having to hold the real estate...do you find the house first and offer or work with the buyer to find a home they want?

How are you structuring you JV with partners - providing a set return? 8-12% or if involved then 50/50....I guess this depends on each situation to some degree?

I’d like to incorporate some of these with the current market conditions and use the high return payouts to work on paying down current properties (or expanding portfolio).

Any input would be appreciated!

Hey

Curious about anyone investing on Vancouver island - Victoria, Nanaimo, Courtney/comox areas.

I am sure Victoria is expense and a bit tough these days, but maybe outlying areas?  How about further north up that island, as prices look to be decent and rents aren’t bad.

Any info is appreciated!

@Robin L.

Kelowna and the Okanagan can work out well, but even with the market slowing - good deals are hard to find and can go pretty quick.

There is still good cash flow in cities around Kelowna and a few good deals in Kelowna.

We recently removed subjects on a great BRRR in west Kelowna.

Where are you located Patti?

that will build a lot of context around what could be some possible options.

Some areas a single family home can make the numbers work rented as a whole, but in my opinion you are leaving a lot of money on the table compared to a purpose built rental (duplex, suited home etc).

Whichever way you go, you should try to make sure that the cash flow from the property covers your additional fund costs from what you take out of your own home to fund the next one.

I haven’t done a brrr with rbc, but have and am currently doing one.  Happy to share some insight from my experiences, but more info is needed to be able to properly assess what you have on the go/plan going forward.

Hope that helps a bit.

Cheers,

Chris

I’ve been curious about Prince George as well for those reasons - please do keep us posted on how this investigation goes!

In my opinion, banking on appreciation and not being cash flow positive is a potential recipe for disaster.

Break even or costing you monthly and let’s say worst case happens - market slides and you have to sell for some unforeseen reason as you can’t afford to top up payments or whatever could happen.

Now you’re left with a detriment to your personal net worth, not an investment.

Don’t get me wrong, some people have done well buying purely on speculation, but out here in 08/09 many people lost their shirt on being spec purchasers.

Weigh out the risk and reward...make sure you do your research and time the market right...buying at a boom peak before the bust can be devastating.

Title is the easiest way...$50 sounds like a lot to pay though.  

Hey there

Looking into diversifying the rental portfolio and Edmonton looks to be entering into the start of its recovery for its real estate cycle.

Any investors on here active in Edmonton? Would like to learn more about it - most likely in the single family suites home section, but open to duplex, multifamily etc.

Good areas/bad areas?

Average rents?

Vacancy?

Always looking to network as well.

Thanks in advance!

-Chris

@Jack Orthman

Post some more numbers.

Loan amount?

$247,500

Mortgage Payment?

$1242.23/mo

Down Payment?

$82,500

Property Taxes?

$1860/year

Insurance?

$250/mo

Rubbish Removal?

Garbage is in prop tax

Water?

$100/mo

Closing Costs?

$6500

Sewer Use Fees?

Included in prop tax

How much can you raise the rent when you close escrow?

Tenancy act here allows 2% plus inflation - 2.5% this year

How much can you raise rent every year? 2% plus inflation (2-5% depending on year)

Repair costs to sell the property?

Property can use $75k in reno’s, area has a 5.5CAP average - would lead to 475-525k property after renos

Are multi-unit values increasing?

Yes overall, less in the smaller town, but 10min from medium city and 30min from larger city that have seen significant growth.

What is the market rent at other similar properties?

In similar condition - about the same. Once cleaned up, 20-30% more roughly

Is there rent control? Not sure what is meant by rent control. Here in BC the tenancy board outlines what can be done. Once a year, after one year of tenancy and with 3 months notice rents can be increased by 2% plus inflation.

To me it comes across as a great cash flow generator, but know it will never see huge appreciation. With larger centres nearby becoming unaffordable (especially rental rate wise) people are forced to these smaller communities.

@Lance Lee

If you’re looking for a good agent - connect with Jared Franczak with royal lepage.

I used to be licensed and worked with him at a firm that specialized in working with investors, plus he is one himself. Very knowledgeable and a great negotiator!

All the best in your search!