All Forum Posts by: Dan Jensen

Deals can be found in a number of ways. Brandon Turner usually mentions a few of the methods he has used during the weekly webinar (MLS, mailouts, driving for dollars).

If you are looking for something similar to zillow for Canada, maybe look at zoocasa.com. I used it until I started working with a real estate agent. A large proportion of the MLS listings are shown, but these are usually a few days old (in my experience good deals often get scooped before they hit web listings)

I was in a similar situation until I found my house hack around a year ago.  I had been working with a real estate agent for about 6 months and looked at a lot of properties (her words) before I found the right deal.  This included backing out of a deal that didn't make sense while completing the due diligence.  

If your market is like mine then it is probably flooded with "poor investments" that might be good for someone else, but not for investors.  You may need to expand your network as several people above recommended.  The good news is that if you have seen a lot of bad investments then the good ones will be obvious if you are patient.  If you are ready to jump (financials ready to go) then when a good property comes up you can close quickly based purely on the home not on your ability to pay for it.  This will help you scoop deals out from the average home purchaser.  Stay the course.

I have been house hacking for the last year (single family home with a legally zoned basement apartment) and spent the six months prior to closing that deal looking for the right property.  In terms of "unexpected" issues, I have had a minor gas leak and have been dealing with issues pertaining to city zoning/permits on an outbuilding (garden shed) and the furnace and hot water tank.  I did a lot of research prior to completing my deal and you never know what will come up.

The answer to your question is: "who knows". Here are some things that can help though:

- Build up your emergency reserves.  Listen to any Dave Ramsey podcast if you don't know where to start, adjust accordingly. I think most of his practices are very basic and conservative but if you have a buffer like this then it will help.  If you are relying on the rental income to help pay the mortgage then this buffer may be useful if you have a month or two of vacancy.

- Talk to your bank about getting a line of credit.  I have had a line of credit of a few thousand dollars for many years.  Have never had to draw on it, but if you have a major issue or a couple issues stack up in short time then this is a good second line of defense.  If you have a good relationship with your bank you may be able to negotiate a reasonable interest rate.

- Complete as much due diligence as you can prior to removing conditions.  Most people know about home inspections, but additional research to make sure that all the permits/zoning are in check can go a long way.  This is all jurisdiction dependent but I think in most cases you can call your city office and do a permit check on a property.  This is not always something that a home inspector knows about so you may need to hire an electrician or HVAC expert to make sure permits and zoning are clear in your mechanical room.  If you need a permit for a secondary suite then you may need to call the city to confirm these are in place and that final inspections were completed.  If there are issues the seller needs to have them fixed prior to removing conditions.  You may also want to look into title insurance (I had the seller buy the policy for me).

This is a lot longer than I expected, but these are a few ideas.

Dan

I was in a similar situation not long ago.  I completed grad school and then worked for a year before completing a deal to start my house hack.  I have now been in the home for a year and have the added security of tenants in my basement suite as I renovate the property.

Outside of reading and podcasts which can be valuable, spend more time getting familiar with landlord/tenant laws in your state and city.  The podcasts and books are great, but they rarely dig in to the specifics that will apply to you.  A couple things that have helped me:

- Learn the landlord/tenant acts/statutes that apply to your city and state.  These are going to set the base for how you write and administer a lease.  There are often short courses available to help with this.  Where I live I took two three hour night school courses through "continuing education" and there were also courses availble through the city landlord/tenant board.

- Take some time to understand how city zoning works for multi unit properties.  Where I live there are options for people who want to have secondary suites in a single family home (basement suite, garage/garden suites), but for it to be legal the owner needs to have all the permits in order to ensure the home is fire safe and that the furnace/electrical/gas are up to code.  Understanding what paperwork and rules you need to follow will ensure that you know what to look for when you are purchasing.

Have any tenant in a house hack sign a lease.  I would treat this in the exact same manner as leasing any other multi unit property.  The only difference is that you are occupying the second unit.  It sets your expectations for the tenant and provides a legal document to fall back on if they break the lease and you need to evict them.

Make sure you understand the fine points between month to month leases and fixed term leases in your state/city before you decide which is best for you.  Where I live it is much harder for a landlord to end a month to month lease than a fixed term lease.  In my case I ask tenants occupying my basement suite to sign shorter fixed term "test leases" to make sure that things work out.

Thanks for the insight Tyler.  I agree with not getting too intrusive.  I want to make sure I have done my due diligence and collected the basic info for record keeping. I had considered foregoing the credit check all together if the employment confirmation checks out.

Hi Greg, thanks for the response.  I don't live in Ontario, so several of the things you mentioned don't apply to me here in Alberta.   I will do a little more in depth reading of the Alberta RTA to see what it says.  I competed a course on the RTA that was run by a lawyer, but should probably read the document a little closer.  I will also take care of doing the Equifax check on my own.

Hi Zach.  I am new to BP and am just starting to house hack in Edmonton.  

Hi BP

I am new so please forgive me if this has been answered.

I just purchased my first home (home with legal basement suite) and take possession on Dec 15th.  Part of the deal is that the basement is currently leased out, with that lease due to expire at the end of December.  I have asked the tenant to reapply for a renewal since I don't have any of his background information.  On the surface he keeps a very clean house for having a dog and having been in the suite for a year, so it would be nice the have the house hack set up from day 1.  I am using an application form that I received from a local continuing education course that I took.

The only unanswered questions I have are: How do I check a person's credit? Do I simply get a personal report/score from Equifax for the ~$30 or is there another method? Also, do you typically have the tenant pay for it and provide it, or do you do the application yourself?

I would appreciate any feedback as I would like to have this situation sorted in the next day or so.  Thanks very much.

Hello Bigger Pockets,

My name is Dan, and I am based in Edmonton, Alberta.  I am new to the community although I have been lurking for the past little bit.

I completed my first deal last week, which is for a single family home with a legally zoned basement suite.  I had been looking for many months and my gut feeling on this deal was this was a good deal based on my rudimentary knowledge as I could afford the home without a tenant, it had a clean inspection, basement was fully zoned and renovated recently (tough to find), and the perks like the double garage and being close to work seem to be rare.  So on the surface it suited me well as a primary residence (I wish I had found bigger pockets sooner to assess deals).  With inheriting a tenant in the basement suite the income will cover about 60% of the mortgage.  My plan is to house hack for a few years and rehab the upstairs, with a long term goal of refinancing to purchase another property.

I am hoping to learn more about assessing deals (to see if my deal was actually as good as I think it is, and prepare for a second deal), adding value to the home through rehabilitating the home, and being a landlord (my tenant's lease is up in December so I am developing the paperwork so he can reapply).

Thanks for reading this. I hope to learn a lot.