All Forum Posts by: Huong Luu

What a great situation to be in! Is the property only in your Mom's name or jointly? It would be best to sit down with a tax accountant to see if the 1031 exchange can be used or if section 85 can be a benefit here. Another option is for your mom to refi with a HELOC and you use for that next investment property. Why is it so important for the house to be in your name? Your mom could give you power of attorney only on this property if you want.

Good luck

@Nicholas Smith What education do you have? What skill sets? There are volunteer opportunities within the RE world. Also, check your network to see if a friend of a friend can introduce to a RE investor that perhaps you can shadow under. I have tons more ideas, so message me if you want. Lastly, at this stage in your career, your word is your precious asset. So if you tell someone you are going to do something, make sure you follow through. This way your build credibility. Good luck.

Not so fast Dylan. The economic climate is changing daily right now. Run your numbers on both scenario and see which will give you better cashflow, less expense and potentially more equity, leverage etc. Here are the considerations with your plan:

Option A: How big of a mortgage are we talking about? If the mortgage is too big, your mortgage payment will be higher and thus you will have less to save towards your next property. This options is not really an investor option. It is more like "I want a primary residency, and great it has a 2ndary suite".

Option B: Get your $30k reno budget checked with someone else. Non investors will get the reno-bug. Before you know it the $30K is now $60K. That new sink needs a new shower head. That new shower head needs a new surround. You get my point (right?). Will your reno's improve the property value and by how much?  

I would go for Option B, as I don't like to be trapped in a large mortgage that only has 2 units and I am more of minimalist. 

In regards to your refi question, the banks will lend you upto approx 80-85% of the appraised value. Lets say you buy the property for $1M, put down 20% ($200K), your mortgage is $800K. After your $30K reno, the appraised value is now at $1.1M. That means you would be able to access $80K more (80% LTV). Then minus your reno, you end up with $50K. You can use this example and adjust the # for your situation. There are a lot of assumptions on this. In Toronto, not much you can buy with $50K.

In either option, look into getting a revolving HELOC/LOC tied to the mortgage.

Good luck. If I can be of further, just message me. 

@Jasraj Singh with $4M US, you can buy a 12 plex in Ottawa, Canada, a 30-plex in Alberta, Canada. And all with better cashflow! The other thing investors get besides cashflow is appreciation and mortgage paydown. In the areas you are looking for, perhaps that is what other investors are doing. Find other investors in India and see what they are doing. Find what other platforms they use. Before you look into investing outside of India, learn about RE investing 'in your backyard'. You might find you don't like it. The other option is to talk to the current owner and see if he will JV or do a VTB with you. Good luck

@Adam Grendys With the current situation, you will find more properties coming onto the market in the next 6-12 months. Be patient. I realize you have limited funds. However, buying s cheap rental will get you a certain kind of clientele, which comes with more headaches. You might want to consider teaming up with someone with more experience. Don't let the limitation of money be the reason you settle for a lower class property. In terms of #, I target $100/door cash flow regardless of area. Cash on Cash, ROI and NOI, etc differ depending on area, so I can't comment on Grand Prairie.

As @Hai Loc mentioned 1031 doesn't exist in Canada. The closest thing we have here is Section 85. Talk to your accountant this. However, I don't think that will help you in this case. 

Since you are at 4 properties, you will not be able to go through the normal channels for a mortgage. You can consider a private 2nd on those properties with space to get to 85% LTV. Run your numbers though to ensure you can pay the interest and fees associated with privates.

Another option if your networth is high enough, some banks (like CIBC, National, etc) have a "back" lending platform.  

I will bring your question up with the Cross Canada Panel on Tuesday and see if there is any more ideas. 

@Errol P. Just curious as to why your accountant needs to be Windsor Ont. specific.

Thank you for sharing this. A contact of mine from the landlord court side shared with me that this info is already out of date! Things are changing daily. Additional and new support is coming out daily. This is what I was told (which may be outdated by the time you read it): 

Most municipalities have rent banks. They are often difficult for folks to obtain. Some people go to legal clinics to help them advocate to get access to rent bank funds.Also, #2 is no longer accurate. It is called CERB program now. All workers which includes self employed folks can get 2k per month for 4 months if they lose their job due to covid.This is the new EI benefit. Application available in April.https://www.canada.ca/en/department-finance/news/2020/03/introduces-canada-emergency-response-benefit-to-help-workers-and-businesses.html. 
And, to answer your question, it is a federal benefit program. That means all Canadians have access to it.

Suggest you sit down with a mortgage agent that specializes with investors (you will be able to find a few on BP). If you are getting student rentals, some lenders won't lend on that. Also, depending on how you are set up (ie solo or corp) your debt service ratios will affect your application regardless of your down payment. Some lenders will consider just the building you are buying if it is over a certain # of door. 

Have you run the #'s using a HELOC as your 'build up capital'? That way you have principal paydown and not carrying interest on the private loan until you need it. Also keep in mind, with the economy the way it is now, may private lenders are slow to lend. You might want to get a traditional and when you are ready to buy the next property, get a 2nd position private.

Property Management fees usually are around 7-15%, depending on what you want. Services include 

- screen new tenants, 

- showing the units to potential tenants, contractors, inspections, appraisers, etc. 

- on-going communication with tenants and you,

- move in and out inspections and reports,

- monthly reports (may be financial),

- monthly survey,

- co-ordination with contractors, maintenance crew, cleaning staff,

- taking pictures and videos, 

- using the management tool you provide, 

- picking up supplies, 

- 24 hours on-call,

- ensuring paperwork/leases are complete, 

- issue notices, writing notices and posting,

- ensuring low vacancy, ensuring high rents,

- resolve issues,

- collect laundry money,

- be nice and approachable, 

etc... you get what you pay for.