All Forum Posts by: Huong Luu

Rentboard.ca (paid service)

Hard to answer all those questions in a short reply. Here goes:

1. There are many ways to do this. If you put a large downpayment on the 1st, you might be able to access the equity via HELOC/line of Credit and use that as d/p for the next place. Another option is if you are doing reno on your house and have forced equity, you can refi, pull out equity for d/p.

2. Yes. 

3. It can be. When running your analysis, check out triplex. You might be able to find 1. As long as the #'s work. 

Check with your accountant to see if your May 2019 purchase can be treated as an investment prop so you can deduct the legal, taxes, etc.  You might want to stay in your current and buy the duplex as a full investment, that way you can take advantage of the Smiths, and ALL the write-offs (where as, if you move in there, you may only be able to write off 50%). 

Message me if you want me to expand on any of the above. 

Another option, is the potential tenants provide a current copy of their credit check which they can get from CreditKarma or Equifax. In Toronto, where the rental market is hot, many of the serious potential tenants, come prepared with their employment letter and credit report. If a potential tenant doesn't have a report, and doesn't want to give their SIN, you can direct them to CreditKarma or Equifax website. For new immigrants, you can ask for a guarantor, or a letter of reference. Good luck. 

@Account Closed Owners usually allow for 7-12% property management fee, so it depends on if the owner is still doing any of the task. Usually a property manager can get from $25-$100/door/month, where $100/door means the owner is absent. From your post, it seems you were new to this. Perhaps you can request $50/door + an incentive bonus (ie if you maintain 75% occupancy you get an extra $5/door). This gives you an idea of how to negotiate. You can also negotiate a cell phone, wifi, larger unit for you, etc). The Calgary market is taking a hit right now, so owners are offering 1 month free rent, reduced rent, etc to fill the units, so the owner may not be willing to give more than $50/d/m. As a note, your 34 unit at $50/d/m is about $1700, so it seems the owner is paying you $50/d/m. Sit down and figure out how many hours/month you are working for this owner and compare that to if you had another job. Good luck.

 The banks will only give you funding upto 80-85% of the appraised value that their appraisers do. The property being assessed at $285K means very little to the bank. The price drop from $250K-$230K could be a result of the mortgage paydown so the bank is just trying to recoup the amount owing, as to making any money. My understanding in Edmonton, is you can conduct an inspection (or at least have a walk through). If it is sight-unseen, that is too risk, don't do it. 

I saw your other post about 'saving'. Might you think about forming a JV. Also, I have a whitepaper on private lending. If you message me, I will send it to you. It may help you remove/reduce some of the risk you associate with private lending.

Good luck. 

I would suggest Park Insurance. 2nd suggestion is Hub Insurance. Last suggestion is Brokerlink. 

@Edward Rueca. Do you have another management company lined up? If not, then I would suggest you do that 1st. As it may be hard for you to find a better company to switch to.

If you have a replacement company already, ask them if they can help with the LTB cases. Keep in mind, that if your current company hasn't been good at screening tenants and submitting paperwork, they might not be experienced in the LTB cases, thus you are wasting 2+ months in fees (and how much of a surplus are they charging you for the LTB cases?) as cases can be delayed with the LTB. Lastly, just because you have a decision in your favor, you will still need to do additional work to get the tenants to actual pay.  

One last suggestion is to get photocopies/originals of all the documents your management company has (leases, receipts, etc) so you are prepared.

Good luck. 

@Hosup Lee. Don't let 1 post reaction keep you from posting. This forum is great b/c everyone helps make it so. 

Let me add something to your theory, as I spent over 10 years looking at resale condos in the Toronto and Edmonton area. Although there may be some undervalued presale condos, the vast majority doesn't cashflow if you use the standard 20% d/p. This is because the units are usually older and the maintenance fees are higher, thus eating into the cashflow. For example, in the DVP area, you can get a 3bdrm condo for $350k but the fees are $1,500/m.

You will be able to find them on your city website. For example for Ontario, we have the gazette, published every 2 wks. There are also websites specific for this (ie https://www.ontariotaxsales.ca/)

Good luck

@Marysa Diadelfo Can you put the property under contract? That way you can get the appraiser in and if the value is higher than expected, the seller can't reneg on the deal.