All Forum Posts by: Huong Luu

The process of purchasing a rental prop is the same as buying your residence. You want to include the standard clauses. These clauses should allow you to back out of the deal. The process changes slightly if you are buying a MFU vs SFU (the main steps are the same). If you do not know what these clauses are and the difference between a MFU and SFU (which I have left out on purpose) then getting the right agent working with you is very important, as they will be able to guide you through this. Message me if you want more info. 

@Jonah Simmons your question: 

Also isn't the refinance loan generally financed at a higher percentage than a conventional mortgage?

This isn't always the case. Best to work with your bank/broker. This will depend on several factors. 

So wouldn't it be easier to just purchase with your 20% down then take out a line of credit for improvements then rent it out.

Yes. If you can get a LofC then this is the way to go, as it will be easier and cheaper. Many investors max out on their LofC/don't have 1/can't get 1, thus have to rely on private money.   

If you message me, I can connect you with a few developers who will be happy to help you.

I rent Airbnb in rural areas only if there is an event taking me there (ie a bike fundraiser). That being said, many people will do that too. You are going to find it hard to cash flow on a property like this. 

My waterfront was only able to cashflow b/c I was aggressive in paying the mortgage down and the increased appreciation allowed me to leverage it. It was very hard to get cleaners (I had to pay them travel time and gas money along with 3 hour min cleaning). Also property managers in remote areas will charge upwards of 15-20% of the rental amount. 

It might be better to use your cash to buy an investment that gives you great positive cash flow without as much headache, and then you use the cashflow to fund your vacations. 

See if they will take less than $50K. ie $25K. The more funds you can keep the better, as it will improve your buying power on the next property. The other thing to consider is:

- will this 4 plex show up on your credit report (ie will the VTB put a lien on the property)

- how will the banks look at this 4plex, as you may be capped at 4 doors with this 1 property 

You might want to line up the purchases to buy the next property via bank (close that 1st) before this VTB. 

Good luck

Doing the foreclosure and tax arrears strategy is a hard 1. I have been doing that in Ontario and Alberta for a few years. So no experience in BC. However the advice I would give you is get your hands on the legal procedure for foreclosure and tax arrears in BC and read through that. Get an understanding of it, as it differs from Province to Province. Understand the deposit, paperwork requirements, responsibility of existing leans, inspection limitations, etc. If possible attend a few tax auctions and get a good feel for it as they happen in 5 mins. Each city/ municipality might have their own site with this info as well. Good luck.  

Here are a few things I have done in the past to build a relationship with RE agents:

-offer to pay them 2%

-hire them as the property manager 

-set up a JV with them where they get sweat equity

-find agents you like and have them door knock for you

@Marcy Janke, if you do a RTO, the tenant should be giving you a non-refundable downpayment so that if they do walk away they don't get that amount back (ie 5%). However 5% of 35K is only $1,750. This won't cover a furnace so you would have to get 10%. RTO is a hard strategy. If you can sell it, then I would suggest that. If you can't sell it for $35K, then I would suggest you do a VTB. This way you can negotiate a slightly higher selling price. If you want more info about VTB, just message me.

If you are in Canada, each province has their own standard lease forms to use (which you can download and use). More is not necessarily better. Its more important to have the intent correct: ie 'no burning of any substance' to cover smoking then not to have any mention. And it is important to get initials at certain spots in the lease document to ensure they read that section.   

Even at $1,400 /m rent, its still negative cash flow. Also you used 7% vacancy. You might want to consider using 8.3% which is 1 month.