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All Forum Posts by: James Ma

James Ma has started 3 posts and replied 274 times.

Post: Worst FIRST FLIP: LOST OVER 100k

James MaPosted
  • Burnaby, BC
  • Posts 282
  • Votes 268

Thank you for your bravery in admitting a loss which most people never like to advertise. Your attitude and perseverance to continue going is great and will take you far!

This is why I am a bigger fan of buy and hold strategies with cashflowing properties so you don't get stuck in a bad situation. I know there can be huge gains to be made with BRRR but I feel you really have to have a strong team of contractors you can trust and know will do a quality job. Without a solid team like that, I feel its too much risk to be left vulnerable to a downturn when you are needing to offload the property or end up holding at a negative cash flow each month while you wait for trades to finish etc.

Post: Determining appetite for risk in terms of leverage

James MaPosted
  • Burnaby, BC
  • Posts 282
  • Votes 268

You should leverage yourself to the maximum that you can still maintain your sanity (some people can't sleep and it affects their mental health when they carry too much debt), and you can still survive downturns in the economy to avoid bankruptcy.

When you leverage yourself to the point where if the property doesn't appreciate or loses its value, that you'll be in a bad financial position because you needed to flip or sell as part of your business model, you're basically gambling.

I prefer to leverage myself to the maximum while being conservative by choosing buy and hold cash flowing properties. So even if there is a huge drop in market value, it shouldn't matter as rents typically stay the same so there is still cash in my pocket every month and the mortgage is being paid down. Even during COVID, rents have actually been going up where I have most my holdings and luckily everyone has still been able to pay so far and the eviction ban is lifted now here in Canada which is nice. I also like to keep about 3-6 months of liquidity to support all the properties expenses in the event of a major crisis.

Personally I sleep better with having some diversification and a piece of my networth in stocks as well so I don't feel completely reliant on real estate being the only thing that can help me achieve financial freedom.

Post: Almost got swindled twice, but got out.

James MaPosted
  • Burnaby, BC
  • Posts 282
  • Votes 268

Glad to hear you learned about the issues before purchasing! Sounds like the realtor you're using isn't great ? They should have reviewed the property and noticed issues with the roof leaks? They should have also reviewed the HOA limiting rentals and mentioned it to you before making an offer?

Post: What is an acceptable tenant credit score?

James MaPosted
  • Burnaby, BC
  • Posts 282
  • Votes 268

600-650 minimum is ideal, preferably higher but it depends what property class and demographic you're dealing with. 

Post: Tenant wants out of lease early!

James MaPosted
  • Burnaby, BC
  • Posts 282
  • Votes 268

They are on the hook for income until you find a tenant to replace them with a term lease. You will have to show to courts that you are actively trying to replace them. If you have a clause in your agreement for liquidated damages due to a lease break, then you can essentially keep the damage deposit to cover that cost.

Post: Officially a Landlord!

James MaPosted
  • Burnaby, BC
  • Posts 282
  • Votes 268

Congrats, I've encountered many of the same obstacles in my REI journey.

My process for finalizing the tenancy is as follows:

- once properly vetted, I'll ask them to send a fee to cover the credit check (i'll have to check out Zillow's feature it sounds great too). I notify if they pass with no red flags then they will be offered a tenancy agreement to sign off.

- Once they pass, I set up a time to review the tenancy agreement together so there is a clear understanding of expectations

- Deposits are expected within 24 hours to make tenancy agreement valid unless otherwise agreed upon. The deadline is due to respect to other applicants who I want to get back to or continue their application process if this tenant doesnt work out

We already dealt with this in Canada - there were no evictions allowed from March till Sept for any reason unless there was risk of damage to the property. The only relief for landlords which wasn't great was the deferral of mortgages for up to 6 months (with the interest still running of course)

There were definitely some tenants who took advantage of this and felt they didnt have to pay and it would basically be interest free and they could pay back the landlord later. Others will never pay the landlords back who will have to shoulder the costs. Luckily the majority of people here have still been making payments but really will put an emphasis on making sure to find quality tenants to an even stricter degree moving forward for me

Post: Is REI worth a divorce??

James MaPosted
  • Burnaby, BC
  • Posts 282
  • Votes 268

Appreciate your vulnerability and transparency.  I think the advice from here will be more on the personal side than the real estate side for this.

How you feel as a man and your insecurities is something you'll need to work on. Reflect on what makes you feel this way and realize that you are in control of your own emotions. Nobody can make you feel that way except yourself. There are a lot of great spiritual resources out there or therapy to help people address these negative thoughts that can at its worse, ruin someone's spirit and zest for life.

Her insecurities and jealousy and her emotions that is on her to work on at the end of the day as well. Similar to how she can't make you feel a certain way, you can't make her change her emotions unless she addresses the root of those causes herself.

I'd hope the two of you can find a way to communicate and help support each other. Even if our partners don't see eye to eye or have any interest in our business motivations and ambitions, they should be supportive of it. If not, I think it will lead to a lot more issues in the relationship over time (ie. not spending enough time with her or family, upset that you have to deal with real estate issues during evenings etc.)

I think OP"s advice makes sense if you are losing money on your property. If it's cashflowing, its a much harder decision to sell unless you are really confident that there is going to be a downturn which is just dependent on each person's market. Some places are going to do fine, others are not going to do as well.

Rents have actually been going up where I hold most my rentals so it's technically not a good time to sell unless I really foresee a huge crash

Post: Syndication how to attract loan sponsor

James MaPosted
  • Burnaby, BC
  • Posts 282
  • Votes 268

If you can raise 3.2M, I'd believe you'll have an easy time finding an experienced syndicate GP to work with on a project