All Forum Posts by: James Ma

I'm excited for the future where blockchain has the potential to make real estate processes go much smoother. Long gone will be the days of having to pay $4K to transfer your property to the new owner and it'll cost maybe hundreds of dollars for someone to verify the transaction.

Real estate and assets will simply have a specific code attached to it and designated to an owner, the blockchain will also be able to act as an escrow and release the funds & asset to each party once each person fulfills their side of the deal.

No need for all the caps lock and exclamation points friend. 

Drive the area yourself and get a sense of how it is. Ask the residents in the area how they find the location. You can always ask your local realtor who is an expert for that area as well.

Failing to plan is planning to fail. However I think if you just "get out there" you'd be better off than not taking any action at all. It sounds like you've already educated yourself on what to do so you are armed with some knowledge of how to achieve success. There's countless people I've talked to who thought about going into real estate but never did. There's also a couple people I've spoken to who don't have a clue about the right way to invest but bought places and have made a great profit since BC pretty much has everything appreciating like crazy, but they would've made even more if they studied up a bit.

Continue to keep studying and learning, it should be an ongoing process. I don't think there's ever a point where you can know everything as things in the markets and laws will constantly change.

I think buying multi-unit buildings is ideal but most people don't have the capital to take advantage of the economy of scale

I guess it would depend on your stock market skills, but assuming you know how to invest properly... I'd just weigh your expected returns in the market vs your mortgage interest rate.

I've actually been tapping the HELOC equity to re-invest into the market which is an aggressive play but if I can beat the interest rate (3.75%), I'll be turning a profit by doing so. My eventual plan once I have enough capital raised for another downpayment would be to get another place and would only paydown the mortgage if the lenders say my debt to income ratio is too high.

Your strategy should depend on your risk tolerance - everyone will have a different limit for the amount of risk to reward they are willing to take on.

A book I read once had a good theory that basically said he aimed for getting about 10-20% of his offers accepted, obviously the math will differ based on how the market is and each person, but the gist is you should be making offers that suit yourself that will be a good deal for you and not just making offers because you really want the place. If the majority of your offers are getting accepted, chances are you're paying more than you need to.

Especially as investors, we have a MUCH wider range of potential properties to select from and bid on that people who are looking for a place to actually live in. Therefore, we can be much more conservative with our bids and less afraid to lowball and lose the bid.

Why realtors would actually present a low ball offer? 

Well they usually only get paid off %'s (ie. 3% on first 100K and 1% on subsequent 100K) so a lowball offer won't really take that much out of their pocket and a sale is better than no sale. Realtors will typically advise you though if your offer is way too low and has no chance to win at all. My realtor recently mentioned he had a client who kept wanting to bid way too low and he was happy to do the paperwork for him believing that after he loses a few offers that he'd realize he needed to increase the bid amount and he'd still end up getting the sale eventually.

Sellers will pay the costs - definitely use a realtor. Plus it saves you a ton of time as they can do the legwork for you if you tell them what you are looking for. Make sure to find an actual investment experienced realtor. Many will claim that they can help you find real estate investments but don't really understand the underlying principles.

A good way to gauge their expertise is to ask the realtor what they look for when finding you a good investment property. Make sure that they have examples with actual numbers and not just saying they'll look for a place with a good ROI - dig in and ask what kind of ROI would you expect from different areas, what average rents are in the areas, how much the area has appreciated etc.

It sounds like you're not in a bad position and it's up to you to decide when to sell which is ideal. You mention your equity isn't working as hard for you and that's great you are aware of that - why not pull out the equity with a Refi or HELOC and put towards another investment?

I believe if you're looking at selling, it all has to do with opportunity costs. After considering all expenses you incur to sell, what are you planning to put your money into that will generate a higher return? If you're not sure you can get a better ROI than your current investment then it wouldn't make sense to sell.

I don't believe you can use refinance as "income" since it is simply cash from a debt/liability

However the rent income from your properties do count as income

Refinancing is tax free and you can actually write off the interest as an expense if you are putting it towards another property. Banks will look at your income / debts before they allow you to refinance and will determine what amount they are willing to refi you for

I've invested in Chilliwack so far for a few properties but the numbers are starting to get tougher to make work as it's recently blown up but still the best value I see for anywhere close to lower mainland