All Forum Posts by: Roy N.

Peter Moser
The listing agent did take our offer to the seller ... not on his way out of town on Friday, but first thing Monday morning. The property had still not appeared on the MLS site. I'm not faulting the listing agent in any way, I've worked with him in the past and have been satisfied with his conduct at all times. {BTW: Steve Babiak, the listing agent did see the Letter of Finance (Proof of Funds) from our accountants}.

My issue here is understanding what I can do - short of submitting the entire offer amount with the offer - to make us more appealing to the bank(s). In this case, I cannot understand why the would ignore a clean offer, over ask, for one with inspection and financing conditions ... unless they were another 5% over our offer.

Albert Hasson
Thanks for the encouragement. REOs are not that common here ... having three pop-up in our area in a two month window is all but unheard.

We will continue to pursue REOs, but will try other "creative" gambits as well and re building a database of "candidate" properties in our "grid areas" to try and get to the owners before the house goes to market or foreclosure.

Ned,

I don't suppose you indicated to the City of Baltimore their cheque was shy 2-months interest?

:-)

Steve Babiak

Yes, this was in Canada. I am also aware the banks here cap the listing agent at 4%, so we dealt with him directly specifically so he could double end the deal.

Kyle R.

First, check your local bylaws/zoning to see if there is a limit imposed on you - here we are only permitted 4 *unrelated* adults per dwelling unit as a maximum [this is provided you have the "bedrooms" to support 4 unrelated adults].

If zoning doesn't give you a "way out" make a policy with which you can live and make it part of your application information and lease.

... and as Louise indicated ... everyone over the age of majority (18 here) signs the lease and is made to understand they are jointly and severally responsible for the obligations thereof

[Note: Seeing that I was the last poster to the Canadian Real Estate Forum - and that was three months ago - this may not be the place to post this question :-(]

Brandon and Josh have altered the dashboard and I am now presented with a big star {very Tejas like} on the menu bar. As an 'eyecon', this star fulfilled its role with splendour and before I knew it, I was {re}reading the sales pitch for BP Pro. {must click shiny star}

It is a well written pitch ... a bit long for an elevator unless you are in Dubai or Taipei, but provides all the details one might need. Nonetheless, I came away with the same conclusion as the first time I read it:

That said, it may just be me.

Are there any other Canucks out there in BP-land who have exchange colourful money for green and become "Basic Pros" or "Pro Pros"? What has been the benefit to you?

[BTW: My menu bar no longer shows me yellow numbers indicating the number of notification or unread message that await me]

Since the beginning of June, we have made offers on three REOs ... these are also our first three REOs.

The first one, I was too late to the game {the fellow who got it already has it back on the market for 35K more than his purchase ... using the same listing pictures. We had a "plant" go look at it, all he did was clean, replace the stove, and paint two rooms.}

After this first dance, I did extensive mining here on BP and took what lessons I could in preparation for our next opportunity ... which happened at the end of June.

The second one was a "pocket listing" ... the selling agent had already shopped it to his investor list before it was listed. We did not know this until we had placed our offer and ended up being the bridesmaid.

Finally, just last week, we made an offer on an REO before it was even listed - my carpenter happened to be doing a job across the street and saw the agent put the lock-box on the house. We made a clean offer, 2K over the banks asking price, sent in 10% EMD, along with a letter of finance from our accountant. We also confirmed with the selling agent we were the first offer submitted by almost 12 hours {it would have been more, but the agent did not take our offer to the bank until the next working day}

After deafening silence from the bank, our window expired. I pushed the selling agent and learned they had accepted another offer - with financing and inspection conditions - and we are sitting on the bench again.

I am only guessing the other offer must have been sufficiently greater than ours that greed overtook comfort and convenience of a sure thing.

So once again, we are in second seat ... this time, being first in the door and over ask, I was certain we would be accepted or countered.

So what did I miss? I packaged this offer and sent in an "I'm serious" EMD.

On the next one, I'm contemplating submitting a cashiers cheque in the full amount with our offer rather than an EMD of 10%.

Bryan H.

We made an offer on an REO last week (before it was even listed ... my carpenter happened to be doing a job across the street and saw the agent put the lock-box on the house) ... a clean offer, 2K over ask.

After our 72hr window had expired, I pushed the selling agent and learned they had accepted another offer - with financing and inspection conditions - and we are sitting on the bench.

I am only guessing the other offer must have been sufficiently greater than ours that greed overtook convenience.

This will be the third REO in the past two months where we've been in second seat ... this time, being first in the door and over ask, I was certain we would be accepted or countered.

I'm interested in reading about your, and others, experiences with REOs as I'm finding dealing with the banks frustratingly inconsistent. On the next go-around, I'm contemplating sending in the full amount with our offer rather than an EMD of 10%.

Brady Hanna

Your LLC would effectively be your Property Manager - the same as if you hired any property management company. You could authorize it to make mortgage payments, tax payments, pay for materials and services, etc from the rents collected. The management company would also charge you the owner a {market rate} management fee for these services. At the end of the year the LLC would pay to you, the owner, any retained earnings.

The advice to work with your accountant and council standing, this arrangement of a separate management company vs strictly a holding company (or individual) can have tax advantages ... at least here in Canada.

Here rental income is classified as "passive income" and is taxed in the highest taxation bracket {for holding companies}. Additionally, since the value added sales tax (HST/GST here) is not collected on residential rental income, you (or your holding company) is not allowed to claim HST/GST income tax credits on the materials and services used by these residential rental properties. The earnings of a property management business, on the other hand, would be considered active income and they management company would be able to claim income tax credits. The management company would also be permitted to deduct a wider range of business related expenses.

The management company may also be liable for any operational related issues.

Things are undoubtedly different in your jurisdiction hence, I will stress again to speak with your accountant and council.

Brady Hanna

Another strategy you could investigate is to hold the properties in your name personally, but engage your LLC to manage the properties.

You will need to consult with your accountant & council to ensure to ensure you properly consider all {non}-arm's length concerns and any tax implications.

Lindsay Wilcox

I would like to reemphasize Karen Margrave's advice to check the tenancy / rental laws in your jurisdiction.

Here, your situation would fall into a grey area: Under Residential Tenancies Act the landlord cannot require rent payment in advance of the next period, but - pending interpretation - a landlord is not forbidden from accepting prepayment if offered. The other interpretation is the landlord is not permitted to "collect" rent in advance of the next period. Personally, it is not a situation where I would want to test the waters.

If your student tenant is concerned he will spend his rent money, then he can always give it to a trusted third-party (like the guarantor on his lease, or a parent) with instructions to release each months payment to you on the first of the month. If he does not have a "trusted third party" he should speak with his bank - he could put the funds on hold in a separate account with instructions to issue a cashiers cheque/bank draft to you on the first of each month.