All Forum Posts by: Roy N.

Doug Rose

Welcome to a fellow Canadian.

At this point in time $25K in Toronto, is probably not going to get you into more than a tree house ... that is one market waiting for a pin-prick. If your property is to be owner occupied than $25K -> $250K purchase price {unless you can still get CMHC insurance for a 5% down payment ... but something tells me that is no longer available}. Also, under the "new" {which are really the old} mortgage regulations you have to qualify for a 25yr (or less) amortization at a 5-yr term, fixed rate mortgage ... regardless of the actual mortgage you take in the end.

If you are open to moving outside TO ... north or west to someplace on the edge of the sprawl, you may find a house or multi-unit (my recommendation) that you can afford.

Alternatively, keep binding your time ... accumulate a bigger bag of cash and wait for the prices in TO to tumble the 30-40% they need ... then swoop-in and purchase a 3-4 unit building close to downtown {there will be folks upside-down who need to get out}.

In either case, find yourself someone local who knows the TO rental market - either a landlord or a realtor - who can help you get your feet wet w/o taking a complete bath. You will also want familiarize yourself with the Tenancy Act (http://www.ltb.gov.on.ca/en/Law/STEL02_111323.html) and how long it takes to get evictions, etc. in the TO area {can you say monstrous backlog}.

I'm down east, so do not know the TO market, but have made a point of staying away from it until the bubble bursts.

Scott:

You could, but your tax tables, etc will not be up to date ... however, that may not be an issue.

Any of the basic commercial packages will run you ~$250.00 (it's a business expense).

Alternatively you could use GnuCash: http://www.gnucash.org/ which is free. It's a good package - I used it for a software development company for 8(ish) years before my accountant nagged me to move to a commercial product. The one weak point with GNUCash is the ability to export into commercial accounting systems {without me having to maintain a utility to convert the GnuCash file into an input stream my accountant could manage}.

Scott:

If you are simply looking to analyse a property, create a budget or model cash-flow, then there are lots of spreadsheet templates available ... or, at least enough bits and pieces to get you started on building your own.

If you want to keep the books of your business, then you will be best served to get a basic accounting package (QuickBooks, MoneyWorks, etc) even if you have only one property (at the moment).

Ask your accountant if they have a preference as they will be more accustomed to importing data from certain packages into their system. Some accounting software vendors - Sage & Cognito as examples - will provide your accountant with a complementary copy of the package when you purchase their software.

Thank-you, Pat! Something I assumed, but did not mention ... but, you are correct, it may not jump out as obvious to the first time investor.

Matt Liu:

In essence, yes, but 5-yrs would be long for a private balloon loan.

Now, one detail I missed in your original posting, but was caught by the venerable eyes of Dion DePaoli and Bill Gulley, is the amount you are talking about borrowing from family is to be used as the down payment on an investment property. If this is true, you will likely encounter other problems with financing the purchase.

Here in Canada, you are not permitted to borrow the down payment on a property - it has to be your own monies or gifted to you (with no expectation of repayment). This may also be the law where you reside, but even if it is not, most conventional lenders will have convenants in their mortgage subscription terms which will not allow it.

Now, if it is the case that the family member(s) are providing a loan for the entire amount of the property purchase, then the loan is private and if both parties agree to a 5-yr term w/ interest only payments, that is fine ... they effectively become the mortgagee. Be certain to have your lawyer draw-up a formal contract as would be the case with any private lender.

I would also ensure that you make a "principal" payment into a holding account (high interest, GIC, money market) each month so you have the necessary cash on hand to retire the balance of the balloon loan when you refinance to a conventional mortgage in 3-5 years ... unless the value of house appreciates substantially in that time period, you will not be able to place a mortgage for your entire purchase price. The key to making this approach work is the discipline to set this capital aside and leave it alone.

Amy,

I've not used them with steam heat, but have used them with hydronic (hot water) systems - both the old-fashioned wax-plug/mechanical kind and the newer, electronic types.

Many of the newer electronic one allow the the use of a remotely mounted thermostat and some can even be programmed for set-back times (i.e. during the work day or at night).

When compared to manual radiator valves, and the humans who will not remember to adjust them, either kind of thermostatic valve will save you energy and money, but the newer electronic ones with remote thermostats/sensors and, optional programability, will save more.

Bill:

Mostly 18" (apartment size) or 24" (domestic). If you are looking higher end or commercial, you will find larger ones.

My recent one seems pedestrian next to some of these.

We had listed a unit for its first turnover since we acquired the building. It was so filthy that we had decided to gut and renovate the bathroom rather than attempt to salvage and clean it.

I am showing the unit to prospects who insisted they wanted to see it right-away before we did any work.

Me: As I mentioned on the phone, this side of the apartment is still filthy. Since we are planning to gut the bathroom and adjacent laundry area we told our cleaning service not to bother cleaning these areas.

Prospective Tenant: That's not a problem, it will probably look like this anyway after we've been here a few months.

I obviously should have but .... tags around that post ;)

No valuable skills here Steve ... just knew it was going to be an arduous task and decided to use my own time to conduct the low-skilled portion of the renovation. I'll pull wiring and help hang a little sheet rock, but I know well enough to keep my hands off the carpentry and mudding parts of the reno :)

Jon,

If you have an electrician pull new wiring and sign-off that all the knob-n-tube has been removed from service, you would probably be fine ... though your insurance company may require the exposed K&T {viz. attic & basement} be removed {as ours did}. We were able to leave the deactivated K&T in the walls.

K&T aside, if the building is old enough to have lath-n-plaster, I'd pick a inconspicuous spot along an external wall and make a hole to see if there is any insulation, or just another layer of lath-n-plaster in the cavities between studs {a common practice for a wind-barrier}.

If you discover multiple layers of plaster and/or no insulation I would budget a reserve to gut each apartment back to the studs as they turn over and insulate {We've found spray foam to work best in the older houses, especially if they have rough-cut framing and sheeting}.

I am partway though this process with one of my buildings that is 120yrs old ... only I am stripping all walls back to the studs and dropping the ceilings as well. Removing lath-n-plaster is an arduous, dirty job, so once a unit is smothered in plaster dust, you might as well remove it all.

... of course, we are also removing the previously deactivated K&T wiring when we open the walls.