All Forum Posts by: Ram Srinivasan

@Roy N. - Hey Roy, not sure if you saw my previous question on this forum, so tagging, just in case!

Ram

@Dylan NA

Dylan "Something" - I am assuming this isn't your last name. I would think most would agree that having a last name like "something" sounds a little foolish on these forums. Most people have put in real last names to give an aura of authenticity.. just friendly advice.

There are so many ways of doing this, but based on your situation, I assume you are able to qualify for a mortgage. By the sounds of it, the downpayment isn't a problem.

Do you consider yourself "handy"? on other tools in addition to being an electrician?

If so, I would say a live in flip would be the way to go for you. OR, purchase a house 5% down. live in one room and rent the other rooms. Do this for a year, let others pay for your mortgage as you gain experience. Renting by the room can usually fetch you more also. In the mean time, you can do certain things like upgrade bathrooms, paint other areas of the house that the tenants are not living in etc. 

Alternatively, you can get a double suite (quite possible to get in Edmonton). Live in one suite and rent out the second.

@David C. - I think you're right!

@Roy N. Dare I say it - This house is Almost like a starter home, 1400 SF, 3 beds 2.5 bath........ I guess the SF could be a little smaller, but I would probably say the cheapest single family house you can find in Airdrie is 320K and up.

Ram

@RoyN Steve

Thanks for your responses. I actually did mean to say that rental market has gone softer with rents decreasing..I am prepared to hold it for the next 5 years, but yes I am not convinced the price will be atleast 400k. There is a risk that I cannot find a r20 buyer. I have an add up but only 1 call over 5 days, which is concerning.

HI All,

I have a potential opportunity that I am considering quite seriously. Here is the skinny:

Single family house in Airdrie, Alberta, Canada (Nice B neighbourhood, close to schools, transit).

A little background on Alberta. We are a province heavily tied to the oil market, and the recent low stretch of oil prices have increased unemployment, increased inventory, increased rents. So far, 1 year later, the prices of homes have not seen a dramatic drop. Folks either seem happy to take it off the market if they are not getting their asking price and rent it out instead.

Here are the details of the deal

- Seller has a fixed, closed interest rate of 2.89%, 4 year term with a renewal option for another 5 years

- Whosesaler involved, asking for 23K.

- Amount seller financed is approximately $376K

- My PIT payment works out to $1700/month

- The basement is about 40% developed. Drywall, electrical has been completed, Paint partially and no carpet has been installed. Unsure if permits have been requested for

- Upstairs has been freshly painted, though there are some cosmetic repairs

- Contractor walked through the property and estimated about 15K-25K to finish the basement, and 5K-10K to finish the cosmetic work upstairs.

- Seller has agreed to replace the roof on the property

- Comps on this property suggest market value to be at $370K today and hence over leveraged as financing amount is 377K, PLUS wholesaler wants 23K to assign the deal.

- Benefits are, no qualifying, 23K is my cash in (excluding repairs), and I have two months to "market the property"

My strategy on this deal would be:

- Find a Rent to Own tenant and Rent to own it for $2130/mo (400 Cash flow/mo)

- 15K-20K downpayment (reduces my cash in)

- Sales price of $400K in 3 years (appreciation rate of 2.5% over 3 yrs)

- Charge 12K fee to borrower as fee for rent to own

- Tenant willing to put in sweat equity to finish basement and complete cosmetic repair

My numbers:

Assuming I can find a rent to own tenant, 15K down, and sell the house for a future value of 400K, and rent the property for $2200 a month (with Average $450 monthly credit back to purchaser), my net return on investment is $52400 over 4 years. With a $15000 deposit, my cash into the deal is $8000, so it works out to a 164% return on investment.

I feel like because this is an overleveraged scenario, the only way I can make money on this is to have a rent to own type of arrangment. Flip, buy and hold and so on, I don't seem to be making any money in the deal when I buy.

It would be great if you could assess this deal and give me your thoughts

Thanks

@Sean Kollee, - I am interested to hear more about what you do,

We have a bigger pockets meeting tomorrow as well, if you would like to come by

Time of Event: 10/21/2015 at 06:30PM
Location: Hamptons Co-Op Center, 1000 Hamptons Drive NW 

@Scottlen Vanschyndel, we have a meeting tomorrow!

Located upstairs at the Hampton's Co-op, starts at 6:30 PM

@Marco Santarelli

Hi Marco, I believe Oct 21 6:30PM works (don't see too many folks opposed to it)

Ram

Thanks 

@Pyrrha Rivers I certainly learned a lot....