All Forum Posts by: Samuel Sedore

Hi there!

My name is Javier, I live in Southamerica and for many years I have always had the idea of getting into Real Estate in the United States. BP is a great resource of information but I am still overwhelmed with all the differences that real estate in the US has compared to my country.

My strategy is to buy and hold SFH or Multi-family properties. I guess for my first property a SFH is more advisable. I still must decide where do I want to invest.

I am looking for the best possible ROI and that seems to be in the Midwest, in states like Indiana or Kansas. Any input I can get on this will be appreciated. Which cities and zip codes are the best ones for investment properties? Any good turn-key providers? I will travel to see the properties and close the deal, but I will do the initial research online. I am using realtor and zillow, is there a better website to find properties?

Hope to make new friends on this forum and excuse my English, I will do my best to be understood! :-)

So it is winter and I have been searching for bargain priced condos to add to my rental portfolio. Unfortunately there is a severe shortage of townhouses, which seem to be the best kind of rental unit here, in contrast to previous years when there have been plenty available around Christmas. However we did find one, so we put in an offer on a unit that has been for sale since March. It was renovated by the owners (new flooring throughout, new paint, vanities, tile backsplash) but needs all new appliances ($3,000+ here for washer, dryer and stainless fridge and stove). Comparable sales are at $153,000 and we made an offer of $142,000 rising to $145,000, which we said was final. From my spreadsheet the unit would produce $99.42 in cash flow at a somewhat ambitious rent of $1,250 ($1,200 for sure) and financed with a fixed rate ten year mortgage. The location is ideal, right by a major hospital which would be attractive for the many renters who are employed there. It is also immediately adjacent to a planned new transit route. My spreadsheet indicates that at $145,000 the cap rate would be 6.31%, cash on cash is 4.11%, gross rental yield is 10.34%. Units in this development have appreciated 26% since 2015, which is about middle of the pack where condos are concerned.

As noted it needs appliances, the only other thing is blinds for all windows since there are no window coverings and I don't want tenants diy installing the absolute cheapest stuff they can find. One other note, it has a wood burning fireplace, which I don't have in other units and can see being a maintenance and possible safety issue. Parking is at the rear of the unit rather than at the front, meaning the tenant might want to use the unmaintained short walkway and steps through the small rear patio area. Otherwise it is a good unit. The location is ideal and is right within our chosen area of concentration.

The owner has been transferred to the west coast and now lives out there (communication has been slowed as a result). The property has been on the market for six months in its renovated state; it was on the market three months before that in unrenovated condition, beginning in March. So they should be amenable to an offer, but they rejected $142 and we are back with $145. I am minded to call it quits after that. But is there anything else that others see here? It is a nice unit, but experience shows that there will be other nice units...

@Account Closedthat some books would be the first step. Here's a good list to get started: http://www.biggerpockets.com/renewsblog/2013/04/14/best-real-estate-books/

Samuel,

That must be a regional thing as sites like PadMapper, Rent Donkey, etc tend not to be any more useful here (Maritimes) than what you can scrape from Kijiji yourself.  While CMHC data is delayed (only published once (October) or twice (April & October) per year depending upon the market), it does provide the ability to drill down based upon sub-markets or even neighbourhoods.   We've been scraping data from Kijiji for five years and consuming the CMHC data over a similar period and in our market they track fairly well.

Why folks do not skip all these silly one-dimensional ratios and focus on learning solid business accounting principals continues to astonish me.

Our our cash flow rates are lower than those in the U.S.A. on average because many markets in the country are fully or over priced  - current real estate prices are not supported by the underlaying economy and the rate of divergence of real estate prices from household income continues to increase.   What you see as "strong and constantly appreciates" has a pretty flimsy foundation at the moment.   It may ease off and allow the underlaying economies to catch-up, or it may keep chugging along until it goes off the tracks.   Either way, real estate will eventually re-align itself to the rest of the economy.

I see just today, the Finance Minister announce a further restriction to CMHC residential mortgage insurance as an effort to apply a little break to markets (primarily in Toronto and Vancouver).

What is a good commercial mortgage rate in Ontario, Canada. Can I expect to get similar to residential rates if I am purchasing a 6-plex?  

I am just looking for guidelines, I have good credit and assume the property has good numbers.  

How much of a change would you expect if I had a VTB as well?