All Forum Posts by: Tina Tsysh

I definitely recommend reading J Scott's book on Estimating Rehab Costs. It's a very useful book for someone who is unfamiliar with the renovations process as it discusses what you need to look out for, how to pay contractors, the scope of work, and cost estimates. That would be a great start. Best of luck! 

The general rule is that the longer you wait, the more you miss out on price appreciation and wish you would have bought sooner. Even though interest rates are slightly increasing, the Fed said that they don't plan on raising rates for at least a year. 

If you wait longer for prices to come down, you are going to pay more interest. If you buy now, you are locking in a lower rate and paying a high price. However, if you buy now, your home will start appreciating right away and before interest rates are high, you will already have some equity built from appreciation. 

Look at Brandon Turner's last instagram post. He said "In 30 years from now, am I going to complain about what happened in 2021 to my real estate if it does drop a bit? Nope. I'll be millions richer."

Renting out to college students has its pros and cons. 

Pros

- homes near college towns typically experience good appreciation 

- there is always demand for student rentals (unless class are 100% online)

- turnover is very fast. Typically college students who are leaving their houses tell their friends about availability. You can ask offer them upon leaving to find a replacement for some bonus 

- can always put parents on the lease as well for insurance purposes

Cons

- depending on who you are renting to, can damage your property 

- if you get stuck with partiers, your neighbors will hate you

- if renting by room, a roommate conflict can cause some vacancy

In my opinion, the good outweighs the bad. Carefully screen your tenants and make sure to put the parents on the lease! 

The gap between home prices and income is growing more and more. Unless we see a fundamental change, I don't think that prices are going to collapse. Even if a large amount of people defaulted on their mortgages, there are so many cash buyers that those homes would be sold right away. The reason for that is low interest rates. Price growth should slow down once the Fed raises interest rates, however, they don't plan on doing so for at least a year. But I don't think we are going to see what we saw back in '08 and '09. 

Is there still a mortgage on the house? Someone has to pay it otherwise it's paid off. 

@Gustavo Zamora that is a pretty good amount of equity if your home is $400,000 or less. If that's the case, I would do a refinance and put that money on your next investment. If you are looking for a duplex, I believe you can get an FHA loan if you plan to live on one side.

Create a holding property that holds all of the other LLCs in it. Those expenses can easily be written off through the main holding company. 

If you are going to be on a loan your name definitely has to be on the title of the property, otherwise you don't have any rights to the property! I would make sure to do as much due diligence as possible, because at the end of the day, you are on the hook for all the mortgage payments. Make sure that the rents they are expecting are actually feasible because guess who is going to have to pay out of pocket if rents don't cover the mortgage? You! 

How much is the mortgage amount going to be? If it were me, I wouldn't accept anything less than 10% on my money. 

Has that partner done any other deals? If yes, were they successful? 

Have you considered partnering with someone who has a high enough income to be able to qualify for a loan? Or can someone co-sign with you on the property?

You can also try to find a multifamily property (has to be 5+ units) and use a commercial loan. They don't usually look at DTI ratios so you might have better luck with that.

If the leases are on a month-to-month basis then give them a notice saying they have an X amount of days to vacate the premises (I am not sure what that number is in Canada). Not having a lease can be very hurtful because if the tenant does something bad whether it's damaging the property or disrupting the neighbors, you can't go after him because there is no legal contract where he agrees to any rules. Also if a tenant doesn't pay rent, you can't charge him a late fee if there is no lease. All sorts of things can happen and a good-written contract is the best way to protect yourself.