All Forum Posts by: Taylor Servais

I have followed the Cornwall market for a while and grew up there. You most likely want to avoid the "East End" which stretches from the water (south side), St Felix (East Side), Marlborough (West Side) and Second St (North Side). There are pockets in those areas that are alright, but it's definitely hit or miss. You'll find some lower priced duplexes and properties, but as was mentioned above, are hard to cash flow once maintenance, management and vacancy are factored in. While on paper the prices look good, it's very hard to cash flow and multi-unit buildings are quite expensive.

Not a credit union, but I would contact Joe Bondy from RBC. I have had good experience with him and he's dealt with some last minute situations.

Well done! Keep it up and congrats.

Hi Monica,

I recommend checking out OREIO (http://www.oreio.org/) for more information and meet ups.

Welcome to Ottawa!

Taylor

Well done!

I've done BRRR in Windsor and now onto my second, which has been a longer renovation time period. Using personal experience (side by side duplex), it is hard to find a good deal since the market is very hot and things sell very quickly. As @Luc Boiron mentioned above, appraisals come in MUCH lower on the refinance. I had 3 comps of properties sold (Giles/Dougall area for your reference) within 1 KM (all on the same side of the tracks and in the same area) that were listed at a RV ratio <1% and were old inside (older kitchens/bathrooms, as is, etc.). I called several lenders and one was 75% LTV, one was extremely slow so I pulled the application, and another was 80% (who I went with).

The refinanced property had everything practically new (wiring, plumbing, kitchens, bathrooms, decks, etc.) with few items less than 5 years old (roof, siding, furnaces/AC), but the windows were 10 years old. Rents are 1725+ hydro/gas rents (I pay for water and Reliance hot water tanks only). It got refinanced at an RV >1%, which in my opinion doesn't make any sense. Very few smaller sized properties trade at 1% RVs. At the end of the day, my all in costs for the property (renovations, holding, and closing costs) are 15% of the current value, which is well above the 0% goal. However, the cash on cash for the property is now over 20%, which is very tough to find in today's market.

Once I've refinanced, the way I try to view it is by taking the amount I have in the property (ex. 25k) and subtracting closing costs of a few thousand (ex. 5k for simplicity), would I pay a multiple of 5 (20% down) for that property given current condition and rents? The answer is always yes.

There are a lot of potential scenarios from the above options, but I'll outline things to consider for each option. Please speak to your tax accountant on these issues (ideally someone who specializes in this).

- Setup incorporation in Canada with the foreign investor being a shareholder. If the foreign shareholders have significant influence, control, or ownership (>50%) there may be tax issues with regards to the corporation losing its Canadian Controlled Private Corporation (CCPC). Losing capital gains exemption, small business tax rate, ABIL, etc. Do a Google search on losing CCPC stats and the disadvantages of so. I've added a link for your review (http://www.taxspecialistgroup.ca/public/taxtips.as...).

- For them having an investco owning shares in the CAD/Provincial corp. would most likely trigger the same issues as above.

- For the loan, you two aren't really partners. You are equity holders and they are debtors, which may or may not be fulfilling your partners goals of ownership, but may fulfill the income.

I would look into the co-ownership structure. Each investor would have an interest in the property either personally or through another legal entity. You could incorporate yourself and your foreign partner could incorporate in Canada, while each of you would report your respective share of income, CCA, and deductions on your own returns. A co-ownership agreement would lead to greater transparency between everyone (who does what, fees, who contributes what - labor, capital, etc.). I would take a look into this.

The information above should be verified by a professional tax accountant, but a quick Google search on this would most likely give you a decent foundation of understanding when a professional would talk to you about these issues.

No worries. Block foundation essentially looks like large grey Lego blocks put together if you look at an unfinished basement wall. If downspouts on the outside aren't directed far enough away from the house, water sometimes creeps in between the ground and blocks and sometimes the blocks come inwards from the inside. This is rare, but there have been a handful of properties in Windsor over the last year that I've noticed this happen to.

Hi Aditya,

There are several things to consider when investing in older properties (including duplexes), which are knob and tube wiring, and galvanized plumbing (especially in the Windsor area). If you have lights that hang from the walls (not ceilings) and baseboard located plugs, it may (no guarantee) be an indicator that there is knob and tube. Looking in the basement as well is usually a good tell tale sign (older panels and wiring exposed between the floor joists.

Other things to consider with older properties (and newer ones alike) are: roof, windows, and hardware (furnace). The age of bathrooms and kitchens are also a consideration. One of the nice things about older Windsor properties is that the majority of them have nice hardwood floors that can be redone. You won't find those classic hardwood floors in newer duplexes. However, a downside is that a lot of these Windsor properties have block foundation, which some (very few and property dependent) have bowed inwards creating foundation problems if the water management of the building is not correctly drained away.

Take a look at the following City of Windsor website to get a feel for the history of the property you are considering purchasing: https://apps.citywindsor.ca/eservices/PropertyQuer...

I might have missed a few things, but in general, wiring, plumbing, roof, windows, and hardware (furnace/boiler, etc.) you need to look at. You will know right away when looking at the kitchens or bathrooms. 

For your first investment, it depends on your risk tolerance and down payment, but I would house hack a fourplex. There appears to be a decent one listed at 683 Gladstone listed at $239K. Live in the smallest unit and manage the remaining 3. You will learn a ton doing it this way and the incremental cost from a duplex to fourplex isn't that much; however the risk diversification is (3 units rented compared to 1 rented). Ideally buy a building that doesn't have any major repairs on your first one (potentially only a roof), but no wiring, plumbing, etc. unless you can leverage family members/close friends for these services. Maybe a kitchen or bathroom you can do, but at the end of the day it is up to you.

Feel free to shoot me a PM if you have any questions.

Happy investing!

Taylor

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