Mindflayers journey to 100k PMNI
12-05-2019
, 02:40 PM
Quote:
I do appreciate your input kekeeke. I plan to view/review 1 deal a day for a year and a half.. +- (500 properties) What I am interested in is WHY you think they are bad deals. .. or good deals.
I will eventually have to create a spreadsheet for the different attributes of each deal. Texas gets a + for having a good tax structure for RE investors. it gets a + in my books since my company's headquarters are in Dallas and they have multiple property management offices there. I can also compare the offering with a similar property in the area that we the company manages (in the Dallas area) from my office here in Vancouver.
There are many reasons for me to do these deals as a place to park cash.
I do have substantial Net Worth/Equity and have covered most of my basic "Safe" investments before branching out into RE investments.
I know i am still weak in many areas, but I have made it my mission to continue to improve.
What I did today to further my goals.
From Ray Dalio's book Principles
"Write down your plan for everyone to see and measure your progress against. " p177
I looked at 2-3 more deals in Las Vegas this time. Tomorrow I should start to define what my criteria are for looking at a deal.
I will eventually have to create a spreadsheet for the different attributes of each deal. Texas gets a + for having a good tax structure for RE investors. it gets a + in my books since my company's headquarters are in Dallas and they have multiple property management offices there. I can also compare the offering with a similar property in the area that we the company manages (in the Dallas area) from my office here in Vancouver.
There are many reasons for me to do these deals as a place to park cash.
I do have substantial Net Worth/Equity and have covered most of my basic "Safe" investments before branching out into RE investments.
I know i am still weak in many areas, but I have made it my mission to continue to improve.
What I did today to further my goals.
From Ray Dalio's book Principles
"Write down your plan for everyone to see and measure your progress against. " p177
I looked at 2-3 more deals in Las Vegas this time. Tomorrow I should start to define what my criteria are for looking at a deal.
Lets start with the airbnb one. You will lose your manager 6 months after closing, who even manages airbnb rentals for 5%? Good luck finding a replacement manager for the same price. I also disagree with the proforma numbers on both listing but maybe labor/material is cheaper in your market, so thats your call. Airbnb also carries additionnal legislative risk. You can't even finance it my market "legally". Obviously banks still finance airbnb properties, they just dont know its an airbnb property... Do banks finance them in your market?
I want to be the guy who buys the dumpster when its a dumpster and turns it around. Not the end buyer, it's expensive being the end buyer.
If I was worth a few millions and I was sitting with cash in the bank doing nothing for some reason, I would consider these deals. But I would be getting a bunch of quebec city rentals first, montreal is on fire and quebec city is next
Someone with a significant networth should have access to pocket listings and bird dogs, usually when you see a public listing, it's because hundreds of investors passed on it, there's still a few nuggets but they are rare. The 80 years old property I just visited is a terrible deal because the juice is all squeezed, you know who could of bought it first? The manager. He knew before everyone when it'd be for sale. In fact the manager owns 2000 units in montreal and 400 in quebec city. He passed first. If it would of been a good deal, it doesnt even get through the first filther. Then the owners probably offered the building to their friends and acquitance. They all passed. Then they probably offered it to random bird dogs and investors who cold called them, they all passed. So now it's time to get a realtor, who offers it in house exclusive for 3 to 5 days to known setious investors (pocket listing), they all passed, ONLY then does it finally go public, after hundreds if not thousands said no. We saw a potential upside so we offered and went to visit it, potential is not there, next.
Theres no easy lunch, you cant sit at home buying cashflowing deals on mls much anymore, atleast here, given the nature of markets, you shouldnt be able to either. Gotta find those who want to sell before they even know they want to sell. Unless you are worth millions and just want to park cash
12-06-2019
, 12:20 AM
Quote:
They'd be bad deals for me. For you they could be good deals, but why invest in RE for 4%CoC? Tax advantages makes sense, so as always it depends. They'd be bad deals for me because it would take too long to refi my downpayment. I don't want to buy a property and sit on it for 10 years. Even if you have millions, you will run out of money buying deals like this one day, and then what? My networth is probably much smaller than yours, so it could make sense to just store a % of your wealth in these "risk free" properties. I'm also not sure why you need our input in this, you should have a knowledge edge on this stuff yourself imo. I personally can't even begin to analyse the neighborhood because I don't know it, if it's prime AAA+ real estate it's different..
Lets start with the airbnb one. You will lose your manager 6 months after closing, who even manages airbnb rentals for 5%? Good luck finding a replacement manager for the same price. I also disagree with the proforma numbers on both listing but maybe labor/material is cheaper in your market, so thats your call. Airbnb also carries additionnal legislative risk. You can't even finance it my market "legally". Obviously banks still finance airbnb properties, they just dont know its an airbnb property... Do banks finance them in your market?
I want to be the guy who buys the dumpster when its a dumpster and turns it around. Not the end buyer, it's expensive being the end buyer.
If I was worth a few millions and I was sitting with cash in the bank doing nothing for some reason, I would consider these deals. But I would be getting a bunch of quebec city rentals first, montreal is on fire and quebec city is next
Someone with a significant networth should have access to pocket listings and bird dogs, usually when you see a public listing, it's because hundreds of investors passed on it, there's still a few nuggets but they are rare. The 80 years old property I just visited is a terrible deal because the juice is all squeezed, you know who could of bought it first? The manager. He knew before everyone when it'd be for sale. In fact the manager owns 2000 units in montreal and 400 in quebec city. He passed first. If it would of been a good deal, it doesnt even get through the first filther. Then the owners probably offered the building to their friends and acquitance. They all passed. Then they probably offered it to random bird dogs and investors who cold called them, they all passed. So now it's time to get a realtor, who offers it in house exclusive for 3 to 5 days to known setious investors (pocket listing), they all passed, ONLY then does it finally go public, after hundreds if not thousands said no. We saw a potential upside so we offered and went to visit it, potential is not there, next.
Theres no easy lunch, you cant sit at home buying cashflowing deals on mls much anymore, atleast here, given the nature of markets, you shouldnt be able to either. Gotta find those who want to sell before they even know they want to sell. Unless you are worth millions and just want to park cash
Lets start with the airbnb one. You will lose your manager 6 months after closing, who even manages airbnb rentals for 5%? Good luck finding a replacement manager for the same price. I also disagree with the proforma numbers on both listing but maybe labor/material is cheaper in your market, so thats your call. Airbnb also carries additionnal legislative risk. You can't even finance it my market "legally". Obviously banks still finance airbnb properties, they just dont know its an airbnb property... Do banks finance them in your market?
I want to be the guy who buys the dumpster when its a dumpster and turns it around. Not the end buyer, it's expensive being the end buyer.
If I was worth a few millions and I was sitting with cash in the bank doing nothing for some reason, I would consider these deals. But I would be getting a bunch of quebec city rentals first, montreal is on fire and quebec city is next
Someone with a significant networth should have access to pocket listings and bird dogs, usually when you see a public listing, it's because hundreds of investors passed on it, there's still a few nuggets but they are rare. The 80 years old property I just visited is a terrible deal because the juice is all squeezed, you know who could of bought it first? The manager. He knew before everyone when it'd be for sale. In fact the manager owns 2000 units in montreal and 400 in quebec city. He passed first. If it would of been a good deal, it doesnt even get through the first filther. Then the owners probably offered the building to their friends and acquitance. They all passed. Then they probably offered it to random bird dogs and investors who cold called them, they all passed. So now it's time to get a realtor, who offers it in house exclusive for 3 to 5 days to known setious investors (pocket listing), they all passed, ONLY then does it finally go public, after hundreds if not thousands said no. We saw a potential upside so we offered and went to visit it, potential is not there, next.
Theres no easy lunch, you cant sit at home buying cashflowing deals on mls much anymore, atleast here, given the nature of markets, you shouldnt be able to either. Gotta find those who want to sell before they even know they want to sell. Unless you are worth millions and just want to park cash
1) If I tried an Air BnB type, I would likely be buying a B class property or better. It was not my goal to look for an Air BnB. I just posted two random listings.
2) I did buy some dumpster fires (Detroit) and put them out. They cash flow pretty well now.
3) I agree there is no easy lunch. That is why I am here asking for input.
4) Second Best point in your post is to look at Montreal and Quebec City it was not on my radar before. It is now.
5) if there are only a few nuggets left on MLS that is fine with me...
5a) if I look at 500 on MLS, maybe i can find one.
5b) if It is dumb to look at MLS then someone may say .. why don't you look at XYZ , there are better deals there. That is the whole reason for this thread.
5c) part of the exercise in posting is to find the qualities of a listing that meet a wide range of criteria for investors. ie. you may say I need 8% Cash on Cash because.. and I would really like to know why. ie. I can refinance my down payment in X years and y months which is important for the next investment. etc.
6) Best point in your post... What is a bird dog and Pocket listing and how are they different from MLS?
12-06-2019
, 10:06 AM
Quote:
Thanks kekeeke. good input, good points.
1) If I tried an Air BnB type, I would likely be buying a B class property or better. It was not my goal to look for an Air BnB. I just posted two random listings.
2) I did buy some dumpster fires (Detroit) and put them out. They cash flow pretty well now.
3) I agree there is no easy lunch. That is why I am here asking for input.
4) Second Best point in your post is to look at Montreal and Quebec City it was not on my radar before. It is now.
5) if there are only a few nuggets left on MLS that is fine with me...
5a) if I look at 500 on MLS, maybe i can find one.
5b) if It is dumb to look at MLS then someone may say .. why don't you look at XYZ , there are better deals there. That is the whole reason for this thread.
5c) part of the exercise in posting is to find the qualities of a listing that meet a wide range of criteria for investors. ie. you may say I need 8% Cash on Cash because.. and I would really like to know why. ie. I can refinance my down payment in X years and y months which is important for the next investment. etc.
6) Best point in your post... What is a bird dog and Pocket listing and how are they different from MLS?
1) If I tried an Air BnB type, I would likely be buying a B class property or better. It was not my goal to look for an Air BnB. I just posted two random listings.
2) I did buy some dumpster fires (Detroit) and put them out. They cash flow pretty well now.
3) I agree there is no easy lunch. That is why I am here asking for input.
4) Second Best point in your post is to look at Montreal and Quebec City it was not on my radar before. It is now.
5) if there are only a few nuggets left on MLS that is fine with me...
5a) if I look at 500 on MLS, maybe i can find one.
5b) if It is dumb to look at MLS then someone may say .. why don't you look at XYZ , there are better deals there. That is the whole reason for this thread.
5c) part of the exercise in posting is to find the qualities of a listing that meet a wide range of criteria for investors. ie. you may say I need 8% Cash on Cash because.. and I would really like to know why. ie. I can refinance my down payment in X years and y months which is important for the next investment. etc.
6) Best point in your post... What is a bird dog and Pocket listing and how are they different from MLS?
Pocket listing : agents have a grace period of 3 to 5 days here to put a listing on the MLS (centris.ca here). In that grace period, they have a list of emails they send the listing to almost instantly because they want to work in house as much as possible to keep the full commission.
Bird dogs: wholesalers basically. These guys look for deals, serious ones full time and take a commission like a realtor, but the buyer has to pay the commission cash. Most of them are dirty shitbags but if you find a serious, honest ones who does things fair with the seller, it's good. My last and best deals was with a bird dog, I only worked with him because he worked with people I respected and had good references. Unlike agents they do not work for the seller, so if a seller approches them and says I want 400k and their building is worth 500k, they sign a contract and sell that contract to you for exemple 25k. Win-win-win... if done right.
My friends who are buying a lot are basically all cold calls, calling owners and asking if they would consider selling. Thats mostly what agents do to get listing,s, but you actually buy the property. I have to do this more..
12-10-2019
, 06:03 PM
Quote:
Thanks for the tip kekeeke. It looks interesting and actually helped me to articulate my preference for cash flow over capital gains.
What I did today to further my goal:
----------------
I reviewed every listing from 22 units to 5 on the Pmml website.
I believe all of the expenses they use as fairly accurate; the numbers come in +- 40% depending on age. What i do not like is that there is no vacancy loss. The numbers assume full rental. Going from there the to the skimpy Liquidity Yield they give makes the Montreal area a no go for me.
If I put down 30-50% and assume say a 10% vacancy loss, virtually all the properties with a 1.5-2% liquidity yield, actually have zero or negative cash flow.
I am sure that you can buy and hold and assume a 2% per year capital gain, like they show, but that is not why I am investing. I would rather take a 0% gain and have a higher cash flow.
In either case I did sign up for the free weekly email/info.
------
What I did yesterday to further my goal.
finished assignment #12 of the rental licencing course.
What I did today to further my goal:
----------------
I reviewed every listing from 22 units to 5 on the Pmml website.
I believe all of the expenses they use as fairly accurate; the numbers come in +- 40% depending on age. What i do not like is that there is no vacancy loss. The numbers assume full rental. Going from there the to the skimpy Liquidity Yield they give makes the Montreal area a no go for me.
If I put down 30-50% and assume say a 10% vacancy loss, virtually all the properties with a 1.5-2% liquidity yield, actually have zero or negative cash flow.
I am sure that you can buy and hold and assume a 2% per year capital gain, like they show, but that is not why I am investing. I would rather take a 0% gain and have a higher cash flow.
In either case I did sign up for the free weekly email/info.
------
What I did yesterday to further my goal.
finished assignment #12 of the rental licencing course.
Buildings here run at 40% when owner is a good manager and runs his building optimally & does not pay heating. If owner pays for heating, 50% expenses minimum.We count 5% vacancy. Some areas you count 10 but not montreal for sure. It's an interesting market and everyone sees the chinese money about to come in, tough market to buy in for sure. Quebec is nice. If you want I'll post the numbers on my next deal in quebec here, hopefully it will be soon! So you can see what I consider a deal. It's a wealth building market, not a cashflow one. Value add is the play, thats tough long distance.
30% of transactions are done without agents here, thats where the real gold is
12-13-2019
, 12:00 PM
Quote:
What I did today to further my plans.
We had a company Trades Appreciation day in our offices.
I traded about 20 business cards with
Carpet cleaners
Power washers
Plumbers
Insurance companies
Insurance appraisers
Engineers
Fire inspection companies
Painting companies etc
Lawyers (specializing in Strata Property)
Landscaping companies
Mechanical (HVAC) companies
Concierge services.. etc.
sent 20 thank you notes and request for connections on linked in.
------------
A comment on the last few days. I was thinking about 2 generalizations.
1) it seems that all properties in Quebec use/pay for concierge staff(as i listed one of the trades types that came to our office.) Even in the Small properties with only say 8 units.. they have a budget to pay for concierge say of $1000 per month! I manage only 1 with full time concierge services at 66+ units. The rest are 20-30 units and only 2/10 of them use a part time on site manager so I can co-ordinate site services.
2) Many of the services i schedule for my local properties do not show up at all on the expenses of the apartment complexes I am looking at.
ie. Annual Fire inspections are mandatory and so are Backflow prevention device testing where I live. CO Detector testing in locations with underground parking etc.
---------
I will start on a spreadsheet to make what I consider to be an "Accurate" list of expenses for any property.
We had a company Trades Appreciation day in our offices.
I traded about 20 business cards with
Carpet cleaners
Power washers
Plumbers
Insurance companies
Insurance appraisers
Engineers
Fire inspection companies
Painting companies etc
Lawyers (specializing in Strata Property)
Landscaping companies
Mechanical (HVAC) companies
Concierge services.. etc.
sent 20 thank you notes and request for connections on linked in.
------------
A comment on the last few days. I was thinking about 2 generalizations.
1) it seems that all properties in Quebec use/pay for concierge staff(as i listed one of the trades types that came to our office.) Even in the Small properties with only say 8 units.. they have a budget to pay for concierge say of $1000 per month! I manage only 1 with full time concierge services at 66+ units. The rest are 20-30 units and only 2/10 of them use a part time on site manager so I can co-ordinate site services.
2) Many of the services i schedule for my local properties do not show up at all on the expenses of the apartment complexes I am looking at.
ie. Annual Fire inspections are mandatory and so are Backflow prevention device testing where I live. CO Detector testing in locations with underground parking etc.
---------
I will start on a spreadsheet to make what I consider to be an "Accurate" list of expenses for any property.
It's another place where you can figure out optimal ways to operate your buildings. 12 units+ is 300/doors for concierge, that's what the bank will put in your expenses to figure out your maximum financing. If you find a 16 units and convert it to 2x 8 units, they will count 130 or 170/doors I dont remember which, thus giving your building higher economical value and having access to more leverage so you can cashback your downpayment faster.
It's a very cool market but if I was in the US with 6.8 cap properties on the MLS I would buy there