Good point about air can.
What do you think will happen to land? Would you put a stop to our negociation? We're damn close to finally getting it under contract. Here's some simple math where me and my partners agree to keep moving forward.

Price: 4.360m
Sellers pays "green tax". "Zone humide" in french. You have to pay to build on that land because it used to be a protected green zone, we estimated the penalty could be 369k. If we do things right it could be as low as 200k, good for the seller but we also protect ohrselves incase of laws change.

Over 450 units can be built and 30000 square feet of commercial.
To get the land ready to build, we have to get sewers in, fill some parts, etc. Should be around 500k, I expect 1m. We might have an additional tax to pay (10% of land value) because we want to change the lots line and overall interconnexion. Our expert will tell us if it's worth it when we get to that.

Land value precorona virus and ready to build: over 12m (25k/units+commercial).

So even if the market crashes 50% post-corona, the numbers still work.. we really **** ourselves up if the market crashes 60%+. Other issue is our potential clientele are people over 50 years old, will they even want to live in huge multiresidential buildings after this..

I really believe in that land and it's localisation, we'll also push to get a grocery store in our commercial space, that will give us an edge on our competition. What would you tell your son in this situation?

Hi,

Just checking in. I still read the forums regularly, but I have most of my real estate projects on a delay. I am still working on each project to keep them headed in the right direction, but things are moving more slowly or on hold. I was supposed to write my Rental Management exam last week but the exam has been cancelled and there is no indication yet of when they will begin again. Notices for my family legal case have been submitted, but since the court has since closed, it is unclear if the deadline for the defendents/respondents will still stand. I had to swear an affidavit via zoom meeting. That was interesting.

I now work from home. The most strange change is holding meetings by Teleconfrence (not zoom or goTo meeting).

Most of my attention on my RE has been redirected to watching the Stock Market. Since I cannot time the bottom, I have made 7 investments starting on Feb 24th and investing a "Small amount" for myself and wife each week.
I have moved essentially the limit for a TSFA into my and my wife's account and will be continuing to invest. Each week for the next few months.

The key takeaways, (virtually all related to taxes) from brushing up on the Ultimate TFSA Guide by Gordon Pape was
When investing

US stocks should go in your RRSP (There is an agreement between the governments regarding dividend payments for RRSP and IRAs)
Blue chip/regular dividend should go in your RRSP.

Canadian Stocks should go in your TFSA (there is no equivalent US program and so there is no agreement, US equities' dividends are taxed and witheld/no chance of recovery)
Put your "more risky" investments (capable of large gains) into the TFSA.

Of course there are always exceptions but those are the points that related to my situation.

My greatest debate is on buying RE without actually seeing it. If a property I am looking at in say Edmonton drops the asking price by 15% Should I consider buying it without going there and looking at it!?!

Stay Safe.

I just wanted to post a quick update on what is going on.
I have opened an account on BP. Bigger Pockets is a site dedicated to RE, to 90% of what is posted is related or just good info to know.

I have started my own personal log. When I need people to give input, I will be on BP as they have tons of people with specific knowledge of what I am asking about.

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I have stopped reading self help books and swapped over to listening to audio books and podcasts relevant to my area.
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Kansas-Vancouver swap. We hired a lawyer and are still in the Incorporation phase. We are going over the articles and shareholders agreements now.
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Vancouver Commercial Property.
We filed the lawsuit in BC Supreme Court in late March. Things were proceeding nicely. Then I was informed the principal that was against my proposal (prior to the LS) passed away in May. The executor and beneficiary said they would not continue with the opposition and the other parties to the LS agreed to 97% of the value I was asking for. Essentially we settled the dispute.
As a follow up this property that was involved is now listed for sale. (The beneficiary of the deceased's estate lives in Australia, and has stated that he wants no involvement in any of the business or RE. I am sure he just wants everything sold and a cash payout.

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I am still actively looking at properties to invest in. I am specifically looking at properties with 15-25 units that are close to a University. I suspect that they are hurting right now as there are no tenants paying them and that most/all of the students returned home. Hopefully I can make something happen in the next 12 months. I really should go back and do a full reassessment as the covid situation may have changed the outlook in cities that I crossed off my list prior to the pandemic. (ie prices in those cities were too high then to make positive cash flow, etc.)
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I have kept investing in equities every week since mid February and am still investing. I will not be selling anything anytime soon. Most likely I will sell a bit when I pull the trigger on my next RE investment.
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My Rental management course exam that was cancelled in March, was just re-opened for sign up. I signed up for a June 3, 2020 exam. I expect to be working in Rentals by August or at least applying to new companies in that area.
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I have also added to my list of skills that I want to work on.
Originally I wanted to get licences in Strata Management, Rentals, RE Trading licence. Now I have added that i would also like to do a stint in appraisals and possibly finance. This comes from my listening to podcasts on BP and realizing that the most money is made on the day you buy the property and the repeated biggest mistake of most experienced RE investors is that they paid too much for their first property.
I am up to episode #12 and plan to listen to ALL of the podcasts just to get the 1 piece of information that I can add to my knowledge base.
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I will be stopping in from time to time to post if there is a major Update on my plans, but for now...
Stay Safe.

Another quick update.

Took the rental exam and passed. Handed in my letter of resignation. I gave them 7 weeks notice. Worked on my resume and sent out my first application today. I have come across many very interesting jobs all related to RE in some way and I may end up doing something else besides rentals. Found jobs in my location for RentMoola, Commercial RE, Syndication, leasing managers, storage company managers etc. Any one of these jobs will help fill my knowledge base.
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I am up to Podcast #15 at Bigger Pockets. Finished reading Crime and Punishment for entertainment. Now I can say I have read Dostoevsky. Ordered a bunch of RE books to read next. At BP, at the end of every podcast, they ask the guest what their top RE book is and their Top non RE business book is. I have read 7 out of the top 10 business books, but only 2 of the RE books so I ordered the top 3 recommended RE books and they are at the top of my reading list.
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Kansas-Vancouver Swap. Still grinding away. Changes are complete (to the incorp and partnership docs). One partner still has to sign the documents. Next step is to actually put the 2M funds together.
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Vancouver Commercial Property.
There is a low 8 figure offer on the property now. All (6) sellers have signed off on the offer. The buyer now has 90 days for due diligence. I am sure there will be more drama about how the funds get disbursed. I will let you know how that goes. I will be super glad when this is settled.
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Next investment property.
Temporarily stopped looking at apartments to invest in. Prices have not dropped, so I have put the extra time into job applications. The goal is still to invest by end of 2021, even if it is only a 800k property with 9 units and one other investor. I just need to do it to get more experience with the process of partnerships and syndication.
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Finished investing in equities for a while. The market is up and down, but the bulk of my free cash is invested in the markets.
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Stay safe.

Another update
Left Job , Looking for a position in Rental Management but will take a job related to syndication or commercial mortgages. (two other key areas I would like expertise in)
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I got to about podcast 25 in Bigger Pockets and then stopped. Not that they are lacking in information. The principal reason is that at the end of each podcast they ask the same questions and two of the questions are:
1) What is the most influential/important RE book you have read?
2) What is the most influential/important investment book (non RE) that you have read.
I read 7/10 of the (non RE) investment books but only 2/10 of the RE books.
I went out and bought 5 of the RE books and started reading. I finished E-Myth for RE brokers. (the book is not that great, but was purchased by mistake and given to me.) the book was supposed to be the original E-Myth book which I purchased.
I am currently reading "The Millionaire Real Estate Investor" Keller; and Principles of Success" Canfield.
I also purchased the pro version of BP and am slowly growing my network there. I do most of my Real Estate Postings on Bigger Pockets now.
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Vancouver-Kansas swap. So we completed the incorporation of the new company. We completed the Shareholder's agreement (3 revisions) and have set the closing date (Sept 30, 2020 )for the purchase of this Vancouver Warehouse. I inform the seller of the proposed date and ask for his Lawyer's contact info. In the discussion find out that there is a CPL (certificate of pending litigation) on the property. Ugh. Another curve ball that I will have to work through. Owner and wife are in a divorce and wife is claiming a portion of this property. Spoke with my lawyer for advice and next steps. .. this may or may not put a full stop on the purchase depending on if we can get the husband/wife to agree to terms on removing the CPL. Will let you know in a month or two!
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Vancouver Commercial Property.
Buyer is still in due diligence phase. The drama in this section comes from the fact that the building is owned by certain individuals and not by all the owners of the land. The owners of the building claim the building is worth 2M+ and had an appraiser do a valuation showing the valuation.
I called the appraiser and asked if they knew who the purchaser was or if they were given the offer/sale documents. They confirmed that they were not given this information and that the valuation was done for financing purposes and not done to a standard for court. Essentially I will claim that the value of the building is close to $0. I have hired my own appraiser $7500 to do my assessment that will show 3 methods (including the one used by the other owners) Essentially I want to confirm with the purchaser that they intend to knock down the building and put a (6-10 story) residential building up.
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Next Investment Property,
well this is up in the air. Since the Vancouver Warehouse is scheduled to close at the end of September it will require about 500k for my portion of the investment. This is a priority, so I am still working on the next apartment investment, but it has taken a much lower priority. I have purchased doodly (some video software to help me sell this investment.)

Mindflayer I have a 16 units under contract right now with no money in quebec city, B- C+ neighborhood. We're doing a deal with a private lender and will be proposing this deal to him and a few of our friends, but if you have any interest let me know I might message you in a few weeks!

Brut revenue is 138k, price 1.4m. Around 45% expenses I'm still waiting on the revenue/expenses paper. It's worth 1.5m-1.55m on a good day.. I literally just closed on it friday.

Thanks kekeeke,
I sent you a message with my company email.
Cheers

Another update

Have not found a new job. I have not been looking very hard in the last 3-4 weeks. I have been mostly concentrating on getting two of my major projects completed.
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I finished reading reading "The Millionaire Real Estate Investor" Keller.
I finished reading "The ABC's of Real Estate Investing" McElroy and am currently reading "Negotiating Real Estate" Irwin
I used BP to contact two Real Estate companies in Alberta that specialize in "Investors" It is another one of my long term goals to develop a good relationship with these contacts over time.
On to the interesting stuff...
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Vancouver-Kansas swap.
So we did 10 Revisions of the purchase agreement and finally sent the document to the seller on Thursday November 5, 2020. The Acceptance deadline is 5pm on November 9, 2020. Our new closing date is November 24. I don't think the seller will reject the offer totally. It will either be accepted as is or modified to not accept one or more of our "subjects/conditions." I probably have written over 100 emails back and forth to get this project to the point where it is now. It was far more complicated than a normal purchase due to the seller's undertaking with us to release responsibility in Kansas and the CPL. It was further complicated due to one of the purchasers having a personal loan outstanding with the seller. I will see what comes up next and deal with any new problems as they come.
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Vancouver Commercial Property.
Buyer completed first phase of due diligence and asked for an extension as their lender wanted a level 2 Environmental Assessment. We granted the extension and I asked that the buyer write a letter stating the intended purpose of the building/land.
The buyer's extension and new conditions state that if the environmental assessment comes back and indicates over $400,000 in clean up then the purchase price will be reduced by the amount over $400,000.
Of course the only way to get remediation that is that high is from soil contamination. A Phase 2 Environmental assessment requires drilling cores below the structure and testing for oil/gas/other chemical contaminants.
This of course would only be necessary if the buyer plans to dig below the current building to put in sub level parking etc.
The letter from the buyer states that they plan to develop the land/building.
I forwarded the letter to my appraiser and he did his 3 valuation methods and came up with building valuations of $70,000. $120,000, and $400,000 depending on the method you use.
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I had my appraiser explain why the $2,000,000 building valuation was wrong.
I wrote a letter to the other sellers saying that it was and why and that I would not accept the $2,000,000 valuation as a valid appraisal as certain information was withheld from the appraiser before he chose his methodology and did his calculations.
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The phase 2 came back clean, and now the buyer has until December 9 or so to come up with the balance of payment for closing. I am assuming that it will close and getting ready for the next fight on the building valuation.
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Next Investment Property,

I have started reading 4 newspapers for Alberta. The two big events that happened are that Husky Oil was purchased by Cenovus. The merger will cause the loss of maybe +1000 good paying oil/gas jobs in Alberta. The other key thing is that of Course Joe was Elected and he has stated that he will kill the Keystone XL pipeline. This is supposed to give Canadian Oil easier access to American Markets and go through Montana /Dakota and Nebraska.
This does not stop me from continuing my work, but I have to think more in terms of catching a falling knife. Alberta is getting a triple-quadruple whammy right now. Virus/Low Oil Prices/ Consolidation of large companies/ and cancellation of a major infrastructure project. I want to see a drop in RE prices before I actually purchase this next investment.

Jan 2020 update.

I have taken a Property Management Job and will be starting next week.
Finished reading Negotiating Real Estate.
Finished reading the Success Principles (Canfield)
Finished reading Crushing it in Commercial Real Estate (Murray)
Currently reading "The Untethered Soul" (Singer)
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I have been attending a couple of Monthly Real Estate Meetings by Zoom and building my contact list.
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Vancouver-Kansas Swap.
We completed this deal on December 3, 2020.
There were two additional complications that delayed the closing. One was a personal loan between the Seller and one of the purchasers. The second item was that we had to do a closing with the adjacent property, which the seller also owned, at the same time. I believe that he had to sell both properties to have enough equity to pay off the amount in the CPL described before.
I am now managing the new warehouse property (not paid) on behalf of the owners.
Finished!!
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Vancouver Commercial Property
The sale closed on December 9, 2020. The funds are being held in trust by the Conveyancer. The 5 parties named on the various titles are now trying to resolve how the funds are to be distributed.
There were a couple of attempts at a negotiated settlement, but no deal. This will likely go to binding arbitration. I have hired a second appraiser to do a second review and am preparing as if I was going to court. The conveyancer has put the funds in a 60 day interest bearing account and hopes we can give him instructions by February 9, 2021. We will see how this goes.
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Next Investment.
Well I have been doing some research and may be distracted or have my Next-Next investment lined up.
So in the US, Joe Biden has been elected the 46th President and one of his first actions is to cancel the Keystone XL pipeline. This pipeline would increase the capacity of Canadian Oil from Alberta to US refineries. I do not take this as good or bad news in particular as I have not yet invested in Alberta. If I was already invested there, it would hurt. Now my opinion or reaction is to wait to see how this plays out in the Edmonton Real Estate Market. Can Alberta pivot? Can they divert the oil to BC and tankers... etc. Will there be massive job losses and will that translate into a drop in rental prices, real estate , particularly multi family +5 units.

In my daily research, I did find a very very good candidate in Edmonton. The subject property is a 15 unit 2+1/2 story apartment building Actual annual rent $154, 320 (Pro Forma rent $ 164,000) offered at 1.47M I am not in a rush and if this is still available in a few months, I would put an offer on it.
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As part of my homework, I also contacted a company that does building condition reports. I have dealt with the company in Vancouver and had them do Depreciation Reports. They have an office in Calgary and employees in Edmonton.
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The side distraction that I also have been doing some work on is in the Industrial warehouse space. I have a few friends who own small manufacturing companies and they are looking to expand. They both are interested in buying a space. I told them that I would look for them, but found that there are virtually none available. I believe that a lot of the retail shops are closing and moving to a 1/3 cost warehouse and online sales only model. I discussed with one of my developer friends if he was interested in switching from residential to industrial warehouse. We will see what happens there. What I see is Retail space is going to have high vacancy and lower costs and the reverse for Industrial Warehouse space.
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Lastly as you may or may not know, I own several SFH in Detroit Michigan. While browsing the news about Trump's pardons... I think 60 out of the 72 were for non violent drug offences done in the 90's and the convicts were given a mandatory 20y+ sentence for possession with the intent to distribute. Well one of the persons Trump Commuted the sentence for (not a pardon) was Kwame Kilpatrick. Kwame was the Mayor of Detroit who was convicted of graft/ pay to play in Detroit. His corruption was blatant and he was convicted and sentenced to 20years.

Sorry for the slight derail, as I enjoy reading your thread, but Biden's cancellation of the Keystone Pipeline will only marginally affect capacity coming from Alberta to the US. Crude being shipped by rail has massively spiked over the last 8 years. All the pipeline does is reduce the cost of the crude currently being shipped, which in turn keeps Alberta Crude more competitive.

This pipeline is purely a political power struggle between Republicans (trying to get cheaper crude while temporarily increasing jobs in Red States) versus Democrats (Many Dem supporters own shares of Rail companies that would be negatively affected by less shipment by rail and artificially appeasing environmentalists, that wrongly think that less pipelines equals less crude (clearly shipping crude by rail is far more dangerous than by pipeline)).

Sept 2021 update. Apologies in advance for the long post, (8 months of update)

I have been working as a Property Manager for 8 months now. I manage approximately 300 units. Got to do my first arbitration and eviction. I have another one set for December 14.
The laws here in BC are heavily skewed in the tenant's favor so you really really have to be good at documentation and timely in your paperwork.
The rest is similar to what I expected. Advertise, do showings, do background and credit checks, draw up leases, do move in, move out inspections, repairs, owner FS reports, etc.
There is an absolute ton of good practical information that I have learned from doing this job that will make my life as a Real Estate investor so much easier.
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Read a lot of books. 1/4 real estate, 1/4 general business, 1/4 fiction, 1/4 philosophy-self improvement . Exercise every day. I have a new blog in the health and fitness forum.
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I have been attending a couple of Monthly Real Estate Meetings by Zoom and building my contact list.
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Vancouver-Kansas Swap.
We completed this deal on December 3, 2020.
I am now managing the new warehouse property on behalf of the owners.
Signed a new 3 year lease on this unit in May, 2021.
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Vancouver Commercial Property
The sale closed on December 9, 2020. The funds are being held in trust by the Conveyancer. The 5 parties named on the various titles took 6 months to work out how the funds are to be distributed.

There were a couple of attempts at a negotiated settlement, but no deal.
It did not go to arbitration. It got settled exactly how I expected. After six months of back and forth, I found that the other parties were using the wrong documents to try and make their argument. They accused me of not knowing what was talking about and emailing me their proof. When I pointed they were using the wrong document, they quietly agreed to my distribution. The conveyancer has been holding this for 8 months now. It is still being held as one of the conditions for my releasing the funds is the settlement of 8 family burial plots. (total value of the remaining 3 plots is... I forget but it is say 50K)
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There is one sad and one funny side story here. The first is that I will not release the 8 figure settlement until they documentation for the transfer of several family burial plots is complete. The sad part is that one of my uncles (when he was alive) tried to block my aunt from burying her deceased husband in his burial plot. The plots are jointly owned by the estate of my father and two uncles. (all now deceased) I told the other parties that I would not allow my family to be subject to any such harassment and required a clear transfer of these titles to individuals so that no crap like before would happen when one party passed away.
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The funny part is that just as we agreed to the distribution of funds and only some minor paperwork is required by the funeral home where the plots are located, The executor for one of the other parties (who is a lawyer) says that he has gone on vacation and will not be available for 6 weeks and asked if I would accept his undertaking to execute the documents after he returned. .... I refused.
Two reasons. What moron lawyer who goes on vacation for 6 weeks does not have someone in his firm cover his caseload when he goes away for 6 weeks... Just tell your assistant to forward the required documentation. What moron lawyer does not tell anyone that he is dealing with especially in an unfinished 8 figure settlement that he is going on vacation ahead of time?!?
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So here is the funny part. I listen to a youtuber named Steve Letho on a podcast called Letho's Law, where he explains crazy cases in normal non legaleze. He mentioned once that if/when you see a lawyer disappear suddenly for a period of time without a good explanation, it is possible that they have had their licence suspended.
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If everything is done correctly by this lawyer, this will be settled by the end of September.
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Next Investment.
I have found 6 possible investments in Edmonton.
#6 on the list is a 9 unit for $868k in a ok location. It is located very close to Grant MacEwan University and Unity Square in Edmonton.
#5 on the list is a 20 unit for 2.28M close to #6, but in a slightly better location.
#1 on the list is a 28 unit for 3.35M also close to Grant MacEwan University and Unity Square, but it is in a way better location/ just 1.5 blocks south of Unity Square mall where there will be a future LRT stop. That stop is essentially right in the middle of Unity Square.

#5 and #6 are much more dependent on students for renters as they are closer to the university than the mall and are having a rough time right now. I looked up #6 on a rental website and found that it has 3 vacancies.

#2 ,3,4 are all on the West side of town located at the turning point of the new LRT. In the future if you ride the LRT East, you pass Unity Square, Grant MacEwan University and then end up in Down Town Edmonton at Rogers center. If you take the LRT south it ends up taking you to West Edmonton Mall.

2-3-4 are all similar in that they are located 2 blocks from that turn in the LRT. Currently you can still take a bus and do the same thing but I love free infrastructure and know when the LRT is complete It will boost the value of these properties by 10-15%.
#2 - 12 units 1.326M
#3 - 15 units (12 residential , 3 commercial) 1.9M
#4 - 21 units 2.6M.
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Another side note, the LRT work began superficially in Spring 2021. They are now mobilizing and cutting down trees etc.
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I have hired a Mortgage Broker/Financial Planner that specializes in investment properties and getting from my level to the next level. I have listened to this broker speak over several years before I decided to go with him. I have two friends who are actually mortgage brokers, but they are not investors themselves. We are discussing corporate mortgages, the proper corporate structure to minimize taxes for multiple investments. There is a team behind this MB/FP that specialize in JV and Syndications.

Anything over 2M, I will need to have a Joint venture agreement and at least one other investors, as will need maybe a 1.2M down payment.
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My plan no matter which property I settle on (it may not even be one of these 6 as more property becomes available) is to make it a JV just so that I can go through the motions and build a track record.

Next twist in the adventure.
The Vancouver Commercial Property is almost done. Everyone has agreed to the disbursement. We should be done in a week.

Next investment in Edmonton is tied to a re-finance of a warehouse I own in Delta. The Mortgage broker says I can get 600k with no difficulty. This puts me on track for the 2M investment in Edmonton. There was an interesting twist in this as i got an out of the blue call from my commercial RE agent letting me know there was a request by a purchaser asking if that warehouse was for sale. It turns out that warehouses in the area are asking $450/sqf and selling for around $430/sqf. That warehouse is approximately 7000 sqf and could sell for as much as 3M!

This lead to a whole other discussion with my FP who gave me a lot to think about.
We do not have a 1033 exchange here in Canada so I cannot off the top of my head avoid paying capital gains tax. I just finished writing an email to my accountant asking the best way to structure this. I may have also mucked up the structure of my companies (and subjected myself to very high taxes) by placing more than one company within the Holding company that originally held this property.
I will have to verify this with the accountant, but if the holding Company owns only one property, then we can sell the shares of the holding company and not the underlying property and utilized a one time capital gains exemption.

Anyhow I am not certain of this and will need clarification from my accountant.

I have a list of 6 properties in Edmonton ranging from 900k (8 units) to 3.3M (28 units) that I am looking at. Will likely post more frequently as I have placed a year end deadline for me to purchase the next property.

So I am writing here because I need to sort out my thoughts.

Off the top, my accountant says that the warehouse would not qualify for the lifetime capital gains exemptions. I believe that only works if it is a share purchase of a company (an active company, not a holding company.) The way I have the property set up, there are other properties inside the holding company that holds the warehouse so I cant sell the specific holding company without also selling the ownership of these other (sub holding) companies that hold properties as well.
I was thinking about this so much yesterday I dreamed about it. If I was able to sell the warehouse without the capital gains tax it would be a no brainer. If capital gains taxes are rolled into the mix, that would take a good 500K out of the selling price. ....
Still that is a lot of money, but the way forward is not so clear.

The two options are renew the lease with the current tenant .. probably at +4.5% or
put the warehouse up for sale and ask for +3M for it.

I was dreaming about the choices and dreamed that I sold it and purchased two apartment buildings. (not both at the same time, but one this year.. then gave it some time to stabilize.. ) then the next one before I quit my job (in about 16 months from now) The total number of units would be close to 50.

Ok Some background on the next investment. All values are in $CDN.
I am not even certain the property is still for sale, but I will just put the first parts of it up so you can see my thinking and comment if you think this is off or not.

Step 1
Sell one of my current warehouses. List price will be somewhere in the order of 3.0-3.4M.
I am not trying to brag, but I want to explain how I got here from a humble beginning about 11 years ago.

That warehouse in particular was purchased with the specific purpose of housing my operating company. It has approximately 6200 sqf of warehouse space and 1700 of office space. When I was running my company, I used the 6200 warehouse and rented out the 1700 sqf office. (the warehouse had its own mini 400sqf of office space which was later taken out.

Essentially, it was about 7900 sqf total that I purchased for about 750k. I never had a market rent back then because my company was the tenant, but if I had to guess, In 2010 could have charged 4k/m for the warehouse and maybe $1300/m. (total $5300/m) today I charge something like $7900/m.

When covid hit, a lot of retail shops folded up or ended their very expensive retail storefront and converted into an online shop. Retail storefronts have dropped in value and warehouses have skyrocketed. There was/is a long term appreciation gain on the warehouse I purchased. It is in a location that is well located to take advantage of a new infrastructure (bridge) that I being built to increase the accessibility to the industrial area and cut down travel time for trucks. The project was underway 4 years ago but then we had a provincial election and 3 years ago, the government changed and the project was put on hold. (other options by the new government were being investigated. ie. a new tunnel instead of a bridge.) In any case, warehouse prices are way up but the rents have not increased to match. Not even close.

My plan is to sell this warehouse and take the capital gains hit.

The first part of step 1 (part 1) was to contact my accountant. I got a few more answers from my accountant but there are new questions .. I will schedule a meeting to discuss the options. I will end up paying just over 25% in Capital gains.

Step 1 (part 2) is to clarify how I will deal with the current tenant in place. The tenants lease technically ends in January 2022... and they did not give official notice as of June 30th, which was the deadline to guarantee the next 3 years at the prescribed increase in their "option to renew their lease." I will likely end up charging the month to month at the base rent +4.5% or so. it depends and may not even be necessary if the warehouse sells quickly. The new owner can just not renew the lease and the current tenant will have to move. (Too bad for them that they are not good at paperwork.) I have had to constantly remind them of items when they were acting in a manor that was not permitted in the lease.

Step 1 (part 3) will be to contact my commercial real estate agent again and discuss an agency agreement. I think the commission will be around the 3% range. Time of the agreement is maybe 3-4 months as I want to get this done fairly quickly.

I talked with my accountant today. verified the Capital gains affects a holding company just like a person. My holding company will end up paying 25.34% in Capital gains tax.
In addition, I will be paying a 2% property transfer tax. There is no way around this like a 1033 exchange in the US.

I contacted my commercial realtor, gave him the good news. Told him based on a $400/psf sale price I am willing to list this Warehouse. I asked him to send me the Agency Agreement (AA) We did not discuss the commission, but I expect it to be in the 3% range. something like $90,000 if he can sell it for over 3M. We should be listing closer to $450 /psf and trying to sell it in the lower 400's.

I mentioned again the tenant who did not declare that they were going to renew their lease. I will be sending a copy of the lease to my Agent so that they know exactly the end date of the lease. (ie. if a new owner wants to move their company into the space, what the absolute earliest would be. )

Step 2 after I sign the AA, I will notify both my mortgage broker and my Edmonton RE Agent to look into Property #1 to see if it is still for sale.
3.3m 28 units half block from mall and 2 blocks from McEwan Universtiy.
Right along the future location of the new light transit line that is just beginning construction.

Waiting for my Edmonton RE agent and Vancouver Agent to send the Agency Agreements. The likely next step is to get the Edmonton Agent to see if the property I am looking at is still for sale or to see if it can be an off market sale.
There are probably many good candidates, but this is a good place to start.

I will explain the idea that I have right now and then tell you what step 3 is.

So with the funds I will have, I will arrange to purchase the new property into a new holding company that is owned by investors in a Joint Venture.

There are several reasons to do this.

1) Bring my friends along with me. I have been fairly successful in my RE investing. Several friends have asked to invest with me in the past but I never had the confidence to be in charge of other friends' money (not bank money.) I have satisfied myself by constantly improving my skills for the last 4 years and am confident that If I was to manage a 10-99 unit residential property, I could maintain the building as well as manage the tenants and keep it at a high level occupancy close to market rates with good tenants.

I want my friends who are willing to take a risk, be able to see similar success in RE investing that I have. It will also (should) be a good talking point and reasons to go for coffee, dinners and be able to write them off as expenses.

2) Having enough funds, I would be capable of taking on the whole project on my own. ie. 1.3M needed .. I would supply 1M and open the project up to 3 investment positions for others to join with a lesser % ownership for 100k each (may change depending on interest.)
If i only got 2,1 or even zero other investors, I could make up the difference with my own cash. That way I can ensure that an offer to purchase completed.

3) I would run this as a JV as it makes me answerable to other investors. I will write monthly reports on the status of the property as I do for the properties I manage... ie . repairs, upgrades, occupancy, income, expenses, evictions... upcoming or planned work or inspections. For other properties I own 100% of, i do not write these reports and that is not a good habit.

4) running a JV. (successfully) gives me more credibility in the future when I ask for new JV's after having run several. This is year 4-5 in my 20 year plan.. so I have to start sponsoring JV's sometime.

5) If I ever run out of cash, i can skill make investments as a regular sponsor, if I want to make it my full time job to look for good investments. The JV's I have invested in the past, the "Sponsor" or General Partner put up ZERO dollars and took 28-35% of shares of the project for putting the project together.

6) in the project I will be running, my fee as sponsor will be 20%.

7) None of the other investors will own 25% and have to be guarantors as the bank would typically demand. Only I as the principal investor would have to guarantee the full bank loan. This will be somewhere between 1.2-2.0M

8) Having skin in the game is another indicator that the sponsor will manage the project/property in an economically beneficial to the investors manor. I learned this lesson the hard way on the previous JV that I wrote about.

9) Planning the JV will require me to go through all the steps from the Sponsor's point of view. I will have to hone my selling skills and make sure the prospectus/investment package looks good and makes sense.

Step 3) is to form a new Holding Company and draft a JV shareholder's agreement.

Vancouver Commercial Property
This property is officially complete. I do not have anything else to add here except that it now frees up a ton of my time.
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Next property investment.
I signed the agency agreement with my Vancouver Commercial Realtor. Who will now list one of my warehouses for sale. If he can get close to asking, I will be in a very good position and have all the funding I need for my next two investments.
I have to follow up with my Edmonton Agent for the same thing.
I have to contact a lawyer to set up a new holding company to hold the new investment and to prepare a SH agreement for the new JV.
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I have read a lot of books since I last posted. The last RE book was the Hands off investor. The current RE book i am reading is Managing Rental Properties by Brandon Turner. I am a property manager so most of the things i know in much better detail. Some of it also does not apply as I am in Canada and he refers a lot to how things go in the US.
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I apologize in advance if my blog/log looks all mixed up. I write a personal log in a Word Doc, I also post part of this on Bigger Pockets and so there is some overlap and sometimes I skip some items. The important part is that I keep writing as it clarifies my goal and the steps I need to take to complete this or any portion of my goal.
Write and re-write, and reorganize those steps. See what I am missing and add them into the plan etc.

After signing with a commercial agent 4 weeks ago, I have not heard anything yet on the sales front which is down a notch from my Agent's expected ability to get this property sold fairly quickly. So I have added on or flipped what used to be the Plan A and attached it to the current plan "If the warehouse does not sell in the next 3 months.. " then we will go back and do a re-finance with an approximate 600k equity takeout and proceed with purchasing the new property.

Some reminder notes of what the plan is/was.

I have completed week 40 of this portion of my education plan. I have several interlinked goals. If you have read my previous blogs, you would know that I have a 20 year plan. October 1st 2021 was the beginning of Year 5. I had to go back and see roughly where this plan started based on my notes and this log.

I have more or less marked the Start as when I first signed up to take a Strata Management License course. on BP that was stage 1 of learning. Stage 2a) was complete course and obtain my rental license. Stage 2b) is utilize my Rental license which I am 40 weeks (I wrote this two weeks ago) completed after being licensed. I will do this for at least another 60 weeks. I have learned a ton, including Residential Tenancy Branch arbitration, notices of rent increase, advertising, tenant application, approval, evictions, lots more.. I have signed roughly 3-4 leases each month for the first 10 months and done maybe twice that in credit checks. I have enough good sense now never to let anyone with a good story and poor credit history into one of my buildings.

My plans have an education component and an investing component and a personal component. The personal can be broken down further but I won't get into that now. The investing portion is on my 2nd step or my 10th step depending on where you look from. With my new plan, i am only on step #2. Step 2 is broken down into many steps, but it is just the purchase of a new commercial project.
2a) hire a mortgage broker, financial advisor (done)
2b) refinance.. has turned into ->sell a commercial unit, realize capital gains, bank the rest, (in progress)
2c) Set up JV Partnership
2d) Set up new Holding Co for the new commercial property
2e) Prepare a prospectus to JV with my target property.
2f) Offer on new commercial multi residential property
2g) Start Pitching
2h) Close on deal
2i) Review leases.
2J) rehab any vacant units. rent out.
Hopefully I will put enough pressure on myself to offer and close on a sale in 2022 Q1 Right Now I am working on selling a property and setting up my first true JV with focus and intention.

Short update as I am going over what I accomplished in my Healthy/Wealthy and Wise categories. Health and details of Wise (not RE) I will post in the Health and Fitness forum.
Part of my wise is to watch educational videos. I also had a goal of reading 26 books this year. I read 27. Of those,
9 were real estate focused and 5 were self improvement.

I found out this week that my #1 choice for RE investment, a 15 unit mixed investment listed for 1.9M was purchased for 1.82M . This is not an issue as there are several other good candidates. My next top pick is only 1.3M and 12 units, all residential.

My 2b) from above, re-fiance has morphed again into take out a large chunk of my HELOC as it is about 1% lower than a commercial refi. The problem with the 2b) plan is that if i do a refinance and then a few months later, the property sells, there will be a huge payout penalty.

2c) I contacted 3 separate lawyers that specialize in JV agreements. One in Ontario that another JV General Partner I invest with uses, one in Edmonton, the city where my investment will be, and one in BC where the investors will reside. I will be using the one in BC. I have the engagement letter and retainer agreement. I need to send the layer 8k as a retainer to start. The expenses for the company formation and agreement will hit around 12k. As it turns out, the way I want to structure my deal, it will be a Limited partnership agreement and not a JV. In the JV all of the investors will be on title and have to personally guarantee the loan. In the LP agreement, only my company will be on title and I will be the only one guaranteeing the loan. The other LP's will be limited in liability to the amount that they invest.

I have a meeting set up in the first week of Jan 2022 with my Edmonton RE agent. He has been hard to reach in the last month as he just had his first child!
My goal is to actually have an offer on the next investment by the end of January with about a 6-8 week closing date.
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As far as my "Wise" Goals, are going, I have completed maybe 48-or 49 weeks of this two year plan as a Rental Property Manager. I served around 200 notices of rent increases, signed around 30? leases; went to arbitration twice to have tenants removed.... Solved 100's of regular PM problems,.. no heat, leaks, broken doors, broken appliances, bed bugs, regular pests, Birds accessing and living in the cavity above the eaves troughs, parking problems, smoking, non payment of rent... .
The list goes on and what is interesting in December.. I have 3 separations/divorces one member wants to be off the lease, the other wants to stay etc. I also did around 150 or so unit inspections and have a much better feel of how people live and what renters expect. I also did maybe 60 or so credit checks and have a decent feel for reading a report now.
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This year my Wise goals in RE include
Take the Real Estate Agent (Trading ) course and pass the exam.
Read maybe 6 RE books this year
Watch more videos on Electrical repairs as I have been doing a bit of work on my own home.
Take a course on interior design. If I am going to own lots of residential RE, I want to be one of those people who can walk into a unit, know what it needs and be able to go down a checklist of costs for a Reno in 15 minutes of looking at a unit.
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I plan to practice my RE JV/Limited partnership pitch, but it will not be a hard sell. I don't need the other investors money, but hopefully at least one other investor will come along and make some money with me!
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I also completed the work for my other JV in a Commercial Warehouse. I keep doing the monthly reports, but the T2 corporate tax and T5 investment slips for the investors was completed by a professional accountant.

I hope the next time I post, I will have made an offer on a property and can report on that.

what books did you read, care to give one sentence review for each with x/5 rating?

Thanks for asking rickroll

Books i read in 2021
All of these books have been recommended in multiple locations, except the one from my Broker which was a gift.
Only one book was not worth reading.
Title/Date finished reading/Author/rating/comment

Crushing it in Apartments and Commercial Real Estate Jan 13 Brian Murray , 5/5
I only rate it 5/5 because this is my area of focus.

Untethered Soul Feb 2, Singer 4/5. if your into meditation etc 5/5

What every Real Estate investor needs to know about Cash Flow March 8 - Galenelli 4/5 if you don't know your RE calcs 5/5.

The Alchemist Mar 11, Coelho 5/5 easy fiction , supposedly one of the best books ever written?!?

Millionaire Success Habits Mar 30, Graziosi, 4/5

Mastering the Art of Commercial RE Investing , April 11, Marshall 4/5

Beyond Order, 12 More Rules for Life May 1, Jordan Peterson 5/5 if you want to change the way you perceive the world listen to some of his lectures from maps of meaning. It will change your life.

Brave New World May 7, Huxley, 3/5 A social commentary on the right wing? if you try to control too much, Chaos will always creep in.

Greenlights May 14, Matthew McConaughey, 5/5 easy reading auto biography to date.

Build a Rental Property Empire June 1, Furguson 4/5 more homework for me

The E-Myth Enterprise June 10, Gerber, 3/5 . I like more actions items in Real Estate instead of concepts.

The 4th Turning June 22, 0/5! seems to be a Phd thesis written for 6 different audiences.. in a very schizophrenic way. Depending on how old you are only 1/6 of the book has any real meaning for you.
ie. Beiber and Lebron have meaning, references to Che, Hamilton or Charles III mean nothing unless you actually studied them. Don't waste your money.

30 Days With a Seal, June 25, Itzler 6/5 Easily the most entertaining book of the year. Read it in 3 days.
The Navy Seal is David Goggins who I watch regularly in the morning while on the treadmill for inspiration. I highly recommend listening to some of his motivational videos on Youtube.

Estimating Rehab Costs, July 5 , Your friendly neighborhood 2+2 poster that answers all your Real Estate questions in this forum, J Scott 4/5 if you are starting to do fix and flips 5/5. Might need an update after all the inflation.

Life on the Bottom , July 15, Dalrymple, 5/5 A hard book to read as it describes people stuck at 0. Living out handouts and where personal effort seems to have no purpose.

Limitless, July 29, Kwik 5/5 The one superpower is to be able to learn faster...then you can master anything ala the Matrix. I know Kung-Fu.

Hands off Investor, Aug 18, Burke, 5/5 info on Syndications and JV's exactly where I am at now.

The Brothers Karamazov, Sep 21, Dostoyevsky 3/5 Fiction, I read it because it is a Russian classic. I am sure this is 5/5 if your into sociology. You need a chart to identify who the characters are and need a heads up before you start that one person can have several names/nicknames. 700 pages of grind. I did not know who the main character was until page 150?!?

Red Sorghum, Oct 6, 4/5 , Mo Yan, Chinese Classic but another hard read as it describes the time during the 2nd world war and the hardships of just trying to stay alive.

Managing Rental Properties, Oct 22, Brandon Turner, 5/5 very good if your starting out in RE Investing.

Hero of a Thousand Faces, Nov 9, 5./5 Campbell, Makes you think that all religions are linked and the purpose and goal of all religions are very similar.

Rock Star Real Estate Investing, Nov 14, 4/5 Full disclosure, Kyle Green is my Mortgage Broker.

Business Adventures, Dec 4, 5/5 well at least some of the 12 mini stories were definitely super interesting. The Piggly Wiggly story is very much worth reading if your wanting to understand the Short Squeeze and Game Stop.

Modern Man in Search of a Soul Dec 14, 4/5, Jung. This is 5/5 if your into Sociology.
This was a more difficult than normal read as it was written a long time ago and references many authors and books, and philosophies that I am not aware of. The real question the book tries to answer is..
What is the meaning of life? ...The answer is in the Jordan Peterson Videos on Youtube. "The highest good"

The Obstacle is the Way. Dec 20, Ryan Holiday, 5/5 A book on Stoicism. This is my philosophy.

Where are all the Customer's Yachts 4/5, Schwed.

So early last week , I took out a large sum from my HELOC and am ready (with funds) to go with the next purchase. Fixed rate 5Y. 2.65% My regular banker called me and told me that rates are scheduled to go up tomorrow, so I went in today and locked in another small variable rate loan that is coming due in a few months.

Last week I also did two virtual tours with my RE agent in Edmonton. The numbers for each of the two properties did not work. The Pro Forma Cap rates were +5%. The actual cap rates were around 2.5% for both. Sigh.

Then late last week, I received an offer on my warehouse. The price is not far off. I let the initial offer lapse as they gave only 1 day for acceptance and based the offer on the warehouse on the belief that the mezzanine in the warehouse in un-permitted.
I intend to make a counter offer, but to gain clarity , I need to find out from the city if the mezzanine is permitted or not.
I have contacted about 6 trades companies, because the offer also lists things that the I am is required to do. in preparation for the sale. Because I have a tenant in place, I need these trades ready to go and quotes in case things go sideways with the tenant. I.e. If the tenant needs extra time to move out. I can still complete the sale with a discount for the quoted work to be discounted from the sale.
I have contacted a mechanical company for HVAC servicing for the office and repair of the heating units in my warehouse.
I have Contacted a contractor with experience in getting mezzanines permitted. This will be a drag and may take several months to do but will be worth several hundred thousand more if it is permitted.
The tenant that has to leave has also done a lot of demolition and unreported renovations to the unit including demolishing a 400sqf warehouse office. They have also removed some interior walls in my office unit. I will need a quote for how much to charge the tenant for the repairs.
I have contacted a window company for a large window roughly 65" x 60" that the tenant broke.
Lastly I have contacted a roofing company to quote on the repairs that will be needed on the roof after the tenant removes his equipment. (The tenant is a furniture manufacturer. They cut holes in the roof to vent a dust collection system and a drying kiln.)

I will need to contact the Strata Manager and obtain a Form B and any minutes taken for the last two years for our strata. Our Strata is self managed and we only meet once per year.

I have already arranged to meet the contractor and HVAC trades this week at the site to go over what work will need to be done.
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On a side note: The tenants that are in the units are furniture manufactures. They make high quality (very expensive ) old growth kiln dried tabletops or desks or dining room tables. Several thousand dollars and up for a single table.
https://www.youtube.com/watch?v=bR4_yHwR_kA This is a typical table (not my tenant.)
The furniture is made by filling in the gaps with epoxy and turning an old piece of (what looks like junk) wood into a piece of beautiful furniture. So because the tenants will end up owing me for possibly 30-40k in damages to my warehouse and office, I may end up....
a) settling for a lesser amount say 20k and call it even.
b) give the claim to a lawyer friend of mine who enjoy's suing companies on a % of settlement case.
c) take goods in trade for the amounts owing.
d) depending on what my contractor, HVAC, Window, Roofer say. end up suing the tenant for +50K and end up owing part or all of the company.

In case of c or d, I contacted a friend of mine Tony Chan of Tony Chan Poker Tables
https://www.chanmanpokertables.com/gallery to see if he is interested in expanding his business and/or if he can use old wood etc.
In short the answer is that he has a colleague that already does make these types of tables and that person would be good to come with me if I have to settle for goods in lieu of payment.

gl with the warehouse project and ty for the book review, it's really appreciated

always love reading non fiction and going to start reading some of those on the list

interestingly, i've only read some of the fiction you listed in brave new world and red sorghum

red sorghum was a pretty mind blowing read, they made into a very famous film in china but it focuses on just a small section of the novel

So I have been juggling many things at once.

1) work as usual.
2) Get organized with my RE Agent. I have now quotes for mezzanine work 6 months and 50K with no guarantee on the 6 months.
Qutoes for the work that has to get done on my warehouse include broken window $2800, After the tenant removes his Kiln Vent, my roofer quoted 2700 to cap it with a tin/aluminum hood or 5400 to repair the roof where there is now a big 3' diameter hole. Hvac work on the office $450. Replace the heaters in the warehouse $25,000!, Contractor work in the main office $6000, Quote to replace 400sqf office in the main warehouse $24,000, Broken concrete Curb replacement $3400. Last quote will be for cleaning the warehouse and that will depend on how much junk the tenant leaves.
They have found a new location and are planning to be out by Jan 31. It will be amazing if they can get it done. I was there two days ago and they were starting to take down their storage racks.

As before It is unlikely I will be able to get the mezzanine permitted in time. The funny thing is that the city Delta where the warehouse is, used to keep building plans offsite at a separate location. Apparently there was a fire and the city does not have any records of drawings for my whole strata , let alone my mezzanine. I will likely just counter offer with half way between original price and first offer. From there I can discount the amounts listed for the work that needs to be done above.

Luckily today the BoC did not raise interest rates and I will have until March to find and finance my next project!

In any case, The buyer, the buyer's agent, my agent and I will be meeting on Monday to work out a deal if we can. I will let you know how that goes.

3) The other thing that I have been working on is the tenant. They have not fully paid January's rent and are approx $6500 in arrears.
I called the bailiff but will likely not go that route as the tenants will be moved out in 5 days or so. I will just write up the amounts owed by the tenant to me in a list including all the quotes and then offer to take about 50% in cash in 10 days or give it to my lawyer.
The total amount owing so far is around $40,000 but will go up after I get a quote to do the final clean after the tenant leaves.
The threat will be pay me half and you dont have to pay the other half. If not, I will let my lawyer sue you for the whole amount. (his fee is 50% and he will be going for the whole amount) So.. you can save yourself the 50% or give it to my lawyer. I have all the documents prepared already.

I will let you know how that goes too!

4) looking for the next investment.. it is going but nothing to write home about i am 0/3 on properties that I have the actual income/expenses for.
Sellers are just wonky claiming that there is no management fee, no caretaker costs, repairs and maintenance are 3%, vacancy is 3% and capital expenditures are 0%. A bank will not lend on a property that shows no costs, or ridiculously low expenses for these items.

Things I am doing to keep furthering my goal of 100k per month net income.

1) Work as usual. Singed another lease with a tenant today. 56 weeks into this two year section of the plan/more training as a PM.

2) I have a signed deal with the purchaser. We came in half way between our asking and their first offer. It was just above my minimum so I am ok with that.
Closing is in 7 weeks. It may close sooner. if I get everything done earlier. It will have over 80K (total) real estate agents fee. that is 7% of the first 100k then 2.5% of the balance so you can figure out the minimum i am selling this warehouse for if you work it backwards.

3) the last tenant's lease ended January 31,2022. They actually moved out on Feb 10th. I did a move out inspection with one of the owner's wife. I put a list together of 15 damaged items that will cost $ to repair. ie. Broken loading bay door, broken window, sawdust everywhere, dismantled HVAC system, Holes in the drywall, roof repair where they cut a hole in the roof , damaged office #2, unauthorized demolition of Office #1, smashed curb in the parking lot etc.. I have quotes for about 13/15 of the items. Once i have them all, I will send a final statement to the tenant for damages. I will propose a settlement or take them to court. The total cost will likely be 40-45k in damages, but depending on which lawyer I hire, I may go for the full 45 or reduce it to 35k to keep it in small claims court.

3b) I will have to take a few days off from work to schedule the required repairs to the parking lot, roof, window, loading bay door ....

4)I am still looking, lots of "fair" deals that need work. While I wait for my warehouse deal to close, i will keep looking for that "Great" deal.