Canadian Money Forum banner

1 - 20 of 28 Posts

·
Banned
Joined
·
16 Posts
Discussion Starter #1
Hello CMF

I'm more of a lurker on these forums than an active poster, but I wanted to share a link to my YouTube Channel (just launched today).

https://www.youtube.com/channel/UCdRtqnqBSq4GY7DGiYICu5g

I'm hoping to document what it's like being a landlord and real estate investor in London Ontario. (I've been investing in RE for over 6 years now - my first post from CMF is still on here from 2010 when I bought my first student rental!)

I'm producing a 6 part video series showing how I implemented the BRRRR investing strategy in London Ontario. (BRRRR standing for: Buy, Renovate, Rent, Refiance, Repeat)


I'm hoping this video (and series) will help first time real estate investors understand how to approach real estate investing. I walk the viewer thru a duplex I bought in London Ontario for 110K, and spent 10K on renovations in order to have bank appraise it at 150K. (There's a fair bit of sweat equity involved as well!). The property was getting $1,150/mo in gross rents before I bought it. It's now getting $1,550/mo in gross rents.


For real estate investors though, I think Video Marketing (and Social Media) is still an under utilized tool. I believe (and hope) it's a great way to establish your experience and credentials in real estate investing. I'm hoping that by showing (rather than telling) I'll be able to more efficiently show what I'm upto and the type of properties I'm investing in.

I'm sure other RE investors have also heard this: "That's so interesting - what your doing with RE investing - and I'd love to do it but I don't know where to start" I often refer people to CMF and BiggerPockets, as well as my favourite books on the subject as great resources for RE investors and Landlords, but no one ever seems to follow through on taking action - I'm hoping that video will be more engaging and get more people to take action (or at least move them in the right direction).

Is anyone on CMF currently using a video strategy to help promote their RE business (whether as a realtor, investor, money loaner or to drum up potential joint venture partners?) - I'd love to hear about it and check out what content your producing.

If you do check out my channel or videos - I'd love your feedback. Too long, too short? Too in-depth or too superficial? Let me know how you think I can improve my content - it would be greatly appreciated!


Also if anyone is thinking of starting their own YouTube Channel and have questions - I'd be happy to help in what ever way I can.

Thanks
Matt
 

·
Registered
Joined
·
368 Posts
I'm originally from EOA, and I'm just wondering why you chose Elias St of all places? I know it's cheap, but I had two friends of mine that rented properties in that area, and the tenants can be nightmares. Will you be doing updates of what it takes to evict your tenants when it happens?
 

·
Registered
Joined
·
6,875 Posts
Well, it seems your system, like the other site I often quote, is very similar to my own system. Of course, I'm sure there will be a bunch of people out there who now claim "there's no way you can buy properties at these prices" (right B?).

Or, maybe you'll be accused of being me with a different login.

There are a couple of things you can also discuss in regard to the neighbourhood. First off, they aren't stagnant, they evolve. Personally, I've fount there to be a 10/10/10 rule. The neighbourhood starts to decline, and goes down for about 10 years. It then remains undesirable for about 10 years, full of crime, prostitution, pawn shops, porn shops, etc. Then, the city or town finally gets upset with the area and decides to do something about it. The police crack down, the city revitalizes, etc. And slowly, over the final 10 years or so, it starts to get better.

It usually continues more than 10 year of getting better, but those first 10 years are when you can get the deals, before it becomes a desirable neighbourhood. You also don't want to be buying in the first half of the cycle.
 

·
Registered
Joined
·
368 Posts
Well, it seems your system, like the other site I often quote, is very similar to my own system. Of course, I'm sure there will be a bunch of people out there who now claim "there's no way you can buy properties at these prices" (right B?).

Or, maybe you'll be accused of being me with a different login.

There are a couple of things you can also discuss in regard to the neighbourhood. First off, they aren't stagnant, they evolve. Personally, I've fount there to be a 10/10/10 rule. The neighbourhood starts to decline, and goes down for about 10 years. It then remains undesirable for about 10 years, full of crime, prostitution, pawn shops, porn shops, etc. Then, the city or town finally gets upset with the area and decides to do something about it. The police crack down, the city revitalizes, etc. And slowly, over the final 10 years or so, it starts to get better.

It usually continues more than 10 year of getting better, but those first 10 years are when you can get the deals, before it becomes a desirable neighbourhood. You also don't want to be buying in the first half of the cycle.
The Elias St area has been a hole for longer than I can remember, and that's going back to the 70's. It's not the DTES of Vancouver, but it's likely been on the undesirable side for at least as long. Just notice the rent, it was $1150, and now $1550 for a duplex - that's less than $800 per unit. I know London isn't Toronto when it comes to rents, but it is extremely cheap, and that means that a lot of the tenant are not reliable. In addition, London is small and there is no gentrification because it isn't needed. It's known as a 15 min city, and there is no need to live closer to the city centre.
 

·
Registered
Joined
·
6,875 Posts
I find it amazing how people will go to any lengths to talk themselves out of investing. "The place is a dump", "bad neighbourhood", "you could have nightmare tenants", etc.

While all of you spend your time coming up with reasons not to do it, people like Matt are slowly making a lot of money.

Instead of looking for problems, people like Matt look for solutions. I'll bet he will be handsomely rewarded for his efforts.
 

·
Registered
Joined
·
368 Posts
I find it amazing how people will go to any lengths to talk themselves out of investing. "The place is a dump", "bad neighbourhood", "you could have nightmare tenants", etc.

While all of you spend your time coming up with reasons not to do it, people like Matt are slowly making a lot of money.

Instead of looking for problems, people like Matt look for solutions. I'll bet he will be handsomely rewarded for his efforts.
Don't get me wrong, of course it is possible to do well. Of the two friends of mine that invested on that street, one now has over 40 properties, although the other one just has three. However, you know as well as anyone, you just can't do a few renos, claim your rent went up almost 50%, and then it's all unicorns and rainbows. In fact, I rather question the accuracy of the appraisal as this house looks a lot like a similar house in that neighbourhood that my friend bought back in the early 90's, and he bought it for $45K. A house that took over 20 years to double, doesn't suddenly go up over 1/3 with a few renos. In addition, the only reason my friend was able to do so well was that he was a real estate agent who was selling over 100 houses a year back then. He specialized in that area so was able to buy houses cheap as soon as they hit the MLS, and of course, was able to further discount the house by his half of the commission. He also did his own renos, and he now has a crew of four people he regularly hires to do the work for him.

It just seems like someone who starts dating, everything is roses and sunshine, but the real work is about to begin. Of course, this is something you know. If everyone could do it then you wouldn't be as successful as you are because there'd be too much competition. I saw a lot of failed landlords in my accounting career, you've likely seen more on your end.
 

·
Registered
Joined
·
6,875 Posts
I agree with your basic premise, however, I too often buy properties well below market, have them renovated and have them appraised for significantly more, usually getting back all my money on an 80% Ltv mortgage.

There are many people who don't believe I can buy the properties that I do, but that doesn't change the fact that I do buy them. The fact that people don't believe it's possible is probably the main reason I don't have much competition.

Therefore, as someone who does something similar, I know what he's saying is indeed possible. If you watch a few of his other videos, he even brings up specific examples. I've seen nothing in them that implies he's lying, or fudging his numbers, though I admit I didn't break his numbers down specifically, but he doesn't seem to be making outrageous claims on the surface. Remember, it's not your opinion that matters, only the opinion of the bank appraiser...and they can be inaccurate to the high or low side depending on the person and the bank's lending policies.

As you said, it probably depends more on the person. Your one friend could do it, the other couldn't. Maybe Matt is one of those who can.

As one of those who can, let me tell you it's difficult for people who can do something (be they surgeons, mechanic, rocket scientists, or whatever) to sometimes understand that others can't do it as easily. When you know what your doing, it always seems easy.
 

·
Registered
Joined
·
368 Posts
As one of those who can, let me tell you it's difficult for people who can do something (be they surgeons, mechanic, rocket scientists, or whatever) to sometimes understand that others can't do it as easily. When you know what your doing, it always seems easy.
This is absolutely true. You have something you are good at, and have worked for years to perfect, and most can't do it.
 

·
Registered
Joined
·
3,349 Posts
I find it amazing how people will go to any lengths to talk themselves out of investing. "The place is a dump", "bad neighbourhood", "you could have nightmare tenants", etc.

While all of you spend your time coming up with reasons not to do it, people like Matt are slowly making a lot of money.

Instead of looking for problems, people like Matt look for solutions. I'll bet he will be handsomely rewarded for his efforts.
There is a big difference between validating an idea, looking for problems, making sure there is real potential etc, and just making excuses to not do anything.
 

·
Registered
Joined
·
6,875 Posts
The difference is, one person (the op) is actually doing it in the way he claims and the other is armchair quarterbacking, no offence intended, saying it can't be done.

The same goes for those who say stocks are risky, or I hate my job but won't look for a new one, etc.

Now, I'm not saying those criticisms are invalid, but true investors or entrepreneurs find ways to overcome the obstacles and profit from going where others fear to tread.

The main reason I'm not afraid to tell other people how I do my own investing is, I know the vast majority (over 99.9%) will never even try it because they are to scared to. They won't become my competition, they aren't able to.

I've literally found people properties, helped them negotiate, and still seen them pull out at the last moment...only to tell me years later they regret the move. Ironically, even though they regret it, they still won't take the plunge.
 

·
Registered
Joined
·
12,520 Posts
I agree with Market Lost.

That is an area most people don't want to live.

I would question the ability to get rents equal to those in better areas. Rents in London are very competitive.

I also would question if the banks would issue an increased mortgage months after already issuing one on the property.

If banks are doing that, maybe our banks have riskier mortgage portfolios than people realize.
 

·
Registered
Joined
·
6,875 Posts
So, are you suggesting that there are whole areas of most cities that remain vacant because the are considered "less desirable"? I've never seen that personally.

I know some very rich "slum landlords" and I also know some unsuccessful "investors" who only bought properties in "desirable" areas.

Personally, I tend to fall in the middle, but I wouldn't attack someone based on an unfounded bias. Every city has bad areas, but they somehow seem to be populated. True, they are more work, less desirable tenants, more issues, etc. But there is monsy to be made I'm sure.

There's a couple of guys I know who only deal with rehousing the homeless. They work with agencies and say that everything is guaranteed, including the condition of their place. Every month, they get government cheques. If the tenant trashes the place, it gets fixed and the costs are covered by the program. Personally, I haven't done this, but I see no reason why they'd lie about it, they are businessmen. I've seen a few of their places, and I've seen pictures of "before and after" a bad tenant. If they were lying, it would have cost them much more than the rent and damage deposit. Their tenants certainly had nothing they could have sued for.

As for the bank refinancing after only two months. I don't know if that is true since again I don't do that in that manner. However, I routinely buy properties paid for on a heloc or some other loan, renovate them, and apply for a mortgage. Because of the price I initially pay, I usually get all my money back out at an 80% ltv. So there are ways to increase the value in that time.

Of course, house flippers must do this all the time. Someone buys a place, gets a short mortgage, renovates it, sell it to a new buyer and they get a mortgage on the same property a few months later. With only 5 big banks, the odds are some of those will be financed with the same bank both times.
 

·
Banned
Joined
·
16 Posts
Discussion Starter #14
Hello All!

I first just want to say thanks to anyone that watched my videos - whether you agree with me, or believe me - I appreciate you taking the time to watch it and consider it. (because this has taken a lot of time to document, and I really don't get any financial reward from it - mainly hoping to pay it forward as I had mentors that helped me when I started and I hoped presenting the info in this manner would reach the widest audience, and hopefully make it easily consumable)

In regards to the exact area I invested in, EOA is drastically changing. I plan to do a video documenting it's transformation. Admittedly I'm very bullish on the area - but the indicators I see that tell me the area is transitioning are: the revitalization of the Dundas east corridor:

1. 623 Dundas St: The London Brewing Co-op. Nano-sized brewery (Open)
1. 623 Dundas St: The Root Cellar. Established 2012, Organic restaurant serving farm-to-fork fare. (Open)
2. 630 Dundas St: Planned Food Hub (actually just opened in Sept 2016) consisting of 464sq m grocery store, 464sq m Fire Roasted Coffee Location, 371sq m incubator space dedicated to local small businesses. (Planned 2016-2017)
3. 700 King St: Medallion Revo Apartments: Two completed towers consisting of 600 completed units (East tower 322units, 278units West tower). Currently constructing a third tower consisting of 298 units. (600 units completed, 298 Planned)
4. 874 Dundas St: Fire Roasted Brew Pub. (Planned)
4. 884 Dundas St: Illbury + Goose. Local lifestyle clothing store, products produced in Canada. (Open)
4. 894 Dundas St: The Hungary Butcher. Local butcher shop specializing in sausages with 41 varieties. (Open)
5. 900 King St: Western Fair Farmers Market. Sat 8-3pm. Main floor farmers market. 2nd Floor Artisans' Market with over 40 permanent vendors. (Open)
5. 900 King St: Fire Roasted Coffee Roastery. Where Fire Roasted Coffee roasts their product and offers tastings and retail and wholesale sales. (Open)
6. 1030 Elias St: Junction Climbing Centre. Climbing Gym. (Open)
6. 1030 Elias St. Anderson Craft Ales. 650 sq m Brewery. (Opening Summer 2016)

London's Old East Village won for the People's Choice for best Neighbourhood in the Great Places in Canada competition. (Presented by: Canadian Institute of Planners; Wortley Village won in 2013 for People's Choice). Old East is also home to a neighbourhood wide garage sale and block party each summer. (July 23rd 2016).

The above describes a transitioning neighbourhood - drive down any street and I almost guarantee you'll see a couple dumpster bins in front of properties (some will be mine though - lol)

There is high demand to live in the old east village, I honestly believe it's a completely different place than 10 years ago, and will be dramatically different 10 years from now.
 

·
Banned
Joined
·
16 Posts
Discussion Starter #15 (Edited)
In regards to how I refinanced so shortly, I understand initial skepticism and you won't be able to use my method on any property.

I plan to outline it in part 5 of my video series on the property - but a quick summary is I used an improvements plus mortgage (Bank of Nova Scotia in this case). Which involves two appraisals at the time of purchase. If you do not use this type of mortgage product in Canada - you'll likely have to own the property 366 days before a major bank would let your refinance at a higher value. I've had deals fall apart when the second appraisal didn't come in at the my expected after repairs value, and I opted not to proceed with the deal (despite the property still being fundamentally a good investment - at my current point in life - stretching my capital is a priority to allow me to acquire properties in a faster method). I know those that are more risk adverse will disagree with this reasoning. I rationalize (right or wrong) with the knowledge that the bank states I have 20% equity in any property at any given point in time, and my properties have significant cashflow and are all 7% cap or better (usually getting closer to that 9-10% range for me to want to get into the deal).

In regards to are properties in EOA worth this? In the old east village I absolutely believe this. Honestly I think years from now people will view the OEV as a cooler Wortley Village... (I know a lot of Londoners will disagree with me, I guess we'll just have to let time tell). OEV properties are frequently getting multiple offers (this year) and if our fair forest city ever decides to embrace rapid light rail, the OEV is smack middle in the proposed line to Fanshawe. (And it makes sense as we would want a station near western fair, and one going to Fanshawe College)

Hope that clarify's things. I'll try to go into further length at another time (currently on a Road Trip with my Father as part of a bucket list trip he wanted to drive west across Canada) if by chance any RE investors are reading this and live in the Grande Praire area let me know - as I'd love to learn more about the GP RE market - I'll be there from Sept 23-25th)

Thanks!
 

·
Banned
Joined
·
16 Posts
Discussion Starter #16
The main reason I'm not afraid to tell other people how I do my own investing is, I know the vast majority (over 99.9%) will never even try it because they are to scared to. They won't become my competition, they aren't able to.

I've literally found people properties, helped them negotiate, and still seen them pull out at the last moment...only to tell me years later they regret the move. Ironically, even though they regret it, they still won't take the plunge.
I've had similar experiences. I've also written at length outlining my process (1000's of word emails that went into excruciating detail) and almost never see the person follow through. It frustrates me - and so instead of repeating the cycle where an acquaintance says - "that's really cool what you're doing I wish I could do that" and then I get excited and proceed to tell them how to do it, only to have it fall on deaf ears I wanted to document exactly what I'm doing and put it out there. I think what I'm doing could easily be replicated in other markets - but honestly I've only ever done it in my market (London Ontario) as that's the only market I know.

If any one in the area would like to meetup and chat, or walkthru one of my properties - I'd be happy to do so for any CMF member - as despite my overall lack of activity on these forums, over the years I have reaped a ton of value from the combined knowledge of the CMF members.
 

·
Registered
Joined
·
8 Posts
The videos your making are awesome keep them coming!

Haven't watched them all yet but I'm close. The detail you put into them is insightful and helps you recognize what it is actually like to be a real estate investor.

Im starting to save up capital slowly(still in University) and want to get into real estate at a young age. Ive been researching here and there but hopefully I will be able to stumble across some help when time comes to actually execute a deal. Hopefully I can put the Brrrr system into affect as soon as possible lol
 

·
Banned
Joined
·
16 Posts
Discussion Starter #18
Thanks Equilibrium, I'm glad you're getting value out of the videos and appreciate the encouragement (it means a lot). That's great that you're saving up capital at such a young age! (I didn't buy my first investment property until I was 25). The BRRRR system is really powerful (in my opinion) as when you first start out in RE investing (particularly at a young age) capital for down payments will likely be your limiting factor, and a well executed BRRRR will allow you to speed up the rate at which you can acquire properties. (Just ensure the numbers work)
 

·
Registered
Joined
·
5 Posts
I know some very rich "slum landlords" and I also know some unsuccessful "investors" who only bought properties in "desirable" areas.
I am considering to buy a duplex in Windsor or Brantford (both near universities). I prefer Windsor as I found it many pros as much cheaper, economic development starts to rebound, unemployment rate is decreasing

For Brantford, I found only one pros: near Toronto/ Hamilton - may have more chance to increase in long term. I could buy 2 duplexes in Windsor instead of 1 in Brantford.

Have you any idea about these two towns?
 

·
Registered
Joined
·
6,875 Posts
Both towns have their benefits and their drawbacks. Windsor's major employer seems to be the casino. It's a border town, bordering on one of the worst American cities. Crime rate is high. Then again, it has a steady population, and the university isn't going anywhere.

If the price is right, and you understand you're going to have difficult tenants more often than other areas, there is money to be made. If Windsor does turn around, there is more money to be made, if it doesn't then there is less to be lost.

Branford is more in the middle of farming territory, also not the best place for long term tenants. Farmers generally don't like to spend money, especially old farmers. The place is, however, more desirable than Windsor.

Given the two, most people would choose Branford, but the place is priced for that. There is more opportunity in Windsor for those willing to do the work. Then again, deals can occur anywhere. You could also overpay in both places.
 
1 - 20 of 28 Posts
Top