Messages

1

Properties for sale / Re: Do these numbers make sense?

« on: March 04, 2010, 04:46:16 AM »

I'm a bit surprised by all the negative opinions on this. I'm feeling pretty ok about it.
My final purchase price was 179k.
My net cash flow is $200/month with this tenant (I'm locking in for 5 years at 3.79%, with 35 years amortization - 3.15% for CMHC insurance). My investment is under 14k (down payment + closing). After 5 years I will have 162k left unpaid on the mortgage. Presuming I sell for purchase price + 10% in 5 years (196k); I will have grossed 32k total (200*60 + 196k-162k-14k). From this, I take away 5% commission (9.8k), 3k misc legal costs, 8k in vacancy and repairs (total of 20.8k). I get 11.2k net return on my original 14k investment in 5 years. Granted there is work involved, but this being one family unit, I hope there won't be that much. If the resale value goes up by 15% in 5 years, my return on the 14k would be 21k in 5 years. I guess that's the gambling part of it. If the resale value goes down, I guess I'm screwed .

 No one is trying to rain on your parade, just giving you our honest insight with our experience.

From the numbers you quoted, here is what I think,
3K for legal, does that include land transfer tax?

8K for vacancy and repairs seems too low, as with $1275/month rent, that only gives you 6 months of vacancy within a 60 month period, never mind repairs.

One bad tenant not paying their rent, forcing you to evict wil cost you $1275 rent x 3 months it takes to evict them  plus $1000 legal fees =  $4825/ $200 net cash flow that = 24 months of net cash to recoup that one bad tenant.   Do you have the cash onhand to cover that expense?

$200 net cash flow does not leave anyroom for interest rate rise or possible repairs.

You forgot to factor in the mortgage penalty should you sell in 5 years, thats going to be in the $3000 range.

Big money repairs, like installing a new furnace/AC will cost you $4000, roof another $1500-2000.  Applicances, $1000

Not saying that you will have to do all of these things, but you will have to spend money on the unit if you want to rent it and sell it.

With the changes in mortgage rules taking effect April 19, there will be a much smaller market for small investment properties like this one.

2

General Discussion / Re: crown lien on property

« on: February 25, 2010, 06:05:16 AM »

Frank has it pretty much covered.

 in terms of legality, the town clerk very well may have made and honest decleration that to the best of his knowledge there where no liens on the property as according to your own statements when the town did the search it came up with no liens.  Good luck with the getting the town clerk to sign an affadavit to that effect.

If the town readvertises the property, everyone will know that their is a lien on it and it will more then likely not get any bids, from the treasuer's point of view what does he have to gain by not proceding with the sale? 

Truthfully, who knows when the town found about the lien, it could have been a week or two before the sale when the lawyer went to finalize the paperwork.

Only recourse I can think off and this is a long shot as according to MELRAY, non of the bidders conducted any due dilligence. 
Other memebers please correct me if I am mistaken, i do not want to give bad advice to anyone.
Townships are supposed to provide, if you ask them through proper channels a decleration of the property showing weither or not it has any liens on it, if anyone was provided that decleration, you can use that as leverage for your case.

3

Properties for sale / Re: Do these numbers make sense?

« on: February 23, 2010, 05:31:45 PM »

Personally. i do not like the numbers, it seems to only make sense if you are making 100K plus a year and looking for a tax write off to lower your taxes to the government, even in that case, there are better options available.

Have you looked into the vacancy region in that area?
Is the property even going to have posistive cash flow with a 5% down payment and property tax
Requires some upgrades, roof, etc..
For heating there are options, there are natural gas heaters that bolt right into the baseboard(look like electric heating), good option for you, no ductwork required and the property already has gas.  However, this are direct vent so it might take away from curb appeal.

I think with the new mortgage rules set to take effect April 19, a lot of this "investment properties" will likely fall in value as their will be a much smaller market for them.

4

Property Information / Re: Another Trent Hills Garage Sale - Santa comes Early

« on: November 24, 2009, 07:06:39 PM »

If you can please fill me in on what the advantages would be of putting in a weathered "midnight bunkie"?

Would it be to claim adverse possession one or two years later and to nullify the ROW?

or

Would it be to prove that the bunkie was a pre existing strucuture and may not have been included in the original survey that might well be 50-70 years old, thereby getting the town to allow you to build as a pre exisiting non conforming structure?\\


or both


Has anybody actually been successful at this, if so, please PM me.  I thought about doing this many years ago, but passed because I did not think it was possible to be sucessfull at it.

5

Property Information / Re: Otawa

« on: November 20, 2009, 12:29:27 AM »

I've seen a lot of people paying close to retail on tax sale properties, still deals to be had but I don't understand it.

Sure, if I could get a property in the location I want, i might pay close to retail too, but these properties and the Hamilton ones where nothing special.  Maybe its a large REIT or person just buying land instead of investing in the stock market hoping for a better return in the future?

6

General / Re: Help! Need advice regarding a crown lien on the tay property.

« on: November 20, 2009, 12:26:51 AM »

How bad do you want the property?

Talk to a lawyer.  I don;t think the CRA will disolve the lien.  A lien is a lien regardless of when it was regisitried.  I think you have two options:

1. talk to a lawyer and get their advice.  Try to get everything the town says in writing, hopefully through email.  If they are only willing to verbally tell you but not put it in writing I would be weary. At this point, with $2400 already in the game, whats another $500 for piece of mind.

2. Roll the dice and see what happens, you might have a leg to stand on if the township gave you incorrect information, however, it would be a legal fight that would cost you a lot.

3.  Walk away, with all the restrictions on the property, its a no win for you.  If you take the township to court, forget about them lifting the Hold and any other favours they might do for you.

What I find interesting is that you listed the 2 other bids and there may have been more, all pretty close to each other, is it possible that all of these people bidding did;nt even bother to do a title search?  That would be crazy.  That alone tells me two things:

1. The township is correct and you will get the deed free and clear or
2.  There are a lot of uniformed people getting into this game.

7

General / Re: Tax Sales going mainstream?

« on: October 29, 2009, 04:25:46 PM »

I am just weary when I see any of these "invest in real estate" seminars, there is always a catch.  Either they are selling you some book/course or are looking for listings, or a bait and switch type of deal etc... Nothing in life is free.

Its all good by me, as I truly doubt that anyone going to the seminar is going to start bidding.  With today;s technology, internet etc.. if someone is not so inclined to even search ontario tax sales in google, I can;t see them doing the required due diligence to obtain a property.

Usually, there is always a sales pitch for investing without capital, which is just nonsense.  In the tax sale game, without capital there are no winnings, as banks do not finance just land.  That right there tells me that something is not legit. 

8

General / Tax Sales going mainstream?

« on: October 29, 2009, 06:18:17 AM »

Was surfing craiglist toronto and saw this ad:

http://toronto.en.craigslist.ca/tor/reo/1441271346.html

WARNING: Real Estate Tax Sales Really DO exist in Ontario!!!

If you've been wondering how to make money in Ontario Tax Sales and don't know:
- Where to start
- How it works
- What are the risks
- How much can you make

or ... if you have not pursued investing in Ontario Tax Sales because you don't have a lot of money behind you to invest,
then this no-cost information session is just for you.

We will tell you how you can find out about all of the nitty-gritty details about investing successfully in Ontario Tax Sales, so that you avoid the most common risks, and make the most profit.

We will show you real life examples of local Ontario residents who made over $100,000 last year (even during a recession), by investing in Ontario Tax Sales part-time, with very little starting capital, and not having to leave their day-job.   

Is someone on this board going to make a special apperance?  Will I be able to get an autograph?

You can simply dabble by spending a few hours in the evenings/weekends on your computer and make an extra $25,000 - $100,000 per year by getting properties through a unique form of Ontario Tax Sales (not live public auction) and then flipping them for a profit.

You will learn about the procedures, receive all of the forms and checklists, and learn the terminology.

Complimentary Session:
Tuesday November 3rd at 7:00PM Sharp

Duration: Approx. 1 hour

Location: Dufferin St. just south of Yorkdale.
(Exact address provided when you call to confirm attendance)

NOTE: You MUST CONFIRM if you would like to attend so that we can reserve a space for you.
Space is limited and with some people still registered, the remaining space will be filled fast.

Whats the deal with this?  Is someone starting up a new business by selling "secrets" that are readily available for free on the internet?  I should attend this session just to find out what there selling and for how much.

People could write a encylopedia with all the info on these forums that is available for free.


It will just drive more people into the tax sale process, maybe by next year we will be lucky if we get too pay full MLS asking price on properties in this game.

9

General / Re: Kitchener Ontario Tax Sale, yet unadvertised in the Gazette.

« on: October 15, 2009, 05:53:59 PM »

Twinn1 if you think that this house is a keeper than you must live in a dump, upgrade and buy this one.

This form is to help everyone, but your description is really overstating the true facts.  No worries, I understand that this is an internet forum and you've got to do what you've go to do to discourage bidders.

I dont think the house is a keeper, but if the min bid includes all liens then there is small margin for profit.  I have seen tax sale properties that have had nothing but shacks on them, much worse then this house.  Does it need work, yes, of course it does or else it wouldnt be going to tax sale.  But is this a tear down and rebuild, no, not even close.  The biggest negative for the house is the unknown factor-not seeing the inside and I can only imagine the state it will be in after the occupants get evicted.

This game is all about profit, not about finding a home to live in, as there are very few homes that actually go for tax sales.

My prediction for this one is that it will either be redeemed before the sale or it will end up going for 200K plus at auction by someone looking to take an early retirement from the tax sale game.   

10

General / Re: Kitchener Ontario Tax Sale, yet unadvertised in the Gazette.

« on: October 13, 2009, 11:54:14 PM »

 FYI, to anyone that is interested, I drove by this afternoon, the google map picture is a pretty good example of the how the house looks now, I didnt even bother to take a pic because it looks the same.

KMAN_KIT
I don;t know, but by your overexaggerted claim of the property, I take it you are bidding or trying to work out a deal with the owner.

House needs painting  sure it can use a coat, but its fine even without one
Lawn maintenance required Its not even that overgrown, 5 minutes with a lawnmower will fix that
Need new roof desperately. One 3 ft by 5 ft section is down to the paper.True
Solar heater on roof was for the pool. dont know, must be from the neighbour
Pool has been filled in. true
Back fence needs repair, boards missing and back gate will not close.Its missing two boards, 5 min with a hammer and its done, never tried the gate as i said, the house was OCCUPIED)
Shed in backyard full of garbage.No idea how you know this without being on the property, shed was closed, no garbage in backyard
House backs onto a Hydro corridor and community trail. True, more of a communty trail then a hydro corridor, there is an school two minutes off the trail almost directly behind the house
A/C unit at side of the house.I did not see this but did not walk around the property too much, it was occupied
Old building materials piled on the front porch.I did not say any material or tarps on the front porch, drive way looks decent,

I am still doing my due dilligence but from my inital research the house is a write off due to the liens and not the condtion.  After reading your write up my first thought was that it might be/have been a grow op, but its being occupied right now, so it can't be in that terrible shape.  Still doing some more research............

11

General / Re: Kitchener Ontario Tax Sale, yet unadvertised in the Gazette.

« on: October 12, 2009, 05:14:42 AM »

Wow, you guys have done more due dilligence then me, and I posted the sale.  Im going to go and look at it this week sometime.  Ill take pics if I dont forgot my camera.

Due dilligence means not talking to the neighbours, they might know already but if they didnt, you just told them and now have potential bidder against you.  This sale has yet to be advertised in the Gazeete and I have not seen any actual hardcopy (newspaper adverts for it in my searchs of local newspapers).  So there is a good chance that you just invited another bidder. 

DO NOT TALK TO NEIGHBOURS!!!!


Thanks for your update regardless.


Here is the google maps street view link



http://maps.google.ca/maps?q=106+Roseneath+Crescent,+Kitchener&ie=UTF8&gl=ca&ei=IbfSSuzmC5DKlAfX65SpCg&ved=0CAsQ8gEwAA&hq=&hnear=106+Roseneath+Crescent,+Kitchener,+Waterloo+Regional+Municipality,+Ontario&ll=43.416345,-80.492784&spn=0.000869,0.002384&t=h&z=19&layer=c&cbll=43.416399,-80.492689&panoid=Fu6r0YNPTDK_HCN53wA7Ig&cbp=12,315.15,,1,-2.38



It looks like the pic posted is from google maps, they were in and around Toronto sometime in April/May/June so this pic must be from that time frame.  Question is, it sounds like the guy is/was doing some reno work, why?  If he is not going to redeem it?  Its not like a property goes to tax sale overnight--.

Second, you must have had a good walk around the property to get those details, is it vacant?  Because Sat morning at 10:30 is when I would expect most homeowners to be home.  I REALLY HOPE IT WAS VACANT, cause if the owner is the one that gave you the tour, this one is as good as redeemed.


Looking at google maps it looks like #107 was for sale in that timeframe. If anybody wants to check what it sold for let us know.  That would give us a pretty good market value for something that is in good shape (I am assuming)


BTW, there was house in uptown waterloo that sold this week, it was advertised for 84K(no drywall, hydro, looked like garbage), I dont know what it sold for, it already had offers on it by the time I heard about it.  But there are deals out there outside of tax sales if you look.

12

General / Re: Kitchener Ontario Tax Sale, yet unadvertised in the Gazette.

« on: October 08, 2009, 06:00:41 PM »

Tax sale properties do have to be advertised in the Gazette, however, that can be one week before the sale.  A lot townships post public notices before they advertise in the gazette.  That being said it could be a surplus property but I doubt it, as how would city of Kitchener have purchased the property with a lien on it?  Being the owners they would be responsible for the lien on the property. Does not make sense.

I will do an drive by and some more research in the coming days, if what i find is noteworthy I will post it.

13

General / Re: Kitchener Ontario Tax Sale, yet unadvertised in the Gazette.

« on: October 06, 2009, 11:43:53 PM »

128K does sound quite high considering that the current owner purchased in 2002.  I do know that some homes that back directly onto Mclennan park (Mt trashmore as the locals call it, used to be a dump like Centennial park in Toronto, now its a park) did have problems 10-15 years ago.  The homes flooded with toxic water and the City of Kitchener had to pay to repair the damage, athough I think that was on the other side of the park.

The only thing I could think of that would cause such a high min bid would be:

1. A lot of homes in Kitchener still have electric baseboard heat even though most streets do have natural gas lines running under them.  Possible that the owner had natural gas run into his home and did not pay for it. Kitchener has their own utility company, even then, I dont know were 128K came from.

2. Lets assume 250K assesment and give them a $3000 annual tax, no lets make it $5000/year, even then its $35K plus 25K to run the natural gas (if they did run it) I know 25K is way to high, but still, even then its only $60K.

I dont get this either, I will try to dig up some info on this, might even do a title search.  Will keep everyone posted.


The closest house on MLS is this one, two streets over:  http://www.realtor.ca/propertyDetails.aspx?propertyId=8717505

259K, mght be room to make some money depending on how much the lien is against the property. 

14

General / Kitchener Ontario Tax Sale, yet unadvertised in the Gazette.

« on: October 06, 2009, 08:13:10 PM »

Here is a tax sale I found that is yet to be advertised in the Gazette.

If anybody on here has some time on their hands and wants to do some research.  Next time I am in the area, I will drive by and check it out.  My guess is that with a min bid of 128K plus government lien, this one will not even get a min bid (really depends on the amount of the govt lien).  As far as Kitchener is considered, its a medium area.  Not the best by far but there are way worse areas.


http://www.kitchener.ca/tenders/tenderDetail.asp?tid=17338


?        Government Lien registered on title

T09-094         Description of Lands:

                                                               

                        Lot 5, Plan 1368,

                        in the City of Kitchener, Regional Municipality of Waterloo,

                        being 106 Roseneath Crescent, Kitchener

                                                                                                                                                           

                        Minimum Tender Amount                           $ 128,851.77

15

Member Experiences / Re: Talking to the Owner

« on: October 04, 2009, 01:37:26 AM »

WHAT THE F***

I can understand this fools game plan as in his mind, worst case is that if he does'nt do the deal, it gets redeemed.  If he can;t play then no one else will.  BUT, if the properties get redeemed it means he never plays and therefore never wins!

Reasons you do not talk to the owner:
1. It WILL redeem 99.9% of the time.  If the owner is abscent and the township has inadequate mailing records etc.. then he just shot himeself in the foot.  And all of us as well.

2. Everybody here assumes that the owner;s are either broke, dumb hillbillies etc... the majority of good properties are redeemed, if not they are mostly junk land with vaule to adjoining owners.

3. If the owners were that desperate for cash, they would have sold the property by now, any fool can call an real estate agent.

4.  Even if the owner was going to let it go to tax sale as he has no use for the land, he will now redeem it because the said douche(s) have implied that it has value.  Why would the owner not just redeem it and list on MLS. 

I assume that this douche is not alone, there are probely a few people that use this stragedy that lurk on here, all thinking they are smarter then everyone else.   Total fools.  I really can;t understand that stragedy, its just so stupid, I can;t comprehend how people can be so dumb.

Simple math.
Fool has "won" two properties with this stragedy over an unspecieifed time frame.  Now, if he would have just bid on ALL of the properties he caused to be redeemed, his chances would much greater at winning more bids.  Sure, he might not have won at all or maybe won 10, guess the fool will never know.