Who Is On Your Team?

[brentdavies]

The ACRE program refers to building your team. In my view there is 2 teams. The buying team and the Manage for Cash Flow team.

The buying team is the realtor, mortgage broker, lawyer, building inspector, and appraiser.

The Manage for Cash Flow Team should be your property manager, plumber, handyman, leasing agent, bookkeeper, tax accountant and your quality customer/ tenant.

But why do investors wait until the last second to find a property manager?

In the last few weeks, I have received 2 calls from investors buying houses with basement suites. The recent call was on Tuesday evening at 7:30 PM, looking for a property manager who could attend an property inspection scheduled for the next morning. Most property managers I know have no shortage of work and generally are not available at a moment`s notice for an unknowen client.

The second issue with the properties not meeting "minimium housing standards" under Alberta Health. Unless the property is a bilevel, chances are the property will not meet the standards. Substantial renovations may be required to correct the small windows, headroom, interconnected fire alarms, handrails, and fire protection to furnance rooms and doors, to name a few of issues, as many basement suite owners are just finding out.

Many property managers in Edmonton are shying away from basement suites due to the liability that now comes with these suites.

If basement suites are your "cash flow" property and it fits your system, find a property manager BEFORE you put in an offer on the next basement suite.

 

[vandriani]

Brent,

Great advice. All investors should have have detailed conversations with their entire team prior to purchasing.

I was wondering if you would be interested in posting a primer in regards to suited properties in Edmonton.
Basically, what things make it legal/illegal and what things make it a safe place (in the eyes of the authorities).

I think it would be a great addition to anyones checklist when evaluating a suited property.

 

[Thomas Beyer]

QUOTE (brentdavies @ Sep 9 2010, 12:15 PM) .. In my view there is 2 teams. The buying team and the Manage for Cash Flow team...
I agree wholeheartedly .. especially on the "impeccable property management side" (which btw includes a money / mortgage manager too) ..

but there is a third: the FIND INVESTORS team/person/partner/employee .. as you need $s to buy usually !

This in essence describes the 3 team members/partner we have here at PrestProp.

 

[Berubeland]

I want to point out that CMHC has a program to help fund any necessary improvements to the fire code in the form of a forgiveable grant. They`ll give you a $24,000 forgivable grant to improve the property as long as you rent it to low income people. Their hurdle for low income and affordable rents is very generous.

For a 1 bedroom the rent ceiling is $930 and one person must make less than $37,000 per year.

For those interested the program is called RRAP and more details are available on their site. You have to apply and be approved before doing the repairs so planning is required. If you have such a suite and the tenant gives you notice you could probably apply then.

 

[housingrental]

I support Brent`s post

 

[RussellWestcott]

Typically things go off the rails when you deviate from the system.

Lets go back to the ACRE program, and particularly the section of the Positive Cash Flow Ladder. In that section there is a tremendous document called the Property Planning Sheet --> found here

There is an entire section of the checklist that deals with Property Management.

for example:
Property Management (select one)
Self Managed
Management Company:
Negotiate Rate
Provide void cheque for property bank account
Status( Tenanted or Vacant): _____________________
If Tenanted, send leases
If Vacant, entry allowed to show tenants before closing?: ________
Complete walk through
Send letter to tenants regarding change of ownership
Resign leases for existing tenants (ONTARIO ONLY)

The answers to may of our `panic situations` can be found within the system

 

[Thomas Beyer]

QUOTE (Berubeland @ Sep 10 2010, 05:34 AM) ...

For those interested the program is called RRAP ..
partially true only .. as the rent ceiling differs by city and is usually WELL BELOW market .. and in effect for 15 years .. so this program is NOT useful for investors but for municipalities or non-profit organizations usually !!

 

[ChrisDavies]

Kudos to the investor Brent mentioned for having the foresight to call a Property Manager in advance, he just needs to get on it a little earlier.

 

[Berubeland]

QUOTE (ThomasBeyer @ Sep 10 2010, 10:44 AM)
partially true only .. as the rent ceiling differs by city and is usually WELL BELOW market .. and in effect for 15 years .. so this program is NOT useful for investors but for municipalities or non-profit organizations usually !!




I checked using my postal code in Toronto. The thread is about basement apartments, which are usually not at market rents because of the space being in lower demand. There are restrictions of course and anyone interested can get free money (up to $24000) so worth looking into IMHO. By all means everyone do your due diligence before signing up. I didn't know that it changed by region, thanks for pointing that out.

 

[fumbrunner]

QUOTE (Berubeland @ Sep 10 2010, 12:55 PM) I checked using my postal code in Toronto. The thread is about basement apartments, which are usually not at market rents because of the space being in lower demand. There are restrictions of course and anyone interested can get free money (up to $24000) so worth looking into IMHO. By all means everyone do your due diligence before signing up. I didn`t know that it changed by region, thanks for pointing that out.

Not to hijack this thread, but I`m in the middle of the RRAP grant process. It`s a good grant if the property is already in a low rent area. The minimum household income ceilings are very low and pretty much limit you to social assistance. However, if you have a property with these characteristics, it is worthwhile exploring. You will need to take care of all mandatory repairs (they do an inspection) and you typically need to be contributing some cash yourself (10%). It also helps to have letters of support from community organizations.