Dear fellow rein members,
I just wanted to share my experience as a newbie. My main purpose is to turn a bad experience to a postive lesson so that we can learn from my mistake.
Background
I m a new immigrant of 2.5 years - read about Alberta Rein prior to coming. So when i landed, i immediately hit the ground running by buying a house. I used the knowledge and research that i read from the REIN website to make myself a Capital gain of $150000 in 6 months on holding a property. I move to a bigger property and when the prices were almost hitting to the peak, i refinanced at got HELOC from the my home.
On April 08, i decided to take the plunge and sign up as a rein member, took procession of my 1st rental property in early June 08. All went well, the property fits the system to a T.
Problems crop up when i needed to do a renovation to spruce up the property for equity apprecation and increase the rental . I interview a few contractors(Condo Handyman, Yellow Pages etc) and finally selected another REIN member (let call him - wolf) who is aware of all the recommend colours for the walls, types of material to order from RONA, BYW he was refer by my mortgage broker (bless him - he is a great guy) and me being naive. Didn`t do the full due diligence that DON always speaks about.
The alarm bells almost started ringing on the day after i handed him 50% of the project cost as a deposit - he was supposed to email a copy of the contract but he didnt. He promised to start work on the following monday but never did. We were playing hide and seek, i was following up with him finally after having the property sitting idle for 1.5 months until he told me that he will not work on my property at all (thank god). The next part of the story was followed by a series of no-show appointment, making appointment to meet u in the east and finally telling u to go to the west of the city to meet him. When u finally getting to meet him = checks that were issued bouncing, being stopped and making a trips after trips to the bank to get the check certified but to no avail. After hounding him for weeks patiently, he finally gave up and return to me my deposit in parts as he realized that i am not going to stop until i get my hard earn money only recently.
At the same time, i was fortunate to engage a tradesman to do most of the required job at half the price. Dont ask me to recommend this guy, everytime i m not there - things hardly moves (he is paid by the hours).
The lesson that i learn are as follows:
a. Due diligence does not slack after the property comes into your name. It has to be on every steps of the way.
b. To check if the company is licensed to operate before parting with a single cent for the "deposit". If the company cannot produced a contract before the work is done be very wary. Til today i have not been able to estab if the company is licensed - ie having a company account does not means that it is licensed.
c. I am also suspicious that the GST he is collecting, is it a way to boost the income - Of course to those of the REIN member who might have used his services before might wonder just like me. Think about it?
d. He is told my broker and me that he is doing all of Russel Property that needs to be renovated. In hindsight? Really
e. Always have a Plan B and never give up - in fact wifey had already given up on ever seeing the $$.
Please give me your comments and ideas from your experience. Cheers
I just wanted to share my experience as a newbie. My main purpose is to turn a bad experience to a postive lesson so that we can learn from my mistake.
Background
I m a new immigrant of 2.5 years - read about Alberta Rein prior to coming. So when i landed, i immediately hit the ground running by buying a house. I used the knowledge and research that i read from the REIN website to make myself a Capital gain of $150000 in 6 months on holding a property. I move to a bigger property and when the prices were almost hitting to the peak, i refinanced at got HELOC from the my home.
On April 08, i decided to take the plunge and sign up as a rein member, took procession of my 1st rental property in early June 08. All went well, the property fits the system to a T.
Problems crop up when i needed to do a renovation to spruce up the property for equity apprecation and increase the rental . I interview a few contractors(Condo Handyman, Yellow Pages etc) and finally selected another REIN member (let call him - wolf) who is aware of all the recommend colours for the walls, types of material to order from RONA, BYW he was refer by my mortgage broker (bless him - he is a great guy) and me being naive. Didn`t do the full due diligence that DON always speaks about.
The alarm bells almost started ringing on the day after i handed him 50% of the project cost as a deposit - he was supposed to email a copy of the contract but he didnt. He promised to start work on the following monday but never did. We were playing hide and seek, i was following up with him finally after having the property sitting idle for 1.5 months until he told me that he will not work on my property at all (thank god). The next part of the story was followed by a series of no-show appointment, making appointment to meet u in the east and finally telling u to go to the west of the city to meet him. When u finally getting to meet him = checks that were issued bouncing, being stopped and making a trips after trips to the bank to get the check certified but to no avail. After hounding him for weeks patiently, he finally gave up and return to me my deposit in parts as he realized that i am not going to stop until i get my hard earn money only recently.
At the same time, i was fortunate to engage a tradesman to do most of the required job at half the price. Dont ask me to recommend this guy, everytime i m not there - things hardly moves (he is paid by the hours).
The lesson that i learn are as follows:
a. Due diligence does not slack after the property comes into your name. It has to be on every steps of the way.
b. To check if the company is licensed to operate before parting with a single cent for the "deposit". If the company cannot produced a contract before the work is done be very wary. Til today i have not been able to estab if the company is licensed - ie having a company account does not means that it is licensed.
c. I am also suspicious that the GST he is collecting, is it a way to boost the income - Of course to those of the REIN member who might have used his services before might wonder just like me. Think about it?
d. He is told my broker and me that he is doing all of Russel Property that needs to be renovated. In hindsight? Really
e. Always have a Plan B and never give up - in fact wifey had already given up on ever seeing the $$.
Please give me your comments and ideas from your experience. Cheers
