Equity Builders and similar investments

[ekisielewski]

QUOTE (dnaumis @ Aug 3 2008, 09:08 AM) Hello again,
Has anyone heard or purchased from Equity Builders or similar companies? They purchase large complexes of units (like townhomes) and sell them off individually to investors. They handle all the rentals and maintenance for a fee. It sounds like it could be somewhat profitable, and worry-free, but not sure. Any info or advice would be appreciated.
Thank you,
Debbie


Hi Debbie: I have purchased 3 properties in the last three years from Equity Builders. It is a hand-free investment which works for me as I already have a business to run. Their mgt fee is low and condo fees guarenteed for 3 years. If you would like to discuss further pls email me directly.
Good Luck
Elisabet

 

[TracyYik]

Hi Elizabeth,



Are you still with equity builders? What are your thought with this company?

 

[Matt Crowley]

[quote user=Mecheng]However, my mortgage planner tells me most properties he did in Alberta last year were negative cash flow but in appreciation markets it ca still be profitable.



There are plenty of markets in Alberta that offer positive cash flow opportunities. Buying for appreciation alone is never a good choice.



Buying negative cash flow properties is not sustainable and will really complicate portfolio growth. If the market appreciates you certainly can profit, but if it takes a breath you have a growing liability. Every month of negative cash flow in a soft market looks as if you are bleeding many times more than the monthly negative cash flow.



My concerns with negative cash flow properties:



- How are you going to pay for maintenance?

- How are you going to qualify for your next mortgage? (this will raise your TDS, decreasing your income room)

- How are you going to attract a joint venture who is betting on appreciation alone?

- How will you mitigate the possibility of cash calls?



I'm sure money can be made in pure speculation, but that sounds really stressful. I sleep a lot easier carrying properties with positive cash flow. A lot of this risk can be mitigated with thorough research.