Finding the Sweet Spot!

Please enjoy the following article from Canadian Real Estate Wealth

New investors are always looking for advice on the best place to start, and invariably, writes industry vet Paul Kondakos, the six-plex comes into view.

Given the current Canadian economic and institutional landscape, might I suggest “starting with six,” six-plex, that is.

I think that the purpose built six-plex offers new investors their best opportunity to become a real estate investor as it sits in the sweet spot of a Venn diagram, where those three circles overlap. The number three, in fact, represents  the key things going for six-plexes.

Manageability

Most new investors want to be involved with their real estate investment as they see it being a new adventure (and rightfully so), they want to gain valuable knowledge and experience and they want to save the costs associated with hiring a superintendent and/or property manager. Managing six units may seem like a daunting task at first, but once you dive in, you will realize that it is not all that difficult as long as you are a well-organized individual who has a few hours to spare every week. While managing one unit (eg. condo) is an easier task, the superior return from a six-plex more than offsets the extra effort. Tips to help with efficient management of the property include:
•  Ensure close proximity to property
•  Try to get post-dated cheques from tenants
•   Prepare a list of contractors (plumber, electrician, handyman)

Cap Rate

The cap rate for a multi-unit residential property typically has a directly proportionate relationship between the number of units and cap rate (until it reaches a plateau and levels off). For example, the cap rate for a six-plex is higher than a triplex, which is higher than a single unit. While geography and location play a critical part in determining the cap rate for a typical six-plex, it is safe to say that the cap rate range is somewhere between 5 per cent to 6 per cent, which is significantly better than most condos and triplexes.

The six-plex lets real estate investors start to take advantage of economies of scale and thus provide a better return. Tips for those looking to maximize the return on a six-plex:
•   Look outside the big urban centers and look to smaller towns university towns such as Kitchener-Waterloo, Guelph, Hamilton, etc.
•  Look for purpose built six-plexes as they have better re-sale value and typically require less maintenance

Low Interest Rate

A low interest rate is the lynchpin to making the six-plex the best place to start for new investors. The math is simple, the cheaper your mortgage interest rate, the bigger the potential spread (difference between interest rate and cap rate) and bottom-line profit. Mortgage rates vary based on whether a property is classified as “residential” or “commercial” and a six-plex is financed as a commercial property as a rule.

We have some great deals on commercial mortgages, so contact us if you would like to know more.

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Three Investment Opportunities -Savvy INVESTORS Only!!!

If you are an experienced investor and looking to add another great property to your portfolio we might just have the perfect opportunites for you!

1.  NEW High end 2nd home or 4 season cottage, Bungalow on Balsam Lake by Fenelon Falls.  Last Bungalow that sold, sold for $549000 in this development.  Builder must sell & close before the end of Feb for a Capital loss & will do so for $425000 bottom price.  Need qualified person that sees the value of this opportunity to own their dream home on a very sought after lake, or being able to rent this out for great cash flow over the seasons OR to flip this cottage & sell in season

2. 2 – 4 bedroom homes, side by side semi, built in 2006 near Brock University in St Catherines – can be rented out & has been rented in the past with no vacancy for $400 to $450 a room each year.  Would like to sell both homes together for $17000 each bottom price.

3. Rent-to-Own…. Tenant & contract in place.  Located in London – purchase price is $315000 – Rent-to-own agreement is for $325000 in 3 years.  Holds positive cash flow with traditional financing & has a payout in 3 years!!!!

If you or someone you know would be interested in more information about any of these 3 great investment opportunities please contact our office today.

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Investment Mixed-Use Downtown Oshawa!

Down town Oshawa Mixed-Use Investment Property 865,000
6- 1 Br Apts and money Mart Tenant in Retail space.
Income $105,210 Net Operating expenses $67, 596

To View details please click image

 

 

 

 

 

 

 

 

 

Contact us to see if you qualify for 10% down Mortgage as a strong Borrower.

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Rentals with 10% Only Down Payment!

Since the implementation of Bill B20 it has been mandated that investment property will now require 20% minimum as a down payment.

But here at Mortgage Intelligence Oshawa we are able to offer 10% down to our top tier clients for purchases in Durham Region.

If you have excellent credit, experience buying and holding rentals and you have the down payment from your own resources we can look at your application with only 10% down. So don’t let the lack of a larger down payment stop you from buying that next investment property.

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UOIT Provides Investment Opportunity in Durham Region

If you are an investor you should consider student housing as an option. Durham Region has grown enormously and Oshawa and Whitby have benefited greatly from the influx of students to UOIT, Durham College, and Trent University.  Students come from around the globe to study in this modern facility. The problem is finding good student housing.

Here at Mortgage Intelligence we have helped many of our Investor clients find great properties to accommodate 4-5 students annually, thus creating positive cash-flow from inexpensive real estate.  If you would like to sit and have a discussion about whether this may be right for you, please contact us today.

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TREB Market Watch

Average Price Up in October, Despite Fewer Sales

“Sales have decreased in the second half of this year compared to 2011, largely due to stricter mortgage lending guidelines taking effect July 9^th 2012. The prospect of higher monthly mortgage payments due to the reduced amortization period has prompted some households to delay their home purchase,” according to (TREB) President Ann Hannah.

In October  Greater Toronto Area REALTORS® reported 6,896 transactions through the TorontoMLS system in October 2012 – a decrease of 7.1 per cent over October 2011.
The average sale price was $503,479 – up 6.2 per cent compared to October 2011. The MLS® Home Price Index composite benchmark price, which allows for an apples-to-apples comparison in terms of home attributes, was up by 5.1 per cent.

“We continue to see price increases well above the rate of inflation. Active listings have remained low from a historic perspective creating competition among Buyers, especially for low-rise homes,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

“It should be noted, however, that the annual rate of price increase has been edging lower over the past few months as the market has gradually become better supplied,” continued Mercer.

5 Questions All Condo Investors Must Ask!

Before buying a Condo here are 5 questions you MUST ask.

If you would like to discuss rate for buying Condos or have questions about down payment requirements, please use the form below.

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Make Money While You Sleep.

Investment Strategy For First Time Buyers.

If you are thinking about buying your first home you need to view this informative video.  It will help you not only buy a home but tell you how to buy a home that becomes your first investment rental property with only 5% down, not the required 20% down for investment buying . There’s a big difference in  first time home and a property that becomes your first Real Estate Rental Investment. But the biggest advantage is needing only 5% down!  In 2011 the Government implemented 20% down payment for all investment property purchase.

If you would like to buy a property with the plan of turning it into a rental investment you need to contact us today!

Use the handy form to ask a question or leave a comment.

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Rent to Own Gains Popularity

Tighter Mortgage Rules Make Rent to Own Even More Popular

Moneyville is always an excellent source for mortgage and real estate information, so I couldn’t pass up this article about Rent to Own.

The information is very direct but more important if you are thinking of Rent to Own be sure you obtain Independent Legal Advice, before signing on the dotted line.

Rent To Own involves a contract and as with any contract know what you are signing.

Once you understand your obligations and you agree with all the terms, then and only then should you go forward.

If you are an investor and want to do a rent to own, please contact us we always have good people who want to buy a home through Rent to Own. Use the form below to contact us if you have any questions or comments.

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Condo Sales Falling in Toronto – Opportunity???

Every Cloud Has A Silver Lining!

Recent reports of a falling sales and investors sitting on the sidelines may just present an opportunity to the seasoned Real Estate Investor.

“Buy Low,  Sell High” is the way investors hope the market will favor them.  The next few months should bring a correction and with that a “Buyers Market”. There are so many condos for sale right now, plus more being built as we speak.

When I came across the article Five Traps to Avoid, When Buying A Condo,  I thought this would be a good time to share it here on the blog. I hope you find it informative, especially if you’ve thought about buying a condo as an investment.

Perhaps the next few months will bring new opportunity for investment in this sector of the housing market. Food for thought: Not everyone who wanted to buy a Condo in the GTA can do so because of the tougher lending guidelines so this could be a good rental option. After all we all need a roof over our heads.

Please feel free to leave a comment or question in the helpful form below. Or apply on-line if you would like to get a rate quote.

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