Fraud Contractor Avoided

Let it Snow!

I can't believe how early it started snowing this Winter. It's not even Christmas and my kids already made a ginormous snowman outside!

Snow Removal: Sold Out 

Last week, I started looking for a contractor to handle snow removal at one of the properties in Barrie. I searched for local companies and contacted a few that looked good. It was almost 6 pm on Friday night, so I was surprised that many people picked up the phone and gave me some info.

But I was even more surprised that most of the snow removal companies were already booked solid for the entire season, even though it was only December 15th.

I started to worry that I wouldn't be able to find anyone for the job.

Finally - Great Fit! 

Eventually, a guy named Chris sent me a text message and said he was available. I asked him some questions about the services he provided, his company, insurance, etc. He replied to all my questions very quickly and gave me perfect answers.

He sent me a contract late on Friday evening. I was very impressed - he was very well organized, easy to deal with, and eager to work. Chris seemed to be a great fit.

On Saturday morning, I printed the contract, read it start-to-finish, thought about it, signed it, scanned it and almost emailed it back to Chris.

But, as I was about to click Send, it occurred to me that I haven't done any due diligence. So I back paddled and started checking.

Oh No! Fraud Alert!!!

I noticed on Chris' website that the service area is Halton and Peel, which doesn't include Barrie. This seemed weird to me. So I texted Chris to confirm if they actually service Barrie.

Chris replied that they've expanded and now service several properties in Barrie.

I started looking for additional information about the company, and sure enough, I found numerous reviews from various people, who signed a contract with Chris, made either a deposit or full payment, and never heard from him again.

Feeling Grateful

I am very grateful to all those people who shared their experience online and saved me from another bad contractor! THANK YOU!

At 7 pm, Chris texted me: "Your driveway was just done. Please send payment for the winter package". I replied that I will not go forward with the winter package and Chris sent a few more texts advising that I should pay for the work done ASAP to avoid late fees. I ignored his texts.

And today I continued my search and hired an awesome legitimate snow removal company! Yay!

Landlord and Tenant Success Stories

Yummy Surprise!

I often come across horror tenant/landlord stories such as the one I posted a few weeks back.

However, I strongly believe that if you do your part right as a landlord, your tenants will bring you lots of joy. They will take great care of the house, pay rent on time, let you know if something isn't going right or needs your attention. And occasionally they will give you a hug or come up with a wonderful surprise, which will make your day.

Here are some examples when tenants made me very happy:

• A tenant made a dessert for me. Very yummy surprise!
• A tenant takes care of a flower garden around the house. She loves flowers and makes the garden look beautiful.
• A tenant paid a self-inflicted $20 extra for being late with rent. We'd previously agreed about the delay and this extra bonus came as a very pleasant surprise.
• A tenant sent me a link to a song that he felt was the most wonderful thing he has ever seen and heard. I really enjoyed the music!
• A tenant recorded a CD of his own music. It was really cool! 

I am grateful to these amazing people!

Hope you found this blog post helpful. Post a comment if you did. I love hearing back from you.

My New Year's Resolutions

The pressure is on! It's time to stop and reflect. Another year is almost gone. New year is around the corner. I will make the best out of it!

Here is my preliminary New Year's resolution:

1. Be realistic. 
2. Set one SMART goal for all of 2018. 
3. Research and study at least 3 ways of achieving the goal. 
4. Find and trust experts, be open minded and learn from them.
5. Fully commit to making it happen. 
6. Follow through, be consistent and disciplined.
7. Have fun, meditate, exercise and go for walks.
8. Finish everything I start. 
9. Get out from under the rock, stay out of my bubble.
10. Share and help others as much as I can!

Buy and Hold Rental Property Recipe

I must be hungry :) 

Yesterday we closed three properties (two duplexes and a single home aka 5 doors). Yoo-hoo!

If you told me three years ago, that I'd be buying three houses a day, I wouldn't believe it. The reality is, buying several properties together is not much different than buying one house at a time. The recipe is the same. All you do is follow the recipe and, if you run into any problems, figure out how to overcome them.

So if you have a big goal, find a recipe that will take you closer to your goal and do your best to follow the recipe. One step at a time! As long as you keep going towards the destination, you'll get there.

Initially, when my husband and I set course towards 50-doors goal, we thought "Okay, let's figure out how to buy the first door". Our hypothesis was that if we buy one property and make it work, we can then repeat the process 49 times... Sounds childish, but so far this approach has worked for us.

And here is the recipe we are using.

Recipe - Buy and Hold Rental Property 

Serves: $200 / month

Preparation Time:  up to 6 months

Cooking Times: 30-90 days

Equipment: Determination, computer, wi-fi, and phone

Ingredients: 1 house that can be rented, 1 insurance policy, 1 real estate lawyer, 1 real estate broker, and 1 property manager. 

Method: Using a computer, wi-fi, phone and determination,

1. Find a house with positive cash flow 
2. Find money to buy the house
3. Add a real estate broker, a mortgage broker and a lawyer, mixing well 
4. Stir in an insurance policy
5. Simmer until successful closing
6. To serve, add an experienced property manager.

Key to Investing Success: Get Good Deals and Avoid Bad Ones

My real estate mentor once told me that "Success is not only the good deals that you get; it's also the bad deals that you don't get".

Here is a recent example of a bad deal that I didn't get.

Perfect Find - Very Ugly House

My husband and I accidentally walked into an open house in Barrie, Ontario. The property was being sold by an estate. It was in a super rough shape. The house had to be gutted and re-built. Most investors would agree that this was the best type of an ugly house you can ever find - a flipper's dream come true type of a deal. Asking price was 250K. Next door houses were selling at 350K.

What Was Given 

In our situation we knew that:

• We could find funds at 10% interest rate
• We could complete the renovation in 3-4 months and sell the property in about 6 months
• We wanted to make at least 25K at the end of the project
• Real Estate Commission on sale would be 5%
• Closing costs on purchase and sale would be approx. 2.5%
• HST applied to real estate commission on sale would be 13%
• Most prominent costs would be interest and renovation. Assume utilities, insurance, etc. would be part of renovation cost.

Good Deal Numbers

We confirmed with our contractor that the cost of renovation would be approximately 100K.

We added up all major costs ans saw that if we buy the property at 185K and sell it at 358K, we'll make our desired profit of 25K.

Given current market price of 350K, it was reasonable to assume prices will reach 358K by the time we will be selling.

If market remained the same and we'd sell at 350K, we'd make ~17K on the flip. This was acceptable to us.

We made an offer at 185K.

Bad Deal Numbers

There were 2 competing offers with the highest bidder being at 250K. Our agent asked if we'd want to increase our bid.

At 250K purchase price, we'd be losing 60K.

In order to make a 25K profit, we'd have to sell the house at 434K or 24% over current market price in only 6 month (48% annualized increase).

Betting on 48% annualized increase would definitely be a "buy and prey" type of investment.

We did not increase our bid and passed the deal. 

What Actually Happened 

After the recent mortgage rule changes, market actually rolled back from 350K down to ~330K.

If we purchased the house at 250K, we'd be looking to lose about 80K on the flip. Given rent and utility costs in the area, rent & hold on this property would be cash negative as well. 250K would have put us in a very bad position.

Looking back, it is obvious that our numbers did not make any sense at 250K. However, it was very hard to walk away from the deal in the moment when the events were happening. What if other bidders with much higher offers were smarter, more experienced and knew more than us? What if the real estate agent was right saying that this opportunity to get a property at 100K below market was a miracle? What if market would keep rising like a rocket ship and we'd miss out if we don't take the deal?

No matter what everyone else was doing, thinking, saying, or predicting, it was crucial for our success to stick to our own business and make the decision of not getting a bad deal, given the facts we had at the time.

Amazing Face Lift (aka Stucco Fixes)

On Friday, our contractor finished stucco fixes at a Guelph, ON property. Timing couldn't be better and I am super happy this project is complete before the winter.

Oh no! Gigantic Stucco Bubbles

A few weeks ago, my husband and I noticed some deepening cracks in stucco. The cracks were hiding behind a bushy vine plant that has spread all over one of the walls. When we removed the plant, we discovered gigantic stucco bubbles. It became obvious that the issue is quite severe and should be fixed before the winter and before the wall outer layer simply falls off. See the image on the left.

Hiring a Stucco Expert

I got several quotes for the job ranging from "this can't be fixed" to $14,000. I was not prepared to give up or pay 14K for the fixes.

Finally, we were lucky to have found a great stucco expert! His bid was reasonable and within our anticipated budget. He has over 20 years of experience and had completed numerous residential and commercial projects in the area.

Making Sure Job Will Get Done

After my recent experience of losing a deposit and lots of time and energy with a contractor who's gone from great to bad due to being over booked, I asked the stucco expert to sign a one-page agreement confirming that he'll either finish the job by Dec 1st OR return my deposit.

Stucco Face List Complete

As expected, the bubbles were really nasty. Most of stucco came off as soon as the stucco expert started removing the lose sections. Metal lathe was installed. Then, bonding agent and high strength concrete resurfacer were applied. Once everything dries up, the patches will blend in with the other parts of the wall. We will also put a nice coat of paint over the entire house in Spring. The house will look fabulous!

Not only the job got done as agreed, but also the stucco expert patched up all the cracks on all other walls around the house at no extra charge. I am very grateful for all his help and doing so much for me on this project. Our tenants will be warm and cozy.

All Patched Up

Stucco Face Lift Complete