Hello Everyone Investing in Hamilton Real Estate!!
Hope you’re alll enjoying the early summer weather! With all this extra heat, I figured the market would cool since fewer people would want to look at property but that wasn’t the case….. Last Friday I was out previewing properties on my own and hit paydirt on the first property. A sweet Mohawk student rental with potential and I liked the property so much, once I was done checking it out, I was on the phone calling clients to see who was ready to invest (conditional on financing and inspection of course). First two calls went to voicemail, third call I get a live voice and we write the offer 20 minutes later. I’d like to say I move fast but imagine my surprise when I call the listing agent and find out we’re one of four offers… and it’s only been 24 hrs since the property hit the market.
On a personal note, Cherry and I moved into our Hamilton home on Saturday so the house is full of boxes while we scramble wipe down every surface since everything is covered in dust. Too bad there is not much time to unpack as we’re leaving for Calgary for vacation
I’ve packed my chaps and stetson
this Friday but will be back July 9th.
While I’m out, Maria as always will handle pretty much anything on the admin side.
On the Realtor side, Tim Hong my business partner that many of you have met and worked with will still be on the front lines and in the trenches looking for quality investment properties to acquire so don’t be surprised if he reaches out to you when he does find one. The qualifying criteria for the property will still be the same, we only recommend properties we ourselves would buy.
While we’re on the subject of Tim covering for me :) Tim was kind enough to write us a guest post based on his experiences when acquiring his last apartment building. Take it away Tim!!
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About two years ago, I was searching for a student rental in Hamilton after having acquired several single family homes (all rent-to-owns). I was looking for something with greater cash flow and a long-term investment.
Along came this beauty three story 6-plex right across from Gage park. The property was in fair condition (in the context of Hamilton apartment buildings…) and the numbers looked good, so my joint venture partner and I wrote the offer, had it inspected, executed extreme due diligence, qualified for financing etc… and here are my top four lessons learned from this experience:
1) Plan a little longer to get financing approved. Typical residential mortgages take 3-5 business days to get approved. This commercial mortgage took almost 2 months to get approved. There were also some unexpected expenses and fees during the process. It’s a good idea to sit down with the broker/lender prior to your search to get a good idea of the process and costs of a commercial mortgage.
2) Request proof of all expenses paid by the seller. We had a good idea of what was being paid, but did not request all the paperwork for proof. After realizing that, a few expenses, especially insurance came much higher than expected.
3) Get a good property manager if you’re not willing to be completely active. With a multi-family home, this being six units, you deal with six separate issues and tenants. We inherited the previous property manager but after a few months, they did not fit what we were looking for. We contacted a new one that meets our expectations.
4) Know your exit strategy. This was a long term project for us. The plan was to renovate the building to increase rents as we turnover tenants. Once the renovations were done, we would get it re-appraised and re-financed to pull out our own money and continue building our real estate portfolio. Currently we are going through renovations in three of the units and increasing rents between 10-20%.
Having gone through the “in the trenches” learning of apartment investing, I want to help and educate other investors with the experiences I have gone through.
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Thanks Tim! If you have any questions for Tim I know he’d be happy to help. You can reach him at Tim (at) mrhamilton.ca.
Hope that helps! Till next blog post – happy Hamilton investing everyone!!
Erwin |Â MrHamilton.ca
PS: If you are in search for a Realtor or RE expert/JV partner, very determined to acquire investment real estate in Hamilton in the near term, have been pre-approved for financing, and have a great heart then contact my assistant Maria (at) mrhamilton.ca. Life is short and our time is at a premium so only the best investors need apply.
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