Tuesday, October 27, 2009

Monday, October 26, 2009

Multi Family Properties - Income Producers

Here is this week's income producing multi-family properties. Please review the list and as always, please pass along any questions to Greg at gblok@kwottawa.ca



Small Commercial Investment Mortgage

Small Commercial Investment Mortgage

Documents required for financing:
• 2 year's property operating statements and/or pro-forma operating statements
• 2 year's Financial Statements
• Personal net worth statements from guarantors with supporting documentation.
• Certified Rent Roll
• Copy of leases
• Purchase and Sale Agreement (if applicable).
• Confirmation that the property taxes are current.
• The Borrower is to maintain a bank account with TD (for the property at minimum).
• Borrower Environmental Questionnaire
• Property Inspection Report (Bank)
• A Phase 1 environmental assessment may be required, to confirm that the property does not contain environmental risks.
• A structural / mechanical report may be required.
• AACI Appraisal addressed to the Bank.

Security documentation:• Collateral 1st mortgage against the commercial property.
• General Security Agreement
• Personal Guarantees (full recourse)
• General Assignment of Rents
• Assignment of Insurance including Business Interruption and Broad Form Boiler & Machinery.
• Evidence of Public Liability Insurance.
• Mortgage documentation to be prepared by Bank commissioned outside solicitor.
• Corporate Guarantees (if required)
• Business Credit Life Insurance

Annual Review Requirements:• Confirmation that mortgage payments are current.
• Confirmation that the property taxes are current.
• Confirmation of acceptable branch site visit
• Certified Rent Roll.
• Fiscal year-end financial statements and any other documentation the Bank may require from time to time (i.e. if there is evidence of a material change in occupancy level and/or rental revenue from the Certified Rent Roll or any other circumstance such that the overall risk profile has changed and an amendment to risk rating is required).

Tuesday, October 20, 2009

Commercial Financing v. Residential Financing

Just wanted to discuss with you the commercial financing difference
Commercial financing is very different than residential financing. Residential financing is usually 4 units or less, whereas commercial financing is usually 5 units or more. A few differences in commercial financing v. residential financing:

1 - you can only ammortorize over 25 years not the typical 35 year residential
2 - you get a better interest rate with only 15% down, not the typical 25%, so you are usually better to put down less money in commercial financing
3 - with the current rates, the interest rate will likely be in the 4.25% range, opposed to the very low residential rates
4 - the financing timeline should be about 1 to 2 months
5 - the fees are a bit higher, appraisal, rate hold fee, etc
6 - the qualification for a commercial financed property is based on the viability of the property, whereas residential financing is based upon your personal situation

It is a bit more of a process to finance a commercial property, but it is not earth shattering. I have done it, you can do it as well.
October 19 2009 - culled income property list posted - http://ping.fm/8KnUB

Monday, October 19, 2009

Income properties October 19 2009

Here is the culled list of income properties for October 19 2009.

Note on CAP RATE - a cap rate is essentially a comparison tool that you can use to compare income properties. The general rule of thumb for capitalization rates is the higher the better.

If you are looking for tax advantages investments, not so much income, I have included a few sub 8% properties for your review. I have marked these with a '***'

For a larger purchase with reasonable numbers, I have marked these properties with '###'

Address - City - Cap Rate
25 Duncan - Easton Corners - 11.49%
216 Hannah - Vanier - 11.10%
707 Cty Rd 18 - Hawkesbury - 10.78%
753 Principale - Casselman - 10.46%
117 Madawaska - Arnprior - 10.46%
117 Main St N - Chesterville - 10.37%
5105 Cty Rd 10 - Fournier - 10.06%
143 Ste Cecile - Vanier - 9.88%
11 Winnifred - Smiths Falls - 9.32%
291 St Laurent - Manor Park - 9.31%
20 Secours - Alfred - 8.43%
22 Market St - Smiths Falls - 8.02%
195 King Edward - Lower Town - 7.05% - ###
124 Spadina - Hintonburg - 6.94% - ***
195 James St - Centre Town - 6.65% - ***




Address - City - Cap Rate
17 Main St E - Smiths Falls - 11.51%
36 Chambers - Smiths Falls - 11.08%
23 Lombardi - Smiths Falls - 10.11%
3874 Champlain - Bourget - 9.27%
18 Main St - Smiths Falls - 9.26%
88 St Paul St - Alexandria - 7.25% - ###
68 Sweetland - Sandy Hill - 6.71% - ***
177 Goulbourn - Sandy Hill - 6.48% - ***

For specific MLS listings or further questions, please feel free to email me (gblok@kwottawa.ca) or call at 613 788 2572. For those of you looking to view the properties, please read the following blog about Offer First, View Second.

Keep smiling,
Greg

Wednesday, October 14, 2009

Property Management Software

The world has become increasingly online focused and is now being manifested in property management software. I have been doing some online reading about property management software by Chris Thorman, who blogs about property management software. As a real estate investor, so much time, but potentially so much upside profit can be made in top notch property management.

A property management firm can be an essential part of your team. They can find tenants, collect rents, do all essential paperwork and actually monitor your maintenance needs. A good property manager will give you the heads up to when things are beginning to wear out and need your attention.

Property management software can also coordinate your advertising needs. Using online advertising can increase your results when renting properties. Online advertising is the wave of the future in real estate rental properties.

Tuesday, October 13, 2009

First make an offer, view second!

I realized recently that not everyone will be seasoned investors who are familiar with the process of “make an offer first, view second” so I thought I should expand on this.

As you become more experienced as a real estate investor you will discover this is an extremely common way to buy real estate. I personally never visit a property prior to having an accepted offer for several reasons:

1 - the property owner does not like having to disrupt the tenants numerous times.
2 - What if I love the property but I can’t agree with the price or terms (then I get involved in an emotional purchase)
3 - I can re-negotiate the original price if the property is not satisfactory on the inspection (for instance the property needs new windows - waive the condition on inspection with a clause that the vendor will replace the windows or lower the price $10,000)
4 - Most importantly, this gives me an edge over other investors because I can get the property tied up before most other investors and it saves me a ton of time. If there is no deal to be had, why waste the time seeing the property.

This is a sophisticated way to buy real estate. It saves you time and the seller. He knows an offer coming in, site unseen is a strong, competitive offer from a serious investor.

Monday, October 12, 2009

Using a Realtor v. FSBO

A recent National Association of Realtors survey found that homes sold by an agent sell for an average of 13% more than those sold by their owners.

Sunday, October 11, 2009

Just wanted to wish you and yours a Happy Thanksgiving and a happy/safe holiday weekend.
Greg

Tuesday, October 6, 2009

10 unit building in Brockville - Exclusive opportunity



10 Unit building for sale in BROCKVILLE Ontario

$545,000 selling price
Exclusively listed

Expenses accurate for the last 12 months:

Tax: $9168.73 (2008)
Insurance: $2312.13
Water/Sewer: $2206.17
Hydro: $5233.86
Gas: $10,106.24 (includes heating of hot water and tank rentals)

Gross rental income (last 12 months):

$76,368.00

NOI - $47,340.87

CAP RATE - 8.7%

Email me today for a chance to learn more about this exciting opportunity - gblok@kwottawa.ca

Penthouse 1205 - 200 Besserer

Check out this hot new condo located in the Byward Market - 200 Besserer penthouse 1205

http://ping.fm/ZkLMp

Saturday, October 3, 2009

Know anyone looking to rent a 3 bedroom terraced town house in the West End (near Ikea)? Call 613.722.1232 for details!
2pm - Experts on Call - Increase your wealth through Real Estate - http://ping.fm/SoXwb
WANTED - multifamily listings (duplex, triplex and fourplexes) in the Ottawa area. I have lists of buyers looking to purchase right away!

Multifamily listings

Right now, in the Ottawa market place, there is a lack of inventory that is well priced in the multifamily listing. Multifamily listing means triplex, duplex, fourplex, etc. If you have a multifamily property that you are thinking about selling, please give me a call or email asap.

Thursday, October 1, 2009

Finally closed!

Today, 5 months after starting the process, I successfully closed the 6 unit building I purchased in the Byward Market. It is a bit of project to get the property running smoothly, but it will need some renovation and updating.

The property was under rented and has a much older and inefficient furnace that runs at less that 65% efficiency. A new furnace, replacing some rotten balconies, new hot water tanks and a new front door are going to get the building running much smoother.

The expenses should be cut by about 25%,combined with an increase of rents should add significant value to the building. For every $100 of increased monthly cash flow, the building should be appraised for $20,000 more.

Now is the time to get the building running better, then get it re-appraised and leverage the property into downpayments for more properties.
Live on 580 CFRA this Saturday at 2pm, listen to Marnie Bennett, Lilianne Eid and Greg Blok talking about real estate and increasing your wealth through real estate