Ask me anything about Real Estate

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Thanks for your honest opinon. I have read a lot of articles and blogs and regarding real estate. With so many conflicting views its hard to really get a grasp of whats happening in the real world.

I think house prices will drop something like 10-25% but thats over two years (might be some wishfull thinking as well), I see a lot of pressure on condo prices as there are a lot of new development coming online.

Time will tell, I'm stuck in my lease until August so I'l start looking in the summer/fall to see how the market is doing by then.
 
Q... if you are in the middle of your mortgage (i.e. 2 years out of 5), and you sell your place to move to another one, do you have to cancel your mortgage, pay the penalty, and get a new one for the new place? Or can you transfer your mortgage from one property to another?
 
Diesel said:
Q... if you are in the middle of your mortgage (i.e. 2 years out of 5), and you sell your place to move to another one, do you have to cancel your mortgage, pay the penalty, and get a new one for the new place? Or can you transfer your mortgage from one property to another?
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Depends on the type of mortgage you have and who it's with. If you're mortgage is portable, that means that it came be take to the new property and you won't have to pay a penalty.

If you're mortgage is with a company that doesn't support portable mortgage, then you might have to chat with their customer service rep and they would credit you back the cancellation fee if you get a mortgage again with them. A client of mine (a biker from this board) did this with his bank and was able to get a year extension in having the cancellation fee waived when he purchased his next place!

Always ask them for what you need and you'd be pleasantly surprised!

Hope this helps...
 
Hey Addy,
I'll ask you anything about real estate.
In Brampton, I'm looking for a 2-3 bedroom freehold townhome/semi/detached (or condo if the fees are below $200...) in a decent area, not the ghetto parts, for around 200k. I've used mls.ca multiple times, do you have anything you know about? With the right circumstances, I could close quite quickly.
If the basement is rentable (w kitchen, full amenities) my price range could go up, somewhat relative to what the renter would pay.
Milford St, Havelock Drive, I like these visually for my budget.
 
Pocket Sprocket said:
Hey Addy,
I'll ask you anything about real estate.
In Brampton, I'm looking for a 2-3 bedroom freehold townhome/semi/detached (or condo if the fees are below $200...) in a decent area, not the ghetto parts, for around 200k. I've used mls.ca multiple times, do you have anything you know about? With the right circumstances, I could close quite quickly.
If the basement is rentable (w kitchen, full amenities) my price range could go up, somewhat relative to what the renter would pay.
Milford St, Havelock Drive, I like these visually for my budget.
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Email sent...
 
Addy,
For your clients interested in acquiring homes for rental income, what minimum yield do you suggest they should be targeting?
 
mma01 said:
Addy,
For your clients interested in acquiring homes for rental income, what minimum yield do you suggest they should be targeting?
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It's the other way around with my clients. My clients usually tell me what yield they are looking for and we look for properties that match it. Yield also depends on how big the investment is and how much money they are putting down, the type of financing they are able to get etc etc etc...

If it's a new investor, I suggest looking at getting at least 10% return of investment and doing our maths based on it.
 
Addy said:
It's the other way around with my clients. My clients usually tell me what yield they are looking for and we look for properties that match it. Yield also depends on how big the investment is and how much money they are putting down, the type of financing they are able to get etc etc etc...

If it's a new investor, I suggest looking at getting at least 10% return of investment and doing our maths based on it.
Click to expand...

Are these yield calculations based on the perspective of:

1) rental income relative to cash outlays by the homeowner, or

b) total rental income to price of the home?
 
mma01 said:
Are these yield calculations based on the perspective of:

1) rental income relative to cash outlays by the homeowner, or

b) total rental income to price of the home?
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These all form part of the analysis for an investment but not all investors purchasing residential real estate would go into the details you're suggesting. Most like to see properties with positive cash flow after expenses so it would help them generate wealth on auto pilot.

You're first is a cash on cash statement but I like to use actual income rather than potential income to calculate the rate.

I would use your second option with operating income (after deducting expenses) to price of purchase to generate a cap rate acceptable to the buyer.

We can chat more specifics if you'd like offline...
 
Addy,

I have an offer on my house but the buyers are going through CMHC which required an appraisal. The appraisal just came back yesterday WAAAY under our agreed upon price. It's no where near the market value for my neighbourhood and now the bank will not give them any more than what the appraisal came out to. What can we do to make this deal happen?

By the way the appraisal was pretty shady - some 15 year old girl (looked like) came in and wrote down a few notes, took some snapshots with her little digi cam and was done in less than 15 minutes.

:mad:
 
mat2312 said:
here's a question:


If you win a house in say one of those Hospital lotteries, do you have to live in it for a year before you can sell it?
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here's the the Princess Margaret Lottery website says:

2) IF I WIN A HOME DO I HAVE TO LIVE IN IT OR CAN I SELL IT?
Once a home is awarded to the winner they do not have to live in it. Any prize won can be sold if the winner wishes to do so. The title for a home may be registered in anyone's name.

3) DO I HAVE TO PAY TAX ON ANY WINNING?
Lottery winnings are considered a windfall and not taxable in Canada.

4) IS THERE CAPITAL GAINS TAX ON A PROPERTY IF I SELL IT?
Winning real estate is considered a lottery prize, not a capital gain. Lottery winnings are not taxable in Canada. We recommend that you contact a tax or legal professional with specific questions.

more info
http://www.pmhhomelottery.com/faq2.php
 
roadtoruin said:
Addy,

I have an offer on my house but the buyers are going through CMHC which required an appraisal. The appraisal just came back yesterday WAAAY under our agreed upon price. It's no where near the market value for my neighbourhood and now the bank will not give them any more than what the appraisal came out to. What can we do to make this deal happen?

By the way the appraisal was pretty shady - some 15 year old girl (looked like) came in and wrote down a few notes, took some snapshots with her little digi cam and was done in less than 15 minutes.

:mad:
Click to expand...

This has been happening quiet a bit over the past few months... Couple of questions:

Is the offer still conditional?
If so, when does the condition expire?
If not conditional, when is the closing?

If it's conditional then there's very little that you can do about the situation as the conditions are included for the benefit of the buyer and will only move forward if the condition is satisfied i.e. getting a mortgage

If the property is sold firm which means that the mortgage condition is already waived, then chat with you lawyer to see if you can work out a price per day and give them extra time to get mortgage to close on the property.

There isn't much you can do if the mortgage is not approved unless you're agent has some great contacts and can pull strings to make things happen...

Hope this works out!
 
roadtoruin said:
Addy,

I have an offer on my house but the buyers are going through CMHC which required an appraisal. The appraisal just came back yesterday WAAAY under our agreed upon price. It's no where near the market value for my neighbourhood and now the bank will not give them any more than what the appraisal came out to. What can we do to make this deal happen?

By the way the appraisal was pretty shady - some 15 year old girl (looked like) came in and wrote down a few notes, took some snapshots with her little digi cam and was done in less than 15 minutes.

:mad:
Click to expand...

Wow, hope it works out for you. Was the assement under MPAC's?

I have a friend of the family that works as an FA for a major bank, talked to him this weekend, he told me that he has never seen so many deals fall apart due to financing in his whole career(11 years) that he has over the last few months.

The way it used to work is that your property appraisal was based on your postal code, it was automatic with no visit required. Now, almost all deals require an independant appraisal.

I asked him why and he told me that banks are getting more strigent with credit. He said a lot of people brought homes with almost nothing down and tied in their closing costs into their mortgages, so many people were already 105% loan to value to start with. He also mentioned that in some parts of the GTA, builders have dropped the cost of new homes by 10-30K, meaning that people who brought with 5% down are now screwed. Even so, that only accounts for a tiny percentage of the market.

From what I can tell, house prices have not dropped that much so I still don;t really understand it. Stuff like this makes me worry, being a perspective buyer, what if I buy now and I am in the same situation 3 years from now if I have to sell.
Addy can you shed some light on this
 
Our deal was conditional upon financing and appraisal so despite our best efforts to send some well connected mortgage brokers to the potential buyers, the deal did not go through. Its definitely a new thing for me because when i bought there was no appraisal done, no one wanted to see the inside of the house, etc. The appraisal was in and around the MPAC assessment but we all know those are usually a lot lower than fair market value as well.

So I wasted about 3 good spring weeks on a deal that fell apart and now I've officially listed the house again. This time i'm only giving 3 days tops to waive financial conditions, or accept offers with no financial conditions first.
 
roadtoruin said:
The appraisal was in and around the MPAC assessment but we all know those are usually a lot lower than fair market value as well.
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Not with the most recent MPAC stink! Some people's homes were ridiculously over assessed.

Twinn, I've heard this from a few agents now. Multiple good deals are falling through because the buyers can't get financing. Banks have become really stringent about who they give mortgages out to. Interest rates are low, there are great deals out there to be bough, yet transactions are suffering because people are having a hard time getting financing. The prices are steady because the buyers are there and are willing to pay, they just can't. Very frustrating situation to be in I'm sure. Any one in that boat should be looking at creative financing options instead of relying on the traditional bank mortgage model.
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