Here we go again...

My long-neglected blog. :D 2011 has been a craptastic "maybe we should quit this" type of year. It's been too depressing to keep the blog updated, AND we had another kid. Amazing how much time those things take up. Anyway, quick year in review - we finished the renovations on Spadina 2, we are currently gutting and fixing the big apartment at Lottridge, and we've enjoyed some friendly banter with the city bylaw officers. 2011 also included another new roof, my first ever "pro" tenant (and eviction), and all the usual hiccups. Currently our war is with garbage. The city has a "one container per household" bylaw, which is fine. Except if you can't meet the limit, or don't get your garbage out in time, or it's too heavy and they leave it behind, etc etc etc, there is no alternative but to take it to the dump yourself (OR, the preferred option in this fine neighborhood), dump it illegally on someone else's property under cover of night). We have been taking load after load of trash to the dump every freaking week. It's driving us bonkers. My favourite is at Spadina 2. The guy doing the dumping is the one we long suspected - he has a "junk removal" business and his racket is to "wander by" when you're clearing up and offering you a flyer for his business. Effing pisses me off. One of the neighbors spotted him at it last night. Rob might kill him, honestly. We also had to convert one of the triplexes back to a duplex, which is not a huge problem. But it IS a pain in ass, and means a loss of about $400 a month for us. Yay. Rents are going up, though, so that's good.

What's going on in here?!

Long time no chat again!  Sheesh.  My daytime life (the well-paying one) and my real life (the cute cuddly smiley one) have taken over and quite honestly I am just skating by in the long-term wealth short-term frustration life.  J  I'm not even sure where I left off…I think with the rehab project, we had just closed with the ridiculous bank restrictions and last minute eff-ups.

WELL.  The landlord life has continued in much the same way except that our previous few years of relative ease and low maintenance have come full circle and this is the year of the fix.  5 fridges and 3 stoves in less than 4 months people!!  That is not cool.  Not to mention a furnace, a sewer backup, and a new roof as well.  Yay for tax deductions?  Sigh. 

I've been having some minor tenant issues as well.  My sweet hottie in the attic at Sanford turned out to be a rather unpleasant drunk (only when drunk, so it took me totally by surprise) who caused quite an uproar in the neighbourhood, including bylaw infractions for noise and disturbing the peace.  Fun stuff.  Eviction went amazingly smoothly, though, he was out when I asked, and even THANKED ME.  Weird.  And the place was relatively clean (tenant clean, not clean clean) when I went in there.  Only some very minor damage. 

It actually worked out really well, because 3 days before he was out, my basement girl at Spadina 1 gave notice (sick of living in a basement, and I don't blame her).  Then the very next day, her sewer backed up, just to be a jerk.  YAY SEWAGE!!!  The serendipity gods were smiling on me, because all she had to do was stay with her mom for three days and I slid her on over into the hottie's attic, which she LOVES.  And she took back her notice, so phew, I didn't have to show the attic.  I hate showing the attic.

One of the units on the rehab (Spadina 2) is finished and looks FAB.  All new ceramic tile floors through the bath, kitchen, and hallway, new kitchen cabinets and fixtures, new fridge, new bath fixtures, new paint on every wall.  It looks amazing.  I'm showing it right now, since our first tenant barely made a dent and only stayed 4 months as school transferred her co-op to a different city. 

The second floor unit remains to be done, and it will be a similar re-do – kitchen, bath, floors.  A bit more flooring as we have to do ALL the rooms.  We are thinking hardwoods in the bedrooms and living room and tile everywhere else.  The kitchen is small but serviceable, and there's a weird second entrance door that needs something done to it. 

Then we re-finance the puppy and pay off some of our massive debt! YAY! 

On the homefront, the three of us are still crammed into our dilapidated one-bedroom while we wait…and wait…and wait…for construction to start on our own little townhouse.  I'm so excited!

FIVE HOUSES

Phew.  We're done.  We now own FIVE houses – two of them on the same street, which for some reason absolutely thrills Rob.  Funny guy.  This was not an easy purchase at all, and I think that it will continue to get more complex as time goes by.

 

First off we ended up getting CMHC approval on the property, much to our surprise!  Probably because it was ridiculously cheap.  But either way, our rate is fantastic, 3.69% fixed over 5 years.  On the last day before conditions had to be removed we find out that CMHC is requiring an appraisal be done on the property because IT IS TOO CHEAP.  Shouldn't they be happy about that?  But they are worried that they may be insuring a mortgage on a pile of crap, so they need an appraisal.  Bah.  Of course the appraiser we hire tells them exactly what they want to hear, but too slowly.  SO we actually lifted the conditions (bought it with or without financing) BEFORE we knew for sure that we had a mortgage.  That was exciting.

 

Then, because the appraisal said that the house had been converted to 3 living units, CMHC made it conditional that the zoning be legal.  YIKES.  So not the case.  It is a legal property under the fire code, but the zoning hadn't been changed from single family.  It took us two weeks and a lot of finagling to get that condition removed…they ended up accepting that we could rent the house out as a single family.  Again, they are just getting what they want to hear…anyone with a brain would know that we are going to rent it out as a triplex.

 

Finally it looked like we were all a go…conditions met, income letters provided, commitment signed.  And then nothing.  No word from the bank.  Our little underwriter, Kaylee (or twit as I like to call her), completely dropped the ball.  They took ages to turn anything around, asked for the same stuff more than once, lost things, forgot to write stuff down (for instance, they needed to actually speak to my boss but then when they did it wasn't recorded and then they asked me again the day before closing to speak to my boss.  NO.).  Needless to say, closing day arrived and still no mortgage instructions.

 

Our broker was on the ball though and browbeat the bank into settling their crap and getting it done.  I got the keys at 4:45 on closing day…talk about down to the wire! Yikes!  But it's finished, phew.

hiccups

Well we must be real investors now! Financing on the new property has gotten interesting. We are still trying to get CMHC financing so we only have to put down 5%. Everything was looking great until yesterday when they decided that the house was UNDER valued. Isn't that interesting? They are concerned since we got TOO good a deal!

So all in a scramble we got an appraiser in to review the property and get this mortgage secured. But it still looks like we'll be lifting the conditions without a commitment in hand. Yikes!

house #5!

Well, negotiations are over! After our 125 offer, the bank came back with 149 (asking was 154900 down from 167900). We took that as a strong sign so we came back at a solid 140, expecting another write-back splitting the difference. They accepted!! We just bought a triplex in decent shape for $14000! Unheard of. But totally awesome. Now of course we have to secure financing and get our inspection but I'm not expecting any surprises.

People ask why we offer low (like the 125) when we know it's not feasible. ALWAYS make a low first offer. Any sensible seller will at least write it back...they'd be foolish not to, even just writing it back at full asking to make a point. But by making a low offer you can get a real feel for where the seller is willing to go. For instance, in this case, if the bank was really eager to sell fast, they may have come closer to our 125 offer. By writing it back at 149 they made it clear that we needed to come up in order to buy it from them. But if we had offered 138 or something equally reasonable, we would have finished around 145 instead of 140.

Of course, there are some exceptions. Heck, we made a full asking offer on 31 Spadina. But in that case it was a turn-key property priced well below value. There were 6 other appointments the next day to see it. By making the full price offer with a 30-day closing period, it encouraged the seller to accept quickly and cancel the other viewings. But in my opinion that was still offering low since the house was undervalued.
Financing has gotten interesting too. I'm not sure we'll get a conventional mortgage for this one. We are right on the border of what CMHC will accept for our total debt ratio. But just when we thought we were toast, we learned about short-term seconds. But baby is calling so I'll discuss that another day!

house #5?

Well, the King St property was a total bust. We saw the rest of the interior and it needs thousands in repairs, and not minor stuff. We're talking plaster replacement, flooring, bathrooms. Yikes. He is going to lose the place...he owes 240K min and you'd be stupid to pay more than 180 in its current condition. Poor old house. Maybe someday the bank will own it and let us make a reasonable offer but until then it's off the radar.

However, we are putting an offer in on another project, which has already been taken by the bank! Its directly across the street from the one we own on Spadina. 2/3 vacant, needs lots of lipstick. But it has new roof, windows, and furnace. It needs a new fire escape though, which will run in the neighborhood of $10000.

But here's the fun part. We have offered only 125K for it, we expect to finish around 140. It will EASILY appraise for 210 and if we re-fi for that we could pocket 42K in cash.

I love bank sales.

long neglected Blog...

Wow! It's been 2 months since an update. But I have been busy and all I guess. Ha. My last little update was about the busted property on king. He did not accept our offer. We are sitting tight to see If he'll be more amenable to a low offer in a few months - he hasn't had even a whisper since our offer and the building is not getting any better. I think one of his tenants has moved out also and yesterday we saw a city notice to comply for the trash piled in the alley. I'm thinking he'll be a bit more desperate in a few months.

In the meanwhile though we've just been to see a 23-unit building. Hahahahaha. But seriously, financing is getting to be a challenge no matter how big the mortgage so why not go for 3/4 of a million? LOL. That's insane. Either way I don't think this one is for us. But we are definitely going to be looking soon for something a bit bigger than the Victorians. Yikes.

On the tenant front, I have an impending turnover in the basement at Spadina. It was easy though and the new tenant will be moving in in February. She's very young but has financial support from CAS until she's 21 and still in school. Here I go again being a social service as well as a landlord but I just can't help giving these kids a shot in life. We both feel like we could possibly make a difference in their lives - maybe starting out in our cute little place will make the difference between success and failure in her life - and change the pattern that put her in foster care and living on her own at 18. I'm probably bring idealistic. We also have this fantasy about meeting a kid like this who really proves that she wants to work hard and succeed - and we can help a bit more than just rent to her - sort of be a benefactor type deal.

Crazy, I know. I just think there are so many people who would be in a different life if not for just a tiny hand up...either the existance of the hand up or the lack thereof.

catching up

I know I haven't updated in awhile but I've been busy bringing in the next generation of our little dynasty. LOL! Corbin is the baby landlord and he arrived October 17. Yay!

And in the month between the last update and his arrival, I managed to (despite being forced off work by high blood pressure) get both vacancies filled with good tenants. The ship has been on a fairly even keel since then.

So what better thing to do than make an offer on a decrepit property? I mean, what do most people do when they have a 4-week-old infant, are on mat leave, and a month before Christmas? Ha!

It's a GIANT 5-plex we saw about 3 months ago. It's gorgeous and solid and has all the right updates (plumbing, electric, etc). It also has a busted roof, a flooded vacant unit, and 4 of the worst tenants the city has to offer. He bought it 3 years ago for $255K and is trying sell it for $279K. But he hired a property management company (he lives in toronto) and never visited his property to see what they were doing to the place. It is currently one small step above gang hangout and it is amazing how quickly people can wreck a place.

We need vacant possession (I don't want any of those tenants) and we offered $230K. Now we see how desperate he is.

Busy busy busy

Well, things are going well. The evicted tenants actually, well, evacuated. Without being evicted. Awesome! Strongly worded letters and threats of rent subsidy loss go a long way. They also did not damage the place or leave it filthy. It's grimy, needs a good scrubbing, and they left both a pile of trash on the lawn and about 6 million fleas to kill, but all in all I think it was a success. And as Rob says, NO MORE CHARITY CASES.

Alas, S. at Sanford #3, he of the moving-not-moving saga, is moving again. :) He has a chance to play baseball in New Zealand for 10 months, which is totally awesome and I say GO FOR IT. Do NOT pass that sort of shit up.

I have a really good prospect for his apartment, on phone screening. Here's hoping it's a one and done and I can get these things rented out before baby enters at stage right.

D-Day

Well, today is September 3! The rowdy tenants at Spadina #1 are supposed to be out by the end of the day. Do you think they will?

I'm feeling a little more confident about it - yesterday when I drove by there was trash on the lawn for pick-up, so they're at least moving stuff OUT. Hopefully that means that they are also moving THEMSELVES out. I should be getting a call today that they've left the keys (hoping).

Then I get to see the state of affairs. Sigh. Here's hoping it's clean and not broken.

In happier news the new tenants are in and happy at Sanford #1 - A&L. R&A moved out before noon, and A&L got in that afternoon with a mailbox key exchange and me at work! It actually went smoothly! I have never pulled that off before. I do have a pile of crap in the driveway to get rid of, but that's a small price to pay.

Well, it has come to that

I served the second notice to my tenants today - their termination date is set as September 3. Two weeks from today. Sigh. I was hoping it wouldn't come to this but I've received nothing but complaints from EVERYONE. Neighbors, both other tenants in the house, blah blah blah. It sucks. So I give up. I gave them a chance and now they've used it up.

So I'm hoping that they just leave, but I bet they don't. They're just stupid enough to try and fight it. I will have to go tomorrow to get a hearing date from the tribunal if I don't hear from them today. Bah. There goes $170. But at least I still have their deposit so I'll get it back, I suppose. And then holdover rent, because most people being evicted do not pay their rent either. And I'm sure they'll behave like church mice too while we're waiting. ACH! This will not go easily.

I hope I get the unit back in good shape. Before I have this baby. Lots of ifs here aren't there? :D

NO MORE DOWN ON THEIR LUCK YOUNG COUPLES!!!

You learn something new every day!

And last Friday, I learned that it would actually be easier to evict someone for being loud/noisy/disruptive to their neighbors in the building than for non-payment of rent! I guess the tribunal doesn't care as much about the "rich landlord" not getting paid - but they do care about people living comfortably.

I've gotten a couple of complaints regarding my young couple with the new baby (P&A at Spadina #1) - lots of fighting and yelling and slamming doors, etc. Normally I just try to smooth this stuff over with both parties until they work it out. OR i prefer to stay completely UNinvolved.

However, last Thursday night/Friday morning, the police were called to the house for a domestic disturbance. UNACCEPTABLE. My upstairs neighbors were the first to tell me about this, and I wrote up the N5 warning. In reading through it (I've never done this before) I realized that they get a 3-week notice with a 7-day notice to cure. If they get a second complaint in the 7 days I can file a court date. If they get a second N5 warning in the next 6 months, they get a 14-day notice with no notice-to-cure. In other words, you're out. They can dispute charges at the hearing, but the judges don't look kindly on rowdies.

I heard from the cross-ways neighbor that they've been causing some issues with all the neighbors, which I don't like. The guy next door to the North is a bit of a dick, but it's still not acceptable to be hearing this crap about them fighting in the street at 4am, yelling and throwing stuff. So I served the notice.

I got a very scared boy calling me about an hour later. He's panicking! And making lots of excuses. I hope this scares him straight and he keeps his mouth shut from now on. We shall see.

How funny would it be to go to a tribunal hearing 9 months pregnant?

New window being cut, yay!

Sent from my BlackBerry device on the Rogers Wireless Network

Honesty is nice

So, on friday afternoon I get a call from R. At Sanford #1. They broke the window in the front door. The big, solid OLD oak door.

Sigh. But you know what? They could easily (it's a triplex, all tenants use the same door) have clammed up and shrugged their shoulders. Especially since they're moving out in 6 weeks! And it's not like I can just not fix it. That's not how it works.

So anyway, since it was a friday and it isn't visible from the street, I booked the guy to come out today to avoid emergency charges. He was supposed to be here at 4. Then they called and said "after 5". It's 6:20 and he's here! With the wrong piece of glas of course. Meh. I just want it fixed. Here's hoping!

Sent from my BlackBerry device on the Rogers Wireless Network

Well, okay, great!

S. at Sanford #3, my adorable single young guy on the third floor, has found a new job! Yay him! So he called me this morning and asked to stay, with just a little help - he won't get paid until the end of the month, so can he use his last months' deposit for July and then pay me an extra $100 a month until he's caught up again?

YES.

It is much easier to "work with" a good tenant like him (he's clean, quiet, pays on time, and obviously is responsible enough to deal with a bad situation) than try to find a new one, all for the sake of a last months' rent deposit.

So, phew. I don't have to schlep the 1-bed again. They're hard to rent - lots of unsavouries come look at them because they're so cheap.

BUT. While I was there I talked to A. and R. in the 3-bed. Boo...they're leaving in September. R. got into Mohawk college and they don't have two cars - A. works up in Ancaster. So it's just more convenient for them to be nearer the school. It will be easy to rent the 3-bed, there are none of them around, so I'm not worried about that, I just loved getting their rent by email (early) every month. I never had to bug them EVER and they've kept the place nice.

After that I don't think I'll have anyone leave for awhile. I hope. We are getting dangerously close to baby time, here.

A possible interesting venture...

I mentioned in a previous post that we really need to look at expanding our own homestead...whether that means occupying the whole duplex (not ideal - I *LOVE* my upstairs tenants) or moving on to another house for ourselves. Two people in the 1-bedroom flat is fine...two people and a ton of construction tools/supplies in a 1-bed is tight...two people, construction gear, and an infant is manageable. Two adults, construction gear, and a mobile baby is going to be impossible.

The trouble, though, is that all of our financial resources are tied up in the rentals. We can ALWAYS borrow money from SOMEBODY to buy another income property...heck, they pay their own bills! But banks get squicky when we talk about buying a house that doesn't produce on top of what I guess they consider 4 risky investments. What happens when we have problems! ACK! They don't seem to consider the fact that we live WELL below our means and in an average month set aside $1500 for emergencies/savings...and when pressed can manage $2500 a month. Above and beyond our expenses. They don't care. They like that cushion exactly like that. They don't want us spending it on a house just for us.

So...what to do? Rob has come up with a pretty sweet plan, and I hope he actually goes through with it. First, consider that he works for a HOME BUILDER. Someone who, you know, builds houses and sells them to other people. Someone who is rich beyond our wildest dreams (okay...in the really wild dreams I can imagine it). Someone who understands the complexity of home mortgages and lending.

Can you see where I am going with this?

Rob proposes that he do a deal with his boss for him to build us a house (a BRAND NEW, NO RENOVATIONS, THREE BEDROOM MODERN HOUSE! WITH TWO BATHROOMS EVEN - MAYBE *THREE*!!!) and hold the mortgage himself. Obviously there are drawbacks to this plan, but Rob loves this job and the company he works for, he doesn't mind the implication that he will be tied to the company. And we can always refinance later. But the mortgage would not have to be approved by squicky banks, we could set our own terms, and, even better, it would not draw down our lending power unless his boss felt he had to report it to the credit agencies! It would just be a big chunk of equity.

In return, his boss will have a slightly tighter hold on his star engineer, and would be making money on the loan. If we default, it's no skin off his back to cut us loose.

I hope this becomes more of a reality than a late-night discussion.

The economy finally brushes up against us

My slightly dopey but always ideal-tenant young guy has been laid off. This is Sanford #3, the attic 1-bed. It shouldn't be too hard to re-rent, at least. I feel bad for him, he's a great guy! At least he's doing the responsible thing and moving home to take care of things until he finds other work. Still - he's just finished his apprenticeship as a millwright - remember when that was guaranteed employment (and DAMN GOOD pay)?

So I'm off to get it listed and the webpage updated. Hopefully I can get it filled for August 1. He'll be out before that and the place will be spotless, he is an immaculate person. I'm giving him a break on his last month (calling this his last month and not charging him for it, even though it could backfire for me). He's been a good tenant and I don't like to kick people when they're down..

What am I dreading most about this placement? I have to climb 3 flights of stairs to show this place! Ha. This pregnant thing is starting to get in the way.

All full again - and looking?

Well, it's been quiet around here for the last couple of weeks. The settling into the new house seems to have gone off mostly smoothly - a few hitches with fuses but otherwise no problems. The kids with the baby on the way - the first floor at Spadina - are a little high maintenance but I think that they're learning.

It's the 3rd and I've gotten lazy with rent collection. Granted, the 1st was a holiday. I have 2 at Spadina, 1 at Lottridge, and 2 at Sanford. I actually have to pick UP one of the Sanford ones, but I'll do that later when I'm out and about. S. at Sanford #3 won't be back until Monday but he ALWAYS pays on the 5th or 6th and it's fine with me. The big three haven't paid yet - but they've all arranged for today/tonight. Hopefully I don't have to chase anyone. Ugh. I hate that. And then I'm done for another month! Although I was thinking that with 9 rents coming in right now, I should work out some new collection system. It's a 3-day job collecting everyone's rent.

We're still keeping our eyes peeled for another gold mine like Spadina. If we can find something at a good price with zero work required, I am up for it. We have 3.5 months before baby comes, and we could do it! I just don't want to be tapped out. It's just that after baby gets here there won't be any buying for awhile, and interest rates are ALREADY starting to climb back up. Now is buying time, and I feel worried that we're going to miss the boat a bit. Not to mention that the first purchase we make after the baby has to be for us. The 1-bedroom just ain't going to work for more than 6-10 months.

Lots of happenings on the horizon, that's for sure!

100% occupied, Zero Vacancies

How awesome am I? Hahaha. In 20 days from closing, counting a weekend away, I have three out of three units in the new house rented AND PAID. That's pretty sweet. I love the second floor people (the ones with the restaurant that we and our friends like to go to). The first floor people I'm a little worried about - they're young and I fear that they will be pretty high maintenance if I don't rein them in quick. They just need a little training is all. The last one, the basement, was paid up as of today - he's not moving in until July 1. Works two jobs though, and seems like a good kid. Hopefully we don't have anything weird happen. Two sets of tenants are taking possession on Monday (well, Sunday actually) but the second floor family isn't going to be moving in completely until the next weekend.

NOW it's party time! Yay! We have a bit of a hoedown every time we buy a house, it's fun. Gives us an excuse to entertain. And especially since we don't have a big enough house to have parties here, it's fun for us. We also invite the new tenants (and selected tenants from other houses that we like and deserve an appreciation nod) for a burger and a beer. BBQ and beer and rock band if you're into that - sitting around chatting if you're not. It's a goodwill deal. Plus it makes it tax deductable...shhh...

Rob finally got ahold of someone at the collection agency that we referred my deadbeat ex-tenant to (he owes us about $600) a year ago. They have been incommunicado since then, and I was not exactly happy with their customer service (ie NO service). Well, it turns out that they might be taking him to small claims court? Errr...a phone call about that would have been awesome! So I need to get that sorted out, I'm not paying court costs just so the kid can stiff us some more. Blood from a stone and all that. I just want it on his credit record so if he ever tries to buy a car or house or something he has to settle us up. That will be so satisfying. It's not worth going to the ends of the earth for a lousy 600 bucks, you know? But apparently the collectors will pay the court fees and just add that to the judgement. Heck, if they're up for that, go for it - maybe they'll go after him harder in that case.

One down two to go!

I got the two-bedroom rented! AND paid! Woot! I like this family, although I may be a bit biased. They own a local restaurant that makes a GREAT breakfast AND they have the most adorable Chinese adopted daughter. they're just hardworking honest people.
I think my six o'clock spot is a no-show. Poo. But I have strong potentials for the 1-bed coming this evening so i'm hopeful there. The basement should go quickly if I market it a bit more intensively. I was concentrating on the big units first.