Teaming Up

[Rob]

I've had a few questions  about people teaming up to purchase, manage and sell a tax sale property.  There seems to be a lot of people with different skill sets and teaming up may help them.


If you are interested in teaming up with someone let the forum know in this thread.

Tell everyone what skills you have and what skills you need.

For example:
Someone might be good at reno's.

Someone might be good at the actual bidding process, title searches, etc

Someone might have capital and wish to invest it

Someone might be a real estate agent and can help sell a property.


If you are interested in teaming up.  Post a message in this thread and lets see what connections can be made.

Remember.  If you wish to send someone a private message:
Use the IM icon to the left side of their post.  Or email them directly from mail icon on the left the side of their post.

[speedfreeksteve]

I would be interested in something like this. I have many unique connections and skills that would be useful. I don't mean to toot my own horn but I'll list some things that anyone teaming up might find useful:

-I grew up in a family of building contractors and I have built my own 1600 square foot cottage from the foundation up.
-I am very familiar with most parts of cottage country in ontario and can tell the difference between valuable land and worthless land
-I have connections with people that will clear land for much cheaper than anyone you'll find in the yellow pages
-I have sucessfully flipped properties in Florida before without using a real estate agent
-Some capital is available at my disposal


I think the key thing is that different people have different timeframes in mind. I would be looking at fairly quick turnaround of 2-6 months per property. Anything longer and you could often make more return on your investment in other ways.

Example: Some people buy properties and sit on them for 12 years and then brag that they doubled their money. Meanwhile if they factor in property tax and land transfer tax the end up with a 5% annual return on their investment, but could have had  double that return  in a average mutual fund and with ALOT less work.

[karlo_k]

This seems really interesting.   Wouldn't it need to be done through some type of business?  This way the people involved have some type of protection!

[micr0be]

I'm interested in "apprenticing" with someone who is investigating/bidding etc.

Basically, my cash flow has been tied up for this year..unless I get creative.  This year I paid off my mortgage in Toronto, got married, bought a few acres of land in NB, and left my job to pursue another degree....so I likely won't be buying many properties

My goal would be to learn the ropes in regards to all the facets of making deals like this happen, and also have an excuse to check out properties and attend auctions/sales as a hobby.

As far as skills/experience go...

- A fair handyman, having owned multiple rental properties in Toronto and done most repairs/maintenance myself.  Accomplished at landscaping from my NB roots..everything from organic gardening to golf courses
- Familiarity with some of NB since that's where I spent the first 20 years of life
- Some experience in real estate dealing...residential in Toronto, land in NB
- Fair financial acumen , CSC courses , perversely well read on personal finance and personal income tax
- Computer skills...plenty.  "Wasted" too close to a decade doing all sorts of crazy things at IBM

Want i want...

Short term:

- Get my hands dirty...so to speak.  Would like to follow an experienced person through the process of investigating, visting, deciding to bid, bidding.  Willing to lend any of my skills listed above in exchange for the learning.

Long Term:
- Likely implement skills gleaned above in picking up properties in NB, and possibly a cottage lot in ON if I end up staying here long term. 

About me:
(Simply to know a bit about where I am coming from financially,etc)
29, Married, Debt Free, Active
Assets (estimates): House 300-350k, RRSPs 80k, savings 30k, house+land in NB??? priceless/worthless since I don't plan on ever selling it
Income: about 60k from various sources until I start my teaching career
Education: Computer Science, Starting UofT in Fall to pursue an Education degree and become a high school math/physics teacher

So as one can see from my financial scorecard I'm pretty house-rich, cash-poor and not planning many large expenses until my teaching career begins at which point all of that would pretty much be disposable income..that will be in a year or two so if some old hand wants to show a newbie the ropes I'm in.

[RichD]

Sounds interesting,

Depending on the "rules" of the game and the expectations I may be able to contribute.

I have ten years of rental property exp. Here and N.B.

Pretty handy with a hammer.

Have about 30g to work with of my own.

Have bought and sold 2 Tax sale props. both vacant land, 100 acres and 2 acres.

Currently involved with a few other people and activly looking for a property.

Looking for a quick flip only.

Any one looking join our very informal group or looking to start a new one let me know. Most of the "partners" are looking to in vest smaller amounts 5 to 10 Grand each.

[speedfreeksteve]

I'm interested in "apprenticing" with someone who is investigating/bidding etc.

Basically, my cash flow has been tied up for this year..unless I get creative.  This year I paid off my mortgage in Toronto, got married, bought a few acres of land in NB, and left my job to pursue another degree....so I likely won't be buying many properties

That part of your post just caused a pit in my stomach!

If you have a paid off mortgage, you're almost crazy not to reborrow the money against your house.

Where else can you get a 4.5% (or lower) loan than by remortgaging your house? Nowhere.

How many investments out there today will get you a higher return? Many.

Bottom line is, having your money tied up in your house is poor financial planning. You're denying yourself a fairly easy $8000 or so in income for the benefit of being able to say you own your house free and clear. Is $8000 significant? Well, over 30 years, and compounded at a modest 6% interest.. that's an additional $670,413.42 you will get from good financial planning vs. bad.

Paying down your mortgage in this day and age instead of investing that money is a very questionable financial tactic.

My advice is to sit down with a financial planner.

Good luck!

[Rob]

In theory yes.  But if you just put the money into a bank account or a GIC you won't be getting a higher return.  If you decide to go a different avenue the element of risk exists.  You could make 20% or better but you have the chance of losing principle if you are not careful in fees and lost asset value. 

I think it really depends on the person and what level of risk they are confortable with.  There is nothing wrong with having the home they live in paided off fully. 

[gap]

I haven't been on for awhile...been a little under the weather, then with the Long Weekend and all..I'm a teacher and have my own small school, so this last few weeks was actually hectic. 
Anyways, we have a small informal investment group that meets every second Wednesday in the west of TO.   We've done many interesting things, but would be interested in having others join.
Email me privately if you're interested.

[speedfreeksteve]

In theory yes.  But if you just put the money into a bank account or a GIC you won't be getting a higher return.  If you decide to go a different avenue the element of risk exists.  You could make 20% or better but you have the chance of losing principle if you are not careful in fees and lost asset value. 

I think it really depends on the person and what level of risk they are confortable with.  There is nothing wrong with having the home they live in paided off fully. 

No decent financial planner (other than one working for a bank) would ever recommend a GIC as an investment. Provincial, or Municipal bonds are VERY VERY low risk, as are preferred shares in many companies.

It's a bigger risk to just let your money sit their doing nothing. I just wish people would realize that.

If I sold all of my investments I could fully paid off my Toronto home, and my executive cottage in Muskoka. However, if I had never invested my money in the first place it would be doubtful that I could own either outright.

[Frank]

Hey Speed

You seem to run with a fast crowd.  I don't like the way that you want me to risk my hard earned estate.  My assets are fully paid and I have money stashed away in RRSP's and GIC's to boot.  A homeline mortage gives me the liquidity I need to do whatever deals I want to with money I haven't spent yet.  I would never think of going your route unless I had a solid investment in my site.

I'm an accountant by profession, but I don't seem to be as good at numbers as you.   Good luck, and try not to get too burned.

My advice to the youngsters is to pay off their house as quickly as possible.  These low rates won't stick around for long.

[speedfreeksteve]

Hey Speed

You seem to run with a fast crowd.  I don't like the way that you want me to risk my hard earned estate.  My assets are fully paid and I have money stashed away in RRSP's and GIC's to boot.  A homeline mortage gives me the liquidity I need to do whatever deals I want to with money I haven't spent yet.  I would never think of going your route unless I had a solid investment in my site.

I'm an accountant by profession, but I don't seem to be as good at numbers as you.   Good luck, and try not to get too burned.

My advice to the youngsters is to pay off their house as quickly as possible.  These low rates won't stick around for long.

Everyone has their own opinions. I have a financial planning background, not an accounting one. I could show all the math for my numbers if anyone is interested. I invented Freedom 35 for myself.

Being an accountant, I'm sure that you're familiar with the "Smith Manoevre". How can anyone argue with effectively making their mortgage tax-deductable, plus getting a return on the money? I've been doing this myself with my own primary residence for several years now and there really is very little (if any) risk involved. None of the investments are tied to the stock market directly, and the loan that I use to make the mortgage tax deductable is fixed rate, but can be paid off at anytime. So the worst case scenario would be interest rates shooting up to 15%, in which case I could simply sell most of my investments and pay off the house.

On a closing note..I have one more piece of probably unwanted advice   Get rid of those GIC's!

You can get much better returns on a Gov't of Canada Bond, and with more liquidity since they are traded daily on the bond market. If you really want to get tax efficient, take the GIC money and get preferred shares in the bank that you have the GIC's with. You'll get probably 3x the returns, plus instead of being taxed as income, you'll be taxed as dividends and have the benefit of the canada divident tax credit. The risk differential is if the bank went bankrupt since the GIC's are CDIC insured. However, preferred shares are the first to be covered by liquid assets so it would be near impossible for a bank like TD to ever go 100% bankrupt overnight.

[Frank]

Hey, I think we are both saying the same thing.  Any mortgage I have ever had has been tax deductable = as I have only had one to purchase and sell property and a coupla businesses.  The GIC's are a temporary repository for surplus monies while I seek out my next target, and I am quite comfortable with that.  You can't get to this point in our lives however if you are still burdened by the cost of a mortgage and debt load of most young families.

good luck with it.

[Michael]

any one with comments on buying in the state of NY, I would like to purchase something that would be a quick flip and I have about 60k to get the job done.  No real experience in this, I just started looking around when this chunk of money fell into my lap.

anyone looking to go in on something together?  Any comments would be helpfull about the state of NY Preferably in new York city!

[Woody]

Just curious.  How do you get a tax deductable mortgage?  I thought that was only possible in the US.

[Frank]

Home mortgages in Canada are not tax deductible.  What is tax deductible is a loan you take out (with your house as collateral) to make investments.   I have done this for years.  The Smith Manoevre talks about a vehicle for making your home mortgage, or a part of it as it gets paid down deductible against investment profits, and you essentially take the equity you have built up out of it to invest.  You need to talk to a financial advisor (stay away from accountants), that knows a lot more about this and deals with it daily - check out a freedom 55 type guy.    You might want to try a personal message to Speedfreaksteve (he invented freedom 35).

 do some homework first, for example go to:

 http://smithman.net/