Our story

Discussion in 'Property Management' started by AlmostBob, 30th Mar, 2007.

  1. AlmostBob

    AlmostBob Evil Landlord

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    Hi jingo, mostly we have told everybody, in dribs n drabs, what there is of our story. But as someone who is happy talking the legs off a chair, here it is in full.
    Go Big, or go home
    Cant go Home, Aus is too long a flight, so we are going big.
    Capital gains are slower here than in Aus.
    Incomes from properties are huge in comparison.
    We bought the worst property in OK neighbourhoods, not the best neighbourhoods, but bordering them, renovation, both real and cosmetic that makes them the best property in an ok neighbourhod. Demand for good rentals is high, so there are never vacancies.
    Nova Scotia is a collection of small cities, of 20000+ population, who mostly never move far from the town they were born in.
    Our First property a single home, for our daughter, because there was not a reliable landlord in our small town, Daughter started work and wanted to be independent. (picthure the upstairs apartment's toilet flushing through the ceiling into the bath tub)
    Then the bug hit, it seemed like a good idea,
    Second was an eleven unit (6*2bed 5*3bed) brick apartment building on 1 acre of land. on the edge of the archetypical small town. the owner had not maintained the property, and it had only 5/11 occupied.
    Purchase price of $310K, which would probably cost 2 million+ in geelong or ballarat, low in Aus, and low even here.
    spent 30000 on repairs 20000 on renovations, revalued at 450k in 3 months, draw out new equity buy something else
    Income 82500/year
    costs ~37000/year
    3000+ use to fuel further purchase
    have become known as honest landlords, something of value here where nearly everyone rents for 3-5 years, and people call to ask what we have, if we dont have any advertisements in the paper, they ask our tenants if they are moving out, when they are moving in

    part 2 to follow soon
     
    sailor and DaleGG like this.
  2. jingo

    jingo Long Term Investor

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    Thanks for posting this Almost Bob. I thought that the income must have been reasonably high for you to be able to purchase and support so many units. What rate of capital growth will you be able to achieve over the long term? I know that you have achieved great appreciation through the renos, but I just wondered what the annual growth would be in the areas you are investing in?

    Regards Jingo.
     
  3. sailor

    sailor Member

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    Wow! Great story AlmostBob...I've also followed your fire/reno threads with interest. It sounds so "easy" when you write it down, and I'm remembering some of the difficulties you've overcome in your IP journey. Stories like yours are an inspiration for me. I think about them when I'm ripping out a wall, and my wrists and back are in pain. So please keep telling them...they get me through the reno-day. Well done!
     
  4. AlmostBob

    AlmostBob Evil Landlord

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    Part two, The Bug
    Our daughter, now 23, going on 13, wanted to be independent, took an apartment in town.
    Aside: Nova Scotia was in this period struck sequentially by a Flood, major hurricane, & blizzard
    The property she leased was not good, if she had asked before signing the lease there is no way she would have taken that apartment. I wouldnt move MotherInLaw1.0 in there. Windows were smashed, in a hurricane, that were still papered over 18 months later. there was often no heat(remember winter is minus 20c here) and the bathroom from the upstairs apartment provided a permanent water feature, with chunks, in the tub. The landlord entered the premises at random intervals "to fix things", great pleasure for a single teen girl. When she complained he pulled the breaker out of the fuse box, against the law for anyone to tamper with the power company's side of the box. to force her to leave.
    We took him to the tenancy board, got 1100 returned rent, lease voided, got the daughter out. So we had to find a decent landlord.
    it turned out to be US. We thought that if that can make a living, we would 'piss it in'
    bought a transportable home put her in it, and started there.
    Of course the tenancy board officer remembers 'the Australian', we had a good start attending hearings as landlords, He knew that we would have the Ts crossed, Is dotted & all the ducks in a row, when we go to evict or demand payment.
    Then we went looking around, ladylove found a building in a 'for sale By owner' website, that we thought had to be a typo. It wasnt, the owner had done no homework and did not know what the property was worth.
    Caveat Vendor, Nope. Emptor did Caveat, so we bought it. and talked them down 20k from the already low asking price, just for practice.

    Today was fun, running between Clerk of the courts, registry of deeds & back again,(literally they are in adjacent buildings) to register liens and garnishee the wages of the tenants I evicted last month.
    When they move in I tell em, "pay me or I will chase you forever, and make your life hell, even for one dollar."
    Cant think why they dont believe me.

    Jingo
    Capital gains are about 13% per year,
    incomes after all expenses about 10% of cost of purchase per year.
    rental increases about 16% per year
    Did we ever mention that we got started on the cusp of a large upswing, if we didnt yet, I will now, we got started at just the right time.
    This region is stealing jobs from the US, at an increasing rate.
    There arent enough rentals for renters, or new construction for those who can buy, for the workers moving here from other regions.
    There are large housing projects stalled in councils by (really idiotic) objections, when there is a definite need for the housing.

    Part 3 to follow
     
  5. jingo

    jingo Long Term Investor

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    Jingo
    Capital gains are about 13% per year,
    incomes after all expenses about 10% of cost of purchase per year.
    rental increases about 16% per year
    Did we ever mention that we got started on the cusp of a large upswing, if we didnt yet, I will now, we got started at just the right time.
    This region is stealing jobs from the US, at an increasing rate.
    There arent enough rentals for renters, or new construction for those who can buy, for the workers moving here from other regions.
    There are large housing projects stalled in councils by (really idiotic) objections, when there is a definite need for the housing.

    Part 3 to follow[/QUOTE]

    Really enjoyed that part of the story. Thanks for posting it. Your returns are amazing! (Capital growth and rental income). Apart from the hipcups along the way it sounds like investment 'nirvana'. (Huge capital growth combined with rental income - Can have your cake and eat it too!).
     
  6. AlmostBob

    AlmostBob Evil Landlord

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    Part 3, Learning the Hard Way
    We have had a collection of tenants,
    Teenage girls dont rent to them they'll have parties all the time good tenants
    Single mums dont rent to them they'll never pay good tenants
    Prior evictees dont rent to them they'll never pay good tenants
    6 20-something males dont rent to them they'll wreck the place good tenants
    fully employed family men they'll be great wrecked the place
    immigrant from Newfoundland dont rent to them they'll never pay good tenants
    some of whom are (now 'were' every landlord in the area now has all their personal information) professional defaulters, knowing that it takes such a long time to force eviction, they stop paying rent. We made a choice to follow every one of them through tenancy board and courts, and always get paid. Current tenants with whom others had difficuties now pay on time or give post dated cheques, they say because we gave them a chance, and were fair.
    Because, I think, we tell applicants that we will chase them through the courts, and do, there are far fewer defaults in our properties, than any other local landlord. The most consistent offender ever now telephones the sherrifs frequently to check her outstanding balance, and is working lots of overtime to pay up, the sherrifs charge $800 extra for fees 21% interest & seize bank accounts and salaries .
    Digital Video tape, digital camera, recorded conversations, dated note book, a regular Sam Spade.
    How do you tell if a tenant is lying.?, their lips are moving.
    I dont want to use a pm, everyone that does seems to have the same problems we do self-managing, and pays for the priveledge.
     
  7. BV

    BV Think outside the square

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    AB, Interesting story, thanks for sharing it with us.
    Is this your full time job now or do you have another occupation?
    Also, how did you end up in Canada?
    Cheers
     
  8. kathryn d

    kathryn d Member

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    Rob made my dream of owning apartments come true.
    Since I already have a full time job at a factory,he takes very good care of our investments.

    as for ending up in Canada.....
    We met online....I went to his home in Melbourne where he arranged our wedding, and I stuffed him and his son in my suitcase and dragged them back to the Cold North of Canada.
     
  9. AlmostBob

    AlmostBob Evil Landlord

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    Part4 Imagination

    Imagination, I dont have one
    Lady love does, she sees the 'needs some tlc' property with the tlc added, its a bloody good thing I cant else the sheer volume of tlc needed would scare me away.
    she finds them, I veto the ones that the repairs would cost more than the house, the broker we use had his oil tank tampered with 1/2million approx to remediate the enviro damage from 800L of heating oil in the ground, if there are visible leaks we run away
    Just finished, save for some cosmetics, the reno on an 1880 house. 6000+ sq feet, plus basement, oak staircase, bay windows, so far out of building code that we were lucky even the electricians didnt electrocute themselves repairing it. Now its great bachelor apartments in high demand we think. the prior owner had it for sale for a long while, eventually included the block next door at less than the original asking price, in 12 months the revalue should way cover all the costs and leave heaps to draw on.
     
  10. Dazz

    Dazz Banned

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    Thanks for detailing your journey Bob.

    You are doing something wonderful over there, providing all of that accomodation for folks, and obviously straightening up a few wayward souls in the process. Hard work indeed, as I know how wearying confrontation can be when people refuse to take responsibility for themselves.

    Loved your long list of typical renters, and the stereotypical reaction vs what actually happened with them.....you can never tell.

    It sounds as if you have a fierce reputation for getting your owed dues from the court process. I couldn't do that, lawyers and judges do my head in, what with all of the fluffying around and having to take people's "extra-ordinary" domestic circumstances into account. Bet the Bank doesn't quite treat you like that though when you are late with your payment.

    I'd be interested to know more about this garnishing of people's wages who the court ordered to pay you back at some pittance per week. How is that aspect working out. It sounds as if you have quite a few little streams of income from this activity.

    Good work Bob and Kathryn. You are obviously making a difference. :)

    So....what's next ??
     
  11. lizzie

    lizzie when i grow up ...

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    back in the painting clothes
    a holiday - i hope. i'ts been an exhausting process just watching from the sidelines!
     
  12. kathryn d

    kathryn d Member

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    We are hoping for a trip, for a couple of weeks, back to Melbourne in February.
    I have until then to get our finances in order.
    Keeping fingers crossed.

    Dazz,
    We are actually going to have another defaulting tenant garnished.The courts (which is just filing the correct paperwork with the Sheriff) take about 6 months before they send you any money.However we do get paid interest.After we start getting money, it's usually once a month.It usally ends up being double the amount they originally owed us.
    So, it's all good.