Buildings for Sale in Toronto

Month: November 2016

November 30, 2016 Addy Saeed Comments Off on Dealing with Contracts Electronically Operations

Dealing with Contracts Electronically

As real estate professionals, our work revolves around contracts that are written and executed.  From helping clients buy investment properties to renting our units for our investors, we deal with papers everyday.  One of the issues you run into when dealing with negotiations is the shrinkage of documents when scanned/emailed/faxed to the other party which results in a document that is very hard to read or illegible.  This can cause issues at the execution phase if the terms of the agreement aren’t clear to a party and the signed agreement isn’t legible.

This is also true for investors when they are leasing their units out.  The constant back and forth can leave documents very skewed.

If you run into this issue, I highly recommend to have the final copy of the agreement copied over to the party that drafted the original agreement and have all parties sign it.  If that isn’t possible, I highly recommend that you create a clarity copy and have all parties initial it and attach it with the original offer to make sure if anyone needs to reference it later, there is a clear copy available.  Documents such as survey and floor plans where small measurements are posted should always be scanned and emailed to the other party along with their lawyers to make sure they all have an electronic copy of it and can zoom in on the desired section to review it.  This will insure all parties have legible documents.

We have been using a new service called DocuSign under which we can sign documents electronically hence avoiding having to scan or fax documents which we found has eliminated a lot of the issues we were having in our business.  This also helps us in keeping an accurate electronic paper trail of all our signed documents and let’s us track which changes are being made.  The one downside to using the service is that not all users will read your contract in detail hence I would recommend having a conversation with the party signing beforehand to review the details of the contact before sending it to them for signatures.  The service allows the user to sign the contacts on any smartphone, tablet or computer and avoid having to print, sign and fax/email the documents back which my clients have really appreciated.

If you don’t sign contracts regularly, the cost can be a burden rather than a tool in which case you can call a friendly REALTOR that has the service to help you out.

What are some of the tools that you’re using in your business that help you increase efficiency in your operations?  Would love to hear from you.

November 23, 2016 Addy Saeed Comments Off on 5 reasons why plaza and apartment building investing makes sense Operations

5 reasons why plaza and apartment building investing makes sense

There are many reasons to invest in your future and investing in a proper investment grade asset can go a long way in getting you to your goal. I wanted to quickly highlight five great reasons why you should consider investing in an apartment building. If you have any questions, I’m available for consultation and can help you with your purchase. We are also always looking for listings for our clients so feel free to reach out for a free evaluation.

Leverage:

Real estate is a great way to build wealth because it offers you the option to leverage your money hence making it work for you. Leverage is defined in the dictionary as:

lev·er·age

noun
1. the exertion of force by means of a lever or an object used in the manner of a lever.
“my spade hit something solid that wouldn’t respond to leverage” synonyms: grip, purchase, hold; More
2. FINANCE
the ratio of a company’s loan capital (debt) to the value of its common stock (equity).

verb
1.  use borrowed capital for (an investment), expecting the profits made to be greater than the interest payable.  “a leveraged takeover bid”
2.  use (something) to maximum advantage.  “the organization needs to leverage its key resources”

Leverage is very important to investing because it helps you increase your purchase price and affordability to be able to take advantage of additional opportunities that may present them self.  For example, if you’re looking at purchasing a sixplex in Toronto for $1,000,000; you can purchase it for as low as 20% down which means you can leverage your $200,000 to acquire a property worth 1 million dollars while the asset would pay for the loan and all its expenses.

Cash Flow

Apartment buildings have the ability to not only pay off their own debt but also generate passive income for you to support your life style.  In today’s market, it’s hard to find buildings in the metropolis areas that cash flow so it’s important that you do your due diligence before hand to make sure the property you’re interested in will not only pay for its expenses but will also leave some money for you at the end of the month.

Equity

There’s a saying that money is made when you purchase the property; hence it’s very important that you pay close attention to the terms of the purchase along with what you plan to do with properties.  There are a couple of different ways you can make money at the purchase

  • Get the property at a discounted price
  • Buying a property to renovate (fixer uppers)
  • Rezoning the land to serve a better use
  • Foreclosure opportunities

These opportunities usually come into play when you have a motivated seller looking to sell their property quickly and will often come out of the blue to you.  These can help you buy into equity at the purchase and further increase value by renovating.

Appreciation

One of the reasons I love investing in Multiplexes is because it offers the most clean-cut way to project future value of a property based on the income the property will generate after renovations and rental increases.  I call this forced appreciation where a buyer purchases a property that needs rehab and is able to renovate it to a high standard and command high market rents.  Since the purchase price was lower, the buyer is able to refinance the property once the work is completed and units rented as an equity takeout and based on how much the property has appreciated can get most of their initial investment back freeing them to invest in another venture.

Monthly payment into mortgage

Every month that you own the property, its building up it’s egg via the vehicle of mortgage payments and you are getting closer to having a property that is paid off with little to no intervention.  In a rising market like Toronto, this can be compounded as properties appreciate, rent rise and you would be able to make larger payments into the mortgage and pay it off faster.

There are lots of other reasons why you should be investing in real estate and they all require careful considerations and risk assessment to ensure you’re not getting in over your head and into trouble.  It’s highly recommended that you work with an agent or a consultant that is familiar with the ins and outs of Apartment buildings and plazas and can help guide you through the process and be an asset to your journey.

 

November 17, 2016 Addy Saeed Comments Off on 10 Ways to increase cash flow on your investment property Profitability

10 Ways to increase cash flow on your investment property

If you own an investment property, you should be concerned about how much money it’s making and how you can maximize your return on investment.  In this post, I will outline 10 ways you can increase cash flow on your investment property.

An investment property could be an apartment building, plaza, senior residence or any other tangible real asset that is generating rental income.  Let’s dive in:

Maximizing Rent

Do you know what renters are paying where your property is located?  It’s far to common to find properties where the renters aren’t paying enough based on the area which can be attributed to poor management of the buildings.  Make sure you’re up-to-date with when tenants are moving in and make sure that rent increases are delivered on time.  In Ontario, any rent increases need to be delivered in writing using this form at least 60 days before the lease termination date.

Utility Bills

Utility expenses are one of the largest expenses you will have when you’re dealing with an apartment building.  If you have individual hydro meters, plan on converting tenants over the paying their own hydro as new tenants are moving into the building.  Further, if you can, spending money on adding gas meters and having individual gas furnaces installed in the units to help reduce your over all burden and cash flow requirement.  If you have radiant heat, look into investing individual sub-meters that can track usage of individual units and bill them accordingly.

This will help reduce your headaches with tenants wasting energy as well reduce your cash flow requirements every month with hydro bills.  Having extra hydro and gas meters means additional delivery charges and these should be passed onto tenants as they bring you NO additional value.

Do the renovations

When ever a tenant leaves your unit, make a point to renovate the unit to ensure you’re getting the best tenant and highest rents.  If you’re kitchen is dated, washroom needs updating, flooring needs replacement, do it!  Most of the time, your payback on your renovation will be less than 2 years depending on the renovations that need to be done.  This will ensure you get a nice bump in the value of your property compared to what you spend in renovating.

Coin Operated laundry

If you currently have a washer and dryer unit in your rental where you’re paying for the hydro and maintenance, you should switch it over to a coin operated laundry and dryer.  Not only will the machines pay for themselves, they will also help with your utility consumption and will make sure your tenants aren’t abusing them by washing one shirt at a time.

Parking Spaces

This is one of the most common overlooked income for your building.  Never include parkings when advertising your rentals rather have them as an extra to the lease.  Further, hire a company to tag any unauthorized parking violators to make sure your generating as much revenue as possible from your assets.

Locker Spaces

Laundry and Utility rooms usually have lots of unused space available that’s perfect for setting up lockers for the tenants.  Again, make sure they aren’t included rather are an additional service that is offered to the tenants if they require it.

Adding more units

Is there lots of storage or unused space in the basement of your building?  Why not check with the city if you can add another unit there?  Lockers usually generate 40-60 dollars per month while a bachelor in Toronto will generate over $700 per month.  It’s a great way to boost your income and value of the property.  Adding a $700 per month unit in the building would increase the value of the property by about $125,000.  I was working with a listing where the buyer could add a new floor to top off the building adding 4 more units in the building and increasing equity by $1,150,000.

Expense audit

A building has to be run like a business.  Keep track and follow all your expenses in detail.  Audit them on regular basis.  There is an unwritten rule with any business; anyone can bring money into the business but any expenses have to be approved by the owner or a high ranking manager.  Follow this rule!  Audit your expenses quarterly at the very least to see how you’re comparing you the years past or your budget.  Find ways to trim your expenses as they will add to the value of the property.

Property Taxes

Object any tax increases!  There are consultants available that will help you review the valuation of your property and find ways to help keep your taxes low.  This all adds to your bottom line so pay attention!

General Maintenance and Cleanliness

Attracting good tenants is the lifeline of your business and good tenants aren’t interested in moving into places that looks like slums.  Spend money in maintaining your property and keeping it clean.  It will foster a culture of taking care of the building and keeping it attractive.  Tenants will stay here longer and will take pride in the space they live in.  Offer incentives to tenants willing to spend energy in gardening or helping out with the maintenance of the building.

I hope these tips will help you better manage your buildings.  If you would like to learn more about how to increase profitability of your building or what your property is currently worth, feel free to leave a comment below and let’s talk!

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