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Quote:
Originally posted by Gapodi
I have one more question.... How do flippers manage selling of condos? Do they have to take full mortgage loan, get the apartment in their name before putting it up for sale? or can they just transfer it to the seller without assuming mortgage even for a month once building is ready for possesion ???
How do they do it?
I am sure that YOUR real estate professional (someone with good experience in condo flipping) can provide you with answers to the above.
Regards,
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Amit Kalia, Broker, REALTOR®
RE/MAX Real Estate Centre., Brokerage
independently owned & operated
100 City Centre Dr, Unit 1-702
Mississauga, ON L5B 2C9
Phone No.: 905-339-5111
Website: https://www.realestate-ontario.com/
Condo Blog: https://condopundit.com/blog/
Location: Canada-Glorious and Free
Posted on: 15-11-07 11:47:38
Quote:
Originally posted by amit kalia
I am sure that YOUR real estate professional (someone with good experience in condo flipping) can provide you with answers to the above.
Regards,
Amit, come now, I am sure you can answer this question.
But let me try using my limited Condo buying experience. When you make a deal to buy a new (not yet contructed) condo, the developer will require a deposit. That is usually paid as a down payment by the buyer. The developer will then give you a schedule of payments based on the %age development of the building. The buyer has to approach a lender (bank, mortgage broker etc) and work out a deal for the mortgage. You have to be careful about the legality of ownership here. Because technically the developer is the owner until the entire building is complete and the hand-off to the condo corp takes place. What you have in your hand is the purchase agreement. Some developers go as far as blocking the transfer of the unit until that hand-off takes place. They do this by blocking the re-assignment of the purchase agreement.
Now back to the process. On the first payment date, the lender will forward the funds to the builder's lawyer etc.. some lenders will start to charge only interest on the mortgage, some will deduct funds from the outset for the interest etc. You need to understand what works for you. This happens every deadline until pocession. At this point you have the full mortgage and partial ownership - until the hand-off. I beleive you can, at this point, sell the condo and legally transfer the "partial ownership" because the purchase agreement has been fulfilled.
Please correct me if I am wrong.
BV
Quote:
Amit, come now, I am sure you can answer this question.
BV
BV,
Please understand, my objective is to help members with correct, honest advice and to guide them to work with the industry professionals. There are so many out there.
I had given a synopsis on condo investing.
Now you won't ask a heart surgeon, a dentist or a plumber to demonstrate their procedures here. Would you?
Cheers,
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Amit Kalia, Broker, REALTOR®
RE/MAX Real Estate Centre., Brokerage
independently owned & operated
100 City Centre Dr, Unit 1-702
Mississauga, ON L5B 2C9
Phone No.: 905-339-5111
Website: https://www.realestate-ontario.com/
Condo Blog: https://condopundit.com/blog/
Location: Canada-Glorious and Free
Posted on: 17-11-07 22:08:42
Selling a service is different from goods. Who hasn't talked to a doctor about a procedure they are going to perform. Or talked to a mechanic about a problem in the car and it's solution. Does that mean we take up a knife and perform the surgery ourself? Rhetorical question.
And here is another, what is the number one thing that people look for when they want to buy a service?
So Gapodi, I agree with Amit. It is important to find yourself an agent who NOT ONLY knows how to flip condos BUT has experience. Those with true talent can EXPLAIN IN DETAIL the process that is involved. How else can you tell if he / she has experience?
BV
Location: Canada-Glorious and Free
Posted on: 17-11-07 22:41:30
Say you are interested in investing in a property. How do you evaluate the property to make sure it is priced correctly?
There are a number of factors that go into the pricing of a property. One of the major indicators of pricing is called the CAP RATE. You will see a number of commercial property brokers (links in prev post) publish a national report on the current and future trends in cap rates. Many times, agents will tell you the cap rate of a property. Or they will ask what is your cap rate range if you want to buy. So what is cap rate anyway?
Cap rate is the %age rate of return against the price of the property. The return is calculated net of operating costs but before interest or financing. So a property earns $ 50 in gross rent annually. It costs $ 40 for property tax, snow removal, garbage, vacancy rate and other expenses. The net return is $ 10. If the property is selling for $ 80 the cap rate is 12.5%
Now you have to remember the cap rates published by the brokers are for excellent properties, in prime locations with AAA credit rated tenants. The GTA is about 6.5% cap rate. The surrounding 'burbs are about a percent higher at 7.5%. Ottawa and other larger markets in Ontario are also around the 7.5% mark. Smaller markets like P'boro, Kingston, Stoney Creek etc are half to one percent higher than that (8 - 8.5%). There are always local issues that affect the cap rate. Properties in the Windsor market were in the 8.5% - 9% but have gone to 10% - 11% because of the volatility in the auto manuf sector recently.
Things that affect the speecific cap rate of a property are:-
1) financial strength of the tenant(s)
2) presence or absence of an anchor in retail
3) location
4) condition of the property
5) restriction in the zoning
6) ENVIROMENTAL implications of the tenants operations
Your due diligence has to involve all of these points. If nothing to protect your investment and second to put yourself in a better negotiating position.
NEXT -> The Agreement to Purchase.
BV
“…I just started getting into it and beginning to enjoy it.
Tamtru”
Yet to hear anything from Tamtru.
Tamtru, you started this thread. Why don’t you contribute anything/ some thing about your enjoying REI; and make this discussion even more lively and useful.
-Ben
Experts,
How are private REIT ? I saw few promising to offer return upto 15%. Are they safe ? Any first hand experience??
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Driller the thriller
