We enrolled in November for the membership. Until then, we had a condo downtown Toronto that was making $10 a month and a rental in Peterborough that was bleeding money. When we say bleeding, we had already lost 4 months of rent and the previous tenants had completely wrecked the house. The previous tenants (a couple in their 60s) destroyed our hottub, the floors were completely destroyed, they even punched a wall and it had a hole! We were devastated!
In September 21st, we went to the "Scott Creates Cashflow" event. We just wanted to find how to turn our UP property to a cashflowing one. We heard him and he was just inspirational. We also met him personally and he spoke to us for 5 minutes. We explained our situation to him and he said: Did you know that student rentals are doing really well in Peterborough? That was it! We changed our model instantly.
We turned our once UP property into a luxury student rental. We managed to rent it to a group of students in October. We were able to increase our rent and we have not lost a month's rent since then. Today, this property now boasts a 13-feet ceiling family room, 5 bedrooms, a home theatre with bleachers, a massive basement fully furnished with high end furniture. The list goes on. The property now earns $1,300 more a month than it used to. This September we were up for refinance. The appraisal of the bank came $150,000 more than we expected and the bank gave us $190,000 for the refi. $100,000 as a mortgage and $90,000 as a line of credit.
Before all that, we need to explain that the beginning was very slow. So, if this happens to you, please do not be dejected. You see, we went to the summit, with high hopes of great deals. Everyone was closing deals left right and center. Nothing happened. We heard fantastic stories of success with people that were more of idols rather than real people. We felt sad, dejected and utter failures. We thought that the event was great, but we had not even closed on a single deal. What was wrong with us? Were we incompetent? Everyone else seemed to close on deals; not us. We returned home and we were more determined than ever. We were watching videos and by fluke Evelyn's dad had a friend who was a real estate agent and who owned 100 doors in our area. Evelyn and I spoke to him thinking that he might need property managers. Evelyn, though, asked him (let's be honest, she grilled the poor guy) to get her off market opportunities. He found a ridiculous one...A four-plex mansion from the 1800s. Super high end, with exquisite masonry, recently renovated. We saw the price tag and it didn't make sense. It was just ridiculous.
But for some reason, we could not let it go. Evelyn was pushing for it (as always). We run some numbers. The numbers did not make sense. After changing 3 mortgage brokers, COVID hit. At that time, it was February. When we started the process, we were told that a B Lender would give us a mortgage at 4%. Due to COVID and the decreasing rates, we were able to secure financing at the ridiculous rate of 1.75%, refinance our condo, which we used as the down payment. So, basically we were putting almost nothing from our own money. With tactics learned by other Keyspire members, we also vacated the 3 units that were under performing, increasing the rent by $1,100 a month. Following Michael's and Scott's tactics, we had rented the main unit to students even before we had possession of the house.
With some renovations and a huge amount of sweat equity, we finished our renos right on time (within a month and a half) and on budget. We created 4 extra rooms in the main house, renovated 2 washrooms and created a second kitchen on the third floor. Evelyn was able to furnish the house with Bombay furniture, paying only for transportation. The house looked great! We also added a vending machine and for next year, we will be buying kayaks that we will be renting to our tenants. In our future plans, we want to create a meal plan for our students. Now, due to COVID restrictions, this was not possible, but we are looking into it.
In the interim, we also did a couple of private lending deals, with a couple of keyspire members, we signed with District REIT and SG REOT.
This is our time to start our JV journey. We are into discussions with a few members to figure out our next move