7 Things You Need To Know About Flipping Houses In Edmonton

7 Things You Need To Know About Flipping Homes In Edmonton

We have been flipping homes in Edmonton for years, and we have learned a lot of hard lessons along the way. Some of these lessons ended up costing us a lot of money, and others have halted our projects and sometimes even made our project timeline go backwards.

As a consumer, I know that you expect that you will hire a realtor to buy a flip and they will have all of the answers. Unfortunately that is far from the case….most Edmonton Realtors don’t know squat about flipping houses. Now that being said, there are some agents that will know what they are talking about and I really don’t want to discount their knowledge.

If your agent has not flipped more than 10 properties, then you should probably find yourself a different agent to deal with for a flip. Let me know if you need any recommendations, as I know lots of agents that are good for this type of purchase.

As you may know, we are Edmonton mortgage brokers that specialize in helping people finance their flip or investment properties in Edmonton as well as cross Canada. The majority of our client base is in Edmonton though and many of them are repeat flip customers.

I have personally flipped over 70 houses, so I really know and understand the nitty gritty of flipping in Edmonton. Please, please be careful when you flip a property and read some of our other Edmonton house flipping blogs. I have seen people loose a lot of money trying to flip houses in Edmonton. I have also seen people get into trouble doing this.

Now I am not trying to deter you, I flip houses because it can be really profitable if you do it right. I want to help you set up some expectations that are realistic for you, so that you know what you are getting yourself into.

So here they Are….

7 Things you need to know about flipping houses in Edmonton

  1. Contractors will try to rip you off

This is one of the most frustrating things about flipping houses, contractors will always try to rip you off. I always choose to get multiple quotes for every job because of this. Most contractors I meet are hardened by the industry and a lot of them have problems. I have one contractor that I have worked with, that jokes to me how he rips off old ladies when he gets the chance. It can be really grimey. So pre prepare yourself for some harsh realities.

Th only sure way to not get ripped off is to take a minimum of 3 quotes per job. I usually get 5 or 6. Never pay deposits upfront as I have had many contractor never show up again after taking a deposit. Please call me with any other questions about hiring contractors. I love to help.

2. You need to get a good electrician

The electrical is an essential job of a house flip. If the electrical is not installed correctly, the house could burn down and people could get injured. I always make sure I hire a licensed master or journeyman electrician WITH INSURANCE. Remember, you are liable for what happens in the house and if people get hurt, it will cost you a lot more than the cost of the electrician.

3. Don’t ever take down a wall unless you know what is behind it

Some people think that taking down a wall is just smashing through the thing. This is a big house flipping no no. I have had multiple situations where we have cut through electrical lines and damaged things because we were not careful taking down walls.

The other thing you need to take into consideration is permits and structure. If you remove a load bearing wall, the entire room can collapse on you. People could get hurt and the damage can be very expensive.

4. People will steal from you

When you are doing a house flip in Edmonton, there will be a lot of people going in and out. At some point you might have to hire some cheap labour for cleaning or general labour stuff. I usually find these people on Kijiji. They will work for cheap, but they also might steal from you.

They are not the only one that will steal from you. I have had multiple cases where our properties were being scoped out by people in the neighbourhood. They would wait until we left and then go into the house taking tools and sometimes damaging the property. These are usually drug addicts and other riffraff.

I put up fake cameras, sometime real ones at job sites as a preventative. I also put warnings on the doors and windows.

5. Contractors might do drugs on your property

You can ask any contractor if they use drugs and they will say no. It is bullshit, I have caught tons of contractors using drugs like weed and cocaine on the properties. I have even caught a contractor having sex with a prostitute in one of my flip houses. You really have to babysit these people. Call me if you have any questions about how to deal or avoid these situations all together.

6. Make sure they sign a waiver

I have all contractors that step foot into one of my flip houses sign a liability waiver. The waiver states that if they are hurt on the property, myself or my company are not liable. I had my lawyer draft this up and it keeps me protected. Not all of the workers you will be hiring will have wcb. So this is very important. Don’t let yourself be on the hook for someone.

As a matter of fact, if you don’t get a waiver signed you are just putting yourself at risk and I can see a contractor getting injured on purpose just so they can sue you. Nothing surprises me any more in this job.

7. Laminate needs to be staggered

Every person that walks through your door will tell you that they can do multiple jobs and flooring is always at the top of the list. If you see that the person you have hired is installing laminate flooring with a straight seam, you need to get rid of them. The floor will separate within a month.

Common questions about flipping houses in Edmonton

  1. Can you make money flipping houses in Edmonton?

Yes you can make a pretty good living flipping houses in Edmonton. You really have to be aware of all of your costs and know what your sell price will be in the end. Ask us how we do it.

2. How much money do you make on a house flip in Edmonton?

You will make an average of 12% flipping houses in Edmonton. However I have had times where I have made over 70k on a single house!.

3. Do I need a realtor to buy a house flip?

No you do not need a realtor to flip a house in Edmonton, but it could help. You have to make sure you hire a realtor that knows what they are talking about. And unfortunately most of them do not. Call me if you want a recommendation on someone that is goo in Edmonton or Calgary. I know good agents in both of these markets.

4. Can you loose money flipping houses?

Yes you absolutely can. I have a friend that bought a flip house without my advice. I’m not sure why, but he worked on this house for months. When it was done, he showed it to me and I told him he put way too much money into it and that he would loose. He ended up having it on the market for over 200days and when he finally sold it, he lost $25, 000. Please call me before you flip. I will help you save money. And read all of the Edmonton Flip blogs I have out on this website

4. How do I get a mortgage for a house flip?

Not every lender will lend on a flip. I am an Edmonton Mortgage broker that specializes in house flips. I know the lenders that will finance these at the lowest rates, and have many options for individuals and businesses.

5. Do you need permits for a house flip in Edmonton

You do need permits for some things when you are flipping a house in Edmonton. Some of these things are electrical, plumbing, load bearing walls, basement developments and more.

Sean Rampersaud Edmonton Mortgage Broker

Sean and Radika Rampersaud are a family team of Edmonton mortgage brokers. They specialize on helping their clients to get the lowest mortgage rates in Canada by leveraging high volume and multiple lenders. “We want to help our clients not only to get the best rates, but also to make the home buying process easier.”

Radika Rampersaud Edmonton mortgage Broker

Have One Of Us Call You Now For Free Or Contact Us Now At
780 278-4847

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7 Reasons Buying A Foreclosure In Edmonton Is Not A Good Deal

7 Reasons Buying A Foreclosure In Edmonton Is Not A Good Deal

Edmonton has a really unique marketplace right now, and what I am finding is that foreclosures are just not a good deal. People have this perception in their minds that they will pick up an awesome price on a house that is in foreclosure in Canada.

This is just not the case, and unfortunately some realtors out there are telling their clients that foreclosures are a good deal. This is a tactic to entice the buyer to act fast. If you really want to know if you are getting a good deal, call us before you buy. I will give you free advice on this, no problem as I have made the mistake myself in the past with buying foreclosures.

How do you get a mortgage on a foreclosure in Edmonton?

You will often have to put a large sum down…like 20%. The reason for this, is agents will make comments on the mls listing that the property needs work, or handyman special. The realtor think this is a good advertising tactic, but it really is not as it raises red flags with the banks.

What happens if red flags are raised with the bank when buying a foreclosure?

They will often ask for an appraisal, and depending on the condition of the property they can ask for more down. The insurers like cmhc and genworth can also decline the deal if the condition of the property is not good.

Furthermore when an appraisal happens, the appraiser may appraise the property lower than the value. You really have to make sure the appraiser doing the appraisal knows about foreclosures and values of repair. If you get one of these newbie appraisers they will grossly undervalue the property and the bank will decline or ask you for more down.

Please call me if you are in this situation, I understand the process and I can coach your realtor on what they can do to get this done. I also know the appraisers in the city that are good at this.

7 Reasons buying a foreclosure in Edmonton Is Not a Good deal

  1. Banks in Canada are Rich

The reason I say banks in Canada are rich, is because they can afford to sit on a foreclosure forever if they wanted to. I have personally put offers in on loads of foreclosures and I never end up getting a crazy deal. The reason for this is because the Canadian banks can afford to hold the property and will generally not take less than what they have in mind.

2. Other Peoples Problems

When you buy a foreclosure, you are buying another persons problem. There can be unexpected things that come up. Like for example, I bought one a month ago and when I took possession someone had stolen the furnace. It was crazy because the furnace was there when I bought it. The paperwork they make you sign is really strict, and you cannot go back to them for any reason.

3. Unconditional offers

If you don’t have cash to buy the house with or rock solid financing, then you may not be able to buy the foreclosure in Edmonton. The reason for this is that many foreclosure listing have to be unconditional offer. Meaning you cannot purchase subject to financing or inspection.

You better be really damn sure of the purchase before you buy this way, as you cannot back out for any reason or you could get sued.

4. No Inspections

Most foreclosures do not allow for inspections. The reason for this is because the homeowners that are loosing the house may still be in the property. Often these people will trash the property before they are evicted.

5. Court date frenzy

I have been to court for foreclosures in Edmonton and it is like an auction. You are allowed to up your sealed offer if you choose right before the decision and you also get to hear the other offers. This is craziness, and people tend to get into that auction mentality and keep upping their offers. I went into one a year ago on a severely damaged property. The people that ended up buying it paid way more than they should have.

I calculated what it was worth renovated vs what it would cost to fix and they would loose around 40k.

6. MLS Listed

The foreclosures are all MLS listed, so it is avail on the open market. You cannot get a good deal this way.

7. Realtor Pressure

Realtors like to pressure their clients into buying these properties so that they can make a quick sale. This is not always in the best interest of the buyer.

Should I buy a foreclosure in Edmonton, Canada?

It is not alway a bad idea to buy a foreclosure in Edmonton, you just have to be very careful and do your due diligence. Call me first, even if you have a realtor for some advice. I have done this many times and would be happy to guide you in the right direction, or help you finance your purchase.

Where can I find foreclosure listings in Edmonton?

Every agent will tell you that they can send you foreclosures, but not all can. I can introduce you to an gent that specializes in foreclosures so that you can get all of the right information.

Do you Pay GST on a foreclosure house in Alberta?

There is no get payable on a foreclosure home in Alberta. GST are for new builds.

Sean Rampersaud Edmonton Mortgage Broker

Sean and Radika Rampersaud are a family team of Edmonton mortgage brokers. They specialize on helping their clients to get the lowest mortgage rates in Canada by leveraging high volume and multiple lenders. “We want to help our clients not only to get the best rates, but also to make the home buying process easier.”

Radika Rampersaud Edmonton mortgage Broker

Have One Of Us Call You Now For Free Or Contact Us Now At
780 278-4847

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11 Common Reasons For Foreclosure In Canada

11 Common Reason People Go Into Foreclosure in Canada

We love to help people get out of foreclosure on their homes, and there are 9 common reasons people go into foreclosure.

It is not the same for everyone, every circumstance is different. The one common thing about going into foreclosure is that it is a really shitty feeling. People tend to feel distressed and lost when they go into foreclosure, it is important to get the right type of advice or you can get sucked into paying massive penalties.

I have seen time and time again, financial institutions  taking advantage of people that are under foreclosure. They will sell their properties from underneath them, and charge them massive fees until there is literally no equity left. They make the home owner responsible for everything including legal fees and more.

I am here to tell you this….there are better options for you. I am writing a series of articles about foreclosures and B lenders so that you can understand the ins and outs of the process, as well as the potential risks there are in the foreclosure process.

We know that you are not bad people, and that circumstances can push almost anyone into foreclosure. Our goal is to help you stay in your home and pay it off as you probably planned for originally anyways.

Edmonton and other areas in Canada have been under stresses in the real estate market, coming from all over the world. We are dealing with inflated prices due to foreign investment, oil patch problems, trade disputes and outside government sanctions. This can be really stressful and put many people in financial hardship.

Not only is it directly affecting our pockets, but it is also affecting our healths and relationships.

In most foreclosure situations here, it is not because the home owners are dumb or irresponsible. They are just affected poorly, and it can happen to any of us including myself.

When I was very young, my family went through the foreclosure process because of a really bad divorce. That is why we want to be your foreclosure support. I am willing to give free foreclosure advice to any of you that want to talk.

Now that being said, I am not a foreclosure lawyer or trustee. I am a mortgage broker that specializes in foreclosures. Please let me know if I can help in any way. My contact information, as well as some links to other foreclosure articles are below.

11 Common Reasons People Go Into Foreclosure in Canada

  1. Divorce

This is one of the most common reasons people in Canada go into foreclosure. I work currently in the Edmonton market, however I serve people Canada wide. In my market alone there are hundreds of foreclosures every year because of divorce.

Sometimes during a bad divorce, accountability is passed on to the other partner and vice versa and the bills just don’t get paid. If you miss several payments, the banks will put you in foreclosure and this is very hard to repair.

2. Job Loss

The oil sands are running at low volume at the moment and a lot of people have lost their jobs in Canada. Large companies are starting to outsource a lot of their products to foreign countries and some countries are not trading at as high of volumes with Canada.

This has put a lot of people out of work…yeah it sucks. On the bright side, we do have lenders that consider this, and will work with you to not only help you get out of foreclosure, but also to help you get a job….believe it or not. Ask me how.

3. Military Relocation

When a person has had consistent spending habits for years, and they are relocated to a market like Edmonton, Vancouver, Calgary or Toronto. Their cost of living will go up. Some people forget to take this into account, and end up in foreclosure.

We may be able to take out some money from your current mortgage to pay off high interest loans, so that you can get back on track.

4. High Student Loan Debt

The great thing about student loans is that you don’t have to pay them for a few years and during your schooling. The old mortgage rules allowed banks to not have to consider someones student loans in their debts if there is no payment. Now they do. But all these people who qualified years ago, do not qualify now.

Some of you in this situation, may have a bank or lender that will not renew the mortgage. You need to port that mortgage or (switch) to another lender.

5. Buying too many Toys

I live in Edmonton, Alberta close to the oil sands. A lot of people made a lot of money many years ago and chose to buy high end vehicles mixed with trailers, motorcycles and more. Their payments are really high and now that the jobs are not as abundant and pay less, they can’t make their payments.

If you are in this situation, you need to consolidate before it is too late. We can pull some money from the house at low interest and pay off some high interest debt.

6. Depression and Anxiety

You never know who has depression or anxiety. But when this happens, people tend to operate at a much lower level. You can read more about anxiety here.

Some people just want to sleep and will call in sick often to work. Eventually their workplaces catch on and they end the employment. If you are in this situation, don’t let yourself get behind.

You need to get help. I can try to make your payments lower for you by extending the amortization. I may also be able to get you one year worth of payments paid ahead of time and build into a second mortgage. Ask me about these kinds of details. I just did one for a lady in distress.

7. Overspending

Yes people do this all the time. Often it happens with people that are new to credit. They spend too much initially and before they know it they are drowning in debt. We can try to pull money out of the house in this case to pay things down.

8. Health

If you become ill the last thing on your mind is paying the mortgage. Many lenders have programs/insurance for this. You may have this insurance already and not even know it!

9. Buying at the wrong time

If you bought at a high time and then find yourself in a tough financial situation, you cannot sell the house because there is not enough equity. You will just have to pay the bills. We may be able to refinance it and make your payments smaller.

10. Substance abuse

Drugs and alcohol are a major factor in why some people loose their homes in Edmonton to foreclosure. This is happening all over Canada. I had a young man that inherited a home from his grandparents. He ended up getting all kinds of loans on the house to fuel his party habits and ended up loosing the house.

11. Death and Probate

This is another distress situation and the reason why I always suggest that people get mortgage life insurance. If someone dies and they are the main income earner, you could go into foreclosure. As a matter of fact even if you are the main income earner, and your spouse or child dies. You may go into depression and avoid making money.

 

Sean Rampersaud Edmonton Mortgage Broker

Sean and Radika Rampersaud are a family team of Edmonton mortgage brokers. They specialize on helping their clients to get the lowest mortgage rates in Canada by leveraging high volume and multiple lenders. “We want to help our clients not only to get the best rates, but also to make the home buying process easier.”

Radika Rampersaud Edmonton mortgage Broker

Have One Of Us Call You Now For Free Or Contact Us Now At
780 278-4847

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