At what point does a rental property become commercial. Say a triplex is residential. How many units can I have before it is recognized as commercial?
4? 5?

Thanks

I do have a website I am working on…. in the meantime the best way to get a hold of me is by emailing FT and he will pass on my email.

You can also register in the Canadian Money Forum and I am always posting there and answering questions.

My handle there and elsewhere on the web is Berubeland.

Thanks!

I have been to the Supreme Court of Ontario with a tenant who appealed the Landlord & Tenant Board ruling. She had no basis for appealing whatsoever. She got Legal Aid and didn’t show up claiming she was ill the first time (she got a friend to bring a Dr’s note) the second time was right after September 11th, she sent a friend to tell the court she couldn’t appear due to the fact that she was ministering to the victims of September 11th. That’s when the case was finally dismissed. Every time our lawyer appeared it cost us $1400.

The previous property manager rented to her. Basically the owners kept him on for an extra month for the turnover and to “train” me. During this time he rented to this lady quite deliberately. I never once met him. She had a drug problem and was a prostitute. Part of my job was to call her and try to get her to pay rent. Of course she never answered but the girls in the office and I used to listen to her creative voice messages and laugh our heads off. Things like “Rrrrrr, this is Miss Kitty, I want to talk to you now, Roaooow. Leave your number, Tiger.

So it’s very advisable to have a large reserve fund for just this kind of eventuality. People have lost their rental properties because of this kind of tenant.

There is no easy answer to your question.

The typical joint venture deal is 50/50. You put up all the money and closing costs and the mortgage. Capital appreciation and net income is split 50/50.

The other option is a Limited Partnership company which is better suited to larger deals with more partners (up to 12)

For me joint ventures are the next level. In the past I have been hired to manage these derelict properties back to cash flow happiness. Because I am new to the game of joint ventures I am perfectly happy to do a 25/75 split on any joint ventures, simply put, there is a lot I don’t know… yet.

I really like the idea of joint ventures, the main thing being that if the joint venture partner doesn’t perform, they don’t make any money. I like deals where the people working together are perfectly aligned.

This is not always true in conventional property management. There is basically a continual power struggle between the owner, who wants more services, and the property manager who will make more by providing less service.

The joint venture way is about performance and for me those kinds of deals are the best kind.

For those who want to consult on buying property I do that too. You can trust me to tell you what I really think, even if it’s not what you want to hear. It’s a lot of work to find something that will cash flow in this market. You have to kiss a lot of frogs before you find a prince :)

For the average Joe, REITs are a much better way to play the real estate market. If you share my view of Canada having overvalued real estate you probably wouldn’t want to buy now though.

What can one expect to pay for these kinds of services?

I have managed mixed use properties as well.

Truly though I am seeing a lot of opportunity in the industrial market these days. This is one of the most overlooked asset classes and I personally think there is a lot of money to be made buying up larger spaces and renting them as smaller spaces. I rented in an industrial plaza before and got to see first hand how that worked for the landlord. He had very low turnover and units rented fairly quickly. You wouldn’t believe the amount of uses these units are put to. We had a rich guy building a model car in one, samosa making, roofers, sign companies, furniture refinishing and even one lady who made those parisienne (small round peeled) potatoes.

I believe that in real estate as in the stock market you need to head away from the pack to make the best returns. If people aren’t telling you how crazy you are, you’re doing something wrong.

Further because these properties are pretty illiquid, great deals are there for those who make offers.

Do you do much work with commercial real estate clients?