It was one of those weeks when it seemed like everything that could go wrong – went wrong.
In hind site weeks like this always get forgotten, but at the time it always seems stressful and insurmountable.
We had two deals that were closing this week. Both didn’t close on time – there we just so many hiccups with financing. It was all the more frustrating because they each had 4 month closings – they were purchased back in April!
On one particular deal, the appraisal was done so close to the closing date, and it came in close to 100K below the purchase price. We ended up having to use funds that were allocated for other projects to finally close the deal.
We self manage our entire real estate portfolio. We have tenants who we are responsible for – collecting rents, dealing with maintenance concerns, move outs and new leases.
I have 2 duplex’s on the go, and I recently closed on a third property that is going to be converted.
We have two single family homes that are getting rented out – coordinating showings and screening tenants.
And of course my clients and investors – keeping to my core value of providing outstanding customer service and always over-delivering.
Settling into a new home and organizing a brand new home office.
It just seems like royal chaos most of the time.
But I remind myself that it is important to struggle, to face challenges and to persevere.
Living each day in alignment with my goals, fighting to create the life many could only dream of – that’s what keeps me going.
There is a great quote that goes like this:
“Entrepreneurship is living a few years of your life like most people won’t so you can spend the rest of your life like most people cant.” – Anonymous
So on the note of financing, and in light of my recent issues, I’d like to offer you some tips that I’ve learned along the way to get those deals done!
1. Ensure you are working with the right mortgage professional!
I have been in this industry for almost a decade – and this is the single biggest mistake people make when starting out.
I was lucky, I stumbled upon a good mortgage broker from the get go who worked primarily with investors
They structured my portfolio so that I worked with lenders strategically, keeping in mind my growth and future goals.
This means going with a lender and a rate that isn’t always the utmost lowest.
I recently had a client who couldn’t get a mortgage qualification done during the conditional period of their home purchase (5 days) – they were working with a big bank whose mortgage professional simply didn’t understand investments.
The deal fell through.
Weeks later they used a mortgage broker who helped get the deal done in the same time period.
It is about working with the right, investor focused professionals.
2. Get your financing documents in order
This is a big one for us – especially as your portfolio size grows.
Having all your documents in order for any properties you already own:
- Property tax bills
- Mortgage statements
- Lease agreements
Along with all your personal financial information
- Letters of employment and paystubs
- Tax returns
- Bank statements (showing proof of funds etc).
We like to use a spreadsheet to track all of our properties, including the purchase price, loan amounts, rates we get, rent we receive etc.
This really helps – for both ourselves and our mortgage professional to see the big picture on our overall portfolio.
3. Be flexible and resilient
This part of the game is always stressful and never easy. Working with lenders can be frustrating and requires patience and some flexibility
Sometimes things are still in the works just a few days before closing.
Go with the flow – keep your cool and know that somehow, someway you and your team will make it happen!
So until next time, happy Canadian Real Estate Investing.
Jose Jafferji, REIA