I had the privilege of attending as a guest of Dave Debeau’s Canadian Real Estate Profits group to the last R2O Bootcamp right here in Kamloops BC.

If you are framiliar with Rent to own/lease options, this was a great course that covered the basics with a lot of gold nuggets along the way. Here are some of the guest speakers and things they taught that stuck me as very valuable:

Dan Heon

Very knowledgeable mortgage broker. Has a service that keeps tenant buyers accountable for the length of the term. It’s very cheap($1500 1st yr and $500 /yr thereafter) and includes 4 quarterly checks with your tenant buyer with reporting.

Ken Beaton

Leverage: Banks sell mutual funds so they must be good. If you go into your bank with $100,000 and ask for $500,000 of the banks’ mutual funds you will be told no. But go with $100,000 and ask to buy a $500,000 piece of property and they ask you to have a seat. They won’t even leverage thier own product but thy will leverage real estate.”

Dave Dubeau

As a refreshing change, Dave Dubeau spoke about rent to own scams and how we as potential rent to own operators should ensure to follow a proven system so we don’t end up on front page news. If you have good intentions but no plan, things can go sideways quickly. Here are a few of the types of rent to own scams:

“Nice people – dumb deals.” 

– no plan

– no paperwork

– no follow up

– failure, hard feelings, small claims court

– ie Parents by their kids a house, employer buys their employee house, tenant buyer does not live up to expectations, there is no recourse for investor. Relationships damaged.
“Churn and burn”

-typically an unscrupulous landlord

– Intentionally seeking a tenant failure(accepting the first person who has a large enough option payment, that is the only criteria)

– Incomplete paperwork, no credit repair plan

– tenant buyer gets screwed

“Rent to own investors falling victim to turn key deals”

– Rent to own operator/deal maker finds a deal

– Finds rent to own operator finds a “deal”

– Find a tenant buyer

– Wholesales the entire deal to you

– They keep the option fee and leave you to deal with the fallout
– No skin in the game

Some of examples of this might be the Golden Oaks company in Ottawa as per attendee discussion.

 

Barry McGuire

Form C of the Land Titles Act is very useful for registering Option to Purchase, JV agreements, and other things against the title of a property. Very interesting and would have saved me a ton of time trying to figure out how to secure interests in the past.  In Alberta this is called a caveat, Ontario it is called something else. A good idea if you are an RTO buyer to register your option to purchase on title.

 

Hunh…..

It sure is neat to get the perspective of different investors, that is why I encourage everyone I meet to continue their education and attend events even if they do not seem like they are in line with their current strategy.
Myself I will continue with buy-and-hold, but it is nice to have added rent to own to my toolbox.
Until next time,
Stay until next time,

Stay SAFE