In real estate, "free with purchase" usually means a stove and fridge thrown in.

In this case, it is a steaming pile of dog poop on the living-room floor encircled by flies.

Scott McGillivray, real estate mogul and host of the HGTV series Income Property, has allowed us to tag along on a typical scouting trip for properties. The dog droppings are on the top floor of a triplex on Royal York Rd., listed at $484,900 for three rental units.

Plastic glasses full of cigarette butts and playing cards litter the kitchen table; beer empties are scattered among the garbage heaps on the floor. It looks like a flophouse.

"The asking price has just dropped 25 per cent," jokes McGillivray, who is a ringer for a young Tom Cruise but owns and manages more than 20 income properties.

 

We knock on a closed door and discover one of the card players passed out on sleeping bag on the floor.

"Two university students just moved in a month ago and they are taking care of a dog for someone," the landlord explains.

It has been on the market for 98 days. "That means the seller is lowering the asking price which is a good indication that it is overpriced," McGillivray explains.

The rent on the units is $800, $950 and $1,050, which adds up to $2,800 a month. It's amazing how fast McGillivray tallies it up in his head. "That will carry the mortgage," he says.

McGillivray, 31, started buying properties at 22, when he was at the University of Guelph.

"There was nothing to rent," he recalls. "Even a dump rented fast. A buddy and I decided to buy a house and we used our student loans as a down payment. Half of a student loan goes to rent anyway. We rented it out and bought more."

After college, where he studied marketing management, he worked for Johnson & Johnson as a pharmaceutical rep but returned to real estate. His big break was being resident carpenter on Debbie Travis' Facelift and her project manager on From the Ground Up.

On Income Property, which airs Mondays at 8:30 p.m., McGillivray rescues home owners by building income suites to offset their mortgages.

"We turn extra space into extra income," he explains. "We will fix up the basement or we turn the place into a triplex. The tenants pay your mortgage. We see how lives are transformed: You make $2,500 in rent, you pay $1,000 in mortgage and $1,500 a month in savings gives you freedom."

He grew up in Leaside and moved to Woodbridge when he got married.

"I'm in a single-family dwelling. I lived in a duplex for years and I rented out two-thirds of the house."

We head west because McGillivray is confident that Etobicoke's lakeshore is the hot, new underdeveloped area.

"Mimico is making a huge comeback," he predicts. "The lake is so close and it is close to the city. It is on its way up."

The second property we view is a two-bedroom bungalow on Twentieth St. listing for $399,000 and on the market for seven days.

"Humber College is here and university students pay really high rent," he says.

The bungalow looks like it has only been driven by a little old lady on Sundays.

The original owners had it for more than 50 years. It is a power of attorney sale, which means the owners have died or perhaps gone to a retirement home.

Instead of dog poo, it smells like Lestoil. McGillivray notes the crown moulding, the original leaded glass windows and the oak hardwood floor under the wall-to-wall carpeting, which has preserved the floor.

"It has good pride of ownership and great potential," McGillivray says. "I'd look at putting an addition on this house because it has a big lot. The kitchen needs remodelling but I could potentially flip this house.

"If there was a third bedroom upstairs, I'd consider making an offer. Two bedrooms don't sell. But bungalows have big basements, which make for big basement apartments."

The basement has high ceilings, big windows and a fake log-cabin look. All it needs is a moose head.

He figures he could get $1,100 a month for the basement apartment, which would be 70 per cent of the mortgage. He says he could get $1,650 a month in rent for the upstairs if there were a third bedroom.

That would generate $2,750 a month and $1,200 a month cash flow. Bottom line: It has really good bones but needs $20,000 of work just to rent it out.

As we set off for the final property, McGillivray checks out the line of students at the bus stop at the top of the street:

"Each student pays $550 a month rent. I see $30,000 to $40,000 a year at the bus stop."

The house is on Fourth St., listing for $359,900, on the market for a week and right across from the lake: location, location, location.

But there is a rezoning sign on the property across the street. It is an application for seven condos.

There goes the view.

The house is ramshackle. It looks like a DIY gone to hell: 1 1/2 stories with the bedroom upstairs via a scary staircase.

"This house needs a ton of work," McGillivray observes. "It must have been a cottage. You can't do anything with it. Just light a match."

There is an amazing property three doors down in a corner lot with a view that won't be compromised by the new condo development. McGillivray chats up the owner and learns that she paid $400,000. He offers to pay her double. No sale.

McGillivray does this scouting once a week. How many times does he succumb?

"Last year, I put in 60 offers and I got six or seven.. I only get 10 per cent of the offers; I am lowballing. Too many people are bidding emotionally, not financially. Then it's buyer's remorse."

He is still mulling over the bungalow.

 

 

http://www.yourhome.ca/homes/realestate … perty-host


COLIN MCCONNELL/TORONTO STAR
Scott McGillivray scouts properties once a week. Last year, he put in 60 offers, and bought six or seven. The 31-year-old carpenter started buying properties as a university student.
REAL ESTATE INVESTING
Real estate scouting with Income Property host
November 21, 2009 Rita Zekas
SPECIAL TO THE STAR