How much money to start?

Question

Hello,

I live in Toronto, Ontario. How much money do I need to start? I am open to any REI at the moment.

Jacob Pereira · Answer

Oh, you can get involved with no money in the bank, but you better have some serious skills and also be prepared to get much lower returns than someone who has some savings. Like everyone else says, it's very dependent  on what you want to do.

In the interest of giving you a concrete answer, however, I'd say you need at least $15,000 USD MINIMUM to get started in this industry if you expect to make more than minimum wage, unless you have great connections who you can convince to take huge risks. If you only have that much with good credit you could possibly buy a small multifamily or house and pull a BRRR strategy and then lever up from there. If you have less than that, then in my opinion you're better off getting a night job for a few months to make those savings because you'll be paying investors way too much of your profits to get in the game.

I do keep hearing on this site about $30k houses; if you happen to be in one of those markets you probably just need a roll of quarters to get involved, but I personally have no experience there and have never heard of anyone retiring on those types of properties.

Eric Delcol · Answer

You can start your real estate path today with NO MONEY down!  That's right, you can buy  property below market value and reap HUGE profits!

Sorry, I couldn't resist.  Fortunately you wont find much of that kind of hype and hysteria here on BP.

Like Matt said, for an investment property in Canada you need 20% down to qualify for a mortgage.

You can skirt around this by buying a multi-unit and live in one of the units as an owner occupied property is only 5% - however, as of Feb 2016 the value over $500K requires an additional 10% down payment.  Eg. a $800,000 house would require $70K (5% of 800,000 + 10% of 300,000).

Claude Boiron · Answer

Hi @Ian Ramos, as other members have said above, "it depends".

However, I feel like you want to hear a number, so try $100K.

That won't do in Toronto proper, but if you're willing to drive to other parts of the GTA, you can get your foot in the door with $100K cash.

Matt Geerts · Answer

Ian, please note that Isuf's answer is not relevant to Canada.

For non-owner-occupied you need 20% down for 1-4. 5+ is complicated with MANY more options than just a conventional loan, but I think from our previous discussion that you are not there yet.

If you are willing to live in your investment you need 5% down for 1-2 units and 10% down for 3-4 units. If you put down less than 20% you will pay CMHC insurance as an up-front cost rolled into the mortgage owing.

Anyway, this answer doesn't help you. What you need to do is learn the market that you want to invest in... Or learn a few markets and pick one that works for you.

You also need to talk to a couple banks and brokers to get a pre approval so you know what you have at your disposal. Your income determines your max loan (debt service ratio).

In fact, do that, then PM me and I'll help direct your next step.

Lee Jackson · Answer

Welcome to BP!     Totally depends on what you are interested in...    Are you looking within Toronto or willing to venture out of the city....   just you location can be a drastic change in the amount you need saved to start....   5-20% down payment for a $750,000 minimum start in the city vs a $250,000 Max purchase price and hour or 2 out of the city....     Then depending on what your planning for any type of property management and maintenance, vacancies. ...  All add up month to month.

Best of luck @Ian Ramos

Interesting to see what your plans are.

Myles Ngumezi · Answer

Hello,

Good question! I don't know the answer so I am interested in what others have to say about this as well.

How much money to start?

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