Jump in with a mediocre deal, or pay opportunity cost? cost

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Jump in with a mediocre deal, or pay opportunity cost? cost

Talia Ibidia
Member since 2021 · 4 posts · 0 votes
HI everyone! I'm new here. I'm Talia, 30, and live in Ajax On. I'll get straight to the point.

I'm completely new to real estate investing. I've always wanted to

Own a little real estate empire because I like the tangible security of owning property, but I never thought it was possible till recently when I discovered BP, matt McKeever, and a bunch of different real estate  YouTube channels and podcasts that I've been binging.

The problem: I barely have capital. All in, with every last
dollar I've ever saved and I only have 30k. I'm looking to invest for financial freedom in the long term. Short term I need to get a property, house hack, brrrr, so I can use the refi money to purchase an investment buy and hold property for my mom who is retiring in 5 years and has absolutely no assets. We
're currently renting.

Given what I've researched about rei, I know that the best deals are not on MLS, and therefor a newbie like me has no access to them. I also
 Don't have the capital to close quickly and pay thousands above the listing price like these homes on the MLS go for.

I'm looking to invest in Hamilton, Windsor, or st Catherine's because they are the places I can afford (barely) and are still up and coming.

I know if I buy now, it will be extremely tight. I have a line of credit for about 15k to cover both repairs and closing costs which will barely cover.

I have been a chronic over thinker and also struggle with analysis paralysis so I really want to jump in now. I also know that with the way the markets are trending, if I dont get it now I might not be able to later on.

For all you experienced investors, what would you suggest I do? Jump in now and try and make whatever I have work, knowing that the chances of me getting a good deal are slim but I may be able to break even?

Or, wait and save. I don't have a high salary unfortunately and I wouldn't be able to save that much more in a year, but it would give me at least another 10-15g to assist with the extra fees. But by then, prices may have gone up enough to keep me out.

I apologize for the long post and I truly appreciate anyone who takes time to read and offer feedback.

I'm a single female, none of my friends are into this type of thing, so I don't have anyone to ask. Its just me, no friends and family who can lend me money, no equity in a house my parents own, nothing. I'm just trying to find a way to make it and retire my amazing mom. Many thanks :)
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  • Jordan Perry
    Banker · Nova Scotia, Canada · Member since 2018 · 83 posts · 59 votes
    5y

    @Talia Ibidia

    Talia,

    Firstly, let me say congratulations on saving 30k for the intended purpose of bettering your financial future. That itself sets you apart from most people in this world, so you should feel proud to have accomplished this. 

    At the early stages of real estate investing, I believe it is all about focusing on the small actionable steps that will take you to your investing goals. You don't climb Everest by only focusing on the top, you have to watch your step and plan your movements all along the way. 

    TO answer your question, get in now, or later, I'm not sure who said this first but I love this quote: "Don't wait to buy real estate, buy real estate and wait". This motto has truly done amazing things for me in my life. 

    House hacking can be a great strategy for sure and if your goal is really to live in your own home, this is a great way to do it. May I offer another viewpoint and suggest taking your money to another province to invest? If you are already renting, and don't mind doing so a while longer, investing in a province where the cashflow is greater will help you to save for the next one, and although the downpayment for a rental you don't live in has to be 20%, I think you will find that it is comparable to how much you would have to spend on a downpayment in Ontario (5% of 400,000 is 20,000$). 

    I myself have had some great success with investing in New Brunswick and Nova Scotia. Property managers are a very worthwhile expense in my opinion and make real estate investing that much less risky for us who suffer from "analysis paralysis" (unfortunately or some, this never goes away, you just learn to use it to your advantage).

    If there is any way I can be of help, please feel free to reach out :)

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  • Melanie Dupuis
    Investor · North Bay, Ontario · Member since 2019 · 221 posts · 99 votes
    5y

    @Talia Ibidia Do not just "jump in" to a deal so that you feel you are now investing. 30k is awesome! I would suggest getting educated in creative financing first. Once you understand how to utilize this, you can find a cashflowing property and use your 30k as closing costs only.

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    5y

    $30K is a good amount.  I'd start by going to a mortgage broker or a bank and finding out how much you can borrow.  Look locally in the areas you mentioned to see what you could buy for that amount.  Remember you will need extra money for fees and closing costs when buying a property.

    Start simple.  If you look at condos, be aware there are extra fees every month.  They are less expensive to buy, but the condo fees can add up fast.  Single family homes are generally better as there are no restrictions (avoid HOAs).  Can you find a place where you might be able to get a roommate?  You don't have to tell them you own it, but it is a good way to reduce your living expenses.  Something with a suite would be better, but that may or may not be possible depending on your budget.

    Someone else mentioned investing out of province.  That is another option if the amount you can borrow isn't enough to buy locally.  You'd need 20% down, so with $30K you'd be looking at places less than $150K.  I wouldn't go to your max as chances are it will take a bit to find a tenant and you'd be paying the bills.

    Talk to your bank as first time buyers can also borrow against their RRSP.  You have to pay it back within a set amount of time, but still it can give you some extra wiggle room.

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  • Talia Ibidia
    OP
    Member since 2021 · 4 posts · 0 votes
    5y

    @Jordan Perry Thanks so much for your response I really really appreciate it! I've heard that quote as well and I've consistently heard this train of thinking amongst investors which is making me want to just go all in.

    Since we're renting now and currently need a residence anyway, it makes sense.

    I'VE heard about investing in Nova Scotia as a great opportunity, I just don't thinka I would feel comfortable enough at this point to buy in a place so far away for my first property.I feel  I'm too new to take such a big leap. Thanks again for you insights!

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  • Talia Ibidia
    OP
    Member since 2021 · 4 posts · 0 votes
    5y

    @Melanie Dupuis

    Thanks Melanie, I'm currently reading invevstor financing by Dalia Barsoum and will continue to seek out more info on creative
    Financing. Hopefully there will
     Be an option that works out for me. Thanks for taking the time to read and offer suggestions.

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  • Talia Ibidia
    OP
    Member since 2021 · 4 posts · 0 votes
    5y

    @there@Theresa Harris

    Thank you so much for sharing your insight and the helpful things to look out for. I have nothing in an rrsp but my mom may have. I will be talking to a real estate agent/investor today who will put me in contact with a good mortgage broker and hopefully I'll have more clarity on what exactly I can afford and which market I can get the most out of. Again, I really appreciate the feedback.

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  • Melanie Dupuis
    Investor · North Bay, Ontario · Member since 2019 · 221 posts · 99 votes
    5y

    @Talia Ibidia are you following us on social media?

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