How would you proceed in my situation...

1 Reply

Hope all is well everyone!

I was hoping for some advice on how to proceed. I live in Castlegar, BC, Canada.

Heres what my first few potential deals look like.

I have an accepted offer on an owner occupied house, working on financials and all looks good. This property would tie up a significant amount of my cash and potentially some line of credit to acquiring and renovate to my criteria. I also have two submitted offers on two bank foreclosure properties, both distressed and would require a significant rehab loan on both, one more so then the other. I may be able to acquire these two properties with all my remaining cash and line of credit, but the rehab loan would need from bank, purchase plus improvement.

My current house I live in would make rental number 1, up and down duplex (3 bed 1 bath up, 2 bed 1 bath down). The two foreclosure properties are an up and down duplex (2 bed 1 bath up, studio/bachelor suite down) and a triplex (3 1 bed 1 bath suites) and the new mortgage guidelines stat in Canada in order for acquiring rental property number 3, I would need $100,000 cash at my disposal. The three rental properties, based on my numbers would cash flow $200 per door for $1400 per month.

I have some ideas on how I am thinking on proceeding, but was hoping to hear your thoughts, if your interested in sharing. This is all new to me but very exciting.

Cheers,

Steve

Originally posted by @Steven Lalonde :

Hope all is well everyone!

I was hoping for some advice on how to proceed. I live in Castlegar, BC, Canada.

....

My current house I live in would make rental number 1, up and down duplex (3 bed 1 bath up, 2 bed 1 bath down). The two foreclosure properties are an up and down duplex (2 bed 1 bath up, studio/bachelor suite down) and a triplex (3 1 bed 1 bath suites) and the new mortgage guidelines stat in Canada in order for acquiring rental property number 3, I would need $100,000 cash at my disposal. The three rental properties, based on my numbers would cash flow $200 per door for $1400 per month.

I have some ideas on how I am thinking on proceeding, but was hoping to hear your thoughts, if your interested in sharing. This is all new to me 

Where did you pull that quote of requiring $100K to purchase your third rental property?   Is this based upon your present debt service ratios?

The amendments to Guideline-B20 last October were:

OSFI is setting a new minimum qualifying rate, or “stress test,” for uninsured mortgages.

  • Guideline B-20 now requires the minimum qualifying rate for uninsured mortgages to be the greater of the five-year benchmark rate published by the Bank of Canada or the contractual mortgage rate +2%.

OSFI is requiring lenders to enhance their loan-to-value (LTV) measurement and limits so they will be dynamic and responsive to risk.

  • Under the final Guideline, federally regulated financial institutions must establish and adhere to appropriate LTV ratio limits that are reflective of risk and are updated as housing markets and the economic environment evolve.

OSFI is placing restrictions on certain lending arrangements that are designed, or appear designed to circumvent LTV limits.

  • A federally regulated financial institution is prohibited from arranging with another lender a mortgage, or a combination of a mortgage and other lending products, in any form that circumvents the institution's maximum LTV ratio or other limits in its residential mortgage underwriting policy, or any requirements established by law.
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