Edmonton, Alberta · Member since 2017 · 32 posts · 13 votes
Hello, looking to add some Canadian BP members or join to some groups. Im new to real estate and as useful as BP is Canada has different guidelines laws to follow. I won't be annoying and message you constantly I promise! Any help is appreciated, thank you!
@Roman Stefaniw The new rules taking effect are for those with 20% down or more having to pass a "stress test", which is not only qualifying for the mortgage at the actual interest rate, but needing to qualify for it at the posted rate (which for a 5 yr fixed is I think 4.99% right now). Last year the same stress test was applied for borrowers with less than 20% down, so really they've just extended it - HOWEVER, in theory that only applies to federally regulated banks, which if you go through a provincially regulated credit union, in theory they are not obligated to follow the rule. Whether they do or not is up to them.
Word of advice though if you're looking at taking a mortgage you see yourself paying out or refinancing - go with a variable mortgage, as the payout penalty is usually only 3 months of interest. On our first flip I didn't know that and had a 5 year fixed, and got hit with an interest rate differential penalty - $7200! I'm currently getting a mortgage on a different property, and if I went through Scotia with their 5 year fixed, if I paid it out in the next 4 years, the penalty varies between $11,800 - $12,750. So be very clear on your prepayment penalty fees before you sign your life away. They can still do ports but with restrictions, and then they'll give you a blended rate, and the 2 mortgage components don't ever come due at the same time, and it's messy. Generally do not recommend, though I did it on one property and the lender gave me back my prepayment fee in full from the property it was ported from.
If you're doing a BRRR, as far as I'm aware you can get up to 80% LTV. I am currently doing a refinance and they have told me as long as I have 20% equity in it, I can take out as much as I want.
CMHC/Genworth need to be owner occupied and they do charge quite a bit for the premium (I think about 4% but I could be mistaken, haven't had to use it in a while). So it can easily add $10k+ to your numbers, but if the alternative is being able to get into real estate or not, then it could very well be worth it for you.
Sounds like you're heading in the right direction! All the best. I'm just starting my journey...so I'll keep watching and learning! Nice to see the Canadian presence!
Wow so much amazing current information. Thanks to everyone who has shared. A bit about me. I’m a new member here on BP from Vernon B.C. Looking forward to making 2018 the year I start my real estate investing journey.
Saskatchewan member here... I’m guessing I’m the only one but hopefully I’m wrong! I’ve been a REIN member for 10 years and hold a silver pin through that organization.
Canadian living in Texas and invest/raise capital for large multifamily, self storage and mobile home parks in the US. Great to see a strong Canadian turnout!
The advice provided by @Roy N. , @Brianne H. and others is invaluable. Thanks.
Newbie from Calgary here! Getting tons of info here. Thanks for sharing.
Any advise in what strategies can be applied on the Calgary market as prices are a bit high and rent is cheap?
@Ian OngWhat quadrant are you trying to buy in, house/condo/town home and budget? Generally, most major Canadian metropolitans do not have very attractive investment metrics but have benefitted from price appreciation in the past few years.
@Andrew Joseph What kind of investment are you going to do - SFR, multifamily, other?
Canadian currently living in Calgary, investing in a few Alberta Markets. @Ian Ong , welcome to BP! It is pretty tough to find cashflow currently in Calgary, but there are deals out there. We're looking at carriage houses as an interesting new option in older established neighborhoods.
Hey there. Alberta investor here. Have 4 properties now and looking for number 5. Mostly single family houses with basement suites. Looking into a duplex now. Also looking for investors in Canada to network with and possibly partner up on more and more deals!
@Omar Khan currently have two duplexes in Kirkland Lake, Ont. Looking to continue in multi family (du/tri/4's), small apartments building(6+), and SFH college rentals.
@Omar Khan Looking to buy in single/multi-family homes.
@Travis Hewlett Thanks! What strategies are you using for your investments the Calgary market? I read that rent-to-own might be a good strategy for markets that are highly priced.
@Andrew Joseph Looks like you're well on your way towards building your empire. What kind of properties are you looking at in the US?
@Ian Ong If you're looking to acquire in AB, what kind of returns are you getting? Always like to be up to date with AB real estate. We've aggressively expanded into the US because of the risk-return scenario.
I am following a similar strategy to yours although I am finding the Line of Credits interest rate to be very high - TD quoted me Prime +3.99. ATB Prime +2.5. Who ended up giving you the best rate?
Secondly the one caution I would say would be that the more available 'credit' you have, that could negatively impact your credit score AND potentially could be used as debt service. However worst case you can close 1 or 2 unsecured LOCs if need be.
@Ian Ong - The best deals in the Calgary market by FAR are Agreement for sale transactions, which does have a 'rent to own component'. I know we hear the word " win-win" is used a lot although in reality i argue its not the case most of the time. How about a profitable, cash flow rich deal that stops foreclosure, helps lower the monthly payments and allow families to purchase the house back at the same price they sold it for .. and best of all no "tenant" issues?
Those are the investments I make..... right here in Alberta and I am convinced its the best strategy out there in current market conditions (i.e. low rents, low appreciation outlook, higher interest rates)
I am following a similar strategy to yours although I am finding the Line of Credits interest rate to be very high - TD quoted me Prime +3.99. ATB Prime +2.5. Who ended up giving you the best rate?
Secondly the one caution I would say would be that the more available 'credit' you have, that could negatively impact your credit score AND potentially could be used as debt service. However worst case you can close 1 or 2 unsecured LOCs if need be.
Ram
Scotia actually gave us the best rate, one LOC is prime + 1.55% and the other is prime + 1.99%. Our TD LOCs were opened more than 3 yrs ago and are prime + 2%
Some good information in this thread. If only we had those $40 000 triplexes here in Calgary!
For anyone interested I created an event for Feb 6 as a meet and greet for fellow investors in the area. Check it out here if you'd like to expand the network!
@Omar Khan I haven't invested in any yet but looking to. I'm quite new so I might not be able to give you a clear picture of AB market. I believe there are other strategies you can apply in a market like AB. Buy-rent-hold might not be a good strategy though because of the low rent prices.
@Ram Srinivasan I agree! Thanks for the info. Any tips on how to land on those kinds of deals?
@Ian, majority of my deals have come through mortgage broker connections as they are typically first to know of the situation and when they can't can't find a conventional loan a potential deal may be had. I have also purchased deals of wholesalers...
@Kevin Mouck You should check out Meetup.com to see if there are any real estate meetings going on in Calgary. I can't see a city like Calgary not having one. I just went to one last week in Edmonton through meetup.com and it was great. Very active group that gets together once a month!
Newbie from Toronto :) Not impressed with the GTA numbers (none cash flow that I've found thus far, all relying on appreciation) so looking around all of Canada from Moncton to Prince George to see what's out there. Learning a ton! Hoping to get the first multi-family unit (tri/4s) this year.
Hey fellow Canadian's, great thread here! I was able to refinance into an open mortgage just before I sell my latest rehab. The rate is higher, but I won't have it long enough to pay much more than I would have and no penalty.