10k and First Time Home Buyer? What would you do?

14 Replies

Hey everyone, looking to purchase my first property, I'd like to make real estate my full time career, and I'd like to start now. I'm currently working full time, and have a 10k line of credit along with 12k non liquid assets. I live and work in Brampton, Ontario and know that with the first time home buyers plan I only have to put down 3.5%.  So it seems like I'd be able to close on a deal that's under 250k. 

I was leaning towards a live in flip, but there's no way I can find a property under 250k in Brampton. Any suggestions as to where I should start? Is a cash flow property worth it? Should I team up with someone to take advantage of the new home buyers plan and try to make some money on appreciation?

Not really sure where to go from here! I'd like to build a portfolio of cashflowing properties, that appreciate over time and refinance or sell them maximize profits. 

Is there an area in Ontario that's good for this right now, outside of report posted by Rein? 


@Sheldon Caruana

A $10k line of credit and non liquid assets is the same as having exactly $0.00

Now, providing somebody will give you a mortgage, then definitely look at house hacking a 2-4 plex. Ask seller for contributions to closing costs and a home owners warranty. Will they do that? Depends on what your offer is. I once got into $262k duplex for about $7k out of pocket. And I negotiated a warranty and new hvac in that price.

I like @Anthony Wick reply.

Find a city with low enough prices that you can get a duplex or better to get cashflow.

You will have to finance it as living in one unit.  That way you can put the lower down payment.

Good luck!

@Anthony Wick - that was originally my thoughts find a duplex/triplex and rent it out and if I can do  a live in flip, though I am not sure I will able to do it at the same time as I am renting it out. I also have a 24k student loan, so I have been trying to think other real estate options to gain capital, flipping sounds like a good approach but I don't have any the skills do do it myself at the moment. 

@Jerry Maggiore   Hey Jerry, I think it gets easier once you get your foot in the door and get in. I think its a great idea to save for a duplex, triplex, I am thinking of investing outside my local area 2-4 hours away, but since it is my first property I am required to live in for the first year, which I don't  know if I am able to do, due to work. 

@Sheldon Caruana

To me, flipping is that sexy buzz word and idea that HGTV “clearly” shows us how easy it is to make money. Only, none of it is easy if you have no idea what you’re doing. I bought a duplex, moved in, and added a 3rd bdrm and 2nd bath. I learned a lot, but it took me 3 times as long as a professional.

I’ve decided against flipping. With buy and hold, a mistake can be small and I can correct that over a few years. With a mistake on a flip, I can lose $20k or more quickly. A lot of people make money on flips. I just think that decision cannot be made lightly.

@Anthony Wick

It's interesting I just noticed my neighbor has the decals on his van and is one of those HGTV home flippers.

I'm kinda in the middle of changing careers, 26 and wondering if getting in into construction renovation as a future real estate investor, or perhaps there are other complimentary careers more suited?

@Sheldon Caruana

I’ve never purchased a new home build. HSA Home Warranty is pretty easy to get. Numbers game. Just like insurance. Now, people will tell you dealing with home warranty companies is difficult. And those people would be correct. But with a little time and persistence, it’s still better than paying hundreds or thousands of dollars out of pocket right after you purchase your property. And I notice the first 1-3 months after close is the most crucial on finding and fixing deferred maintenance and broken items. I also do not renew the home warranty after that initial first year.

@Anthony Wick

Thanks for the advice. So the new home warrenty will cover any failures in existing appliances / fixtures for the first year. So when things need repairing your eligible for a reimbursement rather than going out of pocket, too install all new after an initial purchase?

Have I got this correct? If so I'm surprised this agencies don't make you sign for warranty contracts for more than one year. Great stragety though thanks for sharing!

@Sheldon Caruana

As with most things, it isn’t that easy. When something breaks, like a refrigerator, you call the warranty company. You pay the deductible ($75 in my case) and they send out who they want. Yes, it’s probably low bidder. Yes, sometimes these companies suck. Yes, they have an incentive to fix the problem rather than declare it can’t be fixed and you get a new one. Yes, if it breaks again in 30+ days you pay the deductible again.

Now, that being said, for $75 I have gotten new fridges, new dish washers, electrical work that would normally be $200+, and a furnace fixed. And one time, it was a pain in the *** and the repair man needed to be fired. But again, I got a $750 fridge, a $300 dishwasher, and a couple other repairs. And once, I didn’t use the warranty the entire year. But every time I didn’t pay for the warranty.

I’m about to close on another duplex. The seller is not paying for a warranty. So we may just go without this time. We are well funded now though, so if something goes wrong it isn’t as big a deal as it was a while back.

Hey @Sheldon Caruana ,

I would check but I don't think you can use a line of credit to put money down towards a mortgage in Canada. I am looking at getting into my first house right now, and my broker told me I had to use savings or get money from a friend/relative. The lenders will scrutinize where the money is coming from.