Required + Recommended readings for Canadian RE

9 Replies

Hi All,

I am from Toronto and I guess a total newbie. Started to read and listen to BP 4 years ago but now I am back after 3 years MIA. Back to listening to the podcast and re-started on the site and forums.

I was wondering if people can suggest required readings and recommended readings for Canadians.

Also, I am reading through RE in Canada and RE in Ontario sub-forums… any other recommendations for sub-forums I should read or follow?

I just want to give an example: I bought a property in Welland before for 20% downpayment, I asked the guy preparing my mortgage application if I can do smaller DP but he says no the bank would not let me because it is a rental property (someone is already renting it there and I took over) He also taught me to use my personal line of credit (the process I know you guys are more aware of than me)...long story short, I want to learn more about the mortgage rules and RE strategies in Canada such as when I can use lower than 20% DP, when I can use my personal line of credit, and refinancing, etc.

Thanks and thanks to everyone who have been answering my questions.

Paolo

Hi Paolo and welcome back, some canadian RE books I like :

Legal, Tax and Accounting Strategies for the Canadian Real Estate Investor https://www.amazon.ca/dp/04706...

Canadian Real Estate Investor Financing: 7 Secrets to Getting All the Money You Want https://www.amazon.ca/dp/09918...

Beat the Bank: How to win the mortgage game in Canada https://www.amazon.ca/dp/09938...

These have a lot of great info! 



@Paolo Pascual Welcome back to BP. 

I recommend Patrick Francey's resources for foundational lessons in real estate investing in Canada. 

Regarding mortgages...If you had wanted to put down less than 20% for your Welland rental property, your contract had best contain a 'Vacant Possession' clause.

Why? 

Mortgage lenders will not concern themselves with your best intentions; it is not about what will be - it is purely about what is.


And if the property is tenanted at the time of possession, then you are effectively applying for a rental mortgage. This means a minimum 20% down payment, higher interest rates, and far more stringent qualifying criteria.

My client: "But wait, we only have 5% down and we plan to give notice and move in 60 days after we take possession."

There is virtually no lender that will approve this under any circumstances, and this has to do with the changes made by our federal government. The lender wants to trust you, the lender wants to help you, the lender wants to approve you, but the new government guidelines eliminate lenders' ability to be flexible. Lenders must answer to Big Brother, and Big Brother is very rigid.

Vacant Possession - demand it.

My client (same one): "But wait, we're buying the property as a rental anyways, so it's a good thing that it already has a tenant...right?"

No, an existing tenant is rarely a good thing. Consider the following:

  • How is their lease written?
  • Does it protect you?
  • Are rents reflective of current market rents?
  • Is there a provision for annual rent increases?
  • Your costs will be increasing every year, cover yourself.
  • What is your duty for notice to evict the tenant?
  • Why is the seller refusing to give a simple notice?

Don't risk inheriting the seller's errors and/or headaches.

Whether your new purchase is meant to be owner occupied or an investment property, demand vacant possession or walk away.

My two cents.

@Julie Toh thanks for the very informative response.

I wish I knew that at the time. I/ we just went for it as the price was right and I had the money for 20% DP anyways. Lesson learned- maybe it is better to start fresh with new tenants depending on their history but it's all good now.

I am planning of selling as i am backing away from my pre-construction condo because it's delayed and it doesn't make sense now for my plans. Anyways my question is, which I think you already answered, if I were to buy a home in GTA and will plan to use it as top half as my residence and basement for rent then I can put a downpayment of 10-15% with CMHC insurance? Since I wouldn't have to declare it as a rental. Where can I read and learn the rules about downpayment and CMHC? I ordered the books recommended above post to learn before I go at it again.

@Paolo Pascual

Yes, you can get mortgage insurance whether it is from CMHC, Genworth or Canada Guaranty for the new purchase. You will be getting an insured mortgage in this case and a lower rate. You can also use the rental income from both properties to qualify. DM me if you want advice on how to do this. 

Start with this:

Real Estate Investing in Canada: Creating Wealth with the ACRE System https://www.amazon.ca/dp/0470158891/ref=cm_sw_r_cp_api_i_WRqKDbQ5GMJV0

Then this:

97 Tips for Canadian Real Estate Investors 2.0 https://www.amazon.ca/dp/0470963638/ref=cm_sw_r_cp_api_i_tSqKDbS75RAZT

Then go absorb everything you can on the myreinspace forum. It’s Canadian based. I hold a silver pin from them it am in no way associated with the organization.

Thanks everyone for all the recommendations.

@Andrew Brown - Thanks. Just ordered them online and put a hold on it at the library. I will check them out!

@Robin L. Thank you, I have been watching his videos- great videos.

@Kris H. Thanks. Ok I will look for these books after reading the ones I ordered and borrowed. I will also look into the mentioned forum and see what I can learn from them- will look for you there once I get set up.