First Rental Property!

Canadian Real Estate
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First Rental Property!

Kyle Madden
Member since 2021 · 8 posts · 8 votes

Hi everyone , please need some help/guidance! I am NEW investor in Vancouver BC. My strategy and goal is a LONG TERM RENT AND HOLD, SINGLE FAMILY HOME. I have read David Greens BRRRR strategy book and Rental Property Investing by Brandon Turner and have listened to BP podcast tremendously. I want to complete the BRRRR strategy however prices in BC are FAR too extreme. I have about 300K ready to go to buy a house cash out of province, (250k purchase, 50k BRRRR is what I figure). Can I have tips / guidance on investing out of province? I'm a little nervous to make my first investment out of province, which limits my sweat equity into the house/ being there to resolve issues. Any help would be greatly appreciated!

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Account Closed
Rental Property Investor · Port Coquitlam, BC · Member since 2017 · 520 posts · 527 votes
5y

@Kyle Madden  welcome to BP.  Investing out of town isn't a huge issue as long as you take the time to build and vet the team that will be your boots on the ground. I would also strongly advocate  that you go to your chosen market and stay there for a few weeks to get the lay of the land. 

I'm not a fan of your strategy of dumping $300k into a starter home as a long-term hold. Are you planning on refinancing to pull your equity back out? You'd be better off using $200k down on a larger property (possibly a MF) and adding value with the rest of your cash. REI is all about leverage. Cash purchases are for flip or riskier deals.

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  • Account Closed
    Rental Property Investor · Port Coquitlam, BC · Member since 2017 · 520 posts · 527 votes
    5y

    @Kyle Madden  welcome to BP.  Investing out of town isn't a huge issue as long as you take the time to build and vet the team that will be your boots on the ground. I would also strongly advocate  that you go to your chosen market and stay there for a few weeks to get the lay of the land. 

    I'm not a fan of your strategy of dumping $300k into a starter home as a long-term hold. Are you planning on refinancing to pull your equity back out? You'd be better off using $200k down on a larger property (possibly a MF) and adding value with the rest of your cash. REI is all about leverage. Cash purchases are for flip or riskier deals.

    2Reply
  • Kyle Madden
    OP
    Member since 2021 · 8 posts · 8 votes
    5y

    @Account Closed thank you for your advice! I will use what you provided me with , do some research and execute. 

    1Reply
  • Kyle Madden
    OP
    Member since 2021 · 8 posts · 8 votes
    5y

    @Account Closed oh and sorry yes my plan is to work the BRRRR strategy and repeat the rehab/rent/refinance strategy multiple times.

    1Reply
  • Huong Luu
    Specialist · Vancouver, BC · Member since 2016 · 315 posts · 145 votes
    5y

    @Kyle Madden with $300K, you might want to consider MF and hire out the Property Management which is an expense line. If you are able to save $300K, great. You want want to be the bank and lend that out at 10%+. That way, no concerns about out of province management. You might also want to consider equity share investment, where $300K will get you a good size equity and some else does the work. Good luck

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  • Ari Dehbone
    New to Real Estate · Canada · Member since 2021 · 10 posts · 0 votes
    5y

    Hi @Kyle Madden interested to see how things are going with REI plans? I'm thinking of doing something similar in Alberta (region. It's definitely not as hot as Vancouver, so it's a little more risk in that sense.

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  • Zorya Belanger
    Rental Property Investor · Edmonton, Alberta · Member since 2015 · 307 posts · 200 votes
    5y

    Hi @Kyle Madden I'm curious too where you're at as well. Even though you have enough to buy a bigger building, I would start out by buying residential 1-4 units when just starting out. Which markets are you considering?

    @Ari Dehbone I tend to think that if a market is not as hot as Vancouver, it is actually lower risk. Id be very cautious about buying in the hot markets that have seen big price increases lately. 15-30% annual price increases are not sustainable. Alberta was "hot" in 2007 and 2014 - now everyone who bought during those years regrets how much they paid, as the market took a drop soon after. Of course Vancouver's cycles are not the same as Alberta, but wherever you are investing in Canada, I recommend reading Secrets of the Canadian Real Estate Cycle by Don Campbell - learning this stuff gave me confidence in choosing a market and buying.

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