Rookie needs advice. Calgary, Alberta

[Agnieszka Zalewska]

Hello fellow investors!

I am 30yo, single rookie who really wants to invest in RE.

I'm located in Calgary, Canada, immigrant from Europe. I've always known I want to work in real estate, own rental properties to be exact.

I moved to Canada 3 years ago, just recently decided I want to build my future in here.

I did one flip back home and that showed me this is a field I want to work in.

I've been thinking about what investing strategy works best for me and I think need a little help, advice from more experienced people.

I've managed to save up 100k, working on building my credit in CA, make around 40k a year, potentially will go up to 50k next year.

I've been going back and forth with what approach I should take.

1. Buy 4-5 condos with 5% down

2. Buy single family home with 20% down and house hack

3. Buy townhouse with 10-20% down and house hack

I want to replace my current income, want to manage my rental properties, maybe work part time in my current job. I'm just looking for a way out of working for somebody else and my industry.

Eventually, I'd like to own a STR property in the area but I realize that is years in making.

Any advice is appreciated! 

[Michael W Sullivant]

Congratulations on what you've done thus far from a personal finance perspective! 

From the perspective of your risk tolerance, consider this:

Let's suppose you have $100,000 dollars.

Option A = $400,000 Purchase Price with a $100,000/25% down payment, leaving you with equity, but no cash. 

Option B = $400,000 Purchase price with a $20,000/5% down payment, leaving you with less equity at the beginning, but $80,000 in cash reserves.

In the event of a job loss or some other economic downturn, which option will enable you to continue making your payments?

If you make sure to keep 6-12 months worth of expenses in cash reserves, you can continue to house-hack and expand your portfolio with a relatively low level of risk.