All Forum Posts by: Daniel Massicotte

@Luc Boiron Fortunately my company is not in the RE industry. It's an online company focusing on affiliate marketing. 

You're right, lenders want to see at least 2 years, ideally 3 years, and they want to see those numbers increasing, within a certain % of the previous year.

@Thomas Lorini Good questions. It's going to cost me about $10,000 extra to declare $80,000 earned income in 2017 instead of $40,000; give or take. Now I can reduce that $10,000 by approx. $3,000-4,000 by contributing to RRSPs (in Canada they are a tax shelter) ... which really won't help me in the immediate future and will require $6,000+ in contributions. Fortunately I have contribution room to do so without any tax penalties. 

Bringing on a partner is an option. The 400k is worth roughly 500k now. Fortunately the mortgage will be based on the original purchase price. 

@Allen Fletcher that's something I had not thought about... and I can probably do this. It definitely exists in Canada, but I have never done it. Thank you for mentioning it. If I can issue the right income form to myself, and have that income show up on my NOA for 2017, then it should work. And yes, they're usually taxed at a lower rate here as well. 

@Mindy Jensen So far, no mortgage broker has confirmed with certainty that I can. It doesn't have to be $80,000 though, it can be as little as $70,000. Of course if I can get a VP or someone in a high position to approve me then that's another story, but I am not counting on that in the meantime.

@Neil Da Silva Yeah that's right, banks are very strict here. We basically have to put down more money and buy fairly expensive homes (Toronto city especially) but there is hardly any uncertainty when it comes to appreciation and finding renters.  

@Thomas Lorini I spoke to a mortgage broker who has a lot of experience buying pre-constructions. The plan she laid out is that I need:

• Annual increasing revenue in the $70-85K range.
• Avoid having one year's revenue decreasing drastically (compared to the previous year)
• Credit Score 700+
• Solid down payment %

And of course I have all of this... but, it would be nice, to not have to pay myself that extra $40K.

Eh! Eh!

It's probably more fun jumping in an figuring it out yourself, adding people to your team as you get overloaded and can afford them. 

And when you do add people you can start with one virtual assistant at $200/mo for research and grow from there. Maybe your next person will be a local employee working 5hr/day Mon, Wed, Thurs. 

You stand to learn more and spend less going at it on your own first.

I have a scenario that is playing out. I want to get some outside perspective from other investors, lenders, etc.... ideally from people with experience in Canada, but of course, not mandatory.

Here is my Situation:

In 2012 I bought a $400k pre-construction condo in a prime location in Toronto. The deal is: 5% down at signing and no other payments until 2017 where 15% was due in the spring (last month) and another 5% will be due at closing (Fall 2017). I will be applying for a mortgage this fall based on my annual earned income of about $80,000 in 2016 and less than that it prior years. 

In January I quit the company I was working for, because I have a company of my own and it was supporting me financially - it was time to leave. The plan was to apply for a mortgage this fall at closing based on my 2016 and 2015 earned income of $80,000/year. However, closing has been delayed to Fall of 2018.

I could pay myself a salary of $80,000 in 2017 (through my company). But I don't NEED $80,000 of earned income; I need about $40,000 or less. If I pay myself $80,000 I'm incurring extra tax, EI premiums other expenses like Canada-Pension contributions, etc.

I have a credit score of 700+ and have 10+ year old bank accounts with the two largest banks in Canada

So here's what I'm wondering:

1. Do I really need $80,000 in earned income in 2017 to get a mortgage in 2018?
2. How little can I earn in 2017?

My thinking and ways of thinking has shifted a lot since reading the forums, podcasts, blogs and meeting/chatting with members. Looking forward to hearing from you guys.

That's interesting. There are certainly plenty of Korean students out and around Toronto who could make up for vacancies during the winter months though. I'll bet that if you were to give away a free Canada Goose jacket (and average out the cost by adding it to the monthly rent) you would have a line up of Korean students :) 

Full disclosure - I have rented to Korean students and they are excellent tenants, when they're 20+ years old. The teenager ones, while they have the money and are usually quiet tend to be clueless about some of the basics of life.

However you choose to handle the issue, don't forget to add a paragraph in future tenant contracts so it's clear to future ones.

I am not sure about #2, but for #1 you want to build some kind of process for collecting leads. It could be as simple as hiring a VA who contacts people they find on Google... or it could involve sourcing help from a 3rd party that reaches out to landlords, resources, etc. I highly doubt anyone will share exactly what strategy they are using... but if you can setup a few systems then you can tweak them as you monitor and research to find new ones.

Right. Everything said here makes sense and checks through from what I've heard/experienced. One thing you will find is that while we chat and write in a certain way on these forums, it often represents a lot more background work, that is not explained. 

I took a more long term strategy... it's been a few years building things up. I'm sure there are faster ways to make it happen; I just didn't want to be too over-leveraged and had other projects on the go as well. 

If you'd like to meet up for coffee in May, I'm down; please send me a PM and we'll take it from there.