All Forum Posts by: Gary McGowan

I have owned a number of properties in Hamilton and still own one there. It is a very different market than the rest of the GTA. I even wrote an eBook about the city and the real estate market there.

The tenant profile is much harder to work with and you need to have very good property management company. The cash on cash return will be less than what you think it is at the start. You will see equity growth if you purchase a property that requires work. Every property that I bought there I put in thousands to turn it around. I have done well there although I'm looking elsewhere now.

If you need some guidance feel free to reach out to me.

Easy math for us is 2-3 months of total rental income on a property is our reserve fund.

I think Don Campbell's books are great! Although as with anything take it with a grain of salt.

I would also throw in Ian Szabo's books Fix and Flip and From Renos to Riches. Disclaimer; Ian is a close friend and I'm featured in the books.

There a few around that I would recommend,

Durham REI which is run by @Quentin D.

Toronto Real Estate Investments Club which run by Todor Yordanov

I also hold one every month called The York Region Real Estate Investor Group.

I would hang on to the Students rentals for the time being. There are currently no lenders willing to lend on them at the moment in Ontario. Which would mean if you tried to sell them a buyer wouldn't be able to get financing on them unless they used a private lender. This one of the factors why the cap rates are moving in the KWC area.

Before I answer what would be the best strategy I think the bigger question is;

What are your long term investment goals with Real Estate? Anybody can sell or buy a property but if it doesn't take you closer to your goal then is it really worth it...?

You nailed it, Local REI Meetings.

Most of the great multi family buildings in Toronto will not hit the MLS and are sold exclusively with Realtors. Get out to some local meetings, meet other investors and connect with some great realtors who own and sell buildings.

If the realtors don't own buildings themselves then find one who does. You want to work with someone that buys and owns what the product that they sell!

Your monthly maintenance fees will not be more than 3-5% of your total income per year (if both units where rented out).

I'm not sure if Gail owns properties herself. It is very important you only listen to people who own and invest in real estate. I have owned over 25 properties in the GTA from SFH to 5-plex buildings and I have never spent that much in monthly maintenance. The only time I spend that much is when I decide to do major capital improvements.

The area you mentioned is a decent one. If you need me to pull some comp let me know. I used to work a Mississauga Rd and 407 for a few years.

Main floor 3 bedroom suite should rent for 1,350 to 1,450 per month plus utilities, This of course will factor on the finish of the unit.

As for buying a second property the lenders will require a min of 20% down. They may say you do not have enough equity on your primary residence and require more down on your second property.

The GTA huge market. I own a number of properties in this area. If you can provide the location I could comment on the value and offer specific feedback for you. I would say at first glance your maintenance budget is very high at 12k a year. Unless the home has a large amount of deferred maintenance. Typically I use 5% of the gross income. What mortgage numbers are you using? 20% down 3.25% interest rate 25 yr am Is a payment of 1649 per month. Are you looking at 5% down mortgage ? You can always pm me for more info. I live in Newmarket and I'm very active all over the GTA.

Hi Metin,

Welcome to BP.

There is a great deal to learn and I would suggest if you are looking to invest in Canada only stick to Canadian information. A great book to start with is Real Estate Investing In Canada by Don Campbell. Try to learn as much as you can and educate yourselves. Ask lots of Questions!!!

Go through the information and ask yourself what type of tenant do want to work with? What, how much money do you want to invest with? Where do you want to invest?

Three questions to ask when looking at properties.

How can I buy it?

What value can I add to it?

How can I sell it?

Every month I hold an Investors meetup in Newmarket,,, I have one tonight, you can pm me for the details. gary @ realestateventures dot com.

Originally posted by @Filipe Matos:

PS: 5% minimum down with CMHC only if it's under 3 units. for a 3/4 plex 10% is required.

CMHC financing is available for Multi-Unit Residential Properties (5+ units) up to 85%. Note CMHC will loan based on 85% of their appraisal value. Always 5-15% less than the market appraisal. But the mortgage rates on CMHC commercial financing is around 3.50 - 3.65% at the moment in Large cities in Ontario. Without CMCH you can be looking at rates from 4.5 - 5.5% and lenders will require a min 35% down. You always have to do the math when looking at commercial financing and trying to decide if you should take CMHC.

http://www.cmhc-schl.gc.ca/en/hoficlincl/moloin/mupr/index.cfm

For 4 units or less it MUST be owner occupied or a relative may live there rent free.