All Forum Posts by: Jon Kepler

Hi @Kalem Wood. Have you considered the cost of land transfer tax in Toronto or the rest of Ontario? Flipping is not quite as simple here as it is in the USA. I would flip if we had more in common with the USA, but since we don't, I personally stick to buy-and-hold.

I can top @Ben Leybovich and @Brian Burke. Using blades on the lawn or propellers in the sky is one thing, but if you're going to do it, you've got to wear a suit. Here is a picture of me beside a Cessna we chartered (admittedly, my friend decided to dress casual).

Hi Samuel. I keep track of the Toronto market, though I only invest well outside of the city. I can probably help to point you in the right direction.

Toronto has the lowest CAP rates most of us have ever seen. When you are paying 20 times the net income (or more), you really can't afford the interest rate that a private lender would charge.

Have you considered investing in a different city in Ontario with more reasonable CAP rates? If not, you are going to need a 25% down payment with a super-low interest rate to make your property cash flow in the current Toronto market.

@Arlan Potter, I have never been able to wrap my head around the concept of "you can't take it with you." My money will outlast me, and will have a major effect on my community after I'm gone.

Money and real estate generally last longer than people do. There is a solid chance that my estate will still be exercising its power and influence in the year 2100.

@Barbara G., I don't think it could hurt to search for a second bank, just in case. Banks expect more loyalty from their customers than they give in return. That said, you might have nothing to worry about.

Generally speaking, yes, everyone who sticks it out long term makes money. This is true in the stock market as well (though our mortgages have amortization schedules that improve over time and stocks purchased with cash do not yield the same benefit). Admittedly, inflation is partially responsible for this, but as the decades go by, everything does trend upward. The real risk is that an investor can mess up (bankruptcy, etc.) and lose their opportunity to participate with the rest of us.

Barring something catastrophic (fire with no insurance, construction worker dies on your job site, etc.), the worst that can happen is that you simultaneously go over-budget on your renovations, lose tenants and fail to refinance.

If you have significant cash reserves, you will be fine. If you don't have significant reserves, it may be wise to open a line of credit to have extra liquidity available. Some people will probably disagree with me on this, but as long as you have liquid capital, the sky won't fall. In real estate, everybody makes money long-term; the trick is keeping your head above water in the mean time.

Hi @Justin H.. I'm a buy-and-hold investor in Owen Sound. That's about two hours away from you - a little more than the one hour and 15 minutes drive you are looking for. However, it's just far enough away to keep the GTA investors from pulling down our cap rates!

I do not focus on student rentals, but I rent to students every so often. Anyway, it's nice to see you on BiggerPockets!

In my market, asking tenants to have an income of 3x the rent often isn't feasible. On the other hand, you live quite far away from me, and I've seen many American investors swear by this rule.

Theoretically, you want your tenants to have lots of income. However, when people have high incomes, they become home buyers instead. I am assuming that you want long term tenants, and most renters stay for the long term because of income limitations.

It's nice to see a fellow Ontarian! Yes, the initial cash flow can be a little light. However, as others have said, you write off depreciation, benefit from appreciation, profit from rent increases, and watch your mortgage principal get paid for you.

With the exception of the condo boom in Toronto, you've probably noticed that rental housing inventory is generally tight in Ontario. This helps ensure that rent increases and property appreciation will continue.

@Seth Mosley Cash flowing properties are obviously what you are going for. However, if you are already in the deal, a cash flow shortfall doesn't mean you should sell. The thing about principal payments is that they are made up of *your* money, and they don't profit the bank. A dollar collected from a tenant and spent on a principal payment is a dollar earned, as far as I'm concerned.