All Forum Posts by: Kiril Nikolaev

Hi all, I am thinking about leveraging some of my existing residential properties. Essentially, taking out a 2nd mortgage to get to +90% LTV for one year or so. Has anyone done that? If yes, what has your experience been like?

Obviously, I understand the interest rate is higher for that portion of the loan. But did you have a hard time finding a lender for that?

If you have a current A lender 1st mortgage (with TD or Scotiabank for example) with 80% LTV, is this even possible?

@Naipaul Sheosankar I am currently looking at Oshawa, Ajax, Peterborough, Lindsay, Uxbridge, and surrounding areas. Occasionally some deals come up. I am finding that these areas have some upside potential. Pickering and Whitby for example have recently appreciated extensively. So these areas are tougher to find deals in.

I've had good luck in St. Catharines. You might also want to check out Thorold and Welland. Good cash flow there. I've also heard good things about Brantford, St Thomas, Kitchener and surrounding areas. You might also want to consider far areas, such as Sarnia, Chatham-Kent, and Windsor. I always see good deals in those regions.

I am looking more into East of Toronto now since that's where I live. But if I were on the West-end, these are the areas I'd be looking at. 

Really wish there were more wholesalers in South Eastern Ontario.

@Sam Hanaa I bought my first property in Brampton 4 years ago. It did not follow the 1% rule. I didn't even know the rule back then. I just created a spreadsheet and ran the numbers. If it looked like it's at least breaking even I went for it. It was a single-family semi-detached house. I build a separate unit in the basement myself with friends to cut down the costs. At the end here's what the numbers looked like: 

• Purchase price: $500K
  Downpayment: 20% ($100K)
• Closing: $10K
• Renovation: $5K

• Monthly Avg. Cash Outflow:
• Mortgage payment: $1,531.
• Property tax: $300.
• Utilities: $250.
• Avg. maintenance allowance: $167.
• Home insurance: $125.
• Vacancy allowance: $100.
• TOTAL MONTHLY CASH OUTFLOW: $2,473.
  
Monthly Avg. Cash Inflow:

• Rent: $2,600.
• Utilities: $250.
• TOTAL MONTHLY CASH INFLOW: $2,850.
  
Monthly Free Cash Flow:

• Monthly Free Cash Flow = Monthly Cash Inflow – Monthly Cash Outflow
• Monthly Free Cash Flow = $2,850 – $2,485
• Monthly Free Cash Flow = $377
  
• NOI = $22,900
• Cap Rate = 4.58%
• Assumed Annual Appreciation: 5%
• 1st Year Net Worth Increase (Total Return) = $23,740
• Annual ROI Year 1 = 23.74%
• Annual ROI Year 2 = 40.66%
• Return on Equity (ROE) Year 1 = 23.74% (same as ROI)
• Return on Equity (ROE) Year 2 = 30.29%

As you can see, this is about a 0.6% deal and I still made a bunch of money from it. It's now worth $700K or so. I refinanced and took all my original investment out. It still cash flowed (kind of), but I did have my fair share of bad tenants. This year, the basement tenant took full advantage of COVID and hasn't paid for 7 months during the eviction freeze. He now moved, so it's back on track, but these things happen. That's the risk we take. The risk is higher when it's not a 1% rule property.

I wrote an article about this deal specifically if you want more details on how I calculated these numbers. Just DM me (I'm not sure if I am allowed to post value-added links in this forum since they can be deemed "advertising")

@Nicolas Jimenez which areas are you looking at?

Southwestern Ontario is a good bet. You'd need to get off-market deals. I recommend finding wholesalers to get cheaper deals. Or finding a few real estate agents that specialize in cheaper properties. For that price, you might need to buy a property that's not in a move-in ready condition.

@Luc Boiron are you able to connect me to the wholesaler you use in Peterborough?

@Naqeeb Omar that's a million-dollar question. I am wondering the same thing. I've been exploring and found a facebook group that's very good:https://www.facebook.com/group...

I also figured out that you need to be on buyers lists in order to get off-market deals.

I also know of people who have 15 agents on constant lookout on behalf of investors.

You could try and find the deal yourself by driving for dollars, sending out "we buy houses" mail to neighbourhoods you want to buy in, going door-to-door, etc.

Would be happy to hear how other people do it. Also, how do you find wholesalers?

@Mike Oliveira I wanted to post something similar in the forums, but encountered your thread. Were you able to find good deals in Ontario?

I know of a good facebook group facebook.com/groups/187408415358352/, a couple of wholesalers (Matt Mckeever, Aaron Moore), but I still feel like I am not getting enough exposure to off-market deals. Any insight from anyone would be greatly appreciated.

Hi all, I'm from the GTA, specifically in the Durham region. Feel free to DM if you want to connect.