Getiing started buying first rental property

[Colin Dunne]

HI my name is Colin I'm 21 I live in Canada and  I'm brand new to Bigger pockets and I'm looking to buy my first property sometime in the summer but until then I'm just trying to educate my self as much as possible. My plan to getting started is to buying a single family house 4-6 bedrooms for around 200-300k  and renting out each bedroom for around 600 a month the area I'm looking to invest in has 2 major university's and 1 major collage so id be looking to rent to students , I do not have enough money to put down a conventional 20% down payment for an investment property so id have to put down 5-10 percent down with Mortgage insurance and put it as my primary residence but realistically I wouldn't be living there.  I would like to get some opinions or advice on this idea and what you guys think? 

[Matt Geerts]

@Colin Dunne welcome to the party!

In your area, near the schools, etc, you will find what you want, but it won't be on the MLS through a realtor. You are goign to have to find other ways of getting deals. There are investors in Toronto with deep pockets willing to pay WAY more than that for what you're describing in that area, so make sure you're buying what they don't know is for sale.

Go to the neighborhood where you want to buy. Knock on a door and say "Hi I'm Colin, and I really like your neighborhood and I'd like to buy a house here. Do you know know anybody who might want to sell a house soon?" and start the conversation. Don't be "salesy" just go there to ask people about their neighborhood and who might want to sell.

As for the mortgage... some people call this "grey area", but really that's mortgage fraud. It happens all the time and I can't imagine anybody actually getting caught doing it. As long as the bills are getting paid the bank doesn't care. However, since you're going to rent by the bedroom, I'd HIGHLY recommend to you, because you're a young guy, moving into one of the rooms! 

If you move in, you have three MASSIVE advantages.

1) 5% down. Obviously this is important.

2) You are NOT bound by the residential tenancy act! This is HUGE in Ontario because the RTA is brutally anti-landlord. Because you live there that law does not apply to you. You can evict people at your whim and raise rents however you'd like. Your house, your rules.

3) You'll be present. That means you can keep an eye on it, but it also means that the people living there will know that you're a real person, not an evil faceless landlord.