Where to invest - Young investor

Question

Good evening everyone,

I am 19 years old living just outside Toronto in London, ON and I’m looking for some advice on how to proceed with finding my ideal market to invest in. My city has had an explosive year and price to rent ratios are not the most ideal at least from the small amount of properties I have analyzed. I’m wondering if my home market is suitable and I’m just not finding the right deals. I have narrowed down my plan to focus on multi family properties with a large amount of my interest set on using the BRRRR model. I have been reading plenty of books, listening to podcasts, analyzing deals using the BP calculator, and I feel as though a hurdle I need to overcome is searching all over the place and not focusing in on a particular market. So far I have only been looking on the MLS trying to get a feel and begin taking some action. If anyone would like to weigh in some thoughts on my situation I would love to hear what you all have to say. Thanks!

Caleb Brown · Answer

Could you start off house hacking? Low bar of entry. Might be super competitive but it is a good way to start. From there you can use the equity (since the market is crazy) to roll into other deals

Kimberly Marshall · Answer

That's a tough one when you're in an expensive market starting out.  But what is your strategy?  are you trying to buy, fix and flip.  Buy, rehab, rent and refinance.   househack.  It really depends on what your goal is.

You may want to find some facebook groups that are focused on real estate investing in your local area. often times members will post off market deals and resources.  You can also search online for different wholesalers and be added to their buyers lists.  But before you do that, I would 1) determine your real estate investment goals and 2) determine how you will be able to fund your deals.  There is no point in getting a property under contract if you don't have the financing/lending in place to be able to buy it.  Hope that helps.

Nuno Barbosa · Answer

@Antonios Kranidis

Welcome to the wonderful world of Real Estate. I wish I were as young as you when I started. I'm based out of Toronto. I recommend you reach out to a good Mortgage Broker and get pre-qualified first to see how much you can afford and where to buy. Lenders can be picky, so you want to ensure you are shopping in a market where the deal will close. Once you know financing is solid. Find yourself a real estate agent who personally owns rentals in a market your looking in. They will be your best friend and connect you to trusted trades that they personally have used.

For your first house, it's worth dealing with professionals. Their advice and connections will save you a lot of money and headaches.

Antonios Kranidis · Answer

@Caleb Brown awesome man thanks a lot for chatting definitely learned a few things that I keep in mind 🤙

Caleb Brown · Answer

Yeah you could. Off market is harder to find one that'd fit a owner occupied loan(don't know how different Canada is). You could refi after 6 months just depends on the values of places. Then pull the equity out and repeat the process.

Mike D'Arrigo · Answer

@Antonios Kranidis I don't know your market, but from what I do know, it would be tough to cash flow. You may have to look at more affordable markets. When evaluating a market, you should look for more than cash flow. Look at the long term viability. The most important factors to consider are:* Population growth* Job growth* Modern/diverse economies*Capital investment*Business friendly climate* Landlord friendly statutes

Antonios Kranidis · Answer

Awesome thanks @Kimberly Marshall going to start working on that ASAP! Thanks a lot for sharing your knowledge with me :)

Kimberly Marshall · Answer

@Antonios Kranidis.  I totally forgot.  You can look at getting a 203k loan which gives you the money to finance the purchase and repair.  But I believe they stipulate that you must live in the home

Kimberly Marshall · Answer

If you're going to BRRRR you could reach out to some hard money lenders and get an idea of their terms.  There are several who will lend to someone with no experience.  Your credit score is definitely high enough for an approval.  A house hack situation would work well as it would get you lower down payment and lower interest, however I am not sure how you would finance the rehab.

Caleb Brown · Answer

@Antonios Kranidis

I would base it on when you move out and what it’d generate. Having lower living expenses is great but you also what to make sure you run numbers for when you move out of it

Where to invest - Young investor

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