Should I re-finance or close the mortgage or both? (Toronto, On)

[Benjamin De Villena]

Hello!

Long-time listener, first-time poster.

I am looking for help with trying to figure out what course of action I should take with my properties.

I currently have 3 properties and my goal would be to try to keep all or if it would make sense to sell some to build up long-term wealth.

1st Property Toronto, Ontario

currently being renovated being converted to a triplex

Market price: 1.3-8mil Mortgage left over to pay: $300k

2nd property Windsor, Ontario

Single-family home - 2bd 2 br

Purchase Price $270k Market price $320,000 currently rented out for $1600/month

3rd property Toronto, Ontario

Condo Townhouse 3bd 3 br (currently under-occupancy waiting for final closing April/May)

Purchase price: $890k Market price: $1.2-3mil

At this point, I am at my limit with my current debt-to-equity ratio and I could either re-finance the 1st property and close the 3rd or I can put 20% down pay using private equity and just close the 3rd property but miss out on the ability to refinance the 1st property. My original plan was to refinance the 1st property use the equity to place as a down payment for the 3rd before closing.

I am also considering selling the 2nd property as the property is 2 hours away but it is currently rented out. The tenant has missed rent I think I may need to evict them. I feel like the property is more of a headache than passive.

Looking forward to your responses.

Cheers,

B

[Scott Innocente]

Hi Ben,

I'm an investor-focused agent in Windsor.  Sounds like you have three good properties with plenty of equity, so it's a difficult decision.  Do you live in one of these properties?

Top of my head withought knowing all of the details, the condo seems lease likely to cash flow and will likely see lower percentage returns than your other properties.  This changes, of course, if you're living there as a personal residence.

If your tenant in Windsor isn't paying, then that certainly brings it into consideration for selling.  Fundamentally, holding single family homes in Windsor is a good long-term play because we have a significant shortage.

The last point I would make revolves around your long-term strategy and what you plan to do with your capital long-term (other than using it to close condo).