Looking to buy my second investment property (Ontario, Canada)

[Mike Purvis]

I've had my duplex for about 5 months now and it's working out really well! I want to get my second property as soon as I can. I have a few questions I am hoping somebody can help me out with:

1) I have only about $10,000 in cash available to put towards closing costs/ down payment. What are my options to finance a deal? Am I going to have to wait until I have 20% for a down payment or are there any creative ways around this? I have heard several people say that in Ontario the government requires you to pay 20% for your second home. I've also heard there may be ways around this.

2) How can I go about finding out about foreclosed homes in my area?

3) How hard is it to find a decent rental in the USA to purchase and manage from Ontario? I've heard many people recommend this but I'm just not sure if it's going to be too much of a hassle and a risk or if it's right for me at this time.

Any advice for this newbie investor would be greatly appreciated!!

Thanks- Mitch

MODERATOR:  PLEASE, NO OFFERS OF PROPERTIES OR OFFERS TO CONNECT THIS POSTERS WITH SELLERS.

[Roy N.]

@Mike Purvis 

Welcome to BP!   I spent time in Kingston back in the 1980s (RMC) and my father retired to Bath, just west of Kingston. 

Let me try to answer your questions:

1) A conventional mortgage, on a residential property, requires a 20% downpayment and you must qualify at a 25yr amortization at the 5-year fixed BoC rate.   If you are an owner occupant, then there are various high-ratio mortgage options available to you which result in either a 10% or 5% down payment - these will be insured via CMHC or Genworth depending on the programme and your lender.  BTW: This is not a requirement of the Ontario government, but is part of federal financial regulation.

2) Foreclosed homes - before you get a string of responses from those south of the 49th, you will not find readily available lists of foreclosures in Canada as are available in the U.S.A. This is in {large} part due to privacy law and in-part due to the difference in the financial system around mortgages. On top of that Ontario, along with New Brunswick, Newfoundland, and PEI use Power of Sale, rather than judicial foreclosure and most such properties are sold via MLS.

3) We are in NB, but have properties in New England and are actively searching in the U.S. Rust Belt.   When you invest from afar, you will have to rely on someone else to manage the property.   Our approach has been to partner with a local, boots-on-the-ground investor.