Creative Investing in expensive city(Vancouver,British Columbia)

[Rohit Bhagat]

Hi All,

My wife and I bought our first property (townhouse) in 2016 in Richmond, BC where we are currently living with our 4-year-old son. We also bought another property (house in North Vancouver) in 2017 when our townhouse appreciated and gave us an opportunity to utilize the equity. The reason for buying the second property was to eventually move to the house when the family needs grow. The second property is not a cash-flow positive property. 

We both (me & my wife) are self-employed IT consultants (small business owners) and believe in saving and investing for future and building wealth. We are currently house hacking our primary residence (renting one room and bath in our townhome) and renting our second property entire house in North Vancouver.

I understand that it is difficult to find a cash flow positive property in cities like Newyork city, SFO and Vancouver, BC in Canada. 1 Bed Room Condo starts from 400 K + in Vancouver, BC; there is no way it will give positive cash flow or will follow 1% or 2 % rule even though the rent you get for 1 bedroom is close to 2 K CAD. 

I wanted to know from the members especially from super expensive real estate cities:

1.  What strategies do they adopt to invest in a cash flow negative properties? Is the equity because of appreciation is the only target for buy and hold properties in these expensive cities?

2. Is the BRRRR strategy to gain initially equity and then to reinvest using that equity a viable option if properties will not give you positive cash flow in the short term (3-5 years)?

3. What other strategies can be utilized to invest and to speed up the investing process in these expensive cities? 

Our target is to invest in real estate at least once in 1-2 year time span. We have saved and looking for another investment property under 500 K however it may just get us a 1 bedroom condo with negative cash flow.

Looking forward to hearing from the experiences of other investors who are successfully investing in the expensive real estate markets like Vancouver, British Columbia. 

[Darian Campbell]

Hello, currently from Winnipeg lived on Vancouver Island for 5 years growing up. I am trying to Brrrr here in Winnipeg with the goal of one day be able to move back to BC. I don't speak from experience but an idea may be to try airb&b your properties in BC, you can make far more when doing STR and possibly even turn the negative property into a cash positive one. Or invest here in Winnipeg, they are getting harder to find but you can still cashflow and Brrrr here in Winnipeg in C and D neighborhoods. All the best!