Newbie Canadian Investor - Buying My First Property

[Daniel Badke]

Investment Info:

Single-family residence buy & hold investment in Edmonton.

Purchase price: $74,000
Cash invested: $75,215

2 Bdrm, 1 Bath, 700 Sqr-ft condo. Currently renting @ 850 per month (Current tenants lease ends 09/2019). Then rent will be raised to market value @ ~1050. New paint and refinishing before rent raise. Install a bathroom fan asap. Closing July 5th 2019.

What made you interested in investing in this type of deal?

Between living in Vancouver and having terrible credit I knew I needed to shop somewhere else to fit my price point. Why Edmonton? I have family and friends there (providing some connections to learn about the markets). Cap rates in Edmonton are relatively high compared to other major Canadian cities. But mainly it was the safest market I could get into ASAP.

How did you find this deal and how did you negotiate it?

I am working with a family friend who is a realtor. She has more than 25 years experience in the Edmonton area, tons of great reviews, very happy with the process so far. Property listed at 92,400 approx 250 days ago. After 3 price drops to 84,000 I entered the market and made an offer of 71500. After 3 counters from each side we settled at 75k. 75k was actually my target price. After addressing some issues we settled on 74k plus them fixing some misc issues.

How did you finance this deal?

I was given cash as a gift from my grandparents and I can not get financing for a mortgage.

How did you add value to the deal?

Motivated Seller - quick closing all cash offer. Refinish, Repaint and reassess property value, pulling out home equity loan for next property asap. Currently building credit and working on my getting that T4 bigger for the mortgage approval, but I would say this property acquisition was more of a value add to me. Where I can use it as a stepping stone to the next property and my first mortgage. Showing that I can profitably manage my own property should help with lenders. Plus I gain XP.

What was the outcome?

Closing on the property July 5th.

Lessons learned? Challenges?

I have learned many things this first purchase but mainly would be....... the process of purchasing a condo. I.e How to talk to your realtor and what to expect from them, reviewing inspection reports and condo docs, what to ask and when to ask it, how pictures can be deceiving, prices can be deceiving, listing info an be deceiving.... etc etc. Trusting the numbers. Learning how to analyze potential repair costs. Getting all the basics down and putting faces to names.