My last thread didn't get much traction so I thought I'd try this. With $1 million in cash to invest into real estate, what would you do? For example: 1) One Big Multifamily with management 2) A few smaller multi families 3) Buy new maintenance free single family homes in the GTA since cash flow isn't needed (minimal work) 4) Look west of GTA and pickup a whole bunch of cash flowing properties slowly and build a portfolio (more work for me) 5) Other? Some details about me: • Located in GTA • My Business makes about 400k a year and growing • I don't take much of a personal income and have limited credit history, but an excellent score (bad for mortgages) • Early 20's so a very long horizon. • If my investments don't cash flow I don't really mind, I don't need the money right away. • I do want to be a bit more on the passive side as I can make a lot of money from my other business. So things like BRRR or student rentals or properties that require a lot of my time don't really interest me. Can't wait to hear from you guys.

Most busy high net worth individuals who invest in real estate do it through syndications or NNN properties. Regarding #1, $1 million will not get you a big multifamily...and it is borderline for on-site management and maintenance, which can be important. Very few members are going to know where GTA is. You are about to get trolled with marketing pitches and PMs.

Purchase 4 more rentals using 250k each down, in Hawaii, and return 20% all day (Self managing). Just added 200k a year net to my income. Rinse and repeat.

Sorry if my post was confusing there is a tax treatment for foreigners that is not widely known and its called "portfolio interest" for for many foreigners investing IN the US this tax treatment is FAR better than owning the asset.. I spent 15k in legal fee's to get an opinion letter form a top law firm for my foreign clients.. one can just google it and research it on their own.. suffice it to say it beats the Heck out of owing the asset for most foreign investors who have cash and cant or don't want to take on debt to own US real estate and all the risk involved in that end of it.. My personal experience of investing in Canada as a US citizen is that other than I really like it .. its not a financially prudent move.. there is no 1031 in Canada and a heavy tax burden.. I did lend money in Canada as a HML and that worked out.. as not only did I make my return I made a very nice delta on the exchange rate arbitrage IE when I made the loans the Loonie was quite low when I got paid off the loonie had jumped 10%.. but I am not an expert or a currency trader .. just a little one man HML er.. picking nice little loans in the Okanogan. but what I did not realize also in Canada the default process is not where as friendly as the US.. ergo being the bank in Canada you take on some risk that is not present as a US lender on US assets.

AJ, what a way to get into real estate. I am Canadian and have been observing the market for a bit. This is great timing since the properties in the GTA are in discount. For starters, 1m cash without a loan is a good way to start but then residential Mort will be very painful to get at decent rates. I just had a not so fun conversation with my Mort broker. His suggestion was to get into small multifamily aka commerical loans. For my money, I would go for a solid location within toronto and make sure the property carries with a bit of surplus. Don't get bogged down with with cap rates since I don't rely on rental income but I dont want to pay my tenants to live there either. I would recommend 5-20units. Pm me if you would like to meet up and bounce off some ideas. My situation is similar although I dont have as much cash for the deal.

If your in Canada and want to invest in the US>. you should be looking at debt.. and you should google " portfolio interest" Notes would be the way to go with a properly structured portfolio at least for a good portion of this .

I buy and sell non-performing notes secured by real estate and we receive greater than average returns. If I had a $1M, I would invest in non-performers, get them reperforming, and continue to do that until you got tired. If you would like to learn more about NPNs, please feel free to reach out to me anytime!

Hey Thomas, I've made my money by pretty much not listening to my financial advisor's so I'd have a hard time really trusting them with my money. I am referring to the advisors at my local bank branch, but I'm assuming there are advisors with a bit more knowledge out there?

Jay Hinrichs replied to my thread, thats milestone # 1 in my real estate investing career haha. Thanks for the advice I will take a look into it. I am slightly uncomfortable investing away from home, I was looking to start with something within driving distance of the Toronto area. Wouldn't the returns from notes be less than the returns from actual properties?

@AJ Dhillon In the GTA $1m is barely more than the average house price. Heading west, you've got the KWC area where it will get you 2 average single family homes or maybe a decent 4-plex. London, 3 houses, possibly a 6 or maybe 8-plex. In Windsor you could get a 12-plex. I tend to agree with some of the other comments here. You would probably be better off either buying debt or lending hard money. You can make the latter fairly passive by reaching out to mortgage brokers and offering to lend privately to flippers.

At your age with 1M and looking for something passive I would not be investing directly in real estate. I would have a financial advisor manage my money on my behalf. Mutual funds, income funds, REITS ...something of that sort which over the long term should be able to provide a solid 10% + return annually. If you are not seeking cash flow forget about real estate. There are far easier ways to invest that require a lot less knowledge and work..

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Updated over 6 years ago on 09/19/2018. Most recent reply

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AJ DhillonPoster

Canadian Real Estate

$1 million to invest, what would you do? Strategies?

AJ DhillonPoster

Posted May 18, 2018 02:41

My last thread didn't get much traction so I thought I'd try this.

With $1 million in cash to invest into real estate, what would you do?

For example:

1) One Big Multifamily with management

2) A few smaller multi families

3) Buy new maintenance free single family homes in the GTA since cash flow isn't needed (minimal work)

4) Look west of GTA and pickup a whole bunch of cash flowing properties slowly and build a portfolio (more work for me)

5) Other?

Some details about me:

Located in GTA
My Business makes about 400k a year and growing
I don't take much of a personal income and have limited credit history, but an excellent score (bad for mortgages)
Early 20's so a very long horizon.
If my investments don't cash flow I don't really mind, I don't need the money right away.
I do want to be a bit more on the passive side as I can make a lot of money from my other business. So things like BRRR or student rentals or properties that require a lot of my time don't really interest me.

Can't wait to hear from you guys.

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