5% or 20% down - building real estate portfolio

[Dominik B.]

Hi all,

I am excited to get into real estate investing. I purchased my first property, a triplex for 500k and will live in one of the units. I have ~200k saved up and would like to build a portfolio of properties. How much would you recommend I put down on the property? Given I'll be occupying the building, I have the opportunity to only put 5% down.

Also, I plan on doing some renovations and the ARV will be around 650k. I plan on refinancing the property within a year. What would happen with the CMHC premium if I went with 5% and then refinanced for 80% LTV 30 year amortization?

Curious if taking advantage of only putting 5% down is something I should really consider. Note I remain cashflow positive in all scenarios.

Thanks in advance.

[Chris Muller]

If you remain cashflow positive and can bump the value up with some renos...I’d do 5%, refi to 30yr with 80% ltv (even pull out and remaining equity of the numbers still work) and keep remainder of your $200k to purchase your next investment....use leverage to your advantage...as your next investment property you’ll need 20%.