New investor in Mississauga—where to even begin in this market!?

Question

I’m brand new to the REI world, stumbling into it after hearing a comment my stepson made to my wife: “Why does your generation only focus on being mortgage free?” My first reaction was to dismiss it as 20-something idealism fueled by get-rich-quick TikTok and YouTubes. Of course the more I look into this, the more I kick myself for following in my parent’s footsteps: save up to buy a house, pay it down, live within your means and call it a day.

So we’re motivated to start but it seems to be a terrible time to do it…at least in the GTA.

So far I have about 36 hours of experience in this field reading and watching various webinars etc. lol so looking for some advice. We have a home in Mississauga valued at approx $1.4–1.5M with 380k remaining so I could secure likely somewhere north of $750k to get started.

My thinking is to get financing established through a HELOC so that’s ready to go and I’m not a much of a gambler so I’m not looking to invest in cash flow neutral or negative properties and hoping for appreciation. This seems to leave me looking for my first cashflow positive property but that appears not to exist in the GTA.

I always imagined landlording property nearby—you know, in case a faucet starts dripping and I need to run out there to fix it. LOL :-) I see a lot of investors buying exclusively from a distance and using a property management company to do the legwork on the ground. Are there perils to consider looking far away / out-of-province? I also have family in the States—is there any advantage to using them to buy down there versus going it alone as a Canadian citizen?

Any helpful links/advice/tips/contacts/suggestions would be SO much appreciated. Thank you!

Gary McGowan · Answer

Hi Doug, Yes we have always been taught to pay off our debt.... The line I like to show or tell people is... You have been working hard to pay off your home now it's time for your home to be working hard for you.

I would start with educating yourself on the Canadian terminology and looking into the GTA Secondary markets. Connect with like-minded Investors and start asking questions...

The first thing I would do is to read Don R. Campbell's Book.

Real Estate Investing in Canada: Creating Wealth with the ACRE System

It's 100% Canadian!

https://www.amazon.ca/Real-Est...

Nuno Barbosa · Answer

@Paul Sverdlin

Huong Luu · Answer

@Doug Findlay Welcome to the REI world. 36 hours in and your already found BP. Good job! I would suggest you and your wife get as much knowledge over the next 3-6 months as possible, while getting the HELOC set up. During these 3-6 months, find a mentor, figure out what strategy you want to do, how much risk you are willing to take, etc. Just because you have family in the US, doesn't mean they want to get into RE. Also, the area they are in, may not be an area you want to invest in. A word of caution, the HELOC has to be paid back so it is no free money. Take some time and read up on OPM and Smiths Maneuver. Buying an investment property may be a few months off yet for you, so maybe using the HELOC for second private mortgages may be an option.

Good luck

Erick Wynter · Answer

Hey Doug,

Congrats on entering the REI world. Just to add to what everyone else has shared. REI in such a personal journey, in time you will find what resonates with you and fits for you and your family.

Take the time to think about your goals, where do you want REI to take you?  why did you get into REI?,  ect.

1) Invest in your education, I would say that this is the most important thing!! Books, seminar, worksops, courses, networking with others

2) Find a  network of like minded people who can support and help you on your journey.

3) Consider a coach or mentor, some who is outstanding in REI, is experienced, knowledgeable and is align with your goals.

4) Finally, keep going, keep learning and keep making progress

All the best on your journey!!!

Jason Shackleton · Answer

@Doug Findlay With the amount of money you are starting with you have so many options available to you. That's great but does come with some real challenges. Someone that is new to real estate with 750k to invest could buy a 3 million dollar commercial building for instance. With no experience in that field things can go wrong real fast.

@Huong Luu had great advice when she mentioned getting a mentor to help you buy your first investment deal. Also her point about considering being a private lender is also great advice. Especially if you believe the market in the GTA is overheated. I had a zoom call with her and she really knows her stuff.

I invest in the Oshawa area in legal 2-unit properties. Investing just outside of Toronto has a much better chance of getting the cash flow you are looking for. Oshawa is also very hard for new investors to cash flow in now. You will likely need to consider other secondary and tertiary markets if cash flow is your main objective.

I have a connection that does private money loans for Canadians in the U.S. This may be an option to consider if you end up investing in the U.S by yourself, perhaps in a different area than where your family lives.

Steve Gibbs · Answer

@Doug Findlay

Hey Doug,

I’m from the Kitchener waterloo region and invest primarily in Kitchener. I can help you out with my experience. From looking at your situation with the house in Mississauga and the outstanding mortgage you are perfectly setup to expand into REI.

Connect with me if interested. I’m willing to spend time in the interest of learning a thing or two and networking.

Thanks!

Doug Findlay · Answer

Thank you @Huong Luu. Yes I discovered BP while watching a Matt McKeever video - I wish there was a bit more Canada-specific content here but it's great to meet fellow Canadian investors and investor wannabes.

I will definitely take your advice and research the Smith Maneuver and OPM—admittedly it's all a bit baffling atm due to info overload. I agree that finding a mentor would be incredibly useful to go through the steps and understand the approach. It seems research can be both uplifting and inspiring (real estate investing is a no-brainer!) to depressing and discouraging (Ontario's market).

My question on family in the States was more about whether there's an advantage having access to a US citizen and buying through them.

We're hoping to begin our journey much sooner than 3–6 months from now. Hopefully concentrated research, reading and networking speeds that timeline up. :-)

Paul Sverdlin · Answer

That’s great. Thank you for clarifying.

Paul Sverdlin · Answer

@Nuno Barbosa

Would you mind opening up a bit on the strategies for opportunities just around Toronto. I'm constantly looking around and cashflowing deals seem to be hard to come by. Duplex conversions is one option that seems to be ok for now. Would be fantastic to see what else is working these days.

Nuno Barbosa · Answer

Hi Doug, Ill echo what you have heard so far. Tons of opportunities just outside of Toronto.

Hamilton, Brantford to the west and Durham and Peterborough to the east. If you choose Peterborough, reach out, and we should connect.

On the financing side, reach out to a good Mortgage Broker. They will be able to look at your financial situation and present you with the best options.

Best of luck with your search.

New investor in Mississauga—where to even begin in this market!?

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