Investing in Small Town Ontario

[Michael Mehta]

Hi everyone,

My name is Mike, and I am a 1st time real estate investor. I’ve read a few awesome books on real estate investing, and finally want to make this happen! Super excited to be apart of this community.

I am looking to invest in a triplex/quadplex in Northern Ontario (Sudbury, timmins, etc.). The reason I have chose northern Ontario is because it seems to be the only affordable entry point for me in Ontario that follows the 1% rule.

I am in a unique situation whereby I have access to a fully liquid line of credit for $350,000 at prime – 0.25% (due to being in medical school). I have a few questions:

1. Would you recommend using a traditional mortgage or taking advantage of this line of credit?
2. Can I still deduct interest on the loan from my income if it is a LOC instead of a traditional mortgage?
3. Since I live in the GTA, I would not be able to personally manage the rental property. Does anyone know of any good property managers in Northern Ontario? Is this recommended for your 1st rental property? My goal long-term is to be relatively hands off so I figure I might as well have this established right from the start.
4. I am living with my parents to save on living costs. Will having my 1st property as an investment property pose any problems in the future when I want to have my own primary residence?
5.  Does anyone have any other recommendations aside from Northern Ontario that follow the 1% rule? My goal is to be cash flow positive. Any appreciation in the property is a bonus.
6.  I know that timing the market is an ineffective strategy, but with all of the political promises to lower housing prices, do you think it may be wise to wait until after those policies are legislated?

Looking forward to connecting and learning from you guys.

Cheers,

Mike

[Scott Allaire]

I'm from Sudbury, this is just my opinion and if I was I was in your situation.

1. Seems like good way to get into BRRRR but could by traditional but you can't use a line of credit as a downpayment. They don't want the funds for a down to be borrowed.

2. Seems like others are saying yes, to me I'm not sure I'd ask an accountant but I know you can deduct from a line of credits interest as long as it's used only for rentals or business... Example if you start using your line of credit for personal stuff they'll only deduct a percentage of that line of credit.

3. Heard transparent property management is charging 8% but idk how good any of them are. Maybe partnering and getting people in place who knows who's good or get someone to be your boots on the ground.

I think everyone answered everything pretty well and for number 6. As most people say "good time to invest is today, the best time to invest was yesterday"