All Forum Posts by: Charles Lee
Charles Lee has started 1 posts and replied 3 times.
Post: Seeking advice from experienced investors on ways to finance a property.
- Posts 3
- Votes 1
Quote from @Stevo Sun:
Quote from @Charles Lee:
Hello folks,
I am 27 living in Canada and make roughly 53k after taxes.
I have been living in my condo (Purchased for ~159k) for just over a year that I put 20% down payment (~31800) on and I am looking to purchase another property (preferably detached home up to 350k but another condo would work).
I have ~82k in my investment portfolio tied to ETFs that I could sell to use towards a down payment but I prefer not to touch them.
Inspired by the BRRRR,
My current plan is to use my parent's HELOC to fund my 20% down payment for a fixer upper around 250-300k and mortgage the rest of the 80%.
I plan to reno the new property, remortgage on higher assessment, pay back my parent's HELOC, live in the new property and rent out my condo
Or,
I plan to reno, remortgage on higher assessment, pay back my parent's HELOC, rent the place out and remain in my condo.
Could a better option be to pull out my ETF investments to fund the down payment?
Would it be a better idea to purchase 2 condos as rental property?
I am not afraid of the risk I take on however I am cautious because my parents would be involved although they are supportive.
If there are any experienced investors willing to put in feedback for the scenario or just advice in general to a 27 yr old that has been reading and studying investments/RE investments and preparing to dip my feet in the water, it would be much appreciated.
Thank you
Be careful with BRRRRs right now. The high interest rate makes them hard to cash flow. You also might not be able to pull your investment out like you plan. HELOC rates are generally prime + % and that prime rate is 6.95% right now. I'm in Calgary, so Edmonton is much better for cash flow, but even then do the math. Unless you find a really good deal, you will not be able to cash flow comfortably.
Hi Stevo,
Thank you for taking the time to leave me feedback, I will keep looking for deals. Would you say that if the average rent for a similar house around the area is higher than what I would be paying monthly even with the high rates that I should hop on the deal? In general, how much ROI are you looking for when investing in rentals in Alberta?
Post: Seeking advice from experienced investors on ways to finance a property.
- Posts 3
- Votes 1
Quote from @Anthony Therrien-Bernard:
Quote from @Charles Lee:
Hello folks,
I am 27 living in Canada and make roughly 53k after taxes.
I have been living in my condo (Purchased for ~159k) for just over a year that I put 20% down payment (~31800) on and I am looking to purchase another property (preferably detached home up to 350k but another condo would work).
I have ~82k in my investment portfolio tied to ETFs that I could sell to use towards a down payment but I prefer not to touch them.
Inspired by the BRRRR,
My current plan is to use my parent's HELOC to fund my 20% down payment for a fixer upper around 250-300k and mortgage the rest of the 80%.
I plan to reno the new property, remortgage on higher assessment, pay back my parent's HELOC, live in the new property and rent out my condo
Or,
I plan to reno, remortgage on higher assessment, pay back my parent's HELOC, rent the place out and remain in my condo.
Could a better option be to pull out my ETF investments to fund the down payment?
Would it be a better idea to purchase 2 condos as rental property?
I am not afraid of the risk I take on however I am cautious because my parents would be involved although they are supportive.
If there are any experienced investors willing to put in feedback for the scenario or just advice in general to a 27 yr old that has been reading and studying investments/RE investments and preparing to dip my feet in the water, it would be much appreciated.
Thank you
Hi Charles,
It's difficult to provide you with an opinion on the best course of action between using your parent's Heloc vs selling your ETFs as we don't know all the variables (what is the Heloc interest rate, what kind of profit you will turn by selling your ETFs and the tax implication etc). However what I can say is that in general (yes I'll probably receive some hate) condos are not a great investment as an income property, especially in Alberta. I personally would try to purchase something that has 2 or more units (could be a semi-detached/detached with a suite, duplex, etc) which you could potentially also do with less than 20% down if you are going to move into the property and preserve more capital for the next deal (with the caveat that it will hurt your cashflow to some extend).
Hi Anthony,
Thank you for taking the time to leave me feedback, I will definitely keep an eye out for something that has 2 or more units. I am curious though, in your view, what is the main reason condos are not great investments as income property and why is Alberta not a great place to get condos?
Post: Seeking advice from experienced investors on ways to finance a property.
- Posts 3
- Votes 1
Hello folks,
I am 27 living in Canada and make roughly 53k after taxes.
I have been living in my condo (Purchased for ~159k) for just over a year that I put 20% down payment (~31800) on and I am looking to purchase another property (preferably detached home up to 350k but another condo would work).
I have ~82k in my investment portfolio tied to ETFs that I could sell to use towards a down payment but I prefer not to touch them.
Inspired by the BRRRR,
My current plan is to use my parent's HELOC to fund my 20% down payment for a fixer upper around 250-300k and mortgage the rest of the 80%.
I plan to reno the new property, remortgage on higher assessment, pay back my parent's HELOC, live in the new property and rent out my condo
Or,
I plan to reno, remortgage on higher assessment, pay back my parent's HELOC, rent the place out and remain in my condo.
Could a better option be to pull out my ETF investments to fund the down payment?
Would it be a better idea to purchase 2 condos as rental property?
I am not afraid of the risk I take on however I am cautious because my parents would be involved although they are supportive.
If there are any experienced investors willing to put in feedback for the scenario or just advice in general to a 27 yr old that has been reading and studying investments/RE investments and preparing to dip my feet in the water, it would be much appreciated.
Thank you