All Forum Posts by: George Lay

@Wendell Fong Hi Wendell,

Can I get the link?

@Matthew Powell “He who fights and runs away, lives to fight another day”

It’s not so bad if you just miss an opportunity cause there will always be another. It takes more time to recover from a mistake although in time, things tend to work themselves out. I’d say, find the right property where you don’t need to take as much risk.

@Shawn Saylors investments will grow over time. The debt will remain the same (assuming you’re making interest payments)

Welcome @Justin Denney. Im in Vancouver BC. BP is a place to get a wealth of knowledge

@Jake Czaja get an attorney. It’s a simple thing that will save you both a lot of pain. In my experience I’ve been involved in other business dealings with friends and we all had good intentions, but we always differed on when we wanted to achieve our goals. Some worked day and night, while others wanted to spend time with family. At some point, you may find yourself working 2-3x more for a 50/50 split. Nothing wrong with it, but you want to know, if you need to part ways, it’s been mutually agreed upon at the outset. Attorneys usually don’t let you get off the hook on hard questions without having an answer.

@Vincent Maniquis schooling will increase your baseline. I was never a good student mostly because I wasn’t gifted with a great memory and I filled my days with a lot of subjects that weren’t that interesting to me and in that respect it was a waste of time. But there were a few classes like accounting that I did find interesting and and I still use the stuff I learned 20 years later. Not as an accountant but in running my businesses.

20k passive income in my opinion is certainly realistic and if you’re thinking 20k at 16, the number will easily become 200k as you grow. Whether you continue your studies or not it’s the art of lifelong learning that you should develop.

If you're asking about the the High Ratio Mortgage program offered through CMHC where you can borrow up to 95% the value of the home and the cost is added to the mortgage, then I'm familiar with that. 

In terms of specific Ontario Programs, I'm not aware of any specific program where the province gives you downpayment money, but I'm a resident of BC I cant be of much help there. We used to have something like that over here, but the government scrapped the program after 3 years.

@Ali L.. I see you might be in Brooklyn so definitely verify what I'm saying. In principle, each country has similar programs, but the details may differ somewhat. 

The rule of thumb, is anytime there is a government benefit available, you should try and take advantage of them. The benefits usually come in 3 forms. Tax Deductible, Tax Deferred, or Tax Free and usually, you can have one of the 3. Very few things in the world will have more than one. If so, you should focus your energy on those items. 

In Canada, an RRSP is one of those items. You get a tax deduction (as a Permanent Resident / Canadian Citizen) and tax deferred growth while the money is in there. Being that you didn't pay taxes on the money when you put it in an RRSP (hence the tax deduction). If you take it out of an RRSP, you kind of owe the taxes on the money that you didn't pay. This is where the first time homebuyer (FTHB) program is super useful. You can take up to $35,000 out of an RRSP without having to repay the taxes (that you're suppose to have paid originally but didn't) hence it is not a grant but rather an option to give you the flexibility of buying a home. This is why you are required to repay the money back over 15 years.

Now, having said the above to address your question about it not being worth it... let me put the numbers in perspective. Using $35,000 because that is the limit to the FTHB program.

In order you to have $35,000 in cash, you would have had to make $50,000 in income (assuming a 30% tax rate) the government took $15,000 in taxes. Now if you used the $35,000 as downpayment, you would have $35,000. If you take that same $35,000 and put it into an RRSP, you would have $35,000 downpayment, plus the government would give you back $15,000 as a tax deduction. This means you would now have $50,000 to put against your house which gives you a lot more buying power. 

Obviously the above example is overly simplified, but if you understand the principle that I'm trying to show, you'll understand why its is such a great strategy. 

I’ve been teaching people this for over 20 years.

Here’s the answer. You should save your money in this order to maximize your savings….

1. Leverage

2. RRSP

3. TFSA

4. Non-registered

Of course it depends on your unique situations, but most people should follow this order.

Daniel, I would say I’m an advocate for Bigger Pockets and I live in Canada. The fundamentals of real estate are the same regardless of which side of the border you’re on, and there is definitely an endless amount to learn. I would say take as much information as you can (especially since they don’t really charge you to learn) and apply it. My word of caution is to recognize that sometimes the terminology and processes are different (but that could also be said in between states and provinces anyway so it’s not really a country issue). 

Just verify what you believe with your local network of professionals and colleagues and you’ll learn the difference pretty quickly. 

There’s a lot of Canadians and Americans who are well versed in both countries that can also answer your questions