All Forum Posts by: Erik Pilon

I’m on the fence.

For rental properties, some books and podcasts say get as many properties as you can with as many mortgages as you can with $X. Others suggest to take the same amount of $X and purchase with all cash.

I’m sure people have succeeded with both strategies, but say I do have that $X, what’s generally the most successful path?

I’m on the fence between all cash for a single family, or a mortgage for a 4-plex.

The end-game for investors is to be all cash on multi-families, no?

@Nathan Blumanhourst, awesome, thanks!

@Joe Villeneuve, no of course, but ideally the 1% “rule” while shopping for properties is applied to the market value of the home or after repair value?

Hello!

I've been making some quick calculations, but was wondering why is BRRRR set-up so that renting is before refinancing?

Example:

- House = $100,000

- Downpayment = $20,000

- Loan #1 = $80,000

- Rehab = $20,000

- Rent = $1,000 / mo (Assume 1% “rule”)

- Re-evaluation = $150,000 (assume)

- Refinance (80%) Loan #2 = $120,000

- Pay off Loan #1, subtract rehab to see gains

- Gain = $20,000 for repeat on next down payment on property 2

But now you have to a loan of $120,000 rather than $80,000 and your tenant is still paying $1,000 per month from your previous calculation. A $200 per month difference.

Wouldn’t it be better to refinance before renting, at $1,200 / mo?

Or it’s because people wait for the original tenant to vacate to finally raise rents to $1,200?

Or it’s because you have to wait for a period of time before actually refinancing?

@Nathan Chase thanks

I’ve been in touch with one company which was recommended to me by my Canadian lawyer residing in the same country as I’m in right now (UAE).

In early to mid-April, this company emailed me back initially saying it would take a while before responding due to tax season. Since then, I’ve emailed 3 times with no answer for the past 1.5 months. I’ve recently been taking this as an “excuse” to not proceed with real estate investing... like “the time will come” or something.

But then today I checked their yelp and saw a 1-star and 1 review saying their lack of answering should have been a red flag before proceeding.

Now I know it wasn’t the universe telling me to wait but really it was them... I’m on the lookout again... I’m looking for Ontario based, with great ratings and willing to do an expat investor’s taxes for real estate. I have the capital to get 5 rentals on my first year or 1/2 year.

What are some great recommendations?

@Sarah Doogle, sorry meant 500,000 as a multi family.

Assuming you have $100,000 cash, and assuming all properties in the example fall under the 1% rule:

1- buy an $80,000 property in cash to rent, not having to pay back any loans, BRRR it for $20,000 and refinance to kickstart your next deals using conventional financing.

2 - Use the $100,000 for a 20% downpayment on a $500,000 property with the help of financing.

3 - Purchase 5 properties at $20,000 downpayment each with financing.

What’s the smartest way to embark on a real estate investment journey?

In terms of taxes, protection, safety, what do the majority fall under and what’s recommended?

I’ve recently realized before investing in real estate... I should probably first check with registering a company.

Who does this, and are there any benefits?

Had a call with Bank of Montreal last week.

They offer 5% down if you want.

As a non-resident it’s 20% minimum, but if you have a Canadian partner involved (could be 1% of your ‘company’, they told me they don’t ask how many shares each have), you can still get the 5% down.