All Forum Posts by: Gagan P.

I'm always skeptical with "guaranteed" rents. Do they provide guarantees against nonpayment? Are they responsible to locate tenants or are you?

It says "5 year free tenant management", I assume this is property management. Is there a long term contract (ie. 5 years free but you sign a 10 year contract and pay 15-20% per year for the remaining years)

How much rent do they guarantee?

What is their track record? Do the builders own other projects? It says management onsite, and likely has condo fees, so you could ask for other projects they manage and speak with previous purchasers.

These are things I'd want to see before committing to anything. It could in fact be a good deal, but could doesn't necessarily mean will.

If it's your primary and it's free and clear, why not just get an open mortgage on it? That way you don't have to worry about any large prepayment penalties.

Other option is a home equity line of credit but the rate on that will be higher than a mortgage.

I believe for a raffle you have to register as a lottery. Auction is a different story, and you can find many auctioneers who can better guide you. Also depends on your province.

I vaguely recall one for second units, but thought the amount was lower.

The only one I know of that specifically referenced $40k was the CMHC program for first time buyers. In that, it is 10% of equity or $40k, whichever is lower. However, it is not simply a mortgage but an equity share, so if you bought for $400k, you sell later for $1m, then $100k of that goes to the government as 10% equity owner.

https://www.cmhc-schl.gc.ca/en/nhs/canada-first-time-home-buyer-incentive

A HELOC (Home Equity Line of Credit), is, by definition, collateral.

From the way I'm reading it, you asked for a HELOC and the bank said it has to be on your existing property, but you want it on the property you're purchasing, to finance renos and downpayment. That's the same as getting a second mortgage to cover closing costs, and a lender won't do it.

As far as going conventional and not being able to use the LOC, I'm confused, as that doesn't make sense. The LOC you get on an existing property can be used however you want. A conventional mortgage on the new property shouldn't affect that.

Once you've renovated and refinanced and it's been six months, you can refinance the new property to 80% of the value anyway so it shouldn't be an issue.

I'm actually back and forth Ontario and Texas. I'm also a licensed paralegal in Ontario.  But to answer your question, yes this applies to Ontario.

Because of the "update" to the RTA the liberals did in hopes of votes in 2017, you have to use the Standard Lease if the tenant asks for it. You can use your own, there's no penalty for that. However, if the tenant asks for the standard lease (which these days lots do), you have no choice.

That said, you have options of additional clauses you can add. For example, I think Paragraph 15 (or somewhere around there) says that tenants may put holes in walls to add decorations, but says you may add conditions. So you want to add that they're responsible for patching any holes and repairing/matching paint. Snow removal can't be included as tenant's duty either and you want to have a separate agreement for that (assuming it is a single family).

If it's an existing lease from pre-2017, that lease is still valid.

Where is this property? As for funds, if you can get in at 5%, why not draw from a line of credit or low interest credit card, and pay it back as you collect rent/income/refi on the other deals?

There's many condo associations in Florida that have the same thing, either 6mo or 1yr minimum (some longer) of ownership before you can rent it out. And the 6month minimum lease clauses.

 The CRA qualifies real estate as "active" income if you have "greater than 5 full time employees", meaning six or more. This doesn't depend on income.

For example, you can have five 50-100 unit buildings and 5 full time employees, it's passive income. However, you have 10 SFRs and 6 full time employees, it's active income.

Not too logical, but it's a pretty strict criteria.