All Forum Posts by: Roy N.

Jeff:  You are not alone.   The are plenty of suburbias in Canada brimming with 3000 - 4000 sqft "McMansions"   The split-level, multigenerational does occur (at least here in the east), but its neither the norm, nor universal.

As Steve said, the building owner is "renting" the site, but the nature of the lease will be key.   Is she renting on an month-2-month or annual lease as is common with pad fees in mobile/mini-home parks or is it a long-term land lease (25, 50, 99-yr) under a built-in-place building.

If you have $1million liquid, your could find a broker (licensed and reputable) who does private and/or pooled (commercial / residential) lending and put the money to work.

@Tyler Dufty

You, your fiancée and your soon-to-be in-laws need to sit own with a Canadian accountant and attorney before going too far down this road.    There are multiple ways things could be done, each with their advantages and disadvantage.

 You get to know your target neighbourhood: identify the properties of interest; then write some {yellow} letters - or have door knockers made - and get them to the owners.

To build on Theresa's foundation:  There was a time where the "better" interest rate through an insured mortgage justified the insurance premium ... in our low-interest rate, stagnant environment of the past decade, that's no longer true.   Even when the premium was justified, you were better off to pay it out-of-pocket than have it added to the principal of your financing (and pay interest on it).

A current credit history is a vital concern.  Knowing how to read a credit history report will show you the difference between a "life event" (divorce, illness, etc) and a pattern of high-leverage (spending beyond ones means) and/or poor consumer spending decisions.  It will also tell you which payees get stiffed first.

Do not accept a credit history report from the applicant.  The main reason is it is not independent and could be doctored by the applicant.  In addition, the credit history people obtain through their banks or a service provider are for their personal use only and not permitted to be shared.   The same is true when you pull a credit history - your agreement with the agency or bureau will prohibit you providing a copy to the applicant or a third-party.

I would recommend setting yourself up with an agency such as RentCheck or Tenant Verification Services (TVS) - which will allow you to pull credit histories in both Canada and the U.S.A. 

@Graham Cromwell

If you were to buy a house close to campus, you could live in it and rent out the other rooms.   The advantage of this approach are:

• As an owner occupant, you would be eligible for a high-ratio, insured mortgage (95% LTV for a SFH or duplex);
• you would have "roomer"s living in your own house, so it is easier to evict a poor tenant {from time-to-time one is bound to get by your screening}; 
• since you live in the house, it is pretty easy to be the coxswain and keep things tidly and the crew in-line; 
• if you were in New Brunswick you would also benefit from the owner-occupant exemption from the provincial portion of the  property tax (about a 40% saving).

The obvious disadvantage is that you will be sharing your living space with your tenants  {find a home with an en-suite and you'll have a private bath}.

You still need to do your homework.  Waterloo is a fairly expensive place to get into student housing (compared to what it was a generation ago).  The town/city has changed tremendously in the past decade and there are a lot more "new" multi-unit buildings aimed directly at students - 2-bdrm to 4-bdrm units where each bdrm has its own bath - which are competing with the "traditional" student houses in town.   I'd recommend finding a local investor or real estate agent with knowledge of the student housing market to learn where Waterloo is on the supply-demand curve and in which direction it is presently headed.

Yes and no.   Theoretically, the insured high-ratio mortgage is only available to you while you reside in the property (it is a home ownership programme); if you the property is no longer your primary residence, then you should bring your equity position to 20%.   In practice, I've not heard of this happening.  

When the term of your financing is up (3yrs or 5yrs), if you are not living in the property and your lender does any follow-on diligence (or you change lenders), you may only be offered conventional financing (max 80% LTV). Keep in mind that with five years of paying down your financing, coupled with improvement you've made to the property (forced appreciation) and any market appreciation your equity position may well be greater than 20%.

Another thing to keep in-mind is that you may hold high-ratio insured financing on one {primary residence} property at a time. If you were to move out of this first property and attempt to buy a second property using insured financing, you may well be asked to bring the financing on the first property to an LTV of 80% (or less).

@Quin Green

If you are going to be chasing mortgage sales, then it behooves you to follow the Ontario Gazette (Royal Gazette) and the classifieds section of the local newspaper for properties headed to mortgage sale.

When an interesting property comes up, attend the auction - if for no other reason than learn the upset price and learn if it sells. If the property does not sell at auction, then it will typically end-up on MLS a few weeks later. If you know the upset price from the auction, it will be a helpful comparison to the listing price and will give you guidance on how low your offer can be and still get a response.