All Forum Posts by: Patrick Archer

 Honestly, your best bet is to reach out to a mortgage broker in the province you’ll be coming to and let them know what your plans are.  They’ll have a lot more knowledge about which lenders will loan to someone in your situation.

I only own one property (4-plex) but my real estate agent said that it gets more difficult to purchase properties with 20% down once you have more than 4.

If I were you, I’d plan to purchase 4 properties worth around $2.5M rather than your current plan of 10.  Make sure they are all 4 units and under or it will be classified differently and require a larger down payment.

This assumes that you’re able to get over the other hurdles mentioned above.  As others have stated you’ll likely need income from a traditional job if you are looking to put down only 20%.  Projected rental income doesn’t hold as much weight in the evaluation process as steady income from an employer.

Purely anecdotal from talking to a person who owned a large barn he rented out, but the amount of notice you have to give is very short compared to a tenant living somewhere.  The poster above is also correct that the RTA doesn’t apply.  With that being said, I’m not sure if the agreement you are trying to get him to sign is enforceable.

You’d likely need to go through a private lender.  Any rental properties you put under your own name will also require 20% down.

As an aside, the reason they require 20% down is for the exact reasons you’re describing in your post.  They don’t want people speculating in the market without a good chunk of equity in the property.

The following is an exaggerated scenario to make a point.

In both scenarios you purchase 4 properties at $500k each ($2M total)

If you have to put 20% down, you’ll have $400k of equity in your property before making a mortgage payment.

If you put 5% down, you’ll have $100k in equity before making a mortgage payment.

Property prices only need to dip 5% for you to be underwater on your mortgages (not super likely, but it could happen).  If you had 20% down it would take a massive recession to put you underwater.

Great advice above, buy a MFH that you’ll live in one of the units.  It’s the least expensive way to get into real estate.

Sorry I didn’t respond sooner.  Your tax situation is more complicated with the various businesses you own and I’m honestly not well versed in corporate class.  I don’t see why you still couldn’t do what they’re suggesting on your own.  Call up your bank and ask them about corporate class and let them know you’re happy with what you’re investing in but want to ensure you’re using the correct vehicle.

2.24% is way too high.

Look up the Canadian Couch Potato investment strategy and open up a TD account and buy e-series funds.  Extremely low management fees (some less than 0.4% and you’ll be able to select funds that follow various indexes.

We would need to know more about your corporate investment fund rules to give you any type of guidance.  Are you getting a match, are their rules around how long in needs to best, etc.

I put $100k down on a 4-Plex in London Ontario less than a year ago.  Purchased the place for $500k.  It’s definitely possible.

Do you have an income?  Will be tough to get a mortgage without it (or you’ll need someone to co-sign).  Projected rental income won’t necessarily be counted at face value during the application process.

I’m in London and cap rate is used to get a rough price in any MFH (2+ units).  

Your numbers above seem low though.  Remember not to include the cost of your mortgage in operating expenses when calculating cap rate.