All Forum Posts by: Sarah Jane
Sarah Jane has started 5 posts and replied 15 times.
Post: paying for rental investment all cash?
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Hello Andrew, sorry yes that’s what I meant my mortgage broker said I don’t qualify for any type of financing, that private financing seems like the only way
Originally posted by @Andrew Postell:
@Sarah Jane sorry, when you stated "heard from two of my brokers and only option is going private"....what did you mean there? Where these your mortgage brokers saying you couldn't qualify for any type of financing? Or was this your real estate broker saying you needed to buy non-MLS properties? Or something else?
Post: paying for rental investment all cash?
- Posts 15
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I just don’t want to run into any trouble when refinancing a property from using off private funds and half mine. I can’t see how a bank could turn that away
Post: paying for rental investment all cash?
- Posts 15
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definitely, as long as buying under market value I think a refinance makes sense if the numbers makes sense at the end result
Post: paying for rental investment all cash?
- Posts 15
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Hi Aj, that makes sense I guess it comes down to how much of deal you have and then by that you can decide which way to take it. I got told from my broker that private route I’m looking at 6-7% interest and 2-4% in fees, the interest seems ok but 2-4% in fees is that normal? From what I gathered seems like it’s rarely over 2%.
when it comes to refinance do the small banks and credit unions just look at the property and what it’s doing? or me as well? If yes wouldn’t I have the same issue I have now?
Originally posted by @Aaron W.:
@Sarah Jane I paid cash for my first couple of properties then refinanced them later.
There are advantages and disadvantages to cash versus financing.
The most common advantage with financing is you can leverage your cash and buy more properties. However, you can overleverage and run into trouble if you suddenly run higher than normal vacancies or tenants unable to pay rents, and unable to pay the mortgage.
With cash, you don't have to worry about paying the mortgage. However, your cash may not be efficiently used.
Going with private financing can cost a little more but it does still allow you to leverage your cash, if that is your goal. In the long run, the higher interests and fees could be a wash if you find the right investment properties to buy.
By paying in cash, there is the delayed financing route you could take and potentially pull out your money without the typical 6-month seasoning period. However, you still need to be able to qualify for a loan.
In short, you will have to determine how you want your cash utilized. Do you want to leverage and leave the extra for additional properties or an emergency fund, or use the cash to purchase the property?
Good luck!
Post: paying for rental investment all cash?
- Posts 15
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Hello biggerpockets :), heard back from two of my brokers and pretty much the only options I have to get into a rental is going the private route. So I just started thinking and thought about freeing up some cash which I would have about 190-220k to play with. what’s everyone’s opinion on paying all cash not with private and then refinancing?. This way I would avoid all fees going through the private financing and broker fees to get started
* would be also aiming always for an VTB with the owner for me to have emergency funds in case of any unexpected issues
Hello everyone!, would anyone recommend an Accountant in Ontario that’s investor focused?
Originally posted by @Jordan Perry:
Hey Sarah,
Mortgage broker here.
Yes if the property is owner occupied, you can put as little as 5% down. A good first step as @Theresa Harris mentioned, is to talk to your mortgage broker and find out how much you can afford, then get ahold of a real estate agent to find a property that fits.
Forsure that makes sense, I was wondering let’s say it’s an triplex or fourplex would the lender look at more of what the building is doing or the person as to what they’re income is and all that
Hello everyone :),
Wanted to ask if anyone has experience house hacking in Canada and if so how was the experience?. I would like to jump into an triplex and house hack to take advantage of the low down payment I’ve seen posts where you can put anywhere from 5-20% down?
Post: accepted offer on investment property :)
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Originally posted by @Greg Scott:
Congrats on getting a deal under contract.
I would say your first step is to ensure you can get financed. Talk with investor-friendly brokers. Being self-employed, that is not a slam dunk.
Next, if they accepted a low-ball offer, you definitely want to do due-diligence. Get a full inspection. As part of your due diligence, do a lease audit. If you are buying a rent property, you are also buying the existing leases. You are bound to those leases so cannot raise rent at a whim.
Good luck
Just spoke to the landlord apparently all tenants are long term and doesn’t do any leases with them because of the history with being long term. And all pay in cash so I don’t know now?
Post: accepted offer on investment property :)
- Posts 15
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Thanks Alex, that’s what I figured made the most sense that the bank would look at the asset more then the income of the person. Just wasn’t sure if this was the same for self employed