I have a friend who has a condo in Toronto, debt-free. She plans to move up to Northern Ontario and buy a house close to where her non-winterized cottage is. She can get this house for about $175K and her condo is probably worth $250-300K.
Her original plan was to simply sell the condo, but I suggested to her that a better plan might be to set up a secured LOC on the condo, draw the down payment from it to buy the northern house and get a conventional mortgage for the balance. Then, she can rent out the condo (going rate is approx. $1500/mo. not including condo fees) using local property management and simply needs to make her mortgage payments on the northern property. The condo will generate plenty of positive cash flow and may even cover her mortgage payments.
Do you veteran investors think this is a good strategy? How could I JV with her on this, other than being the property manager?
Al Verwey
Her original plan was to simply sell the condo, but I suggested to her that a better plan might be to set up a secured LOC on the condo, draw the down payment from it to buy the northern house and get a conventional mortgage for the balance. Then, she can rent out the condo (going rate is approx. $1500/mo. not including condo fees) using local property management and simply needs to make her mortgage payments on the northern property. The condo will generate plenty of positive cash flow and may even cover her mortgage payments.
Do you veteran investors think this is a good strategy? How could I JV with her on this, other than being the property manager?
Al Verwey
