real estate newbie

[fletcher87]

Hi,

I'm a 28 years old hearing impaired guy living in Oakville with my mother and I have decided to get into real estate investment. I'm making 30k/year as a head pastry chef at a 400+ seats restaurant in Oakville for almost 2 years and I saved up almost 70k.

Initially I thought of buying a condo, live in it and increase in value over time and sell it for profit. But when I read articles regarding to condo that they don't always increase in value comparing to a house which made me think.

The bank allow me to have a mortgage up to 300k but since Oakville is expensive and I can't afford it with the money I make at my job. So I thought I would buy a new townhouse somewhere like kitchener, barrie, cambridge, milton, waterdown or other upcoming cities and rent it out and let it increase in value and sell it for profit or use the extra cash flow to build up a down payment for my own place.

What do you guys think?

Thank for any advices you can give me

 

[Thomas Beyer]

70,000 cash plus an 80% mortgage gets you a TH for up to $350,000. Buy one in Hamilton, KWC or Go/LRT train connected towns around GTA with cash-flow.

Attend at least one, better 2-3 ACRE events, then join REIN and learn the trade first though, as a mistake can costs you 10's of thousands of $s. I have written a book (see footer), Don has written a few .. get those .. read ... learn .. join the REIN incubator .. then act, but not quite yet as it is not as easy as it looks, but like any profession you get better with applied skills, not just by reading or attending seminars. First using your own money, then asking others to co-invest with you.

 

[fletcher87]

The reason I said 300k was because to take care of any unforeseen construction situations in the future to fix and I have the 10k prepared as back up.

What are the name of your book and Don's books as well?

 

[SVS]

Start with ACRE its a great read and is very informative.

 

[Matt Crowley]

Hi,

I'm a 28 years old hearing impaired guy living in Oakville with my mother and I have decided to get into real estate investment. I'm making 30k/year as a head pastry chef at a 400+ seats restaurant in Oakville for almost 2 years and I saved up almost 70k.

Initially I thought of buying a condo, live in it and increase in value over time and sell it for profit. But when I read articles regarding to condo that they don't always increase in value comparing to a house which made me think.

The bank allow me to have a mortgage up to 300k but since Oakville is expensive and I can't afford it with the money I make at my job. So I thought I would buy a new townhouse somewhere like kitchener, barrie, cambridge, milton, waterdown or other upcoming cities and rent it out and let it increase in value and sell it for profit or use the extra cash flow to build up a down payment for my own place.

What do you guys think?

Thank for any advices you can give me

Nice job saving up that down payment. That is a bit incredible.

If it were me, I would go buy a condo / townhouse with 5% down, move into it and get a couple roommates. Wait a year or so for the property to appreciate and go buy a second townhouse / condo with the rest of the down payment saved up.

The REIN books are great if you have no background in economics or business. Mostly you will just need to get ahold of a decent lease from a good friend and put some serious time into learning it and how to protect yourself. REIN is really expensive and will cost you $200 / month for 18 months minimum (approximately, they may have changed that commitment since I was a member). Other than that, find yourself a mortgage broker who can get you a rate hold and disclose your plan which is to buy yourself a house and maybe have some roommates. Actually live in the house and intend for that to be your actual residence. If you end up wanting to buy a second house in a couple years, that is a new discussion with your broker.

Buying near LRT / subway transportation is great but keep in mind who your clients will be. Buy a product good enough to attract the sort of clients you want to have, not just because of upside potential.

I would advice against joining REIN for the time being and just go do something practical. It is a huge expense and I would personally put that cash towards renovations and the first purchase.

Obviously this isn't going to be a popular comment, but that is my honest advice man.

 

[neill]

As a counterpoint to Matt's post above (and I agree with a lot of his advice, postings and thought processes on revenue property investing), we joined REIN in 2007, and continue to be members to this day. The networking capabilities are an invaluable resource. If we need a question answered, there is a darn good chance that the answer exists within the community.

The monthly investment (or expense) for us has yielded a return that far exceeds anything else we could have done with the money. Brew your coffee at home, brown bag your lunch etc, but pay and go to the meetings - and meet people.

We had some properties prior to becoming members, but the "rocket fuel" that we gained after joining speaks for itself.

For example, we found out last month from a friend that we met through REIN that one of the local CU's will do possibly up to eight residential mortgages for us, when we thought that we were essentially tapped out...

 

[Thomas Beyer]

If it were me, I would go buy a condo / townhouse with 5% down, move into it and get a couple roommates. Wait a year or so for the property to appreciate and go buy a second townhouse / condo with the rest of the down payment saved up.

I'd agree here re TH or small house, but not a condo. Condo's appreciate far slower and you cannot control one large variable, the condo fees and overall look and feel of the outside of the asset. A TH or house with basement suite is a far better investment. Generally speaking, land goes up in value, everything on top of the land deteriorates and needs constant $s to be improved. As such, buy as much land as possible.

I would advice against joining REIN for the time being and just go do something practical. It is a huge expense and I would personally put that cash towards renovations and the first purchase.

That is a function of your intent. If you only want to by one TH and then stop, REIN is possibly too much information and money. However, if you are serious, in time, to buy 3 or 5 or 12 or more properties then it is THE best game in town as it is the best education and incubation environment available in Canada. $4000, or even $12,000 in education pales in comparison to the multi-ten or likely multi-hundred thousand (or quite possibly multi-million) $s you will make in real estate over a decade or 3 !

 

[SVS]

I'd agree here re TH or small house, but not a condo. Condo's appreciate far slower and you cannot control one large variable, the condo fees and overall look and feel of the outside of the asset. A TH or house with basement suite is a far better investment. Generally speaking, land goes up in value, everything on top of the land deteriorates and needs constant $s to be improved. As such, buy as much land as possible.


That is a function of your intent. If you only want to by one TH and then stop, REIN is possibly too much information and money. However, if you are serious, in time, to buy 3 or 5 or 12 or more properties then it is THE best game in town as it is the best education and incubation environment available in Canada. $4000, or even $12,000 in education pales in comparison to the multi-ten or likely multi-hundred thousand (or quite possibly multi-million) $s you will make in real estate over a decade or 3 !

Thomas is right on the condo factor and the educational factor. If anything just be an online member to save costs, You will learn more through this forum and the educational resources REIN provides through reports and magazines then you will in any other area. Plus with REIN it's all about help and education, I think anybody would be hard pressed to find an organization comparable to this in even the slightest regarding real estate in Canada.

 

[MonicaPaslawski]

You are obviously a saver - I get that - it took me a long time to decide to spend money on a "membership" - REIN - but it was a great decision. Even if you join on-line and listen to the meeting material, you will learn something every single month that will save you more than your membership costs. Go to ACRE and the weekend events and you will soon decide that it's not an expense, it is an investment.

 

[Thomas Beyer]

Go to ACRE and the weekend events and you will soon decide that it's not an expense, it is an investment.

Exactly.

If you think education is expensive, try ignorance !

 

[Dan Golby]

Read some books, attend the events, become a member (online at minimum)

Training doesn't cost, it pays!

 

[fletcher87]

I appreciated you guys telling me about my achievement from saving up the money.... I will consider looking at the seminars, education and books

But right now, I recently got a wrench thrown in my plans... My mom want me out by the age of 30 .. she is not going to really kick me out the house after I'm 30 anyway but it was more of a "start your own life, have my own place, be independent etc"

So I have about 2 years to do what I got to do.. I want to change profession as well because being a head pastry chef at a 400+ seats restaurant only make me 30k or $14/hr. Obviously later in life, I can't afford a house monthly payments in the future with the money I make now.

What tactics do you recommend that I should do?

 

[Dan Golby]

Get a better trade! I'm an electrician and make a very good wage so I'd recommend that if you're good at math, but it depends on you.
Either way it keeps you working along the way making money.
I would buy a house with a basement suite and live downstairs so that it is almost as cheap as living at home! Lol

 

[SVS]

I appreciated you guys telling me about my achievement from saving up the money.... I will consider looking at the seminars, education and books

But right now, I recently got a wrench thrown in my plans... My mom want me out by the age of 30 .. she is not going to really kick me out the house after I'm 30 anyway but it was more of a "start your own life, have my own place, be independent etc"

So I have about 2 years to do what I got to do.. I want to change profession as well because being a head pastry chef at a 400+ seats restaurant only make me 30k or $14/hr. Obviously later in life, I can't afford a house monthly payments in the future with the money I make now.

What tactics do you recommend that I should do?

Right now now i live in a duplex with one side rented out and on top of that I rent a room on my side out. I think if you can deal with less privacy and sleep (dont rent out to someone who works continental when you live in the unit i learned that the hard way), its a great way to live expense free, my mortgage is 1177 and i collect 1350 in rental income. So basically all i pay for is utilities on my side, food and vehicles. I think it's a great way to save money if you're willing to live like that. So from personal experience that's what i would reccomend

 

[Cory Sperle]

A couple of great suggestions here. Buy with a suite or duplex and live in one half and rent the other. that is exactly how (I) and many others got started many years ago.

 

[fletcher87]

I was thinking of a trade for a career change or something else that is good paying... I think I'm decent knowledgeable on math

I'm not sure I'm interested in being a electrician.... possibly of getting shocked or getting into cramp/questionable spaces.. also don't want to do plumbing, not a fan of dealing with pipes that involve with the toilets' "output", if you know what I'm talking about lol

I don't think I can afford a house with suite yet in Oakville... I might consider getting a condo and rent it out for a couple years to build up my equity and refinance it to get a house.

 

[alaas1977]

Just a thought here, even though you said not a plumber, it can be a great trade where you'll always have work. I'm a plumber, I chose to do this trade as it was a way to secure my future and get into real estate later in life. The key is learn the trade, make the money and then invest in Real Estate so that you retire early.

Lisa

 

[Dan Golby]

My brother is a carpenter and he did quite well at that until he switched back to farming.

 

[Cory Sperle]

Having a red seal trade in your back pocket reduces the pressure to succeed quickly in real estate, hence learning over time with baby steps. A long term plan and view practically ensures success. Trades today pay at par with engineers in many industries.

 

[fletcher87]

I get where you are coming from, Lisa... is plumbing a tough, and back breaking trade? How long is the schooling for it?

Funny you mentioned carpenter because my half brother who have his own business in cosmetic renovation and I asked him about being a carpenter. He said it a highly skilled trade and not sure it a good idea. I thought of like making furnitures or something like that

That's great that a red seal can make trades on equal grounds with engineers. I will check the red seal site for other trade professions and see anything that is intriguing for me.