- Joined
- Oct 24, 2007
- Messages
- 38
I`m a 25 year old professional who has been interested in real estate for some time and am ready to take the plunge. I will be investing in student property in the Guelph/Waterloo area. I have a very secure job and an excellent credit score of 770. I have no debt and $35,000 in the bank. I have no house or rents and am currently living with family for almost free.
I have qualified for a primary mortgage with 0 down. I was going to buy a place, rent most of it out, and then when I was satisfied it works I`d move out and rent entire thing. (Year or so). First option upon moving out was grabbing a duplex/triplex with friend, share one part, rent out the rest. It would be a 50/50 partnership, I`d provide small downpayment, they`d be able to grab owner occupied mortgage (Their first place). I`d then go from there.
The previous scenario makes me a bit nervous because it seems I may be playing in a bit of "grey" area for first property. Another idea: With my credit, I will qualify for CMHC 0 down rental mortgage for one unit (Which a student lodging house would be I`m assuming). I am willing to live with family a bit longer until I am sure it is stable if I go this route. I would then buy that duplex/triplex with friend and while highly leveraged, I`d have lots of deductions, cheap living, and good amount of cash in bank as slush fund. I`d then go from there. The problem with this scenario is the huge 7.25% insurance premium on a 0 down rental unit.
Is the 7.25% insurance premium worth it for 0 down? It seems to be if it allows for more flexibility with $$ although may have negative cash flow for a while. (Plan on keeping slush fund 4-6 months worth of expenses)
Am I risking getting in trouble if I buy as primary res, rent most of it out, and then move out within a year or so?
Any input from experienced investors would be fantastic on what they would do in my situation. Thanks.
I have qualified for a primary mortgage with 0 down. I was going to buy a place, rent most of it out, and then when I was satisfied it works I`d move out and rent entire thing. (Year or so). First option upon moving out was grabbing a duplex/triplex with friend, share one part, rent out the rest. It would be a 50/50 partnership, I`d provide small downpayment, they`d be able to grab owner occupied mortgage (Their first place). I`d then go from there.
The previous scenario makes me a bit nervous because it seems I may be playing in a bit of "grey" area for first property. Another idea: With my credit, I will qualify for CMHC 0 down rental mortgage for one unit (Which a student lodging house would be I`m assuming). I am willing to live with family a bit longer until I am sure it is stable if I go this route. I would then buy that duplex/triplex with friend and while highly leveraged, I`d have lots of deductions, cheap living, and good amount of cash in bank as slush fund. I`d then go from there. The problem with this scenario is the huge 7.25% insurance premium on a 0 down rental unit.
Is the 7.25% insurance premium worth it for 0 down? It seems to be if it allows for more flexibility with $$ although may have negative cash flow for a while. (Plan on keeping slush fund 4-6 months worth of expenses)
Am I risking getting in trouble if I buy as primary res, rent most of it out, and then move out within a year or so?
Any input from experienced investors would be fantastic on what they would do in my situation. Thanks.