Entrance Strategy

[Gregoire72]

Hello everyone,



I'm new to the real estate investing game and need a little bit of advice. I currently live in Newfoundland, but do not plan on buying any real estate here since I will be relocating to Ottawa in June of 2014. At this point, I have a few options on what I can do upon relocating to Ottawa, with the primary intent to maximize the number of doors I can buy (along with one for myself) with the capital Ill have to play with at that point...



Option 1 - Buy a cheap personal residence with the minimum money (5%) down, and use the remainder of my available capital in order to buy a few rental properties.



Advantages - This option allows me to take my time while looking for rental properties. It seems that finding a property which matches all the criteria may take a while, especially for a beginner such as myself.



Disadvantages - I will be required to put 20% down on the rentals I will be buying after that, which will quickly eat a large share of the capital I have to work with.



Option 2 - Buy a 5-unit multi-family. Myself and my girlfriend would occupy one of the units.



Advantages - This gives me the advantage of potentially buying more doors with potentially only a 5% downpayment. It also may leave me with a bit of capital to work with in order to buy more doors after this initial purchase, Please correct me if this is not the case... Please correct me if I am out to lunch here.



Disadvantages - I may have to live in an apartment for the first few months until I find a property that fits my criteria. This is not ideal, but the financial cost of the move may be outweighed by the potential for more doors with the capital I have to play with.



Please let me know if there are any other options I am not seeing!



Greg

 

[Sherilynn]

I am a big fan of buying a multi-unit personal residence with low-money-down and later moving to another low-money-down property. (Lather, rinse, repeat.) I did this 4 times with two toddlers in tow.



Just be mindful of debt coverage ratios when using low money down. You will have lower cashflow and therefore may have difficulty qualifying for another mortgage (or covering unexpected expenses), depending on your job income.



A point to ponder: there is no need to buy rental property where you live. Alberta is a great place to invest and is substantially more landlord-friendly. Even with my limited knowledge of the Ontario RTA (Residential Tenancies Act), I know that I would never want to own rentals in Ontario.

 

[Thomas Beyer]

[quote user=Gregoire72]options I am not seeing!



You can

• buy 5+ multi-plexes
• you can buying other asset classes with higher yields (but more vacancy risk, lower borrowing ability and more cash-to-close requirements) such a trailer park, hotel, strip mall, office building
• invest with others, either as a JV partner in one deal or with many others in a syndicated projects
• buy publicly traded stocks that invest in real estate or buy REITs
  buy mortgages or lend money
  you can invest in a MIC
  buy fixer-upper THs, single family homes or multi-unit buildings .. fix them up, then re-finance a year or two later based on higher value

 

[Al Verwey]

I'm new to the real estate investing game and need a little bit of advice. I currently live in Newfoundland, but do not plan on buying any real estate here since I will be relocating to Ottawa in June of 2014. At this point, I have a few options on what I can do upon relocating to Ottawa, with the primary intent to maximize the number of doors I can buy (along with one for myself) with the capital Ill have to play with at that point...

Option 1 - Buy a cheap personal residence with the minimum money (5%) down, and use the remainder of my available capital in order to buy a few rental properties.

Advantages - This option allows me to take my time while looking for rental properties. It seems that finding a property which matches all the criteria may take a while, especially for a beginner such as myself.

Disadvantages - I will be required to put 20% down on the rentals I will be buying after that, which will quickly eat a large share of the capital I have to work with.

Option 2 - Buy a 5-unit multi-family. Myself and my girlfriend would occupy one of the units.

Advantages - This gives me the advantage of potentially buying more doors with potentially only a 5% downpayment. It also may leave me with a bit of capital to work with in order to buy more doors after this initial purchase, Please correct me if this is not the case... Please correct me if I am out to lunch here.

Disadvantages - I may have to live in an apartment for the first few months until I find a property that fits my criteria. This is not ideal, but the financial cost of the move may be outweighed by the potential for more doors with the capital I have to play with.

Please let me know if there are any other options I am not seeing!



Greg

Greg,

Saw this old post. How did things turn out for you?