What to do with 117, 000 ?

[Runman]

Hi everyone,

I have a question that maybe you guys can help me with. We recently remortgaged our current duplex in Edmonton and took out about 117,000 in equity. We left 20% or about 60,000 in the duplex as we are planning to rent it out in the Spring. Even With the 117,000 out, the property will positive cash flow about $275 a month. We bought low before the boom as the property value went from 163,000 to about 300,000. We were thinking of putting down 20% or about 90,000 on our new primary home and renting out the duplex. After the downpayment on the primary home, we will have about 27,000 left over for further investment. I guess I`m wondering if this is the right approach? Have done things right so far? Ultimately, we will have 60,000 or 20% equity in the duplex, 90,000 or 20% in our primary, and 27,000 left over for further investment. What should I do with the 27,000?

Thanks alot guys!

This forum is awesome!!!

Josh

 

[bizaro86]

If you think you might want to buy investment properties totalling more than about 135,000 (27,000/0.2) I would put less than 20% down on your personal residence. That is because CMHC premiums are a lower percentage on an owner occupied home than they are on a rental.

So if you bought two properties exactly the same price, and lived in one and rented out one, you`d be better off to put more money down on the rental and less money down on your personal residence.

Michael

 

[AndyLuchies]

$27,000?? Why, I`d buy another property of course! Buy it at the same time as the others so you send multiple lending requests through CMHC at the same time, a little REIN birdy told me that`s the easiest way to get CMHC to qualify all of them for insurance (I have yet to try it out though, perhaps someone else here can validate?)

You could also check out being the money partner in a deal with another RE investor. I know Thomas Beyer has some great opportunities that you could get in on, I don`t know what kind of funds he`d want though...may be more than $27,000, whatever you do, get that money working hard for you!

On your principle residence, can`t you get away with 5% down through CMHC?
Why not do that and have more to buy real estate with. After all, you can use all your cashflow to pay down your principle residence mortgage alot faster if you have more properties cashflowing!

 

[ChrisDavies]

QUOTE (Runman @ Oct 22 2009, 02:14 PM) What should I do with the 27,000?

Hi Josh,

First, I`d join REIN and take in the Calgary ACRES weekend. Then, assuming everything else in your life is fairly stable, I`m 100% behind everyone else in suggesting it`s time to do another deal! There`s many people on here who can provide good advice, potential deals and sometime also will do some mentoring as a part of a JV.

That said, I think you`d do well to get the education ball rolling and get your next property bought.

 

[AndyLuchies]

QUOTE (ChrisDavies @ Oct 23 2009, 06:12 AM) Hi Josh,

First, I`d join REIN and take in the Calgary ACRES weekend. Then, assuming everything else in your life is fairly stable, I`m 100% behind everyone else in suggesting it`s time to do another deal! There`s many people on here who can provide good advice, potential deals and sometime also will do some mentoring as a part of a JV.

That said, I think you`d do well to get the education ball rolling and get your next property bought.

Absolutely agree!!!!!! Find a REIN member to go with for a discounted price and if you like what you hear, sign up for REIN (and I`m pretty sure you`ll like what you hear).

 

[Thomas Beyer]

QUOTE (Runman @ Oct 22 2009, 03:14 PM)
...What should I do with the 27,000?

..
Depends a bit on what TIME you wish to invest in addition to hard cash (i.e. green $s) !!



I.e. consider the value of your time (i.e. blue dollars) also !



Also look at liquidity, risk and timelines !



many options: real estate by yourself, RE with a JV partner, RE in a syndication, public real estate or

non real estate like ETFs, diamonds, commodities, stocks, mutual funds, GICs, ..



read some of these educational posts here:



5 ways to make money http://myreinspace.com/public_forums/General_Discussion/61-3347-5_ways_to_make_money.html



How to get started http://myreinspace.com/public_forums/General_Discussion/61-4391-How_to_get_started_.html



Investment ideas besides real estate: http://myreinspace.com/public_forums/General_Discussion/61-8913-What_else_do_you_buy__besides_Apartment_Buildings.html



What to invest these days: http://myreinspace.com/classified_ads/Joint_Ventures/74-13583-Where_to_Invest_These_Days_.html

 

[Runman]

Thanks everybody for the insight. I`m going to look into the REIN membership as well as look into buying my next investment property.
Thanks guys

Josh

 

[Mitch Collins]

Hello;

This is a good question - you should be able to turn this amount of capital into at least $1,000 per month positive cash flow. Check out the areas in which you wish to investigate purchasing real estate and then dig deeper to uncover the diamonds!

Good luck!