How do i buy my first home?

[Rui M]

ok well the title is sort of misleading, i am actually looking at purchasing a 4-plex in ontario (revenue property). This will be my first property of any sort and i will still be renting in calgary.


Before anyone says i should buy a house first, the property is under 200k and each unit will rent for $700x4 units. The building is solid shape and low maintenance (lived in it for 10 years before moving here) .

[85regal]

same as any property..need to know laws on how much down to be able to rent it out...best advice is be sure you know what you are getting into..you are responsible for insurance..maintenance and repairs..you will have to hire a management company...have a good inspection done..be smart about it, do your research, and you should be fine..:thumbsup: where in ontario..i lived there for 20 years..

[broken_legs]

Originally posted by Rui M
ok well the title is sort of misleading, i am actually looking at purchasing a 4-plex in ontario (revenue property). This will be my first property of any sort and i will still be renting in calgary.


Before anyone says i should buy a house first, the property is under 200k and each unit will rent for $700x4 units. The building is solid shape and low maintenance (lived in it for 10 years before moving here) .

How are you going to manage this property from Calgary?

Assume at least 100/mth in mgmt fees on each unit for regular renting. now add in fees for background checks, settig up direct deposit, inspections, showings, snow removal, cutting grass etc...

What condition are the appliances in?
What about the electrical service?
Water?
What kind of heating is it? Is the furnace in good condition?
^^^ x 4

How much is your insurance going to cost you per month on a 4 plex?
What are property taxes worth?
What is the zoning?

If this property is cash-flowing why is the landlord selling for so low??

Lots more to ask yourself about this venture first before you look at how to do it I'd say.

[turbotrip]

make sure you fully understand how much its going to cost you to run it from here. unless you have a friend/relative thats willing to do it for free it might not be a good idea.
we had a few apartment buildings in ontario and when you added up all the costs they definitely weren't worth it

[rinny]

Attaining a mortgage for an out of province property like that may be a little difficult unless you are making relatively good bank (>60k) or have a ~20% downpayment.

Although it'd be your only property, when the bank looks at your debt load they will factor in living costs for you in your present situation since you wont be living there/since you cant prove that you will be living there (as your employment would be here.)

So with that in mind, call some brokers and go talk to some people to see what they say about your financial position so you know prior to further legwork what the outcome will be.

[Rui M]

Originally posted by rinny
Attaining a mortgage for an out of province property like that may be a little difficult unless you are making relatively good bank (>60k) or have a ~20% downpayment.

Although it'd be your only property, when the bank looks at your debt load they will factor in living costs for you in your present situation since you wont be living there/since you cant prove that you will be living there (as your employment would be here.)

So with that in mind, call some brokers and go talk to some people to see what they say about your financial position so you know prior to further legwork what the outcome will be.

This was my only concern really, i think i am living well below means right now with only $1500 month total living costs no debt and $80k job. Will i really need a 20% dp? is this because it will be a revenue property?

[broken_legs]

Originally posted by Rui M


This was my only concern really, i think i am living well below means right now with only $1500 month total living costs no debt and $80k job. Will i really need a 20% dp? is this because it will be a revenue property?

Do you like paying CMHC?

CMHC on revenue properties is higher than owner occupied...

[rinny]

I dont think they will necessarily count this as a revenue property if its the only property you own.

However, they'll want to see that you can afford to live somewhere else but ALSO be able to afford that residence.

What may happen is they do their normal calculations as to your usual debt service and what you will be paying if you had the mortgage on that place. They then include a monthly cost for living somewhere else thus having to pay rent/bills somewhere else.

Im not sure on their definition of revenue property but if its the only property you own then I dont know if they can technically label it as that. Now where they may have the right of labelling it as such is due to it being a 4plex.

Not sure if it helps your case but you may want to explain that you will keep one unit for yourself as your own residence so it doesnt look like the whole thing is for revenue-purposes.

Anyways, I will refer you to Cathy Falcione who is a mortgage specialist for Scotiabank. She works hard for her money, 24/7, and she dealt with my case with an out-of-province property.

Cathy Falcione, AMP
Mobile Mortgage Specialist
Scotiabank Platinum Performer
Direct: 403.703.1358
Fax: 403.547.1358
mdm.scotiabank.com/cfalcione

[Rui M]

sweet thanks.