[quote user=Darr]
To stimulate the conversation, let`s change gears because we are not addressing the issue of deferred maintenance costs in the calculations.
A muli-family building has very low if any credit risk. As previously mentioned, the only thing separating a sovereign bond from a high quality building is liquidity once inflation is equalized.
Personally, I conservatively calculate the required deferred maintenance and factor it into my purchase price. (Essentially capitalizing it). I also typically do the work right away, as I dislike renovations on a continuous basis. Granted, I'm also buying single units, so the practicality is a bit different compared to completely catching up a 30 plex on maintenance in 30 days.
[quote user=Rickson9]@Michael I would be looking to use the VTB similar to a medium term bridge loan. Instead of using cash, I want some time to sell some over priced less-than-liquid Toronto RE. I would start with 3%, 30 yr am, 2 yr term with balloon at the end of the term. That would give me enough time. At the end of the term everything would be lien free OR I could try owning the property with 20% down and see how it feels like. I haven't decided...
That certainly makes sense, 2 years is a long time in a swiftly changing market. I've often felt your investing style would be uniquely suited to leverage, as your downside protection is significant based on your purchase valuations. Out of curiosity, what type of Toronto real estate is illiquid? The view of the Toronto market from the west looks like just about anything should be salable...
Regards,
Michael