What direction to get start

[vnwind]

Hi everyone,



My name is Tyler and I live in Calgary. I just start out on my personal belize and want to become a real estate investor. My current goal is get my self specialized in single-family home and hopefully i can find my first investment property that fits my score sheet.



However, before I starting out to find my correct network I am tumble on how much i can qualify to buy a house. I understand that I can seek this from bank but i am not sure carrying another mortgage is a wise choice or if i should seek a JV. So here I am and ask this question and hope someone can share some lights or directions. My current financial situation looks like this

1) Have a HELOC of 300K on a 550K primary resident and it is at 2.5%, and I have unused 130K LOC (available from HELOC) at prime rate

2) No debt except on credit card for monthly expense which gets paid off every month

3) Car Asset: 20K

3) Cash on hand: 38 K

4) RRSP: 50K

5) Monthly net income from full time job: 5000

6) Monthly net income from side business (incorporate): 4000



So without having to get second mortgage and not touch RRSP, I only have 168K which is not enough for single house family investment because they are around 300K range.



Should I seek JV from friends/families or should I try to get second mortgage for my first property investment.



Is there any financial advisors / accountants that understands REIN and you can recommend me to talk to?



Thank you for your help and look forward to your responses!



Regards

Tyler

 

[Thomas Beyer]

150,000 plus a mortgage will get you a nice house. The question is if the cash-flow is sufficient to service the LOC debt and the mortgage debt. Doable in Calgary, but tough. Easier in smaller cities, Red Deer, Edmonton, Lloydminster, Grand Parairie etc. .. or in smaller communities further away in BC, SK or ON with its own risks and challenges if afar.



Research asset types, rents and locations first, then build a team of property manager, realtor(s), lawyer, mortgage broker and lawyer, then decide & act. More here: http://myreinspace.com/public_forums/Real_Estate_Discussion/62-10689-Educational_REIN_Posts_by_Thomas_Beyer.html

 

[invst4profit]

To add to what Thomas has stated I would suggest you steer clear of single family homes when starting out as they are notorious for having zero to negative cash flow. Try and find an affordable multi plex that will provide the security of continued income with vacancies.

With single family unit expenses possible in the range of 50% of income and vacancies that reduce your income to zero you should start with something having more security and a higher chance of success.



PS. make sure you steer clear of any units having tenants on welfare or any other form of government assistance. Remember when screening applicants in this business it isn't only about whether a tenant can pay but also if you can collect when they don't pay.

 

[vnwind]

thank you for your responses and suggestions. I guess i will have more reading to do



Cheers

Tyler

 

[Thomas Beyer]

[quote user=vnwind]I guess i will have more reading to do
yes .. AND driving around .. AND understanding rent levels .. AND understanding what area to buy in .. AND what type of homes to specialize in so you know what an above market, at market or below market deal looks like .. plus build a team of lawyer, realtor(s), property manager and mortgage broker .. but that is all very doable for a smart guy like you appear to be !



Happy Hunting !

 

[vnwind]

Thomas, thanks again for your input



Not sure i am a smart guy but i am willing to learn . Anyway, I don't feel comfortable to invest anywhere outside of Calgary just yet because I think I understand Calgary more and much easier for me to drive around the neighborhoods to learn about the location than anywhere else. Maybe once i have established myself then I can look somewhere else but for now I think it is better to stay within Calgary or nearby city like Airdrie or okotoks, which brings me to next question



Should i concentrate on the area that i want to buy or area that fits my current LOC + saving limit? With my current 168K I can try to find a property in NE but my prefer area is in NW which will requires me to get a second mortgage?



Thanks