• I recently worked with a first-time investor. He was referred to me by another investor client I have. He had no idea of how to start investing, what type of investment he wanted to do or in which area he wanted to start investing in. He had done the meet-up groups, signed up for various courses given by other investors, read many books and even spoke to other mortgage and real estate professionals, but he was still stuck on how to proceed. He was what we call in “analysis paralysis”.
    analyseSo we started with the basics. I asked him what type of investment resonated with him. We looked at the pros and cons of rent-to-own, buy & hold and flipping to start with. I then took the time to look at his risk profile – he was very risk averse, so rent-to-own or flipping, would not possibly be the best roads for him to take to begin with; I suggested he look at buy & hold as cash flow and wealth accumulation were important to him.

    We then looked at the markets that best worked for the type of investing he wanted to do. For instance, it would not make sense to invest in Toronto for a rent-to-own, as it would make it too expensive to attract a tenant buyer or even find a home if you had a tenant buyer. Furthermore, it also would not make sense to just pick a market and invest there without first knowing the fundamentals of that market. Is there population growth? Is there job growth and more than one industry to support job growth? and finally is there growth in infrastructure?

    Finally, once he had settled on the type of investment and where he wanted to focus his search, we drilled down into the analysis. When I personally look at investing into a new market or any market for that matter, I look at everything from population, GDP, job growth, which industries exist and are there plans for the city to expand it’s services ie. transportation through new LRT or even GO Stations, just to name a few!

    I asked him to pick 5 cities he was interested in investing, however they could not be markets that appealed to him because they were close to home, unless they fit the above mentioned parameters.

    Once we analyzed each of those markets and looked at what he could afford, we started to expand the research to stay on track with his level of comfort and affordability. In the end, he decided on Hamilton and Waterloo. He chose Hamilton as it still has good opportunities to invest for the investor, who is willing to take the time to find the right property and Waterloo because it is still affordable and is Canada’s tech hub, which also appealed to him.

    I then set him up with great realtors in both markets, who are also investors and the rest they say is history.

    Due to the homework he did before investing, It took him only 4 months from pre-qualifying to finding his first investment property in Hamilton. With every property he looked at he made sure it fit the profile of what he set out in the beginning. He is still looking in Waterloo, however has lost out on bidding wars as of late, so it might take a bit longer.

    Due to the time we took to do the proper work beforehand, he is set up to invest by himself for his first four properties, before needing to JV or use other people’s money.

    Are you interested in looking at your own situation to see if you could afford a rental property?

    Do you need assistance in starting or even progressing to your next investment property?

    Are you happy with your current mortgage provider? Are you getting the service you need?

    Reach out today! Let’s have a chat!