• Nothing drives me crazier than when somebody says “I can’t afford the down-payment ” or “I can’t afford to save”, but they are driving around a car that leases for $750/month!

    This post was inspired by a new investor client that was thinking of getting into his first property. He had done the meetup’s, the courses, and tons of research on the areas he wanted to invest and was really prepared so I assumed he would have no problems financing his first purchase.

    He had decided that since he was young and had time before getting married and having a family, he would purchase a duplex. He would live in one unit and rent out the other. He had found the perfect property that needed some work but he was able to get it for a steal – in Hamilton no less!


    By understanding the new mortgage rules, he knew that a single family rental would incur rate premiums but a purchase of 2-4 units would be considered an insured purchase and allow him to get best rates.

    He had a great job, great income, however he also had some outstanding debts, including a lease for $750/month as he thought he should look the part of a junior lawyer! He had $18,000 in savings and was being gifted the rest from his parents.

    The problem was in his debt ratios – due to the lease and some outstanding debts, he was not able to qualify on the A side with best rates and terms and we had to go to the B side, which meant less cash flow.

    I advised him that if he were to lease a car for less than half that amount, he would be able to qualify for an A lender – especially under the new rules as all must now qualify under the qualifying rate of 4.64%, even with 25% down.

    I basically told him to “Stop Driving Around Your Retirement and Start Saving!”`

    He thought I was crazy and decided to go elsewhere. The other broker did not advise him how to fix his ratios’ but rather focused on the reasons he would be better off starting his portfolio with a B lender. Having had the discussion with me about how to best structure his portfolio for growth, he realized that the advice was off-base and decided to come back to work with me.

    Would it surprise you to know that as soon as you drive that car off the lot, it depreciates 40% and after 5 years the car is less than 65% of it’s original value. That’s a huge loss on such an expensive car.

    Now if you took that same amount of money and invested it don’t you think you would be better off?

    Let’s look at the math:

    Invest $750/month at 8% – in one year you would make $720 in interest. I know nothing to write about but is it not better than 40% depreciation on your money?


    Thankfully my client decided to listen to me – he got rid of his lease through Lease Busters and bought a used car for $10,000, which cost him less than half each month. The rest he was able to put towards the purchase of his new home and had some left over for closing costs and renovations, which were minor.


    Knowing what you are spending your money on is key – before you can invest in property, you need to have your finances in order. Especially if you want to get A rates and terms and be able to finance and grow your portfolio the right way!


    Do you want to start investing but have some outstanding debts holding you back? Let’s sit down and review your goals and make a game plan on how to get you there! Contact me today to get started!