Over the last month or so, I’ve been asked this question by more people than at any other time in my career, so I thought I’d write about it here today, and then you can give me your feedback.

We are currently in an almost-perfect storm, as far as real estate investing is concerned; rates are crazy-low, prices are down, and there are lots of properties available in many areas. Combine this with the tougher qualifications to get a mortgage, and many would-be buyers are having to continue as renters. For investor financing, we can still get great mortgages, with only 5% downpayment.

These factors combine to make positive cash-flow an easy thing to accomplish.

Let’s look at one example property, a 7-unit plus 1 big apartment building in Kitchener. This property is offered for sale at $479,500, and has rental income of $3,375 per month if the big apartment is not owner-occupied. So, that’s $39,300 income from rents, and operating expenses of approximately $10,000 for insurance and utilities, leaving you $29,000 per year for debt service, vacancies, and repairs.

This property has had many major updates in last couple of years, including electrical panel, steel roof, asphalt, and new boiler, so there shouldn’t be any big-ticket items coming up in the near future.

On top of that, the tenants in this legal boarding house have been there for between 3 years and 35 years, so there is stability of income.

What would be the carrying costs with 5% down? Well, your mortgage payment will be approximately $2,138pm & property taxes will be $295 per month, for a total annual outlay of ($2,138 + $295) x 12 = $29,196. That’s a break-even opportunity!

If you put 10% down, you have a small positive cash flow every month.

OR, how about this one, in Cambridge:

6 apartments, 2 x 2-bedroom and 4 x 1-bedroom. Rental Income of $45,000; operating expenses of $9049 per year. Carrying costs are:

$1,663 mortgage, $350 property taxes = ($1,663 + $350) x 12 = $24,156 per year.

So, total carrying costs plus operating costs = $9,049 + $24,156 = $33,205.

Result = $11,795 positive cash flow per year.

I think it’s a good time to be a real estate investor. I do; will you?

For information on these, and lots of other excellent opportunities to put your money to work for you, give me a call at 905-208-7002 or send me an email to chris@chrisnewell.com