# Buy a two suite rental home with a little more than 5% down while renting or...?



## Ubergame (Jul 6, 2013)

I am contemplating buying a two suite rental home (440000-500k) in the next year when I have a little more than 5% down. My wife and I are still living in the parents basement at 500 per month. Should we stay in the basement and have others pay for our mortgage for the first 2-3 years then move in or save save save and wait and have a larger down payment when we want to move out. ?

Cheers


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## HaroldCrump (Jun 10, 2009)

Ha, thanks for the laugh...I needed that on a Monday :biggrin:


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## Ubergame (Jul 6, 2013)

HaroldCrump said:


> Ha, thanks for the laugh...I needed that on a Monday :biggrin:


Thanks for the help, spare me the ridicule and lay down some more info. I am not seeing this as clear as you are. Being that you are a senior member I would assume that you would be able to help me greatly then.

Thanks in advance


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## HaroldCrump (Jun 10, 2009)

It's just a little hard to take your original post seriously.

All I read was...

_My wife and I are still living in the parents basement....buy a rental property.....5% down....get others to pay my mortgage...._


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## Ubergame (Jul 6, 2013)

I'm somewhat content where we are right now and as I said we don't pay very much. In about 8-12 months we will be able to afford something and I would like to start planning on what to do.


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## the-royal-mail (Dec 11, 2009)

Seriously?

OK first of all, I agree with saving as much as possible when your expenses are low. But this rhetoric about "someone else paying your mortgage"? Has our society really been brainwashed that bad with this rhetoric?

YES save, NO rhetoric, YES move into an apt, NO you won't be paying someone else's mortgage while you do that and continue to save, YES save 20% down MINIMUM, YES save an emergency fund first BEFORE buying a house.

You're trying to do WAY too much WAY too fast. Stop listening to rhetoric.

I'm being as clear as possible here since you said you were not clear on everything.


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## Potato (Apr 3, 2009)

You should look into the numbers in more depth than having "someone else pay the mortgage" -- do a full pro forma accounting and see if that assumption is true. It's not axiomatically correct, certainly not in this real estate environment. 

On a more practical level, if you are being honest with CMHC you won't be allowed to buy with 5% down unless you live in it.


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## Just a Guy (Mar 27, 2012)

With each suite basically costing 250k, you'd need to rent Them for upwards of 2k/month EACH to make them cash flow. Real investors don't pay that much per door. 

Also, with 5% down, you'd have to live in BOTH units without technically committing mortgage fraud.


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## Butters (Apr 20, 2012)

Save 20%
easier to save now, than when you have more expenses
renters can be annoying, not pay, things can break, etc...

I do encourage you to look at houses, see what things you like, what things you dislike... finding a house for myself took about 70 houses, 2 overbid houses i wouldn't increase my offer, and finally sneaked it on my 3rd offer 8 months later

especially finding one with 2-3 rental units in it

dont buy the first house you see, wait for the right price and the style you want

a realtor will be able to help you with some of these ideas, a good young guy will want your business.. an old professional will know you aren't serious and not waste his time on you
you will need to talk to the banks also to see how much you can qualify for also


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## Addy (Mar 12, 2010)

I have to agree with the others, you need to find out if you will qualify, very very few lending companies will allow 5% or even 10% down on a rental property, most want 20%. If you live in it while renting out the other unit or two you may quality for owner occupied and you may get 10% down but highly unlikely you would get 5% down.

Check your numbers, and have a large cushion because, as mentioned, renters break things, move in and don't pay, etc etc - and it's difficult to get them out once they are in, even if they are not paying. If you're not an experienced landlord I would advise signing up now for a landlord forum (for example, if you're in Ontario: http://ontariolandlords.org/forum/) and reading, reading, and do more reading, before you decide if you really want to buy a rental unit. It's hard work, and can be extremely frustrating when tenants damage your building, and don't pay their rent.


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## Addy (Mar 12, 2010)

And never go to the bank for a mortgage, contact a good broker.


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