Investing in Toronto Condos - My first investment condo earned me a cheque for $142,000
Hey all, Alexjwilson.com here.
I’m making my triumphant return to video.
But its not a ‘date night in Yorkville’ video.
Those days are over.
I’m a little ticked off, and I’m ticked off at you guys.
Because you didn’t listen to me.
And you guys lost out on some significant opportunities to make money.
I shouldn’t say all.
Some of you did listen to me and I’m sure you’re very happy you did.
But, the majority of you always tell me:
“The Real Estate Market’s crashing”
“There is a bubble”
“We don’t want to invest in condos”
“Condo’s are bad”
“Condo’s are evil”
“Condos were sent by Satan”
That is the thing I hear on the street from you guys.
So, I want to walk you through my journey on my first investment condo.
Because that’s nearing its completion right now. I want to show you how I made significant money investing in real estate and how I’m going to continue investing in real estate.
So, let’s go down my journey.
It was December 2012.
The project was called ‘The Carnaby’ and it was going up at Queen and Gladstone.
I purchased a one bedroom with parking and locker for:
Now that required me to put 15% down over a one year period.
The three payments were $13,000 and that totaled $39,300.
If you don’t have that money liquid, we will discuss how to get it in another video.
My initial investment was only $39,300 and then I just sat and waited.
I watched the building go up and then April 2016 arrived.
That’s when I got my keys to the property.
I rented the property out for $1,750 per month.
My carrying cost on the property was $1275 per month.
$1,750 – $1,275 = $475 positive cash flow per month.
Now, I also have equity paydown too.
What equity is paydown? It is the tenant is paying down the debt – the principal portion on my mortgage.
Not only do I have that monthly cash flow but I have the monthly paydown of debt.
The average monthly principal paydown in the first year is $412.00 per month.
Therefore, my cashflow plus principal paydown is $887.00 per month.
Incredible! A lot of you would be happy with that.
I’m not though. I don’t need that cash. That cash is just getting taxed away.
I want to grow my wealth. I don’t just want one condo, I want many condos.
So…. Now we’re at January 2017 and I’m excited.
I’m a kid in a candy store because guess what?
I sent the bank in to do an appraisal on my property.
Remember: I bought this property for $262,400.
It appraised for $435,000.
So, I’m sure you’re all screaming “sell, sell, sell”.
But I don’t want to sell. I want to own real estate, and the key thing to take away from this – if you want to build long-term wealth, you buy and you hold, and you continue to hold.
So, this is what you do:
So, the bank said:
“Alex, your condo’s worth $435,000.”
So, what I did was I increased my mortgage. I’m able to increase my mortgage to an 80% loan to value on that amount of $435,000. That means the bank is going to give me a new mortgage of $348,000.
My current mortgage on the property was $206,000.
That means I get a cheque from the bank.
And that cheque? That goes directly to me.
That cheque is for….We do the math:
To Alex Wilson.
And there’s no tax on that, because I have not realized the gain.
I just increased my debt position. There is no tax on that. There’s no realtor fees on that.
That money goes all to me, and guess what I do next?
I take that money and I buy three more condos and I sit back and I watch property grow in value.
I continue to grow my real estate portfolio.
And here’s the beauty of it:
So, I have that money and I’m reinvesting it.
I still own my initial condo and my tenants are still in there paying down the mortgage for me.
Do you really think the Toronto real estate market is going to go down in value?
And we’ll have another video on that, another time.
It’s not going to go down in value. I could talk an hour about that.
So, I have these great tenants that are paying down my mortgage.
And I bought three more condos from this initial investment in 2012 of $39,300.
Wouldn’t you like to make that return?
Now, you might be saying:
“Alex, you’ve increased your debt load on the property. How are you covering costs?”
Well … I can also increase the rent on my property, because any building built after 1991, there is no rent control on it.
So, remember how my initial rent was $1,750.
That gets crossed out.
My new rent is $1,900 per month.
Because that’s the market rent on the property.
New rent is $1900 and the new carrying costs are just a little over $1,800 per month.
My new cash flow is just over $98 dollars per month.
But I’ve increase my principal paydown on the property as well.
That number increased all the way to $679 dollars per month.
My cashflow plus equity paydown is $777 per month.
So, I have the property working for me.
I have taken out the ‘dead money’ and I have put it in three more properties.
This is real life Monopoly.
When you start on the Monopoly board, do you buy Park Pace and Boardwalk right away?
No. You’ve got to build yourself up. You start with buying Baltic Avenue.
Carnaby was my Baltic Avenue and now I’m leveraging it across the board.
I’m buying more properties, building more hotels, building more income making properties.
I go around the board so I can eventually buy Park Place and Boardwalk.
That’s real money guys and if you want to learn how to do it and you want to be part of me and what I have email email@example.com or call 416 996 5181.
I’ll teach you how you can invest in condo’s and make real money like I did.
Things are only going to continue to go up.
Follow me on these videos so you can learn:
Why the market’s not going to crash – why even if it does crash why that’s not a big deal.
And how even if you don’t have $39,300 liquid how you can get your initial investment.
I can show you how to do that, too.
Looking forward to being back making videos and talking to you the public.
Helping you build generational wealth so you can retire early.
Okay, talk soon. Bye folks.