Investing in Toronto Condos - Road Map to $1,000,000 - Including my Personal Portfolio 

We have a very exciting episode today, because today I’m going to show you the road map on how to turn your initial down payment into $1,000,000 by investing in condos in downtown Toronto.

Previously, we have talked about how your principal residence has gone up in value. That’s fantastic, but the only way to unlock that value is if you sell. Since you also need to live somewhere, selling is not an option. So how can we tap in that equity?  Well, what we can do is go to the bank. We will talk to a banker who will send an appraiser to the property to give an appraisal of its current market value. The appraiser will also unlock the equity on property through a home equity line of credit.

Now, what we do with the home equity line of credit is use it to invest in real estate. We’re using other people’s money, AKA the bank’s money, for your investment. For example, you now have a home equity line of credit of $160,000. With that $160,000, you buy two pre-construction investment condos for $400,000 each. Typically, you’ll need 20% down for each of those properties, which will be $80,000 each.  Now we wait four years while the building is being constructed. You’re going through different life changes, maybe you have your first child or your second, or maybe you’re getting promotion at work. You watch the building go up and at the end of four years, as if you’re waiting for a cake to bake in the oven, your condo is ready. Well guess what?  Your condo is not worth $400,000 anymore. No, no, no. It’s gone up in value and it’s now worth $525,000. That’s amazing. That’s great. Well, let’s do that again.

So now we have two properties worth $525,000. We refinance $100,000 of equity out of those and we buy two more pre-construction condos. The market price for pre-construction condos is now $500,000, and 20% of $500,000 is $100,000. We have two more pre-construction condos and the whole time we have tenants in the property paying all of our carrying costs. So you’re not out of pocket. We have tenants in the first two properties paying you rent, paying down your mortgage, covering the maintenance fees and property taxes.

We have two other condos under construction and we’re waiting another four years. We are putting another cake in the oven and we’re waiting. More life changes happen. Maybe our children are getting older, closer to university age and we want to change our lifestyle. Maybe we don’t want to work so hard and we want to take a step back. Maybe we’re accelerating in career and we want to retire early. Guess what? The cake is done. The condo buildings are done. Now we’re eight years into our journey with two more properties, two more pieces on a monopoly board for a total of four.

The properties are not worth $500,000 anymore - they’re worth $625,000. So now we’re eight years into this game. We have two condos worth $625,000, so let’s do this again. Let’s continue playing.

We refinance equity out to take another $100,000 out of our two newest condos. Our first two condos are also still going up and we have tenants paying down the mortgage on the properties. Our tenants are paying down the equity, which that allows us to take another $75,000 out from those properties. So, we have $200,000 plus another $150,000 from the first two properties for a total of $350,000 to invest in the market. Now we’re going to buy three more condos. So we’re going to buy three more condos with that money. We buy those three condos for $575,000 - Alexjwilson.com was able to find us a good deal.

We buy three more condos and deposits on each of those are $115,000. We are still left with  $145,000 of the $350,000 we’ve taken out - which is great. Now we wait another four years. More life changes are happening. Our kids are probably in university or really close to university age. The bills will be adding up soon. Maybe you’re looking at early retirement or you’ve been offered a retirement package from work. We want to take that package now because we’ve been investing in condos and more life changes are happening. There is another cake out of the oven because we have three more condos. They’re not worth $575,000 anymore. They’re worth $700,000 each. That’s amazing.

So, now we have these three condos worth $700,000. We also still have our other condos that have gone up in value in both the first round and second round. Oh my God, I have three plus two plus two - I have seven condos. This is fantastic! This is great and we have a lot of math to work out now to see what our net worth now is.

Let’s look at our first condos. On our first two condos, the mortgage obligation is probably going to be around $456,000 - the reason being that over time we have mortgage equity to pay down on the properties. They’re little older, so they are not worth $700,000. They’re worth $650,000, so the grand total of equity in those properties is $388,000.

Now, on our second group of condos, the mortgage obligation is $475,000. They’re worth a little more than others - they’re worth $657,000. Equity wise, that’s a total of $400,000 for the second group of condos. We now have a total of $788,000 in equity. The best part is the biggest payday is still to come. So we’re at $788,000. Now, because we haven’t pulled any equity from the last three condos, the mortgage obligations on those are $460,000 and they’re worth $700,000 each.  In total, that’s $720,000 worth of equity. So $788,000 plus $720,000 gives us a total of $1,508,000, which is $1.5 million. Real estate wise, I have blown past the million dollars mark.  Now this is $1.5 million over twelve years.

It’s very important to remember that real estate is a long game. You play the long game in real estate and you’ll always win. We’re at $1.5 million at the end of twelve years. When we subtract our initial investment and our line of credit of $160,000, our total gain is $1.348 million. You have made nearly $1.35 million for twelve years worth of investing in real estate with $160,000. This initial investment wasn’t even your own money, but other people’s money borrowed from the bank. Through this loan, you were able to leverage yourself into a position to buy these condos. Ask yourself this: how long would it take you through saving RRSPs and mutual funds to hit that $1.35 million mark?

The truth is, it’s a really difficult accomplishment to be made just from saving your paychecks. What we’re doing is we’re leveraging the equity of the home, putting it back into the market, real estate market that is, and then have our tenants to pay down all the costs, to carry ourselves.

At this point you may be thinking, “Alex, you’re lying. There is no way that’s possible. It cannot be possible.”

I’m going to show you my own investment portfolio. These are real numbers from real investments I have made. This is not just me pulling numbers out of thin air. These are real numbers from my own real estate investing.

Alexjwilson.com’s Portfolio

Development

Purchase Price

Current Market Value

Increase in Value

The Carnaby

$262,400

$450,000

$187,600

YC Condos

$244,500

$425,000

$180,500

Minto Westside

$267,490

$440,000

$172,510

75 The Esplanade

$380,900

$520,000

$139,100

Canary District

$579,900

$720,000

$140,000

Total

 

 

$819,710

 

From my own portfolio, the average gains I have achieved are over $160,000. From my initial example, I was using more modest gains of $100,000. My own real gains are much greater than the ones laid out in our path to $1,000,000. These are real numbers that I’ve achieved personally and I want to see you do the same thing. I want to see all of you get ahead in life and this is an achievable way for you to do it. It may seem long and boring, but guess what? At the end of the day you get so much further in life.

We focus of Downtown Toronto condos because of the fundamentals of Toronto - we’re the economic capital of Canada. We have 20% of the GDP for all of Canada in the Greater Toronto Area. We also have 20% of the population in the Greater Toronto Area. So 20% of the economy, 20% of the people and we’re right in the core of it - that’s why I invested right in the core of Downtown Toronto. I have triple A tenants. Toronto is the last market that’s going to be impacted by any downturn and it’s the first market to bounce back. It’s basically rock solid. I want to help you retire early and build generational wealth. Okay guys till next time, talk soon. Bye. Bye. 

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