Real Estate

Could I buy a third property?

  • Last Updated:
  • May 8th, 2020 5:45 pm
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[OP]
Newbie
Jul 24, 2016
5 posts
1 upvote

Could I buy a third property?

Hi
First time poster.
Due to work commitments, I ended up with two properties bought my first and then work location moved within three months.

Property one valued at 350k. Owe 240 rented out for 1650 positive cash flow $50 pm

Property 2 valued at 400k owe around 350. Monthly cash outflow about $2300. If rented could probably get $2100 for it.

I have about 100k in liquid assets and a salary of 90k.

I was thinking of moving closer to my parents and buying a place between 4-500k. I would do a 20% dp.

Is this doable? Any specific lenders that would be favourable for this situation?

Thanks in advance
5 replies
Deal Guru
User avatar
Mar 23, 2008
11906 posts
8172 upvotes
Edmonton
mikemake2 wrote: Hi
First time poster.
Due to work commitments, I ended up with two properties bought my first and then work location moved within three months.

Property one valued at 350k. Owe 240 rented out for 1650 positive cash flow $50 pm

Property 2 valued at 400k owe around 350. Monthly cash outflow about $2300. If rented could probably get $2100 for it.

I have about 100k in liquid assets and a salary of 90k.

I was thinking of moving closer to my parents and buying a place between 4-500k. I would do a 20% dp.

Is this doable? Any specific lenders that would be favourable for this situation?

Thanks in advance
My advice is to talk to a mortgage broker (there's several on this site; check the Mortgage Rate thread at the top of this forum) and get the right answer based on your actual situation. You've got one property at basically break-even, another one cash-flow negative, and you're talking about using most/all of your liquid resources for a down payment. Seems like you could get in trouble quickly if you had some tenants not pay rent for a few months.

C
Deal Addict
User avatar
Jul 8, 2010
1405 posts
1098 upvotes
Ontario
i guess is douable (after you follow advise from CNeufeld), the only thing you need to consider is to consider the risk if somethin goes wrong. What is the impact in that case? Just look at worst case scenario and see how long you can support it, in various cases. Or at most probable case and decide accordingly.
Jr. Member
Aug 21, 2017
195 posts
132 upvotes
No. Your total mortgage under B20 is only 400k~500k. You already maxed that out.

Only way to get a loan is from B lenders.
Deal Addict
Aug 28, 2010
1237 posts
312 upvotes
Toronto
What my lender told me is rental property is added into your ratio at 50%. so if you earn (p1 1650 + p2 2300) * 12 = $47K /2 = $23.7K Added to your income

You make $90k + $23.7k of potential rental income (after the 1/2) = * 6 = 682k of mortgage
obv this *6 isnt ideal and really *5 is ideal.

Then they look at debt/service ratios but thats all BS with the right broker.

You already have 590k mortgage ... i think you can leverage another 100k mortgage wise from my experience. Dont think that is enough for you for 3rd property @ 400k
Deal Guru
User avatar
Mar 23, 2008
11906 posts
8172 upvotes
Edmonton
porchemasi wrote: What my lender told me is rental property is added into your ratio at 50%. so if you earn (p1 1650 + p2 2300) * 12 = $47K /2 = $23.7K Added to your income

You make $90k + $23.7k of potential rental income (after the 1/2) = * 6 = 682k of mortgage
obv this *6 isnt ideal and really *5 is ideal.

Then they look at debt/service ratios but thats all BS with the right broker.

You already have 590k mortgage ... i think you can leverage another 100k mortgage wise from my experience. Dont think that is enough for you for 3rd property @ 400k
Different lenders have different rules, which is why you need to talk to a mortgage broker or your own lender.

C

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