Getting Into The Real Estate Market With Low Income

Monday Nov 25th, 2019


In 2011, My wife Jessica (girlfriend at the time) and I were living in my parents basement in Brampton Ontario.    She was a full time student at Ontario Tech University (UOIT at the time) and I was working in the security industry making $35,000 per year.  Jessica was commuting from Brampton to Oshawa 5 days per week, sometimes more especially during exams.  She was becoming exhausted of the commute and decided she couldn't do it anymore.  She wanted to move to Oshawa and decided to start looking at rooms for rent in and around the University.  So over the course of 2 weekends, we made multiple appointments to view student rentals.  To put it softly, the ones we viewed were absolutely disguising and expensive.  At that point, we wanted to see if there was a way we could buy a place instead of her having to rent.    On top of relatively low income,  I had credit card debt and a car payment.  I called a mortgage agent to find out what I could quality for if I were going to apply for a mortgage.  I was told that based on my current situation, i would be able to get around $100,000.  I remember feeling defeated as we would not be able to buy anything in that price range.  

We decided to approach my parents to see if they would be interested in purchasing a property with us (since they already had 2 investment properties in Brampton) and using this as an investment property.  To make things work, we would live in 1 room and rent out the other rooms.  Well, this was probably the best decision we made because in a period of approximately 6 months we had researched, purchased and rented out our First Property.  It was phenomenal as we were living for free and making a profit every month.   It was a 3 bedroom house, which we converted the living room to a bedroom and added a bedroom in the basement.

In a matter of 1.5 years, we were able to refinance this property to pull money out and purchase a Second Property.  This time, we were living in our own basement apartment and renting out the upstairs to students.  We had 4 bedrooms upstairs which we were able to rent out individually for a total of $2100 per month.  With the positive cashflow from the first property and money from the upstairs tenants we were living for free once again. 

Fast forward 2.5 years and we stumbled into the Tribute sales office and saw that they were selling Semi-Detached homes in the high $300,000's.  We felt that was a great deal and wanted to purchase one as it wouldn't be ready until February 2017.  The only problem was they sold out and were not doing another release for a few months.  The sales lady, Rhonda was her name mentioned that there was 2 semi detached that were purchased by 2 brothers that were still conditional on financing and that if it fell through she would call us.  Well Sure enough, a few days later she called to say that both brothers backed out of the deal and there were 2 units available.  We went in almost immediately and walked out having secured a brand new 4 bedroom, 1600 square foot semi detached "Tribute Built" home.  

Due to the fact that my parents helped us get started in all of this and it was a great partnership, all of our real estate was set up so they were 50% owners and my wife and I were 50% owners.  

About 6 Months after purchasing the Tribute Semi, we Stumbled into the Minto Sales Office directly across the street from the Tribute Sales Office and Saw that they were releasing detached homes for a reasonable price.  This got my wife and I talking about perhaps buying our first property alone that would be our actual home.  We kept in contact with the sales office and found out that on Saturday August 1, 2015 they were going to be releasing 13 lots.  Since my wife had to work that Saturday, I stopped by the sales office on Thursday to grab the flyers showing all the different homes we would be able to choose from.  To my surprise, there was already a line with 5 people waiting.  I couldn't believe it as i had no intention of staying there from Thursday afternoon until Saturday morning but felt i had no choice.  So I called my wife and let her know the news.  When she was done work she came to visit, brought a whole bunch of McDonalds McDoubles burgers and stayed with me most of the time.  I would leave for a few hours while she kept our place in line.  Why were we there the whole time you may wonder? The rule was if someone left, their name would be scratched from the list.  It was very cut throat and people who were 14, 15,16.....In line made sure it was enforced.  At that time, that was their only hope of getting a house.  Saturday came and we went in to select our house.  We were beyond excited and now couldn't wait to move.  Closing date was June 2017.  

In late 2016, we realized we needed the equity from our investment properties and decided to sell 3 of the 4 properties we owned.  which gave us our down payment.  We moved into our Third Property the Tribute built semi in February 2017 and had it listed by end of April.  This was just as everything was going insane in the housing market.  Properties were going for way more than they were being listed for.  We ended up selling this and the other 2 properties all over list price, getting way more than we expected.  Things were looking good.  Then we get a random phone call from the CRA asking us questions about our intention when we bought it and if we could prove that we actually moved into the house.  They were trying to see whether or not we would have to pay back the HST portion which is usually included when buying new construction.  After a lot of back and forth and sending documents, we were told that they were satisfied that when we bought it, our intention was to live there.

In June of 2017, we moved into our new home and couldn't have been more excited.  It was more than enough room for our growing family (Myself, Jessica, Daughter Elena, Son In The Oven - Deacon and Dog Riley).  When We moved in, We couldn't believe that 5 years prior, we were living in my parents basement with no immediate plans of owning our own home.  It felt like such a reach for us as I was not making the greatest money and Jessica was a full time student. 

The main purpose of this long drawn out story is to demonstrate that there are many different paths you can have to home ownership.  Some people have been saving for years, others reach out for help from family members, others use RRSP's, some use the government down payment assistance programs.  At the end of the day, as long as your not cheating or stealing from anyone it does not matter how you get to the point you want to be.  For my wife and I, we chose to get help from my family.  On top of this we lived a very un traditional life where we lived in 1 room of a student rental sharing the house with 4 other people.  Then living in a basement while we rented out the top level to students.  In the period from 2012 - 2017 we moved 4 years.  In our case, it was hard work but it paid off in the long run.  If we followed the traditional path, we may not be home owners to this day, or maybe we would have.  Its hard to see what would have happened, instead we can just focus on what did happen.  

In Closing to this long post, i just want to motivate those who have dreams of home ownership.  You may not be able to tell your story yet, but there are so many paths out there that you can take to get a home that it is more a matter of which path are you going to take?  If you need help seeing your path, reach out any time as I am always more than happy to help you out, listen and maybe throw some options to you that you may not have thought about.  

Oshawa has been vary good to my family, so if you are looking at different cities to live in, perhaps Oshawa should be at least a consideration.  For a video I made on10 things your going to want to know about oshawa Click Here



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