Thursday, September 16, 2010

Grass roots Ontario

I have been investing in real estate since my early 20's, I started doing this at time when money was scarce, and against all of the advice of the people close to me. At the time, I had limited funds available, and the real estate values in Ottawa were out of my reach. I had a difficult time qualifying for a mortgage that was high enough to purchase a reasonably good quality property.


I had a friend at that time who lived in a grass roots community approximately 45 minutes outside of Ottawa. He told me that values in his community were far more reasonable, and that rents were comparatively high in relation to Ottawa. Before long, after some due diligence, I purchased my first triplex in the town of Smiths Falls for $118,000. My cash flow at the time was approx $750 per month, and the rents were slightly below market. Through turnovers and renovations, I have managed to get my cash flow up to the $1000.00 mark.

At that point I began to realize a great opportunity for myself, I was making money in a place where the average investor from Ottawa wouldn't think about going. I didn't have any bidding competitions for the properties I was purchasing, I was able to afford to invest there, and it really wasn't a big inconvenience to own property out of town, I managed to make good contacts with people who could do repairs for me, and go to my property when I needed them to.

This opportunity in grass roots Ontario is what sparked my real estate investing career. From there I began purchasing investment real estate in Brockville, Prescott, Cardinal, and Newington. After 6 years of experience, cash flow, and knowledge, I began to invest in Ottawa real estate. Until this day however, my primary focus is still on small town Ontario "if it makes sense once, it makes sense 100 times." So today I own close to 100 doors and growing, and approximately 90% or more of my assets are within a 1 hour drive from Ottawa.

I just want to say thanks to Greg and the team at Bennett Professionals for all their help in building my business and helping me retire in my early 30s.

Stefano

2 comments:

  1. Wow! This is an incredible story. I am anxious to purchase my first property, and I am considering going the route of an owner occupied duplex or triplex in ottawa. After this, my goal is to acquire additional properties as soon as finances permit. In my searches of MLS thus far I have been focussing on properties in central ottawa. However, high prices and the new mortgage rules will certainly hinder my ability to purchase additional properties. I had not considered looking outside of ottawa. My concern would be my limited knowledge of these local economies. I would imagine towns with post-secondary institutions would be the safest bet. Is there information available on vacancy rates in these small towns?

    Regards,
    Stefan

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  2. Stefan,
    I have many clients who live in an apartment and own investment real estate they rent out.

    Multifamily properties in Ottawa are very pricy. These properties are long term equity growth, not really cash flowing. Outside the city is more of a cash flow option.

    I do like properties in smaller towns/cities that have post secondary institutes but that is not always mandatory.

    For vacancy rates, CMHC is the best option. We can get together to discuss more fully, email me at gblok@kwottawa.ca

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