Explained in 5 Min: With Only $25K I Bought 2 Detached Houses in Toronto Worth $5.5 Million
EVERY PARENT SHOULD watch this video and make their children watch it
OR
EVERY child should watch this video and play it for their parents.
How I currently own 2 detached houses in Toronto valued at $5.5 Million Dollars.
Let me take you on this journey:
1) Step 1 in 2012 I took $25K out of my RRSP and purchased my first condo for $475,000:
a. I was 30 years old at the time and single.
b. It was a 2 bedroom and I rented the second bedroom to a friend for $900 a month.
2) Step 2 in 2016 I was engaged, and my fiancée was living with me so we sold the condo for $630,000 and purchased a house.
a. Instead of purchasing a single family detached for $1,200,000 to $1,400,000 which we were approve for a mortgage we purchased a triplex for $1,600,000.
b. I needed an extra $100,000 so I put a business case together and borrowed $100,000 from my mother at a 10% interest rate.
c. I could do this because the house generated rent of $5,180 per month gross rent.
d. The total carrying costs were less than the condo even with the 10% interest payments on the $100K.
e. In Sept 2016 we moved from our 2 bedroom 2 bathroom penthouse condo in queen west into the 1 bedroom 1 washroom basement apartment of the triplex with our 2 dogs.
3) The following year moved from the basement to the main floor unit and welcomed our first child. We also refinanced the house and paid off the loan to my mother.
4) In 2019 we welcomed our 2nd child. We were now a family of 4 living in 900 sq. ft. on the main floor unit of the house.
5) In 2020 pulled more equity from the house and we renovated the 2nd floor unit and added a 3rd floor in the attic and moved into that unit. In 2021 we welcomed our 3rd child. We were now a family of 5 living plus 2 dogs in the 2nd and 3rd floor units of the house.
6) In 2022 we refinanced the house for $2.5 million dollars. Through that refinance we were able to buy a new $3 million dollar house without using any of our own funds. We then rented the triplex for a combined $10,750 on gross monthly rent providing $1,250 per month positive cash flow AND I signed these mortgages in July 2022 – no mortgage rate discounts for us.
Conclusion: YOU CAN DO IT
In 30 years when I am 70 the triplex will be paid off and worth over $6 million at a very conservative 3% compounded annual growth rate. Plus our primary residence would be worth nearly $7.3 million. All for an investment of $25,000.
Moral of the story – stretch yourself and buy a property with income potential.
Tips From Alex J. Wilson:
If it’s a condo buy a two bedroom and rent the second bedroom.
If it’s a house buy a duplex or a triplex and live in the basement.
If you need money – approach your parents/family/friends and make a business case for them.
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