Property SEVEN

Our Seventh Property Purchased: London, Ontario December 2006. I love this property. I know anyone looking at this would wonder why because it is so heavily cash flow negative. I would think that. However, I found this property located in London's most attractive neighbourhood. Right square in the middle of it. And the sellers needed to get out as they had committed to another purchase firm and absolutely had to sell. I watched as the price fell during the holiday slow season and made an offer.

We had no down payment though. That was our major obstacle. But we factored the current bank rates on the full 100% purchase price and it cash flowed well. And that was setting the rent below market as determined through our research on other SFH in the area and their current rents.

In the end, we got 100% financing through a risky higher interest trust company and we made the conscious decision to go cash flow negative for a couple of years until equity built up and we could move the mortgage to a better place with proper bank interest rates and thus lower payments. Plus, we figured that we'd be saving from our paychecks each month about $300 anyways as means for a down payment for the same type of opportunity. This just meant we got property ownership on a great piece of real estate earlier.

So our objective with Property SEVEN was/is to suffer through the negative cash experience for a couple of years, then transfer to a lower interest place with lower monthly payments where rent will service all expenses.