So how am I going to own a condo and a house within the next five years?
Assume in 2019, I would be able to get a 4.79% five-year fixed closed $150,000 mortgage amortized over 25 years for my condo. The monthly mortgage payment would be $855
After three years, there will be $139,897 left in my mortgage. Picture is from the CIBC Mortgage Calculator:
In addition, I will be estimated to qualify up to $219,000 of Home Equity Line of Credit assuming the appraised value is $550,000. Picture is from CIBC Home Equity Calculator:
As a result, I will rent out my condo for about $2,500 a month and I will end up having $645 of cash flow every month assume my property expense is $1000 (40% of rent).
To purchase the house, I will take out $210,000 of my Home Equity Line of Credit to purchase a property that will be worth $700,000 (this is an estimated average home price in Ontario in 2022).
Assume I will obtain a 4.79% five-year fixed closed $490,000 mortgage amortized over 25 year, the monthly mortgage payment is $2792. Picture is from the CIBC Mortgage Calculator:
I estimated by I could collect a monthly rent (including my share) would be $5000. Therefore, I end up having $208 of cash flow every month assume my property expense is $2000 (40% of rent).
For the next five to ten year, I will use my cash flow and my saving from my job to pay off the debts and to invest in stocks, mortgages and bonds to build my portfolio. I do not want to dig myself into a big hole if a financial meltdown happens.
Feel free to comment below of your opinion on my plan. Catch you in a flip!