How we bought a triplex, without any of our own money - Part 1

First things first, I want to start with an apology. If the title of this story comes across as though we have an ego or vanity issues, please know that it’s not meant to! Really, it was just a name to capture the entirety of fully-repeatable story that we created. A story that we hope will introduce you to a whole new level of thinking and create awareness about awesome (and mostly undiscussed) ways of finding freedom and building wealth. This is our real-life, personal story about how we bought our first triplex for nothing.

Specifically, the story is about the purchase, renovation and leasing of our first multi-unit residential income property - from A to Z. Before we even get into the “what” and “how”, I think it’s important that you understand the “why”. Why do any of us invest? Why did we choose this type of investment? The answer isn’t as simple as “to make money.” Most flippers would confess that making money is their only motivation. That’s not us. That’s not our story. That was never going to be our method. 

No, this story is about creating independence, security and freedom. It’s about creating a legacy for our kids. It’s about creating passive income so that we can supplement our own incomes and give our little girls a leg up in the future. Will our kids be able to buy their own place when they want to - for themselves or even for their families? With the way things are headed, we don’t think so. We want to provide for our kids - while we’re here and after we’re gone. We can’t think of a better way of accomplishing that than by owning price-appreciating, cash-flowing, debt-decreasing real estate.

It’s a long story, but it’s a great story. Spoiler alert: we weren’t able to “buy” the house without some of our money. Someone had to finance it. At the end, you’ll see how we got every dollar invested back, we have unlimited upside potential and we created tremendous wealth in the here and now. 

Annual Reset

Much like all of you, once in a while (at least annually) we take stock of our investments and our assets. Usually when that happens, it gets us set up to have some meaningful conversations about life, goals & objectives. 

We’re property owners, investors and landlords. We own our family home. As our wealth builds over the years, we find new opportunities that we weren't ready to understand or consider before.

You know when you go on vacation and you think, "we should buy here, we can make this work!" Well, we’re no different. We've played around discussing owning a vacation home (if it can rent out and carry itself). We’ve toyed with this idea in different places while we’re there on holiday. Usually after a few days, we end up talking ourselves out of doing anything along the lines of buying. There are definitely some cool opportunities, but we see too many negatives, too many holes, for our liking. For one, it's too far from us to manage. The lack of control would kill me.

Picking the right investment type for us

Coming into 2016, we had one option that really, really, really sounded amazing. Specifically, we wanted to buy and hold a multi-unit residential house in Toronto. I’ll explain why as we go through this - just wanted to provide some background and context into who we are. We’re not professional real estate investors (yet) - but we’re BIG believers in perpetual passive income investments. We don’t want to rely on a government program or an RRSP on its own to cover all of our travel expenses as we age, or to take us skiing, or to help us live a very comfortable retirement. Chances are very likely that won’t happen for us. We wanted to take matters into our own hands.

As a real estate broker, I see the wealth that real estate investing has brought in for us and my clients. I minored in Finance at university. I understand investment vehicles - the pros and cons of each. I can interpret returns on investment, I can assess risk — all that stuff. Let me tell you, I haven’t seen ANYTHING that compares with the returns & safety offered by real estate in an active market. Has it been the best investment around? I’m sure it’s not, I’m sure someone can point me to a stock that has appreciated 1500% in a year. Great. I think that’s wonderful. You can’t predict that, though (and neither can a stock broker, by the way). And there are plenty of similar assets that lost a LOT of wealth as well. I think that, given the current climate in Toronto, for our investment dollar, I’d much rather put that towards a real estate investment than any other type. Not just any real estate investment, but a multi-unit residential home (duplex/triplex).

Here’s our goal: we want to own at least 10 properties in 10 years. It's not an ego thing, it's a financial freedom thing. Is this possible? Can we pull this off? Where there's a will there's a way!