Canadian Expat Buying IP in Canada Need 35% Down

Hi all.

Long-time eavesdropper, first time posting.

I am a Canadian expat currently living in Aus. About 18 months ago, I purchased a house in SEQ as my PPOR for $285,000. As a conservative estimate, the house is now worth $300, 000. However, I still owe $248,000 on my mortgage. I make $70, 000/annually on a permanent government salary with 2.5% + inflation raises each year. I don't know if I have access to any of the equity yet (its a Westpac Flexi Option Home Loan).

Now, my family still lives in Canada in the town I grew up in. My dad needs a house to rent. He's a licensed tradie and will have steady income until he retires, and then a comfortable pension after that. He would be the ideal tenant.

I figure that I should buy a house there as an investment, as I know the area and would like to hold on the the house long-term in case I return. In the meantime, my dad would rent the house and I'm sure he would even add value to it by doing some reno's out of his own pocket and with free labour. Fixer-uppers can be had for the equivalent of $150,000 AUD. It seems like a no-brainer.

The only trick is, because I'm no longer a Canadian resident - Canadian law requires me to put down 35% of the purchase price as a down payment(FAQ for Buying Property in Canada for Non-Resident Buyers | the BREL team). I don't have $50,000 right now. I'm trying to get creative because I feel like I'm wasting away an opportunity. The cost of houses are going up in the area and in a few more years when I do have the $50,000, 35% might be $75,000. I don't want to over-leverage myself, but at the same time I've already got the perfect tenant lined up long-term and it would allow me to secure property in an area I've always wanted to own in.

Does anyone have any ideas of options or advice?

Thanks.

 

Can you take leave from your job and return to Canada for a while, long enough to make the purchase?
Marg

 

In the first instance I would find out whether in fact you can source finance in Canada. May not be as simple as you think? I don't know, but I would be contacting some of the major lenders in Canada.

I know someone who tried to source finance in US and could not get a reference from a bank in Australia, this was a requirement for the loan also in Canada. Go figure, they had an excellent credit rating.

 

$150k AUD? Where's this place?

To the question you would have to come up with the money for deposit. How long do u think the low prices would last? Can you borrow from your dad who is to rent your place if you bought it?

Does the local bank lend you money for such purchases?

 

@Wayne Gretzky, welcome to PC!

I also heard the rumours that you are pretty good at hockey .

Quite keen to know where in Canada you are interested in buying, all I know is that Vancouver and Toronto's real estate is as or even more unaffordable than Sydney!

PS: I know a Canadian account manager of one of my vendor, and he told me that Wayne scored 7 against him (as a goalie) in high school, and he felt privileged to this day.

 

What sort of loan could your dad get? Could you and your dad buy jointly? Could you and your dad set up a company or partnership to buy the property and get a better finance structure?

 

Partnership with your dad would be ideal however they may not recognise 100% of your Aussie income in their servicing.

 

Hi

I know this is an older post but wondering how you went with this? I am looking to do the same and want to know if it's possible before I get my hopes up. The thing I'm most worried about is getting a letter of reference from the bank.