Refinancing Rental Properties in Canada

Refinancing Rental Properties in Canada: The BRRR Strategy

Whenever I go to dinner parties and meet new people, a conversation starter is always, “So, what do you do.”.

I then go on to tell people that I am a real estate investor and of course as we continue to converse – the questions continue to roll.  

The most frequent question I get is – “where do you get the money to invest?”. Especially when people find out that my wife and I had acquired a multi million dollar real estate portfolio by the time we hit 30 – people are definitely convinced that we must have inherited a fortune.

The truth of the matter is that my wife and I figured out early on that refinancing rental properties in Canada was the quickest and most practical way to grow our real estate portfolio.

In fact, I gave a talk about it at the Toronto Real Estate Wealth Forum and got an overwhelming response.

I like to call my strategy the BRRR – Buy, Renovate, Rent and Refinance.

So let me walk you through my strategy with an emphasis on Refinancing Rental Properties in Canada.

Buying, Renovating, Renting and Refinancing Rental Propertes in Canada

For all those flipping fans out there – think of this strategy as the best of both worlds.

You buy a property that is under market, not moving, no one wants to buy perhaps.  You see the potential.  This is the BUY phase.

Once you acquire the property, you put in the renovation dollars and make it look fantastic.  

Now this is the the exact same as when you flip – because you are turning a not so great product into a fantastic product

This could be simple fixes like painting and replacing old carpets – or it could be something more complicated like creating an open concept in a closed off space!

Now that the property is renovated and looks great, we are going to attract a good quality tenant and RENT for top dollar!

So now this is all done – we have:

A premium property

A premium tenant

What’s the issue? Well – all my MONEY is tied into the property.  Especially the money used for renovations.

BUT WAIT……….there is an upside.

We have increased the value of this property through renovating it, and created some great instant equity.

In fact, this property is now worth more than simply the purchase price + the renovation cost!

Let me break it down for you with a real life example:

I purchased a triplex in downtown Hamilton a few years ago.

Growing my portfolio by refinancing rental properties in Canada.

Triplex in Hamilton

Purchase price $185, 000
Cost of renovations $12, 000
Re-appraised price (2 years later) $283, 000

The beauty about refinancing rental properties in Canada.  

I was able to pull out $85, 000 from this property within 2 years!

And, best of all, I am still getting cashflow of $700/month because I still own the property.

Oh and wait – it is still appreciating.  This property is worth well over $300, 000 today!

So as I mentioned, refinancing rental properties in Canada has been the key to my success and growth.

1 reply
  1. nathan
    nathan says:

    maybe i’m not 100% understanding the brrr technique yet. i own 2 homes – which is 3 rental suites for me. one house is fully rented up and down.
    i have a heloc attached to my mortgage , but if i pull that, i’m charged a mortgage rate % each month. so i continually read these posts how investors pull back out their money…? is that what they are doing? and are just now paying $$ and interest on it

    Reply

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