How can I buy a rental property with zero down payment?

Well, this is a question we get from a lot of our investor questions who are looking to start with real estate, or they bought a second property, a third property, and now they wanna grow their portfolio.

Well, if you've lived in a home in the GTA for the last five years, your property has now doubled.

If you bought your home a year ago, you've made about a 25% return or appreciation in your property. So assuming your home was worth $800,000 last year and it has now appreciated to $1 million, there's $200,000 of built-in equity.

This is where you're gonna find your down payment for your second property.

So what do you do? You're gonna go over to the bank, your bank, and you're gonna talk to them about refinancing your property and pulling out the extra equity that you will now use, that $200,000 that you will now use, as a down payment towards your second property. Okay?

So that becomes the down payment and then the bank finances the rest of it as well.

So you basically have two mortgages, one for 200,000, and assuming the other property was also a million dollars, you'd have another $800,000 mortgage. Now, what happens then?

Your ideal objective is to have your tenants pay off all of your mortgages.
Your ideal objective is to have your tenants pay off your property taxes and your insurance.

This is relatively easy to find in investment properties, if you're going a little bit outside of the GTA.

So your ideal objective now is to have your tenant pay off all your mortgages.

So your tenant will pay off your mortgages, your tenant will pay off your property taxes and your insurance. This is called a cashflow neutral property where all your expenses are paid off.

Your utilities are usually covered by your tenant. So now fast forward this five years from now, you've got a mortgage that's been paid off, I dunno, 10, $15,000 a year. So fast forward that for five years and you've got some built-in appreciation, assuming it was, say, 5% a year, 5% of a million bucks is $50,000.