Buying Canadian Investment Properties From Anywhere

How I buy properties while travelling the world.

As of writing, I just closed on my third property in Canada of which I remotely viewed and removed conditions on from Cartagena, Colombia and am closing from Cape Town, South Africa. The first property I ever purchased I removed conditions on from Machu Pichu in Peru, and my second property I closed on from Puerto Escondido, Mexico. I have never actually physically viewed my properties before buying. Even crazier; two of my properties I have actually never even laid my eyes on at any point since owning them..

Hoping to buy my 4th property from this city, guess what city this is. @miketsolty

And no, it’s not because I am blind!

I do this because I know what I am good at and what I am not good at.

I am not the best person for:

• Inspecting the property and understanding its faults or short comings
• Finding and managing tenants

What can I do well? I can:

• Find a great market to invest in
• Find a great realtor who understands investment properties
• Find a great property manager

By focusing on this, I have been able to acquire three properties in two years entirely remotely from my phone. In this article I am going to lay out my process for you so you can potentially think about this strategy and even use it yourself.

Shameless plug: before diving into it, give me a follow to help me get to 100 followers and back into Mediums paid writing program! Help me write more about investing, travelling & data science! Thanks!

Why learning to invest in real estate from afar is important.

I was born in Toronto, and if I could buy and invest anywhere else in Canada, I would choose Whistler, BC or Vancouver. No surprise to the Canadians reading this, these three cities are the most expensive markets in Canada. For the most part properties in these areas have been priced out as a cash flowing investment for years. Not that this even matters as I have been personally priced out of reasonable properties in these markets by stress test guidelines in Canada so I couldn’t even buy in these markets if I wanted too.

Therefore my options are essentially, move to a market that I can afford (which would be hours away from anywhere I would want to live) or learn how to invest from afar. As someone who is constantly travelling I personally do not have a desire to put down roots in a smaller city or suburb at this time. Therefore my seemingly only option is to become great at remote property investing.

By learning how to be a great remote property investor, I can live anywhere I want (currently writing this from Cape Town, South Africa), and invest where the best investments are (currently investing in Calgary, Alberta). On top of this when I invest where the best investments are, it helps me build a better portfolio that;

• spins off cash flows to pay for my travelling and lifestyle
• is more financially stable which actually helps me acquire more properties rather than hurting my financial ratios and preventing me from getting additional mortgages

In short, becoming a remote property investor helps me build a scaleable business where I can maximize cash flows and borrowing power over time.

So, where do you start?

Step One: Pick Your Market.

First, you have to find your market. Ideally you want to pick a market that you understand and meets the following criteria:

• Has a growing economy: more jobs are being created and salaries are increasing.
• Has a low vacancy rate: demand for rentals is high and increasing.
• You have a strong opinion that the market will continue to get hotter in this area. Maybe you believe immigration is increasing, there are supply constraints or the main job sectors are going to boom. Make an informed opinion and take your bet on it.

For me, I am currently betting on Calgary, Alberta based on the following opinions.

• The energy sector is likely to see a boom in the coming years
• Immigration is going to be very high in Canada in the coming years and I believe a large portion of them will end up in Calgary
• They will not be able to build enough new housing supply at affordable prices which will push resale property prices higher
• The remote working trend is here to stay and because of this more-and-more of the tech community will relocate to affordable markets over time.
• Of the affordable markets in Canada; Calgary offers one of the highest quality of life.

Step Two: Validate Your Opinion.

So now that you have picked your market, the next best thing to do is talk to people who know the market.

I like to always start with searching podcasts as this is one of my favourite ways to learn personally. For example, when doing my research for Calgary I found this great podcast episode on the Calgary market.

The next thing I like to do is to reach out to my network for people who I know are successful in the real estate business or are investors themselves. I do my best to get these people on the phone and ask them their thoughts on;

• the market and its future to get a sense of future appreciation
• rentals and vacancy rates
• what neighbourhoods they think are best for my goals and which neighbourhoods I should stay away from
• great realtors/property managers who specialize in cash flow properties

Ideally, these conversations will lead me to validating my opinions and then also lead me to the conversations with the team I will ultimately build.

Step Three: Build your team.

You have picked your market, you spoke to some local experts, and everything is sounding peachy. Now you need your team who will help you close this deal virtually. You need to fill the following roles on your team:

• Realtor
• Property Manager
• Lawyer
• Mortgage Provider

I am going to break down some of my notes for each of these roles.

Realtor

For your realtor its very important that you are working with someone you trust. Ideally you can get connected with this person through a trusted friend, family member or connection who can vouch for their character and results.

Once you have your trusted realtor, it is important that you are upfront with them on your process. Let them know that you buy properties virtually and have no plans to physically be in there in the process. See if they have helped buyers purchase virtually before and make sure they are comfortable doing this with you. Ask them if there is anything you should know or have to do for your specific market to be able to buy a property entirely virtually.

Once you have confirmed that they can help you buy virtually and are happy doing so, I usually start with asking them to send me their top three investment properties that fit your buying criteria. Given you trust their opinion and their character these are likely going to be your best bets. Setup virtual showings of the properties via facetime and ask the realtor to be your eyes and ears. You’ll need them to take account of and point out any deficiencies with the property that you need to be aware of.

Given that the facetime goes well, my hot tip here is; don’t waste the realtors time and make an offer. Realtors will love you if they are confident that their return on time invested is high. I therefore move quickly and close once shown a property that satisfies my criteria.

Property Manager

This one is fairly straight forward, property managers whole existence is there to help you run your business so that you do not have too. They are therefore perfect for helping you setup your rental so that you do not need to physically be there and just collect your check each month. Property managers typically cost about 10% of your rental income and usually they charge one months rent for helping you find your tenant. With these numbers they collect almost 20% of your revenues (which is expensive), but they help you fully automate your business so that you can travel and live with peace of mind. If your cash flows can afford it, I recommend hiring one.

Lawyer

This is a very important piece, I find its often the legal side of things that can get a little stressful while being out of country. I find that sometimes there a are requirements for wet signatures or in-person meetings or unclear process on sending of funds. This can cause a lot of stress as these things usually pop up fairly close to closing and its costly to miss your closing date.

With this, its very important that your lawyer is 100% confident that they can help you close virtually. The things which you need to make sure this lawyer can help you with are:

• Signing documents from afar (some let you sign virtually, some will let you sign over a Zoom call and then let you mail the documents in)
• No need for in person meetings
• A solid wire transfer plan for getting the funds to the escrow account.

Wire transfers can be very finicky. Some impose $50,000 or $150,000 dollar limits. You will want to have a plan to work around this if you need too.

I also recommend getting the funds sent well in advance of closing. Wire transfers can some times take 5 business days to clear and can get rejected if you enter information incorrectly. I recommend that you send a test wire transfer a month in advance to make sure you have a reliable connection to the escrow account and then aim to get the full amount of funds into the escrow account before the final week of closing.

Mortgage Provider

Also a really important piece here and also a team member you need to be very upfront with about closing entirely virtually. I highly recommend that you work with a mortgage broker because of this. Working with a mortgage broker allows you to have a direct connection to several providers and someone working for you to make sure you get the funds you need to close. Some banks will require in person meetings and this may not become clear until you get close to closing. Ask your mortgage broker to only connect you with providers who will allow you to close without an in person meeting and are comfortable with you signing documents virtually. Some banks are extremely unclear about their policies around this, and there seems to be somewhat of a grey area around what is possible. I find that with a broker you can better navigate that grey area and leverage the brokers existing relationship with the bank to be able to close virtually without any in person meetings.

On a recent deal I had 2 of my 4 options fall off as I was out of the country. If I had not had a broker working for me, then I would have had to put in all my own time finding and applying to those 4 options and have had half of my time wasted. There’s a good chance I would have only applied to one bank as well and had all my eggs in one basket which could have been very risky. Broker’s can get you a great deal and will work hard to make sure the deal closes and they are free! Most of the time their charges are charged to the bank so why wouldn’t you use a broker!

So thats it really. Buying remotely almost entirely depends on the team that you build to help you do so.

Once you got your team in place, find a property that cash flows, meets your criteria, and you are happy holding onto for ten or more years; send it.

Do not wait to buy, but buy and wait.

I get more and more comfortable with this process every time I do it and my only regret has been not starting sooner. So give it a shot get started.

If you have any questions or want to talk further about any of this drop a comment or reach out to me on instagram @miketsolty

All the best!