June 2026 - Money Machine - Starting Out

I remember the first house I ever sold as a Realtor. I was at a small house party, and a young man came up to me and said, “You’re in real estate, I understand.” “Yes, I am,” I replied. “Well, I’m interested in real estate.” I thought he meant he was interested in getting into real estate as a career. That’s all I knew. I had just gotten my salesman’s licence that day. I started to explain to him how to take the licensing courses when he said, “No, I’m interested in buying real estate.” In town, I was aware of a wonderful duplex that was on the market. It was a raised bungalow. All brick. But it was also set on a hillside so that the entire back of the lower level was above grade with a walkout to the rear yard. I showed him the property, only that property, and he bought it. After the sale, I was a little worried. Not about the property. It was a wonderful property. I would have loved to have bought it myself. But I was concerned because this guy had bought totally on my recommendations. What did I know? I had only been licensed one day. I expressed my concerns to my manager, and I still recall his wise advice. “Don’t worry, he’ll thank you for it.” And he was so right. I don’t know, after all these years if that man still owns that property, but I do know that he did well by buying it. I have always been a big believer in rental real estate. Right from the time I was a student and bought a student rental house. And shortly after I began my teaching career, I bought two duplexes in one day. And when I moved back to St. Catharines to open a RE/MAX office, one of the first things I did was to buy a triplex to live in. That was 40 years ago, and I still own it. Time and again, when working with a young couple first starting out, I counsel them to buy a duplex or triplex. Some of them get it, some don’t. Occasionally, I’ll have one say to me, “I don’t want tenants.” Well, I say, “you are a tenant now. Wouldn’t you rather have tenants than be one yourself?” “No” they reply. “I want to start out where my parents are at. If I can’t do that, I’ll just keep renting.” They miss it altogether. We hear a lot today about how housing prices make the dream of home ownership unattainable for today’s youth. But that’s not true. Not if they start out with a multi-unit building. If you are a parent encouraging a young son or daughter to get started in home ownership and perhaps ever helping them out financially, you would do well to steer them in this direction. Look at the numbers for a minute. Right now, you can buy a pretty good duplex or triplex at about $250,000 per unit. That’s $500,000 for a duplex. About what you’d pay for a single-family starter home, or about $750,000 for a triplex. The mortgage might seem high at first glance, but with one or two rents coming in every month, your monthly outlay is relatively minimal. About the same as rent or less, perhaps. A lot less than you’d pay to carry the loan on a single-family home. And with that additional cash flow, you can either work diligently at paying down the mortgage or save it to use as a down payment on your next purchase. Then, when the time comes to make that next purchase, don’t sell your original multi-family. Keep it as the first in your investment portfolio. In fact, you may even choose to refinance it to add funds for the subsequent down payment. But don’t sell it. Yes, real estate can seem expensive today, but approach it right by buying a multi-family, and you’ll see how relatively easy and profitable it is to get started. And it just keeps getting easier from there.