What are the infinite ROI opportunities?

What are the Infinite ROI opportunities?

Free property – is it possible?

We all know that buying real estate requires money. Technically there ‘no money down’ deals do not exist. Infinite ROI (Return on Investment) is when you have zero of your own money in the property you own.

When you purchase a property you traditionally need to bring 20% down. Often, smart renovation can force the value of the property up by a significant amount. Two-unit, three-unit property conversions are examples of increasing the value of the property by substantially more than the cost of renovation.

Step 1 – Purchase

If you manage to put down less than 20% down-payment, your goal of getting infinite ROI becomes a little easier. For example, sometimes the seller of a property will be willing to offer VTB financing (Vendor Take Back), which is a small loan provided by the seller and secured by the property you bought from them. Combined with the bank’s financing, you may be required to put down less money, but this is rare.

Step 2 – Renovate / Build Second Suite

The next step is to complete renovations and build an additional new unit. The process may take 8 to 10 weeks. You will need to get an experienced team and apply for building permits. It is important that the property is properly located and zoned to allow the building of additional suites. The city will provide you with a building inspector to make sure everything is built to code, with electrical inspections done by another inspector. In the end, you will receive an occupancy permit, and newly constructed units can now be advertised and rented out.

Step 3 – Refinance

Once you have turned the property into a legal duplex and rented it out, you can now refinance. Refinancing is the process of getting a new mortgage and paying off the old one now that there is additional equity in the property. The bank will appraise the property to determine the new value based on the income from two units. When the new mortgage is funded, the original smaller mortgage is paid off, the difference is then paid back to you which will recoup all the renovation costs as well as some of the initial down-payment.

Step 4 – Enjoy Infinite ROI

There are a few variables here which may play in your favor – if the purchase price was a very good deal and well below market and the renovation costs were low, and bank’s appraisal value was high, then you may have a ‘free’ property by the time you refinance. Otherwise, all you need to do is hold on to the property and wait for about three years. There is a great chance the property value will appreciate, allowing you to refinance again pulling out more than what you initially invested. From this point, you will have infinite ROI – you no longer have invested funds and all future gains make your returns infinite.

The Math

To illustrate the point, here is the breakdown on numbers:

a Property Purchase Price 430,000
b Appraisal, inspection, legal costs 2,900
c Land Transfer Tax 5,075
d Mortgage 344,000
e Total funds required (including downpayment) 93,975 Initial investment
f Renovations (including carry costs for 3 months) 80,000
g Appraisal, penalties and legal fees 5,000
h Total cost (purchase, closing costs, renos, refi costs) 522,975 (rows a+b+c+f+g)
i New value (after appraisal) 600,000
j New mortgage advanced 480,000
k Remaining invested funds (after 3 months) 42,975 h-j

Assuming just the minimum 3% of appreciation over the next three years, we can refinance again. See the breakdown illustration below (mortgage 3.5% with 30 years amortization):

1 Year 1 appreciated value 638,000
Year 1 mortgage paydown 9,251
Total gained equity after year 1 47,251
2 Year 2 appreciated value  657,140
Year 2 mortgage paydown  18,830
Total gained equity after year 2  75,970
3 Year 3 appreciated value  676,854
Year 3 mortgage paydown  28,746
Total gained equity after year 3  105,600

If you refinance after Year 3 your new mortgage will be $540,000 and after paying off the original mortgage you will receive back around $83,000! Your property is now ‘free.’ Remember to be careful when making a decision on how much to refinance a property for. It must have cashflow, and if your tenants are paying low rent, you may want to hold off the decision of refinancing until a tenant turnover occurs and you can start renting at current market rents.

New value (after appraisal) 675,000
New mortgage advanced 540,000
Old mortgage balance 451,254
Appraisal, legal costs to obtain new mortgage 1,700
Net funds received 87,046
Net finds received – invested funds (from year 1) 44,071

If this strategy speaks to you, it is advisable to obtain a three-year term mortgage when you refinance that first time after renovations to avoid break penalties.
I have implemented this strategy with my partners in the past — my investors and co-venturers are enjoying infinite ROI and are ready to reinvest initial capital to continue building their wealth. We still own every property together.

Contact @Vlad for more information on partnerships.


How to create ‘cash flow positive’ property

How to create ‘cash flow positive’ property ? When you purchase an investment property, your main goal is to maximize ROI, and the best investment property to reach that goal is the property that cash flows positively.

The proper way to calculate cash flow is to add up all collected rent from the property and subtract all expenses. The expenses that should be accounted for are:

  • Property Taxes
  • Mortgage Payments
  • Insurance
  • Property Management (6% – 10% of rents collected)
  • Condo fees (if applicable)
  • Utilities (if paid by landlord)
  • Maintenance (3%– 8% of rents collected)
  • Second mortgage/HELOC payments (if applicable)
  • Vacancy (2.5%)

The more rent you collect, the better chance the property will cash flow positively.


In Ontario, it is extremely difficult to find turnkey cash-flowing properties. We at Forward Investments Group realize this and instead, we create such a property ourselves. The simplest way to achieve this is to buy a single-family home in the right zoning and add a second suite – usually in the basement. Single-family starter homes in any city in Ontario would not cash flow with a mortgage secured against it, so to combat this, we buy a property in a good area with proper zoning and build additional units to generate extra income.


Once the second unit is created the financials will look like this:

The mortgage payment in this sample is based on a 3% 30 years amortization and a total of $464,000.00 for the initial amount.

Vacancy and maintenance provisions are not every month’s expense, so they are also extra cash flow.

Without a second unit, this single-family home would rent for $2,400, meaning it would cash flow negatively by -$500 every month.

Highly profitable BRRR strategy

To achieve higher rents, we utilize the strategy known as Buy – Renovate – Rent – Refinance (BRRR).

Here is the flow:
  • Buy a single-family home
  • Renovate and add a legal second unit
  • Rent both units out
  • Refinance – the property will be valued a lot higher which will allow you to get all your renovation capital out plus some of the down payment funds

Below you can find an example in numbers:


As you can see, after renovation and refinancing, the investor in the example is getting back most of the money and some of the initial down-payment. The new equity being generated is about $58,000 which is obviously substantial for just 2 to 3 months’ work.

I trust you learned some valuable information about “How to create ‘cash flow positive’ property”

Please contact Vlad and book a no-obligation free consultation to learn more and to get ahead in creating cashflow positive properties.


Why CMHC’s new rules is a good thing for investors

Why CMHC’s new rules for mortgage qualification is a good thing for investors. The Canadian Mortgage and Housing Corporation (CMHC) has announced changes to its coverage criteria for insured mortgages. These changes could make it more difficult to qualify for a mortgage in Canada.

CMHC is the country’s largest issuer of mortgage default insurance, which protects lenders if a borrower cannot make their payments. Mortgage default insurance (often called CMHC insurance) is required on any mortgages with a down payment of less than 20%.

The changes — which are mainly to CMHC lending rules — are predicted to make it harder for aspiring home buyers with down payments of less than 20%.

These changes will go into effect starting July 1, 2020. The impacts of each of these points are discussed further below.

Less Home Buyers Means More Renters

Simply put, there will much fewer first-time home buyers hunting for a new home. With purchasing power lowered down to 11%, those who planned to jump into homeownership may have to wait longer.

We want the renters to… stay renters! We provide housing to them, making them our customers. Every time there are changes affecting the buying power of wannabe homeowners, it always an opportunity.

Rental Units Shortage Will Continue To Drive Rents Up

With fewer people buying homes and continuous pressure being put on the rental housing market, the rents will be pressured to go up. This is a simple rule of supply and demand. I had a tenant recently who was looking to move out of my three-bedroom unit into a new rental home with more bedrooms and bigger space for their family. She struggled to find such a home for a long period of time and was ready to pay a premium because there was no inventory. There were no units available with those that appeared on the market being snatched up quickly at the above-asking price.

The housing crisis from pre-COVID time did not go anywhere, and it will only be amplified now that things are reopening.

For an existing rental inventory, we should be happy if tenants decide to move out in order to be able to charge higher rents even when it may seem counter-intuitive during the ongoing pandemic. With increased rental demand and low inventory, renters are forced to compete for those few units available.

Starter Homes Get a Price Boost

At the same time, there will be a bigger fight for the lowest-priced homes which are typically starter homes under $500,000 as well as condos. These properties will get a boost in valuation. If you have an underperforming single-family home it is a great time right now to make some updates to it and sell at a premium. The capital can then be reinvested into a better performing multi-family property with a higher projected ROI.

I trust you enjoyed this article about “Why CMHC’s new rules is a good thing for investors” for more information please contact VLAD MAEVSKIY CEO and Founder of Forward Investments Group Inc.

See a huge difference in your retirement

By buying just one income property today you will see a huge difference in your retirement. The simplest way to add to your retirement today is to buy a single investment property. In 25 years, the property will be fully paid off, giving you the choice of either adding its rental income to supplement your retirement or selling it and capitalizing on its increased value.

As an example, let’s say you buy a duplex today in the GTA within a one-hour drive of Toronto for $550,000 CAD. With rents for main level and basement apartments at a conservative $3,000 plus utilities, conservative average yearly appreciation of 3%, and a yearly rent increase rate of 1.8%, the numbers will look like this:

1$566,500 $3,000
2$583,495 $3,054
3$601,000 $3,109
4$619,030 $3,165
5$637,601 $3,222
6$656,729 $3,280
7$676,431 $3,339
8$696,724 $3,399
9$717,625 $3,460
10$739,154 $3,523
11$761,329 $3,586
12$784,168 $3,650
13$807,694 $3,716
14$831,924 $3,783
15$856,882 $3,851
16$882,589 $3,920
17$909,066 $3,991
18$936,338 $4,063
19$964,428 $4,136
20$993,361 $4,210
21$1,023,162 $4,286
22$1,053,857 4,363
23$1,085,473 $4,442
24$1,118,037 $4,522
25$1,151,578 $4,603

It is of my belief that this may be the simplest investment strategy ever created! It looks quite enticing to be able to have a choice of pocketing $3,500 or so of rental income after expenses to live comfortably off of just one property or to sell the asset entirely and travel the world off of its increased value.

If you are skeptical that the property would not appreciate so much, ask your realtor how much your current home was worth 25 years ago!

You can even go further from the GTA and find markets where the prices are lower with good economic fundamentals and growth potential, and then find a property management team to look after it. Here how the results in 25 years will be for properties which are now priced at $250K, $350K and $450K for comparison:

  • $250,000
  • $350,000
  • $450,000
  • 1,600
  • 2,000
  • 2,500
  • $523,444
  • $732,822
  • $942,200
  • YEAR 25 RENT
  • $2,499
  • $3,124
  • $3,905

With this in mind, you can see that you can make it a goal of buying just four homes at $250K and enjoy $8,000 of supplementary income in 25 years. Buying at 20% down payment, you will only need $200,000 (plus closing costs) to invest today.

I trust the insights gained form this article about “How buying just one income property today can make a huge difference in your retirement” has your interest levels at an all time high.

If you are interested to see a huge difference in your retirement, Schedule a Discovery Call to Learn More About Joint Venture Opportunities.