How do we tap into the first-time investors hiding in your database?

Joel Olson • January 20, 2022

(*What's your preference? Listen to the podcast above or read the blog post below)

Did you know that most first-time investors are right under your nose?

There is a lot of media around the idea that investors are scooping up rental units and houses all across the province.


But what if I told you that on our side investors are not some lucrative big city investor with millions, millions of dollars?


What if I told you they're not people that are Uber wealthy, but they're actually the clients you’ve served over the past 24 months. 


In fact, our data shows that almost 80% of the clients we've served in the last two years are in a position since when they were first time homebuyers can now become first time investors.


And this is not a bad thing. 


The idea that a first time homebuyer can build their wealth, especially when many of them tend to be quite young, by buying a rental property is extraordinary.


And we do ourselves a disservice by not reaching out to our buyers in the last two years and seeing if instead of selling a house, we can help them buy their second home. 


Imagine if you can gain a whole book of clients without having your previous clients have to sell their home but having them keep what they have. 


The only thing stopping you from doing that is most clients don't even know where to start.


But with huge equity gains in the last 24 months, the majority of people have enough equity for us to leverage their current home to buy a rental property. 


With the increases in rental income being derived from most rental properties, it means that the vast majority of rental properties they will buy will more than cash will enable them to have a home that does not put any extra burden on their monthly family budget. 


In fact, it's almost as if they'll be able to get a rental unit for free while letting the long term appreciation over 10, 20 or 30 years allow them to be in a better position than ever before. 


This is a really about changing a family's financial position.


So who are these people we're talking about? 


The majority of people that we've helped the last two years are first time homebuyers that put 5% down. 


Now, they have enough equity to pull up to to pull enough equity out of their home by a refinance or adding a home equity line of credit. 


The situation or strategy we would do would depend on the client - taking the equity out not putting any additional cash in and using that money to buy another home. 


Now, another strategy can be looked at at this point, is a lot of people might think about that idea that they may have bought a condo or a townhouse and maybe now's the time to move to a single family home.  In that scenario, they may turn their existing home into a rental and actually only put 5% down on the next house.


So we're not even talking about a huge amount of equity having to be pulled out. 


In many cases, we could probably even see them get into a second home by putting 20 to $70,000 down depending on what they're buying and the market they're in. 


So if you'd like help, we are currently offering a program where we can reach out to your past clients and see if we can help them strategize and build a realistic strategy on getting into their very first rental property with a little bit of guidance. 


This is very, very easy for the vast majority of clients.


The other thing we're doing right now is that we are currently starting a newsletter based on hot investment properties around the province. 


Now we invite you to submit some properties that we could show to our database that ranges from Northern BC to Vancouver Island to the interior to the Lower Mainland, really all throughout the province. 


If you would submit those properties to us, we're putting them out in a weekly newsletter so they can be exposed to more and more people that may be looking for an ideal rental property strategy.


Additionally, we're setting this newsletter out to our existing clients and building even more clients that may be looking at it. 


So, if you're interested in maybe getting a hold of some of these leads, and maybe being part of some of these leads please reach out to us on that as well. 


As always, let us know any way we can help you.

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Joel Olson
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An Overview of the Home Buying Process

By Joel Olson • June 3, 2025
If you’re in the early stages of planning to buy either your first home or your next home, you’ve come to the right place! Even if you’ve been through it before, the home buying process can be daunting, but it doesn’t have to be when you have the right people on your side! The purpose of this article is to share a high-level view of the home buying process. Obviously, the finer details can be addressed once you’ve submitted an application for pre-approval. But for now, here are some of the answers to general questions you may have as you work through your early preparations. Are you credit-worthy? Having an established credit profile is essential when applying for a mortgage. For your credit to be considered established, you’ll want to have a minimum of two trade lines (credit cards, loans, or lines of credit) with a minimum limit of $2500, reporting for a period of at least two years. From there, you’ll want to make sure that your debt repayment is as close to flawless as possible. Think of it this way: Why would a lender want to lend you money if you don’t have a history of timely repayment on the loans you already have? Making your payments on time, as agreed, is crucial. We all know, however, that mistakes can happen and payments might get missed. If that's the case, it’s best to catch up as quickly as possible! Late payments only register on your credit report if you're past due by 30 days. How will you make your mortgage payments? When providing you with a mortgage, lenders are trusting you with a lot of money. They'll want to feel really good about your ability to pay that money back, over an agreed period of time, with interest. The more stable your employment, the better chances you have of securing mortgage financing. Typically, you’ll want to be employed in a permanent position or have your income averaged over a period of two years. If you’re self-employed, expect to provide a lot more documentation to substantiate your income. How much skin do you have in the game? If you're borrowing money to buy a home, you’re going to have to bring some money to the table. The best down payment comes from accumulating your own funds supported by documents proving a 90-day history in your bank account. Other down payment sources, such as a gift from a family member or proceeds from another property sale, are completely acceptable. In Canada, 5% down is the minimum requirement. However, depending on the purchase price, it might be more. Also, you need to be aware that you will likely have to prove access to at least 1.5% of the purchase price to be allocated for closing costs. How much can you afford? Here’s the thing. What you can afford on paper and what you can afford in real life are often very different amounts. Just because you feel you can afford the proposed mortgage payments, know that you will have to substantiate everything through documentation. The amount you actually qualify to borrow is based on many factors, certainly too many to list in an article designed to provide you with an overview of the home buying process. However, with that said, it’s never too early in the home buying process to seek professional advice. Our services come at no cost to you; it would be our pleasure to help. Working with an independent mortgage professional will allow you to assess your credit-worthiness, provide insight on how a lender will view your income, help you plan for a down payment, and nail down exactly how much you can afford to borrow. And if you need help putting together a plan to improve your financial situation, we can do that too. If you’d like to discuss your financial situation and put together a plan to secure mortgage financing, please get in touch!

GDS/TDS Ratios Explained

By Joel Olson • May 20, 2025
One of the major qualifiers lenders look at when considering your application for mortgage financing is your debt service ratios. Now, before we get started, if you prefer to have someone walk through these calculations with you, assess your financial situation, and let you know exactly where you stand, let’s connect. There is no use in dusting off the calculator and running the numbers yourself when we can do it for you! However, if you’re someone who likes to know the nitty-gritty of how things work instead of simply accepting that's just the way it is, this article is for you. But be warned, there are a lot of mortgage words and some math ahead; with that out of the way, let’s get started! “Debt servicing” is the measure of your ability to meet all of your financial obligations. There are two ratios that lenders examine to determine whether you can debt service a mortgage. The first is called the “gross debt service” ratio, or GDS, which is the percentage of your monthly household income that covers your housing costs. The second is called the “total debt service” ratio, or TDS, which is the percentage of your monthly household income covering your housing costs and all your other debts. GDS is your income compared to the cost of financing the mortgage, including your proposed mortgage payments (principal and interest), property taxes, and heat (PITH), plus a percentage of your condo fees (if applicable). Here’s how to calculate your GDS. Principal + Interest + Taxes + Heat / Gross Annual Income Your TDS is your income compared to your GDS plus the payments made to service any existing debts. Debts include car loans, line of credit, credit card payments, support payments, student loans, and anywhere else you’re contractually obligated to make payments. Here’s how to calculate your TDS. Principal + Interest + Taxes + Heat + Other Debts / Gross Annual Income With the calculations for those ratios in place, the next step is to understand that each lender has guidelines that outline a maximum GDS/TDS. Exceeding these guidelines will result in your mortgage application being declined, so the lower your GDS/TDS, the better. If you don’t have any outstanding debts, your GDS and TDS will be the same number. This is a good thing! The maximum ratios vary for conventional mortgage financing based on the lender and mortgage product being offered. However, if your mortgage is high ratio and mortgage default insurance is required, the maximum GDS is 39% with a maximum TDS of 44%. So how does this play out in real life? Well, let’s say you’re currently looking to purchase a property with a payment of $1700/mth (PITH), and your total annual household income is $90,000 ($7500/mth). The calculations would be $1700 divided by $7500, which equals 0.227, giving you a gross debt service ratio of 22.7%. A point of clarity here. When calculating the principal and interest portion of the payment, the Government of Canada has instituted a stress test. It requires you to qualify using the government's qualifying rate (which is higher), not the actual contract rate. This is true for both fixed and variable rate mortgages. Now let’s continue with the scenario. Let’s say that in addition to the payments required to service the property, you have a car payment of $300/mth, child support payments of $500/mth, and between your credit cards and line of credit, you’re responsible for another $700/mth. In total, you pay $1500/mth. So when you add in the $1700/mth PITH, you arrive at a total of $3200/mth for all of your financial obligations. $3200 divided by $7500 equals 0.427, giving you a total debt service ratio of 42.7%. Here’s where it gets interesting. Based on your GDS alone, you can easily afford the property. But when you factor in all your other expenses, the TDS exceeds the allowable limit of 42% (for an insured mortgage anyway). So why does this matter? Well, as it stands, you wouldn’t qualify for the mortgage, even though you are likely paying more than $1700/mth in rent. So then, to qualify, it might be as simple as shuffling some of your debt to lower payments. Or maybe you have 10% of the purchase price saved for a downpayment, changing the mortgage structure to 5% down and using the additional 5% to pay out a portion of your debt might be the difference you need to bring it all together. Here’s the thing, as your actual financial situation is most likely different than the one above, working with an independent mortgage professional is the best way to give yourself options. Don’t do this alone. Your best plan is to seek and rely on the advice provided by an experienced independent mortgage professional. While you might secure a handful of mortgages over your lifetime, we do this every day with people just like you. It’s never too early to start the conversation about mortgage qualification. Going over your application and assessing your debt service ratios in detail beforehand gives you the time needed to make the financial moves necessary to put yourself in the best financial position. So if you find yourself questioning what you can afford or if you want to discuss your GDS/TDS ratios to understand the mortgage process a little better, please get in touch. It would be a pleasure to work with you, we can get a preapproval started right away.