RRSP Mortgages: 5 ways to Safely Secure Your RRSP savings to a Property.

– I don’t wanna (laughs) (laughs) (laughs) – They’re happy– – [Cameraman] (mumbles) – All right. Here are the five.


– I don’t wanna (laughs) (laughs) (laughs) – They’re happy– – [Cameraman] (mumbles) – All right. Here are the five tips to safely secure your RRSP to a property. I’m Rene Masse with getbetterreturns.com Let me tell you how I got screwed over purchasing a property. However, I was introduced
to RRSP mortgages. So we put an offer on a house. This was an estate sale. And it was one of those properties, it needed a bit of work, but it was a great area, good location, near school, shopping centers, it was pretty much the
worst house on the street. And the people who inherited the house just wanted to unload this property. So we offered a low price
and they gladly accepted. As the closing date approached,
we waived all conditions. Yet two weeks prior to closing, my mortgage broker calls me and he says, We got a problem. The lender wants out. Whoa, this was bad news. I mean, this was very
stressful at the time. I’d lined up all the contractors. I’d paid for the windows. I’d paid for the kitchen cabinets. Everything was planned out. You see, the bank had
done some due diligence, as they should, and all the
details of this property were online, in particular
the home inspection. And within that home inspection
it said cracked foundation. We knew about it, it was no big deal. I mean, we had already
lined up the contractor to fix the problem. It was simple. It was to dig the back foundation, put some parging on the
cinder blocks, and busk it. Simple solution for those who know. Guess how much it was gonna
cost us, three thousand dollars. But for the lender, in
fact for all major banks, it was far too risky. A cracked foundation is not a good sign. They wanted nothing to do with it. So two weeks prior to closing,
we lose our financing. So my mortgage broker
calls me the next day, and he says, listen, I may know someone who could actually help you out. It turns out, it’s Oprah Winfrey. No, no, I’m just kidding. It’s his boss, and he had a
substantial amount of money in his RRSP, and so he
bought the house outright. So we were happy to proceed
with the renovation. In three months down
the road, we refinanced. Everyone lived happily every after. Why would this investor do this? I mean, he knew I had other
properties and experience, but that wasn’t the reason why. He did pocket about six thousand dollars in a matter of three months. Sure, that was a bit of a motivation. However, how did he know
that his RRSP savings were secure by the
purchase of this property? Well, it was quite simple. We obtained an appraisal on the property and we found out the
value of the property, and then we also looked at the purchase price of the property. And there was a huge difference between the value and the purchase price. What does that mean? It means that there was instant equity the moment we purchased the building. And the investor knew this as well so he could invest
safely in this property. Let me give you some numbers here. The value of the property
was three hundred thousand. And we picked it up at two
hundred and 30 thousand. Sure, it needed about 40
thousand in renovation, but we were prepared for that. You see, the loan the
value was less than 80%. So when lending your RRSP as a mortgage, keep these five things in mind. Number one, find the
value of the property. Figure out the neighborhood, the street. Find out exactly what it’s worth. Number two, when you lend
your RRSP as a mortgage, it should always be less
than 80% loan to value. Number three, meet the borrower. Find out their experience, what they own, their skills, their values. Figure out what they’re gonna be doing with this property, their
motivation and their end goal. Number four, know the exit
strategy of the property. Is it a flip, is it a refinance? Know in detail how and when
you’re gonna get paid back. Number five, you’re
gonna need a good lawyer who understands and who’s
familiar with RRSP mortgages. It’s gonna make the
transaction a lot simpler. So this is the way you secure
your RRSP to a property. If you found this valuable,
subscribe to my channel. Hit like, share with your
friends, thanks for listening. (cheerful music)

One thought on “RRSP Mortgages: 5 ways to Safely Secure Your RRSP savings to a Property.”

  1. Hey Rene coming over from Mike’s channel watched probably a dozen of your videos so far good stuff!

    I was wondering if you would be able to RRSP loan to yourself for a mortgage or would your spouse be able too?

Leave a Reply

Your email address will not be published. Required fields are marked *