I spent a good part of my break tonight speaking with a security guard. Every now and then he would come and check up on the office. If he sees me, he would stop and make small talk. He’s pretty good at giving advice regarding life. Speaking from experience, he has been through it and knows what he’s talking about. He’s an older gentleman from Pakistan who appears to be in his mid fifties. He works the night shifts and rotates between the east and west building of the Sussex Centre. He currently lives in Mississauga with his wife and kids.
The last time we spoke, I mentioned to him that I was thinking about moving to Mississauga. He told me about how this can be an expensive city to live in and recommended that I get into real estate. I told him that I had no experience whatsoever in real estate. He replied by saying that I didn’t need any experience, just a down payment.
From what he told me, I could live in Mississauga for free and eventually make $30,000 just by living in a house for about a year. It sounded too good to be true but when he explained it to me, it did make a little sense. I couldn’t confirm what he was saying at the time because I didn’t have any paper to work out the math on.
I think he’s doing something similar at the moment. He’s having somewhat of a hard time keeping up with bills. He has a couple of kids who are attending post secondary school but they’re not working at the moment. His kids wanted the best in everything but he couldn’t afford to get it for them. He brought his family here so his kids could get a good education. And working as a security guard, I know that security guards don’t get paid that well for the work that they do.
The idea that he mentioned to me to help me with living accommodations in Mississauga was to buy a house. At first, I thought he was crazy. I can’t afford to buy a house with my current pay. He told me that all I need was $5,000 for a down payment and another $5,000 in the bank. My bank account rarely holds a balance of more than $50 so where was I supposed to get $10,000.
He was suggesting that I get $5,000 and use it as a down payment and then rent out the house to someone. Then I would have to use the rent money as mortgage. A house that sells for $150,000 could be rented for well over $1000. After a year, the value of the house should have gone up. That is when I would sell it to make profit.
According to this plan, I would make an extra $30,000 by investing in a house and then selling it. But like most money making scheme, I’m sure there are risks involved. In order for this to work, I would have to put $5,000 down, fix up the house and find some tenants within a month. The extra $5,000 is to be used for repairs or if the tenants are late on their payment.
I’ve thought about doing this but the problem is the initial down payment that I’m required to make. I don’t want to take out a loan for that amount. And a $150,000 house is a big responsibility. If I can’t make payment on that, I’ll have to declare bankruptcy. It’s not something that I’m willing to risk at this stage of my life. So I’m going to pass on this idea until the day I get more money and maybe then, I’ll reconsider.