The other night, my wife and I were speaking with our two children (ages 18 and 20) about how much more difficult it is to buy a home today than it was when we bought our first home 25 years ago.

I live in Toronto. Over the last 25 years, the real estate prices here have skyrocketed, like they have in many other cities around the world, like San Francisco, Sydney Australia, and many others.

Here’s what I told my kids.

I’m going to offer you the same advice I just gave my kids about buying their first home, and explain how someone young, who is just starting to create wealth, can get into the real estate market, and pay less after expenses for their mortgage then they would for rent on a place one-third the size.

The Back Story:

My grandfather arrived in Canada in 1952 with his wife, two children, two suitcases, a few dollars, no English skills, and a background as a butcher.

Within weeks of arriving, he had a job, and within three years, he managed to find the funds to open his own butcher shop. Then within seven years, he acquired his own triplex ( a home with 3 apartments).  

I told my children that I could show them how to do the same thing, and for those wondering how they can possibly afford to get into the real estate market, and still create wealth, then read on. I’ll go through this step-by-step.

The Home, a Triplex

What I’m going to show you is how to buy an investment property, similar to what my grandfather did in 1952, and what I’ve spoken with many people about over the years as they wonder how to acquire and how to create wealth in real estate.

I did a quick search in the MLS database (a real estate search site), and within 10 minutes, I was able to find a triplex near Allen Rd and Sheppard Rd (in the heart of Toronto.) I happen to like this area because it’s in the heart of the city, and close to public transportation, malls, good schools, and the subway. Since most of the readers of this blog aren’t from Canada, you will need to find an equivalent site that lists commercial properties.

The home I found is listed for $949,000, which is a LOT of money for a triplex by most standards, but keep in mind that this is Toronto, and real estate here is extremely expensive. The upside of an overpriced real estate market is that apartments are also expensive. (More on why that’s good shortly.)

I’m going to make some basic assumptions, but I won’t bore you with the technical details. So I’ll keep the calculations to a minimum on this blog, but, if you want to download my real estate investment Excel document that I used for my book, you can get that here.

Here’s the triplex I found:

Let’s assume the home sold for $920,000 after negotiations (it’s listed for $949,000). If you make a $100,000 down payment, the monthly mortgage payments on an $820,000 mortgage (25-year mortgage, 3% interest) are approximately $3,850 per month.

This particular triplex has a 3-bedroom apartment on the 2nd floor, 3 bedrooms on the main floor, and 2 bedrooms in the basement. Assuming you can rent the 3-bedroom apartment for $2,000 (the average rent for a 2-bedroom), and $1,200 for the basement unit, the balance you’ll owe for the mortgage payment (principal and interest) is $650 per month.


After you make a $100,000 down payment and commit to $650 per month, you can acquire a $920,000 home.

Then save like crazy for the next five years, and renovate.

Once you’re in your new home, it’s time to get to work. When a unit becomes vacant, you’ll renovate the unit yourself. Whenever possible, you can paint the walls and buy countertops, tiles, toilets, and anything else on sale. Put as much sweat equity into the home as possible.

In five years, the apartments will rent for significantly more, and you’ll have paid a sizeable amount of the mortgage. And you’ll have built substantial equity in the home.

But here’s the best part:

If you decide to stay in the home for 25 years, your tenants will have paid most of the mortgage. Assuming you bought the home when you were 30, you’ll no longer have a mortgage by the age of 55. And with inflation, you’ll have the rents from the upper and lower apartments as a $3,200 annuity every month.

So what did we just cover?

You can buy a $920,000 home for $100,000 down and $650 a month.  In 25 years you’ll have the full equity paid for, own the house outright, and receive a $3,200 monthly annuity.

That’s how my grandfather did it in 1952. And that’s how you can acquire a home in an expensive city like Toronto, and still build wealth today.

It gets better.

Let’s say that after five years you’ve saved another $100,000 and are ready to do this all over again, except this time you’re going to rent all three units (since you have a place to live you don’t need another).   You’re now in what we call the MUR market, otherwise known as multi-unit residential, and one of the key variables to understanding the MUR market is CAP Rate. Once you understand the “Power of the CAP”, and how to make leverage work to your advantage, you can make a fortune in investment real estate by doing what I described over and over and over again.

I wrote a blog post about CAP rate which you can read here, and for those who are interested in learning how to make money in real estate, I delve into it in much greater detail in my book, The Kickass Entrepreneur’s Guide to Investing. You can download a free copy of it here.

If you don’t want to read the entire book, you can skip to Chapters 3 and 4, and I’ll show you how to make a boatload of money in real estate investments.

So stop complaining about how expensive home prices are, and start doing something about it.


My goal is to help entrepreneurs scale their business, improve profits, and, ultimately, create wealth. I post two blog posts a week.  You can subscribe here.

Want to know more about me and read some of the other interesting small business growth, profit and wealth stories I’ve written.

Here’s an interesting post I wrote:  The Top 2 Mistakes I Made When I Started My Business. That Was a Long Time Ago, and Entrepreneurs Are Still Making the Same Mistakes Today

Here’s one of the first articles I wrote:  My Journey Post Business Sale as I Sail Into a New Harbour.

Are you a younger entrepreneur? Here’s another interesting article I wrote:

My Response to an 18-Year-Old Who Wants to Become a Millionaire by the Time He’s 30.

Download my book and Amazon bestseller (number 1 in business and non-fiction).  You can get your FREE copy here.

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