My First Investment - Background

I tripped into my first investment. I didn't even know what a duplex was.

I was 24 years old in the fall of 2005. I worked for a national accounting firm earning $54,000 per year. I had ~$12,000 in my RRSP, wanted to move out of my parents house, and wanted to avoid paying rent. My older brother bought a semi detached house a few years earlier and rented two of the three bedrooms to two of his close friends. They "paid his mortgage" while he built equity. It seemed like a good plan to me.

I lined up two friends to rent from me and went searching for a house. It was a relatively hot market in the Kitchener-Waterloo, Ontario area. Multiple offers were typical and I was concerned that I was buying at the market peak. Despite my fears, I continued searching for a house and after exchanging one of my prospective roommates for another I toured the duplex located at 116 Rutherford Drive in Kitchener.

It was in bad shape. The side door was commercial and had a rainbow beach towel hanging on it to shield the sun. The carpet was flapping and multiple flooring types were used in the same room. The screens were torn and the windows needed replacing. It needed a new roof, the furnace was shot, it had no A/C, and the backyard was paved as the 50 year old building had been a doctor's office at one point in its history. The doors looked as if they had been taken from a dungeon and didn't allow a glimpse of natural light to enter the dark interior. Best of all, there was a subsidized housing project over the backyard fence.

None of the defects above could strip this brown brick beauty of its true potential: two kitchens, two living rooms, and extra bedrooms! My girlfriend and I could live in a self contained unit while my roommates had the 3 bedroom upstairs apartment all to themselves! This was MUCH better than my Brother's situation. We could have the financial benefits of living with roommates while enjoying the privacy of our own self contained living area.

While I lacked any and all construction experience, it seemed obvious that this neglected property just needed some blood sweat and tears to make it a home and it received all three in spades.