Multifamily in Edmonton

Thomas Beyer

Thomas Beyer

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#41
Aug 30, 2007
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#41
The get rich fast MF party is over.

If you buy with 30-35% down and hold with modest rent increases and modest improvement you can still make decent money but be prepared for lower overall ROI. A 60-100% ROI over ten years doable but higher than that tough.

It’s tough now to beat public (and far more liquid) REIT performance.

Buying undermanaged assets with upside still exists in many US markets though but by and large not in W-Canada anymore to build a reliable business model. You will of course every so often get lucky and find a motivated (usually overlevered) seller !
 
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Willyboy

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#42
Aug 19, 2016
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#42
ThomasBeyer said:
The get rich fast MF party is over.

If you buy with 30-35% down and hold with modest rent increases and modest improvement you can still make decent money but be prepared for lower overall ROI. A 60-100% ROI over ten years doable but higher than that tough.

It’s tough now to beat public (and far more liquid) REIT performance.

Buying undermanaged assets with upside still exists in many US markets though but by and large not in W-Canada anymore to build a reliable business model. You will of course every so often get lucky and find a motivated (usually overlevered) seller !
Click to expand...

Thanks Thomas for highlighting the new reality as it can save one money and time.

One question though if you don't mind. The 60-100% ROI you mentioned include all the 3 main components i.e. cash flow, mortgage pay down and appreciation or just the first two? Thank you.
 
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Thomas Beyer

Thomas Beyer

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REIN Member
#43
Aug 30, 2007
13,881
2,113
113
Alberta and BC - The Top 2 Places on the Planet to
#43
Willyboy said:
ThomasBeyer said:
The get rich fast MF party is over.

If you buy with 30-35% down and hold with modest rent increases and modest improvement you can still make decent money but be prepared for lower overall ROI. A 60-100% ROI over ten years doable but higher than that tough.

It’s tough now to beat public (and far more liquid) REIT performance.

Buying undermanaged assets with upside still exists in many US markets though but by and large not in W-Canada anymore to build a reliable business model. You will of course every so often get lucky and find a motivated (usually overlevered) seller !
Click to expand...

Thanks Thomas for highlighting the new reality as it can save one money and time.

One question though if you don't mind. The 60-100% ROI you mentioned include all the 3 main components i.e. cash flow, mortgage pay down and appreciation or just the first two? Thank you.
Click to expand...

All three of course, like a good meal. Cash flow doesn’t exist in MF once you factor in R&M, vacancies, required capital expenditures, evictions and non-payment over a sustained ownership period.

That’s why most REITs rarely have over 50% leverage as they have to deliver some cash distributions monthly. Even those often come from refi or occasional asset sale not only from operational monthly cash-flow but cash engineering over a large enough asset base.


Thomas Beyer, Asset Manager, Investor, Community Improver, Author, Father, Mentor www.prestprop.com
 
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Cory Sperle

Cory Sperle

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#44
Sep 1, 2010
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#44
Thomas Beyer said:
Ok

Trump loses in 2020 and 5 year CMHC rates ( for loans over $1M but sub $5M) over 4%: lunch’s on me !


Thomas Beyer, Asset Manager, Investor, Community Improver, Author, Father, Mentor www.prestprop.com
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It appears I've lost this bet Mr. B, but gained a CMHC mortgage on a 24 suiter at sub 2%. Lunch is on me, but not sure when I'll be heading for the sunshine coast!
 
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TangoWhiskey

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#46
Aug 26, 2010
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#46
CorySperle said:
It appears I've lost this bet Mr. B, but gained a CMHC mortgage on a 24 suiter at sub 2%. Lunch is on me, but not sure when I'll be heading for the sunshine coast!
Click to expand...
Nice one :) on coming back to this thread and bet two years later.

Out of curiosity, with the crazy but in hindsight predictable run-up in RE values globally in response to the money supply inflation, have values out West for MF seen cap rate compression/rent growth = return of big refi checks?
 
Thomas Beyer

Thomas Beyer

0
REIN Member
#47
Aug 30, 2007
13,881
2,113
113
Alberta and BC - The Top 2 Places on the Planet to
#47
TangoWhiskey said:
Nice one :) on coming back to this thread and bet two years later.

Out of curiosity, with the crazy but in hindsight predictable run-up in RE values globally in response to the money supply inflation, have values out West for MF seen cap rate compression/rent growth = return of big refi checks?
Click to expand...

Yes somewhat in BC, no in SK or AB, although cap rates always have been lower in BC than in AB or SK. Weak, if any, rent growth in AB or SK the last six years. More so in BC thus higher valuations but not necessarily cap rate compressions.


Thomas Beyer, Asset Manager, Investor, Community Improver, Author, Father, Mentor www.prestprop.com
 
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