Multi-Family Investing - Recent Threads

Can I request Vacant positions on all units in a fourplex

derekchien — Sun, 12 May 2013 22:13:40 GMT

I'm interested to purchased a fourplex unit in Ontario. The current rent is about 15% lower than market value. Can I request vacant positions on all the units before I take possession. I know pretty much the only 2 things I can do is 1. owner occupy 2. renovations. However, If I use the renovations reason to move them out, the existing tenants would have 1st right to come back in at the old rent. Anybody have any solutions on this? Any help with be appreciated. :)

Legalizing units in a multi-family

arniec — Mon, 22 Apr 2013 18:39:32 GMT

Hi everyone, had a quick question:

What is the process to convert a basement unit in a multiplex to a legal unit in Ontario? Who should I contact ? Can anyone share their experiences ? Appreciate any insights into the process/ feasibility

Structuring the borrower in CMHC multifamily deal

rodm — Fri, 19 Apr 2013 01:44:07 GMT

Hello,

I am in the midst of a 26 unit multifamily deal in BC and have assembled a group of investor partners. We are forming a corporation to own the building and everyone including me would be a shareholder. CMHC is requiring all investors to give a personal guarantee. There does not seem to be a way around this. Has anyone done any recent deals in which they have been able to use JV partners but it was not required that the JV partners take on any guarantees? I meet the CMHC net worth rule so going into this I did not think this would even be an issue. It is proving to be a major challenge as now I have to get all the partners to give their financial details to the mortgage broker. Please help me with some ideas as we are at the midnight hour!!

Comment about scarcity of multi-family units

Van OrderM — Fri, 05 Apr 2013 17:22:05 GMT

I listened to Russell Westcott's REIN 'Getting Started' Coaching Call 1 yesterday and picked up on his comment that there is a shortage of multi-family units (MFUs) across Canada (or at least that's what I remember hearing). I would be interested in hearing what the MFU experts have to say on this. What is the story here, why is there a shortage? Are these types of units unprofitable to developers relative to other options? I'm particularly interested in the 1 to 6 unit class (and geographically in Alberta) as I developed an interest after reading The Sandbox Rules. Link to Russell's talk that I'm referring to:

http://myreinspace.com/rein_members_only/Getting_Started/202-25571-REIN_Getting_Started_Coaching_Call_1_-_Russell_Westcott.html

Owner occupied with 4+ units

SalmanAmin — Sat, 09 Feb 2013 22:02:27 GMT

There are standard downpayment requirements for owner-occupied properties with 1-4 units. Are there any standards with respect to the downpayment for properties with, say 6 units, where one of the units is occupied by the owner and the rest are rented out. Does that classify strictly as an investment property and thus requiring a 20% downpayment?

Also, how do the lenders and CMHC define a "unit" precisely?

Any guidance will be appreciated.

multiplex or multifamily ?

DerekMitchell — Wed, 30 Jan 2013 05:08:23 GMT

hello
was wondering ,and thinking perhaps a muli plex is a great idea , i m very new to rein , i m wondering do you need a special licence to operate a multiplex say a 6-10 suite , i understand fiancing is generally easier , and every thing is under one roof ,costs are higher but returns might be as well , is there any other special conditions ?
any info would be great ! thanks

multi-family insurance coverage--enough?

margaretcowan — Fri, 28 Dec 2012 20:21:58 GMT

I'm renewing my insurance on my 11plex in Edmonton and wondering if I have enough coverage. Building is 3 storey, wood frame, walk-up built in 1949. (considered "vintage" style in Edmonton!) Building area is 8916 square feet. Building & business contents coverage is $1,275,100 ($143/sq ft) with 90% co-insurance clause and $1000 deductible.

Do I have enough coverage? Any rule of thumb for this? Should I get a replacement cost appraisal? (which I didn't get last year when I bought it)

Thanks
Margaret

Mama Margaret & Friends Cooking Adventures In Italy
www.italycookingschools.com

Recommissioning Guide for Building Owners and Managers

MadisonNorton — Thu, 22 Nov 2012 16:56:10 GMT

Hey folks,

We came upon this document today and felt that members could certainly benefit from it. Download a copy of the CanmetEnergy Recommissioning Guide for Building Owners and Managers for your own use.

Would you consider this deal?

LIBCAN — Mon, 08 Oct 2012 14:29:37 GMT

I have a debate with a friend on this deal. he thinks it is a good deal and I think otherwise:
12 unit building located in small town is selling for $650k ($600k is fair to me). It is rented for $93k and the net income is $48k. Not very attractive numbers but the deal itself might be. The seller is willing to take 5% down payment to become the mortgage lender for 5 year term. He is asking for $39k/year (on monthly basis) to cover his mortgage.
History shows 5% vacancy and 5% R&M which is included in the expenses above. The building is in a decent condition and most of the repairs over the years are typical (new roof, replacing carpet with laminate, paint, etc).
This an off market deal. the seller did not want to sell today because his penalty is too high and he wants to keep his loan to build up a better credit etc.
The seller thinks it is a great deal for him to have someone pays his mortgage plus he got nothing to do with the building that way. My friend thinks it is a great deal for him because he is only investing very little money, making positive cash flow, no need to be approved by a lender. He also thinks he could increase the rent over the years and create more cash flow. His exit strategy is to either get a mortgage by the end of the term and keep the building or sell it and get his money back plus maybe 10% appreciation.
Is this a win-win deal or is my friend taking a risk here?

8 plex X-Meth Labs

gasman — Fri, 05 Oct 2012 14:44:13 GMT

Does anyone have experience with properties that have had Meth Labs in the past?

I have been looking for multifamily properties in Chilliwack and running into issues with building construction and age. I have found a couple of properties with great potential, but when I have an inspection done we discover some serious integrity issues with the building mechanicals, and the vendors are not willing to adjust the price accordingly.

This newest find is an 8 plex built in the 90s. The vendors seemed anxious to move this property so I made an offer below market that would cash flow nicely. They came back with a higher offer and a declaration about a meth lab in 2011. It currently passes all health and standard inspections.

This property is even located a good distance away from the notorious down town Chilliwack area of questionable residents. Its on a clean street with a church right across the road.

What can I expect for issues while trying to rent out this property? I obviously will need to declare the fact of an old meth lab. Seems as though I'm setting myself up for a challenging clientele.

Also there is the issue of resale values and the difficulty of finding buyers for a declared meth lab.

Seems my only approach is to low ball or walk away. I can see the logic of getting a great price that I can afford lower rents and a lesser resale value. The crazy thing is the vendor is still looking to get the higher value from the building.

35 Year Old Brick Multi ...Downside?

Timfawcett — Wed, 26 Sep 2012 00:37:26 GMT

What is the down side of purchasing a 35 year old brick 18 unit MF in good shape? Plan to keep for 10 years.

Looking for realtor exp in 404 region of Ont

sshuffler — Mon, 17 Sep 2012 18:27:33 GMT

I am interested in the growth areas around Hwy 404 in Ontario. Could anyone recommend a realtor who has experience in this region? Thanks. Sandra.

Inspection vs. Building/Property Condition Assessment

RE123 — Sun, 16 Sep 2012 23:20:20 GMT

My focus is on low-rise (walk-up) apartment buildings from 6 to 30 units. As they get bigger the only difference is that they may be wider or longer and are more likely to have a concrete structure as opposed to a wood structure. At what point in this range do you move from hiring a property inspector (e.g. RHI) that offers "commercial inspections" to an engineering firm that performs a formal building condition assessment (BCA)?

Here's some info on BCAs for those who aren't familiar:

http://www.pinchin.com/building/building-science-building-condition-assessment-bcas

http://www.cdwengineering.com/home/property_condition.asp

First National provided me with a list of their approved BCA firms throughout the country and these are generally consulting firms (e.g. Pinchin, AMEC, etc.) that offer a wide variety of engineering services. Would it be overkill to hire one of them for a 12-plex? Is is possible that an RHI would be better suited to perform this inspection over an engineering firm?

Although many RHI's were or are engineers, they only use engineering principles to assist them in their inspection but do not actually perform any type of engineering analysis. The inspection process and the report is almost identical to what you would get for a home inspection. RHI's do have lots of practical experience because they perform inspections day in and day out. My impression is that an engineering firm performing a BCA would have a much more theoretical approach and given that BCAs are generally only one of the many services that they offer, I can't help but wonder how many they perform a year.

If you had to pick and cost wasn't an issue, who would you use?

PM Agreement

Timfawcett — Fri, 07 Sep 2012 18:44:50 GMT

Does anyone have a PM agreement they would like to share?
Thanks Tim

Cash Flow

Timfawcett — Fri, 07 Sep 2012 18:27:44 GMT

What amount of cash flow should be expected per unit on 22 door MF building after all expenses and debt service?
Thanks Tim.

Amortization Years

Timfawcett — Fri, 07 Sep 2012 18:11:24 GMT

What is most common with mortgage amortization in years.. 25 or 30 for MF?
Thanks
Tim

Financial requirement for a Multifamily loan

Saher — Fri, 31 Aug 2012 20:16:38 GMT

Team ,

I have a question around Networth requirement for a Multifamily Deal

For simplify I will give an example with number
Let's say Am building a JV with 4 partners to acquire a Building with $1M
We paid 30 % down so Loan is around $700K
we build a corporation that will have name on mortgage and name on title
A) each of the four partners would require network of 20% of the 700K or is the combination of the 4 of them would require the networth of 20% of the 700K ?
B) What if this is not possible can some lenders by pass this rule ?

Thank you for your help in Advance
Saher Ghattas

Parking requirement + Vacant Possession

arniec — Wed, 01 Aug 2012 03:29:47 GMT

Hello,

I have two questions pertaining to properties in Toronto:

Is there a law regarding requiring at least one parking spot for a house with 4 units or more in Toronto? I remember one property that I saw having had trouble with the city for having 4 units with no parking spots at all, and now I am looking at another such property but cannot find any literature confirming this law. I don't want to end up with a property and be forced to change to 3 units due to lack of parking.
Getting vacant possession doesn't seem to be easy for some of the tenanted properties I've been looking at. Any creative ways of changing tenants when they are grossly underpaying under current seller? The difference is significant - positive vs. negative cash flow. I will be doing some renovations in most properties.

Thanks!
Arnie

Comfort Letter from the City

gasman — Tue, 24 Jul 2012 17:56:11 GMT

I'm in the due diligence stage of my first apartment purchase. I recently went to the city of Chilliwack and requested a comfort letter, turns out they want me to put my request in writing and outline the information needed. Does anyone have a generic outline for what information one should request from the city? Seems I'm looking for information regarding building permits, building codes, past issues with the property, and or any other items regarding the history of the building.

The building has 2 One bedroom units and 8 Two bedroom units, was built in 89 and is located in Chilliwack.

Thanks in advance.

Gasotn

Multi-Family vs Commercial Pro's & Con's

AnitaKuehn — Wed, 04 Jul 2012 15:23:44 GMT

Hi Everyone,
Could someone please tell me the pro's & con's of investing in multi-family vs commercial? I note that most REIN members invest in multi-family, but am wondering why not more commercial as this would avoid having to deal with the Landlord & Tenant Act, especially in Ontario.

Multi-Family Mortgage Broker in the Regina area

garyyeung — Fri, 15 Jun 2012 08:12:40 GMT

I am new to Multi-Family investing. Looking for a Multi-Family Mortgage Broker experienced in the Regina area.

Multi-family Building Inspector in Edmonton

QuietDolphin — Thu, 14 Jun 2012 14:51:38 GMT

Hi,

Could anyone recommend a company that specializes in multifamily building inspections in Edmonton and roughly how much it would cost? I am looking at a 4-plex to get inspected. Thanks in advance.

CMHC Grants

Emmett — Fri, 08 Jun 2012 00:39:47 GMT

Does anyone have any experience or tips with the CMHC Grants? I have read recently that CMHC has put the administration down onto the Province (at least in Ontario). When I inquired recently, the prvince said that the Grants were no longer available for multi-family housing nor were they available for converting commercial space to residential. Has anyone been through this process recently?

Your thoughts and tips would be appreciated.

Emmett

Need help finding multi family properties

Rickx — Tue, 05 Jun 2012 18:59:06 GMT

I'd like to break into the multifamily market and I'm having a hard time sourcing properties in the Edmonton area....are there any realtors out there that could send me some listings or anyone have any advice. My internet searches are not very productive. Thanks, Shirley

Elevator due diligence

RE123 — Sat, 02 Jun 2012 16:45:39 GMT

Hello

I’m starting to look at properties with elevators. Of course, I know very little about elevators and I was hoping that someone could share some of the steps they take when doing their due diligence on buildings with elevators:

-What questions should I ask?

-Are there features that I should be looking for?

-Are there some brands that are better than others?

-How much should I budget for in operating costs and maintenance?

-Should I bring an elevator contractor in during the inspection process? If so, do you have any recommendations?

-Where else can I get more information?

-Anything else I should be aware of?

Thanks again