Multifamily in Edmonton

ThomasBeyer

Senior Forum Member
REIN Member
#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

Inspired Forum Member
Registered
Aug 19, 2016
104
24
18
#42
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 !
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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ThomasBeyer

Senior Forum Member
REIN Member
#43
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 !
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.
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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