How best to invest 300-400K???

REIGirl

Inspired Forum Member
Registered
With all the wealth of knowledge and experience within this forum, I am wondering how best to invest 300-400K. My primary/initial focus has been on apartment buildings, I would also like something that cashflows well, however, I am open to suggestions.

Also, what would you say the anticipated cashflow per door for an apartment building in AB would be?

Thank you!
 

CorySperle

Senior Forum Member
REIN Member
With all the wealth of knowledge and experience within this forum, I am wondering how best to invest 300-400K. My primary/initial focus has been on apartment buildings, I would also like something that cashflows well, however, I am open to suggestions.

Also, what would you say the anticipated cashflow per door for an apartment building in AB would be?

Thank you!
400K is below the entry point to get into a decent apartment building, although I'm selling a 12 suiter right now that you can borrow 85% loan to value that is CMHC ready.

The residential real estate market and stock market are both HOT right now so buyer beware, and I expect corrections in both in the coming months. Solid MF projects that are CMHC ready and value adds at the right price are still a good bet, as are REITS, still some are 50% of what they were pre-pandemic.
 

REIGirl

Inspired Forum Member
Registered
Hi Cory,

Thank you for your reply! Yes, we were thinking a building around that size would be a good entry point for us getting into multifamily. We were also thinking about something we can fix up to add value
 

Thomas Beyer

Senior Forum Member
REIN Member
Hi Cory,

Thank you for your reply! Yes, we were thinking a building around that size would be a good entry point for us getting into multifamily. We were also thinking about something we can fix up to add value

Consider buying any building with 15% down, for example Cory’s in SK.

That’s how I started: never paying more than 15% down. That is rare to impossible today but does exist occasionally.

So a 15 suiter at $120,000/door ie $1.8M could be acquired with 300,000!


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

CorySperle

Senior Forum Member
REIN Member
Consider buying any building with 15% down, for example Cory’s in SK.

That’s how I started: never paying more than 15% down. That is rare to impossible today but does exist occasionally.

So a 15 suiter at $120,000/door ie $1.8M could be acquired with 300,000!


Thomas Beyer, Asset Manager, Investor, Community Improver, Author, Father, Mentor www.prestprop.com
Rare indeed! Yes it's not the early 2000's so tough to find CMHC ready product

My building meets the criteria, and I may just refinance myself. A full 300 bps spread between CMHC borrowing rate and actual CAP (2.00 to 5.00) so very appealing for an armchair investment!
 

Thomas Beyer

Senior Forum Member
REIN Member
Real estate comes in physical form ie real buildings or in more liquids and/or fractional forms ie REITs, stocks or LPs.

If you buy a REIT, for example that yields 6% with your $300,000 and borrow 50% in a margin account you can buy $600,000 worth of REITs yielding $36,000/yr - minus interest cost, say 3% ie $9000 on the $300,000 borrowed and your cash flow is still $27,000 per year ie 9%. https://apple.news/AB3HKIw-nR8e2_UTWhenJaA

Some REITs yield more say 8% then the math is $48,000-$9000 ie $37,000 ie over 12% cash on cashROI paid monthly. Tough to beat with real physical real estate ! Of course, more volatile but also more liquid !

Residential properties or REITs generally yield far less but may appreciate more than commercial REITs that own hotels, shopping centres, office buildings or industrial buildings.
 
Last edited:

REIGirl

Inspired Forum Member
Registered
Rare indeed! Yes it's not the early 2000's so tough to find CMHC ready product

My building meets the criteria, and I may just refinance myself. A full 300 bps spread between CMHC borrowing rate and actual CAP (2.00 to 5.00) so very appealing for an armchair investment!
Hi Corey,

Thank you for this information!
 

REIGirl

Inspired Forum Member
Registered
Real estate comes in physical form ie real buildings or in more liquids and/or fractional forms ie REITs, stocks or LPs.

If you buy a REIT, for example that yields 6% with your $300,000 and borrow 50% in a margin account you can buy $600,000 with of REITs yielding $36,000/yr - minus interest cost, say 3% ie $9000 on the $300,000 borrowed and your cash flow is still $27,000 per year ie 9%. https://apple.news/AB3HKIw-nR8e2_UTWhenJaA

Residential properties or REITs generally yield far less but may appreciate more than commercial REITs that own hotels, shopping centres, office buildings or industrial buildings.
Wow! Great insight!
 
Top