Should You Start In the US or Canada

[Kyle Leeyaw]

Hi BP,

I am a starting Canadian multifamily investor living in Ontario Canada. My question is for other Canadian investors, do you recommend starting in Canada or the US? I would really appreciate any guidance.

Advantages of Ontario Canada

-Local

-My buying power is higher, not affected by exchange rate

Advantages of US

-Lower Cost per door

-Higher Cap rates

-No rent control

[Hai Loc]

Originally posted by @Kyle Leeyaw:

Thank you both for your comments. I will start to investigate other markets. I am looking for cash flow at CAPs as 7 percent, or higher. In that way I can raise money from investors and use money lenders for deals. I live in Toronto, the CAP rates are very low.

@Joe S.

@Roy N.undefined 

@Stephen Fryerundefined

 Last I have seen in 2019 2H cap rates. Tier 2 cities in B-C class value add will get you a sniff at 7%.. More lucky with Tier 3 value adds.. Most stabilized assets in an Tier across the board max out at a 6% cap.. 

Get ready to join the crowed space looking for value add MF in Tier 2-3 cities. 

My advice to you if you want to go this route is to gather your deep pocket Toronto homies and throw in cash offers as it is one of a few ways to compete in the US for properties that fit your script. Build your resources, capital and figure out your markets until the borders eventually open..

Canada you will likely have to go to Tier 3 cities as well for a 7 cap and will be easier to get financing . However Tier 3 cities in the US are much more populated and have more potential for growth.. aka  Columbus OH, KC Mizzou, Memphis