All Forum Posts by: Chris Ferreira

@Sam McMillan I would invest in education before not during or after I have made an investment. Take your time and learn as much as possible, take a R.E investing course or try getting a mentor who can teach you. 

Investors are in many ways similar to entrepreneurs. You need vision and clarity for your real estate investments more than anything else to spot a great deal. If you solely rely on ratios you will never succeed in business or investing. Instead, you need to see the hidden potential that nobody else is seeing. If you have the vision on how to significantly increase the value of your investment then the ratio's wont matter as much.

Besides, if you bought a property at a 12x multiple and extensive repairs and replacements are immediately needed i.e. roof, brick ties are done, pyrite, contaminated soil, underpinning, cracked sewer main etc. this could take your ratio of 12x to easily above 16x depending on what needs to be done.

Also, right now in Montreal there are properties selling at 12-14x ratios. However, they are mostly in bad neighborhoods. i.e. MTL-Nord, St-Michel (north of met) or a bloc of studio apartments. But the issue here is that your time managing these properties will be much higher as there are greater turnover and overall more issues with management. I learnt this the hard way, I stick with good properties in good areas but create value that nobody sees so I end up getting them for in the range of 10-14x after 6 months to a year of work.

For instance, say a property is listed at a 16x rev. If you are able to increase the NOI of the building by 10K a year, you just created more than 160k in equity in your property. Which would bring your multiple WAY down to 12X. To do this, you need a bit of experience, money and vision on how you can transform your property. This is very possible in Montreal, as I have done it several times now.