All Forum Posts by: Frederic Babeux

Hey all, 

Just wanted to chip in from Quebec, over here the market definetly seems cheaper than Vancouver or the prairies. 

I've been looking into some mfr lately close to Montreal and there seems to be some decent cash flow. Montreal itself I feel it is much harder to find something that will cashflow, as duplexes start at around 500k or so in the nicer areas! 

Good to see some Canadians around here, investing in the US does seem complicated from a tax standpoint. 

Hey Mathieu, 

In all honesty I think there are better ways to spend that kind of money. 

Surely they did not reinvent the wheel and it seems a steep price to pay for a few contacts. 

Being from Canada also, I know there is a few real estate investing groups around and most likely you can find what /who your looking for there. 

Best of luck! 

Be careful when using Google street view, quite often the pictures are quite old. 

For example, my house still shows no fence and a trampoline in the backyard but I got the yard fenced 3 yrs ago. 

Definitely be careful about that junk yard though... 

@gregg Scott, thank you for the reply, you are right on the risk VS return. However when running the numbers on both properties, the one that is slightly further (still close to downtown though) has much better cash flow potential. 

I forgot to mention that in Quebec we have very strict rent control rules and increasing rent is very difficult on anything over the inflation rate (unless you did significant work on the property) 

You can do bigger increases between two different tenants, however some rules apply there as well and the new tenant could demand to pay the same rent as the previous tenant. 

Personally I'm leaning towards the one that is a bit further away from key areas as of now. 

Other comments are welcome as I am not dead set on a choice yet. 

Hello all,

I've been looking around for a Duplex near where I live and came up with a few basic questions. I would like to know how close one should be from the main ''job hubs'' when looking at purchasing a MFR.

For example, here are the 3 main areas where people work/study in this town:

- The hospital

- The agriculture trade school/R&D center (not sure how you guys call that in the US)

- University campus (veterinarian studies campus only)

Is a 10 minute drive reasonable? Otherwise it's about a 30 min walk. For the hospital I'm guessing that would be fine but do you think students would prefer to be closer to schools? (maybe 10 minute walk instead?)

There is about a 30% premium for buildings that are within 10 minutes walk from these. The rents do not seem to have the extra 30% premium however... 

Let me know what you guys think or if you need any additional information!

Thank you!

Congrats! Good to see some people my age and from my region succeed! I'm curious to see how things evolve for you! 

@leona n. Great input! May I ask which rm you are talking about? Most land I've seen is listed around 1k per cultivable acre and is in the gray soil zone (northern Saskatchewan). 130k would be the listed price and not the down payment. 

I will definetly try and get some land that is already rented and will try and find a deal that is cash flowing. 

Good land seems to come up once in a while, there is a lot of grassland/hayland for sale but those don't look very rentable.. 

Great input once again! 

@Barry Hecht, you bring a good point with the negative cash flow in the early years, ideally I'd try to find something cash positive but I am not quite there yet as I'm still saving for a down payment. 

Regarding the rate on the loan, my wife has employee pricing since she works at the bank, I will most likely use a pre discount rate in my calculations though, just to make sure the deal is attractive on all aspects. 

Regarding land maintenance, chances are it will be done by the tenant plus the land I'm considering usually has very little trees around, so we'll see about that. 

Good input from everyone so far, giving me good ideas what to look for! 

Thank you @Jaysen Medhurst, you bring some good points. As you mentionned, you cannot depreciate land in Canada, I'm guessing you guys use depreciation expenses in your income statements therefore ''reducing'' net profits?

Regarding appreciation, you are right that appreciation by itself would be speculation, but i believe that since farmland is a commodity producing asset that appreciation will be driven mostly by global population growth and not directly housing/local population growth.

I'm not too familiar with the cash on cash returns yet but let's say the land is cashflow negative after tax/mortgage, is there a way to know if the deal is still attractive?

Based on 30 yr mortgage with 25% down @ 3%, break-even would be 35.75$/acre. What if I only get 30$/acre? 

Is cash flow positive a must in every single deal ?

Hello all, 

My name is Frederic and I've been reading the forums for a few days now.

I currently work in the investment industry as a mutual fund sales representative and am looking at investing in real estate within a year or two. I currently own a house with my fiance and would like to diversify my assets into real estate as most of my income/assets is linked to financial markets. 

I was looking at buying some farmland in one of the western provinces as an investment. I was wondering if anyone had experience doing this? 

Here's a couple of stats for you. 

List price: 130000 (25% down over 25 or 30 yrs) 

Annual rent: 40$/acre x 160 acres =6400$

Annual taxes: 800$

Vacancy: not sure it'll ever be vacant

Lease would be paid upfront before growing season and generally on a multi year term with built in increases. 

Just looking at some pointers or things I might have missed? This would be a buy and hold and mostly counting on appreciation. 

Thanks in advance for your help!