Hi Dave,
Forgive the late reply; I'm new to the BP forum, but thought
I'd offer my thoughts. My wife and I have purchased 4 new-build small multi's
in Edmonton (6-8units each).
Financing Strategies: First
recommendation is talk to a good mortgage broker specializing in multifamily
lending. They can get you access to conventional lending, and loans insured
under CMHC (regular, as well as MLI select). These debt instruments have
strategies best suited to them; MLI Select, for example, is most favorable for
new-build (we have several MLI Select loans).
The most important thing is understanding how to
underwrite/value your purchases based on the required DSCR/down payments for the
different loan types. If the property doesn't meet the DSCR or the value based
on the market cap rate, your down payment will increase to bring up the DSCR or
close the gap to cap-rate value.
Challenges/Lessons Learned: Just because
you can buy a property with a CMHC insured loan doesn't mean it is a good deal.
We've seen a lot of investors agree to pay too much for the properties, and get
shocked with a big down payment and low cashflow due to the low DSCR
requirements.
You may have to look at a lot of deals to find a good one...
We've walked away from far more than we've purchased because the sellers may
want to hold firm on their asking prices (even when DD identifies major
repairs). Edmonton is a sellers market right now, so this will present
challenges to buyers. Don't buy a bad deal.
Networking Opportunities: The Edmonton
Real Estate Investors Association and the Mogul Mastermind are my go-to monthly meet-ups in Edmonton. Each offers a economic
update, market update, mortgage update, and have a guest speaker each month
covering a special topic. There are networking breaks, and time
before-and-after the meeting to converse.
Google either of those to find out more details.
There are other pop-up and recurring meet ups, but
these are my go-to's to get you started.
