All Forum Posts by: Shrey A.

I've been looking for opportunities in Red Deer and there seem to be quite a few from a cash flow perspective. Is there a catch with Red Deer ? 

 Hi would like to know which education materials you referred! 

I had asked a similar question and got great responses. https://www.biggerpockets.com/... Will help.

Thanks for all the responses guys. I'll definitely dig in more to some of the areas you mentioned. Please keep in mind that I'm looking to make a substantial cash on cash return when going into REI. Something upward of 10% to justify investing. Else, it doesn't help me a lot since my other investments in stocks, etc are doing pretty well.

 I am literally open to anything. I've been looking at distance investing, as well as locally (obviously nothing in Vancouver). I want to cap the property value around 400k. And I am fine with both long term and short term rentals. I also don't have a preference in condo/single family homes/multiplexes. Essentially whatever cash flows after keeping aside money for repairs/etc. Where are you able to find such properties? Especially the ones under 100k ? I am unable to find such markets, and if you could give some pointers, that'll be awesome!

I have been trying to get started in investing in RE in Canada. I want to go over all the info I have and see if people have suggestions on what else might be available or what I can do to make better decisions. There are multiple issues -

1. 1. The price to rent ratio is super high almost across the country. Makes the 1-2% rule almost useless.
2. 2. The price point is much higher if you want to get in as a new investor into just rental property investment.
3. 3. The law forces investors to put 20% down. So a 400k property means I have to tie down 80k minimum. Which reduces Cap rate.
4. 4. Communities have very tight short term rental restrictions, making it very difficult to find properties, and then if tomorrow the zoning changes, you might go from positive cashflow to nothing, since the laws on short-term rentals are so volatile and different across the country.
5. 5. In bigger cities, almost all investors have a negative cap rate.
6. 6. The resources/websites/services are not mature enough to get information as easily as in the States.

I couldn't find a section on BP that is dedicated to Canada and a lot of resources and discussions are specific to the States. Here is what I've found up until now -

1. 1. Realtor.ca is the only website that lets me calculate numbers along with the listing. So I prefer that.
2. 2. Rentometer.com works only in limited ways for giving info on rents. RentFaster.ca is a better resource, unless you want to scour through craigslist.
3. 3. AirDNA gives good data in Canada as well for short term rentals, so that's good.
4. 4. Each city has a different zoning for short-term rentals.
5. 5. Short term rentals seem to be the only way to have a positive cashflow after keeping aside money for repairs, CapEx, vacancy, etc. and still have a decent CoC return.

What do people here think? What can I do to get more information on the Canadian markets? Or what should be my next step? I've mostly looked at all the major places - Victoria, Kelowna, Banff, Calgary, Edmonton, Ottawa, Toronto (and nearby areas), Halifax even. Anyone with experience investing in Canada who can share stories/tips?

Thank you for your responses. They are in line with my thoughts on this as well. I think as a beginner, the biggest argument in favor of RE I see is the unrealized equity vs actual hard cashflow. Yes the other parts like being in control are valid for experienced investors, I'm just too new to consider spending tons in renos and flips, something I know nothing about since I'm not from this industry.

Another potential problem is that I'm in Canada (stocks invested in the US as I used to live there), which means that I struggle to find positive cash flow properties. But that's probably going to be the topic of my next question here on BP. 🙂

I hope I will not be hated on for this question. I have been an investor in stock markets for the last 7 years. In the last 5 years, an index fund for S&P500 has yielded 75% returns (15% yearly on average?). The stock where I would sell and get my downpayment has showed > 200% return in last 5 years (yes, some stocks are crazy!). Now while I'm super pumped to invest into some good real estate opportunities, the best deals I can find are ~15% Cash on Cash yearly, if I include equity, it goes up to 25%, if I assume yearly 2% appreciation, it goes up to 30% returns. 

Yes, both stock market and real estate are cyclical. So it is really confusing as to would it be wise to pull some of my stock investments and put in real estate.

What do people on this forum think?

Not in this complex. In some areas inside the town and in Canmore, yes that's true.

The usual property management fees range in 25-30%. But if I go with the realtor who is selling, they are willing to offer 15%.