How to find/buy Apartment buildings in Ontario
Hi all,
I just started my research about apartment buildings in Ontario and already got a few surprises....
.7+ Apartment Buildings:
It seems it's very hard to get 15% CMHC financing since they will use a different cape rate than current market. In the end we may have to come up with 20% minimum downpayment and pay the CMHC commission.
A broker told me to get CMHC financing, we have to find a building where the income covers 125% of the costs including mortgage costs.
Most buildings are sold off market, meaning, they will never come on MLS... and... the Buyer will have to be the one paying the agent commission, 5% commission!! auch.....
6- Plexes
RBC offers residential mortages at 80% LTV, so I am considering start with a 6 plex to learn the ropes and later on maybe try a 10Plex.
My funds are very limited , so I might have to stay under 500K purchase price.
According to my calculations, a 10 Plex with 15% down would give me better returns than a 6 plex with 20%, but if CMHC financing is hard to get, I might have to stick with a 6 Plex.
Do you guys know of anything else I should be aware of? I have experience with 3/4 plexes, but none with bigger buildings.
If anyone has knowledge of any building for sale between 4-6 units up to 500K and from 7 to 12 Units up to 750K, on a 1hr drive radius from Toronto,, please let me know. My limit is really 1 - 2hr drive so I can "micromanage" the building.
thank you
Filipe