Newbie from Montreal and interested in New Brunswick

25 Replies

Hi BP members,

My name is Amr, I’m 42 years old, living in Egypt and planning on starting Real Estate Investing in Canada.

I'm interested in the BRRRR strategy of holding and renting, till now I can't make up my mind on where to start investing.

I see the New Brunswick market is very promising in term of rental, especially in Saint John. Mind you, why Saint John, simply most of listings has info on income and expenses, other areas don’t have much info.

So, if any one could help me around and directing me to the proper start. I’m hoping to have connections with experienced realtors and investors to mentor me in this path

Thanks everyone for your time and looking forward connecting BP family

I can't tell you why MLS listings provide more detail in listings in New Brunswick, but I can tell you It can be a very lucrative place to invest with the right properties in the right areas. Saint John has had huge growth in the last five years and it's only the start. We have big time investors developing high end up scale buildings all over the city and in the valley. You can't go wrong, you just need to find the right location and property. Message me if you want more information.

I can't tell you why MLS listings provide more detail in listings in New Brunswick, but I can tell you It can be a very lucrative place to invest with the right properties in the right areas. Saint John has had huge growth in the last five years and it's only the start. We have big time investors developing high end up scale buildings all over the city and in the valley. You can't go wrong, you just need to find the right location and property. Message me if you want more information.

Hi @Joel Armstrong

Thanks for your fast response, yes, it’s the same way I feel about Saint John, but a lot of discussion about Saint John on the blogs and forums, would steer you away

I’m interested in buying a few rental properties in the uptown and west and east side Saint John

I know the buildings are old and needs work, also rentals are low and old deals, so my concern how can you let your tenants move out to further rehab and increase rentals

I’m planning on visiting next month to take a look around and if you don’t mind me contacting you

Thanks again

Hi @Casey Maeda

Originally, this is where I wanted to invest, but I can’t find properties that make since in term of passive rental income

Besides, the prices for units are really hi, and I’ve been away from Montreal for the past 20 years, and I don’t have income over there, so going for loans and mortgages, is going to be challenging

But I have a commercial property in Egypt that I’m selling and planning on taking the cash to Canada

What made me go or think of New Brunswick, is, I could buy 3-4 buildings with 2-4 units each; with that same amount, I could probably buy a unit in Montreal or even Ontario

That being said, the plan is to use all the cash to buy buildings with most rental units, operate for a year, to prove income and build up credit, then go to refinancing and begin in the BRRRRing strategy

In my belief, this is possible in Saint John (I could be totally wrong), but I believe to be difficult to almost impossible in Montreal

But if anyone could advise me, if my plan is correct or does it needs changes, and perhaps, if anyone from Montreal could assist, in whether what I’m saying is away from the truth

Mind you, I’d love to start it in Montreal, I’ve lived there, and was managing a few units, for short term rentals, but trust me, it’s a huge headache

Thanks everyone and awaiting your thoughts and advices

Amr

Hi @Amr Tammam

I have to agree with @Casey Maeda . Needless to say, i'm sure there are good deals everywhere including Saint John. However, it feels like you're going there for the wrong reasons (i.e. cheaper units or ease of financing). My suggestion to you is to invest where you feel makes sense for your short and long term goals. Are you Looking for 100 doors in an appreciating and stable market in the next 5 years? I would say Montreal, and more specifically south shore, that's where i'm focused, hence why i'm pro Montreal :). Are you looking for quick flips? high cash flow? maybe Saint John would make sense especially if you can buy it all cash like you said. 

Hope this helps. 

Cheers

Saint John has had a tainted name in the past because of the financial deficit the city was in, little to no growth, and the high property tax. I’m not naive, I can see why investors turned away in the past, but that is all changing now. There still is a deficit and higher property tax, but we’ve seen significant growth, especially in the uptown core. Since 2017, off the top of my head I can think of 10 large apartment complexes that were developed in Saint John and Quispamsis/Rothesay. That’s not including the two big developments  that are slated for Germain Street in uptown SJ in 2020. Just to drive home my point, all those developments had all the units purchased or leased long before the project was complete. I realize this is a stipulation to release funding from most financial institutions, but considering the number of new units that were taken right away, that’s a sure sign of growth for our city. Even if you start off smaller with a four unit, the demand is there if you own clean, modern units in good locations. 



@Mazin El-Achkar makes a good point, it depends on what you’re looking for and what your goals are. If you’re looking for properties that will have a good cash flow, Saint John is where you want to be.

@Amr Tammam I would confirm your financing options in markets you are more familiar before deciding to invest in unknown territory. Some lenders may let you leverage depending on the property type, your income in Egypt etc

Are you moving back to Canada to manage these properties or planning on getting a property manager? What are cap rates in New Brunswick? Have you considered using brrr in the US where there are great cash flow markets relative to Canada?

Hi @Mazin El-Achkar

Thanks for your response

I would love to invest in Montreal, but my goal or strategy is cash flow, and I don't see that happening in Montreal, I believe max CAP is at 5-6%

On the other hand I see potential in terms of cash flow in Saint John and also opportunities for quick flips

Maybe in the future, after building equity and credit history, Montreal could be an option

But still, I’m basing these data on what I could find, maybe you could lead me to a source that gives more info about Montreal market

Thank you for your response and I’ll be visiting next month Montreal and maybe we could connect

@Joel Armstrong

I totally agree with you, and my strategy is cash flow, so you are confirming my view in Saint John

I would appreciate connecting with you and maybe you could steer me to proper sources for multi family units, investor realtor, accountant and lawyers etc

I’m planning on visiting Montreal next month and then going to New Brunswick

@Casey Maeda

You’re absolutely correct about financing options, I’m going next month to Montreal and then go see New Brunswick

I’ll check concerning financing in Montreal, but do you agree about Montreal not being cash flow market, unless you’re in the short term stays?

The plan is to move back to Canada and mange the properties I acquire

I've seen Cap rates from 8-10% and even more, but again, this info is through MLS

For the US, I don’t believe in managing projects long distances, and I have no idea what’s the market like, or where to even start

I see the opportunities are much more lucrative, but US is totally alien territory to me

What’s your insight about the US and where with what amount of capital required?

@Amr Tammam

As glowing as @Joel Armstrong is about Saint John, you still need to take the time to get to know the city before you go shopping.  In Uptown the distance of a block or two can be the difference between good value and bad headaches.  Prices in the north end (i.e. Indiantown) may look amazing on paper - particularly to those from away - but many buildings are tired and you will not command the rent or resale price to justify the re-investement you would need to make to modernize them.

There has been a fair amount of money from away come into the Saint John market in the past 2 years and many folks are now overpaying (IMHO) for properties in the Uptown.

@Roy N.

I agree with what you minus the rents, but that is why I said in the right location. If all we had were dilapidated four units for 59k in the north end then I wouldn’t invest here either. There are many attractive locations; most of the east side, millidgeville, Quispamsis, Rothesay, and the uptown core, minus the south end. There are even new developments though like the new 25 unit building in the south end on St James st that are high end units. Look up Oceanside Urban Lofts. St. James street is still a rough area if you go further down, but it just shows that developers want a piece of the pie.

@Amr Tammam I agree Montreal is not a cashflow market but if you look hard in the outskirts you may find some good value add plays. I have found some value outskirts of Toronto where I’m from.

If you’re comfortable with the employment and population growth in the east coast, by all means go for it. For me, the macro environment has to be right regardless of what the cap rates are going for in a market. I look forward to hearing how things go for you.

Regarding the US market, there are a ton of great markets to invest in for cashflow and appreciation. Ohio, Texas, Atlanta etc list goes on. I go for hybrid markets, that’s just me.

Casey

100% agree with @Roy N.
This year we've added a 6-unit and 4-unit in Saint John and walked away from 3 other deals under contract. Don't under-estimate your due diligence in this market! There are streets in uptown where one block is great, but walk two more minutes down the same street and you're in a slum neighbourhood.

Does that mean there's lots of opportunity? The "buy the worst building on a good street and fix it up" strategy? Like Roy said, the money you'll have to pour into most of these buildings is not coming back to you in a refinance or sale. And as for tenants... you'll place a great tenant in a nice fresh modernized apartment, but they'll be gone within a couple months because that's not the kind of neighbourhood they want to live in.

Just do your homework on the city first. There's lots of opportunities, but there's a lot of investors that have been burned too.

Originally posted by @Joel Armstrong :

@Roy N.

I agree with what you minus the rents, but that is why I said in the right location. If all we had were dilapidated four units for 59k in the north end then I wouldn’t invest here either. There are many attractive locations; most of the east side, millidgeville, Quispamsis, Rothesay, and the uptown core, minus the south end. There are even new developments though like the new 25 unit building in the south end on St James st that are high end units. Look up Oceanside Urban Lofts. St. James street is still a rough area if you go further down, but it just shows that developers want a piece of the pie.

My comment about the rents was in the context of the North End and I stand by-it ... you'll not command rents in that neighbourhood which justify rehabilitating most of the building stock.    Uptown is a different story (if your are on the right blocks).  We are getting good rents on Orange and Princess and have a couple of projects further south that are a little more on the edge.

Anything west of Germain along the waterfront is pretty safe these days.   Oceanside Lofts ... that's the old Sally Anne building?   We took an early pass on that building as it required more commitment to the City than we could make. But it is nice to see folks taking on these old properties and making pretty apartments ... now if they could convince folks to make them more energy efficient in the process. 

We'll just keep quietly improving our clutch of formerly Unloved Uptown properties.

All kinds of markets out there, just depends on what you’re after. I agree with your point. I just feel the need to defend my hometown when I know there’s potential. Right location, it can be very lucrative. As far as the older heritage buildings go, yes it’s a pain dealing with the heritage bylaws and you’ll have to increase your budget to redevelop the older buildings to bring them back to their former glory, but it’d be difficult finding a better unit once they’re complete. A project that size would seem like a pipe dream for someone starting out, but there are many other opportunities around the city, just have to find them. 


I found my first 4 unit by calling every contact I had until I met someone who was able to help, that led to another. I sourced out a 12 unit by mailing a letter to the owner who I knew was older and looking to sell. Now I have a VTB with 5% down in the works. It’s all what you make of it.

And the Oceanside lofts, yes the old Salvation Army building.

Hi @Trevor Gaal

I totally get the importance of due diligence, and doing all the homework, and that’s why I joined this platform to be able to make a network of experienced individuals in the market, getting proper advice

Thanks

Hi @Roy N.

Thank you for your sincere advice on Saint John, I’m glad that there is still good people out there giving advice and warnings of the do’s and don’t

So again, I’m feeling Saint John, with the proper networking with experienced personal like you, I see it promising

Thanks and hope to chat more with you

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