Montreal, Quebec · Member since 2018 · 17 posts · 3 votes
Hi everyone,
My job allows me to work with clients that have real estate investment portfolios and work with real estate agents and after talking to many of them I concluded that it seems that the rule of thumb for buying multi-unit properties is to try to pay less than 10x yearly revenue. I imagine there will be different rules depending on the market. In my case, i'm in the Montreal, Quebec area or the province of Quebec in Canada.
In my market, it's practically impossible to find something that is less than 14-16x annual revenue, which seems ridiculous to me. I have my parents and older clients telling me they use to pay 5-7x revenue... So in theory, excluding, taxes, renovations, and other costs, it would take on average 15 years to pay it and probably more than 20 years if you include all the costs. This seems kind of high to me.
Real Estate Investor · Montreal, Quebec · Member since 2015 · 95 posts · 42 votes
8y
Hi Pascal and welcome to BP,
There are lots of rules of thumb out there that are very helpful, from my experience, i think ultimately, you need to define your own rule of thumb, i.e. how much are you looking at your property to cash flow and what return expectations do you have. The GIM (Gross income multiplier) you're referring to 14 to 16 is normal in Montreal. i recently closed on a 4plex at 13 GIM. at the end of the day, 13 is not really what i based my purchase on, it was full financial breakdown that helped me make the decision including full expenses, vacancy rates, mgt fees, etc...
You'll also run into 1% rule, 2% rule or 50% rule mainly here on BP and again i'm speaking only from my experience, i highly doubt you can find any 1 and 2% properties on the island.
Quebec City, Quebec · Member since 2017 · 11 posts · 1 vote
8y
@Guillaume D. and @Philippe Laurin , Do you guys usually attend the CIIQ meetings? I would love to make it down to MTL for the next event. I just missed the last one in MTL but was at the Quebec City on May 30th.
Real Estate Investor & Marketing Specialist · Montreal, QC · Member since 2013 · 182 posts · 367 votes
8y
@Derek Dickson Last event of the season was last Tuesday and yes I was there. Next one is in September, I should be there too. I might even be the main speaker at one of the upcoming events ;).
Quebec City, Quebec · Member since 2017 · 11 posts · 1 vote
8y
@Guillaume D. I didn't realize they took the summer off. Are there other events going on during the summer?
@Philippe Laurin I will let you know. Please keep me posted if there is an event. I don't know the other groups yet. I have only been to one CIIQ event in Quebec City.
Good afternoon gents, I’m a foreign investor from switzerland that got in the market 4 years ago for two properties in Mtl, le Plateau, mix commercial and plex, completely re-made them to pretty high standards of confort and insulation, and all units (9) are now in use, rent is up 50% after renovations.
After looking at centris, I compute grm up to 19X. Although exciting, it doesn’t seem reasonable. Is there an avg multiplier, gross or income, available somewhere? In your experience, what multiples have you seen in that area lately?
In the U.K. there’s a tool called Zillow that gives you valuations of properties according to addresses, neighbor transactions and past valuation. It is usually trusted by investors.
Anyway, any of those methods above would seem realistic to re-assess my assets or am I better off calling a courtier?