Advice on Multifamily Investing Alberta

[Dave Yates]

Hi Everyone, 

I'm currently exploring opportunities for investing in multi-family properties in the Edmonton, Alberta area, and I would greatly appreciate your insights and expertise.

Financing Strategies: What financing options have you found most effective for multi-family investments in Canada? Any tips or recommendations for securing favorable terms?

Challenges and Lessons Learned: For those who have experience in multi-family investing in Edmonton, what challenges did you face, and how did you overcome them? Any lessons learned that you'd be willing to share with someone new to the market?

Networking Opportunities: Are there local networking events, conferences, or online forums where I can connect with other investors and professionals in the Edmonton real estate market?

I'm eager to learn from the experiences of this community and grateful for any guidance you can provide. Thank you in advance for your time and insights!

[Patrick Belanger]

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.