Multi-Family investor from Montreal, Quebec.

14 Replies

Hello,

About me:
An IT professional from Montreal. I'm voraciously learning how to invest in real estate the right way.

I feel some of the advice on BiggerPockets needs adjustment for the Quebec market and I would love to connect with local investors.

My journey so far:
I currently own a vacation rental property in the Laurentians. While I'm not an expert by any means I can share my experience so far and some of the lessons learned along the way.

Goals:
This summer, I hope to acquire a multi-family with some cashflow. I want to learn how to buy and manage a property remotely.

What I'm working on:
• Management companies, fair prices and relationship structure. Let me know what you pay for 2-4 units. Recommendations for companies operating in the Laurentians would be appreciated!

• Finding resources on how to vet contractors and estimate rehab costs.

Thank you!

Welcome Youssef!

I'm in Ottawa, looking at single-family rentals. Financing seems to be a bit different up here in Canada then in the US. I'm looking at a Purchase Plus Improvement mortgage with Scotiabank for the 1st investment. And I'm looking for a property I can BRRR in about a month from date of possession.

The specialist I found at Scotiabank is an investor herself and what an amazing source of information she's turned out to be.

Anyway, best of luck and feel free to connect!

--

Jeremy

Originally posted by @Jeremy Beaumier :

Welcome Youssef!

I'm in Ottawa, looking at single-family rentals. Financing seems to be a bit different up here in Canada then in the US. I'm looking at a Purchase Plus Improvement mortgage with Scotiabank for the 1st investment. And I'm looking for a property I can BRRR in about a month from date of possession.

The specialist I found at Scotiabank is an investor herself and what an amazing source of information she's turned out to be.

Anyway, best of luck and feel free to connect!

--

Jeremy

Sounds like a solid plan! When I started learning about how people were finding deals it surprised me to see single family homes mentioned. I wrongly assumed they couldn't have a healthy cashflow.

What are your criteria when looking for BRRRR deals? The private lending component is daunting but I hope to tackle it at some point.

Thanks for replying!

Hi Youssef and welcome!

Single Family Homes can definitely be hard to cash flow in major Canadian markets, but not impossible. High down payments or buying a deal with work needed can make them cash flow.

When I analyze, I know I’m conservative, so I’ll strongly consider anything that shows a monthly break even or better for SFRs. I’m comfortable with that because they’re fairly easy to offload and generally easy to add value to them through minor Reno’s.

Hey Youssef,

I am trying to estimate costs for build out and renovations. If you are ever interested in paying a contractor together to have a chat with us and understand how he quotes etc let me know, I am local to Montreal too. 

Originally posted by @Chris Habets :

Hi Youssef and welcome!

Single Family Homes can definitely be hard to cash flow in major Canadian markets, but not impossible. High down payments or buying a deal with work needed can make them cash flow.

When I analyze, I know I’m conservative, so I’ll strongly consider anything that shows a monthly break even or better for SFRs. I’m comfortable with that because they’re fairly easy to offload and generally easy to add value to them through minor Reno’s.

 Being able to sell it easily is an important advantage! I currently own a vacation rental property and we were able to dictate our terms during the purchase. I don't like my outlook if we ever decide to sell it.

Originally posted by @Yan Ohayon :

Hey Youssef,

I am trying to estimate costs for build out and renovations. If you are ever interested in paying a contractor together to have a chat with us and understand how he quotes etc let me know, I am local to Montreal too. 

I found this file made by user Will Barnard while lurking the forums here: http://www.biggerpockets.com/files/user/BarnardINC...

A habit my father made was getting contractors to divide each item in their bid to show labor and parts. He would then shop for parts and save.

My broad guidelines so far are to:

• Get multiple bids

• Ask to see previous projects. Talking to satisfied customers would be a plus.

• Budget a third party inspector and require daily updates. (Saw this in a bigger pockets video)

I reckon I'll still learn some expensive lessons but hopefully I find some quality people.

I'm on the other side of the country in Alberta, but I've been developing the basements of my SFR's into legal secondary suites. Every city and province will have their own bylaws and restrictions, but if I'm going to renovate a house anyways, I will put in the extra time, effort, and cash into this type of renovation.

a) It increases the value of the house much more than a normal renovation would.
b) It allows me to pull in at least 30% more in total rent.
c) It's much easier to mitigate vacancies when a tenant leaves. You can clean and touch up one suite while still pulling in at least some rent.
d) Seems to be a better tenant pool for 2 or 3 bedroom house suites as opposed to an entire house, yard, and garage. Speaking of garages:
e) I also rent out the garage separately on all my split SRF's for more income.
f) I pay for the utilities in my properties, but they are much less than usual. During development, I can get in there and increase efficiency by replacing furnaces, water tanks, better insulation, better doors and windows, etc. This also increases the value of the property and makes it easier to unload. Many of the houses I buy need these improvements anyways. Some provinces offer energy rebates or tax vouchers on these kinds of improvements, so for me, it's a no brainer to spend that extra cash upfront.
g) Much more room to pull your money back out after development when it comes time for refinancing. I supposed it depends on where you live, but here it's the "legal" suites that get the best return. Non-conforming mother-in-law suites will get you part way, but not nearly as much.

Hey guys,

My business partner and I are currently incorporating for multi-family purchases, minimum 8 doors, most likely in the 20s or more for our first purchase.  I have been looking at a lot of place for learning about this stuff, so far, Podcasts, web videos and networking seem to be the key for me.  Then come the analyzing phase and all of its components.  If one of you would like to sit down and chat about how I do or analyze things, send me a BP-email, and we can even skype, facetime or zoom, whatever floats your boat.

It's nice to see some people from my hood in here!

Originally posted by @Ken Didy :

I'm on the other side of the country in Alberta, but I've been developing the basements of my SFR's into legal secondary suites. Every city and province will have their own bylaws and restrictions, but if I'm going to renovate a house anyways, I will put in the extra time, effort, and cash into this type of renovation.

a) It increases the value of the house much more than a normal renovation would.
b) It allows me to pull in at least 30% more in total rent.
c) It's much easier to mitigate vacancies when a tenant leaves. You can clean and touch up one suite while still pulling in at least some rent.
d) Seems to be a better tenant pool for 2 or 3 bedroom house suites as opposed to an entire house, yard, and garage. Speaking of garages:
e) I also rent out the garage separately on all my split SRF's for more income.
f) I pay for the utilities in my properties, but they are much less than usual. During development, I can get in there and increase efficiency by replacing furnaces, water tanks, better insulation, better doors and windows, etc. This also increases the value of the property and makes it easier to unload. Many of the houses I buy need these improvements anyways. Some provinces offer energy rebates or tax vouchers on these kinds of improvements, so for me, it's a no brainer to spend that extra cash upfront.
g) Much more room to pull your money back out after development when it comes time for refinancing. I supposed it depends on where you live, but here it's the "legal" suites that get the best return. Non-conforming mother-in-law suites will get you part way, but not nearly as much.

That's a fantastic way to add value. If you even get a legal address then it makes an eventual sale easier. 

What's your process for finding all the regulations and hiring a contractor who will do work which will hold up on a city inspection?

Originally posted by @Philip Parenteau :

Hey guys,

My business partner and I are currently incorporating for multi-family purchases, minimum 8 doors, most likely in the 20s or more for our first purchase.  I have been looking at a lot of place for learning about this stuff, so far, Podcasts, web videos and networking seem to be the key for me.  Then come the analyzing phase and all of its components.  If one of you would like to sit down and chat about how I do or analyze things, send me a BP-email, and we can even skype, facetime or zoom, whatever floats your boat.

It's nice to see some people from my hood in here!

Looking into a 20 unit building to start is ambitious! My plan is to build up to it with bigger and bigger purchases.

I would love the opportunity to exchange some ideas. I'll send you a DM!

Finding the regulations is pretty easy. They are usually posted on every city's website. Look under development sections. Most should outline what they expect and require for legal suites. A word of caution, different development officers/inspectors from each city will interpret the national/provincial building codes differently. They will also put more or less weight on different aspects of the code. For instance, some of the smaller cities don't seem as concerned with the type of secondary heat source that is used for the basement suite. In bigger cities, they may limit you to only forced air, hydronic radiant, and/or electric radiant .....or any combination. The building code itself if like reading a legal document ...which I suppose it is. Not an easy endeavor for those not involved with trades ....not even easy for those who are!

I do my own development so that aspect saves me alot of money and headaches, but it takes me much longer than the average contractor since I am doing most of my own work. Screen your contractors like you will be screening your tenants. Get references and actually talk to them. The absolute best contractors usually fly under the radar and can only be found by word of mouth so get networking with the blue collar demographics! They can provide alot of insight.

Originally posted by @Ken Didy :

Finding the regulations is pretty easy. They are usually posted on every city's website. Look under development sections. Most should outline what they expect and require for legal suites. A word of caution, different development officers/inspectors from each city will interpret the national/provincial building codes differently. They will also put more or less weight on different aspects of the code. For instance, some of the smaller cities don't seem as concerned with the type of secondary heat source that is used for the basement suite. In bigger cities, they may limit you to only forced air, hydronic radiant, and/or electric radiant .....or any combination. The building code itself if like reading a legal document ...which I suppose it is. Not an easy endeavor for those not involved with trades ....not even easy for those who are!

I do my own development so that aspect saves me alot of money and headaches, but it takes me much longer than the average contractor since I am doing most of my own work. Screen your contractors like you will be screening your tenants. Get references and actually talk to them. The absolute best contractors usually fly under the radar and can only be found by word of mouth so get networking with the blue collar demographics! They can provide alot of insight.

 That's fantastic advice! One of the properties I'm seeing this weekend may have the potential to convert the basement. If it all lines up I'll tag you in a few months to let you know how it played out.

Hi Philip,

I closed on a 3 unit at the end of october. The rehab portion makes up 30% of the total cost. I understand experienced investors often take on much bigger rehabs but this project has been a trial by fire for me.

We managed to complete most of the exterior work before the snow set in. Right now unit 1 of 3 is being gutted.

I'm learning how to manage a project remotely. Some lessons are expensive and I'm not out of the woods yet but I enjoy the process.

If you're interested I'll update again in a month.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you