Im from Montreal, Canada. The housing market is absolutely insane here with 20% jump in housing prices this year alone! its extremely hard to buy a multi family home because as soon as they hit the market they are flooded with offers and sometimes sell for 100k over the asking price. i need someone to tell me how much i should be paying for this multiplex. i intend to use the brrrr method.
this property bring 47000$ a year. The NOI is 34692
rents around the area for a 4-1/2 are 1000$-1100$ renovated
my renovation budget is 100k.
My suggestion would be to use the BP BRRRR calculator and input all the values to best of your knowledge and then share the link/result here for comments. My two cents. Thanks
Greetings from Montreal. Indeed the market here is completely insane. A ballpark calculation I usually do to quickly evaluate a deal is by taking 4% off the total rental price to account for vacancy and then from that value another 30% to account for CAPEX, property management and taxes. If the remaining value pays your mortgage as well as your expected cashflow (or get somehow close to that), then you may have a deal.
Given that this is a 6-plex and you won't qualify for residential financing, you should expect a higher interest rates and a higher downpayment requirement. That being said, I don't believe you have a deal if your annual income remains $47,000. That's different if you can raise the rent to $1,100 with minimal investment.
Honestly, if the property is on MLS greater the chances it's not a deal. Properties are being sold in Montreal for market price not by its potential. On top of that, the economy is not following the house market. In a city where the average family income is around $50K, there's just as much as you can go on rental price, especially now on uncertain times.
If you want a deal, get to it before it goes to the market. This is the only way you will be able to find something in such a competitive market.