Cash Flow Positive in Montreal, Quebec ?

Question

So I'm super interested in getting started in real estate, ideally looking for an investment property that I could buy and rent it and be cash flow positive. Seems as though all the strategies talked online only apply to USA, and not really to the QC market. Over here it's super hard to be cash flow positive, at least for many years to come.

Asking for advice on how would you invest in order to be cash flow positive in an area such as Montreal (and surroundings) or the Quebec province? Perhaps short term rentals ? Also are there areas in Canada where it's much easier to be Cash flow positive sooner or right off the bat?

Share your story and ideas below ;)

Fraser Nybo · Answer

Hi Joe, I am from Saskatchewan but my wife is from Montreal and works for an airline so we go back often. We buy single family homes to rent and to flip along with 16+ unit apartment buildings. We recently sold our last property in Montreal (on Des Carrières) but will be moving back into the market shortly.

I watch and buy property all over Canada, Montreal is a really tough market to cash flow properties, mostly due to the strict rent control. Vanessa (my wife) still has friends in Rosemont paying $450 for a 3-1/2 (1 bedroom in non Montréal terms for those who were wondering). Landlords are doing cash for keys trying to drive tenants out and that particular friend recently recieved $10,000 to vacate the premises.

I analyze alot of properties in Montréal and it is tough to make sense of the low revenue, at this point you are basically buying for quicker appreciation especially when compared to the rest of Canada (Montréal is kind of like old Vancouver and Toronto prices).

That being said, I still think there is a ton of opportunity in the market for the right properties. Rents will catch up eventually and if you buy right and can get even a small amount of cash flow, in a few years you might have a large equity position also.

Find a good realtor who will go door knocking for you, as you don't have a ton of experience, you might have to sweeten the deal for them to bring you the deals. Just make sure you can close the deal when it's brought to you! Haha.

You need to find a seller who doesn't even know they want to sell yet.

Hai Loc · Answer

Sounds like many places in Southern Ontario..

You need to contact the owners directly. Instantly you are saving on real estate commissions..

Realtors who are investors like myself are a step ahead that have access to tools and information to find these owners..

A bit more challenging now going out and about but still doable

Philippe Laurin · Answer

Account Closed, for option #1 I mentionned off-market properties, where in theory you shouldn't be competing with many people over the same property at the same time. If you get into a bidding war because another investor contacted the same owner, just make sure to run your numbers and not overpay.

Philippe Laurin · Answer

Hi!

It is indeed hard to find cashflowing properties off the MLS in Montreal. There are 2 ways to make it work:

1) Buy off-market properties under their market value

2) Buy a property which can be optimized within the first year, either by increasing the rents or decreasing the expenses

Ideally you want to buy a property that hits both points. Those don't come easy, it might take a lot of searching to find.

Fraser Nybo · Answer

I agree, I just bought a 16 unit in Saskatoon last October via contacting the owner directly. Saved the seller commissions and got below market value with around $250k in equity on the buy (no renos needed to get rents to market value).

That's interesting to hear about yyz, are you an agent out there @Russell Butler? I would like to connect with you!

Door knocking and cold calling works. It sucks sometimes but it works haha.

Hai Loc · Answer

The only suggestion I have for an average joe to try this is to find a away to find the addresses of the buildings you like. Go to land titles office and find out which company or individual owns it and find a away how to contact them..

I have access to a search where it will provide me a list of all the buildings in that area. FOr example in Ontario is buildings 7+ units.. I find out who owns the building and cross reference the address of the owner.. then I would doorknock or mail them a personal letter..

Philippe Laurin · Answer

Account Closed said. It takes a lot of effort, and you might have to talk to talk to a lot of people before finding a good deal, but when you do find one it's all worth it.

Account Closed · Answer

are you suggesting to just randomly contact people who own the building you want, even if it isn't for sale? how often does that work out? thanks

Hai Loc · Answer

CBRE released the 1st Quarter Cap Rates and nothing has changed much for the last 2 quarters..

In the east side of Canada Montreal has a descent cap of 5-5.5% of low rise B.. Ontario everything is under 5%..  When I look on public MLS there are a heck a lot more inventory in Montreal area vs all of Ontario. Is it because the buildings are old?  Plus I also see "HST"  does that mean you have to pay taxes on real estate as well?

Hai Loc · Answer

Yes.. it doesn't work very often.. when you are looking for something and there is nothing available I dont see any other choice then trying to contacting the owner directly.. this is what most commerical agents do.. contact business owners..

At the same time if you get in touch of any of them you need to follow up from time to time.. they will think about you when the time comes for them to unload..

Multi family in Greater Toronto Area is just as scarce for A-B class that is 20 plus units..

There is a package of 4 buildings that just popped up for $43 million but its C-D class areas.. you never see stuff like that in Toronto. Covid-19 might have something to do with it

Cash Flow Positive in Montreal, Quebec ?

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