All Forum Posts by: Abe Homulo

@Roy N. cities in southern Ontario wouldnt have double digit cap rate unless you are purchasing century old house in lowly desired part of a small town. I understand if you move out of this region you are probably right about better returns

@Chad U. i am getting hit hard by municipal/provincial level of rent controls and requirements so you really made the right choice to 1. move out of canada 2. switch to different business without such regulations. Here in waterloo the rent controls dont even let you rent out more than 4 rooms in a house no matter what the size of building is. 

Hi bigger pockets,

I am an RE owner in Ontario, Canada. I encountered bigger pocket a month ago, and have been following, reading, and enjoying myself here. 

I come across many investors in BP referring to multifamily/residential rental deals they are interested/closing at an absurd returns and prices. I see a lot of 7-8%, even double digit capitalization rate properties, which are beyond unimaginable returns in Canada. In the city I live in Canada, Waterloo, any capitalization rate 5-5.25%, excluding CapEx is considered a "deal". Pretty much any RE on market with 4.75%+ cap will get sold quickly. I am just wondering are these real numbers investors pay or I am missing out on hidden costs or type of deal (such as just purchasing building only, on a rented land).

For example, I just closed a deal few months ago, with 5000 rent, operating cost 1600 (utility, p tax, minor maintenance) at 750k. at 5.4% cap, this isn't a bad deal here. Even if you go to smaller towns with 5000-7000 people, with drug problems, cap rate wont go over 7~7.5% here. Is there really that much disparity between Canadian and USA RE market? Appreciate any opinion that will shine light on this :)