All Forum Posts by: Tom Stromar

Hi Victor - from experience I would guess that the bellingham properties probably have a higher rate. In Nanaimo for example, the average SFD price is 400K, duplexes start around the same, MFDs start in the seven digits. Rents for 'regular' stock apartments are in the 700-1000 range, houses 1100-2000-ish. Surrounding towns will be similar. There are higher caps in Port Alberni as it has been depressed for some time so the prices there are lower.

I cannot speak to anything on the mainland but here on the island north of Victoria it is still possible to find some cashflowing properties. The cap rate runs about 3-6% on most of them and occasionally (there's a rough apartment building I've got a line on) up to 8 or 10%.

That being said, this year has been *really* hot and the cap rates are compressing.

Also, depending on the city, there's an opportunity to 'develop' some cashflow by adding suites to existing properties. Are you looking for SFDs? MFDs?

Hi Robin,

Like Elliot, we're also invested here in Nanaimo and can confirm that cap rates actually exist here although the last few months the low inventory has been driving prices up quickly so it's currently compressing down. That being said there are still lots of opportunities to be found here.

Welcome to BP!

Vacancy has been dropping for awhile and is now quite low. Officially states 4% but in the trenches I would guess about 1.5% now. In fact in the sale market we have a severe shortage of single family homes. The university has been and, has plans to, expand rapidly. The extra demand from the university renters neatly keeps the vacancy really low surrounding the university. Homes in the 'University District' are usually a safe bet. This borders the area known as 'South Nanaimo' within which there are pockets that are best to avoid (substandard tenants, etc..) most of which are near the water.The Old City which envelopes downtown is normally fine below the 400 block. You'll need to be careful when vetting deals as some properties that look like screaming deals with high cap rates you'll find are in those dodgy areas.

Going upscale from there are Central Nanaimo, Diver Lake, Pleasant Valley, Uplands, Departure Bay, Hammond Bay and North Nanaimo, in that order roughly. It will be tough to find cash flow once you work your way half up that list however. That being said the speculative returns on the north shore have boggled my mind for the last 20 years so if that's your play, that's where you'll want to do it. (We're more cash flow type of investors)

Hi Stanley, 

Congrats on entering the fray!

Over here on Vancouver Island we still have a positive cap rate but it seems the Vancouver bug is spreading and we are seeing them get compressed. 

Up here in Nanaimo the up and down rent for a house with a suite grosses from $1600 to $2200 and the purchase price range is 310k up to 500. 

Another nice move over here is to purchase a property that has carriage house development potential. The return on the main house is standard but you can get some nice returns on the second auxiliary suite. 80k to develop and 700-1000 rent

While I can't recommend anyone local, you'll definitely want to take the time to find some good professionals in this regard. We are currently dealing with a couple doing some transactions who are one part Canadian and one part American and there are all manner of complications.

Welcome to the game - sounds like you've got a good start going :)

I'm up in Nanaimo as well. 

Elliott - how's the fourplex going - still under the city radar?

Hi Melissa,

If you spend some time searching through the site you'll find lots of ideas on how to get started from House Hacking to partnering up with someone that perhaps has the money but not the time to find the deals or, say, coordinating flips.

Brandon Turner has an e-book that I believe focuses exactly on this topic "how to invest with no money" or something similar.

Welcome to BP!

The lower mainland can be tough and you'll definitely benefit from hooking up with someone local to help you navigate the nuances of the market. As you build your RE portfolio you may want to look outside the greater Vancouver area, particularly if you're after cashflow. Here on the island for instance the average house price is still only a few hundred thousand and the rents not too far removed from you'll see over there. I'm sure there are some other areas, say east of the city where you may find the same thing.

Hi Melissa,

They absolutely flip in Vancouver. They buy rundown shacks for 2.4 million, remove the house and then sell the vacant lot for more, lol. 

In any market a flip is possible providing you get all your numbers in line, specifically ARV, reno & transactional costs. Working backwards helps. Also, as an agent you'll save a large portion of the transactional costs. I think the only con would be to not spread yourself too thin and then both ventures will suffer.

Up in Nanaimo the market is heating up and you'll start to see a lot more flips being performed as the rising market makes up for a lot of mistakes.

I work with my wife as agents in Nanaimo and we are both REI as well.