The downward trend to break-even makes sense as mortgage rates came down while cap rates increased. Personal opinion of course but since 5 year GoC bonds are yielding about 3%, real-estate such as this fourplex with a 4.5% cap rate is cheap. Another way to look at this is don't factor the financial leverage. 1.4 million in a bond or 1.4 million in this building? Which one's the better deal?

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Thanks for sharing the details of this triplex sale!

Deferred does not change the cap rate.

Always informative. Thank you.

Great information 🎉🎉🎉

Excellent Job

With the Down Payment number is that just a value you are placing to find out what amount will allow that property to cash flow? Or is that the actual amount the buyer put down?

Great video Patrick, one of the best I've seen explained. I love how you break down all the formulas in a very understandable way.

Buying multifamily is the best thing anyone can do. I was able to buy over 100 rental units in Southern California by adding value to properties and trading up. I do not come from money and all I want people to know, is that anything is possible in Real Estate.

Thank you for this video 🙏🏾

🔥🔥🔥

Thank you for the update 💎

Can you finance properties in Toronto

Where are you getting cap rate comps for a 4plex?

sounds like a renoeviction to me.

Happy Belated New Year. This is great material. I especially like the down-payment to breakeven line. This type of analysis merits a lot more views. I have to conclude that all speculators have exited stage left.

Thank you for sharing. Why an investor would put so much of his money down for a very slim ROI? Shouldn’t He be investing in stocks instead? I don’t get it.

I love this

What stands out for me is the unusually high Operating Expenses. Are they heating with an antiquated oil furnace or what? OE needs some analysis. Moreover, SRI is extremely low for 7 units IMO. Then there's the leverage issue. People have been conditioned to buy productive real estate with boatloads of leverage and hoping for a capital appreciation. They should be buying for the cash-flow with very little leverage. Problem for most people is that it's a big ticket item beyond their pay grade.

dude, your channel should be called "Speculate in Ottawa"; there hasn't been "investment" for quite a few years now.

I’d never buy a rental property like that .!! Not worth it whatsoever

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P r o m o S M 🌷

You're absolutely right about your comment regarding interest rate sensitivity. As a result, Sales are down. I would have to guess that inventory is way down as well. Strong hands have no reasons to divest with these low prices as many have cap rates north of 8%. Moreover, that's index's unlike a bond.

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I would make more sense to have a link in the description to the actual listing so the viewer can look through details and other circumstances of the property. thanks

The math is wrong. Cap rate is actually 4.153% and if you divide NOI by the cap rate, the value is the same as the sale price. The video shows that the value is of 911,707 when it should actually be of 900,000.

Straight to the point, great video Sir.

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There is no reason for an investor to try to calculate a cap rate. Why waste time doing this if you have the market value?

About the vacancy tax. That's got to be a violation of the charter of rights and freedom. If it's your principal residence, It's none of the governments business to dictate how many months per year you have to be there. If I want to travel around the world, I still want a place to come home to.

Where did you get the purchase price? Maybe you paid too much and that is why you are not cash flowing.

I could be wrong here but there's more damage psychologically than financially. Sure, if you're counting on major leverage it hurts but rent prices are going through the roof with Ottawa's one bedroom and two bedroom prices up YoY 19% and 14% respectively. Best guess here, but I think the pendulum will change rather quickly in the next few months as the BOC has overshot their tightening and politicians will scream at the damage they've caused. Capital market debt levels can't survive on current interest rates. Inflation be dammed, just like the central bank has done in the 70's.

It is outrageous that a landlord has to do cash for keys with a tenant who is a problem or non rent payer. The Residential Tenancy Board is totally ineffective for landlords.

Down payment required to breakeven is a welcome addition to your analysis. Well done.

Awesome info as usual. I'm always curious to see a cap rate trend. Of course it's easy to state without knowing how labour intensive it would be to produce.

We don't know what the differed maintenance or CAPEX would be required but at face value, it seems like a great deal.

I always enjoy your videos and analysis which are very informative. I concur with you that the larger segment of the market may be skewed given the small sample size. However the 2~4 unit numbers seem about right. The significant reduction in sales and stable prices makes perfect sense in this environment. These building are predominantly held in strong financial hands. Moreover, these owners are typically more informed and rational than the average home owners. This is just my 2 cents worth but they're holding onto these properties because of their inflation outlook and rising rent potential which are up 10% in Ottawa over last year. They may also think that the Bank of Canada has painted itself in a corner and can't let interest rate normalize over the rate of expected inflation without causing a deflationary spiral. Like I said, this is just my best guess.

Great analysis but how such investment makes any sense!?! Real estate in Canada appreciates 6.11% yearly on a 15 year average; inflation is 8%; ROI is -4%.

As I have posted in your May analysis, what I suspect here is a "Negative Gearing" purchase to lower the buyer's tax liability. I don't think the buyer intends to live in the building. I also suspect that buyer may have leveraged an even greater LTV using other assets as collateral.

Jeez. How many times have I mentioned that you cannot cash-flow positive with 35% down? Those days are long gone. You now need 50% down, minimum. What we have here is a "Negative Gearing" purchase to lower the buyer's tax liability. Post edit: On that note, the buyer may have leveraged an even greater LTV using other assets as collateral.

Hi Patrick, can you comment further on the -1.2% decline? Personally, I wouldn't have been surprised by that or for a 1.2% increase either. Seems there's a tug of war between rising interest rates and rising rent prices.

With variable rate mortgages on the rise will that not shrink the cap rate even more for real estate rental property investors? If you can stick you money in US treasuries at 3% why would you risk your money in real estate that seems to be trending down now with the Fed rate hikes?

good data, thanks

That's crazy.