multi family investing

What Student Rental apartment buildings can you buy in Waterloo?

…and what return will you get on your money by investing in these student properties?

This is something I’ve been asked a lot recently, especially with the news that CMHC is now back in the student rental financing game.

In this video, we look at a 180 bedroom property that an investor is considering near both Universities in Waterloo. It is brand new, in a great location, and fully leased at favorable rates.

If you’re interested in buying, selling or developing a student rental property in Kitchener Waterloo, I’d love to talk to you.  Call me at 519-772-4376 or email me for a complimentary no-obligation investment consultation

PS – Make sure you’re following our updates here http://twitter.com/BenjaminBach

multi family investing

CMHC *finally* returns to Student Housing Rentals in Waterloo

The day is upon us.  Many of our clients have been waiting for this since 2008, when the tap of money for student rental properties seemingly dried up. CMHC stopped insuring loans on this asset, and when CMHC gets out of the game, banks tighten up their available financing terms and start looking for much larger down payments, shorter amortizations, and higher fees.  Yuck

Well, CMHC (Canada’s Mortgage and Housing Corporation) announced a new program, creatively titled CMHC Multi Unit Student Housing.  Watch the video embedded below for details on what CMHC is looking for before loaning you money to buy, refinance, or develop a student property

Some notes:

This program is for refinance, take-out, construction& new purchase loans for purpose built student housing projects “located on campus of within walking distance” from the universities (WLU, Conestoga College & University of Waterloo if you’re investing in Kitchener Waterloo).  CMHC will insure up to 85% of their lending value, which depending on the asset, will probably be between 70% and 80% LTV of the purchase price.  There is the option for fixed interest rates or a floating rate with a ceiling. Second (or pari passu) mortgages are permitted on title (presumably with CMHC and lender in 1st positions permission).

Additionally, CMHC wants to see that the borrowers have a track record of running similar projects, and in the case of a construction or development loan, that the borrower has the personal net worth to sustain the debt payments (mortgage) for a full year, in the case that the property isn’t completed for September and sits vacant (not a pretty scenario, and rare with an experienced developer).

For construction loans, CMHC will advance up to 75% of the value or cost during construction, and increase the loan to an 85% LTV (of lending value) once the property is complete and the rental income stabilizes.

If you’re interested in how you can get into the student rental market, contact me at Benjamin@BenjaminBach.com or 519-772-4376. I’d love to sit down with you for a free, no-obligation consultation. 

PS – Make sure you’re following our updates here http://twitter.com/BenjaminBach

multi family investing

Commercial Real Estate news heard on Twitter

Not familiar with Twitter? Twitter is a communication platform where posts are limited to 140 characters; it’s like ‘micro-blogging.’

In case you are not following me on twitter (you can go to twitter.com/BenjaminBach to sign up and ‘follow’ me), here are some commercial real estate news stories you will find interesting, that I ‘tweeted’ about this past week.  Some are about the local real estate market in Kitchener Waterloo and Cambridge, Ontario, while other’s are about other markets in Canada, and a few are about the US commercial real estate market.

• A great Waterloo Region company! RT GHarrisCCIM: Keep the good news rolling….Toyota adds second Woodstock shift http://viigo.im/1KdW

Toyota Motor Manufacturing Canada Inc. (TM-N83.58-0.44-0.52%) will hire more than 800 workers and add a second shift of production at its plant in Woodstock, Ont., providing another shot in the arm for the Ontario economy and another sign that a recovery in the battered auto sector is under way.

• Just took a real estate investor to view a condo rented for $2k+ /month, for sale under $220k -gotta love Kitchener Waterloo!

(We’re involved in multiple offers on the above property.  As of last night, there were ‘7 or 8 offers’ competing to buy this investment property!)

• TD and RBC lowering mortgage rates (as per the Kitchener Record) http://bit.ly/4y1j7d -if you need a *great* investment mortgage pro, msg me
• Housing Starts up in Kitchener Waterloo area http://bit.ly/7URBZj – another important metric for real estate

WATERLOO REGION — Led by the construction of single family homes, housing starts rose by 16.2 per cent in Waterloo Region in November compared to the same month last year. Foundations were poured for 273 housing units in the region, up from 235 a year ago, according to figures released today by Canada Mortgage and Housing Corp.  November’s total was the second highest of the year, trailing only October when 344 homes were started.

• Kitchener Waterloo just featured in Fox news report as a strong economy. That’s 1 reason real estate investors buy rentals here – FOX News discovers Waterloo Region’s tech sector employment needs: http://bit.ly/796MBy
• Bank of Canada keeps overnight rate at historic low of 0.25%, saying it will stay there til mid-2010. Some say ‘rates won’t chng til 4Q ‘10′
• Moody’s says US & Britain may "test" triple-A credit ratings. Canada considered safe, w ‘resistant’ ratings due to ’strong fiscal position’
• Globe & Mail – Housing starts hit 2009 high http://bit.ly/53Gd1s

Housing starts hit their highest level this year in November, more proof that Canada’s real estate market has clawed out of recession. Starts rose 0.7 per cent to 158,500 units on a seasonally adjusted basis, as single-home construction outweighed a drop in multiple home activity, Canada Mortgage and Housing Corp. said Tuesday.

Record low interest rates are fuelling a rebound in Canada’s real estate market, spurring rising prices and a flurry of buying activity. The Bank of Canada today reiterated its expectation that rates will stay low until the middle of next year.

• Kitchener Waterloo real estate update: construction starts up for 2nd month in a row, over 2008. YTD Cambridge starts up 87.5% (as per CMHC)
• More info @ http://BenjaminBach.com RT @creanews: Real Estate Sales in Kitchener-Waterloo reach monthly high for 3rd cons. month in Nov
• CMHC spring 09 report says Kitchener CMA’s vacancy rate under 3% (& below province’s avg)
• Invest in what you understand or you can lose a fortune! These smart ppl lost millions in areas they didn’t know about http://bit.ly/7uPUDc
• Just spoke w/ real estate investor who owns 2 investment condos in Toronto; he thinks TO market is peaking & time to sell-what do u think? The investor from Toronto thinks their equity will make more $$ in Kitchener Waterloo & Cambridge, so they’re investing in real estate here
• RT @gregboutin: Guelph-Kitchener-Waterloo region might become silicon valley of Canada (I’m talking solar PV silicon) http://bit.ly/7wbiqK

Waterloo Region is on the list as a potential site for a solar module plant that could employ as many as 500 people, says the president of Kitchener-based Canadian Solar Inc.   The company announced today that it plans to build a $24-million plant to produce solar modules for the Ontario market. It said it expects to make "definite decision" about the location in the first quarter of 2010.

• Real Estate Investors: good article (pdf) on how largest multi-family, apartment & investment sales in the US were financed in 2009http://bit.ly/5m6wGi

Includes details of how sales between $2.3 million and $109,500,000 have been financed this year in the States – Very interesting read!

• RT @creanews National Post – HOUSING RECORDS TO FALL; Red-hot Vancouver and Toronto drive totals http://is.gd/5caOl

November housing sales across the country are set to reach new highs based on fresh data from the country’s two most expensive markets.

The national numbers from the Ottawa-based Canadian Real Estate Association are not due out until mid-December but the Toronto Real Estate Board said yesterday it had its best November on record. Toronto’s news came on the heals of a Wednesday release from the Real Estate Board of Greater Vancouver that said sales activity in the city rocketed up 252.7% in November from a year ago.

What the latest numbers will likely mean is an improvement in the national average sale price, which was up 20% in October from a year ago – the largest such increase in two decades. The two cities tend to skew the national average price up or down, based on levels of sales activity.

For daily updates, follow me on twitter.com/BenjaminBach