From Mortgage Brokernews.ca August 7, 2018
The Ontario-based Canadian arm of Greybrook Realty Partners has announced its expansion beyond the GTA and the southern part of the province with its purchase and upgrading of existing multi-unit residential buildings in Montreal.
In particular, the asset management and advisory services firm is looking at acquiring and renovating apartment buildings in the city as tenants move out. Among the upgrades mentioned were new appliances, floors, and countertops, “hopefully increasing the rents a little bit (while) operating the assets.”
“[Montreal is] something that we’re very interested in,” Greybrook CEO Peter Politis told RENX, adding that “we’re actively bidding on stuff as we speak.”
Aside from aiming for a portfolio of 80 residential rental units in suburban Côte Saint-Luc., Greybrook is also in the process of purchasing “value-add opportunities” in Quebec City, Politis said.
Montreal’s relative affordability both in terms of home sales and rental rates makes it a sensible choice for further expansion, especially compared to red-hot markets such as Toronto.
“I think that there are a lot of people that are going there and I think that there’s a lot of legs in that real estate market for us,” Politis explained. “It’s something that we’ve been looking at for a little bit but really feel on the multi-family side it’s somewhere that we want to be”.
It was only a matter of time until Toronto based real estate investors discovered that the affordability factor of the Montreal investment property field made it a worthwhile venture. While this is great news for investment property owners in Montreal, in that this could drive up prices here, it will make it more difficult for local residents to acquire these type of properties. An asset management firm like Greybrook Realty Partners have access to funding that the average person doesn’t. They can buy a building in need of renovations for all cash, fix it up and lease it at higher rents, thereby raising the value, and then acquire conventional financing from a standard lender.
The average investor would have to get conventional financing to acquire the property, but would have to lock in their financing for at least five years, so that even if they raised the value by 50% they could not increase their mortgage until the current mortgage comes due.
This is where a private lender like Tempbridge can help. Their loans are short term (generally 12-24 months). They can lend you up to 75% of the acquisition price. This will give you time to improve the quality of the building and the tenants and increase income, thereby raising the value of the property. Once you have reached the value you have projected you can then get standard financing from a bank (CMHC insured) up to 85% of the new value of your property.
You can get more information at www.tempbridge.ca
