Roger Bolduc, Real Estate Broker
Test Your Real Estate Investor Knowledge !
How to Buy or Sell a Plex Without Any Problems
Everyone has heard of—or knows someone who has—bought a plex and made a lot of money by reselling it. It is true that the past 15 years have been remarkable years of growth for real estate in general, and for plexes in particular. But what do the next few years have in store?
Buying or selling a plex is a matter of numbers. The transaction must be treated as a business transaction because that is exactly what it is. This is not a passive investment—you are in business. Beware of easy “deals” promising huge short-term profits. You should not venture into real estate investing without preparation. As with any business, you need to acquire the essential knowledge to succeed and surround yourself with competent professionals.
Here is a short quiz to help you identify the questions you should be asking yourself and assess your general knowledge of real estate investing.
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What is the best time to buy? To sell?
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Is it better to do “flips” (quick buy-and-sell transactions) or accumulate properties?
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Is it better to buy in your personal name or set up a company?
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Do you know the professionals who can help you? Real estate broker, lender, building inspector, notary, insurance broker, and others.
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How do you find a profitable plex—or, even better, a bargain below market value?
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What is the minimum down payment required with CMHC or for a conventional loan? Which type of financing is best for me?
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Do you know any private lenders? Can they be useful?
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How do you calculate the DCR, or Debt Coverage Ratio? What DCR will the lender require?
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How do you calculate the Cap Rate (Taux Global d’Actualisation, or TGA, in French)?
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Are the Gross Income Multiplier (GIM) and Net Income Multiplier (NIM) important? At what multiple should I buy or sell?
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You’ve made an offer—congratulations! Now you need to conduct your due diligence. What does this due diligence involve? What documents should be requested (or provided by the seller)? Who should I contact? What are the deadlines for completing all the necessary steps? Are these deadlines strict?
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Have you put together a dream team to get started or take your real estate investment business to the next level?
As you can see, there is no room for improvisation. Why take the risk of surrounding yourself with the wrong people?
I have been interested in real estate investing since childhood. I have taken numerous courses in this field, read many books, have been a member of the Club d’Investisseurs Immobiliers du Québec for more than 10 years, and am a personal real estate broker.
I would therefore like to be part of your dream team as your personal real estate broker!
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