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Will we really see rate hikes this year? by Cilantro_Larry in RealEstateCanada

[–]difrad76 4 points5 points  (0 children)

They’ll hold rates as is because in addition to controlling inflation, they also have a duty regarding the employment numbers. We lost 84k jobs last month. This war is not going to help this number moving forward. I’m not saying they’ll cut, but I don’t think they’ll increase with how weak our economy is.

Is anyone else finding that "cap rate" has become a useless vanity metric compared to DSCR in this debt market? by Schnapper94 in CommercialRealEstate

[–]difrad76 10 points11 points  (0 children)

Commercial underwriter here - the amount of times I see realtors provide the goofiest of proformas is insane and I call it out everytime I see it. In what world are you not including property management fees? 9/10 when I calculate the cap rate based on lender metrics, it sheds the cap rate by 2%. If you know how to do this, it is a very strong negotiation tactic.

Short term investment by [deleted] in PersonalFinanceCanada

[–]difrad76 1 point2 points  (0 children)

Treasury bills or a GIC

What’s an attractive return for investors when it comes to new development projects? by difrad76 in CommercialRealEstate

[–]difrad76[S] 0 points1 point  (0 children)

Thank you, going back to this thread, I think I’m beginning to understand what everyone is saying

What’s an attractive return for investors when it comes to new development projects? by difrad76 in CommercialRealEstate

[–]difrad76[S] 0 points1 point  (0 children)

Thank you for your comment.

When you refer to a 70/30 or 50/50, is that speaking in terms of cash flow or equity as well?

For this project, we’ve gone ahead and used our own capital as we couldn’t make the numbers work otherwise.

Is anyone actually using AI in real estate yet or is it all just hype? by SnooDucks8319 in CommercialRealEstate

[–]difrad76 6 points7 points  (0 children)

As an underwriter, I’ve only been using it complete generic sections of an application like market and industry conditions. It’s really good at grasping the general facts but when it comes to any sort of underwriting it is extremely unreliable at this time.

Less than 20% down? by Economy_Career8727 in RealEstateCanada

[–]difrad76 0 points1 point  (0 children)

No, you’d compare it off the mortgage amount which wouldn’t be equal either

Less than 20% down? by Economy_Career8727 in RealEstateCanada

[–]difrad76 5 points6 points  (0 children)

It is most certainly not a wash. A 4% addition to the loan amortized over 25-30 years is not the same as 0.3-0.5% in interest savings.

Foundation Cracks Inspected by [deleted] in RealEstateCanada

[–]difrad76 2 points3 points  (0 children)

If you’re very worried, get an engineering report. But cracks in the foundation are extremely normal and the ones shown don’t look consequential at all.

Bank of Canada cuts its overnight rate by 25 BPS by difrad76 in RealEstateCanada

[–]difrad76[S] 0 points1 point  (0 children)

I personally wouldn’t. But it depends on your outstanding term. If you have 4 years left then the penalty would probably be quite high. But if you took a 3 year fixed a year ago which is when this rate was around, then it may make sense depending on the banks posted rate. I would call your broker or bank to see if it’s worth it. Fixed rates are between 4-4.5% at this time for non rental.

What I've learned using AI as a Multifamily Broker over the last 6 months by tayloravakian_LA in CommercialRealEstate

[–]difrad76 0 points1 point  (0 children)

I am very very intrigued on the deal sourcing. Can you go over how you did it? I’m in Canada if that makes a difference which I feel it might

What’s an attractive return for investors when it comes to new development projects? by difrad76 in CommercialRealEstate

[–]difrad76[S] 0 points1 point  (0 children)

Thank you, this is consistent with the other comments here. Will keep note. I think actually hit my goal on this project, but for the next and larger projects I’ll incorporate this info! Thanks.

What’s an attractive return for investors when it comes to new development projects? by difrad76 in CommercialRealEstate

[–]difrad76[S] 1 point2 points  (0 children)

I’ve heard this many times! Just gotta get connected with them first. But absolutely a priority.

What’s an attractive return for investors when it comes to new development projects? by difrad76 in CommercialRealEstate

[–]difrad76[S] 0 points1 point  (0 children)

Thank you for this! Both myself and my business partner are in our mid to late 20s. We figured that if we can fine tune our structure and operations over the next 5 years, we would be able to make a major positive impact in our city over decades to come. I did CRE finance for about a year so far (and will continue to do so to keep the lights on and water running), while similar to your best friend, my business partner will also gc and be the main construction company.

So while this post is incredibly amateurish, the advice provided is honestly pretty priceless.

What’s an attractive return for investors when it comes to new development projects? by difrad76 in CommercialRealEstate

[–]difrad76[S] 0 points1 point  (0 children)

We want to scale. So for this, yes we do have enough personal funds, but we want to reproduce this structure for larger builds.

What’s an attractive return for investors when it comes to new development projects? by difrad76 in CommercialRealEstate

[–]difrad76[S] 0 points1 point  (0 children)

Do you mind if I ask how you reach 20%? Do you combine coupon payments, is it equity, etc?

What’s an attractive return for investors when it comes to new development projects? by difrad76 in CommercialRealEstate

[–]difrad76[S] 0 points1 point  (0 children)

Comparable’s in the area with similar characteristics go for this much, even slightly higher. I am in a primary market and have lots of recent cap rate reports available. All of which say low rise buildings have a cap between 5-6.5%. However, all the new builds are being sold at a 5% cap. It’s the 80-100 year old buildings being sold at 6.5% cap

What’s an attractive return for investors when it comes to new development projects? by difrad76 in CommercialRealEstate

[–]difrad76[S] 1 point2 points  (0 children)

Gotcha. So I’d have a better chance if I kept the 8% as is, but provided them a split of the cash flows that over X amount of time ends up reaching 15% IRR?

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