Windsor Re

[FUvW]

Hi,

I am looking to invest in a multi-unit residential apartment building in South Eastern Ontario including GTA.

The best deals in terms of price per unit seem to be in Windsor. In GTA I would be lucky to get $100,000 per unit (e.g. $2,000,000 for 20 units). But in Windsor there are 20-30 unit buildings for under 1 million.

I know Windsor has highest vacancy rates in Canada (at around 10%). So the cash flow from 20 units in Windsor can be the same as cashflow from 10 units in GTA. Still... With equal cash-flows, you get bigger building there...

Does it makes sense to invest in Winsdor?

 

[Thomas Beyer]

QUOTE (FUvW @ Mar 2 2009, 12:49 PM) Hi,

I am looking to invest in a multi-unit residential apartment building in South Eastern Ontario including GTA.

The best deals in terms of price per unit seem to be in Windsor. In GTA I would be lucky to get $100,000 per unit (e.g. $2,000,000 for 20 units). But in Windsor there are 20-30 unit buildings for under 1 million.

I know Windsor has highest vacancy rates in Canada (at around 10%). So the cash flow from 20 units in Windsor can be the same as cashflow from 10 units in GTA. Still... With equal cash-flows, you get bigger building there...

Does it makes sense to invest in Winsdor?in GTA you get properties WELL BELOW $100,000/door !

One of 3 car plants will shut down in North-America ! Why would you want to invest in Windsor ?

In my humble, W-Canada clouded, in-migration focused view, investing in apartment buildings in Windsor makes sense only if:

a) you have nerves of steel
b) you pay in cash, no mortgage, or maybe 50% down minimum
c) CAP rate is 20% or better, so with a $800/month for a 2BR and cost of $300, i.e. $6000 in NOI/year this would be 30,000/door max., better 15/door factoring in vacancies
d) building cash-flows with 50% vacancy
e) you know s.th. that we don`t i.e. why is this a RISING market with IN-MIGRATION ?
f) global warming makes Windsor a beachfront / winter destination

My previous partner suggested this logic for Detroit: it is cheap, only 15/door. Well we bought @ 45 suiter for $650,000 .. and with a vacancy of 50% and no mortgage we still cannot cash-flow it ! Maybe you wish to buy it .. 8/door is the asking price !!

DO NOT INVEST IN WINDSOR .. unless a) to f) is true !

 

[FUvW]

Thanks a lot! I see your point <br><br>I researched Windsor more and it`s an definitively an auto-industry town. "Auto-capital of Canada", and auto-makers are going out of business. It`s gonna be a ghost town if economic collapse continues. The only other major thing there is Windsor University, not enough to sustain RE market there... <br><br>I will stay away from Windsor. I could lose money if building goes down in price. It`s much more clear now. Thanks<br><br><br>