If so, CMHC has a new, innovative Mortgage Loan program that can make the purchasing of Rental Housing MUCH MORE attractive to Investors, and this is a MASSIVE DEAL!
Under this new program, if buildings qualify – they can get loans up to 95% of the value of the property, they can s-t-r-e-t-c-h amortizations of the loans up to 50 years and replacement reserve funding is DISCRETIONARY.
Compare this to 80% loan-to-value, 30 year amortization and mandatory minimums for replacement reserves, and you can see why and how this program makes investing not only more attainable, but profitable as well.
The qualification for this program is based on a point system, where buildings have to meet requirements for Affordability, Energy Efficiency and Accessibility. Depending on the degrees of which the building meets those criteria, points are awarded, and levels of the Mortgage Loan Insurance program are awarded.
To qualify for the program itself, there are a variety of other factors that CMHC considers, including but not limited to – the investors Net Worth, strength of overall application, and a number of covenants, guarantees and securities.
Needless to say, this program has already incentivized an incredible number of investors to pick up the pace, and there’s no sign of it slowing down soon.
For more information on MLI Select, or on any number of Mortgage Loan/ Funding programs, please reach out 🙂
Interest Rates went down yesterday again – AMAZING! The Bank of Canada’s Key Rate is now down to 4.25%, so what does that mean for you?
Well, if you currently have a Variable Rate mortgage, then your rate will go down by the .25% decrease and your payments will be lower.
If you are about to get a mortgage, then these lower rates are now available to you!
Let’s see how much every $100,000.00 costs according to today’s rates:
As you can see, current and competitive bank rates are 4.64% on a 5 year Fixed, and 5.59% on a 5 year Variable (rate fluctuates according to the Key Rate). Assuming a 30 year amortization (takes 30 years to pay off), your payment would be …
$512.39 per 100K on a fixed
$569.42 per 100K on a variable
As you can see here, current and competitive market rates (from a mortgage broker with buying power) are 4.19% on a 5 year Variable and 5.30% on a 5 year Fixed. On the same amortization as the bank rates, your payments would be…
$486.33 per 100K on a fixed
$551.73 per 100K on a variable.
So if you are looking to buy a home, look at those amounts per 100K of contemplated purchase price to figure out what your payments will be!
Here are the top 3 questions we get, that I will answer BRIEFLY, but will absolutely elaborate on in further posts:
Are there any other monthly costs to consider? Absolutely. Property Taxes, Insurance, potential Condo Fees, Maintenance Budget and Utilities are all important to consider.
What’s the difference between Bank Rates and Market Rates? One is from a bank, and one is from a mortgage broker.
Why would anyone take the higher rates? Because some people prefer the comfort of a locked in (fixed) rate, and some are more comfortable with a big bank instead of a mortgage broker
That’s a quick snapshot of how Mortgage Rates are affecting your Budget as of September 5th 2024.
If you would like a referral to a big bank or my personal mortgage broker for a FREE Pre-Approval on a Mortgage to either buy, invest or refinance – please just ask 🙂
You may have seen the Oreos. You may have seen the Italian food. If you’ve been around me on a Friday night you may have seen me with a Corona or Scotch in hand.
Am I a hypocrite?
How can someone espouse the tenants of Money, Mouscle and Mindset and then go dabble in processed foods and alcohol?
If you’re one of the people that asks yourselves that question, to you i’d say “give me a fucking break”.
Also, don’t buy into the archetypal fitness nuts you see online, and be more aware of both who you are and what’s realistic and what isn’t.
In REAL LIFE, you can enjoy a little processed food and alcohol in small amounts and be perfectly fine. I would argue that about 95% of your diet should be clean, and 95% of your focus and time should be on self improvement.
The other 5%?
For God’s sake – have 2 Oreos and a scotch.
You know what? Have 4 Oreos and 2 scotches.
Not the end of the world amigo.
As long as you’re aware of what you’re doing, you don’t do any of this in excess, you’re aware of what it will take to make any corrections, and most importantly – you do the work to stay on track, then do it.
You can be a machine and still enjoy a little dark matter lol.
Keep in mind this requires discipline and willpower. If you’re the type that absolutely CAN’T enjoy just a little because you have self control issues – then DON’T dabble.
Again – self awareness is key.
I believe you should be able to out work 99% of the general public, be able to hangout a little, then get right back to kicking ass.
This brings me to my last point.
Ever hear things like..
“If you love something, let it go, and if it comes back to you it’s yours”
Or
“A weak man is not a good man, but rather a dangerous man in control is a good man”?
In the same vein, I believe that it is NOT impressive to have something if you haven’t faced the discipline required to have it.
A skinny guy with abs
Someone born into riches
Etc
Big whoop
Show me someone that’s not only earned something, but who CONTINUES to earn it – someone who has a RESILIENT character and who WORKS for what they have.
That’s impressive
So in that sense, I personally pride myself on the ability to have copious amounts of Italian Food for Saturday dinner and then get on the stepper Sunday morning.
A primal reaction to a threat to someone it loves, cares about, or maybe even just respects. Beyond a thought process and your reasoning – it doesn’t debate, consider, or fear repercussions.
It lives a tribal existence and will put itself in dangers’ way to destroy any threat to those it cares for.
To be honest – didn’t really think much of the people that did.
And I can’t tell you why. I think it’s just normal for most people to NOT sit in the front, but rather to blend in to the middle of the pack.
So think about this… What if I told you that the further back in the class you go, the less self esteem you have? The less confidence you have? The more you care about what people think of you.
Sorry if that offends you a little, but I sat in the middle too. What does that say about me?
Here’s why I think this: lately I took up yoga. In the past 2 weeks I’ve done 9 classes and I’m loving it. I felt like a bit of an idiot in my first class because I did NOT seem like the typical yoga master. I kind of look like a meat head, I don’t go to the gym to socialize AT ALL, so if people do see me they probably think I’m not the nicest guy – and yoga people all seem to be all zen, wearing spandex and less concerned with being jacked.
So what did I do? I went ALMOST in the back of the class and off to the side. Why? to not get attention and to blend in. Why? cause I thought I’d look stupid.
But in my last class I walked in and there was NO room except for the front of the class (Da Da Daaaaaaaaa). So.. whatever… I took it. Too bad.
Within the first few minutes I noticed that I was having a way better class than usual because I WAS NOT DISTRACTED. I can only guess that out of all the units of focus I can muster – having 30 people in between the Instructor and I takes up a few of those units. This time, it was just me, the wall in front – and the instructor. And man… I got a lot out of that class.
When the class was over I couldn’t BELIEVE how good the class went.
I also couldn’t believe how I could not care LESS about what anyone thought during the class. I honestly might as well have been taking a private class.
Then it hit me….
Have I been missing out on getting the most out of experiences, being present in the moment – because I’ve been distracted, or worse, concerned with what other people think?
How much have I been missing out on?
So beside Yoga itself being a LIFE HACK that’s been making me a total weapon, I find that it’s taught me this valuable lesson about having as little as possible between me and what I am focusing on.
I’ve started to become envious of those that sat in the front of the class this whole time, not giving two sh*ts about the people behind them THIS WHOLE TIME, and getting the most out of their experiences THIS WHOLE TIME.
If you’re going to be involved in an experience that you’re going to benefit from, and spend the same time and energy as everyone else – you might as well get the most from it.
Despite many clients of mine seeing these neighbourhoods as being relatively similar options, there are a ton of both important and fascinating differences between them.
Here are some aspects of each village and differences between them (please excuse me as I can’t get EVERYTHING in here):
Navan
Known as one of the best communities in the City, Navan is INCREDIBLY engaged with it’s ‘villagers’. Founded in the early 1800’s, it was named after Navan Ireland (very cool) and was predominantly farming land. Since then it’s amassed some very active and beloved establishments like J.T. Bradleys and the Navan Memorial Center and Arena. Home to the renowned Navan Grads Jr.A Hockey Team and Navan Fair, this village is really a beacon for community spirit. Who hasn’t had a few drinks in the beer tent while listening to some amazing live country music? Their sense of recreation further extends to Fastball leagues, Curling and plenty of activity on the Prescott/Russel pathway.
They also pride themselves on their Navan Market, community dinners and seasonal festivals.
Another unique aspect would be that Navan has an Elementary School and many Daycares and Churches (fun fact… St. Mary’s Anglican church was named after TWO St. Mary’s churches in Ireland).
There are fewer sales per year in Navan and a slightly lower price point than Cumberland (coming in at 875K on average in 2023).
If I had to describe Navan in 1 word it would be COMMUNITY. Go Navan!
Cumberland
Known as where ‘the nice houses are in the East End’, Cumberland has a VERY cool history. While Cumberland was also formed in the early 1800’s, it was originally a fur trading and saw mill community founded by British Empire Loyalists. Fun Fact: The Grandchildren of a ‘Loyalist’ with the Dunning last name, and a renowned Fur Trader with the Foubert last name are what my Elementary School in Orleans was named after – Dunning Foubert! The village boasts a very quaint ‘downtown’ area with shops, restaurants and even a Heritage Museum and Arena within a few hundred meters.
Admittedly a ‘quieter’ community, Cumberland still has an active community association that supports it’s famous Cumberland Market, as well as having a big emphasis on local Arts and Culture.
Not to be outdone with recreation, Cumberland also has many great trails and pathways. It also has it’s own Arena, Outdoor Rinks and Curling Club, but most notably – the prestigious Camelot Golf Course (which I believe is the nicest course in the entire City).
Real Estate wise, MORE sales per year, with a slightly higher price point of around 900K on average. HOWEVER – there are homes for sale as high as 3M in Cumberland, with consistent homes listed in the high 1M’s and even 2M’s. There are certainly homes of that caliber in Navan, just not nearly as many.
If I had to describe Cumberland in one word it would be “High-End” ( I used a dash to make that one word.. it counts).
CONCLUSION
This is just my opinion – so don’t be mad.
If you are looking for more of an ACTIVE community, with a strong sense of Family and Recreation – then Navan is BY FAR your best choice.
If you are looking for a SLOWER paced community, with a strong sense of Arts and Culture – then CUMBERLAND is BY FAR your best choice.
Again, these are just generalizations. OF COURSE each community has a bit of everything.
Are you a builder considering, or already building rental units in Ottawa?
In the past few months, various stages of the Government have introduced incentives to help encourage more development of rental housing, and even student and long term care housing in some instances.
Here is a QUICK summary of what’s being offered:
HST Scrapped
BOTH the Federal Government and the Provincial Government have agreed to scrap the total amount of HST they would have charged on the sale of new construction of Rental Housing, Student Housing and Long Term Care Housing. For Rental housing specifically, that would mean 4 or more self contained units (think fourplex and up….all the way up). These programs harmoniously apply to developments that begin construction by the end of 2030 and finish no later than the end of 2035.
What if the builder is keeping the rental for themselves and NOT selling it? Good question. The part to be careful of here is that as SOON AS the builder/developer/owner rents the units, the Government deems that the property has been sold and purchased at fair market value – kind of like you are buying the asset from yourself. This means that they want their cut – the tax. Under this new rebate they will let it slide for the time being.
2. Rental Construction Financing
For Residential Rental Construction, CMHC will loan a minimum of $1,000,000 for construction of 5 units or more (subject to other conditions) and up to ONE HUNDRED PERCENT of the cost to build.
That’s right – they may finance the whole thing.
3. MORE CMHC Insurance on Financing
This one is a little more of an indirect benefit to Builders, so let me (try to) explain this.
When builders finance rental construction by other means (than self financed or by taking advantage of the above mentioned program), they require CMHC insurance on their loans. One of the ways CMHC raises funds to underwrite the insurance is by selling CMHC Mortgage Bonds, and they recently decided to UP their available bonds for sale from 40B to 60B – making 20B MORE available for sale so that they can generate MORE money and therefore underwrite MORE insurance. MORE insurance means MORE favourable financing from lenders, which means MORE builders can get MORE good financing on rental construction.
To summarize: No tax charged on the construction/sale, between 1M and 100% of value of financing available, and more favourable lending available via more and favourable insurance for lenders.
For more information on these programs please feel free to reach out, and of course – before making any drastic decisions, consult your accountant and lawyer.
In 2022 an Official Plan and Zoning By Law Amendment application to permit some MASSIVE changes to the already incredible venue we’ve all come to love.
Just this past October, some changes to those applications were put forth that are now seeing to add TWO additional towers up to 40 storeys high, a stand alone Event Center at the East of TD Place Stadium, and a remodeling of the North stands.
There are also significant plans to maintain/update the aging infrastructure, enhance the quality of the existing experience, and reinvent the community spaces, sport, music, art and Canal connections.
Current estimate of the cost of this project is at 420 Million.
What are your thoughts on the project?
Have a look at the new Ceremonial Entrance and storefronts in the third picture!
It’s true, it’s true…. Realtors’ can also help people buy and sell businesses!
While the formula for doing so isn’t the same as buying or selling a business, there is still an absolute formula to follow if you want to do it right.
Here are some of the SUPER fun considerations to look at:
Earnings of the Company and how that factors in to the value. Two big terms here are EBITDA and Multiples. The EBITDA is the ‘Earnings Before Interest, Taxes, Depreciation and Amortization’. Why does that matter? Well… because people often ‘fudge’ their earning for tax purposes, and if you can get your hands on a few years of 3rd party (or audited) financials, you can deconstruct them to identify they TRUE earnings – or EBITDA. Then, you need to figure out what multiple applies to your industry. A multiple is basically the number that is multiplied by the EBITDA which can fairly place the value of the company according to other recent sales in the industry and their multiples. So – if you’re EBITDA is 100K, and based off your research you see that common multiples for your industry are between 4.5 and 5, then your value could be between 450K and 500K.
Another thing to consider is the value of any assets in the company. Here you’ll need to look at a full list and you depending how big and how complex that list is, you may want to get an appraiser or subject matter expert to determine the overall value being offered.
Another thing I like to consider, that many people overlook – is the LEASE (if there is one) on the property. Not all businesses own the Real Estate they operate out of, and if that’s the case – you need to know all details about the lease. Most importantly WHEN the lease expires and what RISK that’s going to add to your business. One of my strategies when representing a Buyer for a business is the successful renegotiation of a lease to gain favourable terms and to give stability to the new owner.
The last thing that is also the most overlooked – is a simple business plan. I know – hard to believe.. but a LOT of people fail to do a simple analysis of the both the industry and the business itself, the competition and the risk that it faces on a Macro and Micro level. I’ve found that a quick overview of these aspects gives my clients enough information to make the proper strategic decision.
If you’re BUYING a business – you need all this stuff.
If you’re SELLING a business – you need all this stuff AND you need to advertise it properly. You should take the proper time (often 5 years) in getting everything ready for sale. There are certain things you can do TODAY to help make your business more valuable, which I’ll talk about in another post another day 🙂
The Bank of Canada (BoC) announced today that they are HOLDING their Key Rate at 5% – but why should you care?
Well, there are two reasons you should care.
The first one would be WHY they decided to hold. Essentially, the BoC manipulates their Key Rate (the rate at which ALL banks borrow their money and then turn around and loan it to you (at a markup aka Prime Rate) based off of how much or little they think you should be spending on stuff. If people are spending TOO MUCH and Inflation starts to get out of control, or perhaps debt levels get out of control – they INCREASE their rates to (essentially) squeeze your pocket book and make you calm your spending.
Tough love – yes. But sometimes required.
So the REASON therefore that they decided to HOLD rates is because they are seeing that people and the economy are getting their financial acts together – WHICH IS GREAT.
Inflation is down a little to 3.8% from 4%, and the GDP was flat last quarter at .03% growth (if it would have been in the negative then combined with last Q’s negative growth then we would have officially been in a recession).
So imagine a plane about to crash and then barely pulls up in time and skims the trees and everyone is safe.
Good play BoC. Good play.
The Second reason you should care about this is because since our financial plane just skimmed the trees and everyone will be ok – that sigh of relief will have great ripple effects moving forward. Happy and relieved people have less stress and anxiety, tend to go out and have a little more fun, spend a little money – and overall just make life more enjoyable. So that’s good!
These are two reasons you should care about the announcement this morning.
Now if you are BUYING and/or SELLING Real Estate then this has even more importance to you. The MAIN thing here is that we will have decent consumer confidence moving forward, which in turns means Sales Activity should continue to creep along at (hopefully) decent levels.
Why that matters is because the last rate hikes … well honestly… they hurt.
Last year the average home in Ottawa was 745K and as of last week the average is 588K – nearly a 200K difference. That 745K was also down from nearly 800K the year before that. If you’ve been looking to sell then it hasn’t been a good run the past few months, so this should at least stabilize things and give us a little bit of activity before we close out the year.
If you’re looking to Buy – this might honestly be the bottom of the market.
The BoC is claiming they want to LOWER their key rate by the end of Q2 (June) next year down to 4%, which means variable loan payments will go down and prices will start going back up.
If you want any more info on this situation or have anything you want to run by me please dont be shy. You can call me or text me directly at (613)868-4383, or email me at mevans@remax.net.
The Evans Real Estate Group Blog 