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In E119 of the REI Hot Seat, Andrew Hines and David Hulshof analyze an on-market nine-unit apartment deal in Hamilton, discussing its financials, debt structure, and value-add potential.

They emphasize the importance of cap rates, financing strategies, and structuring deals wisely to maximize returns.

The listing price is $1.89M (210K per door) with a 4.67% cap rate, which they consider too low given current debt rates.

To make the deal more attractive, they propose an offer of $1.6M, which would increase the cash-on-cash return to over 4%.

Key value-add opportunities include introducing paid parking ($50 per spot) to boost cash flow, securing CMHC financing for better debt terms, and potential rent increases for under-market units.

They highlight that negotiation, deal structuring, and identifying overlooked revenue streams are critical to making an investment work.

The episode wraps up with a discussion about renaming “hybrid” deals to better define this investment approach and a reminder for listeners to engage with their insiders' list for off-market opportunities.

Don't forget to join the Insiders list for access to off-market deals and other unique opportunities.