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Where To Invest in Multi Family Real Estate For MAXIMUM Profit

Where To Invest in Multi Family Real Estate For MAXIMUM Profit

Multi family real estate has created more millionaires than any other business. As the great Andrew Carnegie says, “The wise young man or wage earner of today invests their money in real estate.”

But where is the best place to buy multi family real estate?

Where To Invest in Multi Family Real Estate For MAXIMUM Profit


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Before I get right into the strategies of where to buy multi family real estate, I will say that investing in apartment buildings is a COMPLETELY different business than single family.

The main difference is that it’s strictly business and numbers.

How much income does the building generate?

This is really all we, as sophisticated investor’s  and lenders, care about. It’s very different from single family. Which is still a GREAT business to invest in, and you definitely should, but the margin for mistakes is greater in this sandbox.

We’re dealing with a lot more money and mistakes made in this asset class can be devastating.

That being said, if you treat this as the business that it is, it can make you very wealthy!

Buy Multi Family Real Estate In An Area That’s Growing

When investing in multi family real estate, you want to be in a city that’s growing. The last thing you want to be is a landlord in a dead zone where no one wants to live.

That’s a recipe for disaster!

What you want to look for specifically is a GDP growth that’s growing FASTER than the provincial and national averages. Why do we care about this?

Because GDP growth will lead to job growth. And what happens when jobs are being created? People come for work and the population begins to grow (see, fundamentals are fun!).

This is how seasoned and skilled investor’s buy. They study and look for growing trends – not what’s ‘cheap’ or is a ‘good deal.’ Fundamentals!

As I said earlier, the last thing you want to do is invest in a city with no jobs. Or in a city that only has ONE main industry.

Because when times are good, life is great.

But what happens when there’s a change in the economic cycle (and there always is!)?

That industry can get hit really hard, which means your business (your building) will get hit really hard.

The key is investing in a city with a diverse economy. This is why I love Kitchener, Waterloo and Cambridge so much!

We have a VERY strong manufacturing sector, an up and coming tech sector which is growing rapidly and we also have large insurance employers as well as two large universities and colleges.

Long story short, we have a strong working class (which means tenants are more likely to pay rent!) which is more ‘sheltered’ from economic shifts.

For example, if the Canadian dollar rises which in turn hurts the manufacturing sector, there are other industries and jobs to take the hit.

Believe me, there are ALWAYS great tenants in KWC looking for a great place to live. So long as you manage your real estate wisely, you should do very well here.

Good Areas

Now that you know what to look for before investing in a city, let’s boil it down even further.

Where should we buy multi family real estate WITHIN our chosen city?

There are three key things that you want to keep in mind when buying a building.

1 – Is it close to amenities?

Being close to grocery stores, plaza’s and restaurants are very important. Remember, the tenant profile that is living in your building WANTS to be near the action.

This is why they often want to live near the downtown cores – where multi family real estate abundant in most cities.

The closer you are to amenities, the more of a premium you can get for rent. And remember, multi family real estate is ALL about income!

So the goal is to increase your revenue i.e. rents which will in-turn raise the value of your building!

2 – Highway Access

Now this one is a little more specific to KitchenerWaterloo. Our city is VERY car heavy – and that’s just because the way the city is laid out. As well as being right along the 401 corridor.

A LOT of people drive cars, and most likely a lot of your tenants. So keep that in mind.

Being in a 10-15 minute radius from the expressway or 401 is great. Unlike single family, this key point isn’t as important, but it should still be a goal.

3 – Transportation

Now this one is the MOST important when buying multi family real estate.

Many tenants renting an apartment may not have a car, or be able to afford one. But even so, their children will very likely rely on public transportation to get to school etc.

Remember, the LOWER the rent – the less the tenant can likely afford. And multi family real estate generally has the lowest rents compared to other real estate investments.

Also, what is normally around main transportation centers in cities? Amenities!

So they usually go hand in hand.

Avoid Small Towns

Expanding on the tips above, we want to avoid buying multi family real estate in small towns.

Many investor’s (likely not sophisticated) are tempted to invest where real estate is cheap.

But as Warren Buffet says, “I’d rather buy a great business at a fair price than a fair business at a great price.”

The same rules apply in real estate investing.

Quality is of the utmost importance – especially if you want your business to work FOR you. Not the other way around – as so many investor’s get sucked into without even realizing it.

We want our real estate to provide us with more freedom, more money and more time to do the things that we want to do. It’s why we’re investing in the first place!


Remember, job growth and population growth – that’s what we’re looking for.

Are people working in this city and do people want to live here? Yes? Then it’s time to contact your investment savvy realtor and start looking!

**One final thought. As I stated the importance of treating multi family real estate as a business at the beginning of this article, it is even MORE important that you work with the right people when looking for a building to purchase or sell.

You need to work with a realtor that SPECIALIZES with investor’s as they understand how to calculate for cash flow and look over the financials with you. The same applies for your mortgage broker.

This is a very sophisticated business and you need the right people on your team!

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