E134 Real Estate Math Most Investors Are Still Getting Wrong

Become an REI Hot Seat Insider: ⁠https://submit.jotform.com/info_Admin_info831/rei-hotseat-insider-sign-up-formIn episode E134 of the REI Hot Seat, Andrew Hines, David Hulshof, and Jacob Campagnaro conduct a deep dive into an eight-unit townhouse investment opportunity in Minto, Ontario. They emphasize the importance of realistic underwriting in today’s market, highlighting that cash-on-cash returns of 6–7% are increasingly rare and that appreciation can no longer be relied upon as a near-term driver of returns. The property under review is separately metered, has below-market rents, and shows potential for significant upside if even one unit turns over at market rates—raising the cash-on-cash return dramatically. However, the team underscores that tenant turnover can’t be assumed, especially in buildings occupied by elderly, long-term residents. They also explore financing through CMHC, the impact of debt coverage ratios, and the practical challenges of acquiring small multifamily assets with efficient loan terms. Beyond the deal analysis, the hosts stress the importance of submitting offers, even below asking price, as a way to shape seller expectations and eventually land quality deals. The conversation touches on tenant relations strategies and contrasts multifamily with growing investor interest in industrial and commercial real estate, promising a future episode focused on analyzing a flex-use commercial asset. The episode ultimately encourages proactive deal-making and long-term thinking, especially in tertiary markets where opportunities can still be created with patience and creativity.Don't forget to join the Insiders list for access to off-market deals and other unique opportunities.Andrew's linktree : https://linktr.ee/theandrewhinesREI Hot Seat Instagram: https://www.instagram.com/reihotseat/Jacob Campagnaro Instagram: https://www.instagram.com/jacob_campagnaro/David Hulshof Instagram: https://www.instagram.com/davehulshof.realestate/E134 Real Estate Math Most Investors Are Still Getting Wrong01:14 – Minto Townhouse Deal Overview03:35 – Expense Ratio & Rent Breakdown06:34 – Listing Price vs Market Value07:15 – Why You Should Submit Offers09:43 – CMHC Financing Breakdown13:06 – Cash Flow & Turnover Potential16:00 – Tenant Profile Considerations21:00 – Long-Term Upside Strategy24:30 – Creating On-Market Deals25:38 – Rise of Industrial & CommercialDisclaimer: This episode, as with every episode of this show, should NOT be considered as advice. Investment advice is NEVER given on this show. Always consult a competent investment advisor before making an investment decision.---Andrew Hines is a seasoned real estate investor, business-builder, educator, and podcast host, well-recognized for his extensive experience in the field. Andrew graduated with an HBA from the Richard Ivey School of Business in 2008 and spent three years teaching introductory business at Western University as a Lecturer. He has been investing in real estate since 2011 and completing value-add projects since 2015, primarily in the luxury student rental space. Andrew started a project management company for building out new-construction townhomes in 2016 and has since built over 50 residential units throughout Southwestern Ontario. Andrew is an advocate for treating real estate investing like a business and uses his experience in his educational endeavors, coaching numerous investors on strategies to achieve financial independence and scale their portfolios effectively.His podcast, "The Andrew Hines Real Estate Investing Podcast," serves as a platform for sharing insights, strategies, and success stories, connecting a community of like-minded individuals passionate about real estate investing. With a background that blends practical investing experience and investor-focused work, Andrew has become a pivotal figure in the Canadian real estate investing community.