E145 Why Smart Investors Are Buying When Everyone Else Is Scared

Become an REI Hot Seat Insider: ⁠https://submit.jotform.com/info_Admin_info831/rei-hotseat-insider-sign-up-formIn episode E145 of the REI Hot Seat, Andrew Hines, Jacob Campagnaro, and David Hulshof analyze a Hamilton multifamily deal at 17 Cloverdale—a well-kept, purpose-built walk-up of all two-bedroom units priced around ~$130k per door but hampered by legacy rents of $700–$900 and a long-term, elderly tenant base.With most of the capital expenditures complete (aside from a roof due within five years), the main challenge lies in financing, as the low rent roll forces a roughly 50–55% loan-to-value to meet a 1.20 debt coverage ratio.The trio explore two main strategies: securing a long vendor take-back mortgage from the longtime owner to bridge cash flow until natural turnover occurs, or pursuing a CMHC-affordability route to lower the debt service ratio and push leverage closer to 60–65%.They note that while tenant turnover may be slow, even a single unit reset to market rent could add about $12,000 annually in income—equating to roughly $218,000 in added value at a 5.5% cap rate. Ultimately, this deal fits buyers seeking wealth preservation and long-term stability rather than short-term returns, emphasizing patience, fundamentals, and the power of 10-year insured financing.In closing, the hosts highlight how inflation and declining interest rates make now a favourable time for disciplined investors to acquire hard assets and hold quality debt, reinforcing that long-term plays like this remain a powerful hedge against uncertainty.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/E145 Why Smart Investors Are Buying When Everyone Else Is Scared1:03 – Deal Overview4:14 – Rent Roll & Value Challenges5:46 – Financing Struggles (Low LTV)8:24 – Buyer Profile & Strategy Fit10:09 – Vendor Take-Back (VTB) Option13:07 – Affordability / CMHC Play15:16 – Turnover Math & Value Lift17:24 – Wealth Preservation vs Cash Flow20:23 – Rate Cuts & Economic Outlook23:00 – Inflation Hedge Through Debt25:12 – Fundamentals & Long-Term InvestingDisclaimer: 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.