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Edmonton 20-Plex Investment with CMHC Support

This case study analyzes the financial and strategic advantages of a CMHC-backed multifamily investment project located near Edmonton International Airport. The project showcases how leveraging CMHC's programs can create secure, long-term investment opportunities.

    • Project Name: Leduc 20-Plex

    • Purchase Price: $6,289,473.68

    • Deposit: $314,473.68 (5% downpayment with CMHC support)

    • Mortgage Amount: $5,975,000 at 3.5% interest, amortized over 50 years.

    • Unit Breakdown:

      • 5 x 2-Bedroom Basement Units: $1,300/month ($78,000 annually)

      • 10 x 3+ Bedroom Units: $2,400/month ($288,000 annually)

    • 5 x Affordable 2-Bedroom Units: $1,300/month ($78,000 annually)

    • Total Units: 20

    • Total Annual Rental Income: $444,000

    • Net Operating Income (NOI):

      • Annual Operating Expenses: $95,860

      • Net Operating Income: $348,140

    • Cash Flow After Debt:

      • Annual Mortgage Payment: $254,646.42

      • Annual Cash Flow: $93,493.58

    • ROI and Equity Growth:

      • Year 1 Cash-on-Cash Return: 29.73%

      • 5-Year Annualized ROI: 182.85%

      • Equity Gain After 5 Years: $2,875,065.52

    • Debt Service Coverage Ratio (DSCR): 136.72% (demonstrating strong coverage of debt obligations).

    • Edmonton Market Strength:

      • Edmonton's rental income potential is among the highest in Canada, averaging $675,000 annually for properties of this scale.

    • Growth Potential:

      • Edmonton's rental market shows consistent 5% annual rent increases, which significantly outpaces other cities such as Markham, Ontario.

    • Population Growth:

      • Edmonton’s population is expected to grow by 200,000 in the next 12 years, creating strong housing demand.

      • Compared to Markham's projected population growth of 50,000, Edmonton offers 4x the expansion opportunity.

    • Cost Efficiency:

      • With a 90% lower entry cost than Markham investments, Edmonton provides higher returns at a fraction of the price.

    • Low Down Payment:
      Only 5% down payment required, freeing up capital for other investments.

    • Favorable Loan Terms:

      • 3.5% interest rate (lower than standard rates).

      • 50-year amortization minimizes monthly payment obligations.

    • Risk Mitigation:
      CMHC-backed loans reduce exposure to market volatility, providing a secure foundation for long-term growth.

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If you're looking to invest in secure, profitable projects like the Leduc 20-Plex, contact us today! Let us help you build your real estate portfolio and create generational wealth.

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