8 Questions Investors Ask About Multi-Family Homes
/Saint is passionately committed to and invested in each project to ensure projects are completed on time and on budget, working in tandem with investors to develop new multi-family homes. We offer development and investment services and work with both seasoned investors and those looking to invest in their first multi-home development.
Investing in real estate can come with a few questions, so our General Manager, Brandon Burns is sharing some of the most common questions we get asked.
Q: What does the Limited Partners structure look like?
A: At Saint, we use a standard General Partner/Limited Partner agreement and the project profits are shared equitably across the Limited Partners based on their equity contribution percentages.
Q: What are the typical milestones for a project?
A: The most critical timelines that are beyond our control are city planning reviews and engineering reviews. Development and building permit issuance delays can be impactful on a project so it’s important to make sure our submissions are as complete and zoning compliant as possible without stifling architectural design and land use creativity.
Sewer/water and hydro connection and sprinkler design acceptance queues can be long, so it’s prudent to make these a priority at the very beginning of the project to get in the lineup as early as possible.
Q: How much are new construction homes selling for?
A: Depending on which area of Vancouver the project is located in, in our preferred neighbourhoods new construction homes are currently selling for $1100 to $1350 per square foot.
Q: Is Saint concerned about the interest rate increase and inflationary pressure on supplies?
A: We have intentionally spread out our developments over time and feel that as interest rates rise and demands fall off a little, we’ll also see material prices come off which will drive our construction costs down making market prices more affordable. There is some synchronization between build costs and market sales over time.
Q: What about the state of the market when it comes time to sell the units?
A: We’re not exceptionally concerned, as we feel that the product we’re building with the level of quality and finish we provide in preferred Vancouver neighbourhoods will create high demand, especially when buyers are able to view the finished product in person.
Q: How quickly do I need to commit to this real estate investment and deliver my funds?
A: When a development project is started and the land is secured, the Limited Partner investors generally need to commit within 2-3 weeks of the opportunity being released. Depending on the land purchase closing dates, the requirement for funds may be nearer or longer term to purchase the land and kick off the soft cost portion of the project. An ideal investor will have prepared themselves on how these investments work and have a general knowledge of a GP/LP agreements and development proformas as so they can make quick decisions.
Q: Does Saint anticipate any additional costs not currently on the proforma?
A: Infrequently there are additional costs that come from requested changes by the city planner or Vancouver Building Bylaw changes that can impact the soft/hard costs or city fees in a proforma which are then accounted for in the planned contingency.
Q: Does Saint offer the option for investors to purchase a unit at a saving?
A: The short answer is no. The GP/LP agreement limits discounting in order to protect the proforma for all investors, but friends and family of the investors may get the opportunity to purchase early before the product goes to market.
There are so many opportunities available to individuals and families. We are here to help you understand what is possible for you and give you the expert advice you need to make informed, strategic financial decisions. Learn more about our investment opportunities, or download our Investor Brochure.