How do you know if the new construction property you are buying is a good investment?

I help answer this question for you in this video.

This is Part 2 of a 2 part series so if you haven't seen Part 1, I highly recommend that you watch this first before watching this video. You can see Part 1 here -    • This Is How Professionals Invest - Re...  

If you consider yourself a professional investor you will do this process before purchasing any real estate property.

You will do your numbers and then compare it to your investment thesis to see if it fits your investment strategy. Without calculating your numbers you'll never know what you're truly dealing with.

In this video I'll go through a detailed investment property analysis for a new construction purchase in downtown Toronto. By the end of the video we'll see if this is a good investment or not by running it through our model to answer our 2 big questions.

1. What is my cash flow?
2. What is my return on investment?

Once the model is complete you can run different stress tests and scenarios to see what happens in different situations.

*One thing I forgot to note on the video was we're actually paying over 30% down on this video so if we actually used 20% down our cash flow and ROI would be a lot worse.
**There was an error was I forgot to subtract the $10,000 from tab "Cash" on Cell D7. This affects the cash requirement and ROI slightly.
***Also I mentioned about the bank based the mortgage on the Total Purchase Price Including HST but it's the Sticker Purchase Price minus incentives.
****Also the formula for the down payment was incorrect I have to divide by cell B1 NOT B7
*****Found an error with Tab ROI Row 35 cell D35 to AF35. I've updated the formula.

This is not legal, tax, or financial advice. Just my own opinions and for informational purposes only. Consult your professionals for your personal situation.

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0:00 - Intro
0:23 - Recap
1:17 - Cash Required
2:50 - Deposits
5:38 - Interim Occupancy Fees
8:41 - Rental Income Intro
10:35 - Source of Data
12:40 - Rental Income Final
14:11 - Expenses
14:24 - Mortgage
16:53 - Other Expenses
19:42 - Cash flow
21:18 - ROI
27:28 - Break Even Analysis
28:26 - Flaws With Model
31:19 - Example Conclusion
32:56 - Lower Interest Rate Test
34:04 - Final Remarks