Let’s Be Honest — Big Deals Are Intimidating
If you’ve invested in a duplex or a 6-plex before, a 50-unit building can feel like a monster. The price tag alone can make your stomach turn. But the truth is, with the right analysis, these deals become surprisingly logical.
In this blog, we’ll break it all down step-by-step, no complicated spreadsheets required, just a clear framework for making smart decisions.
Scenario: A 50-Unit in NE Calgary
You come across this listing:
- Price: $8.2 million
- Avg. Monthly Rent: $1,200
- Other Income: $20,000/year
- Vacancy Rate (projected): 5%
- Expenses (estimated): 42% of income
Let’s see if it’s a good deal.
1. Start with Potential Income
Gross Rental Income = 50 × $1,200 × 12 = $720,000/year
+ Other Income = $740,000
Now subtract 5% for vacancy and non-payment:
Effective Gross Income = $703,000
2. Estimate Operating Expenses
At 42% of income:
Expenses = 0.42 × $703,000 = $295,260
3. Net Operating Income (NOI)
NOI = $703,000 – $295,260 = $407,740
That’s your profit before debt payments. This is the number lenders care about.
4. Let’s Talk Cap Rate
Cap Rate = $407,740 ÷ $8,200,000 = 4.97%
Pretty solid in today’s market, Calgary has cap rates around 4.5% to 5.5%, so this is a fair market deal.
5. What About Cash Flow?
Assume 25% down ($2.05M), and finance $6.15M at 5.25%, 30-year term:
Debt Service (annual): approx. $410,000
Now calculate:
Cash Flow = NOI – Debt Service = $407,740 – $410,000 = –$2,260
You’re close to break-even. A small rent increase ($50/unit) could push you into positive territory.
6. Debt Coverage Ratio
DCR = $407,740 ÷ $410,000 = 0.99
Banks won’t love that. But with CMHC-insured financing (MLI Select), your payments could be $90K–$100K lower annually. That flips this deal into strong positive cash flow.
7. Pro Tip: The Power of Property Management
With 50 tenants, 50 leases, and constant maintenance, you’re not just a landlord anymore: you’re running a business.
At Green Casa, we help owners of large buildings:
- Handle rent collection and tenant communication
- Coordinate bulk repairs and seasonal maintenance
- Monitor financial performance monthly
- Keep tenants happy and your asset stable
You focus on the strategy. We handle the daily grind.
Final Thought: Numbers First, Emotions Last
Big apartment deals look scary until you run the numbers. Then you realize: this isn’t a gamble, it’s a math problem. And when the math makes sense, the risk becomes manageable.
Whether you’re analyzing your first large deal or adding another to your portfolio, success starts with a clear financial picture.
And a reliable team to manage it once you close.
