Why “Good Debt” Can Still Be a Bad Deal

Same street, same owner, different building. This Episode 149 of the REI Hot Seat, Dave and Jake break down a nine-unit multifamily deal with a stronger suite mix, assumable CMHC debt at 2.69%, and a real conversation around whether good debt justifies paying a premium.

Dave walks through why older 1950s and 1960s buildings often include what investors call the “boiler room special,” how that impacts unit count and value, and why assumable debt can dramatically change how a deal pencils. We dig into cap rates, loan-to-value, cash-on-cash returns, and the trade-offs investors face when leverage is lower but financing terms are exceptional. The discussion ultimately comes down to price discipline, creative structuring, and knowing when a deal is close versus when it actually works.

This episode is a real example of how we underwrite deals in real time, pressure test assumptions, and work backwards to find the number that makes sense, rather than forcing a deal to fit.

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EP 149 Why “Good Debt” Can Still Be a Bad Deal

0:00 Welcome back to REI Hot Seat

0:25 Same owner, same street, different deal

1:03 Suite mix and the boiler room special explained

2:24 Assumable CMHC debt at 2.69 percent to 2031

3:43 Cap rate, price per door, and LTV concerns

4:31 Cash on cash returns and lift potential

5:30 VTB discussion and why it is not an option

7:15 Is good debt worth overpaying for

8:00 How we would actually price this deal

9:25 What purchase price makes this deal compelling

10:27 Creative deal structuring and final thoughts

11:46 Closing remarks and next steps

DISCLAIMER: 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.