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how good is this property??

Douglas10959

New Forum Member
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Jan 19, 2017
Messages
19
I have an offer on a 1042 sq ft bungalow is Fort Saskatchewan at $315,000. 1st mortgage of $252,000 with JV putting in $75,000 for DP and some of the reno cost . My invest is $37,900, will develop a two bedroom basement suite. Older house but sound. Estimate rental for main at $1195 and Suite @ $995 plus the heated two car garage at $150 month. With that I show positive cash flow of $92.88 month plus Appre. and Principle reduction for year one profit of $12805. Does this all sound feasible to anyone.
Would I be better off having JV put up more of the cost say $100,000
 

Remi Noel

Contractor, Renovator, Developer & Investor
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Feb 24, 2016
Messages
22
I’m not too sure on how much work the basement needs but $37,900 renovation could be low. Most contractors will be between $60-$75 per sqft. If part of the basement is completed and there is two heating sources as per building code, then it may be a less extensive renovation (but this is not common).

What’s the game plan?
Are you refinancing after the renovation is done? How are profits/shortfalls split if there’s a loss or gain? Does your partner carry the down but gets his money out first? Who manages the tenants? Are they paid for it?
There are lots of questions and opportunity to make a win in lieu of who puts up money?
I have 3 JV partners and they are all structured differently My advice is to bring what’s important to each of you forward and let it be know.

If you want to chat more give me a shout at
780-257-4301. I love connecting with others and supporting.

Remi
 

Martin1968

Frequent Forum Member
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Jan 22, 2017
Messages
235
I'm not as positive on this one from a cashflow standpoint. I'm not underestimating appreciation and principal pay down, depending on your long term plan this could be a good reason to push ahead, but what is the utilities situation? Garages are hard to rent out and when you do often for short term.
If you were to take the $150.00 away from the cashflow, then you are negative. Can you handle that?

I would really do a good number crunch on it. Good luck!
 

bb2

0
Registered
Joined
Sep 10, 2007
Messages
121
Have you done a legal suite before? 37,900 seems low unless you are doing some of the work yourself. Plumbing and Hvac can run 13-18k alone, unless there is a kitchen and bathroom already in the basement.
93.00 of cash flow isn’t great. I strive for 500.00 positive cash if I’m managing the property myself, which I’ve gotten on the last 3 properties I’ve purchased.
Feel free to call me at (780) 446-3814 if you need a second opinion (or a third - Remi is also in the trenches doing Reno’s and flips)


Sent from my iPad using myREINspace
 
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