Welcome!

By registering with us, you'll be able to discuss, share and private message with other members of our community.

SignUp Now!

Luxury Duplex to Triplex Conversion - Celebrating Your Hard Work

AndreiAngelkovski

0
REIN Member
Joined
Sep 18, 2007
Messages
297
Hello REIN Members,



After a long 9 months of planning and renovating, this renovation project in Toronto`s Upper Beaches is finally complete! With approximately $230,000 worth of renovations and a legal conversion from Duplex to Triplex, this investment property is now a luxury income property. This property was originally purchase for $525,000 back in March 2011 and is valued today around $900,000. The monthly cash flow is approximately $700 per investor. A lot of thought was put into the design of this property and many challenges were faced. In the end, a lot of heart went into this project and the celebration was well worth it. Cheers to the all the hard work and the success it brought. Thank you guys!

This project is a pleasure to show: Luxury Duplex to Triplex Conversion
 

invst4profit

0
Registered
Joined
Aug 29, 2007
Messages
2,042
Nice end result.

Can you share the numbers for a property of that level in the Beaches area.

You have suggested the rent on two units could be a total of $3460 monthly ($1885+ $25+ $1550).

What is the rent on the third unit.



On a total investment of $775,000 I would assume dept repayment in the range of $3600/month. What are your other expense estimates for maintenance, insurance, evictions, vacancies, accounting, utilities when vacant, advertising, legal, property management etc on a property of this caliber.



If I assume your total rental income for all three units may possibly be in the $5500/month range what would your exit strategy be to encourage a buyer at $900,000.
 

AndreiAngelkovski

0
REIN Member
Joined
Sep 18, 2007
Messages
297
[quote user=invst4profit]Nice end result.



Can you share the numbers for a property of that level in the Beaches area.



You have suggested the rent on two units could be a total of $3460 monthly ($1885+ $25+ $1550).



What is the rent on the third unit.







On a total investment of $775,000 I would assume dept repayment in the range of $3600/month. What are your other expense estimates for maintenance, insurance, evictions, vacancies, accounting, utilities when vacant, advertising, legal, property management etc on a property of this caliber.







If I assume your total rental income for all three units may possibly be in the $5500/month range what would your exit strategy be to encourage a buyer at $900,000.



3rd unit rent is $1900.



We are estimating the appraisal to come in at around $800,000 - $900,000, but lets assume it comes in at the lower end of $800,000. Our debt repayment or monthly mortgage payment will be $2,795 using 3.3% fixed interest rate amortized over 30 years. Maintenance has been estimated using 5% of gross monthly rent, vacancy has been estimated using 4% of gross monthly rent, insurance is $104 per month, advertising is free with Kijiji, property management is the responsibility amongst all 3 partners, and there are no legal fees estimated or anticipated during the operation of this property.



If you are looking at an investment property in Toronto or more specifically in the Toronto Beaches / Upper Beaches area, it is almost impossible to find a legal income property that offers this type of income, in this type of condition, for this price (hence the reason we are not looking to sell for that price...our intention is to hold on for a while). The encouragment to future buyers comes from supply and demand in this location...so many motivated buyers and yet so few quality cash flowing investment properties.
 

invst4profit

0
Registered
Joined
Aug 29, 2007
Messages
2,042
I don't anticipate the same numbers on that property that you see but then again I do not invest in Toronto so am not forced to put as many eggs in one basket to achieve the cash flow.



I acknowledge we all have our own area of special expertise and adjust our expectations according to the particular investment market but $775,000 is a stretch.



Although I could not work with your numbers I recognise Toronto as being "special" and as such with a little luck, the blessing of good tenants and future appreciation the deal will work out.



Income wise I believe your tenants, as always, will be your make or break and again based on what little I know of the Toronto tenant base all I can say is Good Luck.
 

terri

0
Registered
Joined
Aug 31, 2007
Messages
493
Greg,



the anticipated rents are typical of a nicely renovated suite in a good neighbourhood in Toronto, even as an unfurnished rental. There's a huge demand for nicely renovated rental units, and therefore easy to rent to A+ tenants. I don't look at it as being forced to put all my eggs in one basket, I look at it as getting good cash flow with fewer "baskets" to manage, and grade "A" eggs, therefore less work, less headache.



Toronto is "special" market indeed. For the smart, savvy investor, it can be a really great one. Congrats Cindy and crew!
 

invst4profit

0
Registered
Joined
Aug 29, 2007
Messages
2,042
Terry I don't disagree I simply require a higher cash flow for that size of investment.

I personally never anticipate smooth sailing in this business even with A+ tenants and have heard and experienced too many horror stories of bad tenants even at the rental rates we are speaking of.

Unforeseen maintenance issues, tenant damage and evictions are all part of the business and, as we all know, Ontario's Tenant Protection Board (LTB) is not there to help.



Screening is of course crucial but regrettably there is no box on the form asking if the applicant is crazy, irresponsible or is planning on getting divorced or lose there job in the future.

I have had excellent applicants with 800+ credit scores that have turned out to be some of my worst, and most costly, tenants.



Just saying that's all.
 

AndreiAngelkovski

0
REIN Member
Joined
Sep 18, 2007
Messages
297
[quote user=terri]Toronto is "special" market indeed. For the smart, savvy investor, it can be a really great one. Congrats Cindy and crew!



Thanks Terri! Much appreciated.
 

AndreiAngelkovski

0
REIN Member
Joined
Sep 18, 2007
Messages
297
[quote user=TrueCashFlow]Gorgeous.







Congrats, you guys did a great job.



Thanks Emil! It was a lot of work, but in the end we are all very happy with the final product.
 

AndreiAngelkovski

0
REIN Member
Joined
Sep 18, 2007
Messages
297
[quote user=invst4profit]Terry I don't disagree I simply require a higher cash flow for that size of investment.



I personally never anticipate smooth sailing in this business even with A+ tenants and have heard and experienced too many horror stories of bad tenants even at the rental rates we are speaking of.



Unforeseen maintenance issues, tenant damage and evictions are all part of the business and, as we all know, Ontario's Tenant Protection Board (LTB) is not there to help.







Screening is of course crucial but regrettably there is no box on the form asking if the applicant is crazy, irresponsible or is planning on getting divorced or lose there job in the future.



I have had excellent applicants with 800+ credit scores that have turned out to be some of my worst, and most costly, tenants.







Just saying that's all.

Thank you for your posts INVST4PRFIT.

There are valid points you bring up and I don't disagree with them.

Everyone has their own personal preferences in where they wish to invest in real estate. Also, everyone has their own way of analyzing property and how they operate their business. With real estate investing, there will always be bumps and challenges to encounter...yes even with A+ tenants.



After investing for 7 years in several locations, I personally have choosen to focus on Toronto...and more specificially the Toronto Beaches for a number of reasons. And I also understand it requires A LOT more capital for 1 project versus other cities/towns. However, I personally understand this market a lot better than other cities/towns and I believe in it along with its future.



In the end, "to each his own"...and it's great that we can share our experiences on this forum so we can educate and be educated.



Thanks!
 

JasonEtheridge

0
Registered
Joined
Apr 10, 2008
Messages
107
Does the 230k include closing and carrying costs? That could add another 40k onto your #s.

In your expenses you didn't include property taxes and you still need to pay yourself and your partners for time spent managing etc...

Maybe I'm pessimistic, but I always worry about exit strategies. Would someone pay 900k for this?

They'll have to put min 210k down at 900k. Their cash flow would be under 1k/month at that point...

not a good ROI for a future buyer.

If your plan with your investors is to keep it for a WHILE....then I guess it's a decent return.

The place looks great and hope the property does well for all of you.

Cheers
 

invst4profit

0
Registered
Joined
Aug 29, 2007
Messages
2,042
[quote user=Andrei Angelkovski]





In the end, "to each his own"...and it's great that we can share our experiences on this forum so we can educate and be educated.



Thanks!






Have to agree with you there, after all I specialise in Mobile Home Parks. Incredibly high cap rates (by comparison) and exceptional positive cash flow but definitely not for everyone. Plus scarcer to find and a challenging tenant demographic.

LTB adjudicators just shake there heads when they see me and have commented that my worst tenants are generally the worst of the worst. The fact that we have next to no legal rights in this province as property owners/landlords in managing our properties in regards to tenants is making our business increasingly more complicated. Free legal aid and duty council for tenants is very daunting for novice landlords. If we do not change the RTA soon there will be decreasing new investment in the future.
 

housingrental

0
Registered
Joined
Oct 10, 2007
Messages
4,733
Hi Andrei



Congratulations on this project + great video.



I'm sure you will inspire others to look to add value to their long term purchases through renovations + show that investing in Toronto is possible with hard work + cash + knowledge.
 
Top Bottom