Ottawa waterfront with tenants in place

[mar]

Hello Everyone,



I'm in a bit of a bind and would appreciate some creative insight. My wife and I own several properties in Eastern Ontario. We currently live in an up/down duplex downtown Kingston and rent the upper unit to students. We love the location and lifestyle, but we are expecting our first baby very soon and have decided to make the move to a single family. Our house sets up perfectly to rent our current unit as a four bedroom student rental, so we would like to keep it. We are having a tough time arranging financing to keep all our current properties and have a sizeable down payment on our new house, so we would like to sell one property to finance our down payment and for some breathing room. The house that makes the most sense to let go of is a small waterfront home just outside of Kanata near Ottawa. We have migrated all of our holdings over the last few years to the Kingston area, as we prefer to self manage our properties. Here is the challenge...we have amazing long term tenants, in their 70's, one of which is going through treatment for an illness. They have been in the home for 7 years, taken care of it as their own, paid every month on time and wish to continue living there. We had a brief discussion about whether or not their family would like to buy the property, but they are not able to at this time.



So, enter Karma...we can't bring ourselves to list the property...but it's what's best for our real estate business at the moment. Our alternative is to sell our beloved duplex, our highest cash flowing property, or consider some less than comfortable financing options. I have spoken to several Ottawa realtors on the d/l to see if they know of any investors/builders who may want to buy the property with cash flow, to build/occupy/sell in the future, but so far no luck.



Does anyone have any ideas on how to sell this property without having to displace our lovely tenants. I know business is business, but sometimes creative solutions can solve challenging situations. The house value is approx $365,000, rent is currently $1260, we are willing to leave some on the table to get the deal done. Any advice is appreciated and anyone that might be interested in exploring the opportunity, please reach out to me.



Thanks in advance!

 

[Alvaro Sanchez]

• Get a better mortgage broker.
• You might want to consider bringing a JV into one of your existing properties at 25% cash.
• Invest 365K to get 15k does not make much sense for an investor so that might be a hard sell unless you arrange different terms such some money now and some later (VTB) or AFS.
  Pull some equity from one of your properties for the down-payment.
  Rent to own your new home until you position your portfolio in a better situation.
  Do nothing (A baby does not take much space and there is no need to buy a mini-van).

Hope that helps

 

[mar]

Thanks Sanchez, I appreciate the response.



We have worked with our mortgage broker for many years and they are one of the best in Canada. They have a solution for us, but I would prefer to have a little less leverage at this time.



We have to this point been able to invest in multiple properties just my wife and I. We have considered this option, but are hesitant to bring others in. We have done well on our own to this point and would like to continue on this path for now.



I totally agree that this property does not fit into the REIN cash flow model. And perhaps that is all that needs to be said...but I am certain a scenario exists that this property would benefit a specific investor. Specifically, someone who could make more cash flow over time (it's a perfect weekly cottage rental in the future-I'm thinking $1000-$1500/week). Alternatively, neighbouring, newer full size homes are fetching $500,000-$800,000. So, someone with liquid cash and a future plan could snap this up at a discount, somewhat cash flow it over time, and then drop a Viceroy or similar on the waterfront property. This would lend well to someone in the building trade who could maximize their return.



Agreed about the baby not taking up much space...it's the proximity to our graduate level student renters that concerns me most. I'm not sure it would work out well for either of us.



The minivan is a done deal...Toyota Sienna...oh the changes!



Welcome all takers...

 

[invst4profit]

If you are looking to walk away with a clear conscience I have the solution to your problem.

Based on the rent your Ottawa tenants are paying, as a investment property, it is worth approximately $180,000.

Sell it to me for that price and I will grantee to allow your tenants to stay.

Otherwise make the decision you already know is the right one for you and your family.

Hopefully they will leave without a fight so you can once again get your head around your priorities.