Hello BP friends,
I just love reading all the wonderful content on this site! I can literally spend hours reading and soaking in all the great stories and advise from so many awesome members. Before I share my recent success, I want to give a big shout out and thank you to @joshdorkin and the rest of the BP team for providing this awesome platform where we can all share, learn and help each other…thank you thank you thank you!
So here’s how BP recently help me…
Lets go back in time, back to October 2015, someone posted here on BP that they had a single family in the same Canadian city I invest in. For those of you who don’t know I live in Southern California and continue to invest back in Canada. I had several conversations with this property owner and we agreed to have my realtor walk the property and provide feedback.
My realtor reported back that the property had a decent size home, double wide driveway and deep lot. However, it had an incredible amount of differed maintenance. Apparently, the same tenants lived in the place for 22 years, paying significantly below market rent, and the owner hadn’t spent much money on the place over all these years.
After speaking with the owner that the place had upwards of $80k in expected renovations, and comps for that particular area were around the $250k range we agreed on a price of $140,000, conditioned on the tenants being vacated.
So now that we had a deal, it wasn’t easy getting the tenants out…I partnered up with a friend back in Canada, and we signed docs March 2016…that’s 5 months from my initial contact with the seller. It took until June 2016 to actually close on the deal because the tenants kept delaying their move out date.
We closed all cash and finally take possession. We initially had a plan to renovate the property, refi and rent it out. Fast forward several months and renovations are going much slower than anticipated…besides completely gutting the place we had to replace the roof, weeping tiles, repointing exterior bricks, rewire the entire house, redo all the plumping, we even had to regrade the entire property so that water flowed away from the house.
Due to being out of country and having a great partner my involvement in this particular project was a minimum. We had our JV in place where all partners first get back all their investment and profits split 50/50 after that. As I shared earlier, our initial plan was to rent it out, but due to the all the surprises we faced we decided to go all out and put the property for sale.
We ended up finishing renos early January and then listed the property. We considered waiting until the spring to list when weather is nicer, however decided competition was less, the market is peaking and we wanted to move on.
We listed the property on a Wednesday for $449,000 holding back offers until completion of open houses over the weekend. However, we still received 2 offers Friday and accepted $445,000 closing in 30 days.
Happy to say we closed and everyone walked away happy as can be.
Here are the numbers:
Partner 77,000 (before tax)
Thankfully all through the year the market continued to go up…this was our saving grace as in the Spring the provincial government implemented some regulations that seriously affected the market…even if temporarily, but it would have most likely reduced our profits by 20-30%.
So again, thankful for BP and this awesome community.
On a side note, as our renovations on this place were nearing an end I realized we were going to be the best house on the street and most likely set the new high mark for this street. Another house on the same street came on the market, a small 2 bedroom freehold townhome listed at $130k. I offered $106k and they accepted. Again took 3 mths to close as I conditioned it to tenants being evicted.
That place has ended up being a nice little gold mine. We put $15k in renovations and it rents for $1200/mth plus utility. The attached neighboring unit just sold 2 weeks ago for $220k!
Happy as can be.
PICS: before and after