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
@Thomas Lorini way to take action and the finished product looks amazing!!
So the property appreciated $200,000 from the time you negotiated with the owner to when you sold? Looks like about 2 years from initial contact with owner to completion/list.
@Thomas Lorini that's amazing! Good work. I suppose sometimes it's a big ole blessing in disguise when rehabs take longer than expected!
@Ryan E. this projects result was definitely a blessing...with all the challenges we faced including contractor issues we had, the end result was heavenly!
Great work, that's a beautiful renovation! I'm sure it was a drag during the rehab, but the check at closing was probably worth it!
Great Story . . Congratulations, Thomas!
The renovated house looks amazing~
We are Canadians and lived in Toronto, ON for about 5 years before.
Now we live in Victoria, BC.
'May I ask you what Canadian city you invest in?'
Big Cheers & Wish You Great Success, Thomas! ⛳
@Sung Stepak thank you for the well wishes! We mainly invest in Hamilton Ontario but recently venturing a few hrs away where cashflow is not an endangered specie :)
Thank you @Billie Miller and nice blog btw! ..some similarities in my household :)
@Thomas Lorini good job. Looks fantastic. And the timing. Perfect!!
HI @Brianne H. , good question as the Canada is alot different than the US and finding cashflow is definitely more of a challenge as there are less options. I am born and raised on Toronto, and started investing in rental properties in Hamilton back in 2011. Back then you were able to find decent cashflow in a transitioning market. Since then the markets goin way up making it more and more difficulty but not impossible....just as i mentioned above i found a deal here on BP and closed on a nice cashflowing property this year on the same street.
I live in sunny Southern California where cashflow is even rarer...the dollar exchange plus my network back in Ontario still make it favorable for me to invest there. I am now looking in a few other Ontario markets to invest in which may not have as much appreciation potential however offer consistent cash-flow.
PM me if you want more info.
great story! love the rehab you did here
@Edward Allport thank you!
@Thomas Lorini great work man, very nice! Question for you, since this is in Canada, how did you get a trustworthy realtor and contractor to do the job? How much was your initial investments and are all your team members in Canada? Thanks in advance
Wow now thats a beautiful renovation! I hope to someday be on that level when I am able to flip houses when I get back to the states!
We just did a flip in Dundas we got a little burned by the new government rules. Miss the max sell by 2 weeks but turned out ok, could have been a home run. Working on our 2nd in Burlington. Next one I want to move the family to Windsor, London or Sarnia for some cash flow properties. Where are you looking at?
I like your light fixtures. Are your cabinets Ikea? I like how the end panels are.
Originally posted by @Fernando Enrile :
Thomas Lorini great work man, very nice! Question for you, since this is in Canada, how did you get a trustworthy realtor and contractor to do the job? How much was your initial investments and are all your team members in Canada? Thanks in advance
Hi Fernando as I mentioned earlier I'm originally from Canada and have been investing there for years. Ive built up my local team over time. For this particular deal I had my partner who is local (and a very good friend) hire and manage the contractors.
My actual all in investment on this deal was only $15k.
I've been busy building up a new team in a new Canadian market over the last year. Closing on our second multi on Monday.
Happy to help.
Originally posted by @Denis S. :
I like your light fixtures. Are your cabinets Ikea? I like how the end panels are.
Thanks @Denis S.! Cabinets were made by a local company not IKEA this time ;)
@Thomas Lorini Awesome breakdown and detail - What street is that?
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