This is an 8 unit building. Reason for initial acquisition: in addition to our normal checklist (distressed, mismanaged, rents below market, renovation needs were high, walkable distance to new LRT, in one of our targeted areas/street etc), the added bonus feature was that our architect confirmed with 90% certainly at the time that the entire building's 1 bedrooms could be converted to 2 bedrooms, (of course) subject to permit results. Without conversion, the building alone with existing renovation plan had an expected ROI of 20%+ due to ample room for forced appreciation.
Currently, after 3 months of working with the city, we successfully obtained the permit for 100%t conversion, and every 1 bedroom will be converted to 2 bedrooms. Based on the floor plan and architectural drawings, renovation will be broken down into 2 phases, each phase renovating 1 side of the building.
Right now, 1 side of the building has already been vacated and demolition has started. Phase one is expected to be completed within 8-12 month. Upon phase 1 completion, the building will be refinanced and phase 2 (the other side of the building) will start. Phase 1 and 2 are expected to be completed within 16-18 month, upon which the building will be refinanced for the 2nd time.
That's fantastic, great to hear about a deal going on north of the border. What kind of rent bumps are you looking at once you get the 2br conversion completed?
Was it difficult to get the tenants out?
typically we can increase rent by 400-600 per door. We are expert at getting difficult tenants out - lots of stories to tell there! we were even in the news for it (good for bad...)
That's fantastic. How long does it typically take to get tenants out?
@Taylor L. if we need complete vacancy, sometimes up to 3-4 months...