Skip to content

Let's keep in touch

Subscribe to our newsletter for timely insights and actionable tips on your real estate journey.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions

Posted over 4 years ago

commercial RE Investing part 9

So the Sale of the Warehouse closed. I got a big fat deposit in my bank account. I put 600k into a cashable GIC. Those funds are in reserve to pay for my capital gains next year. In addition to the sale funds, I have withdrawn almost my full amount from my HELOC at a decent rate. I don't remember if I wrote about it two months ago, but since then, the interest rate has gone up by 0.25 and 0.5% so far. I expect it will go up again in two months.
----------
Things I am doing to keep furthering my goal of 100k per month net income.

1) Work as usual. I got my emails in my inbox down to zero at the end of Thursday April 14 which is a feat. I inspected the hoarder's unit with the owner. Wrote a letter giving the tenant 7 days to clean the unit up before a re-inspection as required by section X of the tenant's lease. Same result on second visit. Took photos of the mold on the walls/glass, flies, open rotting food etc. Next step will be notice of eviction. They will very likely not leave on their own power, which will necessitate further action. Stay tuned.
---------------

2) I contacted a second lawyer regarding the amount owed to me by my ex-tenants. They steered me in the right direction and are willing to take this case on for a % (probably 50%). We will keep it in small claims and go for the full $35,000 maximum. I believe with my documentation I can get the proof of what is owed up to about $45,000, but we will look better by dropping it down to $35,000 and keeping it in small claims. I have already begun to map out the history and supporting documents. I will probably go with the second lawyer as my lawyer says he is tied up for the next two months. (another litigation I assume)
----------
3) I have found a fair deal , asking $2,280,000. for 20 units close to downtown Edmonton and McEwan University. I asked my agent to do some looking into this property. It was for sale for a full year ago and didn't sell. It was taken down, and was put back up about 2 months ago.
I have made an offer at $1,950,000 which would be a good deal for me. I can go up to $2.08M and be ok, assuming the building condition report does not have any red flags. I will see if the seller is insulted and tells me to take a hike or is willing to negotiate. I figure if he had it listed for a whole year, his asking price is way off. I don't rely on Pro forma and cap rates as the Pro forma is 90% made up (hypothetical) - income and expensed the seller has decided on. During due diligence I will do all my calculations based on actual income and expenses.
---------------
4) nothing to report with my younger son. He made an offer on a home, but is in the middle of finals so I don't bother him about what is going on. He has a good group of people around him.
--------------
5) I already told my agent, if item 3 does go thru, I will be starting to look for the next apartment building to purchase. I told him to give a ++ to properties where there is individual meters and the tenants pay their own gas and electricity.
-------------
6) lastly i have registered for the traders Real Estate License. I have a year to complete it, but will likely take five weeks to complete the 20 assignments and a month to write the exam. I have a bit of flex there, but I definitely want to have it done by the end of 2022. I will be looking for a real estate company to join at the end of 2022 or early 2023.



Comments