All Forum Posts by: Bo Taylor

Going through underwriting on a couple duplex deals I’m looking at. I’m wondering what are the most common operating expense line items that should be included in every deal? Feel like I’m forgetting some.

@Ben Redden Thanks for the input, always good to hear from a local. I have spent quite a bit of time in Kingston but don’t know the real estate market there all to well. As a local guy what areas are you investing in or doing contractor work in that you really like?

I can share my excel underwriting if you guys are interested in seeing how I came to my numbers and all of my assumptions. It is a fairly simple model but what I am working with currently as I continue to learn and evolve it.

Hey BP,

Looking at an interesting Duplex deal in Kingston and wanted to hear what you guys thought.

Property:

- Address: 123 Russel Street

- Duplex with 2 above grade units

- Both units are 2 bed 1 bath

- 25 min walk to Queens U

- 15 min walk to groceries, entertainment on princess

Financials:

- Asking Price: $279,900

- Revenue:

- Potential Rent: $1100 per unit ($26,400 annualized)

Operating Expenses:

- R&M: $200 per month

- Prop. Management: $162 (8% of monthly rent)

- Insurance: $125 per month

- Prop Taxes: $250 per month

- CapEx Reserves: $83 per month

- Mortgage: Assuming 20% DP ~$872 monthly payment

Risk and Return Metrics:

DSCR: Minimum of 1.4x in year 1

Debt Yield: Minimum of 7.05% in year 1

Levered IRR: 12.63%

Levered Equity Multiple: 2.82x

Levered CoC: Year 1 - 4.48% Year 10 - 8.56%

Levered Cashflow in Year 1: $3,404

Levered Cashflow in Year 10: $6,502

Potential Asset Management Strategies:

- Finish lower basement to convert to triplex and add add and additional 2 bed 1 bath unit

- Renovate current units to raise rents by 20%-25%

- Manage property personally to decrease OpEx

I don’t currently have the funds to go after this deal so I thought I would throw it out here and get your opinions on it. Do you think this is a good deal? Would you go after it if it were in a market you usually invest in?

Thank you for the tip @Theresa Harris. I am certainly thinking of doing some form of house hacking for my first place as a way to get introduced to land lording and property analyses. This will allow for only 5% down and I will try to find a property that can cash flow once I am moved out.

@Robert Ganzhorn That is interesting. I did not know that insured mortgages allowed for lower rates. Definitely something to keep in mind going forward.

Hello Guys,

I am a 22 year old 3rd year student at Ryerson University in Toronto Ontario. I am hoping to begin investing in real estate in the next couple of years. I have already invested in some REIT's as a passive way to gain exposure to the industry but am hoping to own and manage my own portfolio of properties in time.

As a young person just beginning to come to the end of my time in school money is of course tight. I am wondering what you guys did to get started in the business? Currently I am thinking a BRRR deal with just a SFH may make the most sense for myself to get my feet wet.

I currently really like the St. Catharines market with the Go Train being extended to the area and strong population growth, Kitchener-Waterloo is also interesting with all of the tech growth happening. GTA is just to expensive for me seeing that I would like to have a CoC ROI somewhere between 10%-12%.

I would love to hear from you guys on your thoughts for where you are investing in Ontario, what cap rates you’re seeing, etc. Also, feel free to DM me to talk real estate, I’m open to grabbing a coffee to talk about your business and would be willing to help you out in any way possible if it meant I could learn in a hands on environment.

All the best!