All Forum Posts by: Jack Young

Investment Info:

Large multi-family (5+ units) buy & hold investment in Chetwynd.

Purchase price: $278,000
Cash invested: $50,000

5 unit with great potential! The rents were far below value allowing for great cash flow. Lots of work has already been done, but the few things to really make it better are left to do. hopefully within a year it will all be done.

What made you interested in investing in this type of deal?

It had been on the market for years and the locals were all overlooking it. Its also just down the street from another property I own

How did you find this deal and how did you negotiate it?

realtors

How did you finance this deal?

commercial loan

How did you add value to the deal?

We will be upgrading the heating to separately metered natural gas furnaces. Its all there, just need the furnaces installed.

What was the outcome?

Its all still in progress for the most part but we have had gains in the cash flow of over 600/mo already with a lot more to go.

Lessons learned? Challenges?

I've discovered the right of first refusal law within the BC tenancy act and this has thrown things off some, but its a little more of an adjustment to the overall plan than anything else

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I used Myra Grodzuik as she is a property manager in town as well as a realtor. She is giving a good deal on the management fee because of the units I have with her. So far so good!

I’m curious to know if any of these might allow me to add in things behind the walls? I know it sounds like a lot extra, but simply being able to at least map out a few important things to help in a rehab such as a circuit or some hvac.

I would like to know about layout software. If I want to save layouts for buildings or units to accurately do things withought being anywhere near the property, what can I use? This could be for planning rehabs or just quickly referencing for square footage.

Sure, I have found a deal that will compliment another property near by if you owned both, so I am trying to understand the kinds of return I should consider, I get the basic idea, but as far as seeing how others value a deal a little more specifically by the bottom line or return or what other investors consider as a good deal. Just looking for some ideas. 

@Matt Engle I’m trying to get a little more specific, as in, what return are you looking for? Amount per door? ROI? That sort of thing.

I know this has been talked about over and over, but the landscape is always changing and the deals are always a little different. Here is my question, a small 5 unit, classified as commercial with potential, i would like to simply know what you call worth it?

I feel your pain @Adam Goyette, I have been working diligently on building a spreadsheet template I keep on OneDrive so I can access it from anywhere and save copies of any property I run numbers on. Its been working alright so far but does take more and more work as it gets bigger and more inclusive. Not saying you will want to build your own but using what you find in a similar way might work well for you, its easy, all your numbers are calculated the same way so its easier to compare each property you evaluate and it's free!

Keeping a rapport is a great idea @Roy N., but I'm curious about how I should go about something like this as they hardly want to see you in their office if they aren't signing over every thing you have into their book of business! It really gets frustrating to have a conversation, learn, present ideas and just get to know them and how things work in their bank. Twice now, the banker will not even make an appointment with me until I had everything available for them and I do mean everything. I get incredibly frustrated with their attitude and cant help but wonder how they expect me to want to bring my business to them in any form or be able to compete for my business without starting somewhere, even if it is just one mortgage to start. How they have been doing it is boarder line unethical in my books.

I seem to have skipped over the door count lender in your article @Julie Toh. It would seem as if they don't use the DCR method and this building puts me to 11 doors if all goes well. How would they look at a deal in this scenario?

@Roy N. that was my general opinion, but there has always been this need to have 100,000 in what they describe as liquid cash, their rule was it couldn't be in a registered accounts. As I have just found out today, they will allow me to have 70% in registered funds to make up this amount so we will see how this goes as it totally changes things for me.

This thread has been really great for some new knowledge and I would like to see it carry on.

So now what?? Ive offered on my 3rd property and this is where the banks start to cease up. What kind of financer should I go to next?