All Forum Posts by: John Turner

That's some good stuff there. 

Here's a little update:

We ended up not doing the deal.  The minimum the seller would take was $150k, and the most we would have been willing to pay was $145k ($144,731) before another deal we looked at had better returns.  That didn't include the extra $5k we wanted off for the 40-year old boiler, so our absolute top price was $140k. 

There's only one other 4-plex in the area that has sold in the last year, and it went for somewhere around $150k.  So he very well may get what he wants for it, but it's not going to be from us.

One thing I realized during this experience was the different types of values that can be placed on a property.  I know this is probably elementary, but it's something I learned and am going to try to apply to future investments.  And maybe it's theory BS, but it made our decision easier.  Here it is:  the value that lenders place on 4-plexes on down is based on comparable sales as we all know, and that's how they're going to be priced and what agents are going to push the deal to go through as.  But as an investor, we need to look at comparable returns no matter if it's a duplex, 4-plex, or 10-plex.  By purchasing one property we're giving up the opportunity to purchase another property (at that instant), and there is a cost associated with that.  As long as they both meet your criteria and you have the means to buy either, your return on the property you're buying better be higher than what you can get on another, otherwise why not go buy the other? 

That's how I applied number sense to justify our decision.  We had looked at another property, so we had the expenses and rents to apply an analysis with the same financing structure in both deals.  I cheated and used solver to then calculate what the highest price we could pay for our deal was to match the return on the other property (based on its list price), and that was the $144,731.  Anything higher than that, and we're "losing money" relative to if we had purchased the other property. 

Hi Gary. I've heard Hamilton, kW and Barrie are some good places to look. I am thinking single family homes are a good start and then move up to duplexes and tris....it's coming up with the 20% that is the kicker to get started when things are 350-400k!

Great to see so many ppl from the Ontario area on BP.
I am a realtor and property manager in Barrie. My company manages around 180 doors right now which are a mix of SFR, multi and commercial. If anyone has any interest learning more about the Barrie market let me know, would love to discuss further. Keep the posts going, it's great to learn more about other Ontario market?