Multifamily real numbers sharing #2

[Cindy Shen]

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.