I got a building at 90k per door vs market price 200k per door!

[Cindy Shen]

I'm always excited to share great value added asset when I come across any - check out below a great asset acquisition my team just did! 

This building is very close to where our other buildings operate today; therefore, we know the market well. 

Current purchase per door for multifamily is 200k for a renovated unit; whereas, we are able to purchase 90k per door!

Buy low - that's the key for value-add!

We are also gutting this building which is a 2-year project to increase rent to market level (to be conservative, even though we have achieved higher than market rent in our other buildings).

In addition, this building currently is a legal 12-unit building, but after the architecture review and talk with the city, we are submitting a permit application for a 16-legal unit building with the probability for approval greater than 50%.

This building is also within 100 meters of a new LRT station to be finished in 4 years. Typically, rent increases between 15-25% for such locations.

This building also has a huge parking lot which the city has indicated that they are open for applications to build 8 additional units on the back.

After crunching the numbers, the total targeted return is between 75% to 100% for a 5 year exit. This targeted return does not include the potential appreciation brought by the new LRT station in 4 years, or additional 2 units the city approves (we assumed the city only approves 14 units), or the appreciation brought by the extra 8 units which could potentially be built, or the higher-than-market rent possibly to be achieved.

That is a great deal fitting our criteria, pretty excited!