Buying for under $85,000/door in Canada IN 2022

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Investment Info:

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

Purchase price: $660,000

Buy & Hold investment with BRRRR strategy. This wonderful 8 unit apartment building is located in the up and coming neighbourhood of Dartmouth, Nova Scotia. Upon purchase 3 units were vacant and ready for new tenants at market rent. We are currently working with other tenants to access units and renovate them (they need a full gut & remodel).

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

We saw there was huge potential to add value through renovating and turning units over to market rents

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

This deal was originally listed on the MLS, but had trouble selling so the owners took it off market. While looking for off market deals, I targeted cancelled listings on the MLS and found this one. I found the sellers information, looked them up on facebook and contacted the them. We began negotiations and eventually found a purchase price we were both happy with!

How did you finance this deal?

We joint-ventured to fund the purchase and renovations. We are doing a traditional 50-50 equity split.

How did you add value to the deal?

Finding the deal off market and negotiating for a competitive purhase price. The building was purchased for $660,000 and was appraised for $713,000. We will also be adding value by renovating units and turning them over for market rents.

What was the outcome?

We are currently mid-way through turnover.

Lessons learned? Challenges?

Always lessons to be learned in real estate! We had issued with the property manager (we kept the old property manager on - big mistake!). Part of the reason the purchase price was competitive is likely due to mis-management by the old property manager. After a few months we noticed issues, such as lack of record compliance, poor people skills when managing tenants and much more. We eventually placed a new property manager and learned our lesson.

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

No, this deal was off market.