34% Returns - Light Industrial Condo Bay Development

[Shane Melanson]

Investment Info:

Industrial industrial investment investment.

Purchase price: $8,700,000
Cash invested: $2,700,000
Sale price: $10,720,000

Hold Time – 16 Months

Returns to Investors – 34%

Project Size $10,7200,000

24 Industrial Condo Bays developed and sold to end users.

Location: Calgary AB

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

I was able to secure 4 months due diligence for this property - to purchase 2.9 acres of land.
There were no Industrial Condo bays for sale under 1,500 sq.ft in Calgary
We hit a market demand and sold out before we closed on the land
Secured our Profit in 5 months.
Risk - mitigated with experienced GC and Architect.
Fixed price contract
Turn around (including slow DP / DSSP/ BP) process with city under 16 months.

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

Brokers had relationship with developer. Once we had meeting we essentially took over- but brokers made very good money. They got the land sale and industrial condo sales

How did you finance this deal?

Cash for land
Construction financing with big bank
Cash was raised - $2,700,000 in 10 days from my network of investors

How did you add value to the deal?

Purchased zoned IG land
Developed a sales plan
Executed fast
Significant energy selling condo units
Extensive market plan
Developed and executed

What was the outcome?

34% return to investors
More than $800k in profits for my partner and I with fees
Led to multiple developments and investors asking to invest with us

Lessons learned? Challenges?

Importance of big deposits
Flexible with buyers
Persistent
Taking action- market was in decline, no one was developing. We took a calculated risk

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

Longboard
RBC