At the time I was investing in single-family real estate, After many courses and mentors showing me the power of multi-family investing I knew I had to make the switch. Lacking some of the experience I needed to jump into a project of this scale I partnered with a friend/mentor who had a handful of value add projects under his belt.

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

This project was put in front of us through a broker in Vancouver (Dan Schulz - BCapartmentinsider). The negotiation was in-person with the seller as there was a few creative components to discuss.

How did you finance this deal?

This was the first project that we used the extended closing approach. With phase 1 of the value add we negotiated a 1-year closing with access to operate as property management and conduct necessary construction. We then closed on the property with construction loans to complete full renovations to the units/building successfully increasing the operating income once more. Lastly, we refinanced the fully stabilized building with CMHC insure financing at incredible rates and terms.

How did you add value to the deal?

During Phase 1 we were able to increase the operating income by $97,200 annually. This was done by mutual agreements with the tenants to install in-suite laundry along with new doors and windows (also reducing operating expenses). Phase 2 value add was completed by full unit renovations (again, using with mutual agreements).

What was the outcome?

Fantastic outcome! We managed to take a $3.5M building and create a cash flowing stabilized product valued at $6.75M today.

Lessons learned? Challenges?

The main lesson on this project would be to make sure your construction budgets are extremely conservative. A project this size can go over budget very quickly. You can't plan for the unknown, but you can expect the unknown and build a budget to include a large margin for error so make sure the projects allow for a change in plan or increase in budget.

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

Dan Schulz and Chris Winckers (Realtors). I partnered with Top Down Investments on this project to lean on Guy Bouchards experience. www.topdowninvestments.com