Should I put money in to property?

[Sara Bradford]

Hi BP!

I own three SFH's in Toronto (Scarborough area, accessible by transit). They are in rough shape and require major gut Renovations to be rentable/sellable

for top dollar.

We inherited the properties through a business amalgamation so did not pay any $$ for them. They were purchased in the 80’s and have appreciated greatly and due to the structure of our business there are HUGE gains to be paid if sold. So we opted to hold, flip and rent out.

For home #1 we opted to put a boat load of $ into it to convert it into a legal duplex (which required underpinning, complete fire separation, etc.). In the long run, the CapEx will help to offset some gains and hopefully rent rates will be great since home is essentially all new and utilities are completely independent by unit.

Homes 2 and 3 are awaiting the TLC but will also cost boat loads of money. My intention was to mortgage home 1, let tenants pay mortgage and use it to finance Home 2 and so on...

Question is: Do I keep dropping loads of money into these homes or do I just sell the others and buy something requiring less work? My GC has been working for many months on House 1 and my patience is wearing thin. But then I remind myself that I am already so far ahead to hold these unfinanced homes. Gah!!!

Thanks!