Cap rates for MFH in B.C.

[Taylor Green]

Hi there,

Great to see an entire section dedicated to Canadians, I love it...

Anyways, I have recently started investing in the U.S. only because that's where I'm located for work. I am originally from Vancouver Island in B.C. I have noticed a few people on biggerpockets from BC and I was curious to see what the cap rates are roughly for smaller multi-family units. Also, are people making money on flipping homes? Thanks... Have a good one.

[Tom Stromar]

Yes, I wish it was as easy as all the shows on TV make it seem to find these deals but they do exist. We just closed a deal today that worked out as follows:

- Two level town house in a gated community with spectacular ocean views, 20 years old, all original and in fairly 'used' condition (bleached carpet in spots, etc..)

- Estimate for total renovation including new kitchen, two bathrooms, fireplace, new flooring throughout, wall removal to open up the kitchen through living space, a couple of other wall moves to improve floorplan, including permits and general contacting fees and strata consultation. $50,000, but with the expectation that it could be $80,000 to be conservative. This is through a company we have used before that is both on time and within budget. Total rehab time 4 weeks after close (Oct 1) with preparatory work occurring before to allow for permits, approval, etc..

- Purchase price $330,000 (originally listed at $400 spring of 2012)

- ARV breaks down as follows: There have been no sales of the same configured units below $400,000. Most of the dated units sell in the low 400s and the updated units sell for over 500.

Keep in mind that this is without the investor lifting a finger. The GC is very good at meeting budgets but even the conservative allowance allows for profit, which is the way to go about things.

At 50K, the purchase price is nearly allows for 30% gross profit margin, touted greatly here at BP!

I haven't looked, but I imagine I can probably private message you through BP if anything comes up?

Let me know if you have any preferences of any kind, e.g. area, construction type, etc...