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commercial RE Investing part 9
So the Sale of the Warehouse closed. I got a big fat deposit in my bank account. I put 600k into a cashable GIC. Those funds are in reserve to pay for my capital gains next year. In addition to the sale funds, I have withdrawn almost my full amount from my HELOC at a decent rate. I don't remember if I wrote about it two months ago, but since then, the interest rate has gone up by 0.25 and 0.5% so far. I expect it will go up again in two months.
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Things I am doing to keep furthering my goal of 100k per month net income.
1) Work as usual. I got my emails in my inbox down to zero at the end of Thursday April 14 which is a feat. I inspected the hoarder's unit with the owner. Wrote a letter giving the tenant 7 days to clean the unit up before a re-inspection as required by section X of the tenant's lease. Same result on second visit. Took photos of the mold on the walls/glass, flies, open rotting food etc. Next step will be notice of eviction. They will very likely not leave on their own power, which will necessitate further action. Stay tuned.
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2) I contacted a second lawyer regarding the amount owed to me by my ex-tenants. They steered me in the right direction and are willing to take this case on for a % (probably 50%). We will keep it in small claims and go for the full $35,000 maximum. I believe with my documentation I can get the proof of what is owed up to about $45,000, but we will look better by dropping it down to $35,000 and keeping it in small claims. I have already begun to map out the history and supporting documents. I will probably go with the second lawyer as my lawyer says he is tied up for the next two months. (another litigation I assume)
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3) I have found a fair deal , asking $2,280,000. for 20 units close to downtown Edmonton and McEwan University. I asked my agent to do some looking into this property. It was for sale for a full year ago and didn't sell. It was taken down, and was put back up about 2 months ago.
I have made an offer at $1,950,000 which would be a good deal for me. I can go up to $2.08M and be ok, assuming the building condition report does not have any red flags. I will see if the seller is insulted and tells me to take a hike or is willing to negotiate. I figure if he had it listed for a whole year, his asking price is way off. I don't rely on Pro forma and cap rates as the Pro forma is 90% made up (hypothetical) - income and expensed the seller has decided on. During due diligence I will do all my calculations based on actual income and expenses.
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4) nothing to report with my younger son. He made an offer on a home, but is in the middle of finals so I don't bother him about what is going on. He has a good group of people around him.
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5) I already told my agent, if item 3 does go thru, I will be starting to look for the next apartment building to purchase. I told him to give a ++ to properties where there is individual meters and the tenants pay their own gas and electricity.
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6) lastly i have registered for the traders Real Estate License. I have a year to complete it, but will likely take five weeks to complete the 20 assignments and a month to write the exam. I have a bit of flex there, but I definitely want to have it done by the end of 2022. I will be looking for a real estate company to join at the end of 2022 or early 2023.
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