All Forum Posts by: Alessandro Di Luciano

@Cody Neustaedter, thanks for the insights!

1. Renovations are likely necessary. Even if not an immediate need, I expect some work will be required soon. From my conversation with the agent, it sounds like there has been some owner neglect over the past few years. Additionally, given Ontario’s strict LTB laws, renovations would likely be my only viable option to achieve market rents—though the current rents still allow for minimal cash flow.

2. Land value and development potential are areas I need to research further. Location-wise, I feel confident this is a solid investment, but I haven’t yet fully analyzed the numbers. I’ll be diving into this immediately, but I’d love any insights or suggestions on how to assess land value, future development potential, and associated costs.

3. Financing considerations: The 33% down payment is based on a $1M purchase price with a 25-year amortization, assuming I can secure a conventional mortgage (which I’ve done for rental properties before). Being a triplex, I don’t anticipate financing issues. At a lower purchase price or with a 30-year amortization, the property would cash flow, but still not significantly.

One key factor here in Canada is that while we have 25- or 30-year amortization periods, our mortgage terms are typically only 5 years. Longer terms (7- or 10-year) exist, but are rare and at much higher rates.

The biggest gap in my knowledge right now is future development potential. What resources or strategies would you recommend for building expertise in this area?

Just an update here, this really is one of the better looking deals I've seen on market. With that said after some additional research it looks like there are certainly some red flags (not that that scares me away completely).

1. the fact that I didn't bother putting in any renovation budget makes me question the actual money needed upfront.

2. Being over 100 years old, hopefully the important updates have been done, still any renovations will indeed see more scrutiny, not to mention getting insurance would likely be a challenge. I'm all for taking on problems no one else is willing to accept. Just not at this price, I would like a bit more wiggle room.

3. The money really could be spent better elsewhere, I do have faith in the appreciation of properties in this location but still there's a lot more behind the curtain. Now, there's always a price that makes the deal work but I'm not quite sure this is the opportunity for me specifically.

Here's to continuing the search, while still keeping this triplex in mind.

@Scott Trench Thank so much for your reply it was extremely informative and helpful!

At the $1M price point, my actual down payment is $330K rather than $770K, and I’d be looking at an interest rate around 4%. Vacancy is high, but I tend to be conservative with those projections.

That said, this deal barely caught my eye—but it’s one of the few on-market properties in Toronto that actually makes sense. And location wise it's got great potential.

I completely agree that better terms make the deal—negotiation is key here. I expect it to sell over asking, but I may still put in an offer closer to $800K. I don’t have the full down payment readily available, so I’d need to assign the contract or bring in partners to close. But that’s all just terms—easy enough to figure out.

Long-term, I’m looking to invest outside Toronto (or even in the U.S.) because of insane pricing here, but this is the first local deal I’ve seen in a while that could actually generate real cash flow.

Looking to connect with investors or real estate agents! I’m trying to learn more about markets outside mine (and happy to travel). I’ve done my research—employment trends, population growth, transit, LTB laws—but having someone on the ground who lives it every day would be the extra push I need to really get things rolling.

Let’s talk!

Remote control anything is a rental is a headache from my experience. If you go remote controlled ensure 1. You have a way to manually run the fan, blinds, etc. and 2. Do not put it in your rental agreement and risk being responsible to fix the remote functionality.

interested in hearing others opinions!

Looking to pick the brains of all the smart investors on the BP Forums regarding this hypothetical deal analysis!

Triplex in Toronto, Ontario:

Purchase for $1M with 33% down ($330,000)

Monthly:

Mortgage $3,500

Insurance $250

Prop tax $750

Maintenance $500

Vacancy $600

=$5,600

Conservative Market Rents $6500

Actual rents just under $5900

and looks to be approved for a coach house in the back.

shoot me some questions, issues, and thoughts on this breakdown!

-ADL

@Nathan Gesner I'm not opposed, still Ineed a change of environment altogether, it's just not vibing for me where I am 🙃

@Nathan Gesner I'm in Toronto, Canada. I'm 2020 my max allowable increase was 0%, since 2021 it's been 2.5% (which I have used to my advantage every year). Without the tenant offering me a higher rent I'm SOL. Damn LTB is so against us landlords. In Ontario, Canada.

I'll be honest I didn't give a physical binder, I simply outlined the facts and asked what they felt a fair increase would be.

I want to buy in a more landlord friendly province or state (I'm extremely interested in buying my first property in the USA - and I'm tempted to move to the states) or possibly get into some commercial real estate.

In all honesty the first step for me is to make some friends, build the network and find some deals!

I appreciate the reply! Can't wait to get unit #3 myself. Preferably not another condo, but I'm a sucker for deals so I never say never 😎

I'm also thinking as a more absentee owner, if we hire great PM teams I don't see the management of properties being that much more expensive. May save some fees on finding tenants by having a PM manage leasing vs an agent but as mentioned by Nathan the tenant profile would suggest that savings would be deteriorated by turnover.

Regarding multiple bills I feel they could be simple in either case, the right systems can really make the whole bills process a breeze. I'm not an expert on driving up prices with more supply held, but I feel picking the right markets would help mitigate this for the most part.

The more I think about it the more I talk myself into 20 separate properties. I imagine any insurance claims would also affect the premium of a 20unit much worse than a claim on one of the separate properties.

All this to say, I'm at a point where I'm looking to grow the portfolio, a good deal is a good deal! I'd be all over a 20 unit in the right situation.

a great thought provoking question indeed!

To give a quick not thought through response...All things being equal (from effort to cash flow) Give me 20 properties. This gives me the ability to sell a single property should I need to free up some cash, also the diversification of location gives some freedom to exit a declining market.

what about you?

If you own a rent-controlled property, you may struggle with below-market rents. The Binder Method is a strategy that encourages tenants to request a rent increase by showing them real market data—creating a win-win situation.

How It Works:

1. Gather Market Data – Research comparable rental listings to document current market rents for similar units.

2. Show Homeownership Costs – Present the costs of purchasing a comparable property, including mortgage payments, taxes, insurance, and maintenance. This gives tenants a clearer picture of what it takes to own and maintain a rental unit.

3. Schedule a Meeting – Sit down with your tenant in a friendly, non-confrontational setting.

4. Present the Facts – Show the rental market data and ownership costs to illustrate the financial reality landlords face. Hand your tenants a physical binder with all of the information you have compiled for their review.

5. Let Them Decide – Many tenants, when presented with this information, recognize the gap between their rent and market value. Some will even suggest an increase to stay in their unit at a fair price.

By incorporating homeownership costs into the conversation, tenants gain a better understanding of why rent adjustments are necessary, making them more open to reasonable increases.

Would you try this approach? Let me know your thoughts!