All Forum Posts by: Brian Jung

Hey, I am a young professional interested in real estate investment. I found that real estate market is different from city to city and thought that it would be best to gather with people with similar interest in the same city. I live in Vancouver and highly interested in Greater Vancouver Area market. Would like to touch base with people with similar interest! 

Land is a bit over 10,000sqft currently occupied by a detached home. The appraised value of the land was 950k. Since there was broker fees, property transfer fees etc plus the bonding of ~150k to the city(which is already paid), the seller is appraising the entire deal for 1.2M. 

The construction cost is estimated for around 1.3M for the 17 units. The completed unit is expected to be worth 3.4M 

Hi Everyone, 

I am a newbie investor and has never done renovation on my own place, let alone building a multifamily from the scratch. Recently, a friend of a friend approached me and offered if I would go in as 50:50 partner in a deal that he is currently working on. 

The deal is in Kelowna, BC

Land was appraised at $950,000. They paid the bonding (~$150,000) to the city and already have the development plan approved. They are valuing the entire deal at 1.2M and asking 600k to go in as a 50:50 partner. 

Currently the property is owned by a numbered company. This is my first time engaging such a big deal and a bit nerve racking. Anyhow, What would be the due deligence process from my end ?

Things that I could think about are...

1. Make sure the company does not owe any taxes, any bad debts or in any kind of legal problems since I will be the 50% shareholder of this company

2. Make sure the Development plan is approved by the city. 

3. ????

If anyone has been in a deal like this before, what should be cautious about? Any advise from a senior investor would be appreciated.  

Hello fellas, 

I live in Vancouver. One of the best cities to live in according to many. But not so true for the market. Not just in vancouver but anywhere in Greater Vancouver Area and it's vicinities (I am talking about 200-300km out) It is extremely difficult to find a deal over 6% cap rate. Of course, this gets lower in great vancouver area to about 2-3% Cap rate for multi family. 

I read a number of books on investing, and they all rely or base their investment on finding a "good" deal, where the cap rate is high enough for you to generate income. However, when the cap rate is dropping below 5%, it is difficult to justify your investment. (at least for me ) I believe this is because people expect the appreciation in Vancouver to be so much that they don't mind low cap rate....

I guess one way of solving this issue is buy -> renovate / upgrade -> increase rent -> increase cap rate. But is this the only way ? I'd like hear some of the expert's opinion on this. PLEASE enlighten me. 

Thank you