All Forum Posts by: Leo Di Croce

Joseph - Thank you. Yes, I think I was one of those guys: wanting the land for free. But, fair is fair. We are willing to pay for the land. How does one establish a value for the land separately?

Greg - Thank you. Yes, the seller said preliminary approvals — though informal — are in place. We had a chat with the town to confirm; they are happy with the preliminary site plan. What did you mean by "peony's?" Was that a typo? As for construction costs, we're using a rough guide published by the Toronto Real Estate Board (TREB) for now. TREB says $149 (CAD) per square foot. We'll firm up construction costs during due diligence. So, I think we have enough information to work the numbers backwards to a land basis, as you put it. But how? Also, yes to your question about factoring in the cost to carry the extra land and construction loan into the overall package and financial calculations. Not sure what you meant by raising equity and adding to the reserves. We spoke with our mortgage broker about financing construction costs in general. And we modified our spreadsheet to determine the cash we need specifically for this deal — for the acquisition and construction.

We modified our spreadsheet to calculate Acquisition and Development returns separately, and overall. But the Land Value is still a big question mark. I wish we had a formula to determine land value. Currently, we are using an Excel feature called Goal Seek, which helps us play with certain values — land for instance — to achieve certain goals, like ROI.

The upside here is potential expaision. The site has preliminary approval to build 10 additional 2-bedroom units. Based on rough numbers, the ROI is very good — for the expansion.

Unfortunately the ROI is very low for the acquisition itself. Without expansion, the deal fails our analysis.

Our analysis consists of a spreadsheet that was developed for cash flowing properties. My wife and I don't consider ourselves the most sophisticated investors. We like property that is tenanted. Land development is not.

We're excited about this deal because of the mix. The existing tenants will cover the cost of acquisition. And the ROI — for the expansion — is very good.

But what if the expansion is delayed for whatever reason? What techniques are available to model the mix? Ultimately, we would like to calculate a fair target price — for the acquisition.

Thank you in advance for your insights, suggestions, and participation in this discussion.

Given an MLS#, I'd like to get an XML document with details about the listing, like address, price and such.

I am not an agent.

I'm excited to be here and hoping to learn more about real estate investing, particularly how to build wealth for my family and for future generations.

My day job is pretty cool but stressful. I'm a mechanical engineer and I manage large commercial and institutional projects. Mostly new construction.

But it's time to shift focus and to build something more, something we can leave behind. My wife and I have two rental properties in Toronto, each with two tenants. She manages the properties, but she isn't really interested in growing the "business." So it's up to me.

I feel like a newbie, which is one of the reasons I'm here. So I can meet people like you and we can share our experiences. I also want to have some fun. 🇨🇦