All Forum Posts by: Raymond Rashid

Thanks @Brian Garrett

So when we are investigating lmf, should we be looking at what the potential market Rents are for the unit, and how long we think it will take to bring the units to market rent? Similarly for NOI, lowered expenses increase income?

Hi Guys,

I've only ever bought duplexes, and I am now looking to scale my portfolio.

I am investigating two deals, a 4plex vs 14plex. Currently the 4plex looks much more attractive. However, I'm not sure why, but everyone is saying more doors the better. I understand it's less in gas, and overall utilities, maintenance, etc, but at the present the numbers for the 4plex, look much more attractive than the 14plex. If there is anything else I'm not noticing, or understanding about LMF(apartment) investing and how it differs from SMF please let me know. And how do you analyze larger building vs smaller. Numbers below.

4plex

Purchase Price $600,000

Current Rent $5,950.00

Total Expenses including Vacancy(5%) and MGMT(5%) $1784.72

NOI $4165.28

Cash on Cash 18.9%

14plex

Purchase Price $1,100,000

Total Rent $11,675

Total Expenses including Vacancy(5%) and MGMT(5%) $6,148.74

Cap Rate 6%

Cash on Cash 7.4%

**Maintenance fee last year was about 18k, not sure why it was so high. Also 75% of tenants rent are way below market value, many tenants have been there prior to year 2000.

@Roy Cleeves Thanks for your comments... I did some calling and researching below is what I've found.

Kitchen Cabinets Installed with Laminate countertop: 2500

Basement Egress windows(2) 2600

Hydro Line from provider coming into the property 950 per line. 

Vinyl flooring 2.75 sq/ft installed

Will update with other costs as I get them. As I've followed the fruitful investor, I still cannot see how he estimates 100k on a duplex conversion. It seems almost double than what I would expect.

I'm looking at purchasing a SFH that is zoned R3. Which in Ontario means I can have three units.

The home is priced at 200k. My plan was to create two 2 bedroom units with 1 bath and a 1bedroom unit in the basement also with 1 bath.

I've looked at the Vacancy rate for the area at its at 3.1% and rents for 2bedroom apartments are 1300 + utilities, 1bedroom 1000+ utilities. I would rent for similar, but would cover gas and water. I plan to separate Hydro. 

Their are no direct comparables for triplexes sold in the area, but there is a duplex for sale for 350,000. I am lead to believe I would get at least 350,000 for a refinance.

The difficulty I am having, is estimating the rehab/construction costs. I've done home renovations before, but i've never done anything where I've had to apply for a building permit.

Does anyone have an easy way to estimate the below, including labour or can anyone share with me a detailed breakdown of their triplex conversion costs?

• Kitchen
• Bathroom
• Hydro Seperation

@Evan Kraljic do you have an update on the costs?

I'm new to this Forum... so pardon my ignorance...

There are alot of Condos in the 65-80k mark that are turnkey ready and command rents from 1100-1500/month. HOA is on average 300, and mortgage and principal assuming 5% is 342 (assuming 80k, 20% down), property tax at 100/month, and home insurance at 100 a month. You would be netting 258 to 658. Factor in vacancy at 4 % 248 to 631.

Am I missing something here? but if it's the latter at 600+ would that not be a pretty good investment?