Investor Update - Fall 2018
Each month at the SYNERGY REN meetup I present a short update on the recent Real Estate investment deals I'm working on acquiring and offering to investors.
Click This Link for Meetup Dates; https://www.meetup.com/SynergyREN/
Next SYNERGY REN Meetup is NOVEMBER 28, click the link for details, location, address and time.
This Month's TOP Investor Report!
Placing offers! VIRTUOSO is back in an acquisitions phase and we've placed two offers;
1.) We placed an offer on a 109,000 sq ft piece of land in the South Surrey / White Rock area, we're currently negotiating to get our offer accepted.
What Makes This a Great Deal!
This land is develop-able to about 35,000 sq ft of Office Commercial space as is, it has loads of land for Outdoor Parking Lot without having to build expensive floors of concrete underground parking! AND, we have a buyer in principle for pre-sale of 50% of the space.
2.) We're queued up to place an offer on 3 lots in the 2.5 FAR area of the Surrey City Center OCP that's build-able to 97,000 sq ft of Residential Apartment. If the current offer expires, we're all in!
What Makes This a Great Deal!
These 3 lots make up one Residential Apartment site, no additional lands to assemble or purchase! The area qualifies under the National Housing Strategy for Affordable Housing subsidies, and in partnership with BC Housing the project would benefit from significant savings in development, construction and startup overhead costs as well as providing affordable housing in a much needed area of Surrey and still providing great profits for investors!
Great News for Investors;
"Walkerville Court Apartments" Repave of the parking lot is complete, a $60,000 ticket.
Still have $340,000 left over (and growing) to reinvest for our investor into a new project :-) We're developing a Micro Suite in a Large Mezzanine area of the building which we will Short Term Rent/AirBnB. Since this project is Very Cash Flow Positive the $800+ income per month from the new Micro Suite is ALL PROFIT!
"Deauville Apartments" this property's Condo Conversion is now complete. The final docs for severing the mortgage securities are complete, signed and ready to register to title once the 36 titles are registered in about a month.
As previously reported I received the $3,225,000 appraisal for this 36 Unit building we purchased in 2015 for $1,777,000, very happy investors!!!!
MPAC property assessment is now complete and Windsor just like the rest of Canada took a major value leap in 2017 and 2018 which reduced our tax savings form Condo Converting to $4,000 per year, oh well its still a savings/profit, or maybe not, the City of Windsor issued a letter of mandatory rent reduction to offset the saving and give it to the tenants??? Not happy about that one, the battles on. We're planning to offset the rent reduction with and N10 Rent Increase Above the Guideline for Capital Improvements that benefit the tenants.
Next steps are; 1) Create the Condo Corp. and Articles. 2) Register the 36 titles with land titles. 3) File N10 with the LTB 4) Refinance and take out equity to pay back shareholder loans from investors for the down payment and Condo Conversion Capital Improvement costs, 128% ROI in 3 years just on Equity, add annual ROI from Cash Flow, Principle Pay Down and Tax advantages.
With Condo Prices on the Rise in Windsor there's also an opportunity to sell this building off as individual condos in the future at a significant profit.
Still a very sweet deal with lots more profit potential :-)
"Helen Terrace Townhomes" this is a 6 Unit Row House of 3 Story, 3 bedroom, 1850 sq ft townhome style apartments. I purchased this building in July 2011 for $300,000, spent $230,000 renovating it and severing title and then refinanced it one year after purchase for $618,000 :-).
With the local economy just humming along now I'm renting these units for $1,300, that's a $250 per month increase since last year, now we're making money, and Townhomes in the area are selling for about $150,000 :-)
"Aaron Apartments" is a 6 Unit Apartment Building I purchased in May of 2011. I spent $84,000 renovating this building immediately after purchase, and in August of 2011 I refinanced it and received $94,000 in additional equity paying back all my reno costs :-).
This building is another great cash flow property and market rents have been significantly increasing in this asset class over the past few years increasing its profit an doubling its value :-).
Feel free to contact me on rickg@virtuosocapitalventures.com for more info about similar upcoming investment opportunities.
PROJECTS WE ANALYZED and PASSED ON:
1.) 18 Unit 1970's Strata Apartment Building in White Rock BC.
Had 2 floors of concrete deck Underground Parking so demo would have been super expensive, it was in the 2.5 FAR OCP zone so max 6 floors build-able.
Not enough scale for profitability, numbers just don't work in this scenario, would have been worth a deeper look if it didn't have the underground parking.
And now with a newly elected White Rock Council policy is changing as they where elected on an Anti Development and Anti High Rise campaign platform, and immediately after taking power "Reduced two Developments from 12 to 6 Stories" and put all other OCP Projects on hold until they review and amend the OCP to curtail big, tall developments.
Enjoy, Rick G.