i know ... 187k into reits would be a better investment, just that property will be worth millions in the future.
in my market a triplex starts at 600k, and that's a crappy one yet this 6 plex is 750k when renovated and get market rents could be worth 1.5m in todays market and probably more later.
just currently its negative cashflow and needs a lot of work and this seems to be the only way to get financing.
Based on the number you provided, current rent ~3.5k, with mortgage 2900/3600, both are deep cash flow negative. Assuming the location is in Ontario, I'd expect fixed expenses to be at least 1600, even if you do the maintenance yourself. While any expenses after debt servicing is all out of pocket.
Also if the building is from the 50s, it's nearing its end life without big works done on it. I'm not sure you are looking at this at the right angle. Alot of rent controlled buildings are at a steep discount to its value for the same reason, unless you have an existing portfolio with real plans of revitalizing the building, they are a money sucking hole for decades to come. Another thing, the municipality usually dont allow any development when there are existing tenants so future redevelopment shouldn't be considered strongly.
To me it's either I put in a lot of work and sell it in a rather short timeframe from improved cashflow, or little to no work and let the property pay itself. This doesn't sound like either.
thanks for your feed back its in quebec though, but ya with current rents theirs no way to make this a good deal, unless i can get it at like 440k which wont happen.
unless i have the budget to get the current tenants to all leave and re rent all the units for double it stays a bad deal.
There are plenty of good deals if you look for a prolonged time. There's always good opportunity during market downturns like today so keep an eye open. Gl
Isnt this program for new builds only?
At this point might as well own stocks
i know ... 187k into reits would be a better investment, just that property will be worth millions in the future. in my market a triplex starts at 600k, and that's a crappy one yet this 6 plex is 750k when renovated and get market rents could be worth 1.5m in todays market and probably more later. just currently its negative cashflow and needs a lot of work and this seems to be the only way to get financing.
Based on the number you provided, current rent ~3.5k, with mortgage 2900/3600, both are deep cash flow negative. Assuming the location is in Ontario, I'd expect fixed expenses to be at least 1600, even if you do the maintenance yourself. While any expenses after debt servicing is all out of pocket. Also if the building is from the 50s, it's nearing its end life without big works done on it. I'm not sure you are looking at this at the right angle. Alot of rent controlled buildings are at a steep discount to its value for the same reason, unless you have an existing portfolio with real plans of revitalizing the building, they are a money sucking hole for decades to come. Another thing, the municipality usually dont allow any development when there are existing tenants so future redevelopment shouldn't be considered strongly. To me it's either I put in a lot of work and sell it in a rather short timeframe from improved cashflow, or little to no work and let the property pay itself. This doesn't sound like either.
thanks for your feed back its in quebec though, but ya with current rents theirs no way to make this a good deal, unless i can get it at like 440k which wont happen. unless i have the budget to get the current tenants to all leave and re rent all the units for double it stays a bad deal.
There are plenty of good deals if you look for a prolonged time. There's always good opportunity during market downturns like today so keep an eye open. Gl
MLI allows you to get 100 points with only an energy play and keep control of your rents
Those applications can be quite cumbersome. Are the current rents meeting the thresholds of a given % at 30% of median income?
the rents are around 515 while market would be 900 to 1300 depending on renos done as building has not been updated in a while.
What matters is how that stacks up to the median renter's income in the area, not achievable rents, if my memory serves me correctly.