PURCHASE PRICE: $895,000 (Additional $205,000 Reserved for Upgrades, $100,000 Procurement Costs – Total Investment $1,200,000)
DATE PURCHASED: July 31st, 2018
CASH ON CASH RETURN: 7%
COMPOSITE RETURN: 7%
TENANCY: Nine 2 Bedroom Apartments – Eight 1 Bedroom Apartments
OCCUPANCY: 100% – *Upon Renovation Completion
YEAR BUILT: 1975
FOOTAGE: 14,337 Sq. Ft.
JOINT VENTURE: Safety First Projects 5 Ltd.
A good Realtor® friend called one day in mid 2018 and asked if Daryl Hillman would help him measure a new listing that had just come in. The building was a 17 unit apartment in Innisfail that Mr. Hillman had been watching for over 25 years. It had never come to the market in that time and, in fact, the owner had built the building in the 1970’s and still owned it. What had always drawn Daryl to the property was the fact that it is located adjacent to a beautiful town park. The front yard of the building appears to be a manicured park area. After measuring the building with the Realtor® friend that day, they went straight back to the office and wrote an offer. The seller was a retired lawyer, now living in a seniors home. The Realtor® had his hands full but was finally able to complete a satisfactory negotiation for all concerned.
The property needed considerable upgrading so the price was adjusted accordingly to allow room to complete the improvements and lease up. The purchase was completed all cash to remove any risk of cash flow issues during the turn around period. This property should be a very positive long term hold with a great location, good “bones” and now upgraded to be very desirable for tenants.
When purchased, only 6 units were occupied creating an opportunity. New paint, flooring and hot water tank were a few of the upgrades done. The property faces a pristine park and has recently attracted a couple who used to reside in the building that decide to move back in since all of the upgrades.