Parkside Villas – The Story

A good Realtor friend called one day in mid 2018 and asked if I would help him measure a new listing that had just come in.  The building was a 17 unit apartment in Innisfail that I 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 has always drawn me to the property was the fact that it is located adjacent to a beautiful town park.  So the front yard of the building appears to be a manicured park area.

After measuring the building with my Realtor friend that day, we went straight back to the office and wrote an offer. The Seller was a retired Lawyer was hard of hearing who now lives in a seniors home.  The Realtor had his hands full to navigate communications issues and the odd temper tantrum of the Seller 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.

 

Location/Address: 4820 46 Street Innisfail

Purchase Price: $895,000 (additional $205,000 reserved for upgrades, $100,000 Procurement Costs – Total Investment $1,200,000)

Appraised Value:  $1,520,000

Date Purchased: July 31, 2018

Cash on Cash Return: 7%

Composite Return:  7% (no leverage)(Cash on cash plus equity growth through paying down mortgage)

Tenancy: Lease up will take place as suites are upgraded

Occupancy: At closing, 7 out of 17 suites occupied

Year Built: 1975

Footage: 14,337

JV: Safety First Projects 5 Ltd.

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