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The Triplex: Part 7 – Renovations done!

The Triplex: Part 7 – Renovations done!

About 16 weeks after we got the keys, and after countless calls and contractors – I think we’re finally completed with the renovation of the entire interior space.

Ladies and Gentlemen, we present to you: the “final” product.

The upstairs unit - 1 bedroom

Nearing the end of this project — much like every single project — you get to a point where you’re excited for the end to come. Setting a goal is wonderful. As you get thisclose to that goal, you kind of want it pretty bad. This was just like that.

The top floor was ready first. It was our priority. We worked closely with our GC to get this unit wrapped up, have everything installed, have the suite cleaned and get it up for rent. The washer and dryer are all in, the kitchen appliances all set up (including the new chimney fan) and the high-speed internet fully operational. Now it’s time to rent.

We listed the suite for $1100 and rented it out for March 1st.

The main floor - 2 bedrooms

The main floor and the front half of the basement all belong to the largest apartment in the home. It’s got 2 bedrooms split over 2 floors, and a pretty amazing living room (I think). We put up a barn door to give it an element of hip. I love it, personally.

You can see the style is the same as the upstairs unit. We went for grey, white, black in terms of colour scheme. Some stainless steel as needed. But we think this way it gives a lot of room for people to add their own style pieces to personalize it.

What’s not shown in these photos is the 2nd laundry unit we have in the house. It’s in the lower bedroom.

I don’t know why, but my favourite apartment is this lower level studio apartment. It’s so cozy. Maybe it’s the carpet? I dunno. It’s great down here though. It’s clean, it’s dry, it’s warm. It’s pretty sweet if you’re on a budget.

The Triplex: Part 6 – More on the renos

We talked about some of the interior changes we were making, but there were some considerable changes outside and even underneath the house that we also worked on.

First thing that concerned us was the honking tree about 4 feet from the foundation of the side of the house. So, that’s scary. I’ve been around long enough to see what type of damage a tree that size can do to a house and it’s components. Typically, the tree roots grow and extend from the base outwards. It keeps going, and these powerful beasts can will their way through foundation and cement with no effort really. They especially are known for breaking up the waste drain line underneath houses – when those lines are made of clay (as they were 100 years ago). So we expected to be dealing with some of these tree-issues. Proactively, we decided to contact RCC Waterproofing to open up the side of the house, dig down and rework the foundation and then waterproof it.

Part of the waterproofing also meant that we put in a sump pump. Basically, the sump pump is lower than the house, so if water is rising and about to make it’s way into our lovely home, we want that water to be tossed back outside. So a sump pump does that. It literally is a little water well that, when fills with water, activates a motor and then BOOM tosses the water outside the house. It costs about $2200 for that, but there is a city rebate that gives you back about 80% of that. So, totally worth it.

We did a scan of the clay waste drain under the house, and sure enough, there was a bit of evidence of tree roots. Not much, but enough for us to want to deal with all of this now and clear that out. What that means, is more excavation – only this time INSIDE the house to lay down new waste drains. We wanted to reconfigure the back part of the basement anyways, so now we will.

The waste line at the front of the house also had a little blockage. So, preventatively again, we’re going to redo the waste line all the way to the city’s side.

While we’re at it, since we can see that the water coming into the house is coming through a lead pipe, we’re also going to change the water lines coming IN to the house. We’re going to 3/4 of an inch sized piping to give great water pressure in the house.

Go big or go home, right!

We’ve opened and now shut a big hole in the front of the house. We’re getting there!!

Here’s a little video of us some of the progress we made.

Video update of the progress so far

The Triplex: Part 5 – What are we renovating?

Time to work on the renovations!!

So, the house wasn’t pretty. That was obvious. We certainly want to address the visual appeal before we seek out tenants. Of course – and we will. At the outset, we know we want to replace appliances if we need to, change all the flooring to something way more modern, paint the entire house — things like that. So we have allotted some budget towards that.

Flooring – we talked it over and wanted basically one type of floor for the whole house. We thought about hardwood, we thought about tiles, we thought about laminate and we thought about vinyl planks. In the end, we chose vinyl plank flooring. It’s a little more expensive than laminate flooring – and it’s not fully used in residential applications for the masses – but it’s the winner for us. It’s durable as hell, it doesn’t get water-damaged, it’s thin and easy to install, and it doesn’t need any underlayment. So we factored everything in and made the call to buy a ton of these vinyl planks. We’re in for just over $5,000 for the materials on that. Plus we’ll pay for installation, because I don’t plan on doing any of that 🙂

Painting the whole place – we want one solid type of white for everything. That’s our style, it’s modern – it works. Painting the entire house will cost about $6,000-7,000 all in. We’ll replace appliances we find aren’t up to par, and we’ll swap out some cupboard cabinets to freshen up a kitchen. In the upstairs we had WAY too much kitchen for that small a space. So we’re splitting it in half and we’re bringing one of the halves into the basement.

Besides being way prettier inside – one of our competitive advantages is going to be the fact that we are introducing separate washer/dryer units for the larger 2 units. The tenants will NOT have to go to a laundromat. Those of us with laundry units understand how important this feature is. The washer/dryer combos we scored were $1100 each. Well worth it, in my opinion.

These interior upgrades (and some other ones) are important – sure. But, we’re doing WAY more than this to make this a long-term turn key investment. For that, we’re looking at ways to improve the longevity of some of the bigger ticket items: foundation & plumbing.

Living your life on purpose

I’ve spent years – YEARS! – sitting in my car with clients/friends. Naturally, conversation ensues. Inevitably the chat gets past the weather, and the election and the sports scores – and it ends up going deeper and deeper. Work always comes up. “So, how’s work going?”

Over a decade ago (at the tail-end of my previous career), I used to absolutely cringe when I thought about work. I couldn’t understand why, I just knew that I pretty much hated myself on Sunday nights. If that sounds familiar to you, read on 😉

One of my old passcards

One of my old passcards

Really what it came down to was pretty simple: I was working in a career that wasn’t aligned with who I was. I did it for the money. I mean, I thought I was doing it because it was what I wanted. Though I don’t recall ever actually spending any time really thinking about life. I didn’t “take stock”. The money and the promotions directed my career path – I was just a passenger going along on a ride.

Until one day.

I remember so clearly still.. I was in Ireland for a wedding with my – then – girlfriend (now wife). We were walking in the town, and I just had some clarity on what I wanted to know, who I wanted to be. I didn’t care about the money, all I wanted to do was have a career in something I was actually passionate about and believed in. I wanted to control my career. I wanted to enjoy the work. It took me all of 3 seconds to realize that I wanted to get into real estate. So, right then and there, I walked into an internet cafe and signed up for the courses to get licensed to sell real estate. When I returned home, I didn’t want to wait another minute. I wanted to close the book on my former life and I was ready to start from scratch – with a life designed ON purpose.

If you know me, you know how that’s worked out for me. I’ve had a tremendous career. You know why? It’s because I love this. I love what I do. I’m aligned with what it takes to be successful in this position.

None of this is meant to be obnoxious or showy. That’ 100% NOT who I am. I wanted to share this because I have sat in my car with so many amazing people over the years. Many of them doing what they were meant to do – following their life’s calling. But a high number of them are NOT. And that’s what I’m not ok with. I’m writing this to let you know that you can make a change if you’re not happy. If you’re not aligned with what it is you’re doing, and where you are, you can absolutely do something about it. You can choose to life a life on purpose.

My buddy Charles and I were having coffee the other day, and we just expanded on this idea. He and I went through similar paths to get to where we each are now. If you aren’t happy, maybe this will help you see the possibilities. Maybe it will help you get some clarity. If it at least causes an internal conversation in your own mind, then I’m so happy that I was able to tickle your brain. 🙂

Know this: if you aren’t living your life on purpose, you can do something about it now.

qualityThere’s an old Chinese expression that goes like this: “The best time to plant a tree was 20 years ago. The next best time is right now.” Plant that tree, my friend.

The Triplex: Part 4 – How we decided to buy

First off – I’m thrilled at the response from a lot of you. There are so many of you that have reached out to me (keep it coming, I’m here to help!) and asked questions. Clearly you want to build your wealth for your future and for your kids (just like us). So, I’ll keep writing and giving you the goods so you at least have the knowledge to know this exists!

Alright – last time I talked about our very strict criteria of what we were looking for. If we couldn’t find that, we weren’t interested. That was key to recognizing an opportunity. If we had left it as “any property in 416/905 that was under $1,000,000” – that would have been impossible to make a decision on. Because saying yes to any place meant that I was saying no to countless other options. The typical “paralysis by analysis” conundrum. We weren’t going to go down that route.

That's a big tree. Right next to the house. No problem - just need to factor in to the decision!

We visited a bunch of houses. We even tried offers on 5 or 6. We were always true to our spreadsheet and our math. If it didn’t make sense on paper as an investment – we weren’t interested. No emotions were tied to this at all. We weren’t caught up in bidding wars. We had prices that worked in our spreadsheets and ones that didn’t. Simple!

Then came this house by Corso Italia (St Clair West). It was a semi-detached, 3 unit house. It had tenants in 2 of the 3 units. I had a really hard time getting an appointment to see the house. Tenants weren’t the best of the best, let’s leave it at that. On top of not living to standards that are acceptable, they also wouldn’t agree to show the house. I knew this wasn’t a problem that was unique to us – I’m sure others were also not able to get in.

That made this an opportunity. If the seller can’t get potential buyers into the house to look at it, my competition was weak. And with so few appointments made, it probably made the seller a bit nervous and put the seller in a position where he had to take any offer, otherwise it may not sell.

It took a while for me to get into the house. When I saw it, let’s just say I wasn’t too impressed with what it “was” but I did feel amazing about what it “could be”. That was enough for us. I didn’t even get a chance to see the basement unit, I had already decided that the basement was a write-off and that I would start from scratch down there anyways.

The house was listed at a number the seller felt was fair. We didn’t necessarily agree (and I’m a realtor – actually, an amazing one – so I know values), but we liked the house enough to consider submitting something that made sense for us. I submitted an offer at about 85% of list price (IN TORONTO!) and one of my conditions was that all the tenants would leave before I took over. It totally got rejected. 🙂

The other agent and I got along great. He said they would sell for 99% of list price and that the tenants would remain. I thanked him for his time, wished him the best, and we parted ways.

A month later – after they dropped the price $30,000 – I called them up again and said, “Hey, remember me?”

They did.

I said we were still interested – but at the same terms I presented before.

30 minutes later – I got a call back — “Donny, put it back on paper, I’ll have the offer accepted if you can close next month – WITH vacant possession.”

Boom.

Next –> preparing for closing and renovations!

The Triplex: Part 3 – Assessing the triplex

Alright – what you’re up to see here is nothing glamorous. It’s not Hollywood quality, it’s straight-up reality.

These video shoots were taken when I was there with my property inspector Philip. I knew going in what to expect – having seen old Toronto homes for years live and in person. So none of the findings frightened me.

We had clear goals on this purchase (as mentioned in my previous post) – break even or better on monthly cash flow, and expect no appreciation. If that translates to a 7-12% return on my 20% down payment, we’re interested. Otherwise, it’s a no go. This house was one that – when we considered what market rents would be – would fit into our specific requirements.

Let’s take a look at the basement unit. This entrance is from the side of the house – and it’s really just an UGLY basement bachelor’s unit.

The main floor enters off the back of the house. As it is, it’s a 2 bed apartment (1 on main floor, 1 in the basement). Nothing glamorous here again. Most people would walk into places like these – and walk away. We saw potential all over the place.

Last, but not least, we walked into the front door. This is an awkward layout. What used to be a single-family home’s living room is now a bedroom. The rest of this apartment is up on the 2nd level. It’s a “puke green” space with a decent sized living area, bathroom and bedroom.

All in – there are 3 apartments spread out across 3 levels. Will we leave it as-is? What does this cost? What will we do to the space?

Find out next time. 🙂

The Triplex: Part 2 – Why did I buy a triplex?

Over the years, I’ve bought and sold properties for many clients. I’ve also bought and sold a handful for myself. Like probably most of you, I was looking to minimize what I put down as a down payment, and so that limited what options existed for me. Bottom line: if I wanted to invest in real estate, I felt like it needed to be in condos.

Now, don’t get me wrong, I think condos can make an excellent investment – and definitely it’s the right investment for a lot of people. Though when I sat back and put on my extreme-analytics cap, I started coming up with scenarios that extended beyond condo ownership. Watch the video above from a webinar I held and recorded to get some extra insight into that process. It’s about 26 minutes long (but it’s worth it).

I took a step back this time and carefully thought out what I wanted to buy. I knew we were due to buy another property (we want to own 10 properties in 10 years). For the reasons shared in the video above, we knew we wanted to buy a three-unit home in an accessible part of Toronto. If I could get something under $1,000,000 that could bring in $4,500 in monthly rent, my numbers would work. I’ll get to the math to show you why that makes sense, but being the guy that likes things summarized – I short-cut it for you.

If a place could bring in those numbers, we were open to investigating the home some more.

In the next post, you’ll see the house we settled on – for many reasons. No reason was stronger, than the one created by my spreadsheet 🙂

The Triplex: Part 1 – My latest purchase: a residential triplex

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This is the beauty I just picked up. This is the “Before” photo.

Some of you know, I haven’t really made it a secret, but I’ve been getting more and more into helping people buy multi-unit residential properties. It’s not because I’m attracted to the housing type or anything like that – it’s simply because I’m interested in BUILDING WEALTH FOR PEOPLE!! Right now, I think owning a multi-unit residential property just happens to be the best investment vehicle in Toronto right now.

I’m not saying that in jest. There is no smirk here at all! I truly enjoy watching people around me make a lot of money and setting themselves (and their families) up for success. In fact, I’ve been thinking about changing my job title from “Real Estate Broker” to “Chief Wealth Builder” because I feel the latter describes me better.

I monitor the duplex and triplex market regularly. Just like a stock broker would monitor the financial markets. It’s important to be in tune with what’s happening in a subject you’re passionate about. When you’re so immersed in something, you start to see opportunities that others may not recognize. That’s what happened when my wife and I decided that our next purchase was going to be an investment triplex. I knew what we wanted, and I was there to take advantage of an amazing opportunity.

Most of you reading this probably have thought about buying some type of investment property, but probably stopped thinking about it once it became too large a task to handle. So, in an effort to help you see the ins and outs of finding, buying and managing a triplex, I thought I’d start a blog series talking about the things that come up – and the things you need to know about – when you’re ready to buy your first duplex or triplex.

Want to come along for the ride?