Sometimes it's a little difficult to remain focused during the summer when all you really want to do is hang out with family and enjoy the great summer weather. Summer is a time for family vacations, BBQ's with friends, lazy days at the beach, and hiking our favourite trails.

Then reality bites and the bills arrive. Time to think about work again.

On a recent trip to Cleveland I finalized a deal on a 44 unit property from myself and another investor (we close on it in 2 weeks), and submitted an offer on a great little 22 unit that has been completely rehabbed. With the help of some great people in Cleveland, it seems like the deals just keep falling from the sky every time I go there.

I'll be back again for the last week of August and should come away with more great deals for the savvy investor. We currently have access to a nice 41 unit, 4 story, brick apartment building on Cleveland’s West side for $1M that is owner financed at 6% with $300K down. This building should have an NOI of about $85K a year AFTER debt servicing! It’s almost a 14 CAP without the financing, and still a 8.5 CAP after financing costs. I’d like to see someone find a deal like that in Vancouver!

The biggest issue for most Canadians is financing their U.S. investments. Sometimes and investor can have enough equity in Canada to cover a HELOC or something similar to raise the needed cash, but not everyone is that fortunate. I have found a small Cleveland bank that is willing to finance commercial residential investments as long as they are 90+% occupied and can show a history of income and expenses. In the case of a fully rehabbed property, like one we are looking at, that is 100% occupied and has 6+ months of P&L, there is a good chance of financing the purchase. In the case of our other property which needs some rehab to get it back up to 100%, we have found private money to purchase the property, and will refinance with the bank once the property is performing again.

It’s time to research some new opportunities, but I’ll be back soon talking about how we can alleviate some of the concerns of Canadian investors venturing into markets far from home.

 


Comments


Comments are closed.