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Fourplex Conversions - Volition Meetup 09/2020

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For years, the Volition team has heard from casual investors that "Toronto doesn't work, it's too expensive, it doesn't cashflow". If you do what everyone else does, then you'll only get the same results as everyone else. At Volition, we're not interested in being like everyone else. We want to be better. We want to do better. We want to achieve more. At Volition, WE MAKE TORONTO WORK.

This is the impetus for wanting to share with you the natural evolution of our well-established triplex business model, Legal Luxury Fourplexes. These are an extremely desirable asset class, attract top-quality tenants, and achieve sky-high rents in AAA+ neighbourhoods.

We know what you’re thinking, and you’re right. These types of properties are expensive and don't work in Toronto… UNLESS you create them yourself!

The numbers are big, the cash required is big, but the ROI is even bigger.

At our full-day Quickstart Investment Seminar back in February 2020 (volitionprop.com/quickstart) with over 200 engaged investors, we broke down various business models including small town investing, resale condos, pre-construction condos, triplexes and outlined the pros and cons of them.

You’ve heard us talk about fourplexes at a high level, now it’s time to dig into the nitty-gritty:
• How do you execute on a legal, luxury, fourplex?
• How much money does it take?
• What do the numbers look like?
• What are the steps you need to take?
• Who do you need on your team?
• How long does it take?
• What is the business model?

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Fourplex Conversions - Volition Meetup 09/2020

  1. 1. @volitionproperties www.volitionprop.com Volition Investment Mastermind September 2020
  2. 2. @volitionproperties www.volitionprop.com Who is Volition?
  3. 3. @volitionproperties www.volitionprop.com Thank you Creeds!! We’re still open for coffee takeout and dry cleaning!
  4. 4. @volitionproperties www.volitionprop.com Who is Volition? ● Certified Real Estate Investment Advisors ● Toronto’s Exclusive Investor Realtor for REIN Buyer’s Group ● Nominated for REIN’s Highest Award (Michael Millenear Leadership Award)… (and a bunch of other awards: Silver Investment Award, Bronze Investment Award, Chairman’s Club, President’s Club, Top Producer, blah blah blah) ● $25M+ in personal holdings over 50 doors
  5. 5. @volitionproperties www.volitionprop.com Mentorship & Education & Consultation Acquisition of Investment Properties Design & Renovations Leasing & Property Management We are Toronto’s leading full-service, bespoke Real Estate Investment Firm Marketing, Admin & Client Relations Realty ManagementAdvisory Renovations Operations The Volition Team
  6. 6. @volitionproperties www.volitionprop.com Investor agents make the best “normal” agents! ● We can help you find your dream home and have it make financial sense ○ Does this property hold to long term appreciation fundamentals? ○ Does it require construction? How much are those things going to cost? ○ Can I have a secondary suite to help with cash flow? How much are rents? What tenant profiles will I get? ○ How can my primary residence help me qualify for investment properties in the future? HELOC? Secondary suites? ○ Advanced financing - B Lenders, Second Mortgages, Private Lenders ○ Top 1% of all agents ● We sell investor properties and single family homes ○ Active buyers / investor list, email marketing, social media marketing ○ Virtual 3D Dollhouse, Drone, Lifestyle video ○ Multiple languages, foreign investors Your home is the most important tool in your investment journey!
  7. 7. @volitionproperties www.volitionprop.com Private Volition Mastermind Chat Group ● Open to Investor clients & Advisory clients. ● Talk about news, tenant issues, share contacts, basically help navigate the difficulty of this investor world! Let us know if we missed you!!
  8. 8. @volitionproperties www.volitionprop.com Sign up for Advisory! ● 60 Minute complimentary Advisory Consultation ● We will help you determine ○ Where you are at ○ Where you want to go ○ Help you build a customized plan to get there ● Send us an email at info@volitionprop.com to schedule a session!
  9. 9. @volitionproperties www.volitionprop.com The Investing Maze The Volition Team!
  10. 10. @volitionproperties www.volitionprop.com Ming’s Market Minute
  11. 11. @volitionproperties www.volitionprop.com Sales Volume
  12. 12. @volitionproperties www.volitionprop.com Average Resale Home Price
  13. 13. @volitionproperties www.volitionprop.com New Listings
  14. 14. @volitionproperties www.volitionprop.com Average Rental Price - YOY Avg Rents
  15. 15. @volitionproperties www.volitionprop.com “It is clear that the core of Toronto is feeling the impact of COVID-19 more than the other areas of the GTA. As mentioned in previous reports, the influx of units previously used at short-term rentals, the growing number of new apartment completions (all tenures), and the cancellation of most on-campus classes at downtown colleges and universities are all contributing to the bigger declines.” Average Rental Price - Average Rent / Sq Ft
  16. 16. @volitionproperties www.volitionprop.com Volition Market Data
  17. 17. @volitionproperties www.volitionprop.com Toronto Downtown Core
  18. 18. @volitionproperties www.volitionprop.com Volition Metrics - Downtown municipalities
  19. 19. @volitionproperties www.volitionprop.com Volition Metrics - Downtown SF Detached
  20. 20. @volitionproperties www.volitionprop.com Toronto - Everywhere else
  21. 21. @volitionproperties www.volitionprop.com Volition Metrics - Uptown municipalities
  22. 22. @volitionproperties www.volitionprop.com Volition Metrics - Uptown SF Detached
  23. 23. @volitionproperties www.volitionprop.com Volition Metrics - Condos
  24. 24. @volitionproperties www.volitionprop.com Boots on the ground - Ed!
  25. 25. @volitionproperties www.volitionprop.com Luxury Legal 4Plex Conversions
  26. 26. @volitionproperties www.volitionprop.com The 5 W’s of 4plex Conversions
  27. 27. @volitionproperties www.volitionprop.com Tenant Profile Short Term Headache Long Term Headache Short Term ROI Long Term ROI Affordability Pros Cons Who Is This For Overall
  28. 28. @volitionproperties www.volitionprop.com Small Town Tenant Profile F Short Term Headache F Long Term Headache F Short Term ROI C Long Term ROI D Affordability A+++ Pros Cheap, Cashflow Cons Higher risk Who Is This For Cashflow-chasing myopic thinkers Overall D
  29. 29. @volitionproperties www.volitionprop.com Preconstructio n Condo Small Town Tenant Profile A+ F Short Term Headache A+ F Long Term Headache A F Short Term ROI C C Long Term ROI B- D Affordability A+ A+++ Pros Deposit structure Cheap, Cashflow Cons Can’t get rent or sell in the short term Higher risk Who Is This For Want zero headache in short-term. Short-term Mort Qual problems. Cashflow-chasing myopic thinkers Overall B+ D
  30. 30. @volitionproperties www.volitionprop.com Condo Preconstructio n Condo Small Town Tenant Profile A+ A+ F Short Term Headache A A+ F Long Term Headache A A F Short Term ROI C C C Long Term ROI B- B- D Affordability A A+ A+++ Pros Entry-level $150k Deposit structure Cheap, Cashflow Cons Cashflow is hard at 20% down Can’t get rent or sell in the short term Higher risk Who Is This For Want minimal headache. Limited cash to invest. Want zero headache in short-term. Short-term Mort Qual problems. Cashflow-chasing myopic thinkers Overall B+ B+ D
  31. 31. @volitionproperties www.volitionprop.com Entry-level Multi (2plex/3plex) Condo Preconstructio n Condo Small Town Tenant Profile A A+ A+ F Short Term Headache A- A A+ F Long Term Headache B+ A A F Short Term ROI A- C C C Long Term ROI A- B- B- D Affordability C A A+ A+++ Pros Own land Entry-level $150k Deposit structure Cheap, Cashflow Cons $350k+ required Cashflow is hard at 20% down Can’t get rent or sell in the short term Higher risk Who Is This For Entry-level freehold, Personal residence. Mortgage helper. Want minimal headache. Limited cash to invest. Want zero headache in short-term. Short-term Mort Qual problems. Cashflow-chasing myopic thinkers Overall A- B+ B+ D
  32. 32. @volitionproperties www.volitionprop.com Luxury Triplex Conversion Entry-level Multi (2plex/3plex) Condo Preconstructio n Condo Small Town Tenant Profile A+ A A+ A+ F Short Term Headache E A- A A+ F Long Term Headache A+ B+ A A F Short Term ROI A A- C C C Long Term ROI A A- B- B- D Affordability E C A A+ A+++ Pros New, Cashflow, Solid Lift Own land Entry-level $150k Deposit structure Cheap, Cashflow Cons $800k+ required $350k+ required Cashflow is hard at 20% down Can’t get rent or sell in the short term Higher risk Who Is This For Lots of cash. Big mortgage qualification. Has the time/energy. Entry-level freehold, Personal residence. Mortgage helper. Want minimal headache. Limited cash to invest. Want zero headache in short-term. Short-term Mort Qual problems. Cashflow-chasing myopic thinkers Overall A A- B+ B+ D
  33. 33. @volitionproperties www.volitionprop.com Luxury 4plex Conversion Luxury Triplex Conversion Entry-level Multi (2plex/3plex) Condo Preconstructio n Condo Small Town Tenant Profile A+ A+ A A+ A+ F Short Term Headache F E A- A A+ F Long Term Headache A+ A+ B+ A A F Short Term ROI A+ A A- C C C Long Term ROI A+ A A- B- B- D Affordability F E C A A+ A+++ Pros New, Cashflow, Massive Lift New, Cashflow, Solid Lift Own land Entry-level $150k Deposit structure Cheap, Cashflow Cons $1.35M+ required $800k+ required $350k+ required Cashflow is hard at 20% down Can’t get rent or sell in the short term Higher risk Who Is This For Boatloads of cash. Massive mortgage qualification. Has the time/energy. Lots of cash. Big mortgage qualification. Has the time/energy. Entry-level freehold, Personal residence. Mortgage helper. Want minimal headache. Limited cash to invest. Want zero headache in short-term. Short-term Mort Qual problems. Cashflow-chasing myopic thinkers Overall A+ A A- B+ B+ D
  34. 34. @volitionproperties www.volitionprop.com
  35. 35. @volitionproperties www.volitionprop.com If you recall… Triplex Conversions ● Turnkey triplex ○ Purchase Price - $1.4MM ○ Initial Investment (Down, Tax, Closing) - $333k ○ Rents - $6500 ○ Expenses - $1100 ○ Mortgage Payment (3.3%, 30yr am) - $4,905 ○ Monthly Cashflow - $495
  36. 36. @volitionproperties www.volitionprop.com If you recall… Triplex Conversions
  37. 37. @volitionproperties www.volitionprop.com If you recall… Triplex Conversions
  38. 38. @volitionproperties www.volitionprop.com If you recall… Triplex Conversions
  39. 39. @volitionproperties www.volitionprop.com If you recall… Triplex Conversions
  40. 40. @volitionproperties www.volitionprop.com If you recall… Triplex Conversions
  41. 41. @volitionproperties www.volitionprop.com The 5 W’s of 4plex Conversions: WHAT 4 units in one building 3 units in building + 1 laneway ○
  42. 42. @volitionproperties www.volitionprop.com The 5 W’s of 4plex Conversions: WHAT 4 units in one building 3 units in building + 1 laneway ○
  43. 43. @volitionproperties www.volitionprop.com The 5 W’s of 4plex Conversions: WHAT 4 units in one building 3 units in building + 1 laneway ○
  44. 44. @volitionproperties www.volitionprop.com The 5 W’s of 4plex Conversions: WHAT
  45. 45. @volitionproperties www.volitionprop.com The 5 W’s of 4plex Conversions: WHERE
  46. 46. @volitionproperties www.volitionprop.com
  47. 47. @volitionproperties www.volitionprop.com The 5 W’s of 4plex Conversions: WHERE
  48. 48. @volitionproperties www.volitionprop.com The 5 W’s of 4plex Conversions: WHERE Even more stringent… need high ARVs & rents
  49. 49. @volitionproperties www.volitionprop.com The 5 W’s of 4plex Conversions: HOW Part 1 ● Identifying the ideal property for Multi-Conversions is tricky ● Many homes in Toronto, but what works?
  50. 50. @volitionproperties www.volitionprop.com The 5 W’s of 4plex Conversions: HOW Part 1 ● How to identify: ○ Zoning ○ Parking ○ Fire Code ○ Building Code ○ Access and Entrances
  51. 51. @volitionproperties www.volitionprop.com The 5 W’s of 4plex Conversions: HOW Part 1 ● Considerations ○ Walk-outs ○ Basement Height ○ Distance from neighbouring properties ○ Access from the rear/laneway ○ Distance from fire hydrants ○ Neighbourhood friendly towards Multis?
  52. 52. @volitionproperties www.volitionprop.com The 5 W’s of 4plex Conversions: HOW Part 2 ● How do I execute? Simplified process flowchart (upcoming slides) ● It's a VERY complicated process, fraught with pitfalls. i. Committee of Adjustments ii. Neighbour Complaints iii. Multiple stages of permits iv. Multiple versions of architectural drawings v. Development Charges vi. Etc, etc, etc.
  53. 53. @volitionproperties www.volitionprop.com The Construction Process
  54. 54. @volitionproperties www.volitionprop.com Project Flow Chart Pre-Closing Post Closing Construction Final Steps
  55. 55. @volitionproperties www.volitionprop.com Project Flow Chart Pre-Closing ● Acquire property ● Site visits with team (PM, Architect, GC, Designer) ● Survey and measurements ● High level pricing ● Concept drawings Post Closing Construction Final Steps
  56. 56. @volitionproperties www.volitionprop.com Project Flow Chart Pre-Closing ● Acquire property ● Site visits with team (PM, Architect, GC, Designer) ● Survey and measurements ● High level pricing ● Concept drawings Post Closing ● Cosmetic demo ● Site visits with team (mechanical and structural engineer) ● Drawings (architect, electrical, HVAC, Structure) ● Detailed scope and budget Construction Final Steps
  57. 57. @volitionproperties www.volitionprop.com Project Flow Chart Pre-Closing ● Acquire property ● Site visits with team (PM, Architect, GC, Designer) ● Survey and measurements ● High level pricing ● Concept drawings Post Closing ● Cosmetic demo ● Site visits with team (mechanical and structural engineer) ● Drawings (architect, electrical, HVAC, Structure) ● Detailed scope and budget Construction ● Permits ● Additional drawings from architect ● Structural demo and inspections ● COA submission ● Framing Final Steps
  58. 58. @volitionproperties www.volitionprop.com Project Flow Chart Pre-Closing ● Acquire property ● Site visits with team (PM, Architect, GC, Designer) ● Survey and measurements ● High level pricing ● Concept drawings Post Closing ● Cosmetic demo ● Site visits with team (mechanical and structural engineer) ● Drawings (architect, electrical, HVAC, Structure) ● Detailed scope and budget Construction ● Permits ● Additional drawings from architect ● Structural demo and inspections ● COA submission ● Framing Final Steps ● Inspections (framing, fire separation, occupancy) ● Rough-ins and inspections (HVAC, plumbing) ● COA approval ● Permit submissions
  59. 59. @volitionproperties www.volitionprop.com The 5 W’s of 4plex Conversions: HOW Part 2
  60. 60. @volitionproperties www.volitionprop.com The 5 W’s of 4plex Conversions: HOW Part 3 ● HOW much? ● High level financials
  61. 61. @volitionproperties www.volitionprop.com Now What?
  62. 62. @volitionproperties www.volitionprop.com Sign up for Advisory! ● 60 Minute complimentary Advisory Consultation ● We will help you determine ○ Where you are at ○ Where you want to go ○ Help you build a customized plan to get there ● Send us an email at info@volitionprop.com to schedule a session!
  63. 63. @volitionproperties www.volitionprop.com Next Meetup - October 21, 2020 Life Insurance - The Basics and Beyond! What separates sophisticated investors from the lucky is risk mitigation. When it comes to life insurance, this is not as simple as having a basic policy. It’s much more complex and requires taking into account corporations, inheritance tax, estate planning, family trusts, etc etc etc. For those of you that have been pushing life insurance to the bottom of your to-do list because it’s too overwhelming, THIS IS THE EVENT FOR YOU! Our guest speaker Mary Sun will cover everything from basic to advance planning. Don’t miss this event!
  64. 64. @volitionproperties www.volitionprop.com
  65. 65. @volitionproperties www.volitionprop.com THANK YOU!
  • DonaldPham1

    Feb. 4, 2021

For years, the Volition team has heard from casual investors that "Toronto doesn't work, it's too expensive, it doesn't cashflow". If you do what everyone else does, then you'll only get the same results as everyone else. At Volition, we're not interested in being like everyone else. We want to be better. We want to do better. We want to achieve more. At Volition, WE MAKE TORONTO WORK. This is the impetus for wanting to share with you the natural evolution of our well-established triplex business model, Legal Luxury Fourplexes. These are an extremely desirable asset class, attract top-quality tenants, and achieve sky-high rents in AAA+ neighbourhoods. We know what you’re thinking, and you’re right. These types of properties are expensive and don't work in Toronto… UNLESS you create them yourself! The numbers are big, the cash required is big, but the ROI is even bigger. At our full-day Quickstart Investment Seminar back in February 2020 (volitionprop.com/quickstart) with over 200 engaged investors, we broke down various business models including small town investing, resale condos, pre-construction condos, triplexes and outlined the pros and cons of them. You’ve heard us talk about fourplexes at a high level, now it’s time to dig into the nitty-gritty: • How do you execute on a legal, luxury, fourplex? • How much money does it take? • What do the numbers look like? • What are the steps you need to take? • Who do you need on your team? • How long does it take? • What is the business model?

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