Investing in buildings that have several units can provide you with steady cash flow through rent payments from tenants. In this episode, I talk to my good friend, Ian Szabo on how you can make money investing in purpose-built 12-plexes. He explains what to look for in a 12-plex and why the built-in equity of the properties is important.
Ian has done it all and has stayed busy throughout the pandemic, mostly with fixes and flips. But now that he has been bringing in other money partners, he has been looking at purpose builds. He gets the deal for the project on a contract so that he will close the deal no matter what. Bringing on investors to set up a corporation, which offers dividends and shares depending on the amount of money the investor is investing into the project. The return on the investment is based on profit and is evenly split between all investors in the corporation.
Ian explains what purpose-built means, which is a building that is built as a multi-unit building, as opposed to taking a larger home and transforming it into a multi-unit property. A purpose-built building will have fewer noise complaints from tenants and the structure is made for many families to live there. The rent will be higher than a duplex or triplex due to the way the building has been built.
The case study that Ian brought in for this episode shows exactly how these investments are a lot easier than building a property home from the ground up or rehabbing properties. It gives you a little more control. The building in this case study is a 12-plex that is 20 years old and got the deal on assignment. Some of the units are occupied, and Ian plans on going into each unit, renovating it, increasing both the rent and value of the property, to give himself and the corporation of investors not only a profit on their investment but after refinancing, a steady cash flow.
For the numbers on the case study to see how much Ian projects for the investors to make in this deal, watch the video.
For more information on Ian Szabo, go to www.FlipSchool.ca.