E099 The Secret to Finding Undervalued Properties with High Potential
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In E099, Andrew Hines and David Hulshof discuss a purpose-built six-unit property in London, Ontario. The previous owner made significant energy efficiency upgrades, preparing it for the MLI program, though it won't qualify for the full 50-year term. Buyers can expect up to 45 years with a higher premium. The fully vacant building has been renovated with new windows, doors, heat pumps, and upgraded interiors. Rent estimates for the two-bedroom units, including below-grade ones at $1,700, are conservatively set to attract tenants.

Despite being in a C/C+ area, the building's purpose-built design and high-quality renovations make it a strong investment. David explains that rental rates are based on local comparables, offering real-world data to support their pricing. The seller is flexible, willing to tenant the building or leave that responsibility to the buyer, depending on their preference.

David also discusses broader market trends, noting that many deals are now being done off-market, providing sellers more control and buyers exclusive opportunities. With recent interest rate drops, there are strong deals available, particularly for energy-efficient, renovated properties like this one, which promise long-term value and rental income potential.

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E099 The Secret to Finding Undervalued Properties with High Potential?

0:49 – Overview of the six-unit building in London and decision to sell

2:03 – Discussion on conservative rental pricing and unit layouts

4:19 – Why the building is an attractive investment opportunity

6:10 – Overview of financing options and potential cash flow

7:20 – Advantages of a 10-year mortgage term

9:24 – Details on expected cash flow and return on investment

11:01 – Market trends and the benefits of off-market deals

14:26 – Transition in the real estate market with rate adjustments

17:00 – Non-purpose-built buildings: opportunities and challenges

19:20 – Cash flow comparison between purpose-built and non-purpose-built properties

21:00 – Wrap-up

Disclaimer: This episode, as with every episode of this show, should NOT be considered as advice. Investment advice is NEVER given on this show. Always consult a competent investment advisor before making an investment decision.

Andrew Hines is a seasoned real estate investor, business-builder, educator, and podcast host, well-recognized for his extensive experience in the field. Andrew graduated with an HBA from the Richard Ivey School of Business in 2008 and spent three years teaching introductory business at Western University as a Lecturer. He has been investing in real estate since 2011 and completing value-add projects since 2015, primarily in the luxury student rental space. Andrew started a project management company for building out new-construction townhomes in 2016 and has since built over 50 residential units throughout Southwestern Ontario. Andrew is an advocate for treating real estate investing like a business and uses his experience in his educational endeavors, coaching numerous investors on strategies to achieve financial independence and scale their portfolios effectively.

His podcast, "The Andrew Hines Real Estate Investing Podcast," serves as a platform for sharing insights, strategies, and success stories, connecting a community of like-minded individuals passionate about real estate investing. With a background that blends practical investing experience and investor-focused work, Andrew has become a pivotal figure in the Canadian real estate investing community.