Fourplex Conversions - Volition Meetup 09/2020

@volitionproperties
www.volitionprop.com
Volition Investment
Mastermind
September 2020

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Who is Volition?

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Thank you Creeds!!
We’re still open for coffee
takeout and dry cleaning!

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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

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The Investing Maze
The Volition Team!

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Ming’s Market Minute

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Sales Volume

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Average Resale Home Price

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New Listings

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Average Rental Price - YOY Avg Rents

@volitionproperties
“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

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Volition Market Data

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Toronto Downtown Core

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Volition Metrics - Downtown municipalities

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Volition Metrics - Downtown SF Detached

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Toronto - Everywhere else

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Volition Metrics - Uptown municipalities

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Volition Metrics - Uptown SF Detached

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Volition Metrics - Condos

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Boots on the ground - Ed!

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Luxury Legal 4Plex Conversions

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The 5 W’s of 4plex Conversions

@volitionproperties
Tenant Profile
Short Term
Headache
Long Term
Headache
Short Term ROI
Long Term ROI
Affordability
Pros
Cons
Who Is This
For
Overall

@volitionproperties
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

@volitionproperties
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

@volitionproperties
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

@volitionproperties
Entry-level
Multi
(2plex/3plex)
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

@volitionproperties
Luxury Triplex
Conversion
Entry-level
Multi
(2plex/3plex)
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.
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

@volitionproperties
Luxury 4plex
Conversion
Luxury Triplex
Conversion
Entry-level
Multi
(2plex/3plex)
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.
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

@volitionproperties

@volitionproperties
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

@volitionproperties
If you recall… Triplex Conversions

@volitionproperties
The 5 W’s of 4plex Conversions: WHAT
4 units in one building 3 units in building + 1
laneway
○

@volitionproperties
The 5 W’s of 4plex Conversions: WHAT

@volitionproperties
The 5 W’s of 4plex Conversions: WHERE

@volitionproperties
The 5 W’s of 4plex Conversions: WHERE
Even more stringent… need high ARVs & rents

@volitionproperties
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?

@volitionproperties
● How to identify:
○ Zoning
○ Parking
○ Fire Code
○ Building Code
○ Access and Entrances

@volitionproperties
● Considerations
○ Walk-outs
○ Basement Height
○ Distance from neighbouring properties
○ Access from the rear/laneway
○ Distance from ﬁre hydrants
○ Neighbourhood friendly towards Multis?

@volitionproperties
● 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.

@volitionproperties
The Construction Process

@volitionproperties
Project Flow Chart
Pre-Closing Post Closing Construction Final Steps

@volitionproperties
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

@volitionproperties
Project Flow Chart
Pre-Closing
(PM, Architect, GC,
Designer)
● Survey and
measurements
Post Closing
● Cosmetic demo
(mechanical and
structural engineer)
● Drawings (architect,
electrical, HVAC,
Structure)
● Detailed scope and
budget
Construction Final Steps

@volitionproperties
Project Flow Chart
Pre-Closing
(PM, Architect, GC,
Designer)
● Survey and
measurements
Post Closing
● Cosmetic demo
(mechanical and
electrical, HVAC,
Structure)
budget
Construction
● Permits
● Additional drawings
from architect
● Structural demo and
inspections
● COA submission
● Framing
Final Steps

@volitionproperties
Project Flow Chart
Pre-Closing
(PM, Architect, GC,
Designer)
● Survey and
measurements
Post Closing
● Cosmetic demo
(mechanical and
electrical, HVAC,
Structure)
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

@volitionproperties

@volitionproperties
● HOW much?
● High level ﬁnancials

@volitionproperties
Now What?

@volitionproperties
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!

@volitionproperties
THANK YOU!

Fourplex Conversions - Volition Meetup 09/2020

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