LOCATION: 4932 56th Street, Innisfail, Alberta
PURCHASE PRICE: $1,015,000
DATE PURCHASED: November 1st, 2016
CASH ON CASH RETURN: 7.63%
COMPOSITE RETURN: 13.7%
TENANCY: 12 Residential Units
YEAR BUILT: 1978
FOOTAGE: 10,752 Sq. Ft.
JOINT VENTURE: Safety First Projects 1 Ltd.
A local Real Estate Firm listed a 12 unit apartment complex in Innisfail for sale. Due to the extensive Property Management requirements of multi-family properties we had not pursued them but this property is located one block from our office so we decided go after purchasing it.
We negotiated for an extended time to finally achieve terms that were acceptable to the Joint Venture that we were assembling to buy the property. One of the aspiring owners had a vacant multifamily building site that he was unable to sell for some time and wanted to activate his equity in that site. We suggested that, as part of the negotiation, we offer to trade the site in as part of the equity for the12 units. The initial answer was no, the second answer was no, the third answer yes but at a lower value and thus the deal came together.
The lesson here is that sometimes there are other forms of value or equity besides cash, that can be used in a purchase.