Invest in the purchase of a bare lot and the construction of a Tri-Plex with 3 legal suites in Vernon, BC.
An investor purchases the land after entering into a Fixed Price construction agreement with Brentwell Construction Ltd. Note that the fixed price agreement eliminates any potential construction cost increases for the investor, which is the biggest risk with purpose built rental work. The investor would carry the financing, and have exclusive ownership/equity.
Total cost for the package (land + building, turnkey) will be about $1.35M-$1.45M.
25% capital would be required for the construction financing, or $350,000.
Finished value will be about $1.65M.
Realistic that a buyer will see about $250,000 of equity gained through construction, which could be pulled out and re-invested, or left in the property for improved cashflow.
Duration of the project would be about 9 months from land purchase, so filled with renters this time next year.
NOI target is $82,944 @ a 5% CAP.
There is also the option to pull out equity and rent out the property.
Alternatively, equity can be left in the property to increase cash flow.