Monday, June 1, 2015


When it comes to investing I prefer privately owned buildings with multiple doors 
(3-plex/6-plex) and revenue streams over a single, revenue generating unit. Over the years I've been pretty vocal about freehold, income property investment.  

Some of you may find my recent blogger and Facebook posts praising Freed Developments new, and now sold out town home project at Young and Eglinton a little strange based on my historic position.  Not to worry I didn't sell out I've simply been crunching the numbers. 

At the moment it's almost impossible to find a trip-plex in a good location thats not well over a million dollars.  Most investors already own property and thus require 20% down.  Financial institutions have tightened their lending policies for multi residential dwellings requiring larger deposits even for first time buyers. Don't get me wrong if you have the money multi residential is still my favourite game in town but what if you don’t have a few hundred thousand dollars sitting in a shoe box?

If you read the papers you'll no doubt have seen articles on recent record breaking price achieved by a Picasso painting at auction earlier this month. 

Classic cars, vintage wine and fine watch auctions have been doing the same over the last couple years.  Why is everything so bloody expensive you ask?  

Because money is so damn cheap and international central banks are driving the value down faster than you can waive your bidding card. 

Look at the position your friends are in, the ones that decided to wait for prices to come down before they jumped into the market. Houses as with many other assets are now out of reach and 10's if not 100's of thousands of dollars of appreciation are not at their disposal.

So where does one invest when coming up with a 200k deposit is not possible?  You look for pre-construction in Fantastic locations with a healthy mix of commercial retail and office space, access to public transit, and brilliant, reputable builders.

This is not the "flip quick and get rich" game that was played for a brief period in the early 2000's.  For a single condo unit to carry itself without the need of a monthly cash injection you're looking at a 30% down payment. Some may not mind pitching in $200/month to make up a short fall in rent but to avoid that you're looking at 30% down. The good news is you don't need all that money upfront.  We're looking at holding properties for a minimum of 5 years to maximize re-sale potential and income generation. 

The strategy is to buy pre-construction, put 30% down before closing, rent and hold for no less than 5 years ideally.

Why is location so important?  We want AAA locations because we want AAA rent rates and stable, established neighbourhoods in order to protect our investment. Add a new rail transit line with a area that’s due to grow in density far exceeding current and slated development housing options and Yonge & Egliton has all the right stuff.   

In September 2008, Metrolinx launched a regional transportation plan – The Big Move – a 25-year, $50 billion plan for coordinated, integrated transportation and transit in the Greater Toronto and Hamilton Area (GTHA). One of the first wave of projects currently underway is the Eglinton Crosstown, which represents an investment of $5.3 billion (2010$) toward better transit in Toronto.
The Crosstown is a light rail transit (LRT) line that will run across Eglinton Avenue between Mount Dennis (Weston Road) and Kennedy Station. This 19-kilometre corridor will include a 10-kilometre underground portion, between Keele Street and Laird Drive. 
Lets look at Yonge & Egliton more closely
  • Average property values exceed $1,600,000.00
  • Land values of $385+/Square foot.  
  • New build construction costs $250+/Square Foot.  
  • Condo rental rates in the area are $1500-1700/month for one bedroom units. 
  • Development space is limited due to existing commercial and residential densities. 
  • New Transit System on-line mid 2020

Of all the developments I'm aware of 150 Redpath Ave is the one I choose to endorse based on the criteria laid out above. I will have VIP access to units over the entire summer after which the development will be release to the public and prices will increase. Time is of the essence although we will have breathing room. The sales centre is due to open first week of June.  

If you'd like to discuss this project or other investment options while the value of our dollar can still buy more than cotton candy call me. I’m exited about 150 Redpath Ave and believe it’s a great option for investors and end users so if you know of any first time buyers looking to make the right move coming out of the gates please let me know. 

I've attached a link to the broker portal allowing clients to view the architectural renderings, floor plans, cost schedule etc..Contact me directly for username and password.

Talk soon, 

Jimmy Vlachos
Royal LePage Signature