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Apartment Building Renovation - Part 1

Updated: Apr 28

It has been 5 months since we closed on the deal, and we thought it would be good to give a bit of an update on where we stand with the project. Since, we have taken possession of the building, we have started work on 3 units. The first 2 tenants have moved out in March, and the third in April. We expect to have the next 3 units to become available between May and June, which will give us a total of 6 out of the 9 units, to renovate and bring up to market rents. When we were underwriting this deal, our original plan was to renovate 4-5 units, so we are ecstatic, about the additional units we get to work on. This is definitely a bonus.

There were a couple of surprises along the way of course, what renovation doesn’t? This includes some of the costs related to upgrading the electrical, the roof, windows, and HVAC. By the time, we are done with this building, we will have quite a few upgrades, outside of just the typical in-unit renovations. This way we will have a building that should more or less be maintenance free for some years to come.

We bought the 9-unit building, for $1.35MM, and looking to invest $500k in renovations. We originally closed the property with VTB (seller financing), and now we are in the middle of re-financing with a B-lender. Now this is not our final exit strategy, but we got a preliminary look at the evaluation of the final product, during the refinance. The appraisal report included the future outlook, and the property is forecasted to be worth $2.1MM (at market rents), and we anticipate getting 10.3% more in rents which should bring up our total evaluation, once we are fully done with this project. After we finish this project, we anticipate the revenue of this building to increase by 67.3% to $13,628/month.

This is a huge increase, but renovations are just one of the ways that we increase the valuation of the property. In fact, when we closed on the property, we had increased our revenue by 8.3% from when we did our initial analysis. There were a number of things that we noticed, while going through the numbers:

1) We saw that the rents have never been increased. In 2022, the allowable rent increase in Ontario is 1.2% so we made sure “delivering notices on our behalf” was part of the deal, to ensure that once we take possession, the increase would take effect immediately (since you have to give at least 90 days notice to all the tenants).

2) In addition, we noticed that there was a garage on site, but it was used by the owner for personal storage. We decided that this would be a great way to increase the revenue of the building. We already rent out garages at our other buildings and its pretty low maintenance/time commitment to rent these out. Typically, they go for about $200/month depending on the location.

3) We noticed that the current tenants were going to a laundromat since the building didn’t have any laundry on site. We typically put laundry in every single, unit but in this situation, decided to opt in for on-site paid laundry machines. We expect this to produce an additional $200/month.

4) Lastly, we made sure that any tenant turn over would not be replaced during the due diligence period of the deal. We did this by talking to the seller. This would ensure that we can keep the units empty for the renovation. Unfortunately, there was one that got away prior to that conversation – but lucky for us the rents were much higher (still not market rent), and the tenant profile was great. In fact, they are currently our on-site super that takes care of the tenant relations, trades, notices, cleaning, etc. for us.

You can see that with all of this, even without tenant turn over, we have already paved a way to increase the revenue by 8.3%. We knew this going into the deal. This was definitely an advantage going into the deal, as the seller had not addressed some of these issues in the past, and essentially leaving money on the table. We will try to provide another update in a couple months, so stay tuned. Also, follow us on Instagram @steeltowntitovs for the latest updates and pictures on this project.

If you are interested in finding out more information on how you can invest with us on our next deal – reach out to us directly at 289-242-6294 or

Follow us on Instagram @steeltowntitovs

Have you seen our book "The Novice Investor"?


The information provided in this blog is for entertainment purposes only and is not intended to be a source of advice with respect to the material presented. The information contained in this blog do not represent legal or financial advice and should never be used without first consulting with a financial professional to determine what is in your best interest to meet your individual needs.


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