Buying Investment Properties In Uncertan Times

One of our recent purchases (second suite conversion project) came at a time when another Covid lockdown was looming in Ontario.

There is a somewhat interesting story that led to this deal coming together.

We knew that the property would attract a lot of interest as it was listed at a low price on MLS and the sellers were withholding offers. The house had over 60 showings.

There is no direct entrance to the basement from the side door (not your cookie cutter conversion) and most of the finishes in the house are from 1958 when the original owners built the house. This one is definitely a project.

We submitted our best offer based on our numbers. As investors, we usually can’t compete with buyers that intend to live in the home if they choose to overpay to win a bidding war. And our offer was not the highest.

On offer day, we were notified that we did not get the house. I was not surprised.

An hour after that, the provincial government announced a stay-at-home order. This order included a limitation on starting renovation projects, unless they were already in progress.

Soon after, we found out the highest bidder was backing out of the purchase and we were called back to the table. We adjusted our offer and through strategic representation from our real estate agent, our offer was accepted.

These are uncertain times and some investors are frozen. They may be putting a pause on taking action and waiting for the right time. In my experience, I have found that there is never a “perfect” time to take action.

This is a long-term investment for us. The house requires a total renovation. And when the deal closed, we didn’t know when we could actually start this reno. There is risk in a move like this. We would not have purchased a project like this a few years ago. But with experience, we are trusting our gut, our team, and the process.