Transforming a Single-Family Home into a Profitable Investment
At Visture, we’re excited to share a recent success story that highlights the potential of strategic property investment and renovation. Here’s how we turned a single-family home into a profitable income-generating property.
Original Purchase and Renovation Costs
- Original Purchase Price: $440,000
- Renovation Costs for Apartment: $151,000
- Total Investment: $591,000
After Repair Value (ARV) Estimate
- ARV Estimate: $675,000
- Immediate Profit: $84,000
- Immediate ROI: 55.6%
Rental Income and Immediate Cash Flow
By renting out just the basement apartment, we generated a significant rental income:
- Annual Rental Income (Basement Only): $24,000
- Current Mortgage Payments per Year: $14,040
- Fully Leveraged Renovation Borrowings ($151,000) at 5% Interest: $11,627
- Total Annual Debt Payments: $25,667
This resulted in an immediate cash flow of:
- Immediate Cash Flow: -$1,667 (-$138/month)
Refinance Plan (REFI) in November 2026
Assuming a long-term market growth rate of 7.5% per year, the estimated value of the property in November 2026 is $803,960.
- Loan-to-Value (LTV): 51.8% to clear out $265,000 + $151,000 debt = $416,000 mortgage.
- Tax-Free Cash Available for Further Investment: $186,000
Future Cash Flow with Full Property Rental
Once the upstairs unit is rented, the cash flow significantly improves:
- Debt Payments: $2,107.81/month
- Monthly Rent (Entire Property): $4,300 – $4,600
- Monthly Cash Flow: $2,193 to $2,493 (before utilities, taxes, maintenance, etc.)
Conclusion
This case study showcases the power of strategic renovation and refinancing in real estate investment. By carefully planning the purchase, renovation, and refinancing of this property, we have not only created immediate profit but also set the stage for substantial long-term cash flow and equity growth. Stay tuned to Visture.ca for more insights and success stories from our portfolio.
Contact Us
For more information on how Visture can help you achieve similar results with your investment properties, call/text 705-998-2017 or email sales@visture.ca.