Buying
Adding to your portfolio
Many good buys never reach the listing sites. I research ownership, find owners whose situation is changing and bring you options that fit your plan. Before you buy, look at how the new property changes your risk, your debt maturities and your cash flow. Then make an offer with time for proper due diligence.
Buyer representation
What adding to a portfolio involves
A plain explainer if you’re new to this.
- What it is
Buying another income property
You already own one or more properties and want to buy another, usually for income, growth, or to spread your risk across different types or areas.
- How it works
Equity, financing and fit
Many owners use equity from existing properties, through refinancing, toward the down payment. Lenders look at your whole portfolio, not just the new property.
- Things to weigh
Concentration and cash flow
Owning several properties of one type on one street ties your income to that street. Different types, tenants and lease dates spread the risk.
- What I check
How it fits what you own
I look at the new property’s income and condition, how its leases line up with what you already own, and how much it adds to your debt and workload.
General information, not tax or legal advice. Rules and rates change, and every situation is different. Talk to your lawyer and accountant before you act on anything here.
Start with your criteria
Area, property type, size, price range, how much work you’ll take on and what return you need. A short written brief lets me move quickly when something comes up, and lets me approach owners with a credible buyer behind me.
Finding motivated sellers
Owners sell when something changes: a problem with the building or the debt, a change in their life or estate, a better use for the money, or a price they find hard to refuse. I look for the signs in public records and in conversations, and approach owners respectfully. More in why owners sell.
Properties with room to improve
- Below-market leases coming up for renewal.
- Vacancy that a better leasing plan could fill. My leasing work helps here, because I know what tenants in the area are looking for.
- Under-used land where zoning allows more, or where the City’s plans point that way.
- Tired buildings where a sensible upgrade lifts the rent.
Timing and tax
If you’re selling one property to buy another, the order and timing matter for tax and for financing. Canada has no general equivalent of the US exchange rules, so talk to your accountant about capital gains, recapture and how the purchase is structured before you commit.
Buying shares or the property
Some properties are held in a company, and the seller may prefer a share sale. It can change the Property Transfer Tax and the risks you take on. See the PTT and share sales guide.
Questions people ask
Can you approach owners whose properties aren’t for sale?
Yes. I research ownership and make respectful approaches on your behalf. Many owners say no, and some say “not yet”, which is useful to know.
Can I defer tax when I sell one property and buy another in Canada?
Canada has no general rule like the US 1031 exchange. There are some specific reserves and rollovers, and your accountant can tell you whether any apply to you.
Do you work with family offices and investor groups?
Yes. The approach is the same: a clear brief, research, and a confidential first conversation.
What should I gather, ask and watch for?
Documents to gather
- Current portfolio summary: NOI, debt, maturities
- Equity available and lender appetite
- Your criteria: type, area, size, return
- Accountant’s view on tax and structure
Questions to ask
- How does this property change the risk in my portfolio?
- When does the existing financing mature?
- Is there room to add value: rents, repairs, density?
- Share purchase or asset purchase?
Common mistakes
- Stretching on debt to grow faster
- Buying the same risk twice: same area, same tenant type
- Ignoring the time a value-add property takes
- Forgetting the tax on a sale you use to fund it
Typical timeline
- OngoingCriteria and lender relationships
- Offer to conditions30 to 60 days typical
- Completion30 to 90 days
- AfterPlan the first year of improvements
Typical ranges. Your lease, lender and the City set the real dates.
Go deeper
If you’re looking for more details
Questions before the next purchase
- Does it add a new type, area or tenant mix, or repeat what you have?
- How will it be financed, and how does that affect your other loans?
- Who will manage it?
- How does it fit your plan for selling or passing on the portfolio?
For buyers
Why do owners sell?
Knowing why a seller is selling tells you who is motivated, and what a deal needs to look like for them to say yes. It almost always comes down to one of these four.
- Problem
Something is forcing a decision.
Debt, management, cash flow, rising expenses or the condition of the property.
- Change
Something in the owner’s life has changed.
An estate, a move, a new portfolio strategy or a change in life circumstances.
- Opportunity
Selling opens a door somewhere else.
Another investment, a need for capital, or repositioning what they own.
- Price
The offer is too good to pass up.
An exceptional price, the chance to turn it into cash, or simply “I can’t pass this up.”
The takeaway: owners sell when their circumstances, priorities or opportunities change.
Run the numbers
- Cap rate, NOI and valueCap rate is net operating income divided by price.
- Commercial mortgage paymentCommercial lenders usually want a bigger down payment and a shorter amortization than on a home, and they check that the rent covers the payments.
- GST on commercial property and leasesCommercial property sales and commercial rent in Canada are usually taxable for GST at 5%.
Search
Not quite your situation? Search
Next step
Tell me what you want to add.
Send me your criteria. I can start with research and tell you what I find.