E129 How Small Town Investing Crushes in 2025?

Become an REI Hot Seat Insider: ⁠https://submit.jotform.com/info_Admin_info831/rei-hotseat-insider-sign-up-formIn E129 of the REI Hot Seat, Andrew Hines and Jacob Campagnaro explore a unique mixed-use value-add opportunity in Simcoe, Ontario. They highlight a downtown building currently consisting of five fully renovated and leased residential units upstairs, two street-facing commercial units, three unfinished but permit-ready residential units on the main floor, and additional commercial office space in the basement. The property is listed “as is” for $1.55 million, with the potential for a projected monthly rent roll of nearly $20,000 once stabilized.With a projected net operating income of $170,000, the cap rate on the asking price is roughly 10.9%, dropping to 9% after factoring in an estimated $300,000 in renovations. Andrew and Jacob note that, based on anticipated post-renovation appraisal values close to $2.9 million, investors could execute a classic BRRRR strategy—potentially pulling most or all of their invested capital out at refinance.Andrew and Jacob emphasize the advantages of targeting smaller Ontario towns for these kinds of conversions, pointing out that local municipalities are often more accommodating than big cities, and rents remain surprisingly strong relative to purchase prices. They also stress that their team offers investors a “deal in a box,” complete with pre-arranged financing options (both traditional and CMHC), broker relationships, and all required documentation, making the process as seamless as possible.Don't forget to join the Insiders list for access to off-market deals and other unique opportunities.Andrew's linktree : https://linktr.ee/theandrewhinesREI Hot Seat Instagram: https://www.instagram.com/reihotseat/E129 How Small Town Investing Crushes in 202500:52 – Simcoe Property Intro & Location01:48 – Mixed-Use Setup: Residential Over Commercial02:21 – Main Floor Condition & Permit Status04:09 – Zoning, Conversions & Municipal Flexibility06:48 – Unit Quality & Rents Achieved10:49 – Sale Price, Bridge Financing, and BRRRR13:29 – Deal-in-a-Box Approach & Investor Support15:57 – Cap Rate Math & Value-Add Analysis18:22 – Exit Valuation & Appraisal Insights20:17 – Small Town Growth TrendsDisclaimer: This episode, as with every episode of this show, should NOT be considered as advice. Investment advice is NEVER given on this show. Always consult a competent investment advisor before making an investment decision.---Andrew Hines is a seasoned real estate investor, business-builder, educator, and podcast host, well-recognized for his extensive experience in the field. Andrew graduated with an HBA from the Richard Ivey School of Business in 2008 and spent three years teaching introductory business at Western University as a Lecturer. He has been investing in real estate since 2011 and completing value-add projects since 2015, primarily in the luxury student rental space. Andrew started a project management company for building out new-construction townhomes in 2016 and has since built over 50 residential units throughout Southwestern Ontario. Andrew is an advocate for treating real estate investing like a business and uses his experience in his educational endeavors, coaching numerous investors on strategies to achieve financial independence and scale their portfolios effectively.His podcast, "The Andrew Hines Real Estate Investing Podcast," serves as a platform for sharing insights, strategies, and success stories, connecting a community of like-minded individuals passionate about real estate investing. With a background that blends practical investing experience and investor-focused work, Andrew has become a pivotal figure in the Canadian real estate investing community.