Vol. 3 — Mock Deal #1: The Numbers Don’t Care
This was supposed to be a simple duplex build.
Side-by-side units. Solid floor plans. Good layout. Walkable street. It had all the makings of a mock deal I could dive into — zoning context, design thoughts, site layout.
Then I plugged in the numbers.
Everything else went out the window.
The Setup
This is an infill duplex — side-by-side units, 3,130 total sqft including the garages. Three beds, 2.5 baths per side. Nothing fancy, but not cheap either. The kind of build that shows up in real listings under “brand new, never lived in.”
I pulled a real plan. I used realistic Barrie pricing. I pretended like this was an actual project.
Then I did the math.
The Cost Stack
| Item | Value |
|---|---|
| Lot Cost | $479,000 |
| Build Cost (3,130 sqft) | $782,500 |
| Soft Costs (20%) | $156,500 |
| Contingency (5%) | $39,125 |
| Total Project Cost | $1,457,125 |
No fluff here — just core costs. No landscaping, staging, legal, or HST. And still, we’re pushing $1.46M to get this thing vertical.
The Loan Reality
| Assumption | Value |
|---|---|
| Loan-to-Cost | 80% |
| Loan Amount | $1,165,700 |
| Equity Needed | ~$291,425 |
| Interest Rate | 5% |
| Amortization | 30 years |
| Monthly Loan Payment | $6,257.73 |
Even with 5% interest, the monthly debt service is heavy. No interest-only. No teaser rates. Just a plain, honest mortgage.
The Income Side
| Metric | Value |
|---|---|
| Monthly Rent per Unit | $2,950 |
| Total Monthly Rent | $5,900 |
| Annual Gross Income | $70,800 |
| Vacancy (5%) | -$2,950 |
| Effective Gross | $67,260 |
| Taxes | $2,100 |
| Insurance | $2,500 |
| Maintenance (5% reserves) | $3,540 |
| Monthly Operating Expenses | $678.33 |
| Monthly NOI | $4,926.67 |
| Monthly Cash Flow | -$1,331.06 |
So the project clears just under $5K/month in NOI. But the debt takes more than $6,200/month, and that’s not including surprise repairs, leasing costs, or a bad tenant.
The Exit Problem
At a 5% cap rate, the theoretical value lands around $1.18M.
| Metric | Value |
|---|---|
| Cap Rate | 5.00% |
| Valuation (NOI ÷ Cap) | $1,182,400 |
| Total Build Cost | $1,457,125 |
| Overbuilt By | ~$275,000 |
That’s assuming you could even sell a duplex like this on income — which you probably can’t. Not in Barrie. These kinds of builds trade based on comps, not math.
Most buyers won’t care that your NOI is dialed in. They’ll care that it’s “too far north” or “doesn’t have a finished basement.”
Is There a Way Out?
Maybe. If I could sever the lot or condo the units and sell each side individually, this deal could survive.
Two clean, brand-new homes at ~$750K each is a believable exit. But that means planning for separate servicing, separate titles, legal fees, and a much longer hold.
It’s not impossible. But this deal wasn’t built on that premise — and the current numbers don’t carry it that far.
What I Learned
Design comes second. The spreadsheet speaks first.
I went into this mock deal thinking I’d be exploring flow and layout. I ended it understanding how quickly a good idea can become a bad investment.
The lesson?
No amount of garage optimization makes a negative-$1,300/month deal a good one. Figure that out early, and you save yourself six figures and six months of wasted optimism.