FAQs

Dan Madigan is a Canadian real estate entrepreneur and the founder of Madigan Properties. Since beginning his real estate investments in 2016, he has built a portfolio of multifamily properties through renovation, operational improvements, and long-term property management.

What services do you offer?

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Dan acquires buildings to add to his portfolio through different corporate entities. He will also sell his assets to investors interested in turnkey properties.

Overview

  • Acquisition strategy: Dan acquires multifamily and mixed-use buildings using separate corporate entities for each asset or group of assets. This structure supports liability isolation, tax planning flexibility, and easier management of capital partners.

  • Asset types: Typical properties include stabilized multifamily buildings, recently renovated small apartment complexes, and mixed-use properties with residential units above retail spaces.

  • Value-add approach: Where appropriate, Dan pursues light value-add renovations—unit upgrades, common-area improvements, and operational efficiency measures—to increase net operating income and appeal to tenants seeking move-in-ready units.

Why corporate entities matter

  • Liability protection: Holding buildings in distinct entities limits exposure across the portfolio if one asset encounters legal or financial issues.

  • Capital structure flexibility: Separate entities make it simpler to tailor financing, bring in co-investors, or accept different equity structures per deal.

  • Exit planning: When individual properties are held in their own entities, sales can be executed cleanly—enabling asset-level transactions without entangling unrelated holdings.

Turnkey sales to investors

  • Target buyer profile: Investors looking for turnkey properties typically seek stabilized cash-flow

How did I get started?

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Dan got started around 2016 with a modest beginning: putting 5% down on a triplex. From that first deal he focused on scalable, hands-on strategies—value-add renovations and the BRRRR method (Buy, Rehab, Rent, Refinance, Repeat)—to grow a diversified rental portfolio.

Initial move

  • Low initial capital: 5% down on a multi-unit property allowed faster market entry than waiting to save larger down payments.

  • Multi-family advantage: A triplex provided multiple rent streams and economies of scale for management and financing.

Value-add approach

  • Targeted upgrades: Renovating kitchens, bathrooms, flooring, and curb appeal to increase rents and attract longer-term tenants.

  • Forced appreciation: Improvements increased net operating income and property value faster than passive market appreciation.

  • Operational improvements: Better tenant screening, professional property management, and utility optimization reduced vacancy and operating expense ratios.

BRRRR strategy execution

  • Buy: Identified underpriced or under-improved multi-family assets in good neighborhoods.

  • Rehab: Performed cost-effective renovations to reach market rents without over-capitalizing.

  • Rent: Stabilized occupancy by bringing units up to market standards and implementing consistent leasing processes.

  • Refinance: Replaced short-term acquisition financing with long-term mortgages based on the new, higher post-rehab valuation to pull out equity.

  • Repeat: Recycled cash and loan proceeds into subsequent purchases, scaling the portfolio while minimizing additional cash requirements.

Outcomes and operational lessons

  • Accelerated scaling: Using BRRRR and value-add turned modest initial capital into down payments and reserves for additional buys.

  • Risk management: Diversifying across units and focusing on underwriting that assumed conservative rents and timelines reduced downside.

  • Importance of systems: Standardized renovation scopes, reliable contractors, and consistent property management were critical to maintain margins and speed.

  • Capital structure: Leveraging refinance proceeds intelligently preserved liquidity while maintaining serviceable debt levels.

Result: Starting from a 5% down triplex in 2016, Dan built a portfolio by repeatedly improving assets, stabilizing income, and recycling capital using the BRRRR framework and value-add renovations—turning a small initial investment into scalable real estate holdings.

What makes you different?

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No partners, no VTB, no private financing.

You want to acquire real estate using strictly your own capital and traditional institutional financing. That narrows the playbook but keeps execution straightforward and minimizes outside risk and complexity. Here’s a practical roadmap to find, analyze, finance, and close deals under those constraints.

  1. Deal sourcing and target profile

  • Focus on properties that fit conventional lender criteria: stabilized multifamily, single-family rentals, small apartment buildings, owner-occupied duplex/triplex, and some commercial properties with predictable cash flow.

  • Target lower LTV loans (60–75%) to improve approval odds without private or seller financing.

  • Prioritize properties with clear title, recent appraisals or comparables, and straightforward capex forecasts.

  • Build a pipeline through MLS, brokerage relationships, REOs, auctions, and networking with agents who specialize in institutional-ready listings.

  1. Capital stack (self-funded + institutional debt)

  • Equity: use your cash, cash equivalents, or marginable securities. Consider a cash reserve post-closing equal to 3–6 months of operating expenses and mortgage payments.

  • Debt: conventional bank loans, portfolio lenders, credit unions, Fannie Mae/Freddie Mac (multifamily), CMHC-insured mortgages (Canada), and commercial mortgage-backed options depending on property type.

  • Avoid adjustable-rate surprises by choosing fixed-rate or well-hedged terms. Lock interest rates when favorable.

  1. Underwriting and deal fitness

  • Use conservative underwriting assumptions: vacancy 5–10% above market, maintenance and capex higher than seller’s numbers, interest coverage ratio cushions.

  • Stress-test for rate increases and tenant turnover. Require DSCR stress tests consistent with lender requirements.

  • Ensure the property meets lender income documentation standards (rent roll accuracy, lease terms, tenant credit where required).

  1. Due diligence checklist

  • Title search and environmental review (Phase I for commercial/multifamily).

  • Physical inspection and detailed capital expenditure plan.

  • Rent roll, lease analysis, historical P&L, utility history, and tax assessments.

  • Zoning and compliance verification.

  • Confirm insurance availability and premiums consistent with lender requirements.

  1. Financing process

  • Pre-approval: obtain a written pre-approval from the chosen institutional lender before making offers.

  • Appraisal: order lender-approved appraisal early to avoid surprises on value.

  • Documentation: prepare tax returns, financial statements, proof of funds, entity documentation, and any guarantor credit materials.

  • Closing timeline: align inspection, appraisal, lender underwriting, and title work to meet lender closing requirements.

  1. Price negotiation strategies without seller financing or partners

  • Use clean offers with firm financing contingency timelines aligned to lender pre-approval.

  • Leverage appraisal expectations and inspection outcomes to negotiate price or credits for repair.

  • Offer earnest money that signals seriousness but keeps leverage for inspection/financing windows.

  • If multiple offers occur, rely on speed and lender-readiness to win—pre-approval and quick appraisal unlocks advantages.

  1. Portfolio growth and liquidity management

  • Refinance conservatively to extract equity only when cash flow and loan terms support it.

  • Use cash reserves and conservative leverage to maintain optionality for future purchases.

  • Consider staggered maturities and laddered interest rates to manage refinancing risk.

  1. Exit and contingency planning

  • Maintain contingency cash equal to several months of debt service.

  • Establish clear hold vs. sell criteria: target IRR, cash-on-cash return, and market indicators.

  • If the institutional debt market tightens, be prepared to hold longer, increase reserves, or sell to a buyer who can use alternative financing.

Execution checklist (quick)

  • Secure proof of funds and lender pre-approval.

  • Select lenders suited to property type (conventional, portfolio, agency).

  • Order appraisal and inspections immediately on accepted offer.

  • Complete title/environmental diligence and obtain insurance quotes.

  • Close with full reserve plan and capital improvement budget.

Operating within "no partners, no VTB, no private financing" is conservative and scalable. The key is strong preparation—clean properties that meet lender rules, conservative underwriting, and sufficient liquidity to weather underwriting and market cycles.

How can I contact you?

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You can reach us anytime via our contact page or email. We aim to respond quickly—usually within one business day.