A veteran investor, property manager and Realtor Buying a Canada Post Franchise. The things we do to avoid long-term rentals and grief as investors. After owning a six plex, student rentals, rent to own, house hacking, what is veteran Tim’s next investment? All this and more on the Truth About Real Estate Investing for Canadians! I’m your host Erwin Szeto
Nei hao, from Hong Kong, China. After a wonderful ten days in Tokyo and Osaka and eating everything from chicken hearts to fresh tuna belly to fry your own Wagyu beef I think that was the best ten days of eating in my life.
The kids had a memorable trip. Funny enough the most expensive attraction we hit, Universal Studios Japan, hanging at Hogwarts and Super Mario World was at best on part with one of the cheapest things we did: we fed wild deer who would bow to us and are messengers to the gods.
The kids are normally carb monsters: the luv to eat bread, noodles and rice until they tried the Japanese Wagyu beef. Our kids aren’t picky eaters, they’ll try anything which great. The downside is when I have to share my Wagyu beef with them.
For those foodies keeping score at home, Omakase Wagyu beef which included five cheaper cuts with Instagram worthy marbling was about $26 dollars Canadian.
If you have not been to Japan, the yen is on sale so everything when travelling Japan is on sale. Do yourself a favor and go there. It’s bucket list level.
Before I forget this is a show about real estate…
Real estate prices in the world’s least affordable, the city of Hong Kong is still nuts. I’m grateful to be staying at my in-laws place but it’s so different than back home.
We’re staying in the equivalent of Barrie, Ontario, north of the city and last stop on public transit but this 2 bed, 1 bath, 600 sq ft condo is worth $1.2M Canadian and that’s after protest and post covid crash. Down somewhere around 20% from BEFORE the pandemic. Unlike North America, prices here never had a meteoric rise.
I had an extended family member share with me how their rent dropped 11% between tenants, there was a five month vacancy period between tenants with no renovations, and guess what an 823 sq ft condo rents for? Keep in mind the average two bedroom in downtown Vancouver or Toronto is in the mid to high $3,000/ month.
Have a number in mind? The new rent for a 823 sq ft condo is… just over $6,200 Canadian dollars per month which would be worth about $1.5M. Real estate over here is nuts.
Are Cherry and I looking at real estate while here in Hong Kong or in Japan? No, we have no plans to invest here. The minimum capital to invest here is just so high. Down payments are typically 50% and for that amount, I could own houses with land that cash flow better in the US.
Add to that the Chinese government restricts the amount of capital allowed to leave the country so Chinese citizens are forced to invest locally which caused an artificial bubble for Chinese real estate so that’s too much risk for my preference.
As much as we are enjoying our stay here: it’s December but I’m dressed in shorts and T-shirt, we’re eating like pigs. Well it’s mostly me over indulging in comfort food like dim sim, our current streak is three days in a row of chinese brunch, and pineapple buns with a big slice of butter. Food is wonderful here and relatively inexpensive since there’s no sales tax and tips are much smaller. As we’re enjoying our stay, I’m reminded that there is no where that is perfect to live just like no where is perfect for investment.
I do love where I live west of Toronto. The schools are great, my friends, family, clients all great. We Luv our house with a pool with a view. But there is so much I don’t like about what is happening to our country. The amount of debt, the exploitation of international students, our understaffed health care system.
The sunshine list of six figure public servants was just published and it’s full of nurses making over $200,000 thanks to working obscene overtime hours thanks to nursing shortages.
Then of course our housing crisis. I just read this month’s Macleans Magazine detailing the tenant unions have successfully organised rent strikes in Toronto with the support of the Mayor and it’s not just the low end rental buildings, even a newer building where one bedrooms rent for over $2,400 has over 50 tenants striking as their building was built after 2018 so they don’t have rent control. They’re not happy about their rent increases.
The rest of the striking tenants do have rent control and they’re protesting the Landlord Tenant Board approved above guideline rent increases for capital costs like roof replacement, new balconies.
But the tenants don’t want to pay for the renovations and they’re complaining the contractors are slow, loud and disruptive to their enjoyment of the property….
There is no way this ends well. With no rent coming in they’re scaring the private sector from investing and there is no money for maintenance.
If the landlords are smart, they likely report rent on their tenants credit via Landlord Credit Bureau so the tenants equifax and credit takes a big hit since rent is usually a tenants’ largest expense.
Someone has to pay to maintain the building and all those costs have risen.
I don’t see how this ends well and I certainly don’t see how this motivates the private sector to build more purpose built rentals.
In the US however, in many of the hot markets during covid where they don’t have rent control, they over built purpose built rentals and rents are coming down.
From the 2024 Realtor.com forecast report it states new home builders have overbuilt so there is pressure for prices to come down.
Austin, Texas is expected to lead the country in price declines at negative 14% and I’m getting excited to buy in one of the best city’s in the world based on economic fundamentals at discounted prices. I’ve already booked my plane ticket for January.
Austin is a four hour flight, just like Calgary but I prefer warm weather, golf, and comedy. The best comedian club in the US is owned by Joe Rogan and it’s located in Austin.
More important to real estate rents and prices is high paying jobs. Elon Musk already brough 10,000 jobs to Austin via Tesla and SpaceX so that’s old news. New news is Samsung is building a $42 billion dollar microchip manufacturing plant near Austin that will directly employ 4,500 people.
That many good paying jobs in a warm weather climate with no state tax will attract a lot of people which will drive house prices and rents up. Combined with no rent control and no landlord tenant board that’s a formula for successful real estate investing. And they’re developer friendly!
First I need to sell some of our existing properties to raise some cash and they’ll hit the MLS the first week of January as that’s the ideal time to sell student rentals. When students get frustrated with the limited supply of quality housing and how rents in my market are $700-800 per room, the maths will make a lot of sense to buy instead of rent for the more savvy, deep-pocketed parents.
My pre-listing inspections are done, repairs and renovations have started, cleaners are lined up and I can’t wait to invest down south where investors are wanted for improved cash flow!! When I was touring Atlanta, a typical investment property: a house with 3 bedrooms, 2 full bathrooms was around $300,000 and rents for $2,000 plus utilities per month. That beats a lot of investments in Canada without having to shell out hundreds of thousands of dollars nor renovate basements nor develop property.
This is how we’re going to make real estate investing great again.
If you’re interested in learning more about how to invest in the US, the tax implications, corporation setups, financing, where to invest, we will answer all those questions Saturday, January 13th at our iWIN office in Oakville which we’ll be available virtually via Zoom as well. Details in our email newsletter and the show notes!
Link to register: https://USworkshop.eventbrite.ca/?aff=iwin
Investor Buys A Canada Post Franchise with Tim Hong
On to this week’s show!
We have my old friend Tim Hong, we’ve been associates at Rock Star Real Estate and coaching investors since 2011. Tim has done several joint ventures in rent to owns, an apartment building, student rentals. Tim has his own property management company for condos to duplexes from Toronto to Hamilton to Kitchener-Waterloo. In his newest venture, a cash flow play, Tim acquired a private, off market Canada Post franchise and he is approaching one year of ownership and has drastically raised revenues.
He’s done this all while being married, having three young kids and two dogs.
Please enjoy the show!
This episode is brought to you by me! We don’t have sponsors for this show. I only share with you services owned by my wife Cherry and me. Real estate investing is a staple in my life and allowed me to build wealth and, more importantly, achieve financial peace about the future, knowing our retirement is taken care of and my kids will be able to afford a home when they grow up. If you, too, are interested in my systematic strategy to implement the #1 investment strategy, the same one pretty much all my guests are doing themselves, then go visit www.infinitywealth.ca/events and register for our next FREE Online Training Class. We will be back in person once legally allowed to do so, but for now, we are 100% virtual.
No need for you to reinvent the wheel; we have our system down pat. Again that’s www.infinitywealth.ca/events and register for the FREE Online Training Class.
To follow Tim:
HELP US OUT!
BEFORE YOU GO…
If you’re interested in being a successful real estate investor like those who have been featured on this podcast and our hundreds of successful clients please let us know.
It is our honour to give back and educate others on how we build cash flowing real estate portfolios using all the best practices shared on this podcast, from the lessons of our hundreds of clients and of course our own experience in owning investment real estate.
If you didn’t know already, we pride ourselves on being the best of the best real estate coaches, having the best property managers, contractors, handy people, cleaners, lawyers, accountants, everyone you need on your power team and we’re happy to share them with our clients to ensure your success.
New investor or seasoned veteran investor, we can help anyone by providing our award winning coaching services and this isn’t all talk.
We have been awarded Realtor of the Year to Investors in 2015 by the Real Estate Investment Network, 2016 by the Canadian Real Estate Wealth Magazine and again in 2017 because no one told the judges no one is supposed to win the award twice but on merit, our peers deemed us as the best. In 2018, we again won the same award by the Real Estate Investment Network.
Hopefully being the most decorated team of Realtors in Ontario will make you consider us for your first or next real estate investment. Even if you don’t invest in our areas, there’s a good chance I know who would be ideal for you.
I’ve been around for a while, some Realtors are talented at servicing investors there are many with great ethics. The intersection of the two, talent and ethics is limited to a handful in each city or town.
Only work with the best is what my father always taught me. If you’re interested, drop us an email at email@example.com.
I hope to meet you at one of our meetups soon.
Again that’s firstname.lastname@example.org
Infinity Wealth Investment Network – would you like to know how our investors returned 341.8% on positive cash flowing real estate over the last five years? On average, that was 68.4% per year.
Just imagine what winning in real estate could do for you.
If you would like to know how we did it, ask us how by calling 289-288-5019 or email us at email@example.com.
Don’t delay, the top markets we focus in are trending upward in price, so you can pay today’s price or tomorrow’s price.
Till next time, just do it because I believe in you.
Hamilton, St. Catharines and Toronto Land Development, Real Estate Investor, and soon to be builder.