New Member from Calgary, Alberta

[Marco C.]

Hi Everyone,

My name is Marco Carducci. I discovered BiggerPockets a couple months ago as I became interested in real estate investing. Since I am just starting out I have used BiggerPockets as a way to learn more about real estate investing, particularly through listening to the podcast, reading blogs and articles, and reading the stories and ideas from many categories of forums. So thanks to BP for the wealth of information and insight!  

As I mentioned above I am from Calgary, Alberta, so I am most interested about the market here as it will likely be where I begin purchasing real estate. I am not looking to dive in right away (personal situation for the next while is a bit unclear), but I think I am using this time well to gain as much knowledge as I can about the different types of investing strategies. I would be happy to hear from other members from Calgary for more specific insights into the market here. By the way, insight from members from around the world is just as welcome!!! 

Thanks!

Marco 

[Sean Kollee]

It is very true the Calgary market can look awful on the surface for investors.  Just the other day someone offered me a 'deal' priced at 218 X the monthly rent.  Prior to that two motivated sellers tried to dump their northeast two bedroom condos' on me for $250k, equally terrible deals that come with $300 condo fees and $1750 tax bills, for apartments that maybe rent for $1200 (more likely are vacant for months on end).  No way to make that work unless you like to lose money every month.  Apparently we are a appreciation based market rather than a cash flow based market.  It is puzzling though how a property that already does not cash flow can further appreciate.

Despite this there are full time investors doing deals right now in Calgary. Some are rehabbing, putting suites in basements, marketing to distressed sellers and getting deals, and finding deals on the MLS. Not every segment is weak, and some segments are appreciating. For example, inner city land has increased in value by $50k in the last 6 months, bidding wars have been seen, and over asking prices received, and is now hard to even get at any price.

One factor working against finding deals is the average Calgarian tends to be educated, market savvy, has resources and may want to sell but is not really motivated. They tend to be motivated to sell to you for full retail and of course they don't way to pay those obscene realtor commissions! They tend to view the sale of a property as a matter of pride and consider whatever they paid a couple years ago to be the floor price for whatever they want now (+ another $50k for their trouble), despite major market changes to the downside. You will find endless numbers of unrealistic sellers on kijiji, comfree, and the MLS. Some of the worst sellers are realtors themselves who invest in a property and feel entitled to make $100k on every deal, regardless of what the market does, because they are 'professionals'.

It is rare to find a truly motivated seller, who needs to sell for cash and is willing to accept a discount. This does happen though, and I know investors doing deals all the time.  You may have to get more creative if you are looking for that elusive rental property and leverage whatever it is unique about your personal investment situation (house hacking, etc).  I am working on a build to rent model that will  work in select inner city neighbourhoods.  This has recently become allowed to changes in zoning.  Knowing zoning in Calgary gives you a big upper hand vs other local investors that don't take the time to learn about what is possible.  This type of investment is only available to a small segment of the market so is way less competitive. So that is the strategy I am leveraging to create my own deal.

Good luck with finding deals in Calgary, it is done here every day.