All Forum Posts by: Peter Crisp

Hi Shar,

Just saw your post and hopefully it helps Arthur also. I'll start with Surrey. SFR's have taken off in Surrey and while the prices haven't gone up as much as, say, Richmond/hot school districts, they have done well, and they've pulled ahead of MFR's over the past few years (I called that one right a few years back and bought a fixer-upper house vs a townhouse). I think the spread will stay there because there's a lot of MFR coming on line in Surrey (particularly North Surrey - can't speak for South Surrey/White Rock). I'm just not seeing price/rent ratios working for most of these developments and I can't count on price appreciation in either in the short-medium term. Long term, the whole downtown will be massively changed over the next decade so it could be a good long-term bet. Our rental house happens to be right downtown near the hospital and land/housing has shot up nicely, because not many SFR's other than, for want of a better word, 'crack-shacks' are left in the area. I think Nanaimo might even be safer, but there is a lot of development there also. I agree that Maple Ridge (partly because of the Skytrain line), and Chilliwack / Abbotsford and even Langley make more sense if you can buy a SFR. I'm just not sold on this idea that all Millennials want a 750 ft2 apartment near a Skytrain line so they can have lattes, which seems to be common wisdom based on very little research. Give me land over strata any day!

-P

Quick follow-up. I'm not sure if it's OK to mention specific properties and I have no ties to anyone in this way. Here's an example on the commercial listings - 515 Campbell Street, Nanaimo, BC. To me, it currently looks like a dog that can't hunt - an apparently vacant building that was a medical centre. It's been listed for a long time at $399,900. It's the kind of turn-around property I wouldn't touch because I don't have the right background, but it's an example of one that might just be re-purposed and be a good income generator for someone with a real estate and renovating background. Please use this as an example only!

-P

Hi Arthur,

Not sure if I can help you too much but I thought that I'd kick things off. I'm in Surrey, BC and it's even more expensive here than in Toronto. For what you want, I'd look hard at Victoria and Nanaimo if you want to be hands-on and stay in Canada. Nanaimo downtown in particular could be a good fit as it's gradually being fixed up and it's less expensive than Victoria. A couple of years ago, I salivated at an old house downtown that could have been repurposed for office/commercial and it was only about $160,000, but it needed a lot of work. I think this gentrification is a long-term trend. On another thread, I just heard of a couple that built a retirement building near Victoria and it was a wild success, and I can find their names if it helps. You might also find a residential and/or commercial property to fix up and there are some infill lots available also in both cities, but I'm thinking Nanaimo first. If you haven't done it already, scanning the commercial and MLS listings would be a logical start. Further afield, WA has rebounded but I'm sure that good properties can still be had anywhere in the Seattle to Bellingham areas. I just think that with the CDN dollar and wanting to be hands-on, Vancouver Island is the place to be. I'd really like to be in these markets but it's not the right time for me at this juncture, unless I sold a place in Surrey first. One issue - things are so expensive, even on the Island, that it's going to be more of a long-term appreciation play than cashflow I suspect. There might be deals in smaller towns but I haven't looked, and you might find price/rent ratios to be more in balance. Please keep me posted as I think you will do well with whatever you choose!

-Peter

Hi Jun Won Lee,

I agree with Roy N that wholesaling doesn't make a whole lot of sense - as done in the USA. An acquaintance of mine (met from a Kijiji ad) was trying to wholesale by picking off MLS listings but I didn't see the point - I can do the same thing as an investor. You can try digging for deals (e.g. 'driving for dollars') but a lot of real estate agents do the same thing, so you'd have to come up with a unique angle. Maybe if you can scan for non-traditional sources such as property management companies and build up relationships it might work, but I don't think you can make enough money to do this as a business. It might be better just to get a real estate license and focus on real estate investors as your clients? There's a good firm in Windsor, ON that does exactly that and I'm on their mailing list. I'd certainly like to hear from successful wholesalers in Canada to prove me wrong!

Interesting conversation. I'm hedging my bets, with income properties in the Lower Mainland, Ontario and New Brunswick. I like New Brunswick because it's so beaten up that some markets offer great value. And, long-term while other areas of Canada will grow more, even New Brunswick's population is forecast to grow modestly, not shrink from what I've read (Stats Canada report a few months back). But the problem in New Brunswick is that the rental incomes are so low, they often won't cover basic property maintenance. I looked at over 50 properties on paper in Saint John that are in receivership, and of those only 5 made any sense and that's the reason. A $15,000 duplex that needs $50,000 of work in a war zone is no deal, which is a shame. One of the places we have just barely pays the bills because of this trap, which has been a good lesson for me!

Matthew/All,

I like what I'm hearing and I'll look for the next meeting in Surrey. I've got enough exposure in BC right now, but I can provide eyeballs locally to like-minded people just for fun and networking. I've seen a handful of SFR properties in Surrey that were good flips over the past 3 years. The Okanogan makes sense, since Calgary oil money is quiet right now, and Victoria and Nanaimo have always interested me because I suspect that more retirees are heading that way.

Hi Myo,

The duck's in the oven so I have a chance to reply. I'm not up on specific investments in the Lower Mainland to suggest. I could have sworn that there was a firm in Vancouver that was doing flips and they were active on BiggerPockets. You may want to look for a firm that does Executive Rentals. I did a bit of research on this and I liked what I saw because it's one of the few areas that has the potential to generate free cashflow. My wife (who is Chinese background) knows from real estate agents that have done very well for themselves and some friends chasing the hot developments - residential SFR/presales and commercial, for offshore Chinese investors. Not my 'cup of tea' (too risky/no control/no value added), but it's where the fast money is being made. One thing I don't see - it's a crazy market but I don't think it's over-valued either, unlike many markets in Canada. However, I keep thinking that it may go 'cold' where nothing sells and prices are static for a long time (years). Just a gut intuition.

-P

Hi Matt,

I'm also in Surrey. The Lower Mainland is challenging. I'm interested to know about your flipping experience here. I've seen a handful of houses worth flipping but not much. It's mainly a land play in BC it seems, so it's more cost-effective to do tear-downs in a lot of spots. Can multi-family units be flipped I wonder?

Hi Myo,

I also live in the Vancouver area (Surrey). It's painful making 20% but losing maybe 30% on the CDN dollar drop. Matt makes a very good point and it may be best to focus on a closer market. However, I have another option to suggest, which is to wait a bit or sell and hold in CDN dollars, and buy in another Canadian market when the time is right (or just buy into a REIT). I'm not seeing enough pain in major markets anywhere in Canada, so it's not generally a good time to buy. But I think Vancouver will hold value better than other cities such as Calgary, if oil prices stay low, so you have time on your side to hold or sell.

I'm a bit late on the discussion. I work for a consulting company that specializes in building safety. One of our branches deals with asbestos, and while I don't deal with it every day, I have a lot of IH background. Vermiculite was used not only in attics but also in a lot of commercial buildings inside metal posts. It's also a contaminant in non-asbestos fireproofing sometimes. Not all vermiculite is contaminated, but the majority of it is. Sampling isn't hard, but it's not foolproof either because different lots can contain different amounts. Planks don't constitute encapsulation and I wouldn't trust having another layer of insulation to help either. My advice - it's a pain but not probably a deal-breaker and I'd remove it sooner rather than later. It's not hard for a HAZMAT crew to vacuum the stuff out (don't try it yourself - you need some serious gear, not just a dust mask).  It's VERY friable and easily disturbed by any work in the attic and it's a real hazard. The commercial people we deal with remove is ASAP when they have it exposed in any way. BTW you have an obligation as a building owner in any jurisdiction in Canada of to disclose the presence of asbestos to a worker and to manage worker exposure, and I'm 99% certain it's the same in every State.