Sustaining & Building Your Real Estate Investing Business in a Crisis - hear from experts across Canada as they share what is happening in their local matkets.
The REITE Club Coast-to-Coast Experts:
Atlantic Canada: Jeff Murray (NB)
Eastern Ontario/Ottawa: Tony Miller
Southwestern Ontario/GTA: Dylan Suitor
Central Canada/Prairies: Alisa Thompson (SK)
Mid-West Canada/Alberta: Dale Monette
Western Canada: Brent Roberts (BC).
Alfonso: We have professionals joining us from across Canada. Even if they're not in your area, I think there's going to be a lot of valuable information that we're going to take away from them. And around the real estate investing business and our businesses as a whole. We're really pumped for tonight.
What do you guys say? If everybody's ready, everybody type in a one, everybody just put in a one into the chat and see if you're ready to go tonight. Let's get some energy. It's clocking online. Let's go. Let's get the ones going. All right.
Sarah: That's great. So, we got lots of people ready to go. And I will say, when you put two, if you select all panelists and attendees, that way everybody can see your answers and your questions, that would be great. And again, I'm going to introduce our first panel and I'm going to then take myself off of phones. I was going to moderate it. And if you guys have questions in the chat, put a question and I will come back on screen and ask the panel at that point in time.
Shall we get started? Let's do it, first panel coast to coast market updates. It is really important to have a good pulse on what's happening. Not only in our own provinces, or our own area, but also across Canada, because so much it's changing all the time. So, I want to introduce our panel.
So, from the Atlantic region, Jeff Murray from Canada Homes For Rent, he manages overall properties. We also have Tony Miller from Ottawa, also known as Mr. Ottawa, realtor and real estate investor from Southern Ontario, Dylan Suitor one of the top realtors for Keller Williams in Canada, Elevation Realty. Dylan's also found me my last two properties.
We have from Alberta, Dale Monette, from Homeowners. Now, and as a wide range of real estate strategies has lots of different experiences. From BC, we have Brent Roberts, top realtor in BC, bought and sold over a hundred homes so far.
Alfonso, I will let you take it away. And guys, if you have questions, feel free to add a question to all panelists and attendees. And I will put myself back on video and ask the questions away.
Alfonso: All right. Awesome. Let's make sure all of our panelists have their microphones ready to go and give me a quick wave if you guys are ready. Can you hear me? Awesome. Great stuff. All right. So, we're going to get right into it. First of all, on behalf of the founders, on behalf of our attendees. Thank you. All of you guys for sharing your time. That is one of the most valuable assets, crisis response. Thank you, all of you for being able to join us tonight.
Let's get ready and we're going to go from West to East. So, Brent, we're coming to you, first question, what's the current state of the real estate market in your area and what trends are you seeing and what do you expect to see in the next few weeks? And we're going to go from West to East. We'll start with you, Brent.
Brent: Thanks Alfonzo. The people have gone through stages as we all have with what's going on out there, right? And the markets seem to be, there's less activity too, for sure. Sales are way down because there's a lot less product and everything else, but there are multiple offers because of the products that are on the market.
If they're a good product priced, people are out there still looking, there's still a need in the marketplace to buy. One of the things we find out is that you might have seven showings and four offers. And in the 31 years I've been in this game, I've never seen it that high of a ratio of people buying compared to people, looking at the properties. And part of the reason for that is why would you be looking if you're not a serious buyer?
You've probably driven by the property. You've looked at our virtual tour or pictures, whatever the case is, the price you come by, you drive by it and it's a real serious buyer. If they're doing it, they're serious. And they're looking, it's still a little tough. People are losing their jobs. There's people that are nervous out there for sure. People are losing their jobs and not qualifying there's some situations in that respect, but the activity overall, the prices seem to be holding their own, but you have to be sharply priced.
Alfonso: Awesome. And Dale, I'm going to come to you next out in Alberta and obviously for our thoughts are with them as well, too, in the midst of all this, but what are you seeing in the in the state of the real estate market and some trends and what we're going to be leading to in the next couple of weeks?
Dale: Yeah, Alfonso and all you guys are right, thanks for having me. It's a privilege. I love the community. You guys have it's so important to have a group like this in times like now to make sure you're operating well, and you're ready for the future. Thank you for that. And a lot of friends up there and it's real every year. It's crazy there's a risk of the river breaking up and creating these ice stands. Hopefully they're all right. That combined with COVID is just crazy.
Regarding the market right now. I'd say the way to summarize it. And then this is really the way I think everyone is noticing how it is. It's just people don't want to look at houses and people don't want to show their houses right now. Now that being said, Brent, he made a great point. It's these there's certain people out there that have to sell their house, or they're just super anxious about buying their own property.
The people that are out there are serious about selling or they're serious about buying and what I've noticed. And because there's this, what I think is going to be a pent up demand when the health crisis is over or the health emergency has ended. There's going to be that pent up demand is going to start coming onto the market.
There's going to be people that have been holding up, buying people, holding off selling, and we're already starting to see that. So, the way the markets are trending from a week or two ago is yes, sales are down, but with real estate, it's all as a supply and demand story, not just a sales story.
We've also had listings down, but about a week or two ago, that trend started to switch over. So, we were getting sales increases as well as inventory or new listings increasing, maybe that's that pent up demand, starting to come on board, those anxious buyers, those HQ sellers, both getting more active in the market.
We'll have to see, but again, Brent nailed it. It's the people who are out there right now they're motivated. So, that means there are deals to be found, particularly. What's also interesting is Alberta, which has really been a cash flow story for so long and in Canada. And what's interesting right now is that the highest volume of sales is shifting to a lower price point, which is also typical in this environment. But what we're finding with that is that price point is the sweet spot with the cashflow zone. So, if you're looking for those good cashflow properties, you might not get as sweet of a deal as you're hoping, but you're still going to get a deal. So, wait for the right time.
Alfonso: Yeah. Right on. And let's keep moving across. Let's go to Dylan. We're situated in our live events and in a big sponsor and supporter. What are we seeing in Southwestern Ontario? And I know I get a lot of my market updates from you and your team. So, what are you seeing in the market, what's going on and where are we leading?
Dylan: Absolutely. I'm a bit of an outlier, but I can say right now that I'm probably the busiest. I've been in a couple of years. What I'm finding is that there's a lot of realtors that aren't working and are still staying home. And what that's doing is providing opportunity because there are still clients out there. I have multiple listings that didn't even make it to the market. We had three properties that we brought buyers to before they even hit the market on exclusives and even offers on the first and second day, what we've been seeing in some of these properties. They are still moving. I heard a quote this morning and I'm sure you guys have heard it all again. And it made a lot of the best time to buy it a hundred years ago or five years ago, or 10 years ago, whatever you want. What are you going to talk about is the past, and the second best time is now.
We are seeing an increase in sales and we're not seeing that same increase in new listings. So, what we're actually seeing is a squeeze in the market, which is providing less listings for more buyers. I actually have a statistic that came out a couple days ago. One of my colleagues put up there, the number of new homes on the market is up by 7.64% in the last week. And the number of homes sold went up by 43.4%.
The statistics are basically showing that the amount of listings that are going up is only up seven. But actual sales went up by 43%, which means you're squeezing the market even more. What's going to happen in the future. Nobody knows whether we're going to see COVID round to come back. Who knows?
My recommendation to buyers, if you're looking to get into the market as an investor or as a buyer is to just go and put offers on a lot of stuff. I said that to you guys a month ago when I was here and I'll say it again at the end of the day, if you're an investor and you're sitting back waiting, you may end up waiting for January and February, we saw one of the hottest markets we've seen. It was very similar to late 2016, early 2017.
There wasn't a whole lot of supply and there was a lot of demand. And I think this COVID thing provided an opportunity for us as investors to get into the market without having to be in multiples all the time. And we are seeing multiples coming back pretty consistently.
Who knows what will happen in the future. But I do think that if they opened the floodgates and let people out of their houses, for non-essential businesses that I think we're probably going to see a pretty heavy crowd going to the real estate market. So, if you are thinking of buying I would probably look into doing something sooner than later.
Alfonso: Yeah. Great take. So, there's more serious buyers out there. Their sales increase. And what I picked up as well too is less than we're being serviced because maybe people are stopping as well, too. So, there are, from your perspective, more people to help. Let's stay in Ontario, but school a little further east to Mr. Ottawa and to Tony Miller. So, what are you guys seeing? Ottawa was on fire obviously in the last few little while. And where are we now? What's the market doing there?
Tony: Hey guys. Yeah, Ottawa. If I go back to March the first two weeks of March where we're gangbusters, things were going. Absolutely. And then the pandemic where they start shutting things down. Second half of March really slowed down. We saw the numbers, showing listings activity in general, really drop so far in the last month.
I'll say actually the last couple of weeks, I've been tracking the number of new listings for the Ottawa real estate board for just for residential and condo. We're at about 60 per day on average. Pretty low for a spring market number. We are seeing definitely more properties going up as suspended. Meaning people are saying, screw it. I'm going to put it on hold for now. And just, I'm not certain about the market right now. I'm going to put it on hold and we'll bring it up again in a couple of months.
We're seeing that in multi-family residential Alfonso, typically in the auto real estate, usually see about 250 to 300 active listings. Last I checked we're at 65. And when you have the bottom of the barrel sort of thing, those listings are usually not very advertising for most buyers.
So, what's happening listing wise. I think that, I'll put on my crystal ball hat and I think. And I think, I don't think that's, it's going to be this huge pent up demand. And then everybody's going to burst out of the gates. I think it's going to be very slow. It's going to take over, it's going to take time. It's going to take time for consumers to start collecting their paychecks and to regain their confidence before being able to buy or wanting to buy.
There's still a market here in Ottawa. It's still happening. But I think in terms of immediate demand and immediate sales, as they started opening things up, I don't think it's going to be like a big rush. I think it's going to be slower and balanced over time. Very much like Ottawa.
Alfonso: Yeah, great take on that. And again, this is going to cause shifts and movements in legislation, in funding, in how banks are giving out money in all from this whole, our whole industry really right. Is going to be really under scrutiny and then taking a look at it from all aspects. And some of those changes, like you said, it's going to be waiting and seeing it end before rushing to that line.
I like to take on that. Let's wrap up by this first question out east Mr. Jeff Murray and joining us tonight from Canada Homes for Rent. So, you're managing over a hundred properties. You're seeing you're an investor yourself as well. What's the market doing there? And what do you see happening?
Jeff: Thanks guys for having me, by the way. Nice to be able to join everybody. So, leading up to COVID things were really busy. Things were renting. Things were selling. We had buyers coming in from all over Canada. And honestly, there was a little bit of panic at the beginning.
Now, we're six weeks in. It's sorted on that. I am having no trouble renting our places. I'm having no trouble collecting. Because that was a big thing. Everybody was very worried about whether or not they're going to collect the rent or not. And I can say that, when I look at my own list, it's the same people that I probably would have been collecting.
If everybody who was making money hand over fist. No one real concern in the market out here in that regard, the biggest challenging thing that we're facing right now is a property inspection. So, property or selling, but as far as inspections go that has been something that's been holding some sales up but ultimately what they're doing, they're just delaying some things till June.
Those of you who are watching the news, for in New Brunswick where I am, we're doing great. Like we have four active cases, so we're doing that regard. When you're looking at other provinces across Canada, you don't think we're in fairly good shape. I've said it before and I'll say it again. It doesn't matter how high the market gets or how low it gets. Our market sorta just hums along. And that's why people enjoy it. And that's why they come.
Alfonso: That's a great take on it, and that kind of leads me to my next question. And I want to stay with you, Jeff, and everybody's talking . When we were first in the midst of this, it was April 1st, who's going to pay rent. Who's not going to pay rent. What's going to happen in the world? It's like the world's gonna end after April 1st with rents or something. But then we moved on. We got through that. There were things trickling out more and more information, in plans for employers for all types of people. You sound pretty confident obviously with the effectiveness less out East, but have there been any plans regarding rents for May 1st and what are you hearing from tenants and landlords?
Jeff: So, the one thing is that our provincial government came out and those of you who don't know our laws. We're in good shape compared to other parts of Canada. So, right now, what they've told us is that we're not able to handle any notice to vacate for any non-payments until May 31st now, whether or not they extend that or not. I don't think they will. We're going to see the month of May. But ultimately they put that out there right away immediately when the government started coming out and saying, no evictions, no, this, no that, immediately there were a lot of people saying, oh I guess I don't have to pay, technically I guess they don't. But ultimately I think after cooler heads prevailed and people started this, set in the fact that yeah, look like, is it a good idea for me to get myself into that?
A lot of our owners, we were setting up webinars just like this with all of our owners to make sure that we were doing our best to keep people level-headed I guess, and making sure that they don't get too worked up. It's more challenging times right now because everybody likes it, even leading up to May it's not quite as high stress as April was, but we're months away from people. Believing that they're going to be just fine. Let's say.
We run our business fairly confidently in regards to how our processes are and how our tenants are and the people that we choose. So, I keep a close eye on who's working and who's not, the government's handing out money, hand over fist right now. So, there's really no excuse for anybody not to pay, as far as I'm concerned.
Alfonso: Yeah. And you know what, and I might've misspoke earlier, you manage over a thousand properties. So, the systems that you put in place are very important and you have a variety of different people in different situations. Thanks for that. Let's go back with Tony. If you work with a lot of landlords you work with a lot of investors. Some preparations for May 1st are what you're hearing from your tenants and your landlords and the people out there for me first.
Tony: Number one thing we've been telling people at least for the last week or so is, you gotta get on the horn and call your attention. Find out what's going on with them and especially the small mom and pop landlords, get on the horn, talk to your tenants, find out what their situation is, what their employment situation is and try the grease, the skids, to make sure everything goes well for them.
And if things aren't, if it sounds like things are going to go downhill for inmates with those tenants, work with them and try to find solutions. I think overall most commercial landlords and by commercial, perhaps mixed use landlords who have some retail, maybe some office space in there.
Those are the ones who are feeling the pinch because of so many businesses that have gone under or will be going under, especially this month, we're going to see next month, we're going to see higher numbers, I think. But I'm really proud. I'm really happy to see so many landlords out there cause we, landlords, get called a lot of different names out there. But I'm really happy.
The way that most landlords have handled themselves. And I've worked with tenants and especially, there's one here in Ottawa who was working with his commercial tenants offering whatever help he can to get through, if it's a viable business at the beginning and now they've hit some roadblocks because of COVID while he's working with them.
I just give a shout out to many of the small landlords out there who are doing the right thing and helping them understand, of course, that there's a financial limit as. We can actually do and help people out. By the way, I did a survey last couple of weeks about rent collection for April and the number one reason why people didn't pay according to the survey.
Now, it's totally unscientific, but the number one reason was because of the loss that was up there. The number two reason why tenants didn't pay rent in part or full for April was because of poor messaging by the prime minister, the premier or local elected officials. Buy food instead of paying rent, use your last month's rent to pay for expenses. Nobody should be evicted during this time period, those types of things. So, roughly 12% of tenants didn't pay because of that reason. So, I just wanted to toss that out there to everybody.
Alfonso: Yeah, I took part in that survey, Tony.
Tony: Okay, great. I think you have 450 properties. Is that what I saw?
Alfonso: No, not yet, but as we go stay in Ontario here with Dylan who works with a lot of investors, has a lot of properties and doors under, under management and as well too. So, what are some of the things that you've put in place? For me first and what are you hearing from other landlords and some of the tenants that you're dealing with?
Dylan: I hear a lot of rumbling on landlords are worried that you're not going to collect rent. We saw April coming and going. And that was before the serve was actually an effect. So, April 1st came and went and we still had probably 50% of our land, our attendance. And we're up to almost a hundred percent collection at this point in time which is awesome.
They're getting the survey. They've already had two periods of the CERB. They're going into the third period. What I am going to say though, is that the CERB has seven periods. That's the $2,000 implemented from the seven to $2,000, putting them to networking and they did change it to someone to make up a thousand dollars and still get the $2,000.
Technically, if you had two people in a family, you can make $6,000 a month. That might actually be a better income than they were getting before this whole. So, a lot of the people that are renting might actually be in a better position for four months. And then after that four month, max is up. Now, they're going back to potentially being unemployed, potentially not having issues at that point or having issues at that point in time if they're not saving up.
I'm still thinking that we're probably five weeks away from a non-payment. If that's going to come down the pipeline. And I would say, as others, my other colleagues you've said on your talk to your tenants and see what kind of payment plans you can set up and have that conversation say, hey, just want to make sure you're putting a little bit extra cash aside as a bit of a savings.
If you're collecting the service, do you have the ability to pay if the CERB after the four weeks you don't have an income. Also I think the 75% subsidy for employers is up until June. So, again, that's still going to go on for a little while. And I do think there's some employers that are probably taking advantage of hiring new employees, because that is possible and bringing on a bunch of employees, filling some of the workforce, getting that 75% wage subsidy.
I do think there's going to be some people that are going to let go of their employees if they're not making it, they're not doing really well because that subsidy was in place. So, I think that we're still a couple of months away from it. I do hear from landlords that own one or two or three properties that can be fairly concerned about it.
If I was to concern myself, if we're not collecting our rent with the right number of doors that we have, I would probably have less air than I already have. I have to look on the bright side of this. And at the end of the day, we still are collecting. And I do think that, with the government subsidies that are in place now, people should be set up at least for a few more weeks before we end up seeing any hiccups.
I don't foresee May being a big issue personally. June might start, and I think July is where we're going to see some issues, if people are still stuck inside, that might be the time where we start seeing some non-payments. So, that's just my personal update. The other thing I will also say is we're seeing a lot of people right now.
They're either selling and moving up or they're downsizing, or they're actually tenants that are saying this place is really ugly. And I've been sitting in it for seven weeks. And I want it to be improved and they may be looking for a new place. So, there might actually be opportunity and turnover, especially on some of those like $600, $700, $800, $900 a month rental places that haven't been updated in 20 years. I think that there is an opportunity for some of those people that may not be making $2,000 or $3,000. To potentially move up. So, there might be an opportunity to turn over looking on the bright side of this whole thing.
Alfonso: Yeah. That's great. So, as we wrap up this panel, I want to do a little bit of rapid fire and just in less than 30 seconds for all of you guys. Is there anything specific and I'll give you guys a minute to think about this, about the region that you're in, that you're servicing that you're working in, that you guys want to share with the REITE club nation. Take a second to think about that. And Dale, I'm going to start with you out in Alberta. Is there anything less than 30 seconds that you can about Alberta that the REITE club nation should know.
Dale: Yeah, for sure. So, I think the first thing people think about when they think about Alberta and Saskatchewan as well is the resource sector and oil and gas, obviously. I think my main takeaway right now is like I said before, if it's the right deal and you can handle the scenario of a big market drop in the future or hopefully things aren't that bad and policies put in place right now can stabilize the markets. If you can do the right deal, do it, but you might want to wait until we can see what's really going on in the economy and be prepared.
I want to go up to Brent out in BC, anything out in BC?
Brent: Thanks. Alfonso. I'm pretty excited about the future, with all of the abilities that we've got with your club here and learning and everything else, we've got time to hone our skills and to get ready for when it is the right time. Like Conrad was saying, and Tony,, all these guys were saying, there's going to be some opportunities. We've gotta be right. We've gotta be right with it and be ready for it. I think that the tenants, I think everything's gonna play out, we've just gotta be patient and like on the red set, but there's some really good opportunities in the future when markets change like this.
Alfonso: Awesome. Thank you very much, Brent. Thanks for joining us today. And Jeff, let's go to Jeff.
Jeff: My takeaway is if you don't invest in New Brunswick, now, this is a good reason why you should. And other than that, just don't panic. Nothing you can do about it. You don't panic. You just let it play out.
Alfonso: I love it. That's gotta be an Eastern Canada mentality. I gotta get out there again.
All right. Let's go to to Mr. Ottawa and Tony, what's your advice for the REITE clubs nation?
Tony: Yeah, if you're in Ottawa right now, I'm telling people, sellers, especially if you're nervous or you're worried about stuff, don't read the headlines. Don't listen to many realtors. Don't listen to, or just ignore the investors out there who are pounding at your door. Don't sell right now until you talk to an investor focused realtor or your teams to figure out if there are other options. Ottawa typically is very stable. We're generally buffered by the federal government here with all the jobs. Things should go well. So, in a nutshell, if you're nervous, don't sell, just wait, talk to somebody who knows what they're doing first.
Alfonso: Awesome. And we'll wrap up here at home, Dylan, some advice for the REITE club?
Dylan: Two things, one real big thing I'll say is that traditionally in the REITE club as real estate investors, we'd love the BRRRR method by renovating, rendering, refinance, especially these larger renovations that might take three to six months. I would caution you on doing those right now. I find that the lift is actually squeezing quite a bit, especially needing to unit conversions. And if you're going to be over leveraged by doing that, and you're going to basically be relying on that refinance to come through, to get your capital back out, because you need it for some way, shape or form.
I would probably pump the brakes on doing that and buy something that's already turned key or buy something that maybe needs some cosmetic renovations. You don't have to put as much capital in because if you are tight on funds and something does happen in the future, again, knock on wood. I think that everyone else was pretty accurate, but we were saying, but if something did happen, I wouldn't want to see them get caught with a bunch of a down payment and a bunch of renovations in. So, cautious, a little word of the wise in that one.
Alfonso: Awesome. And amazing advice from these gentlemen and Brent Roberts, Dale Monette, Dylan Suitor, Tony Miller, Jeff Murray. Thank you guys so much for joining us tonight and speaking to the REITE club nation.
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