Eddie Kamps: The first is I'm a bit of a finance nerd at work, so I have my endless plethora of spreadsheets where I can very quickly train properties.
Sarah Larbi: REITE club nation welcome back to the REITE Club podcast. I'm Sarah Larbi and I'm joined by Francois Lanthier. How are you doing Francois?
Francois Lanthier: Good. I'm doing like you multitasking and you never know how things go, this interview is gonna be quite interesting. It's a busy guy and Sarah, Anyway we should get to it very shortly, but it's interesting when you do a lot of things at once. What happens?
Sarah Larbi: Absolutely. Eddie is a real estate investor, a realtor out in Calgary. Has invested in different types of properties and is a realtor helping other investors in the Calgary market. So we talk a lot about the ups and downs of Calgary, the pros and cons of investing in Calgary and some of the things to look out for. I hope you guys enjoy the podcast. Don't forget to leave a rating and review.
Francois Lanthier: Welcome, Eddie. So we're really excited to have you on our podcast. We'd love to find out a 30,000 foot view of you as an investor and a realtor as well. If you could give us your background.
Eddie Kamps: Absolutely. I am a real estate investor. I do have my real estate license. I've been doing this investing in real estate since 2015. I've had my license since 2016. I've always had a very keen interest in real estate. In my career before this one and that I still hold now. I actually went to military school and I remember my final year looking on mls, all of these properties of where I wanted to live and what have you. It goes way back. But I've finally become a part-time investor, five, six years ago. And I've loved every second.
Sarah Larbi: Amazing. Awesome. So now you are located on Canada's west coast of Calgary, Alberta. And have you always invested in this area or have you invested in other areas as well?
Eddie Kamps: Most of my investments are in Calgary. That's where I tend to focus. That's where I live and work, and I know the area best, but I do also my wife and do also own a fourplex in Prince George. We bought that about five years ago. We were refinancing it in short order. And we chose PG on the advice of a friend. After we did some due diligence just based on the financial metrics, cash on cash and what juice we can get for the squeeze.
Sarah Larbi: Awesome. So obviously we have a lot of Ontario investors and some people from BC as well and we've had, I think a couple people from Edmonton, but maybe talk to us about the Calgary market, what you've been seeing in 2021 and where you think it is headed towards.
Eddie Kamps: Absolutely, so the Alberta market and the Calgary market specifically is going through an interesting time. So obviously since the start of 2021 a lot of real estate markets across Canada have seen very significant price appreciations. Most notably, in Ontario and Quebec, you're certainly not immune to it, particularly the GTA, but also on the East coast nova Scotia, New Brunswick have really taken off. And while the overall Canadian market has increased substantially here in Alberta, we're lagging behind the national average a little bit.
For example, in Alberta, Saskatchewan created just to release some stats that the average increase in price from last summer to this summer is about seven to 8%. Compared to, in Ontario, Quebec is about 16% to 18%. This is a fairly hot market for us which is a welcome change of pace since 2014 when the oil price crashed and we actually saw some price declines and decreases in the market. So overall the Calgary market has been doing relatively well led by the detached sector.
The benchmark price for a detached home, and this may shock some of your Ontario and Vancouver listeners and viewers is about $538,000 in the city. So detached I have been doing the best. Whereas, our condo market is fairly lagging due to higher prices. We are seeing some we have done fairly well compared to previous years. The market has plateaued a little bit just due to seasonality, but overall, I'm quite bullish on the direction of Calgary real estate.
Francois Lanthier: One thing I find shocking about Alberta is the average salary is quite high versus living expenses and cost of life. So I find that's a huge missed opportunity. We've been talking to other investors, people are being digital nomads and taxes as well in Alberta, I think it's like a flat rate. The provincial taxation on income tax Is that something you can speak about?
Eddie Kamps: We had a flat income tax for the personal side for the longest time, however that changed in about 2015, 2016. With the somewhat novel NDP government that we had for four years. But your overall thesis is correct, is the fact that Calgary is a very affordable market. RBC publishes housing trends and affordability reports that compares the average income and the benchmark price for a house and calculates affordability.
For example, Calgary's right now is 31.7 in terms of, the share of an income of a typical household, what they would need to pay for housing. 31%, 32% for Calgary. That's almost double wrong. Vancouver is almost double what it is in Calgary. So you're looking at 63, 64 in Vancouver. These are just absolutely crazy numbers to those who live and work in Calgary.
The oil and gas industry is really starting to come back and pays very high wages not just in Fort McMurray, but for skilled labor like engineers, geologists, business types, accountants. So overall calories have very high wages. It has a very high quality of life. Being so close to the Rocky Mountains, we're about an hour away. And our housing is really affordable. There's a lot to like about this market and Alberta in general.
Sarah Larbi: Look, there's pros and cons to every single market, right? Calgary or Alberta or what, or whatnot. I think that. Your landlord and tenant laws are much more favorable. But I also think that there's going to be more ups and downs for somebody investing in Calgary based on the history. And so what are some of the things, as an investor that they could do to potentially mitigate all of the additional, in my opinion, the cycles like you guys have a lot more ups and downs as maybe somebody in southern Ontario might have. What are some of the things that an investor could do knowing that before buying?
Eddie Kamps: Absolutely. Very good question. So you are right. We do tend to have a more cyclical economy, not just in terms of oil prices, but that also has cascading in provincial resource revenues outlays by the provincial government public sector investment. And that will also affect the real estate market. There is that issue. One, knowing that it is a fairly cyclical market. Two is the fact that you have to be aware that there is a real estate cycle.
I publish a quarterly newsletter where I track the metrics like employment, housing starts and oil to determine approximately where Calgary is in that real estate cycle. And most importantly, what it is that you do based on where you're at and where the real estate mic market is at, where the cycle is at and making informed decisions about your tactics and your plan.
If you're in a slump, that's probably the time to buy some lower priced assets. Whereas if we're in a boom or at the tail end of a boom, that's probably when you should be divesting your non-core asset. However, in terms of some of the more tactical decisions there are some property styles that really never go out of style and they'll provide you with a buffer or will de-risk your purchase.
The one that I can think of off the top of my head which has become in vogue in the city and should be going forward, is the use of secondary. Not only having a main suite typically on the main floor, but off a basement suite, which your listeners should be very familiar with.
The advantages of a sec secondary suite are many, but really what it does is it de-risks your revenue streams so that if you have a vacancy in one unit obviously you provided that the basement or the other unit is occupied it provides a buffer to your revenue. If you legalize the basement suite, that's another issue.
That has been seriously discussed over the last few years, and that's an ongoing process that provides some value as well. So there are several ways to de-risk it. Secondary suites are one knowing where the real estate market and cycle is at. There's another, and there are another few tricks that you could employ.
Francois Lanthier: That's great. I'm currently looking at Calgary myself, so it's great to hear this information. I've also heard about secondary or garage suites, that's something a bit different. I guess you can put a suite on top of the garage. Can you end up with three suites that way, like the principal house, the basement, and something on top of a garage?
Eddie Kamps: Not legally right now. However, there are discussions. About doing that very thing. It's not currently in the land use bylaw. But frankly, if I could tell the very short war story here, one of my latest acquisitions we closed on a little over a year ago is a single detached house in a neighborhood called Seton.
The important thing to know about Seton is several things. One, it is close to a large major employer that is South Health. Make the major hospital in the South. Two seats, the terminus of the future green line, and three, it has favorable land use and zoning. And the house that we purchased, and it's going quite well for us, is we bought it on a pilot lot such that we can develop it a garage suite in the back. We have designs. I may modify it a little bit but we'll be ready if the land use by life or changes to put in a suite in the basement to make it a triplex.
Francois Lanthier: It's one or the other, but that's also nice having the garage suite cause it's the privacy oftentimes the garage is completely separate from the house. Is that something you're, that's how you're building it.
Eddie Kamps: Absolutely, yes. It'll be about an 800 square foot two bedroom suite on top of a triple garage.
Sarah Larbi: You don't know. At some point, Bill 1 0 8, which is what we have in Ontario that allows us to do three, might come to Calgary.
Eddie Kamps: I hope so. I am hoping and praying for that.
Sarah Larbi: Alright, so you've got some interesting plays in Calgary. When I look at it, I'm just gonna compare, cause I don't know Calgary, obviously like you, but I'm gonna compare it to the GTA, right? So sometimes you buy in a city in the GTA like Burlington for appreciation.
Sometimes you buy in Windsor for cash flow or well end, for cash flow. Probably a little bit of both. What's the play in Calgary, is it cash flow? Is it appreciation? Is it long term buy and hold for mortgage pay down? Why are, what would be the main play for an investor?
Eddie Kamps: There are several ways that you could approach the Calgary market right now. So we have some decent cash flowing opportunities in secondary suites. Like I've already. . In terms of there are always opportunities local to whatever market. I follow Edmonton quite well and they have a fairly robust plan to expand their LRT system. And we have a fairly significant project that has recently been approved and funded.
In terms of the Green Line. So in terms of opportunities we are a large city. We have cash flowing opportunities. The Green Line presents a compelling case, not only for cash flow if you pick the right neighborhood along it but also some significant opportunities for capital gains, not just in the home value itself, but also for potential redevelopment as well. We're not, our market isn't as big as the GTA. Obviously I'm, you're several times larger. But we are a major city and there are opportunities here for most types of investors.
Francois Lanthier: Excellent. And what is a bit of a change of gears, but what is the most important thing a first time investor should know before investing? Like some top tips that you have?
Eddie Kamps: I have several that I could explain. The first. To be perfectly on, like my day job is I'm a development engineer and a financial anus for a large oil and gas company in Calgary. And when I was getting out of the military, the first things that the senior engineer told me and related to you can relate this to real estate investment as well.
As he said, Eddie, you need to know your scope. You need to know what it is that you're building, and you need to know what it is that you're doing. So sometimes you have to ask very embarrassing questions to make sure that you understand all of what it is that you're buying, what the risks are, what the financials are, if I was approaching a first time real estate investment, you have to ask all of those questions of why are you buying this? What are all of the costs associated with it? HOA Homeowners Association, property taxes. Who pays those? When it comes to tendencies, what are your land, what are your rights as a landlord?
What are the tenant's rights? And honestly I don't think there's any substitution for knowing the rules and reading the legislation and reading the regulations behind it. I don't think that's something that you can outsource. So it may be a bit painful or tedious or may not be something that you precisely want to do.
But it is something that I think you absolutely have to avoid risks down the road. The second thing that I would say is after you've made your first purchase, and you're still somewhat of a nascent real estate investor I would advise people to if you're going to continue with this and expand your portfolio, is I would advise you to professionalize your internal processes and professionalize your approach.
As soon as you can. I'm given your constraints. If I may, if you bear with me I read this excellent book by this guy named Richard Rohmer who's a management consultant, and he defined strategy in his book called Good Strategy and Bad Strategy. And what I find a lot of people do is they don't have a very good strategy.
They don't think about Some of the more esoteric and long term implications of what it is that they're doing. What I would advise people to do is do your due diligence, not just on your neighborhoods, but what is it that you're actually doing or Why are you being a long term buy and hold investor?
Why or do you have the skills to do a BRRRR or a flip? Do you rent out to VRBO type clients, like short term rentals or long term rentals? What are your internal, what are your internal skill sets that you can actually use? Are you a tradesman or a tradesperson? Can you apply that to your real estate journey?
I find it beneficial to list out your assumptions, list out what market forces you're actually trying to benefit from, building an LRT rejuvenation or the redevelopment of a neighborhood etc. And it just formalizing those internal processes of how you manage them as if you can make procedures, simple procedures and professionalize yourself. I think it'll do you a lot of credit and save you a lot of stress in the long term.
Sarah Larbi: Absolutely. Obviously, making this a business is gonna help people scale. What are some of the things that you've done, yourself as a real estate investor, some processes that you put into place that really worked well for you to be able to scale?
Eddie Kamps: The first is I'm a bit of a finance nerd at work, so I have my endless plethora of spreadsheets. Where I can very quickly screen properties based on their purchase price, what I determine the rent to be and all of those financial characteristics. I'm not wasting my time. I'm doing in-depth investigations on properties that should pass first screening.
That one is fairly simple that I think most of your readers should be familiar with. The second thing that I have done is just write an organization. I think it's very important to keep proper documentation, not only in email form but electronically in paper. I find that it is very much de-stress. The more organized you are, the clearer thinking that you could be. The third thing is just creating a plan and a procedure for tenant acquisition. Tenant onboarding, tenant management.
For example, three months before leases up, I send an email to the tenant. Asking whether they want to renew. If I don't hear anything for two months I follow up with them. And if they decide not to renew the lease, then we go through the procedures of listing it on rent faster. Everything is very much templated. It requires very little effort over time and also taking care of your tenants.
Every Christmas we buy them a Christmas basket, with a handwritten note saying how much we appreciate them choosing us as their landlord and as their housing provider. And we find that tenant retention is a lot better and less costly than tenant acquisition. Stuff like that
Sarah Larbi: That really trusting point. So I do wanna talk to you about what you just said there, tenant retention and tenant acquisition. And I think that Our markets are so different because for Ontario, like for me, for example, and like I think this is so cool, why, like we have people from all the different provinces in Calgary.
You want tenant retention. You're essentially, Looking for tenants and you probably wanna show why your unit is better than others and there's probably a higher vacancy rate. Do you know off the top of your head what it's at right now? Your vacancy?
Eddie Kamps: I'm guessing 6%, 7%, something like that, 8%.
Sarah Larbi: 6% to 8% vacancy. So you obviously wanna look for tenants and I will also say that your landlord tenant rules are much more in your favor. So if I'm sending somebody who doesn't pay, you can get them out a lot faster versus Ontario. That you can't really kick out a tenant. There's no vacancy.
There's 0.9% vacancy rate. And we are capped to rent control, meaning if the tenant's in there, we can only raise it a certain amount and it's 1% or 2% a year, which is like absolutely nothing. So we actually, it's funny how it's different because in Ontario, We don't want tenant retention.
Many of us don't. Like I do not want retention. I seriously would be happy if my tenants moved out every single year. That's totally cool. I will take the cost because if they move out, I can increase that. Literally like somebody that's been there in my unit for, since 2014, 2015, they move out tomorrow and that was market rent.
Obviously with the increases you just can't do it too much. I can get a thousand dollars more per month. If they leave, that's how much the rent has increased year over year in Ontario in some markets. I'm just curious, your thoughts on that for Calgary and what that looks like for you year over year, if your tenants stay, are you able to increase rents? What are some of the things that you're able to do out there that maybe we can't?
Eddie Kamps: Obviously our tenancy laws are much different in Alberta. We have much more flexibility as a landlord. And that depends on if you're on a fixed term lease or a periodic lease. So the regulations in the forces driving our decisions respectively in Alberta and Ontario are much different.
To put it simply in terms of what we're seeing in terms of rent increases, rents are increasing here. I had a town host that I was renting out in 2014, 2015 for $1,800 a month just on the outskirts of the city. We had to drop that to 1550 because of the oil price crash and people moving out of the city.
Now, given the market conditions over the last year, we've been able to increase that to 6050, 1700. On several properties we're still off peak. Several properties of mine were above peak. But like you said I can adjust my rents much more flexibly than you.
It is in my best interest to not from Afin even from a, especially from a financial perspective, but also in terms. The time needed to manage the property. And it's highly advantageous to retain a very good tenant who takes care of your property. It's more in my interest to do that.
Francois Lanthier: I invest in not in Alberta yet, but in New Brunswick, and I find where there's less. Tenant protection like Ontario and Quebec, it's very intense on tenant protection. It's a much more transient population. People tend to house hop a lot more, move around quite a bit more. So as you said, retention is huge in those provinces.
It's nice that you can get rid of bad tenants, but it's a double edged sword as well. People have those options while in Ontario with that 0.9%, you can't move. You're gonna be homeless if you give your notice very quickly. So great information.
Sarah Larbi: You move and your prices like almost a third or yeah, 50% more as soon as you start looking somewhere else. It's crazy, the different markets, but it is interesting. I think there's definitely some cool opportunities in Calgary. It sounds like in, that I think for multi units or conversions or duplexes or whatnot. But you've gotta look at, like you said, potential reductions in rent.
If and when, cause I think it'll happen at some point again in the markets. Go back down and people move out and the oil and gas industry gets hit, what are your thoughts of the five year out projection? Obviously you don't know with a crystal ball, but I don't know if there's anything you've looked into that you can share.
Eddie Kamps: Absolutely. I'm quite bullish on Calgary real estate going forward and the future of the city. There are a lot of naysayers in the rest of the country and among pundits about energy transition, net zero, etc. And you can call me a homer because I work at an oil and gas company. But what I think people don't realize is how ingrained fossil fuels are to our daily life.
It is not like switching off a light switch. So I think there's a lot of longevity. I read numerous energy pundits and analysts and investors, and they only see oil prices and energy prices going up over the next few years. The primary reason behind that is there've been chronic under investment in the oil and gas industry since 2014. If you have rising demand and lowering of supply. Then you see the price spikes and price increases that we've seen recently. Overall, I'm quite bullish.
Francois Lanthier: Excellent. And then again, switching back to your realtor role. So what sets you apart from other Calgary realtors?
Eddie Kamps: I would say several things. One there are a lot of good realtors out there who are very good at sales and client interaction. But one of the reasons why I became a realtor and I got my license is because I felt that there is a part of the market that was very much underserved in terms of investment and having a very well informed viewpoint on what the investment opportunities are here. I couldn't find too many realtors in Calgary who researched some of the economic fundamentals.
Guiding real estate values. I didn't find too many realtors that could talk about the direction of interest rates, what the investment opportunities were, what the major projects were, what the GDP outlook was, which I think investors really do need to look at. I think it's fundamental to the investment decision. I got my license to fulfill that need to inform my own investment opinions. And that is what I bring to the table above and beyond my tier.
Sarah Larbi: Amazing. That's why they have to, you have to set up your team of people that are already investing, in my opinion. They're gonna be able to give you a team of contractors, a team of other people, but also the knowledge. And clearly a lot of the research that you've done to get to where you are today. So that is awesome, Eddie. So the next part of the podcast is our lightning round. So Francois and I will ask you a series of four questions. Everybody gets the first, the same four questions, and you're gonna answer with a first answer that comes to mind. Are you ready?
Eddie Kamps: Let's do it.
Sarah Larbi: All right, so here's question number one of the lightning round. What is the best advice, Eddie, that you have ever received from another investor or at a networking event?
Eddie Kamps: Similar to what I told you about my engineer friend. You have to know your scope. You have to dig down into the details. You have to ask if there's a nagging question in the back of your head that you do not know the answer to, it'll come back and bite you. Ask those embarrassing questions.
Sarah Larbi: Amazing. Great answer.
Francois Lanthier: Second question, what is your favorite real estate investing resource? Could be a book, a podcast, a club, something.
Eddie Kamps: I really like Don Campbell's books. That's what I started off with, Real estate investing in Canada, Little Book of real Estate, etc. I found his frame really useful.
Sarah Larbi: Absolutely. And I will say that the slumps and the cycles that we talked about and the ups and the downs, that is a great book. And Don Campbell, that comes from Don Campbell. He explains the Canadian real estate investing cycle. Thanks Eddie. Those are great books. Number three, what is the one attribute in your opinion that has made you most successful?
Eddie Kamps: I tend to be an analyst by nature. I have a very analytical mind, so that is what has given me a lot of success. And if I had to say number two, it's probably being very organized.
Francois Lanthier: Absolutely. You have to have a family and everything going on in your life. You have to be very organized and the careers and real estate investor, realtor, and working full-time. I don't know how you do it all, but Next question, perfect segue. What do you typically do on a Sunday morning?
Eddie Kamps: You're gonna laugh at me. You may not believe me, but due to my time in the military, I'm actually used to waking up really early. So
I wake up between 4:30 and 5:00. I try to do a workout. I catch up on whatever things I need to get done during the week, whether that be real estate related, realtor related. But Sundays are the days that I spend with my wife and three kids. So we're usually, I'm going to a park playground sporting event, something like that.
Sarah Larbi: Awesome. Sounds great. Eddie, where can our REITE Club Nation reach out and find out more?
Eddie Kamps: I tend to have a fairly lean social media profile, so I'm on Instagram at Kamps Realty, that's probably the best place to get a hold of me. And see my work and all my publications. If not, you can phone me at (403) 603-0132 or email me at eddie ediecamps realty.com.
Sarah Larbi: Amazing. Awesome. Thanks so much, Eddie, for being on the show. It was a pleasure having you. And thanks for sharing a lot of great insights about the Calgary market as well.
Eddie Kamps: Pleasure to be here. Thank you.
Francois Lanthier: Thank you. Hey, Sarah, Do you feel like investing in Calgary now?
Sarah Larbi: I don't know. Actually, you know what, I'm still on the fence. I do wanna diversify out of Ontario. I don't know if Calgary is exactly the area I will personally invest in. Edmonton is also a good opportunity, but it's interesting to see some of the pros that it has, I think, it's on the table, but it's gonna be a different type of investing where you're gonna be going through a lot more, I think, cycles of those industry and a little bit faster. But there's nothing wrong with knowing that ahead of time and diversifying. What are your thoughts?
Francois Lanthier: Exactly. If you can plan accordingly, and that's what Eddie taught us, I think, is really knowing the scope. And I, that's something I wrote down is knowing what can happen, how do you mitigate those risks? And that's it that applies to any market, but Calgary as well, it's seen more boom and busts. You need to be prepared. . And anywhere where the tenants are maybe less protected than Ontario or Quebec or BC then it tends to be a more transient population and you need to be aware of it as an investor. Those Christmas gifts do come in handy and be not, your tenants should be not even more so in those provinces I fined.
Sarah Larbi: Absolutely. And folks, don't forget to go to thereiteclub.com, check out our online community, and when we are having either virtual or in person meetings at thereiteclub.com, Francois do we say to the REITE club nation?
Francois Lanthier: Customize your life and come grow with us.
Sarah Larbi: Thanks very much. See you guys next week.
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