Mitch Collins
Daniel: After years of working, drilling and service rigs around BC and Alberta, Mitch began buying investment real estate in his early 20's. Starting with very limited capital which actually was non. Mitch began attending real estate investment training networks across Canada to learn how to buy real estate.
On his days off, he would put on the tool belt and go to his real job, renovating older homes and typically adding a basement suite to rent for cashflow over the next few years. Mitch purchased 34 homes while working a full-time job and handling all aspects personally. During the process, you found that there were no real investment minded agents working in the NorthEast BC area.
Mitch became a realtor today. That's 12 years ago today. He has helped over 400 clients from coast to coast. People from all over buying in BC, closed on over 800 units valued at over 250 million. Dollars. You have been a busy guy in Fort St. John and Dawson Creek Mr. Collins.
Mitch: It's been a lot of fun. Here's the thing. I'm actually from Edmonton though. Here in some of those things, it's kinda neat to see. That's not too far from us. Edmonton is about six hours away from where we are up here. We're up in the Northeast quadrant of British Columbia. They have a lot of parallels with them, but didn't accept were heavier on the natural gas end, but I'll get into more of that in a few minutes,
Daniel: Working, drilling and service reinstall. Where were you in BC and Alberta when you were doing that?
Mitch: I was born in Edmonton, raised in Ontario. Actually, that's all kind of been all over the place, but I moved out here when I was 18 years old. We're drilling rigs in Edmonton again, and we got an uncle that was a drilling rig manager. From there, my wreck moved to Fort St. John. I met my wife and things happened the way that they did. We've been investing now for just about 18 years. We started off and I think I bought 34, 35 houses or something before I became an agent. We've done well in advance of a hundred since then.
Daniel: Did you enjoy the drilling rigs?
Mitch: I hated them, worst job ever. But the thing is when I took that job, I didn't know what the other options were. It's not 50 below on your old side, frozen and people screaming out shit. I took my job because I didn't know anything better than that.
Daniel: You did better than me because I moved to Yukon bike in 1981 to work for a summer on the diamond drilling rig. We were looking for molybdenum cores and stuff like that. I lasted two weeks which was amazing. The money was good, but that was crazy. On the 25th of June, I'm standing at the top of the rig and my operator is at the bottom because everything is done with a hand signal. The snow is coming so heavy and 30 feet above him. I can't see him and he's yelling at me, but I can't hear him because of the wind. I think two days later I quit that was completely stupid. But congratulations on however long you did it, man, you got to have nerves of steel to do that.
Mitch: It was about four or five years for me. I told the guys at the rig that I wanted to get into buying properties and they all thought it was a joke and everything else. But yeah that's the thing. They didn't think it was anyway a lot of the guys didn't think that was gonna happen, but it did.
Daniel: Enough of the going around the core of your presentation. What is happening in Northeastern BC. Why should people on this call be interested in doing business with you?
Mitch: I'm just going to share my screen here. We'll go through a bit of a slide deck as to what's going on in the market. This is just a slide deck, basically an update for February, 2022. Again, my name is Mitch Collins. I've been an investor in the marketplace here for just about the last 18 years. We've done that. We started off buying older homes, adding in basement suites who've done commercial, residential multi-family land development. I've been an agent for the last 12 years and got to work with hundreds of investor clients from coast to coast, sourcing, not really the properties in our unique marketplace. What I'll show you right now is that we're up in the Northeast quadrant of BC, Fort St. John is really close to the Alberta border and we're a relatively small market.
Right now, this is the last census. We're about 24,000 residents somewhere in that neighborhood, 60,000 in the general catchment in the rural areas surrounding us. It's really important to keep that population number in mind as we go through some of the size of the scope of the industrial projects that are currently underway in our marketplace.
I'm going to jump into those here right now. What's driving our market is we're not a one horse town at all or in the general region either. We're a major agricultural hub. We produce about 90% of British Columbia's grain. Lots of big ranches and cattle operations, things of that nature, oil and gas is a major player up here.
We'll get into that in a little more detail in a few minutes. Forestry, in general folks BC forestry is the largest single industry over the entire province. in 2016, Fort St. John was deemed to be BC's forestry capital, we're home to a major OSB facility. That's like plywood. We've got dimensional lumber, pulp and paper. It's got about 3000 to 3,500 employees at any given time in that sector alone, major play there.
We're big into mining. Between a two hour radius of Fort St. John and copper and coal mines, there's some gold mines that are basically under planning here right now as well. Everything rounds out to a nicely diversified economy and why these things are boring and why I'm going to get into macroeconomics. I'm not going to spend really any much time getting into properties themselves, but just the general macroeconomic view. We could spend a couple minutes maybe later on going into particular properties, but in general, what you want and this is just for myself and my investment know career over the last 18 years.
You really want to target a region that's got a strong GDP growth because that's going to basically fuel the boom and the demand for real estate in any particular region. In our region right now, we've got some of the strongest probably the strongest GDP potential as far as one small economic corridor, anywhere in the country right now that's leading to unprecedented job growth. We're seeing that already. Population growth as people come in to fill those positions. All of those things are in our favor here very strongly. As a result of that, we're seeing increased rental demand for vacancies coming down, and it's basically pushing our property purchase demand up to quite significant levels here over the last couple of years.
Everything is underpinned at the end of the day by GDP growth. Without that, you don't really have a strong environment at least fundamentally to create the kind of investment opportunities you're looking for. The first thing I'm going to tell you guys about Fort St. John right now, our region is home to well over $100 billion and that's a billion with a B of capital projects that are currently under construction right now. Not planned or maybe or under review or anything like that. These things are already under construction as we speak right now.
I keep my 24,000 residents, a hundred billion dollars in major projects, basically unprecedented on a per capita basis, anywhere in the country. The project is adding into that a hundred plus a billion dollars under construction right now is somebody called Site C Dam. This is BC Hydro's when they first announced that they told us who was going to be able $13 billion. We're going to be well in advance with 20 billion for this project right now. They're basically building a massive hydroelectric dam, five minutes from my office here right now.
Currently there's about 5,000 employees on site there. Over the next five years while the dam is under construction, it's going to work its way up to about 8,000 employees. We know you've got about 3000 more people coming in for this particular project, major play. Here's a bit of a drone shot, this picture was a video that I took a while ago, but for some reason, the video was loading. This is showing one side of the dam and this was actually taken last fall. Tremendous amount of work has been done on this project and outside of the natural gas developments. I'm going to talk to you guys about Site C Dam before the LNG project was the largest construction project anywhere in Canada. Really big play there.
The next thing here is that we're home to Shell Canada's LNG Canada project, which represents the largest investment of any kind in Canadian history. We're super fortunate to be home to this project and I'll get a little bit of what's going on. Shell International, they're the world's largest natural gas producer. They are number one. They bought a British petroleum hearable five years ago. In that merger it became the largest producer on the planet. What's happening is for reasons that we'll show you in a second year is that they've decided to take our supply of natural gas and ship it off to the coastline, liquify it and then send it across the Pacific to China, Japan, Korea, and India. 60 to 65% of the global population as their economies are basically rising.
The demand for energy use is increasing. They're pivoting away from coal in particular and leaning heavier into natural gas. We're seeing major demand fundamentals in that way needed because when they first announced this project. We said it was going to be a $40 billion deal, which by itself makes it the largest project of any kind that I have in our country. However, since they've made this announcement, they've started the process of doubling their export capacity.
Anything that's going to bring the project to somewhere around $55 to $60 billion which is just tremendous. Between this project alone and Site C Dam, just those two things alone were over 80 billion. We don't see numbers like that very often in the country. What we're looking at right now, guys, again, Fort St. John is right here. We're sitting on somebody called the Montney shale basin. Okay. Yeah. The Mani shell basin happens to represent the most prolific natural gas play certainly in North America and among the top three on earth.
Now, as it happens, Fort St. John is basically right home, within a two hour radius of Fort St. John, we have. Great in the most prolific play of the Montney shale basin. Really fortunate to be in that situation right now. We got for all intents and purposes, a pretty much an infinite supply of natural gas and nothing's infinite, but I mean will very likely beyond with some other kind of fuel before this resource is exhausted. Why is that a big deal?
As I mentioned to you guys earlier, Shell International is taking our supply of natural gas and then sending it across the Pacific to Japan, China, India, Korea, for a couple of reasons that they're doing that. Number one, is the quickest shipping corridor anywhere in North America to the major where the demand center is coming from right now. On top of that, because the Montney basin is raining. There's relatively short pipeline corridors required in order to extract the gas.
There was a lot of reasons for them to select our region as home to such a massive investment. The neat thing is there's seven other major oil and gas companies that are all playing in. Little projects that are in different phases of review and approval and all of that. Shell is just the first company we're anticipating in the next few years to see one, two, maybe even three more similar sized projects going forward as far as the natural gas industry is concerned. If that happens, if we even get one additional terminal that's equivalent to roughly the size of the school, but what the oil sands industry looked like 20 years ago from a capital perspective anyway. Really neat in that respect we're the most favorable natural gas play in North America, certainly for global demand.
Outside of the natural gas stuff, guys this is our OSB plant, it was in 2016. Forestry had an issue or pricing came down to softwood lumber tariffs and things like that. We actually had our mill shut down, by the way. When I left their drilling rigs and I started buying investment properties, I took a job as a crane operator at this particular moment where I worked for five years as I was buying my properties on my days off. We helped build this plant in 2005. At the time, it was the world's largest OSB mill. I think it's number two or three. Now a major employer was a single largest employer. Only gas is the largest sector, but this was the single largest employer anywhere in Fort St. John.
What's neat here is we lost this mill in 2016 due to forestry, corrections and things like that. Last year they announced that they're reopening our plant again, and it's just opened the last production line where it's brought back about 700 employees and had a major impact. A couple of sites seem to have involved the LNG development into what we're seeing right now, which is a major real estate push in our market. There was an announcement or a study put out, basically the city commission, some engineers to figure out basically what the housing requirement is going to be as a result of all these major projects in our marketplace. That report came in last January.
I showed that we're going to need over 4,500 new housing units, at a baseline over the next 15 years. Basically right now, guys, I work with all the major builders and developers in town. We would have to see construction go higher than a factor of 10. We need to see it increase by more than 10 fold starting right now today to come anywhere near to meeting that supply figure over the next 15 years. Currently, we're not going to come close to that. They may say what the bottom line is: there's more demand than we have the ability to create supply. Obviously, it's a pre indicator to price appreciation.
One of the things about Northern BC and Fort St. John in particular, is that we're home to major industrial projects. Most of the people working up here are blue collar kind of guys, plumbers, welders, pipe fitters, gas technicians, you name it. As a result of the type of employment that we have the highest household income in the country at any small market. Almost in any large market as well. Average household income is just about $140,000. We've got a new report on this a few days ago. I haven't been able to update my slide deck, but it actually brought it to $144,000 is the average median income in our region. Really high average incomes. What's neat about that as it was one of the few markets.
Housing prices haven't gone silly yet. If you take a look at most of my clients are in Vancouver, Toronto, most of those markets, it takes, Quite often more than 70% to 80% of average income, just to service monthly housing costs. It's becoming a real big problem here in Fort St. John, because the average price point and again, the medium price is just attached short of $400,000 with their high incomes. It's taking only approximately 15% household income to cover all the housing costs. We could see real estate prices double here, and we'd still be somewhere in the neighborhood of 30%, which is still super affordable relative to pretty well than any other market in the country, as far as any big center goals or pretty much any other place of British Columbia, cause it's gone nuts everywhere else.
Another thing that's going on as a result of our major projects up here in Northeast BC, our unemployment rate is basically two local, even while they're reporting. In July last year, they couldn't even report it because anybody that has a heartbeat, if they want a job out one. That's a little bit unique. I was raised in Ontario where at the time when I was there, unless you went to school or there was limited opportunity where I was raised in Southern Rural Ontario, moving out here was completely different, a completely different situation from what I experienced as a young guy.
The other thing I want to touch base on, and there's a corollary here with oil as well. But right now, natural gas pricing over the last year or so has been taking off tremendously. Part of the reason for that guys is that we're seeing a major global poll with climate change being, probably the single largest global concern a major pull away from dirty or fossil fuels and leading into cleaner fossil fuels, which natural gas happens to be by far the cleanest burning fossil fuel would exist still not perfect, but it's better than what the alternatives are. As a result of that, we're seeing China, India, Japan all pivoting that way.
When you get 60% to 70% of the global population leaning heavy into one in a demand or fuel source. It does these kinds of things to the pricing. What we're going to see here in my opinion is as the pricing for LNG, which is Liquified Natural Gas, but as we see that continue to take off, we're going to have a lot more the players that are looking to create additional LNG terminals in our region right now are going to get a lot more active to get their projects underway.
I think that's going to lead to us very likely again, and it is possible. I would be pretty surprised if we didn't get anywhere between one and three new multi-billion dollar LNG projects in addition to shells in the not too distant future. Really exciting for us that way as well. One more thing here about the marketplace is at Fort St. John in particular property sales saw a 51% increase in 2021. For the first time now, I've been investing here again for almost 20 years. This has been a long time. The reason that investors by and large used to buy up here in general was simply because we had some of the highest cash flow and the best macro economics.
What I'm seeing right now, it's different than that. We still have all those factors of play to a really high degree, but our pricing hasn't taken off to a major degree. If you're anywhere else in the province, for example, whether it be the Okanogan, the lower mainland and most other places in the country. The pricing has gotten so intense that people are squeezed out of the major markets coming up here where people can get a really high paid job afforded by a house, pay for it, still go on a vacation and raise kids on a single family or a single person income, virtually impossible to do that. Most other places at this point.
We're seeing the market take off here right now really hit. Here's what somebody needs. This was a report in November here last year a few months ago by the Vancouver Sun and because of the increasing pricing, a particular right in the lower mainland and similar to the GTA and everything else got lots of clients there as well. There's a big push for younger families who maybe don't have a bunch of family help to buy a home or something like that. There's a really big push to get younger families moving up here so they can afford to live, without being cash strapped and having to work two or three jobs just to make ends meet. It's becoming a destination for them. That's something new because it's only been the last few years that pricing has taken off to a ridiculous degree and most others.
Last thing here, we're going to get into market stats real quick. I'm not going to spend a ton of time on this books, but in Northeastern BC in general, what we're seeing here over the last decade is pricing is taking off pretty strongly. It's not jumping like you're seeing 30%, 40% in some other markets, but it's been a steady incline for the last decade. We're seeing it really starting to take off.
You're starting from a boat, last 2020. In 2021, we saw a big jump, 2022 this year, we're expecting to see even a bigger jump. Somewhere in the neighborhood of 10% to 15% time will tell nobody really knows that, but that's what the indicators are telling us to expect right now. But long story short is our market recovery and our boost. Fundamentals are firmly underway right now. The next thing is ten-year active listings.
We take a look at how many properties are for sale at any given time at the market over a 10 year span. What we're seeing is that for the last seven or eight years has been relatively consistent, relatively flat, but just in the last couple of years, we're seeing a decline to levels that we've never seen before. Right now, there's fewer listings on the market than I've ever seen in my career. We know what happens there, where there's more people coming in, there's less supply. That jacks up prices pretty standard. We're seeing those fundamentals in play right now. The last thing is from the same time we saw pricing, takeoff and listings decline, the active sales to listing ratios have just skyrocketed as well.
Any time that there's a listing on the market, multiple offers or not every case we're seeing, but certainly it's frequent. Quite often we see deals sold on the first day, second day on the marketplace. That's happening all the time here right now. Just showing that we are firm. That's in general, again, 24,000 people over a hundred billion dollars of economic investment going on against small markets. It's not a major center, but I live here and it's a neat place to be. That's basically what's going on in general in the market.
Daniel: If you're a builder, this would be a good place. I'll start to go and start a business or move your business.
Mitch: The problem appears getting trades. Maybe if you're able to bring a lot of tradespeople with you that's fantastic. But if you're a single guy coming in, I work with all the major builders in town and it's the same problem with everybody. If you're trying to do framers or electricians or plumbers, they're all in high demand and Site C Dam and the oil and gas fields. It's hard to get them trades they're an issue everywhere, but they're really big issues.
Daniel: That's too bad because the potential is there. If I had a construction business and somebody tells me you need to build 4,500 houses and there are people who want to buy them and their dealer economy is going to support that. But I can't do that because that would frustrate the heck out of me.
Mitch: Yeah, I deal with it all the time.
Daniel: I only have one question, because you covered everything that I would want to know about the area and where I should be investing there. Can we cash flow in Northern BC in North Eastern BC?
Mitch: Absolutely, that's the reason I started buying here years ago is I wouldn't look at properties and it's not quite the same anymore because pricing has crept up a bit. But back in the day, I wouldn't buy a property if it didn't cashflow a thousand dollars a month, that was my minimum threshold. For example, but right now we do a lot of brand new single family investment specific properties and their cash flow and are between like $700 to $900 per month net of all expenses.
We are seeing very strong cash flow, but again, Because the prices are relatively low, rents are relatively high. We're in a region where there's a lot of people coming in for employment, rental rates are going to escalate higher than most other places, just because of the demand coming in. It's more of an indie industry coupled with people coming in because they can't afford to live anywhere else. That's a new dynamic in the last few years.
Daniel: You said your unemployment was so low, you can't even measure it. I'm guessing that the vacancy rate is probably the same.
Mitch: The vacancy right now is probably sitting around four points, but we were hired a few years ago when oil and gas crashed. Here's something I'll tell people about in 2015, our LNG project was just getting ready to get off the ground. Same thing with Site C Dam. When Justin Trudeau got elected in 2015 or was it 2016? They threatened to cancel some of our major projects that were still in review back then at the same time that happened. We had an NDP government elected here in BC and they threatened to do the same thing. Created a lot of uncertainty in that point in time, which created a downward momentum in the marketplace as that uncertainty was working through.
We've got all those sorted out. The projects all got approved, even in those government scenarios. We're seeing vacancy calmed down sharply right now, but we'll probably have somewhere in 4% under the newer properties, 3.5%. Something like what's trending now, sharply.
Daniel: Mitch, thank you so much. I like it when people come to one of these events and they are fully prepared to inform us.
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