Sean Power and Cameron Brioux
Francois: We have Sean Power, President and then Sean's bio. Raised in Moncton with grassroots, in Newfoundland. It began with one apartment building and now has over 20 homes. He's done commercial real estate and over 30 years in the business. Sean, I'm not sure here that all with your father. I think it's the power team that probably has over 30 years in the business. And tonight Sean's giving us an insider's view of real estate investing in Moncton and an update on the markets. Welcome, Sean.
Sean: Thank you.
Francois: Joining us at the same time. Vice-President of Moncton REIO, Cameron Brioux, originally from Burlington, Ontario, so fell in love with the lifestyle of the Maritimes and yeah offered it while he was in school. And he's a realtor as well as a real estate investor, residential and commercial properties. And he's done some property management. Cameron is focusing on St. John and Fredericton tonight for his report and let's get started. Welcome.
Cameron: Thanks Francois.
Sean: Thanks for having us guys.
Francois: Thank you.
Sean: Francois, we look forward to you moving to Moncton. Yeah, I'll be good to see you, like what we can accomplish when you're actually here all around.
Francois: Yeah. Imagine that you're going to suffer.
Sean: I didn't realize that there was so much a rent to own background within your guys' group. It's interesting because that's actually how I started out in real estate.
My first meeting that I went to was the group that Cameron and I now run the Moncton REIO and I went to a random meeting. I think I found out about it in the newspaper. And some guy was coming down from Ontario to pitch the ideas on rent to own. Being my first meeting, I didn't really know too much. He pitched the idea of being able to buy real estate without any money out of your pocket. And I was just fresh out of university, so I had no money. That was a great thing. Whatever money I did have. I paid him for my mentorship. And that's how I kinda dove into real estate that was rent to own.
Francois: Excellent.
Sean: The group that we run, that's how Cameron and I originally linked up. We would've known each other through university, but we really started networking and talking about real estate and building each other's ideas and businesses through the Moncton REIO. I'm glad that you guys have an organization like this too. It's beneficial for anybody and everybody who wants to start out in real estate. As well as anybody, who's a lot more advanced as well.
Francois: You're a team, that's where I'm sure you've found many of your power team people.
Sean: That's true for sure. Yeah. You wanted us to talk about team building and basically like the advantages of being part of a team versus an individual. Obviously, Cameron and I are here together as a team. We're here to talk about our team and how we'd like to accomplish the business world as a team, as well as investing where recently we just acquired a nice flip for ourselves.
I don't know if we'll chat that much or not, but maybe at a later point in time. To me, like when I think about teams and how I am going to build my team, obviously a lot of people from this meeting are going to be investing into cities that are not their own. How do you find the people that you want to be teaming up with? And the most obvious answer is referrals. But there's a little bit more to it than that. I think if you're going to start out investing in another area, you should probably start with what are your goals? What are you trying to accomplish and get very crystal clear on that?
You may want to even dive a little bit deeper and figure out what is your, why? What is it that makes you tick and get you up in the morning for myself and the team? Like kind of the groundwork of our, why is protection. That's why we operate our business in such a way that we hope to make sure that our friends and family and our clients are never getting screwed over in any real estate deal, whether walking through a property and a leak in the foundation or some water dripping from the roof, like we want to make sure that everybody knows exactly what they're getting into, because it's gonna come out at some point anyways. Being in a small city. What's our population Cameron? Like 170,000.
Cameron: It's probably the only number. I don't have anything written in my notes.
Sean: In Moncton city proper is probably only 70,000. And then you got it's like a Tri-City factor. If you have a bad reputation in a city, like this word gets out very quickly. So, basically, my premise is like going to a team and starting with your why moving on to your goals and then finding people that align with their goals. And that's how Cameron and I aligned with each other. Like we have very similar interests, very similar directions. We both want to be moving forward in the most ethical manner. And doing deals at the same time.
Cameron: A lot of the deals that we pitched to our clients or getting involved in are ones that we want to invest in ourselves. Like Sean said, being a small community, you do see people that want to make a quick sale. And perhaps they're very singularly focused on how they're viewing that.
We have seen a very hot market that went from zero to hero in the last two and a bit years. And you get some properties where the rents might be on the higher end of the spectrum. And knowing the building, knowing the area, knowing the tenant class is going to be there. I would say, as an extreme piece that you want to consider, because it could be diving into a deal where you need to come back and the rents and all of a sudden the building doesn't make sense.
And that team approach is something that we would always want to leverage. So, we're constantly talking to property managers. We do have a few lawyers that we'd reach out to periodically to ask some more complex questions. And then if a client needed to, we would align them with them. And also home inspectors.
They do get a bit of flack, but they are very knowledgeable and each one is a little bit different in the skill set that they can offer. So, again, being in a small community, it is something that we want to make sure that our clients are very well versed on. Don't take our word for it on paper, we could present a fantastic deal. This is the area, this is your goal. And then these are the other people in the process that you want to check.
Sean: I can only say it is working well, sorry to interrupt there, Cameron. That kind of leads me to think about one particular topic. Like when you are getting referrals from an individual, a realtor or a lawyer or whoever the case may be, I would probably ask for a minimum of three people for whatever that contact is to help build your team. Because you could call somebody, they may be a great referral source and a great connection with that individual, but that doesn't necessarily mean.
Your goals are gonna align with them. Your personalities may not match, and they may not be giving you the same level of professionalism that they give the other person that actually referred you to. So, always get three different individuals per contact base and let them all out.
Francois: That's so true. I always asked for three, sometimes even more. I agreed, do your due diligence.
Sean: I wrote down a whole bunch of notes talking about teams and like the benefits behind them and like the whole premise of one plus one equals more than two. It really does accomplish that if you actually build the right team, as myself individually wouldn't accomplish 1/6 of our team of six on the power team. We try to go with premises that like, we are a team of six, we benefit from each other. And those six people are able to do the type of business that possibly 12 individuals could do.
When you are structuring your team, we need to bring together people that play on your strengths and weaknesses like Cameron. He's a lot more detailed, analytical systems driven than I am. My strength would probably be negotiation and understanding like human emotion and moving the deal forward on that side of things.
When it comes to structuring and like optimizing systems and whatnot, that would definitely be Cameron's strong suit. That's just one example of putting people on your team. That is strong at stuff that you are not so good at.
Cameron: It works out well too, because obviously in real estate, there are timelines that you have to adhere to and understanding that somebody on the admin side and also having system tools in place, whether that's a gentle reminder to your client, hey, we need the insurance letter tomorrow afternoon. Here's the deposit instructions. All of those things are minor details, but it certainly helps move the deal along.
It shows how motivated the clients are. And I get it. A lot of people that are in real estate are doing it with a nine to five job. It's us that is helping the investor, their machine forward. And the easiest way to do it is with teams. I'm not sure if now's the right time to answer some of the questions, but Francois, maybe you can guide us on that.
Francois: If you want to introduce a few things that I know the first question was, what area of Moncton would you recommend investing in? That's a tough question.
Cameron: There are some knobs floating around in the city that do have kind of your, A, B and C class tenant neighborhood. All of those would be indicative of the rent that you could get. On average, a two bedroom in the province of New Brunswick is around 925, 950. That's a CMHC published stats.
You'd want to use that for your benchmark. If you're going to look and aim at a B class neighborhood cap rates or multi-family. I'm assuming that's what mark means, like commercial, residential. We're seeing some buildings be sold on a five cap. A few months ago, it was a strong high six, two years ago, it was in the sevens, maybe eight. Things are changing very quickly. And again, there are some people that maybe are taking a C class building, applying for class rents and projecting an image that way. That answers your question. If you have a specific one, you can always email us.
Francois: Perfect. Thank you. I guess now you had some stats to show us about Moncton and sales.
Cameron: I think we just had the fire emoji.
Francois: There you go. Everything's on fire.
Sean: I'm going to share mine now. You could see this well, can you? For those that don't know, we run on the branding power teams or websites, powerteam.ca. These are market stat updates that are given to us by the Greater Moncton Realtor Board. Specifically talking about the Greater Moncton Area, like we're seeing trends here for active listings that are dropping and dropping. I guess the message that we're trying to portray here is like we have a supply and demand issue right now with COVID happening the way that it is, where we're noticing a lot of people that are moving from outside of these bigger cities, where they're paying almost millions of dollars to live in a very small square footage space.
They're now able to work from home. With that, they're choosing places where they can have a better way of life. With our average price range and like the 250 range, and you could get like a five bedroom home in that price range. That's why we have such an influx of people moving. And with that again, we also do have a limited supply. Back to 2019, we had about 1400 listings in February alone. Right now in February, we only had 584. That puts our months of inventory down around like the two months range versus, 2018 we had about 10 months worth of inventory. A supply and demand issue is the picture that we're painting here.
It comes with the demands that 2021 stats, for February alone. There were 299 transactions in February. Whereas back in 2018, for example, there were only 175. We have a lot more sales and a lot more active listings. It's driving the prices up. And what we're seeing with that is the obvious stats of the pricing. I don't know, Cameron, if you want to touch on this one a little bit.
Cameron: Our market has seen a massive influx of multifamily development and as such some of these single family home builders transitioned their business model to produce a semi detached or duplex offer. We don't have much in the way of row homes and are very dense non condo type developments. As in the last two years, we've seen a lot of these come online, a lot of semi detached and what used to be a very attractive entry point on single family, semi detached.
We are now seeing a massive price increase and it's taking people back because first time home buyers are finding it difficult to enter the market. And now they're making the consideration to rent. This spring buying season should be somewhat unique. And like Sean said, with the lack of supply people are really exploring what options they could potentially have.
Sean: One example would be my wife and myself are actually shopping around for our property and there was this one house that looked pretty attractive. Like it was probably like a seven out of 10 for us, but it wasn't quite the 10 out of 10. Maybe we're a little bit too picky, but anyways we hummed and we thought about it. We didn't buy it. Literally like a year ago and now it just recently listed again instead of 399 and is now 499. And it's sold within two weeks.
Just to paint the picture of the pricing going up, it would fall into this category here at a single family detached versus one now versus about 12 months ago, it's about a 30% increase in value or the single family attached, which I assume falls into the 70 tach market has gone up almost 22%.
Townhouses are not really as attractive for whatever reason. And then apartments would actually be in the condo market, but really I'm noticing this 20%, 30% increase in the detached homes in and around the homes that would be less than 400. Would you say that's common, Cameron?
Cameron: We're seeing a very big push to homes that are a hundred thousand dollars more than what buyers would traditionally look for. And I think that's indicative of the stat over three and four years, you could see the increase. The joke a few years ago at REIO is that you don't buy appreciation.
We were seeing out of town buyers interested in our market and they were saying yeah, it's going to appreciate, no, that's not the case, it is now. Some of the people that did buy even a year ago or two years ago are seeing that, which is phenomenal because it was a very difficult market. And I think there was a slide, a one before the show, just the amount of active listings three years ago in January and it's a big number.
Sean: If we want to talk loosely about the price per unit here, like you used to be able to get like a two bedroom unrenovated apartment on a price per unit of maybe 60,000 a unit. Would the square footage be like? 7, 800 square feet type of deal. Yeah, two bedrooms. And then now that same one I'm seeing go for 80 sometimes a hundred thousand per unit, which in some markets is extremely cheap, but for us, that's quite the increase from what three, four years ago at 60 up to 80 a hundred.
Cameron: Knowing that some of them are in C class neighborhoods and there is a demand for affordable housing. It automatically puts your tenant pool completely.
Sean: We're probably tying up more time than we're supposed to. Maybe just zip through Fredericton, St. John reports, so that we could get onto the other tucker's.
Cameron: If you don't mind driving for me, I'd appreciate it. As a whole, the province is up about 22% a year over year. And that was a prediction that was publicized in global mail. And a lot of that is driving new home buyers that are diving into the market with interest rates being low. And out of town buyers want to come here and still be able to work from home by larger format home that allows them to get more for their money. If they were looking to the GTA, they can come this way and get a house for a reasonable price.
In both markets, Fredericton and Saint John, we're sitting under three months of supply, which is a little bit unique. Fredericton is known as being a university town. It's driven by a university in healthcare. Whereas St. John is in part has been known as blue collar. There is a large refinery there and there is some manufacturing. If you've heard of the Irving corporation, they do employ a lot of folks.
Within Fredericton, a large REIO came there on the multi-family side a number of years ago, and they bought up a lot of properties and around the university and hospital, it's quite a dense spot. And as such, it drove the price of multi-family up. Whereas residential kind of stayed flat for a number of years. And this year they did see an increase in their average home prices, around 220,000 and their format of home would consist a little bit more of row home and semi detached.
In St. John with their two and a half months of supply, I would predict that a lot of that is being driven by the multifamily market. That's currently under construction. I would say 5 to 10 years ago, there were a few cranes that would have been popping up. And then now if you drive around the city, there's cranes everywhere. The uptown market and a lot of the old historical buildings are being forced by fire code to be renovated, to be code compliant.
I think there should be some out-of-town investors that would have seen on Kijiji or Craigslist units that were a fourplex for a hundred and twenty-five grand. There are still some of those available, but they do require a significant amount of work. And as such the home price in St. John is creeping up to about $200,000 and that's a mix again between single family and semi detached.
On a day-to-day basis, I do not trade real estate and either Fredericton or Saint John, I do focus on the Moncton market. We do have contacts in those markets. Should you be interested to dive in whether that's knowing the stats from a property manager and, or being connected to a realtor. We are more than happy to help you and the start of your process.
Sean: The overall message for the month in the market is that COVID has actually put a serious upswing from the market. I haven't seen the stats on where the population growth is, but I would guess that it's jumped quite a bit more than Moncton has ever seen before and again, the whole supply and demand issue. I see that continuing so long as people are able to work from home. But on top of that so long as people are able to work from home. But on top of that, when we already have all the people that have moved here, I think that's already started the wave of more and more people to come because once somebody comes and settles in a particular area, there.
They're not likely to uproot and go elsewhere. They're going to try and pull their friends and their family over. I see the population continuing growing, and we're always going to have a bit of a supply and demand issue until the new builds are able to catch up. And that would be all for us.
Francois: Perfect. Thank you so much. And just before you go, I just wanted to hear about your Moncton REIO events. That's coming up because you have monthly events and I'm sure people would love to tune in. When's your next event?
Cameron: The third Tuesday of every month. And to be honest we're still in discussion about selecting speakers. Generally announced in our Facebook group and our email group. And we do it presume so much like this. You can click in certainly not as fancy. Yeah, we try our best.
Francois: Okay. But soon I'll be there. Maybe I'll come.
Cameron: I saw it. I changed my shirt.
Francois: There you go. Pure pressure. That's how it works.
Sean: The best way to find out about it would be to just do a search on Facebook for Moncton REIO - R, E, I, O for Real Estate Investing Organization. And you'll get future new notifications on when the next meeting is and what the topic is.
Francois: Excellent. Thank you very much.
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