Edmonton is not a market in Alberta that fluctuates dramatically but with several solid employment sectors, demand for rental and real estate investing properties is consistently strong. Join Adrian Nedelec as he shares the interactive real estate investing map that his real estate company has developed for the city and hear his insights on the best opportunities for real estate investors.
Daniel: With five years of real estate investing already under his belt, only 10 months passed before he earned the award of Remax, Edmonton rookie of the year. This guy is a duper. Experienced as an investor to build confidence and success for new and experienced real estate investors. Adrian works a lot with real estate investors. On his own, he continues to raise capital for investment properties in his own town of Edmonton. Good evening, Adrian.
Adrian: Hello, Daniel, how are you doing?
Daniel: I am fine. I know you have a presentation, but I want to ask you a question because my sister lives in Vancouver and I talk a lot to people in BC and they have this habit of referring to the market and Ontario's a little say, hey, how's the market on Ontario and I keep wanting to say to them, listen, Ottawa, North Bay, London, Windsor, GTA. They're all in Ontario, but they're all different markets. Conversely, when we talk to people here and we talk about Western saying, oh yeah, the market in Alberta. Is there really a market in Alberta or is it really different depending on where you are in Alberta?
Adrian: Great question and I know we talked to a lot of people from Ontario and a lot of people from British Columbia. We hear the same sort of things, but of course in Alberta, there's different markets. We have two major cities, Edmonton, and Calgary and with those two markets, we have micro markets in the communities and zones and areas.
We can look at how Calgary and some of the other markets are trending to give us a basis on what's happening in Edmonton and then also just overall in Alberta.
Daniel: We've had presenters from Alberta before and when the oil cycles up and down, it really affects Calgary. We know that because of all the companies there and everything does it affect Edmonton equally.
Adrian: Great question. No, typically, what we find is Calgary has hit a lot harder than Edmonton does. As you may know, Calgary has white collar jobs. They have a lot of the head offices there where Edmonson is a lot of blue collar type individuals who call our employees. Anytime we go through an oil recession, typically boots on the ground, maintenance people, safety people. They're still important employees. White collar jobs definitely get hit first and hardest. We tend to see Calgary get hit first. If it does last a long time then Edmonton may see some of that come down from Calgary as well.
Daniel: Of course, people have to remember it for those of you who may not know all your capitals of the provinces that the capital of Alberta is Edmonton. There was always this very strong base of government employees there. No matter what the tourism, no matter what the oil is doing, there's always this base there in Edmonton.
Adrian: A hundred percent. It's a very diversified economy. A lot of people assume it's just an oil and gas sort of market. It's the capital of Alberta, with tons of government jobs. One of the things that we'll dive into for sure. I'm glad you brought that point out. It's something that people often forget.
Daniel: How I wanted to start this. Now, take us through what's happening in Edmonton.
Adrian: Awesome. Thank you so much. I wanted to start off and say, thank you so much for bringing me on today. I'm super excited to be able to share some insights of what's happening in the markets. One of your fellow members, Francois, came to join me here in snowy Edmonton. He was making his way to Calgary this afternoon. As we were driving from property to property there. Vehicles in the ditch truck hit a light pole, things on the Trans-Canada highway, we're all over the place. He was a little bit nervous making the track, but I'm sure he did fine and made its way there.
If anybody else ever wants to come and endure some of the cold and the snow by all means, we can definitely tour you around the city. A quick intro into myself and Mogul Realty Group. My name is Adrian Nedelec, I'm with Mogul Realty Group. We're a company based head office in Alberta like Daniel mentioned earlier. We also have a location based in Vancouver as well.
We started Mogul Realty Group about 10 to 12 years ago. I started with my founder and business partner, James. I joined his team as soon as I started with getting my real estate license. James and I quickly grew the company. One of his big goals and things that we often talked about is what we call our lives. For him, it was being closer to the mountains, being able to ski, and going to whistler. One of our game plans was growing our team, me taking over the Edmonton area and office, and then James moving out to Vancouver and mirroring what we built to the imaging and having that in the Vancouver area as well. He's been able to do that.
We've been in Vancouver now for the last two years. We have about 10 agents, full-time admin staff. We have quite a large team. If you need anything, we can always help you out. A little bit about myself personally. If you can see the photo here on the left-hand side, that's my beautiful wife and our newborn son. We have a little guy who is over two months old, his name is Atlas. We're still working on the whole sleep situation. But it is definitely fun.
We also have a nice little dog. His name is Walker and he's a actually failed service dog who was supposed to be a seeing-eye dog who was a little bit too lazy to cross crosswalks and help out with his owner. He failed after about a month in service and last but not least, I'm a big car enthusiast and hobbyist. Those are two of the vehicles that I do with. One is an old school BMW and the other one is an old Ford Bronco and one of the cool stories about these two vehicles is that both of them were acquired through real estate transactions and finding them in properties while searching for investment opportunities.
Next is a little bit about my investing career. I've been investing in Edmonton for the last eight years. I started through just the house hacking mentality, living in the basement, buying a property, renovating it, myself, doing everything I could to add some suite equity to the property, and then being able to just grow that portfolio that we started doing BRRRRs, looking for joint venture partners. Building from Sweden houses to duplexes, fourplexes, and then to syndicating funds to buy a large multi-family building.
I'm in and around that 50 door range and my business partner, James and what really attracted me to joining James and the team was he had a large portfolio at a fairly young age. I said, how can I learn from a gentleman like that and follow in his footsteps? We can help any investor looking to buy anything from Sweden houses, Airbnbs to multi-family types of properties. One of the big things is building that power team, making sure that you have the team around you in order to build and make sure you feel like you have boots on the ground and support while you invest from a different city.
If you come to mogulrg.com, this is our website that we have. We have our two districts here, and if you come to mogul mastermind, this is the tab on mogul rg.com page. If you click on market intelligence, we've put together a super handy-dandy investor's map. This has been really impactful for a lot of people looking to invest in the city.
Obviously, for a lot of people outside of Edmonton, they may not know what's going on. What's happening in the city. You can come here and find out a lot about what's going on in this city. If you click on the far right side, it'll bring up a full screen version of the map. What we've done is we've created little districts and areas of the city. As a new investor, you don't want to know what's happening in the city, what's going on with the city and figuring out, is that a good place to be investing or is that somewhere where maybe I should be proceeding with caution?
If you click on the specific area of the map highlighted in this portion it gives you a couple things. We have a video here, this is linked to our YouTube page. This is from a presentation that James gave about Millwoods, which is this general area here, highlighted in the space. What it also provides is a quick description of the community, symbolic pricing type rental profiles, properties, common investment opportunities, and the key drivers of the specifics in that area.
If you click on any part of the city, whether it is an industrial zone or whether it is a community, I'll give you just a quick rundown of what's happening. Couple other key features of the map, and we'll discuss this a little bit further, but one of the key things that people have been looking at the key drivers of Edmonton is our infrastructure projects.
Edmonton has an approved and funded LRT line or Light Rail Transit. If you click on the map, this'll give you an area of the station. If we look at the ones that are green, these are property, or these are stations that are currently constructed and in operation. These are the existing lines. Anything with the yellow hammer is ones that are currently under construction. The ones with purple, these are approved, funded, and waiting to be constructed. Anything in the black means it's passed phase one, which is thought of but it's not approved and or funded yet.
Let's give you a good idea of the phases of the Light Rail Transit, what we call the LRT line in Edmonton. A lot of investors have been targeting areas and zones close to the key infrastructure and the LRT line. This map gives you a good option of just checking into, to find out how close to the property and to the LRT line your investment. You may be searching for it. A couple of things to just give you general knowledge wise.
As far as looking at Alberta, looking at Edmonton as a place to invest. A couple of Alberta advantages that a lot of people don't really focus on or think about, number one is there's no land transfer tax. I know in BC they get hit hard with land transfer tax. There's no land transfer tax in Alberta, which is fantastic. Second point is we have no PST, so we only got charged GST which is 5% the landlording rules.
A lot of people, I know the struggles in BC and Ontario with rental rates caps and a bunch of things that really hinder and put the power into the tenants. Alberta doesn't really have that. We're still the wild west when it comes to landlord and tenant laws. Some of those things are non-payment that typically you can give us 14 day eviction notice. I'm getting tenants out of a specific property. Typically, you can get most tenants out within 90 days. There's no cap on rental rate increases.
If the Edmonton rental rate market skyrockets, anytime between a lease, you can double, triple. Whatever amount you want to increase that rent, you can do that. A lot of people have used the way of increasing the rents to force out tenants if they don't want to renew a lease. Some of the structures between a fixed term and month to month, there's a bunch of advantages when it comes to looking at Alberta and having that investment property located here.
Let's transition into Edmonton generally. Daniel definitely touched on a couple of the factors that people look at when they want to talk about investing in Edmonton. Number one, is Edmonton being the capital of Alberta. As you mentioned, people think that we're a very oil and gas focused city which is, it's not incorrect, but it's definitely not fully formed and focused on just the oil and gas sector. When we take a look at Edmonton, we have a couple of things that we can point out and we can look at when we're talking about Edmonton.
If we scroll into the map, number one is the Alberta legislature. Obviously, we're the capital of Alberta, things like Alberta health services, anything that has to do with things that are government funded are located in Edmonton. It gives us a large government population market, similar to Ottawa markets, similar to other capitals across Canada. It really helps diversify our economy.
Next, is the University of Alberta. The University of Alberta is the third largest university in all of Canada. When you take a look at the map here, this section of land is all of university, so it's massive. It's like its own little district of Edmonton. Thousands of students and staff that come to this specific area. This general area gives a lot of opportunity for professionals, young, professional and students. Really good areas to be investing in are a couple other key drivers and things that we're going to be looking at.
If anyone is a hockey fan, if you can see behind the a little bit of some Oyler, a swag in the back, but tons of infrastructure, product projects have been happening in the downtown core. Local billionaire who owns Rexall pharmacies. He threatened to take the Oilers away if the city and taxpayers didn't help out with building a downtown arena. People didn't wanna lose hockey and they ended up caving and they paved their way for about a $2 billion infrastructure project in the downtown core. Most people refer to this as what we call the ice district.
We have Roger's place here. We have the JW Marriott, a hotel, and then we have a high-rise and we have a couple more high-rises plan to be in this downtown that has paved the way for a lot of people to be sourcing some investments in not only the downtown area, but some of the neighboring communities in and around the downtown core. One of the big geographical things that a lot of people don't realize is we have a river valley system that's running through our downtown core that separates the South and the North of the city.
A lot of the areas around the river valley are already completed and developed. When the city expands and builds, there's only a couple directions in which you can go west. Our only options are going North and going East is a little bit more of a challenging area. Most people have been projecting the growth of the city to be pushed towards the North side of Edmonton and the downtown core. A couple of other interesting things that are happening in Edmonton is we have this giant piece of land called Blacksburg. This used to be our old municipal airport.
The city of Edmonton became the developer for this project and took the land and created one of the first geothermal communities in all of North America. All the builders here had to go through rigorous plans to make sure that there's a ton of efficiencies going on right now, they're in phase one of building it out. The plan is to extend the LRT lines through Nate's, which is similar to a technical school or BCIT for people of BC.
This is putting a lot of speculation on some of the surrounding communities that in the next 10 years, once this whole community is built. That is probably going to be one of the top addresses in the city. It's going to have a lot of gentrification for some of the neighboring counties. A couple other fun facts that people don't often think about when they're investing and Edmonson is we have this area here the Canadian forces base, or what we call the Edmonton Garrison. It's about 15,000 military people who work out of the base. A lot of them spend time and live in the community of the North side of them.
Speaking about industrial and heavy industry. We have a lot of areas here in this zone. This is the Edmonton East oil refinery. How many, like Suncor and Syncrude, have giant refineries here. That neighbor, the East portion of Edmonton and then moving on into the LRT. The LRT line, as most people are shooting to be in about an 800 meter radius from some studies that we've analyzed and looked at. The brief description is if you're within about an 800 meter radius, you typically will be 8% to 12% increase over what that city average is doing as far as house value goes.
People who are banking on some appreciation have been focusing on some of the areas located close to the future LRT lines. This lot, this zone right here, this area is what we call the self valley LRT line. The way that the city had developed this plan was they broke it up into two sections, self, and the west portion. This line is already constructed, they're working on testing. This was supposed to be done almost a year ago, but as we all know, with municipalities and timelines, they don't often line up.
Their plan is about summer this year. Hopefully, they can hit that plan once they're done with this completion and that's an operation, the city is going to be moving into the west portion of the LRT line. Once that's done, they're projected to be about five to seven years. For people who are looking to get into an area that hasn't completely appreciated yet, who hasn't had the bump from the LRT line and who have a timeline of anywhere from 7 to 10 years. These are big, hot areas that people are looking at.
I'm just checking the time here. We're getting close to our 20 minute timeline. Just wanted to bring up a couple other resources we do have. I'm going to shuffle over to our MLS system. One of the hot areas and types of investments people at Edmonton have been searching for is what we call side-by-side duplex. When we go back to the map, one of the big things that Edmontonians and people outside of the city have seen is when you drive here, it's Prairie's, we have a ton of land. The city has been really pushed for urban sprawl and they're hoping and pushing for more density within the core.
Previously, you were only allowed to add basement suites to single family residences with typical, normal zoning, but because of urban sprawl and infrastructure and the cost of the city it puts on, they've really been pushing for that densification. Over the last couple of years, they've applied basement suites to be put in side-by-side duplexes, row housing, half duplexes, townhouses, pretty much anything where it has a side or separate entrance. You're allowed to put a basement.
That's really sparked this kind of sub market within the Edmonton general area. It gives an opportunity for a lot of investors to be putting like a BRRRR style property where they're building and putting in basement suites into a property and then refinancing it similar to what they would do with a suite at home. I'm just going to quickly show you one option as something that people are looking for.
This is a quick glance at the backend system of the MLS. We take a look here. Edmonton single family, and we're going to go duplex side-by-side. We have a couple searching for anything that's pending. There's one specifically that I want to bring up. This one is side-by-side. This one is if we take a look at the map similar to what we were mentioning, the West Valley line LRT. This one coming through from downtown LRT is going to be heading by itself. This property is about three and a half blocks from the future LRT stop.
This one is pending already a pretty good deal, but $500,000 two suites in the basement that are non-conforming and then three bedroom units on the main floor. You got four doors out of one property and out of this one, it does have some definitely good options here. I just wanted to quickly highlight this before we transition back over to Daniel. These are some of the options and things that will typically be seen in the Edmonton market and some of the micro markets and types of investments that a lot of people in Edmonton have been searching for. That's the quick version of going through and taking a look at what Edmonton has to offer and giving a quick update on the LRT line and some of the zones that we are seeing.
Daniel: Oh, my God, you came prepared. Wow. Katherine was making the comment there. This is like an insider's view of what's happening in Edmonton. Really interesting information. Couple of quick questions. First of all, when we do a presentation on Edmonton or some of the places in America times, what we find out, the people locally don't really know that they're sitting on a gold mine and in Monkton where you can buy a beautiful triplex for 300,000 bucks.
Most of the deals are taught by people from Ontario, and we can recognize a good deal over there with everything that we saw there about Edmonton. The intensification, LRT and all that kind of stuff, that the real estate investors in Edmonton, are they aware of what the goldmine they're sitting on, or are most of your deals done with people from outside the province?
Adrian: There are some investors in Edmonton who want to do different types of investments. But when I look at the portfolio, investors that I work with I would say 70% to 80% of the clientele I deal with are out of town investors. Most of them are investors in Edmonton. I'm typically dealing with more short term. They want to flip properties or they're going to buy into a BRRRR style. Some of them realized, but I'm definitely seeing more out of town folk coming into Edmonton, Alberta, because they see the opportunity that it presents.
Daniel: Absolutely, while you were saying that somebody made a comment that said, that's because the locals have lost faith in the Alberta economy.
Adrian: That's so funny. It's true and some of them have been projecting increases and they've been holding out. They've been holding out and especially people in some of the multi-family spaces. They've been waiting for those increases to happen, but they never have. Edmonton is a very steady Eddie. We don't see giant upswings of appreciation images, a very cashflow nice long-term investment city, whereas other investors if they're impatient, they don't see what they're sitting on.
Daniel: You mentioned the word cash flow. In other words, for people on the call and we will be watching this evergreen over the next few months, is there a possibility of cash flow in Edmonton?
Adrian: Big time. Edmonton has been one of the best cashflow cities that you know. That's a decent economy. That's not too small of a market where people can have a very steady Eddy type of investments where things cashflow.
Daniel: That house that you showed there, I saw there were two addresses of 499 is for one side. Correct?
Adrian: 499 is for both. Side by side duplex.
Daniel: 499 this whole place with four sources of income?
Adrian: That's correct.
Daniel: Sorry, for 4 99 here in Niagara on the lake, we will get the garage next to it.
Adrian: I mean that one got scooped up pretty quick. It's currently pending, but deals like that pop up all the time.
Daniel: How much rent would that whole complex kind of to call it that it would bring?
Adrian: You're bringing in monthly on the upper units. You're about $1,300 for the main floors. At about $950 to $1,000 for the basement suites.
Daniel: We're looking at 4,500 bucks a month. We're almost at the one. What was that thing that would say, if you can do the 1% or the one, whatever rule you're laughing at?
Adrian: The 1% rule and we always talk about that too. There's always the risk of your reward. Some people we're investing from other towns. These are non-conforming suites. There's a risk that they could be shut down, but some investors see the opportunity there that gives them the opportunity to legalize the suites and bring up that value.
Daniel: My last comment here before we switched to Mitch Collins is I had no idea that the University of Alberta was the third largest in the country, wow lots of potential for student rental.
Adrian: It's a massive area. I personally lived close to a university and have quite a few rentals in the area. And it's definitely a big, hot spot for students.
Daniel: Adrian, I am extremely impressed with you and you guys. Just a quick question, you know what, when we started our map, did you guys have the same thing?
Adrian: We don't have the same thing, but I'm sure I could give a little nudge to the Vancouver team to see if they could source one and make one.
Daniel: We'll have a conversation tomorrow then or in the next couple of days cause that would be awesome. This is the way to show or talk about a city. This has raised the bar now. When people say, I want to give you an update on what's happening in Halifax, they better have something like that because that's the bar. Thank you very much, Adrian.
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