Wholesaling - Professionals Update

Luc Boiron
 
Luc: Wholesaling updates for one, wholesaling is becoming much more competitive. A lot more people are jumping into space and trying to give it a go. Some people are succeeding, some aren't, but you will see a lot more marketing for off-market properties. And that hopefully means a lot more opportunities for investors to get deals. I hope a lot more wholesalers are sending a deal soon.

I will say buying from a wholesaler right now, and part of this year has been more competitors. They're more competitive. There's been a lot more demand from wholesalers this year as well, because it's so hard to get deals this year. There's been so little on the market. Even understanding, you might be going on the MLS and competing with 10 people for a property that's much higher price. Even with the wholesaler, you may have some competition anyways, so understand that as well, but the end result of your offer should be that you're paying less than you would have been paying on the MLS.

What we are seeing since we're in several different areas, work across the whole Greater Toronto Area. As well as in Ottawa and in Montreal we are seeing in different areas, some areas like Hamilton, for example, prices are obviously way up and I'm still seeing very little inventory compared to previous years.

But in some areas, condos in Toronto are a great example. There's softening, there's way more inventory. And because of the low inventory, we were seeing, pushing, like from the GTA pushing to smaller towns, some of those smaller towns there might be a little bit of a pull back. There was a lot of price appreciation because you couldn't buy anything closer. And then some of that demand may have wind down as more inventories can be sitting.

You're going to see some price reductions and stuff like that. That doesn't mean prices are necessarily going to fall. At least not in the short term. I don't know where that's going to go. I'm just saying you may be able to get some opportunities, but it's still very region specific. So, we see different things in different areas that we're in.

Keep an eye on your local markets and something, as a wholesaler, we're always looking at what we think you can do with these properties, the opportunities that there are. And one of the wonderful things we're starting to see is how many municipalities are starting to open up their zoning bylaws to give way more opportunities. I think these are huge for investors. Cities like Barrie, I believe Kitchener is the same. They're allowing three units in what would have been a single family home in most of them.

A lot of these homes, you can do a basement, apartment, a duplex, a secondary dwelling unit. Whatever the municipality calls it, and then you can build a coach house in the backyard as well. So, I would say as a trend and something that people should be jumping on now is a lot of homes. Like maybe a semi-detached house, that is a two-story that wasn't a good candidate for a basement apartment for duplex conversion before. And there would have been a ton of demand from investors. Prices would have been so high. Now, that two story home that can't have the basement apartment. You could potentially build a coach house depending on the municipality.

Those kinds of things are great opportunities. My wife and I we're building, we're hoping to build four or five six of those in Ottawa in the next little while. And I know some investors up in Barrie that are building a ton of them. So, I think that's a huge opportunity up and coming. And I think everyone, if you can find a way to build them inexpensively. They can be a really good extra source of income for people who are otherwise having trouble finding properties for duplex conversions.

Sarah: Very cool. And just for those that may not fully know what a coach house is. Can you just give us an overview of that?

Luc: All these terms, duplexes, coach houses, garden suites, different municipalities, call them different things. Some call it, still call it an accessory dwelling unit, but they're allowed to be in a separate building. So, every municipality has its own zoning bylaw, and they decide in their definitions what they're going to call it. And one city might be a secondary dwelling unit. Another one might be an accessory dwelling unit in another city might call it a duplex.

They might be talking about the same thing. It's just the definition in the zoning bylaw. What I'm talking about is a separate, usually small, almost like a tiny house usually in the backyard of another house. So, we're building about 540 square foot, one plus den houses behind the main house. It hooks up to the plumbing and electric in the main house, in a separate meter, but it hooks up to the plumbing from the main. It's fully permitted.

What you have is the main house actually gets better rent than just the upstairs of the main house. And then you have a free standing unit that's going to rent for better than an apartment, even though it's small. We're seeing that we should be able to rent these for somewhere in the 1600 range, which is, if we can build those for low one hundred, it's a pretty good return. And in other areas, Ottawa has a very expensive building market, construction market. If you can build those for less than other markets, I think there's a huge opportunity.

Sarah: Yeah, absolutely. Think outside the box. I think that's where we're at right now. Like you said, there's such low inventory right now and some places don't have cash flow, but something like a hundred and $150,000 coach houses generating $1,600 a month. I mean, that's the 1% rule or more. There could be some great opportunities there. Thank you so much, Luc. And by the way, I do believe that everybody should have a wholesaler on their team. Luc, how can people get added to your list?

Luc: You can go to cashhousebuyers.ca/buyers.